For those of you like me who have participated in the last decade of advertising, I have two words for you:
It probably isn’t hyperbole to suggest that we’ve likely just wrapped up the most eventful decade in the history of advertising since the creation of television. Perhaps it’s been more transformative.
Just think about how much has changed.
1) Rise of the smartphone/mobile as advertising outlet – a decade ago, iPhones were just going mainstream. Android devices were in their infancy. None of it was considered a viable alternative to traditional advertising quite yet.
2) Internet self-expression and the explosion of pictures – a decade ago, the most mainstream ways to publish things online were by creating a website, uploading blog posts to a server, and getting your neighborhood techie to set it up for you. And you needed a real camera to take pictures of any quality, much less a selfie.
3) Unprecedented data collection by major platforms – a decade ago, Facebook and Google were collecting data on users, but just getting started. And that effort was innocent enough. It’s not like Facebook, YouTube, or Google could help influence an election, be misused, or steer public opinion, right?
4) Subsequent marginalization of “dumb advertising” – a decade ago, it was unthinkable for a major brand to shift significant ad dollars to Facebook or even Google. It was ok to run an experiment, but real money couldn’t possibly generate any value there. Staying the course meant continuing to spend money on what the media model says – television, billboards, and radio. And that thinking REMAINS the case in some larger brands who have been slower to adopt digital advertising alternatives.
I could go on and on.
Some of us saw the writing on the wall – that these platforms would create transformational value creation opportunities for brands that dedicated themselves to mastering Google and Facebook. I’m proud that our team identified those opportunities early. And hopefully some of you were able to read where I talked about this in Facebook Marketing An Hour a Day when the first edition was first released in 2010!
But in all seriousness, the world has changed significantly in ten short years.
I don’t have a crystal ball about what we’ll say in 2030, but I thought today we’d spend some time looking at where we see things going in the next ten years.
1) Race to create smarter ad platforms – consumer data is the name of the game today, and stalwart ad networks or platforms won’t just sit idly by. Expect traditional media companies of all types will attempt to modernize ad offerings around data – not unlike they’ve started to create their own television streaming networks. A few will succeed, many will spend a lot of money only to fail.
2) Ad allocations settle into a more mature, permanent state – brands will continue to move ad dollar growth into digital, while traditional remains a relatively flat growth business. Facebook and Google will continue to capture most of that growth in digital, but astute brands will begin to see declining returns from those platforms mid-decade and display will make a resurgence. We are starting to see that already with companies who have been most aggressive, particularly with Facebook.
3) A host of challengers emerge, but none captures more than 5% of digital share – we’ve seen this story before with Twitter, Snapchat, and now with TikTok. Teenagers flock to a new platform. Thought leaders declare the new platform to be “the next Facebook”, citing the same behavioral/tech adoption pattern. New platform ultimately disappoints. Facebook was a generational invention that made people comfortable publishing life’s details in exchange for social capital among friends. We won’t see it again in the 2020s.
4) Additional complexity will be required to deliver “alpha” to advertisers – as Facebook and Google become “de rigeur” advertising investments for just about all brands, everyday strategies and tactics will become more commonplace. This will revert the average/mean ROAS to something that is increasingly unsatisfying for brand advertisers. Delivering “alpha” to advertisers (i.e. using ad dollars more effectively than competitors) will require advanced strategy and tactics more than ever. Ultimately, this is positive for the beaten down ad technology business, as technology will be required by the end of the decade to automate human processes to fulfill a differentiated ad performance story to brand advertisers.
This last point is why I’m so bullish about Polygraph’s prospects going into the next decade. Advertisers who will win over the next ten years will have the ability to react to ever-changing dynamics in Facebook platforms (Facebook, Instagram, the Facebook Display Network, Messenger, and WhatsApp), the Google platforms (Google search, Google Display Network, YouTube), and everything else (display, mobile display, traditional).
That means reading data in real-time from the platforms about ad performance, tying cause and effect together in ways that definitionally cannot be done in real-time or even near real-time by humans. There’s just too much to analyze at any one time!
Most people who have spent a decade or more in advertising will tell you that it’s relatively simple to see where the trends are going. But they’ll also tell you that the trends take longer than you think. When Polygraph first got into the advertising business, we thought data science was critical to delivering outsized return to brand advertisers. We certainly had some successes with that in the past decade with our decorated client roster.
But we’re resolute that watching ad investments cross-platform and making real-time changes to creative, targeting, budgets, ad copy, offers/discounts, promoted products, etc. ARE the way to deliver outsized return.
Welcome to the 2020s! Do you feel prepared?