2017's five biggest marketing challenges and opportunitiesby
2016 represented an exciting leap into new pastures for the marketing community. Augmented reality broke into the mainstream thanks to the extraordinary success of Pokémon Go!, opening marketing minds to the possibilities of AR and virtual reality. At the same time, artificial intelligence also had a break out year thanks largely to chatbots in the service space, but marketers too were able to start capitalising on AI’s maturity, courtesy of its application to the likes of semantic analysis and segmentation.
It wasn’t all sunshine and lollipops, of course. Ad blocking became more of a problem for the industry, while, in Europe, there was a growing understanding of the implications of the impending General Data Protection Regulation. But all in all, an exciting – if challenging – year to be a marketer.
Can 2017 top it? What fresh strategies, technologies and platforms will emerge in the coming 12 months? MyCustomer spoke with a number of experts to predict where the biggest opportunities and challenges may lie.
Two of the biggest challenges facing today’s marketers are ad blocking, and wrestling with vast and varied streams of customer data. With the potential to tackle both of these problems, and more, it is little wonder that machine learning could be a saviour for modern marketers.
“The new Zeitgeist is all about machine learning - using intelligent machines to segment audiences and then make predictions for their future purchasing behaviours. It’s about taking data from the past and applying it to the present to predict the future,” says David Bowen, head of product at Episerver.
“While talk of artificial intelligence (AI) and “future forecasting” may sound closer to science fiction than fact, in reality many of the biggest brands are already jumping on this trend, investing in AI and the latest predictive analytics software to get their foot in the door early on.
“The ultimate aim of marketers is to anticipate behaviour and customer intent, but there’s also great value in automating the delivery of better customer experiences and highly individualised interactions online. That is the direction that today’s marketers need to go in, and it’s a process that we expect to see a lot more of in 2017.”
Doug Conely, chief strategy officer at Exponential, agrees that machine learning will further establish itself in the coming 12 months. But he emphasizes its applications in the advertising arena. He notes: “Machine learning will continue to disrupt current ways agencies and brands plan and buy online display and video ads. Whilst, the industry needs to further educate itself to embrace this technology, I believe we will see more and more marketers utilising machine learning and automation to plan and optimise their campaigns.”
“In 2017, we can expect machine learning to be a tool used to combat a number of key industry challenges, such as complex planning and buying processes, ad blocking, overexposure to re-targeting and will enable the next evolution of programmatic.”
However, Daniel Telling, managing partner at Bench, sounds a word of warning about machine learning. He explains: “The next few years will see organisations start to get to grips with what cognitive computing can offer. While there is much fascination with the potential for cognitive, there is still an element of nervousness from many organisations, especially when it comes to A.I. This is not unfounded, as A.I. has not yet reached the point where it can run without careful human monitoring.
In 2017, we can expect machine learning to be a tool used to combat a number of key industry challenges.
“There are still fundamentals to be worked out to achieve true machine learning where the machine is fully responding and recalculating on changing inputs without any programming from a human party. More fundamentally, though, businesses need to look beyond a ‘gimmick-led’ application of these technologies and instead investigate how it can be applied to actively improve personalised customer experience.”
Nonetheless, he too expects it to be a big trend in the coming year. “The concept of cognitive computing and AI has been much discussed recently, in the same way that real-time marketing was a few years ago. While there have been a limited amount of practical applications of this technology to date, there is no doubt that the concept is set to dominate the landscape for some time. All the big players such as Adobe, Salesforce and IBM are vying to take the lead here, with IBM’s Watson in particular making waves in the industry.”
Voice as a channel
Audio voice control is an increasingly mainstream gateway to digital applications. Apple (Siri), Microsoft (Cortana), Google (Home) and Amazon (Alexa) are spearheading the technology, while the likes of Facebook are already working on their own offerings.
“The adoption rate of this technology has been rapid because it offers what customers want – a simple and easy user experience,” notes Clint Poole, CMO at Lionbridge.
And from the marketers’ point of view, the technology is interesting because it creates a frictionless customer experience, removing all barriers to activity. Poole continues: “If a customer can easily make purchases directly through voice command, they are more likely to purchase more products at greater frequency and avoid the distractions that prevent purchase completion on traditional digital channels.”
But it also raises a number of questions for marketers.
“It’s hard to imagine that voice recognition isn’t going to have a big effect on marketing. I have Amazon Echo and the new Dash button, and the impact on my shopping habits is fairly profound,” says Martin Harrison, head of strategy at Huge.
“Many brands never got to grips with a search page that had ten results - how will they get to grips with a machine that gives a single answer? It’s important because the opportunity for brand choice and switching reduces. If I’m scanning my empty tub of butter to order again, other butter brands are going to have a very hard time getting in my basket.”
