NewBase Marketing Priorities 2016 THE GROWING IMPORTANCE OF CONTENT IN A CONSUMER-LED MARKETING ERA

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1 NewBase Marketing Priorities 2016 THE GROWING IMPORTANCE OF CONTENT IN A CONSUMER-LED MARKETING ERA

2 About the author Mike Jeanes Global Head of Insights CONTACT: E: Mike is the Global Head of Insights for NewBase. He has 25 years consumer research experience on both the agency and client side, working for some of the worlds largest print, TV and digital brands. Mike s career has focused on exploring consumer product and service needs, evaluating market trends and providing innovative research and insight solutions. The results have helped direct product and brand development, secure significant advertising investment and demonstrate ROI for clients. With ever greater demand by advertisers for data and insight, Mike s project findings are frequently presented at conferences, or feature in white papers. Some have won awards, and others have generated significant press and social media engagement. Positioning research at the heart of any company reflects Mike s passion for seeking out innovative research approaches and delivering new ideas, practical actions and creative outputs.

3 About NewBase NewBase is the world s leading international marketing services company operating in more than 25 major markets. Equipped with the latest technologies, powerful data and research capabilities, NewBaseprovides advertising solutions through the most valued, targeted and effective media. We offer unequalled access to quality audiences across all media channels globally. Our multimedia solutions include bespoke campaign management and implementation. We reach premium audiences through our extensive global portfolio of quality news media and digital platforms. These include mobile, video, social and transparent in-house programmatic solutions, luxury magazines, outdoor spaces, leading television and radio networks and inflight media. Mediascope, NewBase Content, Matrix Media in India & Asia and Adnative in Europe are sister companies.

4 NEWBASE MARKETING PRIORITIES 2016 The growing importance of content in a consumer-led marketing era Background Over the past ten years or so, there have been dramatic changes in the way the media industry is structured and unprecedented shifts in the way people access content around the world. These changes in content consumption are driven by new platform choices, the huge number of information sources available, and the choice of content formats on offer today. Technology developments have driven these changes, with mobile taking centre stage. NewBase Marketing Priorities 2016 is a global online survey among over 670 marketing executives evaluating the key issues shaping the media industry right now and into the future. The survey was fielded in April 2016 across EMEA, APAC and the Americas, and the sample covers clientside marketers, agencies and publishers. The data provides regional results against a global average and can also be sliced by seniority and media sector. Marketing Priorities findings confirm the continued influence of mobile technology, social media and video across the industry. Programmatic buying and cross-device targeting is high on the agenda for global marketers, with big data feeding this process and linking up the importance of accurate audience measurement. There is also growing interest in emerging technologies such as Virtual Reality, Artificial Intelligence and Robotics, and global marketers are upbeat about the ad blocking challenges ahead, with a focus on seeking solutions to work with this trend. Marketing Priorities results highlight Content Marketing as the primary consideration for global marketers as they strive to target consumers with relevant and engaging content in what is proving to be a year of consumer-led marketing. Taking this customer-first thinking one step further, the findings also reveal a clear understanding among global marketers that brands

5 need to make an emotional connection with the consumer to encourage increased brand engagement and ultimately drive action. Mobile persistence Results from Marketing Priorities 2016 closely reflect Zenith advertising forecast shifts. Mobile registers the highest growth area for advertising budgets, with 87% of agencies and client-side marketers who voiced an opinion across the globe, claiming that their mobile spend will increase between 2016 and Newspapers and magazines continue to struggle with only 13% of agencies and advertisers projecting an increase in print spend, compared to six in 10 set to reduce spend. TV faces challenges ahead with only 29% of global advertiser and agency executives claiming their TV budgets will increase in the next 12 months vs. 27% indicating a decrease. TV optimism is higher among agencies with 34% claiming an increase in spend compared to only 18% among client-side marketers. Social and video drive the agenda Results from Marketing Priorities 2016 also reflect advertising forecast shifts for different digital formats. The greatest projected increase in advertising spend among global agencies and client-side marketers comes from Social media with 87% forecasting an increase in the coming 12 months. This is followed by Online video with 81% projecting an increase, Mobile web (75%), Location based ads (73%), and Native advertising (66%). registered the lowest proportion who envisage an increase in spend (35%), although this percentage is still higher than those indicating a decrease (19%). Technology Priorities Mobile technology changes continue to dictate the way we do business, but the hardware and software required to facilitate progression is key. This could explain why Marketing Priorities 2016 shows that two thirds of global marketers identified Power of mobile devices as the highest scoring technology factor likely to impact their business in the next 12 months (see figure 1), followed by M-commerce (60%), Social media software (57%), Mobile app development (56%) and Big data (53%). All these technology priorities are

