2019 End Year Review
This Year in Marketing
As marketers headed home for the holidays last year, they were gifted with a strong fourth quarter to carry them into the new year. This optimism carried through the start of the year despite conservative estimates for the global economy. The U.S. reported GDP growth in the first quarter of 2019, but by the second quarter tariffs and trade uncertainty led to broad economic contractions that impacted advertising and marketing efforts employed by major brands.
Despite slowed growth in the middle part of the year, a rise in consumer spending in the fourth quarter again has shown renewed confidence in the economy and is prompting brands to continue investing in their marketing efforts.
Cautious optimism and confidence in advertising and marketing is likely to carry over into 2020. As business leaders prepare for the year ahead, sustained investment in tried-and-true marketing efforts will help maintain growth, while investment in new and innovative solutions will benefit those bold enough to try them.
Trends That Came To Life in 2019
To prepare for the future, it helps to analyze trends of the past. Last year, Collective Measures made several predictions for 2019. Here is how those shook out:
WAYS TECH AFFECTED SHOPPING BEHAVIOR. Due to tech innovations like social shopping and expanding online marketplaces, ecommerce continued to account for a greater portion of total retail sales in the U.S. this year and helped to continue reshaping the way consumers shop. While total retail sales have averaged 3% growth per quarter in 2019, ecommerce sales have averaged over 14% growth, according to the U.S. Census Bureau.
Leading this ecommerce growth, Amazon’s Prime Day this year not only set new sales records for the company, but also it had a halo-effect that benefitted other major retailers and niche retail sites. Facebook also contributed to ecommerce’s effects on shopping behavior. The social network unveiled shoppable images on Instagram in 2019, effectively transforming retail social accounts into digital catalogs.
HOW THE CONVERSATION AROUND PERSONALIZATION AND PRIVACY SHIFTED. With new legislation dictating how digital companies acquire and manage user data, 2019 sparked a debate in marketing around developing personalized online experiences and adhering to user privacy regulations. Google was part of the debate early on as the first major U.S. company targeted by the EU’s General Data Protection Regulation, fined $57 million in January for not properly disclosing how user data was collected across its many properties.
Domestically, final amendments to the California Consumer Protection Regulation were signed into law in October ahead of the January 1, 2020 enforcement date. Several other states have begun to introduce similar legislation and the U.S. Senate has introduced a bill called the ACCESS Act, which would require technology platforms like social networking sites to create a mechanism for easily transferring data between different services.
SEARCH MARKETERS CELEBRATED THE LIFE AND DEATH OF THE KEYWORD. Keywords themselves, of course, didn’t actually go anywhere, but how they are being used changed drastically over the last year. Changes to search engine algorithms have made it easier for users to find what they’re looking for, while voice and image search continued to grow as focus areas for search marketing.
Even within search advertising, which has historically relied on precise keyword matching to reach searchers in the moments that matter, building exhaustive lists of all possible words and phrases was no longer a necessity this year. Search engine advertising has grown in sophistication to the point where searchers can be targeted by advertisers solely based on the intent of their search query, rather than the keywords used.
TRADITIONAL MEDIA STUMBLED IN ENTERING ITS NEXT ADVERTISING LIFE STAGE. Just when it looked as though traditional media channels were ready to fully integrate into the digital age, progress in modernizing the measurability of traditional media seemed to stall. Marketers were promised better attribution from offline efforts, but instead were given digital alternatives to traditional channels to help increase their measurability. As the digital versions of these channels – such as advanced TV or digital out of home – continue to mature, marketers will soon be able to better measure across offline and online touchpoints.
Trends in Digital, 2020
As we enter a new year,Collective Measures expects to see continued change in the world of marketing & advertising that could impact business strategies throughout the next decade. How brands and platforms are able to respond to these changes could shape the future of the industry. Here are our top four digital marketing trends to watch in 2020:
- Political ad spending will force marketers to reevaluate their advertising strategies
- Big names in digital will look to enter new markets, opening doors for marketers
- Marketers will need to reassess their attribution models… again
- Gen Z’s cultural influence will be felt by marketers in 2020
1. Political Ad Spending will Force Marketers to Reevaluate Their Advertising Strategies
If somehow you’ve managed to tune out political media up to this point, consider yourself lucky. Soon political messaging will be nearly impossible to avoid as candidates, parties, and interest groups spend record amounts of money on both traditional and digital advertising. According to Politico and the Wall Street Journal, U.S. political ad spending could reach between $6 billion and $10 billion in 2020, higher than any previous election cycle.
Although digital ad spend is projected to see the greatest percentage increase from the 2018 midterm elections, local and national TV inventories will be most affected by the increase in spend. Because the FCC regulates the rates charged for broadcasted political advertisements, the cost of declining inventory will likely be passed on to brand advertisers.
Beyond shortages of inventory and higher costs, oversaturation of political media and advertising will likely impact how U.S. consumers react to branded media and marketing over the next year. In short, consumer attention will be harder to capture. Add in the Summer Olympics in August 2020 and consumers will be inundated with ads throughout both Q3 and Q4.
Harder to predict are the changes that major platforms might make in 2020 related to political advertising. With the specter of foreign influence and data mismanagement continuing to haunt Facebook, founder Mark Zuckerberg will have to continue fighting a reputation war on two fronts – congressional inquiries on Capitol Hill and criticism from peers in Silicon Valley, specifically from Twitter’s Jack Dorsey. With hundreds of millions in ad spend already planned for the platform, it’s difficult to imagine the company will take a stand before the next election.
