'Addressability, Amazon and voice assistants' - media predictions for 2018

Arvind Hickman
By Arvind Hickman | 13 December 2017

Media agency bosses predict that 2018 will be the year of addressability, Amazon and virtual assistants. Voice search will have a far greater role in the media mix and as media becomes increasingly personalised.

A few agency leaders recognise the need to provide attractive and meaningful career paths, while there are also stern warnings that short-termism will haunt brands that do not also focus on long-term brand building.

Here are the pick of media agency predictions for 2018.

Initiative CEO Melissa Fein:

Addressability will be the big driver of change in 2018.  In the US it's approaching a $3bn industry and is a key driver behind many of the mergers of telco and media companies, where data and technology can enhance marketing effectiveness to levels not seen before.  

We should all embrace the reality that success should not be judged on the delivery of outdated buying metrics but rather the sales and business outcomes the campaign has actually generated. Addressability is a key factor is making this happen and has proved so in both the US and the UK. 

Building truly effective communications should genuinely start with the consumer and then design messages around the channels we're using, rather than creating a message and then trying to attach it to available environments. Accelerated levels of effectiveness will lead to stronger relationships with our clients, founded on great work and shared goals.

As we continue to redefine a total communications approach where experiences and conversations are as important as advertising messages, we need to re-think how we communicate. A new year is always a good opportunity to do that.

WPP AUNZ CEO Mike Connaghan: 

Complexity is the enemy of efficiency. In a low growth environment smarter clients will consolidate their roster of agencies and look for a more integrated solution.

PHD Australia CEO Mark Coad:

The industry has been talking about the potential of Virtual Personal Assistants (VPA’s) for many years now, but 2018 will be the year they really become evident in our daily lives.

With the launch of Google Home in July, Amazon launching in Australia on Black Friday last week and with the addition of smart rings (with embedded microphones) about to take market by storm it is clear that VPA’s will be what 2018 is remembered for within the media industry – as they represent a movement away from the screen.

Users can request an Uber, adjust their thermostat, post a message to Slack or order a coffee in Starbucks making VPAs the middle man that mediates every request, conversation and purchase between customers and thousands of their brands. In the short term, brands will have to consider how they want to speak to consumers through these devices.

However long term, we need to be prepared for when sentient VPA’s are making many of our purchasing choices for consumers…meaning we will soon be marketing to these VPA’s.

Slingshot CEO Simon Rutherford:

The media marketplace will be flat in 2018 and we’ll see more consolidation amongst media owners as they look to control costs.

Diversification: we’ll see more innovation as media owners look for growth in a flat market from things other than core business. They realise that they need to innovate through diversification and how they better utilise owned assets. They’ll continue to invest in start-ups and other opportunities to try and get a better return on their assets.

Automation: we’ll see greater automation, as all businesses look to take some of the complexity and workload out of media.

Transparency: will continue to be at the forefront of media, as it should.

Data: the move towards addressable advertising will see a continued investment in data.
A flattening of digital spends: clients will back off digital spends until such a time that the big digital issues of viewability and transparency are addressed.

Simon Ryan, CEO, Dentsu Aegis Network ANZ:

CRM and digital and addressable advertising is where the money is going in our industry. In the current digital ecosystem, increasing our understanding and control of the e-commerce journey for customers will deliver better outcomes for our clients. 

At Dentsu Aegis, we’re already gearing our business for this change and have significant plans to enhance our capabilities in people-based, or addressable marketing next year.

Whilst a strong data strategy is going to continue to be at the heart of every successful campaign in 2018 and beyond, no data strategy is complete without rigorous checks and balances around securing personal information and managing privacy. Integrity and trust have never been more valuable in this industry, so we’re investing heavily to keep up with the pace of change and maintain compliance with data laws, as we advance our capability and competitive advantage in the area.

WPP chair media services John Steedman:

2018 will be more of the same. Growth will be low single digits and margin pressure will continue with FMCG and retail businesses likely delivering little or no growth in marketing spend. However, this may be offset with the local launch of Amazon which may stimulate spend in this sector. Higher growth categories are expected to be automotive, insurance, fast food, government (3 state elections) and gaming.

On overall market growth across the media sector the forecast growth is slightly ahead of 2017 at around 4%. By media channel;  Broadcast TV Should flatten if not realise slight low digit gains as we see FMCG clients move their advertising dollars back out of digital. Digital will continue its dominance taking in excess of +50% of the advertising dollar although, growth will slow to high single digit. The channel will also continue to have issues surrounding viewability and brand safety. 

The so-called tech companies are big media players in the communication world. Outdoor growth will continue with growth expected around +5%. Radio will also see continued growth of around 2%.  Print decline will be arrested to around -6% and cinema will see growth around 4%.


m2m Australia managing director Wendy Gower:

The MFA Industry Census was recently released and turnover this year hit a frighteningly all-time high. Some agencies (not this one I might add), and in turn their clients, are clearly doing it tough. Many people that leave are opting out of the industry altogether, which is very bad news, given the industry has a consistent vacancy rate of 6%.