6 interlinked, and ultimately contribute towards a goal to create a positive, engaging and speedy experience for the customer. Big data will help personalise content across platforms, as well as provide the analytics to address specific content, product and service needs of consumers. In addition to this, social media will provide an increasingly important distribution channel for content delivery. So whether it s social, commerce, or search, there s nothing more powerful than a consumer being delivered the right ad at the right time and at the right place, and this is what makes the experience work for both brands and users. Figure 1: Global Technology Priorities Power of mobile devices M-commerce Social media software Mobile App development Big data Internet of Things Security and data protection Cloud technology Virtual reality Wearable technology Augmented reality Robotics and AI 3D printing Sensors 7% 7% 35% 31% 26% 21% 18% 13% 60% 57% 56% 53% 51% 66% Base: All global marketers There were some differences in Technology Priorities among marketing executives across the regions (figure 2). In APAC, two thirds of marketers highlight Social media software as the highest scoring technology factor to impact their business in the coming 12 months, followed by the Power of Mobile devices (62%) and M-commerce (61%). In EMEA, the focus is on Big data which is the highest ranking priority (62%), followed by Power of mobile devices (60%) and M-commerce (59%). Interest in immersive technologies such as Virtual Reality are clearly growing in popularity with over a quarter of global marketers (26%) listing VR as a key technology factor likely to impact their business in the coming 12 months.

7 Virtual Reality is certainly generating some excitement among the media industry in 2016 with seven in 10 global executives agreeing that Virtual reality will drive the next technology revolution with a quarter agreeing strongly. It may take a little longer than 12 months to iron out any technology issues to drive mass market success, but with today s consumers adopting new technologies at a faster rate than ever before, these technologies may be common pace sooner that imagined. Figure 2: Technology Priorities Ranking by Region (Top 10) Rank Americas EMEA APAC 1 Power of mobile devices Big data Social media software 2 M-commerce Power of mobile devices Power of mobile devices 3 Mobile app development M-commerce M-commerce 4 Social media software Mobile app development Internet of Things 5 Big data Social media software Mobile app development 6 Internet of Things Internet of Things Big data 7 Security and data protection Security and data protection Security and data protection 8 Cloud technology Cloud technology Cloud technology 9 Virtual reality Virtual reality Virtual reality 10 Wearable technology Wearable technology Augmented reality Base: All marketers by region In Americas, mobile dominates the top three technology priorities likely to drive business change. With growing concerns from the FTC regarding targeting relevant advertising to the correct audience in the US, it s not surprising that Power of mobile devices dominates technology priorities in this region, noted by 76% of marketers, followed by M-commerce (60%), and Mobile app development (57%). Among agencies, client-side marketers and publishers, technology priorities varied slightly (figure 3). Mobile device capabilities are the primary priority for agencies and publishers alike, with M-commerce in second position for agencies, and Mobile App development following the lead for publishers. Among advertisers, Social media software is the number one factor likely to impact their business in the next 12 months followed by the Internet of Things.