It’s hard to imagine that voice recognition isn’t going to have a big effect on marketing.
John Watton, EMEA marketing director at Adobe, agrees that there are some major questions that need answering. “Without a traditional screen, how will the major search players respond to marketers and advertisers who have historically relied on ads and clicks for their promotional tactics? It will be fascinating to see how this new channel can be used for effective marketing.”
However, at a technical level there are still obstacles to overcome, if the technology is to become truly mainstream. As Poole notes: “The challenge in 2017 will be getting the technology to work flawlessly. The current systems work best with direct requests and often fail with highly contextual language. However, with major tech players investing a great deal in research and development, we’ll continue to see vast improvements and breakthroughs in the technology over the next 12 months. We predict this will be done on a global stage as consumers’ preferences for using voice interaction crosses most cultures.”
Efforts to deliver truly personalised marketing have tended to come up short. In a multichannel, multi-device world, companies are failing to create a single view of the individual across every channel or a complete data set of behavioural data that can be fed into decision engines and truly personalise the consumer experience.
However, the need for marketers to target consumers with precision is leading them to explore people-based marketing. This strategic marketing discipline leverages authenticated, first-party data about customers to serve them targeted communications on an individual level, rather than targeting a cookie or device ID.
And in a study of 358 senior North American brand marketers and agency media buyers by Econsultancy last year, 92% of media buyers said their clients will be accelerating their people-based media buys.
“Targeting and personalisation will still be at the top of the agenda for brands as consumers continually expect more. To create lasting, engaging relationships with consumers, brands need to increase the rate of identification,” says Nick Keating, director EMEA at BounceX.
“The crux of creating this high level of engagement is delivering the “right message to the right person at the right place and time”, and this means not only understanding who your customers are, but what they want, when they want it, and how they want it. People-based marketing, the approach to marketing whereby a business identifies and targets single individuals as they engage across every device, every browser and every channel both on and off the website, will mark a significant shift in the way marketers engage with visitors online during 2017.
“Cross device identification combined with behavioural profiling will enable marketers to target medium and high intent visitors to deliver incremental revenue and a substantial return on ad spend (ROAS).”
If 2016 represented the year that European marketers woke up to the implications of the EU’s General Data Protection Regulation (GDPR), 2017 will be the year that the hard work towards compliance begins. With the regulation coming into effect in May 2018, there is much work to be done.
“Over the coming year, one of the biggest challenges facing marketers will be the implications of the new GDPR,” says Rachel Aldighieri, MD at the DMA. “Those not preparing for the new legislation – in whatever exact form it takes – are risking the very lifeblood of their future business. As well as protecting consumers, the marketers that take action now will be better placed to take advantage of the economic opportunities that digital transformation and big data will offer in the future.”
The year ahead for businesses will be focused on tackling the questions raised by the GDPR.
Lindsay McEwan, VP and managing director EMEA at Tealium, adds: “The year ahead for businesses will be focused on tackling the questions raised by the GDPR ahead of its enforcement in May 2018. Businesses will enter a period of uncertainty and a degree of data lockdown, with some misconstruing the regulation as requiring a total replacement of their technology stack. But this won’t be necessary, and better-informed businesses will realise that they simply need to implement a centralised point of control to coordinate and command their actioning of data wherever it is stored – rather like an air traffic controller.”
While there will be much focus on compliance, smart organisations will realise that the process of GDPR compliance could also be used as a catalyst to change the entire way they approach customer interaction and engagement.
The process of GDPR compliance will also have implications for email marketing – and indeed could lead to a resurgence.
Andrea Wildt, CMO at Campaign Monitor, predicts: “The importance of email will be re-established this year as rule changes, such as new ad formats and the EU’s upcoming General Data Protection Regulation (GDPR) continue to limit the potential of marketing tools, such as programmatic, audience targeting on social media and look-alike display. But while the likes of Google and Facebook continue to acquire and monopolise these different marketing channels, no one “owns” email. Social media, programmatic and display advertising will continue to be a crucial channel for marketers, however the editorial independence that email offers retailers will be more valued this year.”
Keating believes that this resurgence will also be characterised by new email marketing strategies.
“In 2017 I think we will see a step-change transformation in email marketing strategies,” he notes. “As consumers acquire additional devices, cross-device identification becomes more important in creating next-gen customer experiences. In order to truly own their audience, brands will have to strategically capture email addresses at the moment of highest intent to create a compelling ROAS for both paid spend and owned channels. Email marketing is not dead, but the current tactics of unintelligent email capture and uninformed messaging are killing it. A behavioural email strategy will emerge as a critical success factor.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.