Emerging TechnologyThe future of digital advertising: Where are marketers placing their bets for 2017 and beyond?

The future of digital advertising: Where are marketers placing their bets for 2017 and beyond?

The last few years have seen the rise of cutting-edge new technologies with exciting possibilities for marketing and advertising. With a limited budget to allocate, where are marketers investing their spend for 2017 and beyond?

The last few years have seen the rise of cutting-edge new technologies with exciting possibilities for marketing and advertising: from AI to AR, chatbots to smart hubs, voice search and visual search, and more.

At the same time, advertisers know that the fundamentals of marketing – like search, social and content marketing – as important as they ever were.

With a limited budget to allocate, where are marketers investing their spend for 2017 and beyond? Are they prepared to take a gamble on innovative new ideas, or are they playing it safe?

The State of Digital Advertising 2017, a new report by ClickZ Intelligence in partnership with Marin Software, set out to discover just that. It surveyed more than 500 advertisers around the world on their ad spend, both present and future – and in particular, the top priorities for their business in 2017.

The report found that while there is interest from advertisers in newer, more speculative technology, not surprisingly, most marketers are still prioritising the fundamentals of advertising where they know they can drive ROI.

However, the results tell us which of the newer technologies are attracting the most interest from advertisers; and they also provide an intriguing insight into how marketing companies of different sizes are choosing to allocate their ad spend for 2017 and beyond.

What are digital advertisers prioritising in 2017?

As mentioned above, digital advertisers are mainly concerned with prioritising the fundamentals of marketing in 2017, with content marketing (cited by 42% of advertisers), search marketing (cited by 39%) and social media (30%) ranking top of advertisers’ list of priorities for 2017.

More than a quarter of advertisers (26%) cited mobile optimisation as a top priority for their business in 2017. In an increasingly mobile-first world, this figure might seem lower than expected. It could mean that many advertisers believe they are already optimised for mobile and so don’t need to prioritise it as highly; or it could mean that advertisers are underestimating the extent that mobile needs to be a priority.

For many advertisers, mobile optimisation is only the first step in delivering a successful campaign on mobile. While companies might understand how to create a mobile-responsive offering, they still struggle to track and attribute returns to mobile customers. Indeed, 26% of advertisers also cited attribution as a top priority for 2017 – the same percentage as mobile, which may not be a coincidence.

“We know that more people are using mobile than using their computers to visit our website,” says Melodi Campbell, Vice President of Marketing and Communications at Worldwide Counter Threat Solutions, and a participant in the State of Digital Advertising 2017 survey.

“Our site is mobile-ready, but it concerns me that we aren’t able to track exactly where those conversions are coming from.”

Woman using her Mobile Phone, Night Light Background

In an increasingly mobile-first world, are advertisers prioritising mobile optimisation enough in 2017?

In the realm of more speculative technology, which new prospects are attracting the most interest from advertisers in 2017? More than a tenth of advertisers (11%) said that they were planning to prioritise social commerce, a relatively new concept combining elements of social networking and ecommerce, in 2017.

A further 7% said that they were planning to prioritise artificial intelligence, which encompasses chatbots, digital assistants and voice search, an increasingly important trend in the search marketing industry.

“[Artificial intelligence] really gets into why we want to continue to explore with different search engines,” says Pam Weber, Vice President of Strategic Initiatives at ROAR! Internet Marketing and a participant in the State of Digital Advertising 2017 survey.

“Voice search is going to continue to increase; we’re watching as those vehicles – Alexa, and Siri, and Google Assistant – become smarter and smarter.

“It hasn’t yet broken into the commercial market, but it’s only a matter of time.”

Smaller businesses are more willing to take a gamble

You might expect that the size of a business would have a positive correlation with its willingness to invest in more speculative technologies: the larger the budget and resources, the more a business might be willing to take risks and branch out into unknown areas.

In actual fact, when the responses from advertisers were analysed by demographic, it was found that more small businesses (defined as those with an annual revenue of less than $10 million) were planning to invest their ad spend in cutting-edge technologies than medium-sized (annual revenues of $10-100 million) and large businesses (with annual revenues of more than $100 million).

Top priorities for 2017, split by business size

The interest in social commerce, for example, was found to come much more from smaller businesses, of whom 20% cited it as a priority for 2017, versus 7% of advertisers from medium-sized businesses, and just 4% of advertisers from large businesses.

Small business advertisers are also more interested in investing in artificial intelligence, with 9% citing it as a top priority for 2017, versus 7% of advertisers from medium and large businesses, respectively.

And 5% of small business advertisers cited smart home hubs (such as Amazon Echo or Google Home) as a priority for 2017, versus 4% of large business advertisers, and none from medium-sized businesses.

While these differences might seem marginal in places, the trend is interesting to observe. It could be that small businesses are more willing to take a gamble on up-and-coming ad technologies with the hopes of a big pay-off in the long run; or that they are focusing their efforts on a specific niche, for example voice search, which encompasses both AI and smart home hubs.

By contrast, advertisers from large companies have larger sums of money at stake, and thus aren’t willing to risk them on untested avenues – especially the case of agencies, who might represent wealthy clients with more to lose if their campaigns don’t deliver strong ROI.

Either way, the findings of The State of Digital Advertising 2017 give an indication of where advertisers are focusing their efforts over the coming year. It will be worth keeping an eye on these channels to see whether they really do pay off as expected.

 

How have trends in 2016 shaped ad investment in 2017, and what does this mean for the future of global advertising? Download your free copy of The State of Digital Advertising 2017 to find out. 

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