It is incumbent on all of us in leadership roles to shape a fulfilling and diverse career path for everyone joining our industry, regardless of the discipline in which they land. The media agency of today is barely recognisable from the media agency of 10 or even 5 years ago.

These are different times, with many different disciplines and specialists making up a large part of what we do for our clients. With data and technology fuelling much of this change, it is somewhat heartbreaking to see the repetitiveness of tasks and the daily grind that typify some roles.

Ours is a great, restless and dynamic industry and if we don’t work as an industry to nurture and develop talent, minimise burn out and eradicate death by excel spreadsheet I predict there will be some agencies in chaos, and a lot more clients looking for alternative agency partners that are getting the people piece right.

Starcom Australia CEO Toby Barbour:

Rise of Smart Speakers as a new platform: Just as mobile with smartphones have been the platform driving accelerated consumer change in the last 10 years, ​s​mart ​s​peakers will fundamentally change the game in the next 10 year. How consumers engage brands, search and buy products will change forever

We are already seeing the battle ground heating up: the ​Google Home ​giveaway ​with ​the ​Woolworths promo​tion​ looking to pre-empt ​the ​launch of Echo from A​mazon​ next year.

Potential Change in Direction of Ad Spend: How clients respond to the launch of Amazon,​ whether opportunity or threat​,​ has the potential to change the existing mix of ​a​d spend by channel.

We have already seen a ​significant shift in spend for ​the ​Oct​ober​ SMI data​, which was​ down 8%, driven by retail, so how brands invest in CX in a new ​omni​channel, ​e-​commerce world will be our focus.

Spinach GM and media director Ben Willee:

In 2018, mass personalisation is going to come into its own. This year, many advertisers have been busy getting their tech stacks in place while wrestling with segmenting audiences and using data to create specific campaigns for very specific audiences.

Just as 80% of the work in any data analysis is data preparation, same goes for becoming data-driven and integrating your data to meet the needs of your company as a whole. 

You could say this has been the “pain" phase. Many advertisers have now gone through the pain and next year will start to see the gain. 

We can all see utopia – the future where we will have automated systems with robust audiences and be able to do really cool stuff. I predict that after all this setup and testing, it's time to rock and roll. Next year, those tech stacks are going to start to really hum.

Havas Media CEO Mike Willson:

2018 will be another pivotal year in the media industry and we will begin to more evidently see a seismic shift when it comes to three things: competition, compensation and content. It's all about the C words.
Competition: Whilst still a bit of an elephant in the room we will begin to see greater competition coming from all corners. Consultancies are on the move and we have already witnessed very credible acquisitions and moves from some of the big names moving in on what was a media shaped space. 'Experience agencies' will become normal vernacular in the comms sector but for now it looks like just strategy and planning are within their grasp. But it won't be long until the consultancies have the same technology and tools that the major holding groups do, not to mention the know-how when it comes to putting forward a fully comprehensive trading model. 
Compensation: Brands and businesses are quickly moving towards a greater use of owned, earned and shared channels for communications whilst paid media becomes ever more automated. But agency holding groups have a long way to go in order to bring back the trust that has been lost through automation and programmatic  - which is another conversation altogether. Going beyond this, agencies need to deliver beyond just 'media' and carve out an offering that delivers more than just metrics. Delivering real business results that are fully attributed to what we do should be the ultimate goal.
Content: Branded content and content marketing will continue to grow and gain momentum. The huge amount of money wasted on irrelevant and meaningless content cannot go on and proper content strategies need to be in place. But the idea of what 'content' is must change. Content has a huge role to play in media so the quality, use, context and idea is integral to producing meaningful communications. One of the formats on which we will see huge growth of content is OOH - coined to be the saviour for the Australian media industry. DOOH migration has has seen units amongst media owners reach 18% saturation but already having 50% of the revenue.

HM Communications founder and principal Virginia Hyland:

2018 looks bright for the world of digital outdoor. Creating waves – video content served on the biggest screens in cities. Outdoor is set to become a mass player in content distribution. The sound barrier is now no longer the issue with mobile phone Apps and headphones answering the problem. Viewing and listening to great content via large outdoor screens will create a whole new impactful experience for audiences in their daily journey. 

Nunn Media MD Chris Walton:

Whilst there has been understandable focus on the many technological developments happening in the world of media, including the onset of a million and one clever things we can all do with data, the focus next year will swing back towards talent. Who has the talent to bring all of this to life?

He who has the talent wins. Many of the recent tech announcements made by the broadcast networks are little more than baby steps focused on improving productivity.  It's OK for starters perhaps, but the potential for such platforms to add real value is huge. That's going to put a greater focus on attracting and retaining great talent to bring all this potential to life – for media, for clients and for their agencies. 

This year has also seen much conjecture about consultants playing a more active role in marketing. If this indicates a greater need for high quality, experienced and insightful advice, then that is a good thing. This need will only grow in the coming 12 months. 

