OPINION: Mark Pejic's predictions for 2014

Mark Pejic
By Mark Pejic | 13 January 2014

MediaCom boss Mark Pejic shares his predictions for 2014. He reckons branded content, native advertising and increasing partnerships between brands and adland are where the money's going.

1. The group buying sector is in its final death throes

The last year has been one of consolidation for the group-buying industry in Australia. Even the market leader, Groupon has had a very challenging year and has made a lot of redundancies. After its poor performance this year, the US board fired its CEO Andrew Mason.

In my view, the daily deals market is a fad that has now peaked in Australia. Consumers are now looking for deals that are more personalised to their needs rather than those blanket emails with a multitude of irrelevant offers going to everyone on their database.

If they are to survive, the remaining group buying firms in Australia need to implement systems that intelligently use customer data to drive future sales.

2. Finance to overtake auto as #1 ad spender

Automotive advertising spending has been static this year, but with a significant shake-up of the car industry in Australia afoot, budgets for 2014 will reduce and could well be overtaken by the booming finance sector.

It has been well publicised that most of the major car manufacturers are planning to cease production in Australia if they haven’t already done so. This country made just 94,000 vehicles in the first six months of 2013 and ranks 30th out of 39 car-manufacturing nations. There is increasing pressure for the Government to withdraw its significant subsidies to the local car manufacturing industry to maintain the jobs and there is a Productivity Commission review underway that could end their support.

Foreign imports, particularly from Japan and Thailand are what Australian people are buying and smaller cars are becoming more popular due to rising fuel costs. So far this year the Toyota Corolla and Mazda3 are the number one and two best selling cars and the VW Golf is inside the top 10 for the second month running at number nine.

On the other hand, the finance industry is looking like it will have more funds available to invest in advertising, due to factors such as the boom in the domestic property market, increased competition in the retail banking, financial services and insurance markets including the prospering health insurance sector.

3. Death of the desktop PC

Over the course of the last several years, desktop PC shipments have declined sharply as lighter, more portable Ultrabooks, tablets and phablets have surged in popularity and begun replacing traditional computers. In fact, phablet sales outpaced laptop and tablet sales in Asia- Pacific from the first quarter of 2013.

Tablets and phablets are predicted to make up a total of 50 percent of all shipments. Apple's iPad line up will account for 30 percent of tablets shipped, while Android tablets will make up 65 percent of shipments. Microsoft's tablets are expected to be responsible for five percent of total tablet shipments.

I believe that the success of the phablet is not only due to the increased desire for mobility (see point 7 below), but that the prosumers that have bought them have reacted in their droves to responsive approaches to advertising and communications online by device manufacturers and mobile telecoms providers.

4. Apple's popularity will wane

Apple managed to hold the top vendor position in the PC market in 2013 thanks to combined sales of iPads and its desktop and notebook computers. However, the decline in its PC market share is unavoidable when considering its business model. Samsung narrowly took the lead in EMEA this quarter and Apple will lose its leading position to competitors in more markets in the future.

However, Apple is one of the few companies making money from the tablet boom. Premium products attract high value consumers; for Apple, remaining highly profitable and driving revenue from its entire ecosystem is of greater importance than market share statistics.

In August, non-iOS tablets had surpassed the iPad in global market share for the first time, with Apple responsible for 42.7 percent of tablet shipments while tablets from Samsung, Amazon, Acer, Lenovo, and others combined to make up 57.3 percent of shipments.

I predict that Apple's share of the tablet and phablet market will shrink further in 2014, under the continued onslaught of less expensive Android and Windows tablets.

Although Apple's days of hardware dominance are fading, its iTunes Radio product launching in Australia next year could quickly make them a major player in the streaming content space currently dominated by Spotify and Pandora.

5. The shift from single channel to multi-channel media experiences

It is tempting to see the recent changes in the way people consume content as a simple jump from analogue to digital; in reality we are actually seeing is more of a shift from single channel to multi-channel media experiences.

In 2014 this will continue to pose significant challenges for brands that want to engage their audiences across a variety of analogue and digital touch points and also the opportunity to create unique trans-media brand stories that create true differentiation.

6. The 'make or break' year for Australian retailers

With the imminent arrival of foreign fashion retailers to our shores including Muji, Uniqlo, ASOS, H&M, River Island, Next, Forever 21, Banana Republic and Miss Selfridge, I believe 2014 could be a make or break year for many Australian retail stores. There has already been an undeniable impact to both bricks and clicks retail, as a result of increased competition from highly successful European stores like Zara and Top Shop.

The huge success of overseas online retailers like Marks and Spencer, Next and ASOS targeting the wealthy Australian market is causing local retailers to rethink their own strategies due to falling trade. It has been reported that ASOS alone imports two full 747's worth of product to Australia every week.

However, the proposed GST on online shopping from overseas retailers for purchases under $1000 could have a major impact on where people choose to shop if this change goes through in 2014.

Australian retailers really need to pull out all stops to survive – and that's not just in terms of their technology infrastructure, customer service and whether they offer free shipping and returns, but also in terms of their advertising investment that will help to ensure their brand stays top of mind amongst all of the noise and hype from the new entrants.

7. The rise of mobile consumers

I think the main trend will be the continued shift to people accessing the internet on their smartphones and tablets. For most brands this will provide opportunities for brand building through content that is discovered and consumed on social media platforms. This will mean designing content that is consumed within these apps, rather than trying to push people to branded destinations.

As connectivity, device and app design continue to improve, we'll see a shift towards more video content and we'll see more investment in the quality of content coming from brands, effective distribution of it and the measurement of its impact.

Getting the measurement right and responding to it quickly and in a relevant way will be the key to success for brands.

8. The increasing role of content for brand marketing

Real-time marketing, mobile and TV-length online films will be some of the trends that dominate brand marketing in 2014.

We have the technological capability now to respond to the cultural context as and when it is happening. We will see much more topical content that engages with consumers daily in a relevant way. The benefit for consumers is fresh and topical in content and conversation.

9. Social-native advertising will really take off

The time spent on social media platforms has officially tipped from the desktop to mobile in 2013. This really does have huge implications for social advertising. Native advertising, in which posts are integrated into the social media stream, is already performing well on the desktop and we expect it to grow sharply in 2014 in mobile too.

Brands need to be aware of what relevance they have in social, beyond advertising messages, so they can be involved in the conversation in a meaningful way.

10. Increased interconnectivity

The biggest trend we are seeing currently in the media industry can be best characterised as ever greater interconnection and looking ahead into 2014 we believe that navigating that world and building the right connections will be the key to a brand’s success.

Whether it’s consumers becoming more connected as their lives are lived through an increasing variety of devices and platforms, media becoming more connected as it evolves its planning processes to adapt to this new reality, or the economics of the industry becoming more connected, with new kinds of content partnerships being formed between brands, agencies, media owners and rights owners.

Mark Pejic


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