From Pokemon Go to GDPR: Four megatrends that shaped marketing in 2016 by Neil Davey

MyCustomer spoke with a handful of experts and took a step back through this year’s news to share the four marketing stories and trends that characterised the last 12 months. What have we missed?

Augmented reality

Pokémon Go was one of the sensational stories of 2016, becoming the most popular mobile game in history. It garnered rave reviews from gamers. It attracted more daily users than Twitter and was used on more Android phones than Tinder. And it drove Nintendo’s share price up 70% in the week after launch – its biggest jump in over 25 years.

But its lasting legacy may not be its popularity, but the fact that it brought augmented reality (AR) into the mainstream. What’s more, it also validated AR as a potentially valuable platform for digital marketers.

Previously adopted by sectors such as retail, which allowed shoppers to scan shoppable windows, and the car industry, where the likes of Ford had allowed users to preview cars via AR apps, Pokémon Go demonstrated that AR could be part of everyday. And Pokémon Go developer Nianatic was capitalising on this by selling ‘sponsored locations’ to advertisers. 

There was certainly evidence of how it could generate business. Slant Marketing, for instance, surveyed Pokémon Go users to see the impact that it had on customer engagement with businesses while playing the game. Some of the most interesting findings, included: 

• 51% of players had visited a business for the first time because of Pokémon Go.
• 71% of players had visited a business because there were PokeStops or Gyms nearby.
• 56% of players reported visiting local businesses while playing as opposed to national chains.

But while businesses were falling over themselves to capitalise on the latest craze, there were words of warning.

“A phenomenally successful launch has secured plenty of attention for Niantic and Nintendo…But monetising the user base is a different challenge and one that will probably involve a fair amount of testing and learning before it starts to generate significant revenues for brands, if indeed it ever does,” warned Jens Nielsen, MD of NetBooster.

“The brands that straight away sign for sponsored location-based advertising or similar deals, will probably not receive a quick boost in sales as a result. Of course, for many this won’t matter. To be able to communicate with even a fraction of the number of users the game currently has is still a phenomenal opportunity. Especially, if those users – the younger die-hard fans – happen to be your core audience.

“However, the brands who get seduced by the sheer numbers involved without properly thinking through why they’re choosing Pokémon Go, could waste significant marketing dollars without seeing much of a return on their investment.

“As ever, it comes down to relevancy and understanding your own customers and their behaviours – what drives their attention and their spend. What’s right for a hip young fast-fashion brand won’t necessarily work for a luxury watchmaker, and vice versa.

Pokémon Go was the surprise augmented reality hit of 2016, but it’s just the tip of the iceberg when it comes to AR.

“Once Pokémon Go’s sponsorship features kick in there are brands which will rush in to take advantage of this game-changing moment. Many will succeed but others may look out-of-place and, even worse, out of touch with their core customers. There are definitely opportunities here but Pokémon Go is only one, very early part of the AR story, and brands need to treat it as such when planning their digital marketing strategies.”

Nonetheless, early days or not, 2016 will be remembered as the year that AR was taken seriously by the marketing fraternity – and more than a little thanks should go to Pikachu and his friends at Nintendo.

“Pokémon Go was the surprise augmented reality hit of 2016, but it’s just the tip of the iceberg when it comes to AR technology’s upside,” suggests Katie Penfold, managing partner at BEcause Experiential Marketing. “In 2017, we can expect to see many, many more examples of blended realities, with reality blending increasingly with fiction and fantasy in both advertising and media.

“Faux campaign ads for House of Card’s Frank Underwood have already outshined real-world political candidates by becoming a top trending topic on Facebook and Twitter during CNN’s recent presidential debate, while highly controversial imagery to promote Amazon’s The Man in the High Castle caused quite a storm in New York City’s subway system after trains were covered in symbols to launch the show.

“These blended reality forms of advertising rely heavily on the intelligent consumer being able to tell the difference between what’s real and what’s fictional. But as entertainment continues to blur these lines, marketing, advertising and media will follow suit and our surroundings are likely to become even more surreal, with live creative technology central to this.”

Artificial intelligence

Artificial intelligence may have been generating considerable buzz in the customer service sphere, thanks to the rise in prominence of chatbots, but it was also coming to the fore in the marketing discipline too.  

