From the next big platform shift, the changing nature of ecommerce, and the potential of Amazon being the 3rd force in digital; July gave plenty of food for thought.
The Next Major platform: Messaging?
With 5.5bn mobile users expected by 2022 (66% of the world population) its no surprise to see the knock-on effects across multiple markets: From the obvious rise in mobile adspend (60.5% in 2016 to $83bn), and the continued rise in time spent with digital being driven by mobile, to the most recent suggestions that Messaging is the next platform.
In the next 5 years, nearly 1bn new messaging app users will be added as apps such as WeChat, WhatsApp and Facebook Messenger see a global market of 2.48bn users by 2021. Ads, Customer Service, Content distribution, and Chatbots are all linked to this growing platform shift; but there’s no doubt that the dominant force in this is Facebook.
Facebook began testing ads in Messenger globally this month; enabling advertisers to buy through the Ads Manager or Power Editor, with the ads themselves being Click-to-Message or direct users to a webpage rendered within the app’s internal browser. Facebook have played down the monetisation of ads in Messenger for now and with messaging’s share of global mobile adspend declining to 3.1% in 2016 ($2.6bn) its likely to be a slow & steady approach.
eCommerce growing, but is how we buy changing?
According to eMarketer double-digit growth in global ecommerce sales will drive it to nearly $4.5bn by 2020 — equivalent to 16.1% of total retail sales; whilst this year will see ecommerce surpass 10% of total retail. It’s worth monitoring just how people are searching and buying products though given developments such as 50% of Pinterest users considered a purchase, 19% of US consumers & 43% of millennials have made a purchase via voice in the last year, and eBay’s launch of visual search tools just to name a few.
Social media will have a significant part to play in ecommerce as Social adspend for the next 12 months will look to leverage more visual qualities with Snapchat (19% of global marketers to increase), Pinterest (16%) and Instagram (40%) all likely to see increase in spend. The significance of the social aspect of ecommerce is reflected in Amazon launching Spark to be the ‘Instagram for products’ and a way of creating a more engaged community of shoppers. Spark will offer users feeds based on their interests and past purchases; whilst users can follow other users, scroll through their feeds and buy those products.
Is Amazon auditioning for the 3rd Digital Force?
Facebook recorded nearly 45% YoY revenue growth in Q2’17 to $9.3bn (98% of which was ad revenue and 87% of that being mobile) with healthy profit and user growth across its properties to match. Google recorded 18% YoY revenue growth to reach $22.7bn driven largely by mobile and video. The Google-Facebook duopoly in digital advertising looks like a difficult one to break, but as well as newly formed Oath, Amazon could be a contender.
According to several agency executives Amazon is pitching to become an “ad platform leader” with a widening network beyond what was once a search and programmatic proposition that now includes Amazon’s Echo personal assistant and its Prime Video service. Added to that is the amount of user, historical purchase and intent data Amazon holds on millions of consumers globally which could provide very specific targeting options. With advertising shifting to safer environments (something Oath is playing on too) Amazon could offer an environment devoid of risky content on-site, and a targeted approach off-site. In addition, the Amazon’s new social service Spark could be another contributor to a strengthening ad proposition.
Time to get a Voice
The recently launched Echo Show is an example of just how fast the Voice market is moving, which means brands need to move quickly too to optimise content for such devices. With content for these devices will likely come monetisation — whether that’s through ads or other content. Meanwhile; Amazon’s Alexa passed 15,000 skills vs 378 Google Assistant voice apps and 65 Cortana skills as it continues to lead the way.
Some other key Voice findings recently include:
- Google found 45% of UK consumers believe voice is the future of search with convenience and speed being key for their usage. Marketers will have to consider a new set of variables as they develop voice user interfaces and build a consistent tone of voice for brands.
- Adobe launched Adobe Sensei for Voice — a voice analytics tool to help brands take advantage of conversational data to improve targeting and conversions.
Snapchat acquisition trail takes new twist
Whilst Snap’s share price continues to struggle, they’re continuing to develop its location focus. Having partnered with Foursquare and Factual, Snap is looking to make geofilters more scalable beyond the 2.16bn views they already get every day. Recent acquisitions by Snap point to a heavy focus on location-fuelled ads and online-to-offline conversions. In addition, there are also reports suggesting Snap is in talks to acquire AdRoll as well as other adtech/martech companies in an attempt to bolster its capabilities and attract more advertisers. Buying AdRoll would give Snap a deeper foothold in ad targeting and campaign management along with e-commerce expertise.
Other things to check out:
- Check out Oath CEO Tim Armstrong’s outlook on Oath including its growing base (1bn+ users), its strong video syndication business and 50+ brands. Mobile video, differentiated ad approaches, and trusted content are seen as areas to build upon in the coming months.
- Keep an eye on blockchain’s rumblings in digital advertising with a range of developments including the UK’s Dennis Publishing leading a project on behalf of a group of publishers to create an SSP prototype using blockchain.