The following is a guest contributed post by Ben Tregoe, SVP Business Development at Nanigans
Expect 2018 to be a year of reckoning. In our experience, marketers are increasingly seizing the reins and taking control. As they do, they’re asking hard questions of themselves and their vendors and many times the answers aren’t pretty.
There will be four big trends in 2018 as a result of marketers taking control.
Marketers will demand transparency
The industry has been on notice for some time about fraud within the ad tech sector. A 2016 ANA study found that fraud cost the industry some $7 billion a year. Thanks to similar studies, marketers are aware that some of the traffic they’re paying for comes from bots.
But the rot goes deeper. The ad tech industry is built on obfuscation and manipulative business models that put the vendors ultimately at odds with the marketer. Marketers have long been aware that their ad tech partners are hiding data from them and overcharging. But in 2017, Procter & Gamble chief brand officer Marc Pritchard drew a line in the sand by announcing that P&G would pull its considerable ad dollars if it didn’t see more transparency on data regarding ad viewability, reach and frequency. Pritchard’s words weren’t idle threats. The company cut its digital ad budget by 41% between January and May 2017.
In 2018, marketers will continue demanding transparent pricing and business models that align with their interests. No amount of yacht parties in Cannes can overcome this.
Self-serve platforms will spread
Facebook and Google’s success with their self-service ad platforms hasn’t gone unnoticed. In 2017, Snapchat also launched a self-serve platform, as did Quora. They join the ranks of Pinterest, Yahoo Gemini, Amazon and Twitter. Judging by the outreach I get from large publishers considering this route, this trend will continue in the coming year.
One great benefit of self-serve platforms is marketers know exactly how much of their budget is spent on media. But there’s a big drawback as self-serve requires learning a new interface and nuanced ad system. Can a marketing team master all these self-serve channels in-house? Can partner platforms integrate them profitably?
As a result, self-serve offerings from smaller publishers will struggle to survive because not enough advertisers are using them, which will likely lead to a hybrid approach of API plus RTB (real-time bidding) for many of the smaller publishers.
Marketing metrics will go back to basics
The digital promise of perfect knowledge of a campaign and its influence on the customer journey remains unfulfilled. Everyone knows that Google and Facebook (and now Amazon) have little incentive to share data. And proxy metrics have been used effectively by ad tech vendors to overcharge marketers. Last click attribution anyone?
In an industry rife with fraud and unscrupulous vendors, smart advertisers have lost faith in metrics like impressions, click-throughs, app downloads and viewability. Instead, they’re assessing the bottom-line, revenue consequences of their advertising.
Isn’t the whole point of advertising to increase sales? We believe the “incremental lift” measurement will become the standard for the smartest performance advertisers in 2018. With incremental lift, randomized control trials compare the revenue from an exposed group (that sees ads) to a control group (that does not see ads).
This is the acid test of advertising effectiveness. If the ad campaigns are working, the results show up in the marketers’ sales data. Click and view attribution are proxy metrics that marketers have relied on for too long. They shouldn’t be considered “results” but simply features in the machine learning models used to tune results. Sales are the only goal that really matters.
CMOs will face an accountability crisis
In 2018 and beyond, CMOs will increasingly be expected to engineer sales.
As Forrester recently framed it in rather blunt terms, CMOs must “go or grow”. The demand on CMOs to be more data-centric and prove ROI will obviously accelerate. But this trend will go even further. Armed with increasing transparency, business-model aligned vendors, a cleaned up ad supply chain and a focus on incremental revenue, CMO’s and their organizations will be expected to drive revenue and profit.
Overall, 2018 will be an exciting year for marketers and partners on the right side of these trends. If you are in this group, marketers are desperate to find a better way. Let’s move faster, keep up the pressure and work together. We can’t tear down the old rotten system without building a better one to take its place.