CMO Exclusive |
Some of the trends predicted by experts in late 2011 have taken off faster than predicted, such as the growth in mobile commerce and QR codes. Others, such as interactive TV and gamification, are still peeking in the horizon. But digital media remain the bright spot in marketing’s future. Here's what industry observers see trending for the second half of 2012 and beyond.
Fears of a double-dip into recession plus the uncertainty of the coming elections have marketers tightening the reins beyond what they had already done at the start of the year. Zenith warned in its latest report that “key economic indicators that increased in 2011 have decelerated,” which means the pressure to show results will only get tougher.
Marketers aren’t just looking at the ROI for each marketing effort, but comparing across departments, said Howard Sherman, president/worldwide of marketing agency Doremus, in an interview with CMO.com. “We’re living in a world where people aren’t saying, ‘There’s a marketing budget, there’s a development budget.’ … They’re saying, ‘There’s a budget,’” he said. “It puts a greater burden on marketers not only to demonstrate the return on their marketing efforts, but how that return can exceed the return on other initiatives.”
With the rise of social media and marketers increasingly looking at how all of their operations affect sales, the marketing silo is history. The customer-service call center, Web site design, and the brick-and-mortar store environment are all fair game for marketing in 2012 and beyond, experts say. “The world is becoming a lot flatter,” Doremus’ Sherman said.
This is actually good news for CMOs’ career paths, Sherman said. It will put chief marketers in line for the CEO spot at some companies, where the traditional path to the top job had been through finance or operations. He personally knows three CMOs (he won’t name names) who are on that track already. “The really great CMOs are playing a role that’s much broader. They’re playing an executive leadership role,” he said. “They’re weighing how the enterprise has to move forward.”
CMOs may have a track to the corner office, but there’s a crisis in hiring in the middle ranks. Head marketers are having a devil of a time filling openings for creative and account management staff, as well as the all-important measuring and analytics functions.
According to marketing headhunters The Creative Group, 51 percent of marketing and advertising executives polled in June feel it’s hard to find skilled talent, 10 percentage points more than three months earlier. But “skilled” is the key word. Firms stopped hiring at the start of the recession, so the entry-level talent that should be moving into those positions wasn’t developed, Sherman said. “That whole generation has moved on to start their own businesses or moved into different industries,” he said. “It’s a lost generation.”
Some companies are developing talent in-house, some are outsourcing, but, overall, there is “a crisis in hiring” he added.
Marketers began looking beyond the BRIC countries in late 2011, seeking the next emerging markets that would show explosive growth in consumer spending and media consumption in the future. While Latin America and Africa were mentioned, the former Eastern Europe and the secondary markets in Asia (beyond China and Japan) have also turned out to be fertile ground for marketers.
Consultant A.T. Kearney’s 2012 Global Retail Development Index (GRDI), a ranking of the top 30 developing countries for global retail expansion, recently added Georgia (#6), Oman (#8), Mongolia (#9), Azerbaijan (#17), Jordan (#18), and Botswana (#20) to the list. While Zenith is projecting Brazil will edge out the U.K. for fifth place among the world’s biggest ad markets by 2014, the world’s 10 fastest-growing ad markets in the next three years also include Indonesia, Argentina, South Africa, South Korea, Thailand, and Turkey.
It’s not just new markets that are exploding. New media is changing the landscape in 2012, too. While industry observers were expecting tablets to make their mark in 2012, they were caught by surprise by the speed in which consumers adopted the gadgets during the 2011 holiday season.
According to eMarketer, tablet penetration will reach 29.1 percent of Internet users by the end of this year. And according to according to a May report from Adobe Digital Index (ADI), tablets’ share of Web site traffic is on track to exceed the traffic of smartphones by early next year.
“The tablet is now the ‘real’ third screen in the household,” said Steve Kerho, senior VP of analytics, media, and marketing optimization at agency Organic. Importantly for marketers, tablet consumers overindex among affluents, according to comScore, which found three out of five tablet users lived in households with annual incomes of $75,000 or more.
Marketers knew consumers were sharing their likes and complaints in social media. But this time last year, no one was talking about Pinterest. Now it’s on everyone’s radar--especially for retail marketers. “We’re in the early stages of social shopping, but 2012 will lay the infrastructure that will allow consumers to collaborate real-time while shopping online,” said Rick Gardinier, chief digital officer of marketing agency Brunner. Adding user reviews and fine-tuning the mobile Web experience are hot right now, he told CMO.com.
