The first banner ad ran in 1994, which means the digital marketing industry is on the eve of starting its third decade of life. At that time, just proving the efficacy of online advertising and waiting for widespread consumer broadband adoption were the most important trends facing marketers. Online video was still a dream, social media wasn't even a category yet, and smartphones and tablets were things you could only see on an episode of Star Trek.
A lot has changed since then...
As I reflect upon this list of trends shaping digital marketing, I see the clear signs that this industry is beginning to mature. Almost all of these trends have sprouted from seeds planted many years before, and our upcoming challenges aren't new developments but rather the evolution of existing trends that mark major pivot points of change.
While none of these trends alone should be a surprise -- when you consider them as a group -- it's easy to see that this industry's ready to move on from being a teenager into full adulthood.
25 percent of all marketing is now digital
It was reported by Gartner earlier this year that one out of every four marketing dollars is spent online. As more and more marketing dollars flow to online channels, the pressure mounts for digital advertisers to deliver. However, the same problems we've had for years -- inventory quality, consumer privacy concerns, inefficient and costly media execution -- continue to threaten the next wave of growth.
The good news is that online advertising has definitely proven that it can be a major driver of conversion activity and has secured a strong place within the overall media plan. But how will digital marketers need to evolve the industry in order to garner the next 25 percent of the advertising revenue?
Mobile device usage is now firmly on track to represent half of all website traffic
This shouldn't be shocking to anyone, but the knee-jerk reaction has somewhat been to wait and see. There seems to be some hope that technological innovation and changes in consumer device behavior will begin to slow their pace a bit so marketers can begin planning multi-year, multi-million marketing strategies on stable ground. However, marketers must overcome the inertia and jump in headfirst before their competitors figure out how to leapfrog them on the mobile battleground.
The second age of programmatic buying
It just needed a few years to get some momentum, and it's time for it to blossom and evolve. Now that marketers have had a few years to play with the tools, vet the data and media, and build some expertise, the appetite to take programmatic beyond standard ad units on remnant inventory is growing. There have been major moves to build programmatic pipes to premium inventory as well as figuring out how to scale automation to handle more impactful native ad formats.
With so much interest from buyers, there has been pressure on publishers to evolve their teams and internal processes to allow for more programmatic selling. Programmatic is turning the corner and is on a fast track to automating the buying and selling of any ad impression that could be sold this way.
The imminent death of the cookie
It's true. Apple, Microsoft, and Mozilla now all plan to launch browsers with default do not track settings that reject cookies or, at the very least, send out a signal that users does not want to be tracked. Many of the digital marketing technologies that track, measure, target, and retarget are absolutely tied to third-party cookies, and the loss of the cookie will impact almost every company -- be it brand, agency, publisher, or vendor. Unfortunately, cookies have been abused by a few bad apples over the years, which has sent consumer privacy advocates spinning.
Those abuses, along with the NSA scandals this year, have forced the issue, and more data is being sent behind encrypted walls. To survive, digital marketers need to figure out a new default tracking mechanism. Google announced recently that it is working on a solution to finally allow the anonymous tracking of consumers for advertising purposes, meaning that one company would own the gateway to this information. Either way, it's going to happen very quickly, and 2014 might see this major shift occur.
Speaking of Google, its two curveballs this year have altered the landscape of search engine marketing (SEM). This important channel -- including both paid and organic search -- has historically been the largest line item of digital marketing spend and biggest driver of online sales.
Google announced enhanced campaigns in February and forced all of its paid search advertisers over to this new approach in July. Whereas previously search marketers were able to split campaigns to target PCs, smartphones, and tablets with individualized budgets and bids, under the enhanced campaigns structure, keyword campaigns are automatically opted into PC and tablet targeting with an optional bid adjustment modifier for smart phones. This dramatic shift sends waves through the industry with paid search marketers having brought a surge of attention in 2013 to multi-device marketing.