8 Figure 3: Technology Priorities Ranking by Media Type (Top 10) Rank Publishers Agencies Advertisers 1 Power of mobile devices Power of mobile devices Social media software 2 Mobile app development M-commerce Internet of Things 3 Big data Mobile app development Power of mobile devices 4 M-commerce Social media software M-commerce 5 Social media software Big data Mobile app development 6 Internet of Things Internet of Things Big data 7 Cloud technology Security and data protection Security and data protection 8 Security and data protection Cloud technology Cloud technology 9 Virtual reality Virtual reality Virtual reality 10 Wearable technology Wearable technology Augmented reality Base: All marketers by sector Marketing Priorities Out of a list of 24 media trends and priorities measured on the Marketing Priorities 2016 survey, attributes relating to content, advertising formats, programmatic, audience targeting and measurement appeared in the top tier (figure 4). 44% of all global executives consider Content marketing as the primary marketing consideration in the next 12 months. This isn t a new trend, but its #1 position reflects the on-going importance of packaging and distributing relevant, quality content to key target audiences. This high interest in Content marketing is supported by the high ranking scores for Content quality and Content relevance, both appearing in the Top 10. The current trend in programmatic and private market place bidding has driven this priority into joint second position with Content quality, and Mobile video (all scoring 35%). Cross-device targeting and Ad personalisation appear joint 5th (both 34%) and Accurate audience measurement ranks number seven with 33%.

9 Figure 4: Global Marketing Priorities (TOP 20) Content marketing Content quality Programmatic Mobile video Cross-device targeting Ad personalisation Accurate audience measurement Content relevance Ad avoidance and skipping solutions Rich media advertising formats App ad blocking Importance of Millennials Virtual reality Viewability and fraudulent traffic Moment marketing Real Time Bidding 360 degree video Cord cutting and the future for linear TV Cross-device App ecosystems Continued growth in VOD 16% 16% 15% 15% 15% 14% 11% 11% 9% 35% 35% 35% 34% 34% 33% 31% 28% 26% 22% 44% Base: All global marketers 85% of global executives agree that Understanding cross platform audiences is a challenge. Measuring audiences across multiple platforms and formats is an essential requirement for the media industry, and one that the research and analytics industry has struggled to deliver. However, audience measurement that stretches way beyond traditional measurement techniques, is already evolving with an increased focus on algorithms and applying analytical technologies to ever increasing data sets. Looking at the results across the regions (figure 5), Content marketing and Cross-device targeting are the top Marketing Priorities in Americas (both 42%) followed by Accurate audience measurement (37%), Programmatic, and Mobile video (both 36%). In APAC, Content marketing was also top (51%) followed by Ad personalisation (42%), Rich media advertising formats (39%), and Mobile video (38%). In EMEA, the focus is on Content quality (42%), followed by Content marketing and Programmatic (both 38%).

10 Figure 5: Marketing Priorities Ranking by Region (Top 10) Rank Americas EMEA APAC 1 Content marketing Content quality Content marketing 2 Cross-device targeting Content marketing Ad personalisation 3 Accurate audience measurement Programmatic Rich media advertising formats 4 Programmatic Cross-device targeting Mobile video 5 Mobile video Ad avoidance & skipping solutions Content quality 6 Content relevance Ad personalisation Programmatic 7 Content quality Accurate audience measurement Content relevance 8 Ad avoidance & skipping solutions Mobile video Accurate audience measurement 9 Ad personalisation Content relevance Cross-device targeting 10 Importance of Millennials App ad blocking Ad avoidance & skipping solutions Base: All marketers by region Across media sectors, Content marketing is the number one priority for publishers (45%), agencies and advertisers alike (both 43%). Among agencies, there is greater interest in Programmatic ranking #2 with 41%, followed by Mobile video (36%), whilst publishers are more focused on the need to deliver creative ad formats in a personalised way. The focus for client-side marketers is clearly on the content - satisfying the needs of their target audiences in a consistent way with the right content, in the right environment. This explains why Content quality and Content relevance both ranked just behind Content marketing, which is effectively the process that delivers the two (figure 6). Ad Personalisation is also an important consideration for advertisers, ranking 4th. These results confirm that there is clearly an appetite among advertisers to be part of the content make-up of their brand. They are highly interested in, and in many cases already involved in the creation of their own content with a clear marketing objective in mind - to connect with consumers as efficiently and directly as possible, with useful, relevant and engaging content.

