2016 was a breathtaking year for the mobile advertising industry and it doesn’t seem to be slowing down anytime soon. Mobile ad spend is up 430% since 2013, and with over 2 billion smartphone users worldwide, it’s becoming clear that the future of digital marketing is mobile. Globally, eMarketer predicts mobile will account for 71% of all digital spend (and 32% of all media) by 2020.
As we move towards the end of the year with holiday campaigns in full swing, and financial planning for the next year underway, it’s time to think about how the industry is going to change in 2017 and how marketers can prepare accordingly. Here are some trends that marketers need to watch out for in 2017:
Mobile Video Capability Set To Increase And Will Be A Real Game Change
Mobile video, set to comprise two-thirds of all mobile traffic and more than half of online ad spend, is a highly valuable investment for advertisers. Besides increasing smartphone usage and adoption of 4G technology, wide distribution, booming consumption, continuous innovation, low entry barriers and standardization of video templates will continue to fuel the growth of mobile video. The mobile video market is expected to reach over $13 billion by 2020, primarily powered by programmatic video, projected to be more than 60% of total digital video spending in the U.S by 2019. Video ad formats such as vertical, 360 degree and virtual reality (VR) videos are the next frontier and will bring an immersive and interactive experience to users on the go. Industries such as travel, fashion and entertainment can guide customers through virtual holiday tours, product trials, movie trailers and encourage transactions. With the development of ad viewability standards and proven results with shorter formats (30 seconds or less), mobile video will become the most effective, efficient and widely accepted medium for advertisers.
Mobile Remarketing As The New CRM
Retaining users and keeping them engaged is more important than driving just app downloads. According to recent studies, after 30 days only 6% of people who installed an app were still using it. This is a big problem in the app ecosystem. Retention rate continues to trend downward each year, going from 42% to 37% this year, while cost of acquiring new users rose 117% year over year.
Two years ago, advertisers were only concerned with acquiring as many new users as possible but when the data started coming in, it showed that 23% of users were abandoning the app after opening it just once. In such a fiercely competitive environment where smartphone users and app downloads continue to increase but aren’t keeping pace with the number of apps being continuously used, a shift in marketing strategy with the target of retaining users is key to success. Mobile remarketing has become a central strategy for businesses today and is emerging as the new age CRM platform to customize value propositions for users across the lifecycle. Through app remarketing, brands can reach out to lapsed and new users to ensure they keep using the apps they downloaded.
Mobile Programmatic Will Become Even More Essential
Programmatic ad spend has been on the rise and shows no signs of letting up. According to eMarketer, mobile will represent nearly 75% of all programmatic ad spending while desktop will account for about 25% by 2017. The use of programmatic ads is not only growing on the video side but is now representing a larger portion of the overall advertising market. With economic uncertainty looming and with recent ad blocking apps, marketers are looking to maximise every opportunity to engage with customers. The combination of features such as rich ad formats, ability to buy digital ad inventory and usage of real time data to improve targeting and measurement, and the opportunity to make on the fly changes to maximise interactions and conversions, will further catapult programmatic to new heights in 2017.
Unlocking The Potential Of Emerging Markets
Emerging markets presents a tremendous opportunity for mobile advertisers. It’s estimated that advertising in emerging markets will be a $300 billion business by 2020. With mobile penetration nearing 80% in the US, and the market becoming crowded, it’s a good idea for brands to look closer at the emerging markets. BRIC (Brazil, Russia, India and China) countries are the largest emerging markets followed by South Korea, Indonesia, Saudi and Mexico.
Of all the emerging markets, China is the most exciting and fastest growing with a huge audience and great purchasing power. According to iresearch, China’s mobile advertising industry has maintained a growth higher than 160% in recent years with advertising revenue expected to exceed 300 billion Yuan ($43.5 billion) in 2018 from about 90 billion Yuan ($13.1 billion) in 2015. With internet usage and smartphone penetration skyrocketing in these emerging economies, advertisers cannot ignore the opportunity and scale these markets provide.
Importance Of Mobile Measurement & Attribution Rises Further
The challenge to provide trusted and effective measurement and attribution of marketing efforts on mobile is raising the demand for accountability from advertisers. While getting customer data from apps is important to drive marketing efficiencies, it’s equally important to understand what is being measured, and how to translate the measurement of marketing activity into something that is clear, focused and actionable. With exploding mobile advertising budgets, there’s a need for data-driven analytics to connect user's mobile behavior and their real world offline actions. As users jump from device to device along the purchase funnel, marketers will be looking to attribute across devices to better understand the buying behavior and plan their media strategy accordingly. From guaranteeing 100% viewability of ads on mobile to enabling seamless cross-device targeting to ascribing impact of campaigns across networks and formats, measurement and attribution will be pivotal to scaling advertiser spend on mobile. At the same time, marketers will want to evaluate campaign performances in a holistic manner across all marketing activities and any malicious reporting or opaque self-attribution could only hamper mobile ad growth.
AR & VR All Set To Gain Momentum
The success of Pokémon GO generated widespread interest in augmented and virtual reality apps and will grow next year and beyond. As AR and VR become widespread and more developers get on board, the apps will expand beyond gaming and move into mainstream sectors ranging from a car test-drive VR experience, to retail shopping via VR enabled transmission and distance learning programs, to real-estate sector.
According to IDC, It’s estimated that the number of virtual reality users will reach 171 million by 2018, as the mobile VR headsets become more accessible and cheaper than computer VR headsets. In terms of revenue, it’s estimated to reach $5.2 billion this year and expected to grow to $162 billion in 2020. These numbers will definitely push brands to create some revolutionary products over the next year and think about investing in virtual reality ads.
With the constant advances in technology, marketing strategies that worked this year may not be as effective in 2017. Marketers should always be on the lookout for the next cutting edge trend and push the boundaries to stay ahead of the competition.
Download our Yearbook for more detailed insights to power-up your marketing strategy in 2017.