The Seven Marketing Trends to Watch in 2016

Percolate lives at the intersection of marketing, media, and technology. The digital age of complex customer journeys has brought more change in the last five years than in the five before.

That fast-paced environment makes it more important than ever for

marketers to become forecasters—to identify the trends we can rely on

happening in an unpredictable climate. We have to answer: which industry

forces will be most important for making decisions and carrying them out in the coming year?

Here are seven marketing, advertising, and brand management trends we

think will meaningfully impact marketers’ priorities and the way they do

work. We hope they give you a fresh perspective as you head into 2016.

Introduction

1. THE RISE OF THE GLOBAL, CONNECTED MIDDLE CLASS

Despite what you may have heard, the world is becoming richer. By 2030, nearly two-thirds of the global population is projected to

join the consumer class, according to the Brookings Institute.

At the same time, more of the world is on the web; the internet has

gone from about 35 million users in 1995 to 2.8 billion users in

2014, according to Mary Meeker’s 2015 Internet Trends Report.

Even the most remote parts of the world are becoming increasingly connected, thanks to the adoption of mobile and innovations that

build on SMS technology (among others) to extend the benefits of

digital even further.

The takeaway: more buyers around the world that will draw more of marketing’s focus.

$26

$12

Emerging MarketsDeveloped Markets

$34$30

Emerging MarketsDeveloped MarketsSource: L2 Think Tank

2025 World Consumption, Trillion USD

2010 World Consumption, Trillion USD

1995: 35 Million Internet Users

The Growth of the Internet

5%

12%

22%61%

USA China Rest of AsiaEurope Rest of World

of global population

0.6%

21%

19%

28%

23%

10%

USA China Rest of AsiaEurope Rest of World

of global population

39%

Source: Mary Meeker’s Internet Trends Report 2015

2014: 2.8 Billion Internet Users

2. BRAND CONSISTENCY WILL BECOME A LARGER PRIORITY — BUT MORE DIFFICULT TO MANAGE

As your company chases after the global five billion, you will need a way to find consistency across all your

markets even as you localize brand.

This has always been true. But new levels of expansion brings new demands for marketers. Big brands have already

started making drastic changes to their identity for the sake of consistency.

The most notable was probably Google’s logo change in the wake of their Alphabet reorganization in 2015. As the

company explained on its design blog, one of the chief reasons

for the change was the need for “a systematic approach to

branding in our products to provide consistency in people’s

daily encounters with Google.”

Other large tech companies that are high visible across

regions and channels have redesigned logos with consistency in mind, including Logitech, Verizon and Facebook.

“We’ve taken the Google logo and branding, which were originally built for a single desktop browser page, and updated them for a world of seamless computing across an endless number of devices and different kinds of inputs.”— Tamar Yehoshua, VP, Product Management & Bobby Nath, Director of User Experience at Google

3. VIDEO WILL FUEL MOBILE’S GROWTH (AND VISE À VERSE)

It works the other way, too; mobile is allowing us to spend more time

consuming media-rich content like video.

That means the intersection of video and mobile will become an

increasingly attractive spot for marketers.

Related to increased connectivity is the adoption of mobile all over the world.

Almost three-quarters of the world had a mobile device by the start of 2015,

according to the most recent Internet Trends Report by Mary Meeker.

Additionally, we’re poised to spend more and more on mobile advertising.

But these expenditures need to take into account how how video fuels mobile use.

Glo

bal I

nter

net A

dver

tisin

g ($

B)

15

30

45

60

75

90

105

120

135

150

2009 2010 2011 2012 2013 2014

Desktop Advertising Mobile Advertising

Source: Mary Meeker’s 2015 Internet Trend Reports

Internet Advertising is Increasingly Mobile

Hou

rs p

er D

ay

0

3

6

9

12

2010 2011 2012 2013 2014 2015

TV Other Connected Devices Desktop/Laptop Mobile

Source: BI Intelligence

Time Spent on Screens by Device

Data usage by activity (globally)

Mobile Video is Exploding

Source: Cisco (February 2015)

Exab

ytes

Per

Mon

th

5

10

15

20

25

30

2014 2015 2016 2017 2018 2019

File Sharing Audio Streaming Web/Data/VoIP Video

4. AD BLOCKING WON’T RETREAT

Publishers are increasingly worried about the rise of ad

blockers, which threaten revenue streams. Ad blocking

software use has grown dramatically since 2013 and is

widespread among desktop users, according to PageFair and Adobe.

Ad blocking is not limited to desktop, either. In 2015, Apple announced that its iOS 9 platform would allow ad

blocking, opening the floodgates for a potential market of ad-blocking apps.

