May 2018 was dominated by the imminent arrival of GDPR; but with the $7bn mobile gap, ramping up AI focus, and rising time with digital, there are many opportunities ahead.
Getting Data Protection Right (GDPR)
The biggest news for the digital world in May 2018 was the introduction of the EU’s General Data Protection Regulation (GDPR) on the 25th. Google were at the centre of some early GDPR controversy as they clashed with publishers over not registering on IAB’s GDPR framework, though they have since made it clear they will commit to it by August.
One of the most interesting things to come out of GDPR is the potential for other countries to adopt similar policies. According to Janrain 68% of US internet users would support GDPR-like policies as concerns over the use of data continue to proliferate. Similarly, Unruly surveyed users in non-EU markets finding of those that knew what GDPR was 93% would like to see GDPR rules in their country. We could well see similar policies develop over the coming months as the world watches how GDPR goes.
Highlights of Mary Meeker’s Internet Trends 2018 Report
Late-May also saw the 2018 release of Mary Meeker’s Internet Trends 2018 report which reported that Global internet penetration will surpass 50% this year and though growth will be harder to find, digital media usage continues to rise as it will likely surpass 6hours per day this year. Some other key highlights included:
- Accelerated ecommerce growth driven by a range of influences such as ad innovation (e.g. mobile PLAs on Google or promoted products on Amazon – see above). For instance; US ecommerce grew a further 16% and now makes up 13% of all retail sales. Data-driven ecommerce personalisation will further accelerate ecommerce growth whether its personalised product recommendations on landing pages or targeted display ads, the use of ecommerce personalisation can have a huge impact on CTRs and profits.
- Messaging is an increasingly core activity with leaders including WhatsApp, Facebook Messenger, WeChat – all of whom have over 1bn users – and Instagram all having experienced steep growth in the last 5 years. The next year or so will see marketers gear content distribution, ad serving, customer services towards the medium.
- Video consumption – particularly on mobile – is continuing to rise too. For instance; global mobile video viewing is likely to surpass 30mins daily this year; whilst platforms such as Twitch, Netflix and YouTube continue to grow their content repositories.
- Voice lift-off as Google, Amazon and Apple continue to scale up their voice device install base as well as the skills/apps built upon them. According to a May 2018 survey by RichRelevance, 30% of US internet users have used a voice assistant for product research or purchase.
- One of the largest opportunities outlined in this report was the $7bn mobile opportunity (29% time spent with mobile vs 26% adspend on mobile) and over the next few years there should be a balancing across ad spend vs time spent as analytics and data platforms show where budgets are best spent.
Mobile, Search and Video drive advertising growth
Whilst media time has plateaued in the UK – and will stick at around 9hr 24m for the foreseeable future – there is still opportunities for publishers and advertisers alike. Consumers’ media time is increasingly digital, in particular mobile will account for 32% of that time this year overtaking TV’s 30.8% for the first time. Overall Digital will overtake traditional by 2021 – as digital ad spend rises from $232.3bn this year (39.7% of total) to $427.3bn by 2022 (53.9%).
Video is also a key digital opportunity. For instance; IAB reported that UK advertisers spent £2.78bn on video in 2017 with smartphone video ads standing out as the fastest growing online ad format. Given that smartphone internet time overtook desktop, its no surprise to see smartphone adspend approaching the majority for UK digital adspend too; though there’s still a balancing act to be done.
Search is another key opportunity. Marin reported in its Q1’18 Digital Advertising Benchmark Report that there was an 11% global increase in Search spend, fuelled significantly by Europe. Other key findings included rising CPCs, higher CTRs driven by improved targeting, and strong growth in Dynamic Ads that use personalisation. Similar findings from Warc showed search spend hit $100.5bn (or 21.9% of budgets) with mobile accounting for 62.4%.
Who will win the AI race?
Investments in AI continue to flow with recent deals including Microsoft looking to improve conversational AI; Paypal acquiring Jetlore to improve online retail; Alibaba partnering with SenseTime to launch an AI lab in Hong Kong; Havas launched an AI centre in Montreal to focus on CX; and Chinese search giant Baidu is spinning out its ad unit in order to focus on AI.
Meanwhile; much of Google’s key announcements at I/O 2018 revolved around AI including the rebrand of Google Research to Google AI, the use of AI to improve conversations, image creation and its news services. For instance, Google’s consolidated news services under the Google News app will leverage AI to give users more of the news they care about.
Other interesting things to note
- Check out this interview with Oath CEO Tim Armstrong in which he talks about the future of consumer data; specifically referencing GDPR and consumer data control including Oath offering a consumer dashboard to control their own data, the importance of improving CX and the ads that are served as well as improving their mobile media offerings.
- Google continue to strengthen ad propositions with moves such as a partnerships with Feefo to bolster its AdWords network with review-based ad expertise, the testing of Feed ads – specifically ad cards – and the launch of audio ads to DoubleClick Bid Manager to purchase ad spots on Google Play, Spotify, Soundcloud and TuneIn. Audio ads is of particular significance this month as Pandora acquired AdsWizz – an audio adtech company.