What Marketers see as Critical Emerging Technology/e-marketer

IOT tops the list as more businesses are in mature deployment stages this year

A survey of advertising and marketing executives indicates that, of a variety of emerging technologies, the internet of things (IoT) is seen as the most important.

Importance of Select Emerging Technologies According to US Ad Agency/Marketing Executives, Oct 2016 (% of respondents)







According to data published in November, about half of US advertising and marketing executives identified artificial intelligence, virtual and augmented realities, the internet of things and “conversational marketing” as at least somewhat important. But almost a quarter called the IoT very important—distinctly more than the other platforms.

In October, MediaPost Communications and Advertiser Perceptions surveyed 303 advertising and marketing executives in the US on their understanding of emerging technologies.

According to the data, IoT was rated “very important” by 24% of executives, in contrast to only 14% feeling this way toward each of the other technologies.

While the rankings were clustered in a close range, VR/AR was perceived to be slightly less important than the others, with 48% said it was “somewhat important” and a total of 38% saying it was either “not very important” or “not at all important.”

This could be related to concerns about the market for VR products and experiences. A recent survey by Greenlight Insights found that fewer than half of VR professionals are confident that their products will be profitable in the near term.

By contrast, the internet of things is seen by many as a near-term business reality. In research released in August, Deloitte found that in 2016 more than one-third of executives polled said their companies were actively deploying IoT, while nearly 20% described their company’s efforts were already at the mature stage—effective deployments. A similar number said their company’s efforts were in the early, experimental stage.

Implementation of Internet of Things (IoT) at Their Company According to US Executives, 2015 & 2016 (% of respondents)

Marketers interested in IoT may want to take a cue from the retail industry. A year ago, more than half of retailers worldwide told Retail Systems Research that they believed the technology was poised to dramatically change the way companies do business in the future. Through IoT, retail executives said they are able collect, share and analyze real-time data that can be useful to supply chain and inventory management, as well as in delivering personalized promotions and enabling ecommerce.

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Japan’s Consumers Expect Big Changes in the Way They Interact with Companies/eMarketer

Firing up web chat and messaging apps to make contact

Of all the myriad ways consumers can connect with companies, web chat and messaging apps are hardly used at all, according to a recently published survey. But consumers expect that to change—a lot.

Current vs. Planned Channels Used by Internet Users in Japan to Interact with Companies, Aug 2016 (% of respondents)







Just 5.3% of internet users currently use web chat to interact with companies, but more than one-third expect they will in the future, according to a survey by Transcosmos. Similarly, around 5% use messaging apps to communicate with companies now; 43% expect do so in the future.

The dominant communications mode today is the telephone: More than 86.1% of the survey respondents said they had interacted with a company via telephone sometime in the last six months. That mode is expected to decline, but even then telephone is still expected to be the most commonly used channel to communicate with companies. Likewise, email interactions, in-store interactions and forum sites are all likely to decline but will remain significant communications channels.

The results of the Transcosmos survey stand in contrast with data from a report released earlier in the year by JustSystems. In the earlier survey, nearly 60% of smartphone users in Japan ages 15 to 49 said they used Line, the popular messaging platform, to get information from companies or brands.

Mobile Channels Used to Get Information* from Companies/Brands According to Smartphone Users in Japan, Jan 2016 (% of respondents)

The widespread use of Line would suggest that messaging apps are already in wide use for interacting with companies—no waiting for the future to arrive. But it may be that the relatively young survey group (ages 15-49, all smartphone users) was the most likely to tap into Line for these types of interactions.

In any case, together the surveys indicate that messaging and chat are likely to play a significant role in consumer/company communications in the future.

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Marketers Say ‘More’ to Search, Mobile, Facebook/eMarketer

Social is also a priority beyond Facebook

Three-quarters of US marketing professionals said in August 2016 that they plan to increase their AdWords budget in the next 12 months, according to a survey from pay-per-click optimization firm Hanapin Marketing. Nearly as many said the same about mobile budgets and Facebook ads.







Over 50% of those surveyed say they’ll spend more on Bing. With 41% saying they’ll spend more on Instagram, 34% on LinkedIn, 21% on Twitter, 18% on Pinterest and 15% on Snapchat, along with the 69% who will increase spending on Facebook, it’s clear that social is eyed as massively important to US marketers.

In fact, the same survey highlights that both brands and agencies said in August 2016 that the most important tactic or metric for the digital marketing industry over the previous 12 months was social advertising.

Over 50% of brands cited social advertising as most important over the prior 12 months, while 46% of agencies did the same. But with social, it isn’tonly about advertising—38% of agencies, for example, also called social commerce one of the most important. Brands, however, find it less critical: Only 26% of respondents called it most important.