Penny Davy-Whyte – General Manager, Canberra, dentsu X:

The focus on digital measurement, performance and brand safety will continue including non-acceptance of premium rates for greater visibility. 

There will be continued growth in on-demand media services with unlockable contracts. 2018’s forecast is stable year on year, however, the Amazon retail disruption and a potential Federal Election will drive inventory demands, increasing pricing across premium inventory. Media reform legislative changes will mean more mergers and new investors.  Watch out for a review in regional/metro TV markets with increased demand and more cross media ownership.  It will be interesting to see what happens to Fairfax. 

There may also be a potential pendulum shift against social media, its role, accessibility, safety and potentially a new alternative brand. Merging of roles will intensify with the necessity for Chief Client Officers, integrating CTOS/CMO and CPOs.  Additionally more women will be promoted in executive level across the board.

Publicis Media COO Chris Nolan:

The 2017 trajectory suggests that the advertising market will decline by 1.9% continuing the trend of low to no growth.
Sports on TV and digitisation of Outdoor will be the main sources of growth for traditional media for 2018. The Commonwealth Games, the Winter Olympics, and FIFA World Cup will be the incremental growth drivers for TV reinforcing the continued importance of sport as the main instrument for television.

Outdoor companies have been investing heavily in digitising their plant, in 2018 more than 50% of sites will likely be digital, whilst ensuring this medium can use price as a mechanism for growth it will also bring a sharper focus on accountability and effectiveness for the medium.

Holding companies such as Publicis will continue to offer new operating models that cut through creative and media silos, designed to deliver more agile, insightful, customer lead thinking.

Rebecca Tos, CEO of Columbus:

Advertisers will continue to disrupt their structures to be more customer focused, and contemplating the impact and opportunity of commerce marketplaces. Collectively the industry needs to accelerate our ability to identify relevancy moments with our customers, and addressing our customers’ needs with greater agility."

We’ll see an explosive increase in voice search as a result of smart speakers, bringing an adaptation to how we interact with our current device set.  

Smart speakers have already been embraced by early adopters, quickly becoming the newest family member of every digital household. Google Home, Apple HomePod and Amazon Echo have given Australians an on demand digital assistant or access to news and entertainment with nothing more than a simple command. 

Search by voice will account for half of all internet searches by 2020 according to ComScore. The impact is widespread & multi-faceted; marketers must pivot fast to understand what this means for the new world order of search, entertainment or low-involvement product purchases at the drop of a sentence. Solving real, daily problems will be reshaped in the home with an opportunity for brands to do the same in the minds of all Australians.  

Wavemaker CEO Peter Vogel:

With the ongoing fragmentation of audiences and touchpoints, together with the development of ecommerce in Australia, 2018 will be the year we experience a resurgence of brand building and meaningful customer engagement. There will be a re-appraisal of customer lifetime value versus low-cost acquisitions, together with a relentless focus on elusive growth opportunities.

Brands will need to be relevant and purpose-driven. This will require the effective use of data to gain an accurate view of customer behaviour, to then enable brands to connect with their customers in a relevant and personalised way. While everyone is talking about data, no one has cracked it. That’s all set to change next year if the conversations I’m currently having with clients are anything to go by.

At the end of the day, the winners will be the marketers who truly understand their customers’ complete purchase journeys, and effectively join up media, content and technology.

Zenith Australia CEO Nickie Scriven:

In 2018 companies that have been lured by the appeal of short-term sales campaigns with an absence of brand building initiatives will likely start to see a negative impact on brand health, brand equity, profit margin and ultimately share price.

2018 needs to becomes the year of pivot where companies start to reinvest in their brands to build value and relevance - giving consumers a reason to engage with and choose their brands. Those that continue to focus purely on discounting will likely suffer lack of differentiation, declining margins and profitability.

We need a longer term focus, to readjust the balance of brand building and sales activity closer to 40/60 and to start to view advertising as an investment rather than a cost. But to be truly successful companies need to link marketing KPIs to desired business outcomes to prove the ROI of marketing and advertising efforts.

Performics CEO Grace Chu:

New technologies that facilitate digital transformation will continue to grow, and the pace of change will only increase. Companies will have no choice but to embrace transformation more rapidly than ever before. AI Will Go Mainstream – If it’s Not Already. With Alexa, Siri, Google Assistant and customer service chatbots, AI is already deeply engrained within our daily lives but in 2018, we will see an even deeper implementation of AI as brands continue to strive to connect with consumers on a deeper level.

We will see more use of machine-based technology and more providers leveraging machine learning. At the same time, it’s important for brands to approach with caution and carefully scrutinise AI offered by vendors to ensure the best outcome is delivered for the brand and not just the vendors.

With Amazon launching in Australia very soon, many retailers will be offered new distribution, new marketing and new revenue opportunities. With the Amazon experience, will also come a dramatic increase in consumer’s expectations of the online shopping experience in 2018. Shoppers will soon expect more for less. Online retailers will be forced to radically improve their offerings (from personalisation to fast shipping) to survive and thrive.

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