Digital Advertising Predictions 2012

To be clear, I’m not doing the Mystic Meg references this year. If she couldn’t see the demise of her paymaster then what hope does she have to see digital advertising’s future?

So, I shall also get all clairvoyance references out of the way right at the start as I look into my crystal ball to read the 2012 cards. Or something like that. Yet I still hear the voices from beyond telling me that, in the UK, digital advertising will continue to grow; by which I mean it will take a larger share of all advertising and generate more money for businesses supported by digital advertising (I’ll find some numbers to prove that in a year from now). Given the state of many European economies, I’d be foolish to try to predict where the money will come from but I’d wager it’ll mainly be a shuffling of existing advertising monies rather than new cash.

Perhaps my references should be topical and sporting this year, with the 2012 games happening right here in London in the summer. Even at the kick-off of the year (see what I did?), they’re calling them the first digital Olympics. While we’re going to see a lift in advertising revenues caused by the impact of the games, the powers-that-be guard any use of the Olympic logos closely and only authorised brands can use it in advertising messages, which, I think, will mean the lift will be smaller than some might expect.

I’d be interested to see how the brands not partnering with the games get their messages out in 2012.

I am surprised not to see any of the big European mobile telephone brands on the 2012 official partner list. While we’ve all long-since given up on calling this – or any year – the year of mobile advertising, it could be the year mobile payments come of age (that is, of course, if anybody can get their phone to work in London during the months of the games). Paying for things, using your phone as the debit card, certainly appeals to the gadget geek in me. And, I really think that the introduction of mobile payments will have a positive knock-on effect on mobile advertising.

I’m also pretty confident that we’re going to see more and more “buzz” around television-companion apps. These apps primarily run on mobile-type devices but enhance, in some way, your big-screen viewing. The “enhancement” currently appears to mainly allow you to interact with others who are watching the same programme via Twitter or Facebook, or play along with a version of the game-show you are watching. This additional screen provides both a whole new place for advertisers and the prospect of some interesting battles for control of ad-messages there. How anybody will determine which ad you saw, the one on the television or the one on the app, will be an interesting technical and data challenge this year.

And that segues nicely into a prediction that picks up on a tipping point I missed from last year’s list (but at least acknowledged in my Report Card). We know that non-broadcast video, the kind that doesn’t make it on to a television via a traditional broadcaster, commands a large viewership and I think more and more brands, who are getting increasingly comfortable in social media environments, will spend money there. There’s a chance the wall-to-wall sporting coverage this summer will drive people to YouTube and the like. Of course, that’s also a big opportunity for video-on-demand services with the rights to more traditional programming. A bumper year for those is also on the cards (sorry, I had to get one more reference in) with increased ad loads (that’s a term I learnt in 2011 to mean “more ads”) and possibly the wider adoption of ad-selection opportunities, where the user chooses which advertisement to watch, as demonstrated by the Hulu service in America. We’ll see more and more of that here.

Report Card 2011

Almost nobody fails with these “predictions” because – like the best clairvoyant – we can’t predict the big stuff & we’re all looking for the trends which will get a little bigger or smaller. So, even with our ears to the ground, we’re vauge and can hang our hat on almost anything to prove we were right. Let’s face it, if anybody could have predicted the rise of Facebook or – insert any shining tech starlet here – we wouldn’t be making lousy predictions on the web, would we?

For a couple of years I have written my predictions for the twelve months ahead in digital advertising. Everybody’s at it and, of course, nobody takes it too seriously. “I’ll predict they’re all wrong”, one of my colleagues amsuingly suggested last week but, of course, it’s him that’s wrong. Almost nobody fails with these “predictions” because – like the best clairvoyant – we can’t predict the big stuff & we’re all looking for the trends which will get a little bigger or smaller. So, even with our ears to the ground, we’re vauge and can hang our hat on almost anything to prove we were right. Let’s face it, if anybody could have predicted the rise of Facebook or – insert any shining tech starlet here – we wouldn’t be making lousy predictions on the web, would we?

