In December 2017, we wrote about what would happen in the next twelve months. WARC’s Head of Content, David Tiltman, looks at how we did ahead of our predictions for 2019.
We’re getting ready to launch the Marketer’s Toolkit 2019 – the latest in our annual series of reports on the industry’s priorities and challenges for the year ahead. So it’s only fair we look back at last year’s report and see how the themes we identified have played out in 2018.
Like last year, the report for 2019 will be based on an exclusive survey of our audience, with a total of 800 client-side marketers and agency executives sharing their thoughts on strategic priorities for next year, tech and media investment. To this we add WARC’s best articles, case studies and research on a range of hot topics.
Keep an eye out for the full data report, supplemented with a series of CMO interviews, on 12th December, with some in-depth spin-off reports to follow in January. There’ll also be a launch event in London on the 12th December – so come along if you can and look in detail at some of the trends we highlight.
We’ve had a pretty good record in spotting what’s important. In Toolkit 2016 we highlighted the emerging ‘digital backlash’ a full year before Procter & Gamble’s Marc Pritchard made his speech. In Toolkit 2017 we noted that brands were reinvesting in reach – a trend that is ongoing. So let’s see what we said a year ago, and what actually came to pass.
What we said: “Voice-enabled technology is opening an entirely new engagement opportunity for brands. For the first time, marketers will have no choice but to consider the audio characteristics of their brands. What, if any, persona should they adopt? Brands will also need to rethink sales channels in an environment where consumers wish to order products and services with the utterance of a short sentence.”
What’s happened: There’s been plenty more hype around voice in the past year – and it looks set to be an area of marketer interest in 2019, not least due to the growth in penetration of smart speakers. A project by Estée Lauder, the beauty company, is a good example of test-and-learn – it partnered with Google on a voice-led marketing program for its Advanced Night Repair anti-aging product, based on Google Home speakers. The project yielded useful insights around when and how consumers might interact with brands using voice.
But there is still a way to go. There are signs that consumer take-up of voice commerce remains low. Voice search is an important area of development – there’s some good data on this coming up in the Marketer’s Toolkit 2019. But even there progress may be slower than some of the statistics touted at conferences suggest: “One [figure] that's quoted a lot is 50% of searches by 2020 will be voice searches,” commented Adam Skalak, global head of search at Nestlé, at a recent conference. “I don’t believe that will happen. The answer is not as simple as that because I believe the future of voice will significantly vary market by market.”
In fact, some of the quickest adoption is in emerging markets. Google India has reported that 28% of its search queries are now voice searches, and India is now the second-largest market for Alexa skills after the US.
What we said: “Lying at the intersection of conventional marketing and tech, customer experience will be a priority for many brands in 2018. At a time of low sales growth, fragmented communications and commoditised products, delivering a positive experience to customers is increasingly considered a way to build brands and stand out versus the competition.
Many companies are now actively making efforts to improve CX through the improved use of data and more rigorous attempts to 'map' the customer journey.”
What’s happened: The pressure big brands are feeling from digital native direct-to-consumer brands – whose business model revolves around great experience, great design and smart use of first-party data – means CX has been a big theme in 2018. Coca-Cola is one brand that has adopted more of an experience-led approach, dividing experience into four areas: on-screen, on-shelf, on-occasion and on-pack.
Not that consumers seem to have noticed – a survey in September found that more than half (52%) of consumers in US, UK and China reported that brands fail to live up to the promises they make, while one-third saw overpromising as “just something that brands do”.
With so much work still to do in this area, CX remains a key battleground between agencies and management consultancies. At Cannes, Accenture Interactive’s MD for Europe, Africa and Latin America, Anatoly Roytman, told WARC: “Consumers can compare a bank to a grocery store, to other types of services they receive. It's about the service you provide. Yes, of course, the branding, positioning, all of those things still matter. But consumers don't look at advertising, or marketing, or service separately; that's what the brand is. So what we are saying is that you need to start from the experience, from outside in.”
With the DTC model continuing to make waves, this realignment of the industry around experience looks set to continue.
What we said: “2017 saw a 'purpose backlash'. In 2018, the challenge will be recognising when (and how) purpose can drive sales as well as social good. For brands looking to stand for something bigger than their business, the challenge of 2018 will be identifying which elements of purpose remain worth pursuing. Donald Trump's tenure in The White House, alongside populist political events such as Brexit, has prompted many brands to adopt a more overtly political stance… Brands involving themselves in politics will require a thoughtful message and a history of supporting the issues or promoting the values in question.”
