Data-Labor-Technology

As we enter the era of mass personalisation, tempered by strict data protection rules, we at iCrossing gaze into our crystal ball to reveal eight predictions for digital advertising in 2018. 

1. The Duopoly will finally be breached

Google and Facebook have ruled the digital advertising roost for years, hoovering up nearly all the growth this year. After numerous failed attempts by pure plays to breach the duopoly, Amazon will emerge in 2018 as the realistic challenger. When it comes to searching for products, Amazon has no equal – and over 70% of us search Amazon at some point during a purchase journey.

It’s the rich consumer behaviour data that powers advanced targeting through Amazon’s digital signal processing (DSP) onto unique ad placement that will attract share of spend – plus, of course, the invaluable sales and data reporting so craved by the advertisers.

Expect 2018 to be the first of several big years for Amazon, as the duopoly becomes an oligopoly for the next decade.

2. Watch out for a high profile bust after a short GDPR honeymoon

Friday 25 May 2018 will be a date etched in the history of digital advertising. When the day dawns, the General Data Protection Review (GDPR) legislation becomes law across Europe – and the UK has opted in. That means we have to gain specific, unambiguous consent to use personal data – including cookies, IP addresses, device IDs and so on. It all becomes personal data.

And while the likes of Amazon, Google and Facebook are sitting quite pretty with tens of millions of registered users, the opposite is true for the swathes of ad tech businesses most people have never heard of. I expect a short regulatory honeymoon period from the Information Commissioner’s Office, before investigations begin in earnest. We could see a high profile bust in the autumn.

3. Could the Government finally announce legislation over harmful and illegal content?

This year has been an annus horribilis for brand safety exposures, from Jihadi websites, to fake news and even child abuse. So it’s no wonder marketers cite brand safety as their number one concern. This month the Prime Minister’s independent watchdog, The Committee on Standards in Public Life (CSPL) recommended that social media sites be recast as publishers to stop them describing themselves as platforms with limited control over the millions of messages and videos that they host.

This would have huge implications, and any future legislation could lead to fines or prosecution for not complying with new rules surrounding control of content and take-down. Watch this space over the next two years.

4. Voice search reaches early majority

Voice search has already reached 20% of all queries. That’s critical mass in my business book, so we must be heading for the early majority on the old bell curve. With Google, Siri, Alexa and Cortana there’s a whole gang of virtual assistants taking our commands, and getting smarter in the process.

This will have a positive impact on our SEO strategies in 2018, as we optimise and generate content to respond to longer (and sometimes surprising) consumer voice queries. For those who do it well, this should become a seamless element of the modern brand experience 

5. Chatbots take over the sales and service front line

Businesses successfully implementing chatbots to help answer consumers’ questions in real time have realised great efficiencies in customer service and sales conversion. And it turns out customers love the convenience of chatting with a virtual assistant – just be sure yours is an intelligent one who knows when to hand over to a real human being if the questions get harder.

Your customers expect excellent, fast service and in 2018 we’re going to witness the emergence of some seriously talented virtual helpers.

6. AI rules ‘mass personalisation’ targeting revolution.

Once upon a time, demographic targeting was the height of sophistication. Now we’re entering the era of advanced audience insights. Not just time and place, but known consumer likes and dislikes, search, social and purchase history, even preferred formats.

It’s that ‘big data’ we kept talking about five years ago that can now be analysed in nanoseconds with artificial intelligence to customise messages in the moment. Welcome to the era of mass personalisation.

7. Wholesale shift of programmatic to private marketplace.

Programmatic ad trading is highly advanced in the UK, and in 2018 we expect a whopping 80% of display spend to pass through the trading desks. In the early days, nearly all the programmatic spend was on open exchanges, but as the market matured and the big publishers started to take part we saw growth in the Private Marketplace (PMP) offering premium inventory.

