On the Blog: The Next Age of Advertising

The Next Age of Advertising
2016 will be game-changing for advertising. New technologies will reshape video, mobile advancements will unlock personal touchpoints and an emphasis on the consumer will drive the industry forward. In The Next Age of Advertising, we've curated the top 3 trends we know will transform the industry, rooted in proprietary research and in-depth conversations from advertising leaders. Gear up for a significant year of transformation. #AOL2016

The Evolution of Sight, Sound & Motion
The age when TV content was controlled by the networks and all eyes were focused on a single screen marked a simpler time. Now advertisers are increasingly shifting TV budgets to digital video and testing large-scale, digital-only campaigns. While the changing content landscape presents significant opportunity for 2016, it also poses new challenges. Consumers experience frustration as a result of the greater lengths they have to go to watch what they want. What used to be a simple scroll through the channel guide has turned into a confusing maze of choice.

Rebundling options will help to simplify the experience for consumers. Examples include universal search on connected TVs and apps that aggregate primetime TV footage and digital content. While it won't replace linear and cable TV in 2016, rebundling will become a viable option for many consumers. Exponential increases in research and development and a greater number of partnerships improve both the technology and the quality of content. As deals between traditional TV networks and digital companies forge ahead, the two will also aggressively compete for greater share of advertisers' video budget.

The merging of TV and digital will happen on the advertiser side as well. Once completely separate corporate silos, they will work more in tandem, especially since they now share a need for effective targeting capabilities. The alignment of data and measurement of digital with TV buying allows advertisers to create more relevant video touchpoints and better drive performance and delivery to optimize across channels. The platforms for planning and buying will also continue to improve in 2016, offering advertisers greater automation, standardization and ease of execution across screens.

  • Worldwide digital video viewers will increase by 18% in 2016. (ZenithOptimedia, July 2015).
  • 96% of Canadian video buyers are shifting dollars from linear TV to digital channels, reallocating an average of 11% from TV budgets. (AOL, Canadian State of the Video Industry, December 2015).
  • 2-in-3 of programmatic video advertisers are using or plan to use programmatic TV in the next 12 months. (AOL, Canadian State of the Video Industry, December 2015).
  • Over half of video buyers cite the opportunity to align TV buying and measurement with digital as the top reason for investing in programmatic TV. (AOL, Canadian State of the Video Industry, December 2015).

Mobilizing the Future
As mobile continues to upend the media landscape, advertisers will need to change their approach to address blind spots between consumers, content and technology in 2016. The path to purchase is no longer linear. The journey from consideration to favorability to purchase intent is now a meandering trail of online and offline consumer touchpoints. Advertisers that can deliver personalization at every step of the way will win.

Data is the key to streamlining media and advertising from screen to screen and beyond. Holistic, reliable data gives advertisers a thorough understanding of their consumer and the ability to create relevant, engaging experiences across every touchpoint. Consistent messaging that is adapted for each individual touchpoint is essential for a seamless consumer experience.

The ability to activate around a mix of verifiable 1st, 2nd and 3rd party data (CRM, clickstream, linear TV, location, offline purchase and more) will become even more important for advertisers in 2016. Those that can effectively sift through the data to deliver the right message, at the right place, at the right time will have a major competitive advantage.

  • An average of three hours per days is spent on smartphone or tablets, with 85% of that time spent in-app. (U.S. Forrester Research, June 2015) .
  • 4.43 billion people worldwide own mobile phones in 2015, with 61% using mobile monthly. In Canada it's 25.7 million people and 64% usage.
  • Canadian video buyers cite cross-device targeting, optimization, in-demo targeting, and attribution and measurement as the largest challenges to mobile video advertising. (AOL, Canadian State of the Video Industry, December 2015).

The Consumer Power Shift
While advertising has steadily shifted to digital, the consumer experience hasn't yet caught up. As new technology emerges in 2016, the key will be to develop ads that aren't intrusive. In the past, the consumer was a captive audience, but with the emergence of ad blockers that's no longer the case. Now consumers are driving digital advertising based on the ads they choose to interact with.

The first part of the ad experience is how it is delivered. A key focus for publishers in 2016 will be advancing mobile ad formats. As the first screen for many consumers, mobile offers an abundance of possibilities for the coming year, especially in mobile native ad formats. Programmatic creative personalization technologies will also explode in 2016 as advertisers commit to satisfy consumers' expectations of relevant brand messages delivered specifically to them in a matter of milliseconds across any device.

In addition to the format of the ads, the creative will also improve to serve the consumer. Brands will step up to create quality ads and content that audiences find valuable, personal and relevant. Creatives will fully embrace data as foundation for their concepts and use sophisticated analytics to determine what's working. As a result, the content they produce will, in a data-driven way, directly serve consumer needs and motivations. If the industry can innovate toward well-produced content that provides concrete utility to the consumer, the conversation will shift away from ad blockers and refocus on value-driven advertising.

  • 2-in-3 Canadians say they aren't bothered when they find out that branded content and/or sponsored content are advertising (Advertising Standards Canada, 2014)
  • Half of Canadians 16-34 years old "expect brands to really know and understand them as people, and for communications to be tailored to their values and preferences." (Microsoft Advertising, Digital Trends 2015) Note: This is 39% among all ages.
  • 46% of brands, agencies and publishers use data to both inform future creative strategies and optimize performance of existing creative. (AOL & Digiday, U.S. Programmatic Creative Research, October 2015).

What's Next?
The evolution of video, mobile and data-driven personalization, and emphasis on valuable consumer interactions will fundamentally transform advertising in 2016. Now, see what industry leaders are most excited about.