While I readily admit to following the pack and, probably, highlighting the trends everybody else is seeing, I do always start by reviewing last year’s “predictions” so see how far off reality my senses were. So, albeit a few weeks into the new year, I’m starting with a review of my 2011 predictions.

I began with “increased data usage in advertising targeting”. Of course this is probably impossible to prove either way. Publishers are certainly more confident in their data conversations but who knows if it’s really being used? Given Amazon registered a patent suggesting an ability to understand more about you based on your choice of wrapping paper I think we can safely say we have not come to the end of this trend. As for anybody falling foul of the data comissioners, well Facebook seemed to do the opposite and get a good grade from Europe. Not a bad result on that one but nothing amazingly forseen.

Last year I called my second prediction “The Cloak Of Transparency” and I think this is one that didn’t (but should have) come true. Being more accessible with explanations of data usage can only be a good thing. I am, however, releived that we are not bombarded with opt-in/out boxes at every online interaction. My prediction about this was off but somebody will meet the need soon, I’m certain. My favourite article on the subject in 2011 was by Kevin Curtin who encouraged somebody (maybe, everbybody) to sell his data. As for my point about data validation services, did I miss any?

Did digital advertising grow in 2011? I think we really need to wait a while to get the numbers in, don’t you? But if Hearst Digital can report that their “U.S. digital media businesses were solidly profitable for the first time” [source] I think I am onto a winner with that one. Since 2000 digital advertising has “has leapfrogged every traditional advertising vehicle except television” suggested The Chicago Tribune, which must be a good sign. Back in October, the IAB reported UK internet advertising expenditure growing 13.5% to £2.256 billion in the first half of 2011. The cards are looking good for that one. And take a look at some of the excellent creative you may have missed in 2011. That one came true and, in an uncertain economy, I’ll happily take credit for being right on that.

Also back in October, an Econsultancy/Rubicon Project report suggested 44% of publishers were then selling their online display inventory via real-time bidding (handy if you’re in RTB, huh?). I’m using RTB as a proxy for the traded environment here, as I can’t find any stats talking more generally about trading. Without a doubt, there were even more ways to sell inventory on offer to publishers last year and, therefore, businesses need to understand the trading environment better. With 30 billion UK RTB-traded impressions seen during last year’s European RTB Insight Report, somebody ought to be making sure the money’s right. Of course, publisher’s might want to put analysts on managing their direct sold campaigns, which was a suggestion repeated a number of times in 2011.

But where was the exodus from the City to digital that I suggested might happen? Perhaps that prediction failed because the City bonus culture didn’t.

My final prediction last year was about advertising and social media. How could I fail with this one? Twitter claims 60 billion tweets in 2011 and the most re-tweeted was from a commercial organisation: the Wendy’s hambuger brand. There’s a long way to go here but Twitter did introduce an advertising play in 2011 and it will only grow in 2012. Groupon, the couponing site that IPO’d (can I say it like that?) last year, earned an average return of 6,352% for private investors and generated top line growth of 700% in the nine months ending Sept 30 2011 (year over year) [source]: impressive sounding numbers, if nothing else. So, I think my suggestions that coupon sites would still be strong came true. While new Daily Deal sites came – and some disappeared – in 2011, there is more to come from this sector I’d wager. Last year I didn’t say much about video; I think it’s a given that it’s now part of the online/digital mix. But online video continues to grow as a viable advertising medium, and not just with long form content. This year charlieissocoollike became the first UK channel to reach one million subscribers which suggests a continually growing audience for well-produced, non-broadcast video content. YouTube counts as social media, right? Oh good. Tick, then.

Of course you can never go wrong saying that there will be a “raft of technology announcements” in the coming year, I don’t think that was wrong. I may even use that again for my 2012 predictions which will be with you soon enough.

So, there we go. I think I idnetified the trends well enough and, while these predictions aren’t going to make anybody rich, they weren’t awful.

Let’s see what the crystal ball thinks we’ll do in 2012.