I feel like we’re at an important juncture in digital media. Consolidation is happening all over the place so that a few key players are emerging in ecommerce, in social and in technology.. We’ve witnessed Facebook struggle in 2012 potentially putting a spanner in the works for many upcoming tech companies. The impact of this has signalled a warning sign to investors and the industry alike. We’ve also experienced a dynamic shift in the SEO industry; what was once a murky landscape has become an entirely new opportunity for content marketers. There has been a meteoric rise in video advertising, driven largely by Google’s continued investment in YouTube. Big Data has been the industry’s strapline in 2012 with claims that data is the new oil, driving agencies to hire analysts and technicians instead of negotiators and suits.
So what will be the key trends of 2013? Will there be any new big players in this already cluttered landscape? What are the key opportunities for online marketers to take hold of? I’ve outlined my 5 key trends for 2013.
1. Amazon advertising eats into Facebook revenue
We’ve long been waiting for display’s equivalent to search. Facebook appeared to be taking that particular mantle for a while; the opportunities to target one’s social graph appeared abundant. The challenge for Facebook as a DR vehicle has always been the mind-set of its audience. Brands on Facebook are a little like those nerdy kids at school who are trying to be cool and butt into a conversation but are not really welcome. F-commerce has proven to be a challenge too and whilst I feel Facebook has a lot of potential as an advertising vehicle, I also think it has a long way to go to prove real value.
Amazon on the other hand has an audience which is in a mind set to buy, and that mind-set is more valuable and powerful than any other in the online space, Google has proven that. Being able to reach people who are looking for specific products but have not yet found what they want is an extremely compelling ad proposition that I have no doubt Amazon will capitalise on in 2013. Amazon will make between $500M and £1BN in advertising revenue in 2012, not too far off Facebook’s revenues in 2011 if I’m not mistaken. Expect that figure to at least double in 2013. The online advertising battle will be between Amazon and Google in the not too distant future.
2. Advertisers Will embrace YouTube In A Big Way
Content marketing has come of age. The ability to create videos, apps, online tools to inspire and educate your audience is now part and parcel of the marketing mix for sophisticated brands. Online video is one of many tactics for content marketers to engage specific audiences and YouTube in particular is an opportunity for brands to get ahead of the curve in 2013. The idea that a brand can now launch its own television channel, stream live hangouts by integrating Google Plus and speak in real time to an audience by implementing simple gadgets and apps is quite an exciting new opportunity. I’m waiting for the first clothing retailer in the UK to launch their own shopping channel where you can buy clothes live in an auction experience. Imagine too an estate agent that uses YouTube to provide virtual property tours, or a tech brand using YouTube to launch a live helpdesk. The possibilities here are endless. The challenge for brands is not to think about YouTube as a brand or DR channel. From a paid media perspective we’re starting to see brands create video ads specifically for YouTube and using the pre roll ad format not simply to broadcast but also to drive further engagement on the brand channel. Brands will start thinking about YouTube a lot more seriously in 2013, and for many it could be a game changer.
3. Facebook will launch hardware (that will be met with a muted response)
Google has its Chromebook, Amazon has the Kindle, Apple has it all; Facebook as the last of the quadrumvirate has nothing but an advertising platform. With their share price heading towards mediocrity and mobile usage being a very large threat to their ad revenues, Facebook will need to fire another canon quickly or else risk being eaten alive by their currently superior companions. I feel certain they will enter the hardware business which has been an industry rumour for quite some time now. Why do I think the response will be muted? Well I can’t see a clear reason for Facebook to enter the hardware business, unless of course it’s cheaper than anything else out there. A Facebook phone would be an interesting proposition if it enabled calls to your Facebook network for free, relinquishing the need to be tied to a contract with a mobile provider. I’m just not sure that would be possible right now, or even that compelling; after all there are still 6 billion people who are not on Facebook. Facebook will launch something in 2013, and it will probably be a phone. The rumour mill suggests it will be a partnership of some sort. As a consumer I’d be much more inclined to buy a Facebook camera, one that auto-recognizes your friends, auto-uploads pictures to your profile and is completely synergistic with your social graph, sending pictures to your friends and becoming to cameras what Kindle is to books.
4. Advertisers get closer to the media source
The online media landscape has split in half. On one side we have ‘paid media’, a place where technology is automating the buying process, where consolidation of the publisher landscape means we can buy media across the web using 2 or 3 platforms, a place where technology is taking the place of humans. One the other side we have ‘earned media’, a place where content is king, where brands must speak, respond, entertain, inspire their audience, and most importantly think like a publisher. One side sits firmly rooted in technology and automation, the other in creativity and content, both are underpinned by data and measurement. Technology providers and creative agencies will continue to thrive as a result. As RTB continues to grow, buying video, display, paid search and paid social through two or 3 platforms will make it easier for brands to bring their media buying in house. This is a worry for the large network agencies which have focused on building ‘trading desks’ to arbitrage online display media buying. Whilst paid search remains a level playing field for all, display is an opaque landscape where there are far too many players in the supply chain. This will change in 2013, not drastically, but advertisers will start to forge relationships directly with the DSPs and cut out the middle men (of which there are too many). Agencies should wake up to this and acknowledge that the days of marking up online media spend and hiding kick-backs will soon be over.
5. Value measurement will become the new buzzword
Okay, so I might be jumping the gun a little here, but all this talk of big data has lead me to believe that defining what has real value to a business is becoming ever more important. I have been a part of many debates disputing the value of post view data, of likes and tweets, of online video views, of PDF downloads or app downloads. We can now measure a whole host of activity but many still struggle to understand true value. The main reason for this is that data can be interpreted in so many different ways to tell the story that either the teller wants to convey or the recipient wants hear. My recent article about correlation and causation explains this further. If brands are going to invest in content and video they will need to understand the value of this activity to their business and the role these elements play in the customer journey. This is not easy to do and requires above all else technology which can join all the dots seamlessly. We cannot underestimate the ramifications of not doing this. Facebook’s disastrous IPO was partly driven by its ad platform’s inability to prove real value to many businesses. Simply being able to tell a story using arbitrary metrics which are not empirical does not cut it any more. Value measurement is what brands will seek and demand in 2013.
Nathan Levi is a contributor at The Makegood and the Head of Media at VCCP, a media optimisation company.