What’s happened: The purpose ‘backlash’ turned out to be bump in the road rather than a turning point. ‘Purpose’ remains a major theme in the industry, and according to the CMO of IKEA, 2018 is the year “purpose went mainstream”.
Arguably, however, this year’s purpose initiatives have learned from some of the earlier add-brand-to-good-cause examples from previous years. WARC’s report on effective use of purpose highlighted a growing trend for purpose strategies that harnessed consumer participation, and a more nuanced approach to ‘empowerment’ campaigns.
Denny’s in the US is a good example – rather than latch on to a fashionable cause, it built its ‘purpose’ initiative out of its brand history, and specifically its founder’s comment in a newspaper article that “we love to feed people”. That has led them to develop a ‘mobile relief diner’ that can bring food to hurricane-hit areas.
Perhaps the most significant development was Nike’s campaign in support of Colin Kaepernick. That campaign marked purpose not as a fluffy, feel-good activity, but as a matter of taking sides. The short-term impact of Nike’s work is not yet clear; but it has been lauded as a means of reclaiming its positioning as a rebel upstart brand, and a fitting way of celebrating 30 years of being on the side of the athlete.
It’s not just the upstarts. Procter & Gamble is also getting more comfortable with controversy – its ‘The Talk’ initiative focused on racial bias. The decision led to some criticism – but P&G has stood its ground and reinforced the message.
We said: “2018 will be pivotal to the development of digital, as the current drive for transparency continues. Much more needs to be accomplished – notably on brand safety – before brands can feel truly comfortable that digital ad investments are delivering the desired returns.”
What’s happened: Digital transparency for marketers has arguably been more under the radar in 2018 than we might have expected – but only because there has been so many bigger problems afflicting big digital platforms. Scandals such as Cambridge Analytica or Russian misuse of social media have dominated the headlines, rather than marketing issues such as viewability of measurement inconsistency.
However, the drive for greater brand safety has continued throughout the year. Unilever’s Keith Weed noted a “step-change” in efforts by Google and Facebook to clean up content on their platform.
Trade bodies have been doing their part too. In May some of the world’s biggest advertisers joined forces with the World Federation of Advertisers to release a Global Media Charter, setting out eight ‘Principles for Partnership’ which the WFA expects all agencies, ad tech firms and media platforms to comply with in order to secure future advertising revenues. And in the US, the Trustworthy Accountability Group (TAG), an industry alliance that tackles failings in the digital marketing ecosystem, has developed an approach that, according to recent research, can slash levels of invalid traffic by 83% compared with industry benchmarks.
Not that it’s all been plain sailing – Mars pulled all YouTube advertising in the summer after one of its pre-roll ads appeared before a music video linked to gang violence in London.
That sort of response remains the exception rather than the norm – and there is no sign yet of a large-scale withdrawal of budgets from digital platforms. But there is a sense of momentum – not just from platform owners, but adtech firms and agencies too.
So overall it has been an important year of development – with plenty more to come in 2019.
What we said: “New regulations mean that data – and, in particular, data management – will be a major brand concern in the year ahead. At the same time, there is a broad push by brands to take control of their many data sources – for example, by building data management platforms. Post-GDPR roll out, brands operating in the EU will need to take a more proactive, disciplined approach to data management to protect their reputation.”
What happened: This time last year, just 25% of European respondents to our Toolkit survey said they were ready and prepared for GDPR, the European Union’s new online privacy framework that came into force in May. So the first half of 2018 saw marketing departments across the continent – and, indeed, globally - rushing to figure out what it meant, and how much they had to worry about it.
Consumers quickly took GDPR to their hearts. As marketers bombarded them with requests to opt in, Europeans took the opportunity to perform a ‘spring clean’ of their email inboxes.
Publishers and ad tech firms were also affected – the number of web trackers operating in the European Union since the introduction of the General Data Protection Regulation (GDPR) has declined by up to 31%. And the fallout from GDPR was a key area of discussion at dmexco – specifically, how consumers are demanding greater control of personal data and ownership of their digital identity.
The impact is being felt outside Europe, with similar regulatory regimes being looked at in other major economies. In the US, the California Consumer Privacy Act, broadly similar to GDPR, will come into force in 2020.
The upshot of all this is that first-party data and opt-in lists have never been more important, and consumers are increasingly aware of the value of their data. All of which reinforces the drive by brands to improve their online customer experience so that they become one of the brands consumers will let through the net.