While the open exchanges gave us access to millions of consumers on thousands of sites at low CPMs, the brand safety and fraud risks were higher. Witness then the inexorable rise of the PMP which should cater for around 75% of programmatic spend in 2018, with growth formats in video, native and high impact display. Again – it’s all about the brand experience.

8. Static banners die off as video becomes all-pervasive.

The first ever online ad was a banner for AT&T on www.hotwired.com back in 1994, and for almost 20 years the majority of digital display spend went on banners, skyscrapers and things called ‘mid-page units’. These formats have not only been in decline for the last few years, but the far more dynamic and engaging video, social, native and paid content ads are due to account for three quarters of online display spend. All very much better for the consumer experience, and improved brand engagement for the marketer. Which also means…

A bonus prediction… CPMs will go back up (at last).

OK – I’m sticking my neck out for the publishers here. After years of decline, following not just the recession, but a veritable tsunami of cheap content available on the exchanges – which led to ad blocking, ad fraud and brand safety issues – we took a long look at what actually worked and what the consumer might actually accept.

So, given the above predictions for the continuing growth of video, content and native, traded on private marketplaces; and the associated declines for static display formats and spend on open exchanges, the outlook for CPMs is…. pretty encouraging.

So there we are. As always, the New Year is full of exciting and innovative opportunities, but it’s also tinged with tough challenges as the digital ad industry continues to mature and take the lion’s share of media budgets. We at iCrossing are all over this stuff, but, like everyone else at this time of year, we’ll press pause for a few days before whacking the fast forward button in 2018.

Guy Phillipson is the chairman at iCrossing UK and the former chief executive officer at the Internet Advertising Bureau UK.

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On stage at Edinburgh’s Leith Theatre one evening last week, the Scottish stand-up comedian Vladimir McTavish was playing his part in funding the rise of an alternative UK news media.

McTavish, a popular act on the Edinburgh Fringe, was part of the bill at the Festive Ferret Fundraiser, an event generating income for the investigative journalism website the Ferret, which launched two years ago and is already having significant impact on Scottish politics and society.

Backed by nearly 700 paying subscribers, who have input on the subjects that the site’s journalists probe, the Ferret went undercover to expose a neo-Nazi backed group, Scottish Dawn; it revealed how Donald Trump received a £110,000 hand-out from Scottish taxpayers; it disclosed how Police Scotland extracted data from 36,000 private mobile phones; and it ran a ten-story series on the potential impact of fracking.

Nearly 400 miles away another member of the new publishing breed, the Bristol Cable, lays out its investigative reporting on a sharp website, and on the 36 pages of a monthly magazine produced on high-quality paper stock and distributed throughout the city. The Bristol Cable is the product of an 1,800-strong co-operative who contribute an average £2.70-a-month and are invited to monthly meetings around Bristol to discuss the progress of the three-year-old project and where it should be directing its editorial resources.

The Cable’s impact on Bristol life has been considerable, affecting council policy on housing developments and helping to persuade Bristol University to stop investing in fossil fuels. It also uncovered the use by local police of eavesdropping IMSI-catcher devices used to intercept mobile phone messages, prompting a national news story. Operating out of an old factory building (now a community project space called ‘The People’s Republic of Stokes Croft’), it is also backed by the Chicago-based Reva & David Logan Foundation, a philanthropic trust which gives grants to social justice and investigative journalism projects.

Its various income streams, including five pages of print ads sourced by Ethical Media Sales & Marketing, an agency dedicated to social justice, allow the Bristol Cable to sustain the equivalent of six full-time jobs across its team of editorial ‘co-ordinators’ and to pay its large pool of ‘contributors’ for their work on articles. The team has won a reputation for its data journalism.

But projects as ambitious as the Ferret and the Bristol Cable are isolated examples in the landscape of UK news media.

As we near the end of 2017, the overwhelming majority of news produced in the UK – including that on social media – is still the output of organisations founded before the digital revolution. The emergence of digital-native news brands has been limited in a market where audience loyalties to public broadcasters and well-established newspapers run deep.

