Walled gardens and acceptance of OTT offerings will grow

Marketing managers must be prepared for growth in the areas of closed platforms and OTT offerings. Media companies and platforms, on the other hand, should expect a change in the distribution of advertising budgets. And consumers can look forward to innovations - for example in the fields of branded entertainment, content marketing and artificial intelligence. Kantar Millward Brown has identified a total of eight digital trends for 2018:

1. walled gardens will grow rapidly

Closed platforms and advertising environments, so-called walled gardens such as Facebook or Google, provided plenty to talk about in 2017. This is because advertisers and media agencies are faced with the fundamental question of whether they should invest media budgets even though the platforms do not provide relevant targeting data. Another point of criticism is the lack of standards with regard to proof of effectiveness. Procter & Gamble has already taken action in the USA and massively cut digital spending. Nevertheless, Google and Facebook will end this year with a substantial increase in their advertising revenue - and Amazon also recorded growth of 58 percent in its advertising business in the third quarter of 2017. We predict that walled gardens will become increasingly important in 2018 due to three factors: 1. the offerings of many platforms are so attractive to users that they are happy to share their personal data 2. advertisers (and agencies) have an increased need to address sometimes very small target groups. Large platform players have comparatively very specific target group data - and are allowed to use it. 3. at the same time, smaller providers will falter more quickly in future if they are unable to reach certain target groups or provide the desired content context.

2. advertising expenditure is shifting away from digital and towards cross-media investments

As much as 30 percent of global advertising expenditure is invested in the digital environment. However, this year major advertisers such as P&G have reconsidered their digital investments and drastically cut them for the first time. Due in part to the fact that these cuts had no direct impact on sales in the case of P&G, this trend will intensify in 2018. Marketing managers will scrutinize the importance of digital activities in the marketing mix even more closely. Media companies, content platforms, agencies and market research partners should prepare for this and have answers ready. Advertisers want integrated measurement of activities across the various channels. One sticking point is the inadequate measurability of cross-media ROI. However, new hurdles are also emerging in individual channels: Increasing investments in mobile marketing - which currently already account for 50 percent of digital investments worldwide - will increase the number of walled gardens and therefore make it even more difficult to measure digital activities in the future.

3. measurement of cross-media ROI is under development - but remains piecemeal for the time being

Marketing managers and their media and creative agencies are under enormous pressure to prove the effects of their initiatives on sales development. However, it remains wishful thinking in 2018 that this will be possible in every detail and across all channels. It will therefore be some time before the code for cross-media ROI is cracked. Advertisers will therefore initially continue to try to make the influence on variables such as brand awareness and sales increases plausible on the basis of individual activities or channels.

4. the acceptance of OTT offerings is growing

The growing acceptance of so-called "over-the-top" (OTT) offerings by consumers is obvious: audio and video streaming are in vogue and providers such as Spotify, Netflix and Amazon are recording high growth rates. As large numbers of younger users in particular are losing interest in linear offerings, the pressure on established providers is increasing. However, this development also places new demands on market research: not only will methods have to be adapted and systems revised for cross-platform ad effectiveness measurements in future, but OTT platforms in particular will have to be added to the panels.

5 The dominance of algorithms is coming to an end

Over the past decade, digital marketing has been dominated by companies that have been able to program smart algorithms. And algorithms will continue to create a lot of added value for marketers in 2018. But at the same time, next year we will get a first glimpse of how artificial intelligence can help marketing. Machine learning approaches will optimize campaigns in the future by collecting large amounts of unstructured data in a meaningful way and deriving decisions for media investments from it. Artificial intelligence will improve natural language processing, machine vision and chatbots, for example.

6 Branded entertainment: videos become the central format

"Branded entertainment" is the name of a trend that will spread in 2018. The term primarily refers to entertaining videos, which will become a key content format in the coming year. This is because brands will increasingly rely on entertaining films to spread their messages. The trend has various roots: on the one hand, it is to be understood as a response to the sometimes fundamentally negative attitude towards advertising; on the other hand, the Kantar Millward Brown study AdReaction shows that classic moving image channels such as TV or cinema are particularly popular with younger Generation Z consumers (16-19 years old). Advertisers will respond to this - also with native advertising that is played out in an editorial environment.

7. voice activation with potential for marketing activities

The potential of networked devices in the home has been discussed for many years. Light bulbs, thermostats, security cameras and door locks - everything can be controlled remotely via an app. However, consumer enthusiasm has so far been rather muted. It is possible that this attitude will now change with the spread of Alexa, Amazon's voice assistant. Such a development would also open up new opportunities for marketing. After all, consumers are generally quite open to advertising in the context of voice activation and control. However, in order to avoid negative reactions, users must have full control over when, how and where they interact with brands via networked devices at all times.

8 Story first! Storytelling will conquer content marketing

Successful advertising has always relied on the power of storytelling. After all, good campaigns are based on inspiring, emotional stories. Due to the hype surrounding content marketing, some marketing managers seem to have lost sight of this mantra. But the guiding principle is just as important today as it was yesterday. And there is much to suggest that it will become even more important tomorrow. This is because studies on advertising impact by Kantar Millward Brown using facial coding show that videos only engage recipients emotionally with a good story. In the age of content, a convincing narrative is therefore the mainstay of the content that brands and products use to engage with their audience via channels such as Facebook, Twitter, Snapchat or Instagram. Content without compelling storytelling will definitely become a marketing waste in 2018.

"The challenge of new advertising formats - regardless of whether they aim to increase awareness, change perceptions or initiate specific actions - is primarily to prove their effectiveness. Impact and ROI can already be compared in many cases with other variables from the field of brand and behavioral economics. However, data only provides valuable insights in conjunction with clear objectives and measurability across as many channels as possible," says Bernd Büchner, Managing Director of Kantar Millward Brown in Germany, Austria and Switzerland, summarizing key points for 2018.