The February-March issue of Australia’s leading rag for the marketing industry just declared its’ own demise.
This was followed by its reincarnation as a “beautiful…keepsake”, aiming to redefine the trade publication category. There’s no question it’s well on its way, with some of the best writing, art direction and production values in the industry. But jumping into a browser is a different story – you get functional content, but it still feels like the old ways the print copy is trying to transcend.
It’s a familiar story in media today. The next three years will see seismic shifts across the media-marketing ecosystem and the stakes are high. Australia’s total advertising market will grow at 2.7% a year ending up $1.7bn at 13.2bn in 2017*.
The marginal growth is the least interesting development. Press will decline from 22% market share to 13% over this period and digital will surge to 37% at a compound annual growth rate (CAGR) of close to 10%. The resulting shifts in the media sector will see large scale realignment of value as the supply-side evolves to meet the emerging demands of marketers.
While it’s easy to write-off these movements as ‘digital disruption’ but companies that want to remain competitive need to pay more attention. As we work through some of these themes with our clients, we’ve characterised the drivers of change along five key dimensions:
- A new “always-on” structure for marketing
- Mobile dominance of digital
- Connecting the data dots (to ad. ops.)
- Supply side targeting
- Unit production cost crash
Most marketing departments are structured around campaigns, but a few brave souls area realising that customers no longer live their lives according to a media schedule (if indeed they ever did).
The most sophisticated advertisers are busy developing integrated always-on marketing capabilities that challenge the campaign-based rhythm of the industry.
The days when simple stand-alone display or SEM campaigns were the rule are numbered. Mobile is clearly developing as a significant channel in the mix; and this means personal, location-aware, and inherently social. Context will not be optional.
Digital = Mobile
If digital is growing at 10% compound, mobile search could expand at a rate that drives that number even higher. We’re currently forecasting 85% mobile internet subscriber penetration in 2017 for Australia as the Country moves from a PC-centric internet to a mobile-social centric internet.
This trend is underpinned globally by shipments of smartphones and tablets expected to grow at 16% and 23% CAGR respectively between 2013 and 2017. Q4 2013 marked a global industry tipping point where shipments of Apple ‘computers’ (incl. smartphones & tablets) exceeded Windows PCs.
With devices per person expected to treble at minimum by 2020 the marketing possibilities of wearables, sensors, and other ‘iThings’ have scarcely been imagined.
Doing Stuff with Data (really)
Data is already driving more and more digital marketing decision-making but irrationality is rampant in marketing at large. The clear imperative for marketers is now to use data to illuminate rather than post-rationalise so many will need to acquire capability in dealing with large amounts of unstructured and dirty data on the stream.
Even the type of analytics used are starting to shift. Analysis are shifting from batched operations, reporting by document, to mashing up multiple streaming data sources in real time, driving instantaneous changes through ad. operations.
Advertisers’ ability to target on these data is already outpacing the ability of networks to supply inventory, leading to frustration and a quest for alternatives.
At the same time the speed and granularity of always-on marketing is putting significant pressure on ad. ops. and we expect to see an evolution of publisher capability to support this. Being slow to adapt to the emerging environment means your inventory gets traded at bulk CPMs or worse, ends up as remnant.
Cheaper, Better, Faster Creative
On the creative side, the unit cost of content will need to come down as campaigns are developed for more highly targeted and ephemeral micro-segments.
The reorganisation of the content creation supply chain already being observed in news will play out across marketing communications as the need for a greater volume of more niche targeted messaging emerges.
Recently I attended the Australian MOFILM awards and the quality of some of this content never ceases to amaze. For a hundred thousand dollars, you can get an ad that holds its own during the Superbowl. Some great young filmmakers are using MOFILM to build experience, reputation, and relationship with brands thirsty for content and if companies like 99 Designs are anything to go by, this is happening elsewhere.
And of course, some of the journalistic and editorial talent shed as the Press sector shrinks is finding gainful employment brand side. Another dynamic supporting digital-driven content hunger is dynamic creative including data-driven content generation models from companies like Narrative Science – already established in both marketing and niche media.
These five drivers of change are transforming the industry as we know it. Such is the speed of this movement, businesses only touching on one or two points can’t hope to keep up with the pace of change – only by adopting all of these trends will those in the marketing, advertising and media industries hope to survive.
This article is by Jason Juma-Ross, former Digital Intelligence Lead for PwC.
*PwC, The Australian Entertainment & Media Outlook 2013-2017, 12th Edition
An amended edition of this article was first published in AdAge.