In the United States, venture capitalists and legacy media companies have poured money into new digital news initiatives which have become part of popular culture, from trailblazers such as the Drudge Report and Slate to the likes of Vox and Mic. Some, such as HuffPost and BuzzFeed, are now major international news operations.

But the economic signals for digital news media in general have not been good. BuzzFeed has this month made major job cuts, including to its UK newsroom. Its founder, Jonah Peretti, previously a big supporter of Facebook as a distribution platform, has complained bitterly of the social media giant’s failure to share its advertising revenues with companies that provide it with content. The female-focused publisher Refinery29 last week became the latest in a long line of digital publishers to lay off staff this year.

In such a climate, projects like the Ferret and the Bristol Cable – and other UK operations that choose to emulate them – face a challenging future. But both have been careful to limit their dependency on commercial backing, in fact, neither publisher carries digital advertising.

“We had to do something that made us different, more credible, more transparent….,” explains Rob Edwards, one of the founders of the Ferret. “We had long discussions and we decided we didn’t want to use ads, we wanted to raise money by subscriptions and grants.”

Lorna Stephenson, a member of the editorial team at the Bristol Cable, says that digital ad revenues have fallen so low that “there’s almost no point” in the project even looking for clients. Furthermore, the project has an “advertising charter which is voted on and agreed by members and is quite strict”, taking business only from “local and ethical businesses”. So the site is ad-free.

The Bristol Cable launched in both digital and print form in October 2014 after a series of meetings attended by journalists and other interested parties. “People liked the idea of co-creation of the media and they liked the idea of it being independent,” Stephenson says.

The motivation for the Ferret, which was first mooted in 2012, was to create a platform for the kind of probing, in-depth reporting that the founders felt was in demise. “We were very conscious that, with the malaise that’s causing the decline of the mainstream media, investigative journalism was suffering,” Edwards says. “We all felt very strongly that a modern democracy like Scotland was incomplete without proper investigative journalism to hold power to account.”

The Ferret is run by a board of five journalists (Edwards is also the environment editor of the Sunday Herald, a Glasgow-based national Scottish paper) and four ‘reader’ board members. As well as having no advertising, it opted for a co-operative model “to show we were not-for-profit and were working together and that we were not run by some distant corporation or some media mogul”.

It publishes an annual report of its finances and editorial record. The latest records show that it has published over 330 stories and now has a base of 6,000 people signed up to receive push notifications of latest articles.

Its subscriber base – paying £3-a-month for access to a website that allows three articles free per month – is currently insufficient to sustain full-time employment of journalists or an office (the Ferret’s team mostly communicate via an online chat group). Contributors are paid £110-a-day for their journalism.

Edwards says that the Ferret is anticipating new income from grants. It already has a €50,000 grant from Google’s Digital News Initiative which funds the Ferret Fact Service, compiled by Alastair Brian. The service, which typically analyses the veracity of claims made by Scottish politicians and pundits, is also published in the Daily Record newspaper.

The Ferret might be an alternative approach to producing news but Edwards says that it is not intended to undermine existing media. It has partnered on stories with many news outlets, including the Guardian, the Times and the BBC. And it recently co-ordinated a complaint by 23 journalists from different news outlets over the Scottish Government’s failings in responding to Freedom of Information (FoI) requests.

What marks the Ferret out is its openness, publishing its FoI documents and other material, provided it doesn’t reveal confidential sources. “We try to be as transparent as possible and give readers all the tools they need to make up their own minds about what we are writing about,” says Edwards. “It’s all about trying to re-establish trust with readers.”

Unlike other websites that emerged in Scotland around the time of its 2014 independence referendum – such as Bella Caledonia and Common Space – the Ferret is studiously non-partisan. “None of our journalist directors are members of any political party and we don’t do opinion or editorialising,” says Edwards. “We just look for fact-based investigative reporting.”