“In 2016 we saw the rise of artificial intelligence making a much bigger impact on our lives than ever before,” notes Blake Cahill, global head of digital and social marketing at Philips. “AI is being used across all industry sectors to improve efficiency, reduce costs, increase revenues and boost customer satisfaction and 2016 has been a very interesting year. Large tech companies such as Apple, Google and Amazon all have their own versions of smart assistants on the market and marketers will quickly have to learn how predictive analytics, chatbots and customer service will all be effected as the technology is increasingly used to connect with and benefit their customers. 

“Machines have gotten better than us at recognising images and recognising speech and numerous brands are experimenting with machine learning to construct a persuasive two-way conversation with a wide variety of audiences. They will have the intelligence to deliver many convincing messages, replies and retorts in real-time, and we’ll need to learn to manage these systems and use the data they produce wisely.”

So how is AI being applied in marketing? In a nutshell, it’s making marketers lives easier via:

• Semantic analysis. Semantic analysis is a part of artificial intelligence in digital marketing that is already used in spell checks, social media analysis, sentiment analysis, fact extraction, summarisation and more.
• Segmentation.
• Search and filtering. From RankBrain answering your search queries and Facebook’s Deep Text creating your newsfeed to Klevu’s smart ecommerce search, neural networks and machine learning are changing the way online search works.
• Website recommendations.
• Website optimisation. Self-designing websites are actually a thing now thanks to artificial intelligence in digital marketing. Although Grid still hasn’t officially launched, the idea of a self-designing website is pretty amazing. 

Boomtrain’s Tara Rachel Thomas explains: “Artificial intelligence and machine learning can understand human behavior to the extent where not only are Big Data sets analysed, segmented and filtered, but meaning is also derived from them.

• Which customers hate receiving your emails and delete them as they hit your inbox? 
• How can I make sense of all this data I have on our campaigns?
• Which customer would like a particular product?
• How can I personalise the user experience and make it ‘sticky’?

“Using artificial intelligence in digital marketing can not only help answer marketers answer these questions, in some cases it already is. This gives back marketers time to innovate and grow their brand, rather than worry about how to automate emails to millions of customers at a time.

“AI in digital marketing not only exists, but it has started making the lives of users and marketers easier already. From texting to visualising business insights, the merger of big data, machine learning and AI is creating smoother and smarter experiences every day.” 

Jason Hemingway, chief marketing officer at Thunderhead, believes that AI has been a significant trend in the past 12 months – but will become something even more important in the coming years.

“Advanced intelligent technologies (such as predictive analytics, machine learning and natural language processing) are becoming more important in marketing,” he notes. “This trend will continue and brands will become better at integrating them, transforming their ability to understand and serve their customers better. The tendency so far has been to use this technology to try and manipulate customers’ behaviour, particularly through digital marketing and advertising. In 2017, the emphasis will be put on understanding customers – a change for the better.”

Ad blocking

“This year saw the industry wake up to the reality of ad blocking and the impact it is having on ad campaigns,” says Doug Conely, chief strategy officer at Exponential.  “Ad blocking has largely come about due to mistreating the consumer, either through poor accessibility or overall user experience, and in order to combat it the industry needs to work together to enhance the user experience by delivering relevant content to consumers in a non-intrusive way.”

Data from eMarketer suggests that 16.6% of the entire UK population already block ads, and this is set to rise dramatically over the coming 12 months due to widespread recognition of software availability.

“There’s no doubting that ad blocking is now a very real issue for advertisers. Next year, over a quarter of the people they’re trying to reach will be wilfully making themselves unreachable,” says eMarketer senior analyst Bill Fisher. “The good news is that numbers like this have forced those within the industry to think long and hard about what it is that they need to do better in order that this practice doesn’t become an epidemic.”     