Ad blockers likely won’t materially affect key marketing

metrics too soon. However, the growth of ad blocking use

should prompt a key question:

How do you evolve advertising—whether that’s a mobile ad, a video, or something else—to not seem so much like an ad?G

loba

l Mon

thly

Act

ive

Ad

Bloc

king

Use

rs (M

illio

ns)

0

40

80

120

160

200

January 2010 January 2011 January 2012 January 2013 January 2014 January 2015

21M30M

39M

54M

121M

181M

Source: PageFair and Adobe

Global Monthly Ad Blocking Users (Desktop)

5. CONTENT MARKETING WILL EVOLVE AND THRIVE

It’s hard to define content marketing — but in general, if it provides more than just a brand impression, it likely

qualifies. And more and more ads will try to come off less like advertisements.

For instance, car manufacturer Honda created an interactive

experience in 2015 called “The Other Side” for its Civic Type-

R vehicle, which asked users to press “R” on their keyboards

to flip between two videos that tell the same story together.

And fragrance producer Glade launched the Museum of

Feelings, a real-world installation experience that billed itself

as an interactive exhibition.

A corollary to this trend: publishers will increasingly take on

content marketing workloads for brands. The New York

Times’ T Brand Studio has provided a new space for

marketers to inform audiences with stunning visuals, and

Mashable created an online shop that’s actually an ad for

Visa’s Checkout payment service. The Atlantic and BuzzFeed have also generated strong results from the work they’ve

created for brands.

Reve

nue

($Bi

llion

s)

0

2.5

5

7.5

10

12.5

15

2013 2014 2015 2016 2017 2018

Native Style Display Sponsorship Social

Native Advertising Will Explode

Source: BI Intelligence

6. NON-WORKING SPEND LEVELS NEED TO STAY IN CHECK

Source: Percolate

In the fall of 2015, Percolate surveyed over 300 enterprise U.S. CMOs, VPs, and Marketing Directors about non-working media expenses: the dollars spent

producing creative, as opposed to putting it in front of an audience and driving

brand awareness.

You can find the insights we uncovered here. But key results indicate that as much as two-fifths of the advertising budget is tied up in non-working

expenses, with little indication of slowdown.

Marketers need to control these costs to make the biggest impact possible. If you can moved one more dollar from the production of content and

advertising to its distribution through better briefing and process efficiencies,

you would be better off.

How have non-working spend levels grown in the last year?

2%10%

26%

40%

22%

Increased significantlyIncreasedStayed about the sameDecreasedDecreased significantly

Have seen growth in the past year

62%

4%13%

33% 40%

11%

Will increase significantlyWill increaseWill stay about the sameWill decreaseWill decrease significantlyExpect growth in

the next year

51%

How do you expect them to grow in the next year?

Those categories see these average non-working spend ratios:

Source: Percolate

The Cost of Non-Working SpendThe Average Marketing Budget Allots 48% to Advertising

Of the 48% that makes up the Average Advertising Budget, it funds different media categories in these amounts:

Search Ads

Social

Traditional 22%12%

Display Ads

13%

Brand Publishing14%

Programmatic

10%

Website & Ecommerce

15%

Advertising48%

14%

Traditional

Brand Publishing

Social

Website & Ecommerce

Programattic

Display Ads

Search Ads

40%

40%

38%

50%

43%

42%

38%

Non-Working Working

Non-working expenses make up 40% of the average advertising budget and 20% of the average marketing budget.

THE TAKEAWAY

7. A NEW CLASS OF MARKETING TECHNOLOGY WILL START TO REDEFINE ADVERTISING

Mobile isn’t the end of the line. New types of marketing technology companies

have emerged — and are receiving funding — to find new ways to collect

information and help brands grab the attention of potential buyers.

New hardware means new formats and channels to reach audiences, too.

Augmented and Virtual Reality might generate over $150 billion in revenue

by 2020, according to consulting firm Digi-Capital.

The first banner ad on a website reached a 44% click-through rate. These days, they have trouble making it to half a percent.

It goes to show that new technology and formats can help advertisers grab attention. For instance, ads that build off of the innovation of mobile to geo-locate audiences help drive engagement better than others.

Marketing Technology Funding Over Time

Mill

ions

0

5

10

15

20

25

30

2014 2015 2016 2017 2018 2019 2020

Smartphone- Mounted VR

Gaming Console Headsets

VR Headsets

Others

Source: BI Intelligence

Virtual Reality: Demand, Sales to Rise

We’re excited for 2016 and what it means for advertising. These trends will mean new places and new ways to engage with customers.

We’ll be here to help.

Percolate is The System of Record for Marketing. Our technology helps the world's largest and fastest-growing

brands at every step of the marketing process.

Want to learn more?

Contact learn@percolate.com for more information

or request a demo today at percolate.com/request-demo

Victor Gamez Victor Gamez is an associate on Percolate’s integrated marketing team.