The climate for digital news publishers might be a harsh one, but the Ferret, with its mission of “nosing up the trousers of power”, is convinced by the evidence of its first two years that it has a viable future. “We were embarking on something that none of us had ever done before,” Edwards points out. “We have written hundreds of stories, broken dozens of exclusives, we are talked about and we are gradually raising our income to a point where we can become a sustainable operation.”

The Bristol Cable is now a fixture of the local media scene, alongside the 85-year-old Bristol Post newspaper and other outlets. Its stories evoke the campaigning spirit of the lively West Country city but Stephenson believes that its ground-breaking model is one that could be adopted elsewhere in the UK, citing Manchester, Leeds and Brighton as examples. “Bristol is a creative place but there are other very vibrant cities where you could definitely do something like this,” she says.

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The skaters-turned-commentators say their sport is missing the sort of stars it had in the ’90s.

In the 1990s, U.S. Olympic figure skaters were household names. But today, you’d probably be more likely to know the names of the skating commentators, Tara Lipinski and Johnny Weir.

“We’re very proud to educate people in a different way than maybe they have over the last many moons,” Weir said on the latest episode of Recode Media with Peter Kafka. “Tara and I do things more conversationally. We’re very direct with our audience, and it’s a huge audience for us to be carrying figure skating.”

Figure skating is, in Weir’s words, “the diamond in the tiara of the Winter Olympics.” Talking with Kafka and Weir, Lipinski said part of their goal next year will be reminding viewers why that is — despite the shortage of household names.

“There really hasn’t been a name that is in the media on a daily basis and that’s what skating in the ’90s was,” Lipinski said. “Everyone knew, after the Tonya Harding and Nancy Kerrigan incident — Tonya Harding, Nancy Kerrigan, Kristi Yamaguchi, Michelle Kwan — everyone knew these names; they were household names because they were winning, they were on TV.”

“The perception of skating was different,” she added. “It had a little more glitz and glamor, it appealed to all ages. Whereas now, we haven’t really had that star. If we do, and that star starts popping up in pop culture moments, that would change the sport, in my opinion. You never know when that could happen.”

You can listen to Recode Media on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

On the new podcast, Weir said that when he competed in the Olympic Games in 2006 and 2010, he found himself having to compete with a completely different type of celebrity than his predecessors. And the older generation of people who coach and judge the skaters don’t always appreciate how interesting and different today’s personalities can be.

“I understood, in the twilight years of my skating, who I was and what I was going to be able to do at the Olympic Games,” Weir said. “… When I was going to my second Olympic Games, it was Gaga and it was Kardashians — it wasn’t as wholesome as maybe the ’90s would have been. You have to be, in some ways, competitive in an entertainment format with that sort of person.”

He and Lipinski also reflected on how the internet is changing the sport: Figure skating superfans can follow their favorite skaters year-round, thanks to the proliferation of livestreaming options online. But during their first turn in the booth, at the 2014 Winter Games in Sochi, Russia, the commentators took advantage of social media.

“Our main audience really isn’t that [superfans], and I think we established that in Sochi,” Lipinski said. “We brought in a lot of people that never watch figure skating at all. We really don’t know, [but] we go off of our Instagram and our Twitter.”

“I think back to my time when I was skating: I was 15 and there was no such thing as Instagram,” she added. “Nowadays, it can only be helpful that these athletes can engage with fans and become visible on a different platform. For Johnny and I, it was a huge blessing in Sochi … we made a joint Instagram account just because we thought it would be fun, and I remember one morning knocking on Johnny’s door and saying, ‘We had 11 followers last night, now we have 20,000 more followers!’”

If you like this show, you should also sample our other podcasts:

• Recode Decode, hosted by Kara Swisher, is a weekly show featuring in-depth interviews with the movers and shakers in tech and media every Monday. You can subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
• Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers all of the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcastor wherever you listen to podcasts.
• And finally, Recode Replay has all the audio from our live events, such as the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Peter. Tune in next Thursday for another episode of Recode Media!

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