Google began encrypting organic consumer search terms that led to site visits in 2012. Although this started by only blocking the terms from consumers signed into a Google account performing a search, over the last 18 months, the percentage of total keywords blocked from website analytics platforms began rising significantly late this year. Finally, in September, Google announced that 100 percent of keywords would show up as not provided. This has been a major blow to search engine optimization (SEO) as the core of these practices has been tracking keyword visitation. With almost half of all website visits originating from natural search terms, and Google representing almost 70 percent of that traffic in the U.S. and abroad, SEO practitioners had to utterly change their entire approach overnight.
The ongoing industry measurement discussion put the focus on actionable attribution in 2013. With more dollars coming into this space, there's more scrutiny and accountability than ever before on how we measure the performance of digital marketing. It seems that everyone believes that last-click isn't the right methodology, but the lack of standards around attribution has made it hard for advertisers to make the switch.
Ultimately, what everyone really wants out of multi-touch attribution is the ability to optimize marketing efforts to generate the highest return. For that to happen, attribution must evolve to become more actionable than it is today. Solutions must plug in to marketer buying and optimization platforms to bring automation both within the ad and in the online content owned by brands. We're getting close to realizing that vision, but it's not here yet.
A variety of industry factors came together to launch Facebook advertising into the stratosphere in 2013. In just over a year, Facebook's mobile ad offering rivals every established mobile ad network, and its Facebook Exchange (FBX) programmatic channel is one of the biggest players in the space. In fact, the social advertising category as a whole is beginning to emerge as a viable channel with YouTube, Twitter, LinkedIn, Pinterest, and others launching more and more paid media opportunities.
Up until 2013, social marketing mainly centered on social media's promise to facilitate rich, engaging social conversations with consumers at scale via owned and earned media while paid media was a bit more of an afterthought. The unique targeting available (interests, connections, etc.) and the native ad formats that leverage the power of these platforms (Facebook promoted posts, sponsored tweets, etc.) will help marketers find new avenues to reach consumers at scale. Starting in 2014, marketers will be able to build complex, layered social advertising plans to take advantage of the evolving platforms offered by major social players.
Television and online video data
We've been watching television and online video data for years, and it's time for the marriage. The industry has never been closer than now for this vision to become a reality. There's just too much cost in developing fully separate high-quality sight, sound, and motion assets and too much value in crafting cross-device, sequential video campaigns for them not to be managed, planned, and executed together. It's all about reach and frequency with television, and online video fits very neatly into that model. This convergence of offline and online should end up moving more dollars to online video from the proportionally large television budgets.
It's possible that the convergence of offline and online video could help to bridge the gap between offline and online advertising. The impact on digital marketers would mean more fluidity between these budgets where online is at a record high of 25 percent, but that means there's still 75 percent of the dollars still on the table. The merging of television and online video is something every digital marketer should be rooting for.
Real-time becomes more real-timey
Many marketers haven't even considered a world where all channels have real-time components because it just seems that the industry is too far away from that concept. However, more opportunities are coming online for real-time marketing to exist.
All of programmatic isn't RTB (real-time bidding) enabled, but a lot of it is. For brands to be able to react in near real-time -- with consumers who are in-market and researching/browsing online -- is one of the most powerful differentiators to traditional, offline advertising. Take for example travel shoppers who might be in-market for just one or two days as they look for deals before finally booking their trip. Once these consumers send out the first in-market signals, the brands that have the marketing infrastructure to react quickly will have the best opportunity to make the sale.
Look to 2014 for technology providers and publishers to offer more solutions to get the industry closer to real-time marketing.
Location and proximity marketing will finally gain prominence
The rise of social and mobile as significant consumer trends opens up a whole new world for location and proximity marketing. Brands must collect and decrypt the signals about where a consumer is online and how far they are from a physical location in order to serve up the best mobile ad (and site) experience.
Although the tools to engage with this type of cutting edge marketing are still being evolved, 2014 will be a turning point for brands to mass adopt these tactics in order to fully take advantage of the mobile revolution. There are companies out there -- with major brick-and-mortar business models -- that have been desperately waiting for these innovations in order to reach consumers at scale so business can flourish.