11 Figure 6: Marketing Priorities Ranking by Media Sector (Top 10) Rank Publishers Agencies Advertisers 1 Content marketing Content marketing Content marketing 2 Ad personalisation Programmatic Content quality 3 Rich media advertising formats Mobile video Content relevance 4 Mobile video Cross-device targeting Ad personalisation 5 Programmatic Accurate audience measurement Accurate audience measurement 6 Content quality Content quality Cross-device targeting 7 Cross-device targeting Ad avoidance & skipping solutions Mobile video 8 Ad avoidance & skipping solutions Content relevance App ad blocking 9 Accurate audience measurement Ad personalisation Virtual reality 10 App ad blocking Rich media advertising formats Programmatic Base: All marketers by sector Whilst it seems likely that ad blocking will remain part of the fabric of how we consume media today, only 8% of marketing executives strongly believe that ad blocking will put organisations out of business. In fact, the mood is upbeat, with the need to seek Advertising avoidance solutions listed in the top five Marketing Priorities in EMEA. Ad blocking has encouraged advertisers to look more closely at the environment in which the ads are placed. In total, eight in 10 global marketers agree (and 39% strongly agree), that Relevant content and environment helps prevent ad blocking. Furthermore, 92% agree (and 56% agree strongly), that Advertising in a relevant contextual environment will continue to increase its appeal. Whilst, content relevance and environment is an important consideration in retaining customer engagement, it s worth remembering that ad blocking is primarily a symptom of poor content targeting which could also explain why Cross-device targeting is listed in the top seven Marketing Proprieties ranking across all media sectors. It s difficult to dispute that relevant advertising in an appealing environment will enhance levels of engagement with the consumer and connecting with the customer at an emotional level has unanimous support from global marketers. 86% of all global marketers agree (and almost four in 10 strongly agree), that Emotional marketing is increasing in importance. In addition, almost six in 10 strongly agree that Advertising is more effective if it makes an emotional connection to the customer.

12 Summary Marketing Priorities 2016 findings confirm the continued investment in digital advertising. This trend is driven by mobile, with social media, video and location based formats at the core. Looking at the key considerations for 2016 and beyond, Programmatic buying and cross-device targeting technologies are key marketing priorities for global marketers, with big data underpinning this process and feeding into cross-platform audience measurement. Content marketing consolidates its position as the number one marketing priority among global marketers in 2016, as they strive to target consumers with relevant and engaging content in what is proving to be a year of consumer-led marketing. The importance of content is especially evident among client-side marketers, who appear to want a more active role in the creation of content, and delivery of their brand messages to customers. This increased focus on the consumer is supported by unanimous support for the need to make an emotional connection with the customer to encourage increased brand engagement. As global marketers continue to define the cross-device consumer journey, the media industry must grapple with the changing ways in which content is accessed, produced and distributed, with a clear goal in mind - to connect a buyer with a seller, using relevant content as efficiently as possible. The new technologies and toolsets available to marketing are making it easier to reach consumers with relevant messages in the right formats, and at the right time. However, it becomes essential for publishers, agencies and advertisers to better utilise these tools and improve the delivery of relevant content that fits evolving media formats, and aligns with consumer needs. Whilst there is a need to further exploit the potential of customer targeting through existing technologies, Marketing Priorities also reveals a growing interest in the future, including Virtual reality, Augmented reality, Robotics and other technologies. The vision for better tools to connect consumers with content that contains relevant and contextual brand messages has never

13 been greater, as consumers are adopting new technologies at a faster rate than ever before. These trends will become quickly realised if the application and monetisation models are in place to enable mainstream use.

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