But marketing love for social media doesn’t necessarily prove it be effective. While 42% of respondents did call social effective, mobile, remarketing and text ads all got higher marks in the survey about pay-per-click ads.

eMarketer estimates a total of $15.4 billion spent on US social network ads in 2016, which accounts for 21.3% of all digital ad spending.


Is Internet Time All About Apps?/e-Marketer

Strong majorities of smartphone and tablet time are spent with apps

Mobile apps are taking over the digital world, according to research on the amount of time US consumers spend with media. eMarketer estimated earlier this month that 85.7% of nonvoice time spent with smartphones was spent with apps, as opposed to just 14.3% spent on the mobile web.

Share of Average Time Spent per Day on Mobile Internet Among US Smartphone and Tablet Users, In-App vs. Mobile Web, 2016 (% of total)







On tablets, too, mobile apps are dominant: About three-quarters of tablet time is spent with apps. Overall, eMarketer estimates that the average US adult spends 2 hours 28 minutes each day with mobile apps, or about 20% of their daily media time. Among mobile device users only, the average time spent daily with apps is 3 hours 18 minutes.

That’s more time than they spend with desktop or laptop PCs, a finding echoed by comScore as far back as June 2014. The internet users studied by comScore have continued to spend more time with mobile apps each year since then, opening up the gap between mobile app time and all other digital media time even further.

Time Spent Online Among US Internet Users, by Platform, June 2013-June 2016 (billions of minutes)

Mobile web time spent is up slightly as well, from 118 billion minutes in June 2015 to 125 billion a year later.

But smartphone apps account for the lion’s share of growth in time spent online since June 2013, comScore reported.

Tablets apps also contributed 9% of growth in time spent online.

Share of Growth in Time Spent Online Among US Internet Users, by Platform, June 2016 (% of total change vs. June 2013)

Aggregate figures only tell part of the story: Younger smartphone users overindex in time spent with apps, while the same is true of older tablet users. For example, 18- to 24-year-old smartphone users spent an average of 93.5 hours using smartphone apps in June, compared to 73.8 hours among the overall smartphone population. Meanwhile, on tablets, those 55 to 64 spent the most time with apps that month, at 28.0 hours. Average time spent with tablet apps among tablet users was 22.6 hours.


Mobile Ad Spending in Australia to Outpace TV Spending this Year/e-Marketer

Digital ad spending will account for more than half of all media spending next year

This year, for the first time, mobile ad spending will exceed outlays on TV in Australia, according to eMarketer’s latest worldwide ad spending forecast. 2016 mobile ad spending will total $2.71 billion, or 25.3% of total media ad spending in Australia. Meanwhile, TV ad spending in the country will amount to $2.58 billion, or 24.2% of the total.

Mobile* vs. TV** Ad Spending in Australia, 2015-2020 (billions)






“Digital and mobile ad spending saw stronger-than-expected growth in 2015, driven by a significant increase in digital video advertising,” said eMarketer forecasting analyst Shelleen Shum. “Australia boasts one of the highest smartphone and tablet penetration rates in the Asia-Pacific region and ad dollars have followed consumers’ eyes to mobile.”

eMarketer has lowered its growth projections for TV ad spending and increased its estimates for digital, including mobile, spending since its last forecast. This is because data from some of the commercial TV networks showed lower-than-expected growth due to the growing popularity of various subscription video-on-demand (SVOD) services launched this year and last.

Digital vs. Mobile* Ad Spending as a Percent of Total Media Ad Spending in Australia, 2015-2020

“Traditional TV is facing strong competition from digital streaming subscription alternatives like Netflix that have appealed to consumers who are drawn to the ability to stream content anywhere, on-demand,” added Shum.

Next year, digital will account for more than half of all ad spending in Australia, or $6.94 billion. By 2020, eMarketer estimates, this share will have risen to more than 57%.


12 marketing lessons from 20-year Coca-Cola veteran

Digging through a new book by former Coca-Cola Company European marketing chief Javier Sanchez Lamelas turns up plenty of insights for aspiring brand leaders.

Lamelas, who left the company in February after 20 years and subsequently set up a marketing consultancy, has written Martketing: The Heart and the Brain of Branding as “a manual to shorten your marketing learning curve”.

His understanding of how marketing and marketing departments work, or should work, also draws on eight years at P&G earlier in his career.

