What does it take to future-proof the CMO function? We take an in-depth look at some of the trends that will shape the industry in the years ahead.
1. Real-time data will rule
To improve the efficiency of advertising, the demand for real time information and capabilities will go up.
“We are moving from just recording data to modifying the system in real time, which means continuous improvement,” says John Zeigler, chairman and CEO of DDB Group Asia Pacific, India and Japan.
“Old, non-optimisable formats will fall by the wayside. Display will boom, as real-time bidding becomes possible, making every campaign mutable-by-the-moment, enabling ad buyers to tailor bids and ads, impression by impression, across a wide range of ad spaces.
2. Marketing will become increasingly contextualized based on user data
User data is the key to keeping campaigns targeted and relevant to the lives of specific customers.
“We are starting to see the use of location in direct marketing tools and information such as at what time of day I am accessing something and who I am,” says Colin Light, digital consulting leader of PwC China and Hong Kong.
“Advertising is increasingly moving away from push to something that’s much more about push and pull, whether it’s an ad on a vending machine or your TV and mobile phone.”
Consumers trading information with brands is part of this new trend.
Light says, “It’s not just happening with millennials. According to our recent survey, users across the board are very willing to trade information provided that marketers are transparent about it and offer a fair value exchange such as free content, money off something or experience through a particular brand.”
Being transparent means asking users for permission to use their data and allowing them to opt into the process, adds Light.
Zeigler agrees that technology has not only changed the way marketers think of customer relations, but also consumer behavior.
He says, “They’re not just signaling that they want to engage with brands on Twitter or over email; they are also voluntarily divulging the kinds of personal details that were only shared among close friends a few generations ago.”
“The ‘campaign’ era in marketing is over, and what we are calling the post-campaign era is in full swing.”
For Zeigler, the opt-in part of the process includes allowing consumers to skip ads, micro-pay for content, and contribute and comment on their own terms.
The key to marketing success becomes fostering a community of loyal users who care about the brand, rather than simply because they love a particular product or price point.
“The consumer is increasingly relying on ‘social’ branding and friend recommendations. Brands that build web services fostering community and loyalty are gaining equity whereas those that rely solely on price and selection are dying,” says Zeigler.
3. Apps are introducing the idea of marketing as a service
Adrian Toy, regional marketing director for at PUMA Asia Pacific notes that while using apps to market a business isn't for everyone, it has transformed the way marketers see marketing.
“The whole idea of using services as a means to market through apps – such as an app to help you on your daily run or an app where you catch virtual butterflies - they change how you interact with the consumer,” he says.
Apps may work better for brands which are more transactional, such as Starbucks, rather than luxury and higher-end stores such as Gucci, which the customer may not frequent every week. Toy also cautions against investing too much in mobile games, because they are difficult to sustain and are not part of the core business for most brands.
4. Viral advertising is becoming a new way of grabbing attention
Hoping to create viral advertising campaigns online has changed the process of content creation for marketers.
Toy says, “You are no longer constrained by a 15 or 30-second brief. The keyword is viral, which means making sure that people are either laughing, or sharing something because it’s stupid.”
“The challenge is: does that match your brand? You need to test it but the experiment can go horribly wrong. For example, you may sell the idea to management and it doesn’t work - then it becomes about managing expectations."
But he notes that investing in the less predictable can be game-changers and the concept of letting go of some control also applies to the fast-paced social media and the viral side of digital marketing where anything can happen.
5. Instant messaging is a new tool for getting closer to the customer
Toy says Whatsapp, WeChat and Line have reversed the idea of social networking as being open to your friends, family and even the public, such as Facebook feeds.
Now, with instant messaging, brands are communicating directly with the customer on a one-to-one basis.
He adds that this is where the basic principles of email marketing apply.
“Brands always want communication with the consumer, but the consumer doesn’t want to receive spam every day. You need to figure out how much you know about the consumer and how often you want to communicate with them – you have to determine the level of friendship that you want,” Toy adds.
6. Mobile money is becoming the norm
For Zeigler, all retailers will eventually go mobile.
“Coupons, circular spending and formats are migrating, with offers that are more targeted, personalised and accountable,” he says.
“New mobile services are springing up, providing price and availability on products without being asked.”
Pricing transparencies mean a return towards differentiating from competitors based on service.
7. Digital will rein not just in virtual online platforms but in retail and in-store environments too
Digital technologies will be increasingly used to advertise and communicate product information in physical retail stores.
“For example, what you will see in retail stores in the future is as soon as you lift up a hanger, the LED wall next to the customer will show information and visuals about the product,” says Toy. “The content displayed changes based on the customer’s behavior in-store.”
Video source: teamLab
Another example is a Brazilian fashion brand's stores feature coat hangers displaying the number of likes a garment has received on social media so that customers can assess the online popularity or exclusivity of the garment.
Digital space can also help brands overcome the constraints of a store with limited physical space. This is particularly relevant in big cities with high rent such as Hong Kong, where small spaces reduce the exposure of products to the customer.
“You can use LED walls to show all the footwear, because with a limited amount of physical space, you can’t put all your shoes in the store. But with a digital display, the customer can see all the products and even try them on virtually,” says Toy.
“This kind of thing will become more prominent. I don’t think physical retail stores are going anywhere – they will just become more digital.”
Zeigler agrees that retail stores will offer more personalised choices for customers through digital means.
“Context is the new king. The closer you get to the point of sale, the greater the effect your message will have,” he says.
“The potential for retail is clear – you arrive in a grocery store, and immediately receive a targeted message that draws on everything we know about you. It could be a recipe for burritos because tortillas are discounted on aisle five or you bought chillies in your last shop, or because it’s 5.30pm on a Friday and it’s a popular recipe in your area.”
Zeigler calls this the evolution of the mailer, retail’s oldest trick, where customers always want to know what’s on sale.
“Now we have the power to tell you about the discounted products you are likely to buy and we can give you this message at the most useful moment – when you’re in the store.”
8. Brands can be the connective tissue between people and new technology
New technologies emerging from labs and start-ups can be intimidating to the average consumer.
“Brands can get these products out of beta and into the hands of consumer. They have the scale, the resources and in most cases, the trust of their customers. They just require the vision and the investment,” says Zeigler.