Tuesday, December 27, 2011

Digital Marketing Trends To Watch Out For In 2012

Matt Lawson

As you put the finishing touches on 2012 budgets and plans, it’s important to build a point of view on the future. While it’s impossible to predict what will happen or when, running through a few what-if scenarios makes you more prepared for changes as they come.
In this column, we’ll highlight some of the trends and possibilities we see for digital marketing in 2012. But first, let’s review the predictions I made in our 2011 predictions and trends column last year – to see if my foresight was correct.
My prediction that marketers would increasingly apply automation to combat rising costs-per-click for paid search was spot on. Across our clients, we saw a dramatic shift in click-share from broad to exact match keywords, resulting in improvements in CPC across the board.
I also correctly called the launch of Google+, writing that “a new, more social search algorithm will allow users to rate search results or even websites, and have user ‘likes’ factored into ranking algorithms.” Take that, Nostradamus!
But no soothsayer gets by without a fair number of misses. Predicting that online merchants would convert visitors off-site through mobile, social, and local platforms was premature.
While brands are building experiences on these platforms, they are often designed for top-of-funnel engagement as opposed to converting visitors off-site.
Finally, my crystal ball must have been broken altogether when I anticipated that Facebook would launch an ad network for 3rd party publishers to rival the Google Display Network.
So what does the future hold? Below are four trends to look out for in the coming year.

Google Dials-up New Incentives & Options For Advertisers

While the headline here may sound like saying “the sky is blue,” hear me out on this one. In aggregate, as costs-per-click continue to rise for Google’s ad networks, Google is at risk of driving incremental dollars elsewhere.
For years now, Google has been the only game in town, but with the rise of Facebook and the advent of the search alliance, real alternatives for advertisers may be on the way. To continue capturing the lion’s share of net-new ad spend, Google has to continue innovating with its advertising products.
Innovations will include improvements to matching algorithms that make more efficient use of ad inventory. Remember, quality score is an incentive mechanism, and one which Google can easily dial-up to drive behavior.
Deeper discounts for advertisers that do a better job of managing quality scores will result in a heightened focus on optimizing match types and negatives. New ad formats and options will also play a role in increasing ad inventory for Google.
Look for innovations in retail product listings, travel search, and local offers to abound – creating high return opportunities for first movers.

Advertisers Find Themselves Needing To Make Friends

Google “+1’s” and Facebook “Talking about this” scores are just the beginning. In their quest to capture brand dollars and improve ad relevance, Google and Facebook will begin to incorporate social likeability and sentiment measurements into ad rankings.
In response, advertisers will begin to invest heavily in promoting “+1’s” and “likes” to consumers via PPC ads. Consumers will benefit as ads for more popular products and brands are presented more often. Purveyors of television or print media, on the other hand, will find themselves getting the short end of the stick as brand dollars increasingly shift online.

Search Outpaces Apps For Dominance In Mobile Marketing

While paid search already claims the largest share of mobile advertising dollars, advertisers should expect it to attain outsized gains in 2012. For mobile, tracking and analytics remains the largest roadblock for many advertisers. Advertisers lose visibility as soon as a visitor clicks into the app marketplace or uses an app, and tracking a click out from a mobile app using to traditional analytics tools is difficult at best.
Rather than continuing to double down on apps, advertisers will look to simplify their existing web experience for the mobile browser. HTML 5 will play a role in this trend, making the power of application design available on mobile devices through a standard Web browser.
As mobile experiences becomes more integrated into the website, advertisers will gain improved visibility into campaigns, allowing them to invest more accurately in performance advertising and paid search.

Exchanges Increase Transparency, Resulting In Increased Investment

Yahoo!’s recent move, requiring that advertisers have a seat on the exchange, gave them better visibility into their customers media plans. Expect more exchanges to follow a similar route. If requiring individual advertisers to have accounts proves too restrictive, exchanges may simply roll out separate pricing structures for advertisers vs. intermediaries through use of API fees or pricing floors.
Customers will benefit from the improved visibility, receiving better insight into how much biddable media is costing them. DSP’s and Trading Desks will be forced to respond with more transparent and standardized pricing. Expect percentage-of-media-spend pricing models to emerge and a drive toward self-service platforms as advertisers become increasingly involved in the buying process.
As we turn the corner on the New Year, we’ll see which of these trends and predictions play out. If you have predictions that we missed, please leave them in the comments section below. We’ll see you in 2012!

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