Campaign has picked out 12 passages from the book worth perusing:

On reversing Coca-Cola’s sales decline in the 2000s
Coca-Cola sales were declining – there was a faction that was convinced the product was stigmatized by consumers because of its sugar content. But that couldn’t have been the real reason … consumers tend to blame products when they’re not happy with brands. In fact, people forgive products when they love brands: Louboutin in spite of uncomfortable heels; Porsche in spite of their noise and inflexible suspensions; Rolex, even though they are heavy and inaccurate.

I realized the brand in declining markets was simply getting old: it was aging with its user-base consumers … we weren’t renewing our user base at a sustainable pace. During the nineties we’d been focused on driving existing-drinker consumption: “Always Coca-Cola”; introduced larger sizes; ran promotions to increase frequency of consumption; we introduced multi-packs in stores and larger cups at McDonald’s. Unlike in previous years we devoted very little effort to making new generations fall in love with Coca-Cola.

On focus groups
I have to confess that during my entire marketing life, I have not seen a single insight come out of a focus group … Consumers do not spell out insights. They do not know what is feasible and/or they provide unrealistic solutions. Or worse, they don’t know what they want.

On the failure of Coca-Cola C2, a predecessor to Coke Zero, in 2004
We were losing people as they aged [they weren’t switching to Diet Coke because it had a different taste to Coca-Cola]. We needed something low in calories, but with a taste that was closer to regular Coca-Cola. The R&D people came up with a product that had a 50% sugar reduction that tasted very close to Coca-Cola. We undertook a large battery of tests, both at the concept and product levels, to determine the potential of the idea. Test results indicated it was a good idea. That’s how Coca-Cola C2 was born. We launched it in the USA and Japan in June 2004. Pepsi simultaneously countered with a similar product, Pepsi Edge. After a few months in the market and more than $50 million invested in marketing, both companies had to discontinue … it was obvious the trade-off we offered consumers wasn’t enough.

On the need for marketers to stay objective about their ideas
People tend to fall in love with the stories they create. In marketing, though, you might have ugly babies. And you have to be ready to accept it. I know it’s hard, but that’s also why you get paid: to keep objectivity and your critical judgement intact and unbiased.

On rolling Diet Coke and Coke Zero into the Coca-Cola masterbrand in 2016
Coca-Cola was about “happiness”, Coca-Cola Zero was about “possibilities” and Diet Coke was about “sexiness” … that was a confusing and very expensive model. I recommended moving to a masterbrand approach … the idea of embedding “choice” within Coca-Cola was spot on. It was a smart way to answer our detractors when they claimed that Coca-Cola had too much sugar. Our answer was: “Which Coca-Cola? We also have Coca-Cola – the real one – with zero calories.

On research
Research is not a substitute for decisions. It just helps the decision-making process. And more importantly, research cannot “create” marketing.

The equivalent to [showing someone an ad and asking if they would buy this product more than competitors’ products] would be to give a bunch of flowers to somebody you just met and then immediately ask: “Would you be more inclined to marry me and have three kids with me than with another guy?” The obvious answer would be a big no.

On effective marketing investment
About 80% of the population chooses its favourite soft drink brand before they reach the age of 18 – and this tendency isn’t unusual in other categories either. Of this 80%, only 20% switch their favourite brands later in life … Any dollar spent on generating brand love that targets people older than 18 is at least five times less effective than the marketing investment aimed below this age.

On obstacles to great marketing
Most companies fail to deliver great marketing not because of the individuals involved, but because of processes – or lack of processes – that prevent them from working together.

Many marketing departments are organised like a tailor shop. The tailor – usually called the marketing manager – has end-to-end responsibility for projects moving through the department.

[It is] able to produce high-quality marketing, but only if … the tailor is a good professional with deep knowledge; the rest of the team respects and follows the tailor’s leadership; and the entire organisation has worked together long enough to understand how the tailor shop works.

That said, the tailor shop suffers from several important drawbacks. First, when the above conditions aren’t met, the quality of the subsequent marketing is usually very poor, or at best inconsistent. Second, the amount of work this kind of organisation can handle is limited. Eventually, the only way to boost the output is by increasing the number of tailors. Third, when the tailor leaves, the department needs to be rebuilt all over again. Fourth, high levels of team frustrationg are generated simply because the “boss didn’t like it”.

On commissioning design
Only a small percentage of people have the ability to cut through and understand the power of a great design at first glance.

The key is to leave your design in experts’ hands; your responsibility is choosing the right experts. Trying to modify an expert’s assessment using public opinion is a bad recipe. And don’t worry if not everybody likes the design at first. If the design is really good, they will like it sooner or later.