So how are marketers responding? Neil Joyce, managing director EMEA at Signal, believes that while it’s still early days in the ad blocking battle, with the landscape and technology changing quickly on both sides, advertisers can start taking steps in the right direction to prepare. He suggests that marketers:

1. Understand the full impact of ad blockers on your ads or content. Advertisers and publishers need to pay close attention to how their content and advertising is rendering both with and without ad blockers. Ad blockers aren’t fool-proof: they can block non-ad content by accident and break the user experience. Make sure you understand what your users are seeing.
2. Be more relevant. The more relevant the advert, the more likely it is to be valued by consumers. This is where people-based strategies, which identify customers across devices and channels, and tie the data back to a user-level profile, become crucial. Real-time, always-on technology for collecting, matching and activating data within milliseconds can empower you to engage customers like David from Torquay at the exact moment they’re in market for your product.  
3. Pursue a diversified strategy. Not everyone is using ad blockers yet, but they are having a significant impact. Make sure all your messages can’t be wiped away with one software application, and explore in-app ads, native ads, and whether you can be doing more with email marketing.

GDPR

The General Data Protection Regulation (GDPR) has been four years in the making, and up until now it’s been a waiting game for most businesses as the finer details of the regulations have been ironed out by the European Union. But in April, the European parliament finally voted through the new rules. 

“GDPR was created to update previous data protection regulations in Europe, which, interestingly, had been put in place well before the internet became important to business operations,” explains Rick Powles, regional VP, EMEA, at Druva. “The updates within GDPR were designed to bring data protection regulations up to speed with all the new ways of doing business that have developed over the past few years.”

Based on guidance from the Information Commissioners Office, consumer rights under GDPR include the following that directly affect marketers:

• Right to be informed – this covers any gathering of data by companies, and consumers must be informed before data is gathered. Consumers have to opt in for their data to be gathered, and consent must be freely given rather than implied.
• Right of access – this provides consumers with the right to request access to how their data is used by the company after it has been gathered.
• Right of rectification – this ensures that consumers can have their data updated if it is out of date or incomplete.
• Right to be forgotten – if consumers are no longer customers, then they have the right to have their data deleted.
• Right to restrict processing – consumers can request that their data is not used for processing. Their record can remain in place, but not be used.
• Right to data portability – consumers can get a copy of their data, which can then be moved to another provider.
• Right to object – this includes the right to stop processing of their data for direct marketing. There are no exemptions to this rule, and any processing must stop as soon as the request is received. Similarly, this right must be made clear to consumers at the very start of any communication.

“The EU GDPR passed into law earlier this year and will come into force in May 2018,” adds Rachel Aldighieri, MD at the DMA. “The new rules offer consumers greater protection by changing how businesses hold, process and deal with all customer data. For brands, the legislation will also help protect their own reputations by building long-term relationships with customers based on transparency and trust.”

With a text in place, focus shifted from what the regulation comprises to what it would take to become compliant in time for the 2018 deadline. But some confusion was created with the surprise result of the UK’s EU referendum.

“The result of the EU referendum in June means that the UK will leave the Union, which has led some marketers to believe that the GDPR will no longer impact their business,” continues Aldighieri. “However, leaving the EU is going to take time and event once the EU has exited, any company doing business in Europe with any European citizen will need to be compliant with the GDPR, even if UK national laws change following Brexit.

The events of 2016 should pave the way for better transparency between consumers and organisations.

“Data is increasingly at the heart of everything marketers do to engage customers, which means the announcement of the GDPR has certainly been one of the biggest events of 2016. However, in a survey of marketers we conducted earlier this year, when asked about the GDPR a third (30%) of those that took part believed their company to be ‘unprepared’ for the new rules, while 42% believed their marketing efforts will be ‘very’ or ‘extremely’ affected by new rules – highlighting the need for marketers to continue to prepare for the GDPR in unrest over the coming years.”

Lindsay McEwan, VP and managing director EMEA at Tealium, believes that the long-term impact of EU GDPR will be positive for customer relationships – particularly following another year that has been characterised by privacy concerns.

“In 2016, a series of high-profile customer data breaches sent shockwaves across the media from reputable UK brands to global corporations. Customers questioned not only the ability of organisations to adequately protect their personal data, but why organisations were storing and trading it in the first place,” she notes. “

The devastation caused by data breaches finally gave businesses the wake-up call they needed to start taking data privacy and governance seriously. Combined with the upcoming General Data Protection Regulation (GDPR), the events of 2016 should pave the way for better transparency between consumers and organisations, significantly improving the data value exchange – and customer service – in the process.”