We will see more brands rewarding or even sharing profits with fans who curate or create content for them, said Camilo LaCruz, EVP and director of innovation and brand experience at agency RAPP. He singled out experiments like Converse’s Made By Facebook app, which rewards consumers for making their own items in their personal stores, and Zara’s People!, which rewards customers for contributing to the brand’s style book.
“The winners in the race will be those who embrace the reality of ‘influencers’ and understand that this key group, while not always the consumer, often is the final validator for purchase intent,” said Stanton Kawer, chairman and CEO of Blue Chip Marketing Worldwide.
Not all social shopping has been an unqualified success. Daily deal sites like Groupon were hot in late 2011, pushing time-sensitive offers to a community of like-minded shoppers. As the concept took hold last year, marketers applied it to everything from clothing to travel. But experts say the market is quickly reaching saturation. The term “daily deal fatigue” began cropping up on discussions more often in early 2012.
“We have seen a cooling of Groupon and LivingSocial,” Steve Minichini, president, interactive marketing at agency TargetCast tcm, told CMO.com. “While they still both have big reach, consumer involvement has dwindled because of the frequency of offer and the novelty wearing off. “
As a result, deal sites are trying to reinvent themselves with new technologies, RAPP’s LaCruz said, relying more on such features as geolocation and social recommendations to make more relevant offers, he told CMO.com. This could lead to partnerships with content creators and dual-screen apps that sync deals with TV content, he added.
Gamification hasn’t taken off as expected, but it is being used in new ways. As a marketing tactic, gamification--last year termed "serious business"--has run its course without a big win, said Todd Drake, VP of technology at Organic. He noted even FourSquare, the “poster child” of the trend, is moving toward being more of an “exploration engine.”
Some experts argue gamification is evolving beyond just a tool to boost engagement into a kind of infrastructure to help marketers sort through Big Data. “As gamification matures, brands will seize this as an opportunity to collect consumer insights about purchase decisions, online behavior, and interests that can be used to tailor offers, enhance products and services, and incent loyalty,” said Dick Thomas, CEO of agency TRIS3CT.
Mobile commerce may be giving it some momentum still, since experts note mobile media is ideal for gamification, especially location-based efforts. Programs such as Heineken’s Star Player soccer app show how TV content can engage where mobile and gamification meet, RAPP’s LaCruz noted. He said the combination could become business as usual for live events and sports sponsorships.
The rise of mobile shopping has been a bit of a double-edged sword for some marketers, especially retailers. With shoppers able to comparison-shop on their smartphones while standing in the aisles, there’s been a troubling rise in “showrooming,” the practice of looking over products in store, then buying the cheapest one online. “The biggest challenge brick-and-mortar retailers face is not traffic--they have plenty of traffic. It’s in converting the traffic into a sale,” said Mark Ryski, CEO of analytics firm HeadCount.
The showrooming phenomenon is forcing some marketers to focus more on the in-store experience and improve what they deliver, experts said. This “endless aisle” trend--the intersection of online, mobile, and in-store experiences, is spurring trends such as “stores that know you,” building off real-time data, said Shane Ginsberg, senior VP of corporate development at Organic. Look out for more offers based on geolocation, where shoppers will get a Groupon-like offer if enough of them are in the same location, based on their phones’ GPS, said chief creative officer Conor Brady.
Thanks to social media, word-of-mouth is gaining momentum as more marketers tie in their networks to loyalty programs and use them to identify their best customers and brand ambassadors.
Malcolm Faulds, senior VP-marketing at social media agency BzzAgent, noted Nielsen’s recent Global Trust in Media report shows that consumers are twice as likely to trust friends over brands. The survey found 92 percent of consumers around the world trust word of mouth, making it the most trusted medium, followed by online reviews with 70 percent. By comparison, trust in traditional media ads has dropped from past years.
Research shows brand advocacy programs can generate double-digit sales increases, Faulds told CMO.com. But he warned that marketers should keep in mind that not all brand advocates are the same. Those chosen based on their shopping behavior lift sales more than those segmented by demographics or influence scores, he said.