On why New Coke failed
New Coke [launched in 1985 in reaction to the Pepsi Challenge campaign] was one of the most consumer-researched launches in history. What went wrong with all that research? Actually nothing; the research was clear and consistent: New Coke was significantly preferred over Coca-Cola in sip and extended usage tests. Also in blind and identified tests. What went dramatically wrong was the interpretation of the results. Having – let’s say – 60/40 significant difference in overall preference does not mean that product A is better liked than B by everybody. It just means that 60% of people prefer product A and 40% prefer B. Remove product B from the market and you will get 40% of angry consumers, especially if the brand has a high emotional attachment. A terrible mistake in interpreting data led to a dramatic business decision.

On what makes successful brands
Successful brands do not talk to people. They lead conversations with their potential consumers, and not their current consumers. The essence of any good conversation is first to listen and then to respond.

On what makes dangerous employees
The really dangerous group [is] people with a low ability to solve problems correctly but with a high level of initiative. These people are the real value destroyers in the organisation. They do it naturally. And to make things worse, they also consume a huge amount of resources in the form of other people kept busy fixing their mistakes. Your job as a manager is to identify them and make sure they are out of your organisation.



Calls to improve creative standards in ad-blocking war

Industry leaders have warned that the creative challenge around digital advertising is just as significant as the technical one, in response to the launch of a consortium fighting against ad-blocking

Direct Line: the insurer’s online ad boosted awareness and purchase intentDirect Line: the insurer’s online ad boosted awareness and purchase intent

The Coalition for Better Ads launched at the Dmexco conference in Cologne last week, promising to create and implement standards guiding how ads are delivered to web users. It aims to improve the user experience and tackle the growing number of consumers adopting ad-blocking software. Research from eMarketer predicts that 27% of internet users in the UK will be running ad-blocking software next year, compared with 20.5% this year.

Industry figures largely welcomed the new drive but raised issues around creativity in digital ads. Direct Line marketing director Mark Evans said the coalition “can’t be a bad thing if it raises awareness and solidifies that this is a problem for everybody”, but added that it was only tackling half the problem.

“The appearance of digital marketing has changed a lot but the content hasn’t,” he said. “One of the issues is that perhaps the industry is not yet holding the balance between response and brand-building in digital advertising.”

Evans added that digital ads needed to embrace the creative potential of the medium, citing the example of a Facebook ad for Direct Line’s emergency-plumber service that depicted a room filling up with water.

The dominance of direct response in digital advertising also makes assessing the effectiveness of campaigns more challenging, according to Zoe Harris, group marketing director at Trinity Mirror. “The way success is measured often doesn’t take into account the overall effect on consumer perception,” she argued.

Other publishers called on marketers to revise their expectations of digital advertising. Ben Walmsley, digital commercial director at News UK, said that while good advertising could be as engaging as editorial, “poorly targeted ads or those with ‘spray and pray’ acquisition goals will drive up the prevalence of ad-blockers”.

The coalition’s standards will be informed by the “Lean” (light, encrypted, ad-choice supported, non-intrusive) ad principles launched by the Internet Advertising Bureau in October last year and will specify factors including ad format, frequency, density, file size and data use.

Adam & Eve/DDB chief executive James Murphy said that enforcing such standards would help but that creative agencies also need to consider consumers more carefully. “Creative agencies are experts in emotional experience, not user experience,” he said. One example of this, he added, is agencies’ tendency to prefer rich media, whose aesthetic qualities may come at the expense of functionality.

Other agency figures cautioned against the “snobbery and arrogance” of some in the industry towards digital creativity, which Ben Fennell, chief executive of Bartle Bogle Hegarty, said was usually misplaced.

The coalition’s stakeholders include prominent advertisers, media owners and industry bodies – such as Google, Facebook, Unilever, Procter & Gamble, the IAB and the World Federation of Advertisers – as well as Group M, the world’s biggest ad buyer.

John Montgomery, executive vice-president of brand safety at the WPP media group, said it was necessary to form the coalition in order to enable publishers and advertisers to fight back against the ad-blockers, after Adblock Plus owner Eyeo announced at Dmexco that it was launching its own ad exchange (see page 8).

“What we don’t want is for the ad reinsertion companies to define what the standards are,” Montgomery said. “There needs to be a global set of standards.”

Eyeo’s tactics, he said, are only addressing the “symptoms and not the cause” of ad-blocking, which is a poor user experience, and this needs to be tackled before publishers could credibly ask readers not to use ad-blockers.

Percentage of UK Internet Users Running Ad-blockers (by device)

2014 2015 2016 2017*
Desktop/Laptop 9.5 13.0 18.5 24.0
Smartphone 1.7 3.3 5.8 8.8
Total 10.0 14.0 20.5 27.0

Source: eMarketer, April 2016; *Forecast



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