A few weeks ago, media, marketing and technology leaders came together in Sydney for Advertising Week APAC to share their perspectives on emerging trends in digital advertising and what they mean for the future of the industry both across the region and globally. A number of topics stood out among the noise this year, giving us deeper insight into emerging trends coming out of Australia.
From the evolving data and regulatory landscape to the increasing popularity of smart audio and the dominance of OTT- here’s a quick look into four trends making a big impact:
- The audio revolution may come sooner than we think.
Audio has always been a staple in media and advertising but the rise in popularity of streaming music services and podcasts has given the medium new life. The ad industry has taken notice of the growing promise of audio as smart speakers gain adoption and mobile devices in the hands of almost everyone make listening to music, books or podcasts while on the go, or even at home, extremely convenient for consumers.
As one of the early market leaders in smart audio technology, Australia has already seen rapid growth in this industry — almost a third (29%) of Australians already own a smart speaker for their home which surpasses even US market penetration. This presents a lucrative opportunity for advertisers.
Improvements in the quality of streaming and access to a wide array of great content (either music, books, podcasts, etc) are just two of many reasons affluent listeners are now making the switch from traditional radio to streaming services or podcast subscriptions, and they are bringing top tier advertisers with them. This influx of new channels and opportunities for advertisers has allowed the Australia market to mature much quicker than others. Its rapid growth have some boldly claiming that smart audio may even replace traditional search or keyboards in the coming years.
- OTT is everywhere.
Once again, OTT was widely discussed among industry leaders in APAC with lots of chatter around its growing dominance and what that it means for advertising. In particular, the maturity of the mobile market in Australia has been the main driver behind the shift to OTT, propelling the growth of connected TV.
And, while appointment TV is on its way out, great content can’t be ignored. Popular linear-TV programming is still drawing in sizable audiences, bringing people together on their own terms with catch up TV. Catch up streaming of these shows has been shown to add incremental reach of 30-50% across certain demographics.
What does this mean for advertisers? People are streaming content when they want, and on devices that are convenient for them, so it’s more important than ever to take into account the environment and device where ads will ultimately be digested by consumers — i.e. a small screen on the bus vs. a large screen in their living room vs. streaming via a tablet in bed a night.
- Marketers want to diversify beyond the ‘Duopoly.’
Advertisers remain optimistic about digital with 70% of marketing leaders planning to increase spend in digital in 2020, however, growth doesn’t come without its challenges. For example, mobile and video have brought new opportunities for marketers but have also contributed to the fragmentation of the media landscape.
This dynamic is making it harder for marketers to build a digital strategy that they are confident will deliver the ROI they need. In turn, marketers are shifting their ad dollars to platforms that are easy to use and have proven to deliver results. Now 65% of ad spend is being funneled into the walled gardens when only 34% of all consumers time is spent there.
Even though budgets have shifted in favor of the walled gardens, the dominance of these players is keeping marketers up at night. There’s a strong appetite to spend marketing dollars elsewhere but the complex and disjointed open web environment isn’t going to cut it. If technology players can replicate the success of the walled gardens by introducing a people-based marketing approach for the open web, there’s an opportunity to restore balance back to the way digital budgets are spent.
- Global regulation is keeping everyone up at night.
Data and the regulatory landscape couldn’t be ignored throughout Advertising Week APAC as self regulation has increasingly become a thing of the past. Australian leaders are coming to terms with GDPR, viewing the regulation as the ‘new normal’ for global best practices in privacy and data governance, especially since Australia’s strict privacy act mirrors many of the same concepts as GDPR.
That said, uncertainty and ambiguity around new regulations and data practices have many considering the unintended consequences these changes could bring to the industry as a whole. One industry leader went as far to say that, from their perspective, GDPR has seemingly made Google even more dominant in Europe. But, even with robust conversation around this topic at the show, it’s clear that there are still a lot of unknowns creating a wait and see game for how regulation will shape the future of the industry for the long-term.