The Top 7 Online Marketing Trends That Will Dominate 2016

forbes.com

The online marketing industry is complex and volatile, but an exciting one for anybody who stays up on modern trends. Each year, new hardware, new software, new companies, and new user preferences dictate a host of sweeping changes that either get adopted or ignored by the businesses of the world. Early adopters get a leg up on the competition, appealing to new markets or cementing their reputations as industry leaders, while those lagging behind miss out on a key opportunity to retain their positions.

2016 looks to be a great year for online marketing, and I anticipate it shaking up the game with these seven trends:

1. Video ads will start dominating. Video ads are certainly nothing new, with social channels like YouTube dedicated to hosting billions of videos and advertising platforms like Facebook and Bing already offering advertisers video options. 2016 is set to be different because Google is finally getting on board with in-SERP video advertising. It’s a sign that users are becoming more accepting of video ads online, and as that trend continues, expect to see more types of video ads popping up in more unexpected places. With Google’s ownership of YouTube, the possibilities are virtually limitless.

2. App indexing will lead to an explosion of apps. Google has offered app indexing for a while, but as the ranking possibilities for apps become more complex, 2016 will be the year more business owners realize the online visibility advantages of a dedicated app. A mobile-optimized site works wonders for appealing to the mobile crowd, but soon, apps will begin to replace them. Apps can do everything that websites can, except in more intuitive, convenient, accessible ways. We’re still several years away from apps completely replacing websites as a medium, but 2016 will be a pivotal year in app adoption from business owner’s perspectives.

3. Mobile will completely dominate desktop. 2015 was a big year for mobile—not only did Google announce that mobile traffic finally overtook desktop traffic in 10 different countries, it was also the year they released the “Mobilegeddon” algorithm update to phase out sites not optimized for mobile. But apparently, you don’t have to have an optimized desktop site in addition to a mobile version—according to Google, a mobile-only site with no desktop counterpart is perfectly acceptable. This alone won’t be enough to drive down desktop traffic, but it’s clear what side of the fence Google’s on; they’re banking on desktop traffic fading away, meaning the smart money rests on mobile-focused online marketing.

4. Digital assistants will lead to a new kind of optimization. Search engine optimization (SEO) and pay-per-click (PPC) advertising are two highly popular strategies for getting your site seen by thousands of previously unknown visitors. But the rise of digital assistants is going to lead to a new kind of optimization. Digital assistants like Siri and Cortana do utilize traditional search engines, but only when necessary to find information. The key to optimizing in this new format is to make sure your business information is easily accessible to these assistants, rather than trying to funnel people to your site specifically.

5. Virtual reality will emerge. There are dozens of different virtual reality devices set to release in the next few years, some of which are dedicated for specific applications like video games, and others which are available for general use. Oculus Rift, arguably the most hyped VR device, is set to release in the first quarter of 2016. Oculus Rift and other VR devices will introduce an entire new medium of online advertising, with integration to popular social media platforms, video channels, and even forms of direct messaging. There’s always a chance VR could fizzle as a temporary fad, but there are billions of dollars of funding in limbo, ready to bet otherwise.

6. Wearable technology and the Internet of Things (IoT) will pave new ground. While not quite to the level of virtual reality, wearable “smart” devices should start gaining more traction into 2016. 2015 saw the unveiling of the Apple Watch, a first-generation smart watch, but more smart watches and similar wearable devices should start emerging next year. Such devices will change the landscape of local marketing, and will do more to blur the lines between “online” marketing and “real” marketing.

7. Advertising will become more expensive. Competition in the online marketing world has increased dramatically over the course of the past few years. 2016 will see it increase even more. As the basic laws of economics suggest, an increase in demand is often accompanied by an increase in price, so all those new online marketing competitors will drive the prices for online advertising even higher. Realistically, online ads are pretty cheap, but the increases in price may drive some smaller companies out of the landscape.

