The media industry has seen a roller coaster 2016, with ANA in June revealing findings from a K2 Intelligence study pointing to the pervasiveness of media rebates and the recent Dentsu-Toyota over billing scandal. Coupled with Facebook’s recent misreporting to brands, the call for more transparency and higher standards, is louder than ever.
According to Forrester report from its Predictions 2017 insights, 2017 will be a year of huge change for marketers, media agencies and media companies alike. Here are six ways the industry will be disrupted.
Shift in media hierarchy
Marketers historically have been reluctant to throw their weight around for fear of upsetting the delicate relationship between media companies and agencies on the roster. This is likely to change next year as they embrace customer obsession and gain confidence in their strategic planning.
The report predicts that “walled gardens” will start to find marketers taking more charge. Walled gardens which continue to limit the performance data marketers need will find themselves losing out on ad dollars, especially if what they offer does not fit in the marketer’s overall strategy.
Closed platforms in particular are likely to lose out due to loss in market share to more open entities such as Verizon/AOL.
Media companies will also bend to marketers as content marketing continues to take over marketing strategies. 2017 will see more traditional media companies creating new products for advertisers as digital favourites such as BuzzFeed and Vice power through with their content strategies.
Lawyers will be more involved in the pitch process
In countries such as Southeast Asia, where the client-agency relationship is one often based on trust, marketers in an earlier interview with Marketing voiced their fears and concerns on how these revelations will impact the industry moving forward.
According to Forrester, the RFP and subsequent negotiation processes are likely to take a different turn next year. Rather than an emphasis on strategy and technology, marketers will lead the pitch process with more questions about transparency, accounting and billing.
Media agencies on the other hand are likely to keep auditors on staff in order to meet ongoing financial scrutiny from clients. According to research interviews, Forrester is already seeing this trend of agencies declining to comment on media contracts without the presence of lawyers.
Increased scrutiny of tech and media talent
Recent developments in transparency will force marketers to keep an open mind when deciding where to place their marketing dollars. 2017 will see more marketers bringing their CIOs to the table as they explore new agency-client relationships, optimise programmatic strategies and demand more transparency in pricing.
Agencies will now need to find a better way to justify and explain the strategic value of their people and the business value of the technology they use. They will also need to find ways to make up for potential lost revenue from licensing, consulting and various research fees which will now be under much inspection.
Programmatic space will continue to heat up
According to Forrester, with 79% of marketers using programmatic today more attention will be placed on its results and practices. 2017 will hence be the year marketers find a way to get the best of both traditional media buying and the intelligence and efficiency capabilities of programmatic.
Firstly, advertisers will focus on finding a balance between targeting and scale. As more media companies such as Facebook up their offering for more personalised or people-based targeting, marketers will draw more focus to one-to-moment marketing strategies and contextual customer experiences.
According to the report, giant advertisers such as P&G have already started to realise the benefits of both mass-market advertising and targeting. Hence other marketers are likely to follow its lead in testing less targeted buys in search for the right balance between contextual, relevant advertising and reach.
An earlier report by Zenith also echoed similar sentiments saying that in the coming year, programmatic will grow “comfortably faster” than social media. Social media is currently set to grow at 25%, and online video at 20%. Meanwhile programmatic advertising is set to grow 31% in the year 2017.
Pressure to buy cheap
Good news, this will subside.
In view of fraud and viewability problems, marketers will now have to ensure they choose quality over a perceived lower CPM. This means they would have to hold their agencies to standards other than lowest CPM possible as they realise their actual CPMs are higher when non-viewable impressions are accounted for.
Although 2017 will not be the year the whole industry switches its measurement standard permanently, the report states that building blocks will at the very least be established. This comes as marketers become more willing to pay higher prices for better quality inventory.
Advertising standards will only get higher
With the rising power of ad blockers which is set to only get higher, marketers will find their top and bottom lines suffering if they cannot connect with their target audience – even if they do not pay for blocked ads. As marketers’ demand for native advertising increases, the line between editorial and advertising is likely to blur – hence the call for more standards which “separate church and state for content”.
With the recent coalition among advertisers, Google and the IAB to set advertising standards to combat ad blockers, the report states that the approach is likely to expand to be more than just a how-to guide to deal with ad blocking.