The dominant themes of 2018 will center around the consolidation of the giants, beating the duopoly of Google and Facebook, the birth of Bladtech and Madtech, the tipping point of OTT TV, and more players getting into the advertising industry. The good news is that there is a still a ton of potential in AdTech. The bad news – Amazon, Microsoft and IBM see it too!
Google and Facebook will generate over $150 Billion in advertising in 2017. That is a large and daunting number for anyone who is looking to compete with these giants. With that number showing no signs of decreasing in 2018, it can be all too easy to want to throw in the towel. However, that number only represents 15% of the global spending on advertising and marketing in 2017. There is a lot of upside out there and room for additional players to come in and make their mark on the advertising industry
So, as we look ahead to 2018, we attempt to identify the trends that will help the market survive the duopoly and will open the market for new companies and new technologies.
Let’s take a deeper look into these trends, which are set to shake up the advertising industry in 2018.
1. Consolidation in TV will continue.
Disney/Fox capped 2017 and whether the Time Warner deal goes through or not, consolidation will accelerate so media companies can keep up with Netflix, Amazon, Facebook and Google. It is much easier, and more cost efficient for companies to merge to gain scale rather than to try to compete organically. As the consumer continues to migrate to new platforms and new technologies continue to emerge, we will see more legacy media industries turning to M&A in order to keep up. For example, look for a big move by Verizon in the TV space in the new year.
2. The big TV players will acquire and invest more in technology.
In addition to the big strategic mergers, . These acquisitions will validate the adtech model and creating a whole new set of winners. When it comes to TV and video, the industry is hungry for data analytics and new technologies are emerging daily that aim to be the solution. As these technologies become more accurate and advanced, we will see a new standard of video data measurement come into place.
3. OTT penetration will grow significantly and challenge Netflix etc.
2018 may not be the “tipping point” for OTT penetration, but . There will be scores of independent OTT content providers claiming their stake in the quickly growing space. For consumers, this means they can pay for ad-free streaming and the ads they do see will be targeted and personalized. Which will hopefully translate to a better experience.
4. Amazon and others will challenge the advertising industry duopoly of Facebook and Google.
In 2018 other . These businesses are beginning to realize that there is a ton of potential to maximize advertising revenue. Amazon is already beginning to experiment with advertising packages and products. With their online marketplace growing at such an exponential rate, digital marketers are eager to jump on the opportunity to deal with a more diverse set of platforms.
5. Bladtech (Blockchain + Adtech) will become a thing.
Digital technology has made our world so much more connected and efficient. However, the technology has created a few problems and questions in itself, especially as we sit on the verge of the rise in Cryptocurrencies. The advertising industry is certainly not immune to these issues and must adapt, like any other industry, as new technology develops. That being said, in 2018, adding massively to the confusion among marketers about blockchain is all about. However, in the usual fashion, marketers will use it anyway and figure it out as they go.
6. MarTech and Adtech lines will blur (Madtech) and become one thing unified by AI.
Data quality and audience modeling will surpass impressions as the value driver in advertising. Marketers will take what they know about customers across content, social, paid and owned channels and will deploy mad tech tools to generate ROI. This consolidation of technologies and the creation of new ones will continue as technology providers continue to try and build the ultimate all in one solution. .
7. Twitter will be acquired.
The social media company is too powerful with consumers to remain a stand-alone platform. Messaging platforms are notoriously hard to monetize with advertising. Unless twitter finds a way to harness their advertising potential the way other social media channels have, it must merge with a larger player that can cross promote with Twitter’s audience and drive organic growth. Let’s hope that in 2018, the company will finally be acquired and that the acquiring company will have success in turning the platform around.
8. Ratings will begin to lose “currency” status.
The direct measurement of consumer interaction with content and services will make aggregate ratings less relevant and useful. . In order to remain relevant, existing currency players will look to buy a major data and digital measurement platforms. This will create a new form of direct audience measurement and data analytics solving the scale vs one: one digital media dilemma.
9. The ad agency world will continue to transform with massive M&A and re-orgs
Agencies are hurting as marketers take media in-house, and consulting firms take market share. Clients are using transparency like a bat and tech-driven creative platforms are hurting margins. . Agencies will see end-to-end services as their core value prop and will start to retake the hill in the future.
10. Despite all that (or because of it) Cannes will be bigger than ever. And crazier.
Let’s face it – our industry is intense. We all need a place to get together and blow off steam. The Cannes Festival has become THE place where we all get together and have some fun and try to out-do each other. So, despite the optics and handwringing, Cannes will be Cannes. See you there!