These seven trends aren’t the only ones that will emerge over the course of the next year, but they will be some of the most significant. There’s no guarantee exactly when or how these trends will manifest, as much of that is driven by consumer adoption, but it’s worth hedging your bets in at least a few of these tent pole technologies and strategies. The earlier you start, the more time you’ll have to adjust and reap the full benefits of your forward-thinking campaign

The Internet of Things and the Customer of One: Welcome to the future of advertising

alphr.com
With sensors, Big Data and machine learning all about to hit our shops, are we taking the next step towards a scary future of retail?

There’s a scene in the 2002 film Minority Report when Tom Cruise’s character walks through a shopping centre and a wall of holographic advertisements address him by name.
In that film, optical recognition technology allows a series of sensors dotted throughout the centre to pin down the specific identity of customers, call on a stored database of information and tailor adverts in real time to appeal to an individual person’s tastes. This is framed in Minority Report as a terrifying intrusion of consumerism into our private lives. It is also surprisingly close to what will happen across many shops over the next few years.

The reality of this Minority Report-style consumerist future was toted at a recent Intel and WPP event I attended. Entitled “Retailing to the Customer of One in the Internet of Things Age”, the Customer of One is advertising material tailored to the individual. If advertisements are traditionally aimed at segments, the Internet of Things promises to narrow this down considerably. Instead of marketing to a vague demographic, adverts will be selected based on the individual characteristics of customers.

Internet of Things and the Customer of OneCreepy associations are something that both advertisers such as WPP and technology companies such as Intel are keenly aware of. In his opening keynote, the CEO of The Store WPP, David Roth, spoke about the way facial recognition, data analytics and machine learning will revolutionise the retail industry over the next decade, but that using these tools without scaring customers is a tricky task.

“The Customer of One is something we’ve all yearned for, but it’s like a Chinese curse,” he told the audience of retail bosses. “You have to be careful what you wish for. We can do these things, but we have to take a tremendous amount of care. It’s going to get easier and easier to seamlessly track the consumer across shops, presenting them context-sensitive messages at the right time, location-based and insight-driven. We are at the cusp of that. […] Data will be doing things on our behalf without us knowing. Spooky? Maybe. Liberating? Maybe. Scary? Maybe. But it’s definitely going to happen.”

During the presentation Roth demonstrated a small camera attached to a cute-looking robot that – like a Debenhams Terminator – was able to identify both his mood and the brands of clothing he was wearing. This information could then be used to display appropriate advertisements on a nearby monitor.

There is undoubtedly a degree of creepiness that goes along with being analysed in this way by a machine but, crucially, the robot eye was not able to identify Roth’s name or personal details. I say “not able” – it most likely could if the programmers linked it to a suitable database. Nevertheless, it was prevented from being able to attach a specific identity to the person being sized up by the software and this, I learned, is key to how WPP and Intel draw the line between what is and isn’t an acceptable use of the technology.

The line between intrusion and assistance

What if the reason Minority Report is unsettling isn’t because of the targeting ads, but because those adverts refer to the main character by name? If a sensor were able to judge certain characteristics of a person, and recommend items accordingly while maintaining a sense of anonymity, would that be an invasion of privacy? Or would that be a digital extension of what shop assistants have been doing for decades?

To get a better idea of how techniques like these would work, I spoke to Joe Jensen, general manager for Intel’s Retail Solutions Division. Jensen told me in more detail about Intel’s vision for how the IoT would function in a retail environment.

“Say I have a store in a neighbourhood and with sensors I’ve observed that when it’s early afternoon, and there’s a female shopper, and she’s moving quickly, she tends to do this,” he explained. “You don’t have to know anything about that shopper, except that she’s female and moving quickly and, historically, in this store, in this time window, someone in that situation tends to, say, pick up milk.”

(Above: Samsung Display digital viewing platform combines Intel Real Sense technology with OLED technology)

As Jensen described it, an array of interconnected devices in any given shop, using everything from facial recognition to motion sensors, could form a profile of a consumer – not based on private information, but on details picked up about that customer during their visit to the shop: their sex, size, speed of movement, and so on. “It’s not so much that you need to know ‘Elaine’, it’s that you need to know that this shopper has these characteristics and, in the past, that when those characteristics happen, this is what a person tends to do,” said Jenson. “It might not be right – maybe you guess by accident that I’m a girl and I want to see a prom dress – but I’m not going to be insulted. It’s about making the hit rate of content better, not necessarily perfect.”