To prepare for the year ahead, marketers should ensure their ad dollars are being allocated and spent strategically. Some channels may see a rise in cost while others may be oversaturated with political messaging. It will be more important than ever to have a diverse media mix and the flexibility to test different channels throughout the year.
2. Big Names in Digital Will Look to Enter New Markets, Opening Doors for Marketers
Each year, advertisers look to the biggest names in digital to see what innovations and opportunities await. In 2020, marketers should watch as the major players will look to enter (and disrupt) new markets.
AMAZON. Outside of ecommerce, Amazon is continuing to build its health insurance alternative, which has been predicted to be a major disrupter in the health care space. The company also introduced Amazon Care for employees and their families, which could be scaled to turn over the virtual care industry.
FACEBOOK. Facebook’s cryptocurrency project, Libra, is still moving forward despite criticism and recent departures from founding partners, including Visa, Mastercard, and PayPal. If Facebook is able to launch Libra in 2020, it will be a first. Skeptics aren’t holding their breath though – the company has a track record of promising but not delivering on global solutions. Remember Zuckerberg’s dream of drones that would broadcast Wi-Fi around the world?
GOOGLE. Google and its parent company Alphabet have been making moves to dominate in 2020 with all new revenue streams. Stadia, a video game streaming service and console hardware, is brand new to the market. Google’s acquisition of Fitbit and reports that the company has been amassing health data signals a focus on the healthcare industry. The company also recently announced “Cache,” a checking account service in partnership with Citigroup that’s likely intended to compete directly with Apple’s new credit card.
Many of these moves will come under close scrutiny. Specifically, the benefits and consequences of major corporations amassing health and financial information must be assessed carefully. For Amazon, Google, and Facebook, however, the increased diversity of products and services will help insulate the digital giants from accusations of monopolizing their core industries (ecommerce, search, and social networking).
For marketers, data collected by these organizations will likely translate into new targeting opportunities. Because health and financial data have historically been controlled by a handful of companies, the ability to leverage that data has been limited. As Google, Amazon, and Facebook begin to accumulate their own users’ health and financial data, however, opportunities to target new consumer segments may arise. The key will be to ensure data is used responsibly and ethically, otherwise concerns over privacy will escalate.
3. Marketers Will Need To Reassess Their Attribution Models… Again
Just when we thought the barriers to better attribution would be coming down, the walls around the ad industry’s highest-walled gardens have grown even taller. API limitations, the blocking of third-party tracking, and increased concern over data privacy are all at odds with demands of marketing leaders. And as we’ve seen in 2019, evolving consumer and data privacy legislation – such as more states proposing legislation similar to California’s – will complicate matters further.
In the new era of measurement, assigning value to visibility metrics – even for channels traditionally closer to points of conversion – will be critical to understanding the broader consumer journey. Within search, for example, the visibility of results on a given search results page (measured via impressions) will need to be closely monitored as clicks on certain query types continue to see a decline.
To account for the fragmentation of digital channels and future difficulties with attribution across them, marketers should focus on their own measurement practices, reviewing how they’re actually using the attribution models they already have and developing new, more flexible models that can account for change. The days of expecting one silver-bullet attribution model to solve all business challenges is over. Instead, analysts and marketers need to utilize both existing and new measurement methodologies to answer an increasing array of attribution questions.
4. GEN Z’S Cultural Influence Will Be Felt by Marketers In 2020
You may already have started to feel it: a resurgence of style trends you thought were gone, new phrases sneaking their way into your vocabulary, or the sudden realization that your young coworkers don’t watch the same shows or follow the same bands as you. That’s because Gen Z is finally starting to enter the workforce and the broader consumer marketplace.
In 2020, Gen Z’s influence will continue to grow, which means marketers will need to realize (and capitalize on) the benefit of reaching them. This year we saw the rise of TikTok, and with it the voice of a generation sarcastically retorting, “OK boomer.” How Gen Z uses technology and digital will shape the way companies advance going forward. Facebook has quickly taken notice, testing TikTok-like features and removing “Like” counts from Instagram posts in response to how this generation likes to interact online.
After years of millennials enduring industry-killing accusations, it’s the next generation’s turn. Might Gen Z finally kill primetime TV? Young people entering adulthood are the first to do so with an array of streaming services available. This means that the winners of the forthcoming streaming wars will likely be determined by the cord-nevers, rather than the cord-cutters.
This generation’s tech savviness will both challenge and enable companies to further innovate, bringing new products and services to the marketplace. Having been surrounded by technology their entire lives, expectations for online experiences will be much higher. Marketers should focus on building seamless, problem-eliminating brand experiences in 2020.
What 2020 Will Look Like For Marketers
Trends that helped shape marketing strategies in 2019 will continue to have an impact going forward. As Collective Measures predicted, tech continued to affect shopping behavior, privacy and personalization were forced to strike a balance, and both the way consumers search and how marketers reach them changed.
In 2020, political advertising and market expansion from the biggest names in digital will shape how marketers are able to reach consumers. Meanwhile, attribution models and personas will need to be reviewed to account for the next generation of consumers and an ever-changing array of touchpoints.