US Insights

3 predictions for digital advertising

Elizabeth Wilner

US Editor

Digital 01.14.2016 / 11:40

Four screens

Millward Brown sees new approaches to mobile and online video but not much reason for linear TV to fear Connected TV

Successful marketing is all about delivering the right content to the right person in the right context. In envisioning what successful marketing looks like in 2016, Millward Brown focuses on the growing importance for brands to manage context and content. Marketers who adopt planning approaches that recognize media channels as the best way to distribute content, as opposed to a device or a technology, will see the most success in 2016.

While the evolution of new platforms and technologies presents brands with many opportunities, the adoption of these brings a responsibility for advertisers, ad agencies and media owners to ensure brand-building will thrive. Overall, Millward Brown sees declining receptivity to advertising and risk for brands whose digital content is not well executed. More marketers will spend higher proportions of their advertising media budgets on mobile, with mobile video being one of the main growth drivers. But, the performance of mobile advertising to date has varied widely and many brands are making big mistakes with execution. Here are three predictions for the new year in digital advertising:

Smart brands will rethink how to create effective mobile ads. The key challenges for brands developing mobile advertising are 1) overcoming low consumer receptivity, and 2) addressing consumers in a way that will be well-received and is relevant to the brand. If brands want to make a meaningful impact on their audiences, it will be critical for them to consider all mobile advertising plans early in the creative development process. Given the amount of time people now spend on mobile devices, the opportunity for brands is massive. But it's important for marketers to rethink their mobile advertising and avoid the common mistakes that will have a negative impact on their brand.

Connected TV won't kill linear TV advertising in 2016. Connected TV (or Smart TV) is expected to take over the television viewing experience, bringing profound changes to the way people consume content and advertising. Connected TV opens the door for more on-demand content, better targeting (through addressable TV advertising), and ad-free platforms. But as viewing behaviors shift, will advertising dollars follow? Will this mean an inevitable decline in the quality of advertising-subsidized content on linear (live) TV, and subsequently a greater loss of viewers?

Addressable TV advertising will reduce ad waste by delivering ads only to the most relevant households. It will also offer smaller local brands the opportunity to use TV to advertise. Some platforms will offer an ad-free service and rely solely on revenue from downloads and subscriptions. Others will continue to experiment with models that offer a balance of advertising and subscriptions.

Millward Brown predicts significant barriers will make these scenarios above less likely. Until recently, traditional TV advertising hasn't had to compete with digital ad dollars. And, there are still plenty of issues around lack of measurement and the limited inventory available from platform providers.

Precision targeting is another challenge for marketers to overcome because it exacerbates the increasing annoyance heard from consumers who feel like they're being stalked by advertisers. Even though Connected TV provides more choice, viewers will still gravitate to their favorite content curators, which will certainly include linear TV.

Millward Brown does not see Connected TV posing a threat to traditional advertising models today or this year. But 2016 will be a turning point in video content viewing that will represent real implications for the future of TV advertising.

Brands waste billions by failing to adapt video creative across formats. Online video advertising will be the fastest growing ad format in 2016, driven by the increase in video consumption on mobile devices. Millward Brown research shows that online video is a cost-efficient way to extend reach and effectiveness beyond TV, and media agency optimizers often recommend increasing online video spends.

The majority of online video traffic in 2016 will be mobile - triggering a transformation of the video advertising formats being used, and the business models behind them. Skippable and reward-based formats will also flourish over the next year. According to Pierre Chappaz, CEO of online video advertising platform Teads, "Ad blockers are sending a clear message; users can't stand formats which block navigation any more. People hate interstitials and non-skippable pre-rolls."

This shift from desktop to mobile comes at a time when advertisers, already spoiled by format choice, have also been given the power to choose how they want to pay for media. Today's marketer needs to decide whether to buy on the basis of cost per impression (CPM), just after the video starts playing; cost per view (CPV), after approximately 10 seconds of viewing, or by cost per completed view (CPCV), when the full ad or at least 30 seconds has played.

Making this new matrix of payment options and formats work requires brands to align their creative assets appropriately. Too many online videos are still repurposed TV spots that have not necessarily been tested for online readiness. Within the online space, the need to generate intrigue, skip resistance and branded impact in the first 2, 5 or 10 seconds also presents three very different structural creative challenges.

Unless format and buying decisions are made early on, and built into the creative briefing process, brands will continue to develop video creative that wastes a significant amount of their media budget.

 

Source: Kantar Millward Brown

Editor's Notes

Click here for a full list of Millward Brown's 2016 Digital and Media Predictions. Journalists, to speak with a Millward Brown expert, contact us. Follow us on Twitter for the latest news or sign up to receive our email alerts.

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