Monitoring customers and building predictive models is a different kettle of fish to delving into specific customer accounts, but it is still surveillance. The big question is whether or not this is an intrusion. Is monitoring the physical characteristics of shoppers and using this as a basis to select advertisements an unwarranted invasion of personal space, or is it a useful way of streamlining the shopping experience? Jensen argues that this method retains anonymity but whichever way you look at it, convincing customers not to smash profiling sensors with hammers hinges on an enormous amount of trust.

MAC address tracking

Jensen told me that trust is indeed a very important part of the relationship between customer, consumer, and technology. “Whenever we work with brands and retailers we always emphasise that, at some point, trust will be broken,” he said. “And with social media, a company will die. Let me give you an example: Nordstrom [a US retailer] was doing an experiment in one store, where they were looking at the ISN number – MAC address – on your phone. Some blogger said Nordstrom implemented tracking and there was a huge controversy.”

Nordstrom did indeed use the Wi-Fi signals on its customer’s smartphones to track movement in the shop. Nordstrom’s defence was that they were only doing what online outlets like Amazon already do, but people reacted negatively all the same. It’s easy enough to see why. There’s a vast difference between a customer’s relation to an online shop and a physical shop, not to mention having your physical presence invisibly tracked with a device many associate with private communication.

(Above: Smart bins installed in the City of London were removed in 2013 after it was revealed that they had been collecting MAC addresses)

Nordstrom may have bore the brunt, but it isn’t the only retailer delving into these tactics. Jensen told me that any time you log onto free Wi-Fi you are likely to have your MAC address tracked. “A huge number of retailers are using MAC address tracking. In Asia, we had a customer tell us that in their digital science network in Beijing, they can track every single cell phone in the whole of Beijing. It’s a hugely prevalent thing. I’m personally not a fan of it. I think it crosses a privacy line. […] We don’t want to use the word tracking, because we’re not actually trying to track people. We’re trying to observe behaviours.”

The Internet of Things and the shop of the future

WPP and Intel talk about bringing smart devices into the retail environment as less of a far-off sounding possibility and more of an impending inevitability. The argument isn’t whether or not customer monitoring will come to shops, but rather where you draw the line of conduct when it gets here.

We adapt to things very quickly, and privacy is by no means a solid concept. How long will it take for us to get used to being watched by sensors as we shop? From the outset, monitoring and targeted advertisements sound like a creepy infringement of our personal space, but with the promise of a tailored shopping environment, will consumers fight against this new technology or embrace it?

For all the rhetoric about introducing sensors as a means to improve our shopping experience, there is ultimately one reason for these technologies to be introduced: to make advertisers and shops money. That, in itself, is nothing new. They are businesses after all. But when the line between a clever use of data and intrusive tracking is less to do with the capabilities of the technology, and more to do with the way it’s used, that future is something we as citizens need to pay attention to.  

What The Music Business Could Learn From The Internet Of Things

forbes.com

As I drove from the North Shore of Boston down to Cambridge to speak at the fantastic MIT Hacking Arts event, I worried about trying to clearly articulate what I knew I was going to be asked about: What’s the future of the music business?

Generally, I avoid music “business” panels, because they’re typically echo chambers with the same people espousing basic variants on the same themes:

•Streaming services don’t pay enough to artists

•At least streaming services are getting some people to pay for music

•Over time as streaming services scale there will be more money for artists

•There is now more music being consumed than ever before

•Artists need to be more entrepreneurial

•Super fans are important

•Music is a loss-leader for other revenue drivers

•Spotify is bad

•Spotify is good
................................

I genuinely feel bad/guilty when I look out from a panel into a crowd of artists who have paid money/taken time away from something else to attend events, and are being fed “information” such as the above.

I therefore, try very hard NOT to just spout the same tired bromides that everyone has already heard, and also to call out those people who have the misfortune of being on a panel with me when they do. This perhaps explains why I don’t get invited to speak on too many panels (though, I do my share – at this point, people at least know what they’re going to get if they do invite me).

In any case, given that this panel was hosted by MIT, and that many of my students were involved in the event, I gladly signed on, and, knowing that the above list of “topics” would inevitably be discussed (because the above list of topics are always the list of topics discussed), determined that I would do my very best to not let the organizers or attendees down by contributing to the noise.

As anyone who has been reading my columns knows, my dominant focus with respect to the music industry has centered on blockchain tech (I am increasingly weaving in pieces on how music heals, and profiling entrepreneurs in this space).

I am genuinely excited about how blockchain tech (or a decentralized registry along with smart contracts, generally) could radically transform the music industry in a positive fashion.

The problem with this is that, as the brilliant D.A. Wallach said to me in a recent conversation, blockchain is an “interesting technical solution to a pretty complex problem…and it sort of tickles your brain because it’s hard to understand.”

I’m an entrepreneur and an academic, and so I LOVE complex problems that tickle my brain. My challenge – as both entrepreneur and academic – is to help people who have neither the direct interest or time to understand these complexities.

Certainly, I’ve not only spilled a lot of words trying to explain blockchain tech, but have also recruited some of the smartest and most creative people on the planet to help me do so. Beyond, the above-mentioned, Mr. Wallach, the list (to date) includes:

Zoe Keating

Imogen Heap

Ryan Leslie

Andy Weissman

Bill Tai

Jesse Von Doom

The founders of Colu

Dominantly because of the contributions of those listed above, I feel I’ve had some success in bringing a greater level of awareness of blockchain tech to the artistic community, but there’s still a LONG way to go.

It struck me, as I pulled into the MIT campus, that what we really need is some form of comparison or heuristic; something that people already understand that can help tame the inherent complexities and strangeness of blockchain tech.

Fundamental to how blockchain tech can add value to the music industry is the idea that an artist can define how and at what cost (if any) their works can be utilized.

Once quantified, those who desire to use/buy/stream musical works can search for the works they desire, and which are offered with terms/rules (price, types of usage, etc) that fit their needs/budget.

Smart contracts embedded in the works themselves will allow for those who are offering their works and those who desire to use the works to connect without any intermediaries, and crypto currencies will allow for micro transactions to occur without the prohibitive transactions costs related to fiat currency.

As such, vast numbers of relationships between those making music and those consuming/utilizing music will emerge, and – because of the distributed nature of the blockchain – there will be no need for intermediaries such as ASCAP, BMI, Harry Fox , SoundExchange, et al.

Where people seem to get bogged down with this approach is with idea that these types of matches – between those who are offering music, and those who want to utilize music – can efficiently take place without some type of centralized service.

Sara Torti, senior product manager of apps for Nest. (AP Photo/Eric Risberg)

To see how this is not only possible, but actually occurring, it is helpful to look to the Internet of Things (IoT).

While – as with so much tech – the promise of the IoT has not yet lived up to the reality (uhm, Apple AAPL -1.87%, will you ever release HomeKit in any meaningful way?), we increasingly live in a world of connected devices that “talk” and connect with each other at great scale and with little-to-no human (or institutional) intervention.

When I returned home from the panel, for instance, an app on my phone, using geo-fencing, notified my Nest thermostat to turn up the AC. When I walked in, I said, “Alexa, turn on the lights,” and my Amazon Echo device “talked” to my Hue lightbulbs, which illuminated my living room. I then said, “Alexa, play Paul Desmond,” and it “talked” to Pandora , and started streaming my Paul Desmond station.

In a sense, I was sending out requests – not only for music, but for lighting and temperature – and machines translated these requests into the requisite languages necessary for those machines set up to service these requests could understand.

This is really what the IoT is: requests from users being translated into a language that the machines providing the services can understand in order to fulfill the requests.

Smart contracts between those creating music and those using music would work in a similar way.

(Of course, this is analogous to/the same thing as API calls, but I’ve found that using APIs as an example to explain smart contracts across the blockchain not to be effective.)

Certainly, this is not a perfect analogy, but it hopefully provide a basis of comparison between something people seem to understand (Internet of Things), and something people seem to be struggling to grasp (blockchain tech/smart contracts, and its applicability to the music industry).

Those listening to my panel – at least those who I hadn’t offended with my surliness – seemed to think so.

The secret to successful ad operations

imediaconnection.com

Away from the parties and the two-hour lunches that have made advertising famous, one will find utilitarian ad operations, the segment of the industry which ensures that ad campaigns run and achieve their targets.

Though ad operations might not have the same appeal as the rest of the ad industry, the work managed by ad operations is necessary to guarantee that the ad campaigns run and achieve their targets.

In pre-internet advertising, ad operations, often called traffic, ensured that the media had all of the materials from their advertisers/agency partners and all deadlines were met.

Today, with so many moving parts in digital marketing, from multiple creative executions targeted according to region, language, market segments, interest, etc., coupled with immense amounts of data -- advertiser KPI/post-install event (for apps) data, demographic data, behavioral data, client CRM data, traffic data, and more -- ad operations needs to continuously monitor campaigns.

Once the campaign has been planned and the insertion orders are signed, ad operations takes over, ensuring that the creative elements are ready for the campaign to launch, which can be anywhere from 30 minutes to 24 hours after the insertion order was signed.

So your campaign is live. Here's what marketers and agencies can do to enable ad operations to maximize the performance of their digital marketing campaign:

Share relevant KPIs/post-install events (for app campaigns) with your partners
For competitive reasons, many marketers are reluctant to share sensitive client data, even with their agency partners. I understand this concern because your agency account executive or media planner might be working with your competitor in six months. However, the only way your digital/mobile campaigns can be optimized is against your own business critical data. So if a marketer knows that a user who accesses their app three times per week or more is the customer with the greatest Lifetime Value, then this information must be shared, so that the campaign can be optimized to find prospective customers who will visit your app three or more times per week. Without this information, it's like expecting someone to pass a test while hiding the book, notes, and study materials. In this day and age, with marketers all investing in business intelligence and competitive analysis, your competitors probably already know which post-install events can predict a profitable customer for your (and their) app.

Provide retention reports on a frequent basis
When running a mobile marketing or user acquisition campaign, the only two data elements your partner running the campaign will have are clicks and downloads/installs. While those data points are important, they won't provide a complete picture. According to research from Compuware, most downloaded apps are only used once after they're downloaded. Therefore, it's important to provide those who are running your app or digital marketing campaigns with usage data found in retention reports -- like time spent engaging with the app and the number of times users accessed your app -- so that your mobile and digital campaigns can be optimized to generate more users who will use your app and become profitable customers.

In addition, campaigns will generate the best ROI when retention reports are provided on a regular basis -- no less frequently than once a week -- so that campaigns can be continuously optimized. For example, one source of traffic -- let's call it Source One -- might be generating a significant amount of clicks and a high click-to-download conversion, making that publisher look optimal for your campaign. But the retention report might show that 98 percent of those users never access your app after the initial installation. Another source of traffic -- let's call it Source Two -- might be generating a much lower click and click-to-download conversion, but 40 percent of those users have accessed your app after the initial installation, and 10 percent are accessing your app three or more times per week. According to the data available to the partner running your campaign, Source One appears to be a much better source of traffic than Source Two. Only with access to the retention report can one see that Source Two is delivering more profitable users and a better ROI based on analysis of post-install events found in the retention report.

I understand the hesitation to share sensitive marketer data with your partners, particularly when you know that they're also working with your competitors. But the likelihood that your data will be unique (to your competitor) is pretty small in an era where competitive intelligence is inexpensive to obtain and relatively easy to do.

For the last few years, data has become the new black in digital marketing. In this sense, ad operations is no different. To ensure that your campaigns are running as effectively as they can, it's necessary to provide your vendor ad operations team with as much feedback on campaign performance as quickly as possible. In the absence of campaign performance data, ad operations can only optimize campaigns based on clicks, and as we've learned over the last decade, clicks aren't necessarily the best performance metric.

In the same way that your employees and co-workers need feedback in order to improve team performance, your vendor ad operations team needs feedback in the form of campaign performance metrics to optimize campaign performance.