Digital Futures – what you need to know for 2011

We contributed to UTalkMarketing’s recent futuregazing article - you can read our thoughts on how brands will take a more sophisticated approach to social media marketing in full below, or click the link to read the article.

There is no doubt that 2010 was the year of social media. Facebook became a dominant force overtaking Google as the site people spend most time on and, meanwhile, Twitter became ubiquitous and its power in circulating news or gossip became clear. Elsewhere the phenomenally popular iPad and the increased penetration of smartphone made apps the must have marketing tool, and online video had a resurgence as the perfect solution to the demand for ‘shareable’ content.

But what trends does 2011 hold for marketer and their brands? UTalkMarketing highlight ten key areas to watch over the next 12 months.

Social Commerce

Facebook predicts a social commerce revolution in 2011, and this year social media will become more ingrained in everyday consumer life than ever before. As Chris Maples, commercial director at Microsoft Advertising puts it, “social media is the internet”. Therefore it’s only natural that marketers should be looking beyond simply having a presence in the space and towards monetising it.

Successful social commerce strategy will be built around user reviews. People trust products and services endorsed by friends – a fact that makes social commerce a hugely lucrative opportunity for advertisers.

An increasingly sophisticated relationship between social media and search will enhance opportunities in social commerce. “The tighter interweave between social media and search is so exciting: search results will become increasingly influenced by what searchers’ friends and peers think is relevant.

“Search results will begin to rely more on users’ social context. Bing has already started with its Facebook partnership in the US, but that is only a first step,” says Maples. “Marketers will need to think in terms of combining [search and social media] disciplines, which no longer exist in silos”.

Retail sites are also starting to experiment with customer curation – using social technology to give customers a say on inventory.

Social Media Optimisation

As social networking sites emerge as sales channels in their own right, so brands will need to look beyond simply having a presence on them, and towards identifying and focusing efforts on the sites that provide most benefit for them. “In all likelihood, your organisation has joined the conversation. But how effective is your programme, does it support your overall brand strategy?” asks Thomas Mueller, global digital director at strategic branding company siegel+gale.

Social media can help to build stronger and deeper relationships, but only if brands identify which platforms work best for them and concentrate their efforts. “If you’re a small company dealing in products which aren’t engaging, like concrete or electrical components, to devote a huge amount of your marketing budget to Facebook would be a mistake, as the volume of people interested will be minimal. Whereas a viral campaign can increase mentions of a ‘less sexy’ brand across these channels,” says Christian Howes, head of solutions engineering at digital agency Webtrends.

Brands will increasingly perform social media ‘health-checks’ as standard, to keep track of how social media activity is helping to forge meaningful relationships with audiences. “[Brands will] use insights arising from an agreed set of social media performance indicators. They will learn to swiftly respond to what these indicators are telling them about their market-place, customer and competitor behaviour in social spaces,” predicts Iain MacMillan, director of social media agency RMM.

Location Based Services/ M-commerce

The prolific rise in the number of consumers using smartphones, and their eagerness to access the internet via them, has set the stage for an exciting year in terms of m-commerce opportunities. Figures released this week by ForeSee suggest that one third of shoppers in the UK are now accessing retailer websites through their handsets.

“Over the next 12 months we will see a rise in the number of retailers focusing on fully-transactional mobile operations. These include in-store check-ins, bar-code scanning for pricing and comparison information via mobile cameras,” says James Cronin, CTO of e-commerce solutions provider Venda.

Mobile CRM strategy will become one of the key focuses for m-commerce savvy brands. Supermarkets are already exploring opportunities here by, for example, issuing customers who have not visited their local store for a time with a mobile coupon enticing them back.

AdMob, Google’s mobile advertising network, now receives more than two billion requests for ads per day. To put it into context, that’s four times more than the number of requests the company was getting just a year ago.

Location based services will come of age as m-commerce opportunities do. “Location-based marketing will reach mass adoption, and when bundled with customer lifestyle marketing, customers will soon receive highly relevant and personalised offers and promotions at exactly the right time, through their mobiles,” predicts Colin McCaffery, director of products at 2ergo.

Meanwhile O2 and Orange have both just announced that they will offer brands the opportunity to target subscribers later this year. Customers who opt in to receive ads will be able to redeem in-store offers by paying via their handsets.

Apps Vs Websites

Depending on which tech commentator you are reading, apps will kill off websites within five years; or the future will be dominated by cross-platform browser-based mobile websites. According to Alistair Crane, chief executive of app developer Grapple Mobile, the reality is less dramatic. “They will exist in collaboration like TV and radio,” he explains.

Apps and browser-based sites have their own merits, typically that, at present, apps present a richer mobile experience, make money and collect customer data but app platforms are fragmented, which can make development expensive. Mobile optimised websites are cheaper because as one site can be read on every device and a site can be updated easily and regularly, whereas apps have to be updated with user consent.

But marketers do not need to choose between the two. As Mads Holst, founder of agency Holst Digital, says: “Websites are the shop front, the introduction. Apps are the long term relationship.”

For Crane, 2011 will see apps become more viable for all brands as developers can now create code that can be used on all platforms; whilst Holst believes brands will redesign their mobile websites to emulate the simplicity and usability of apps, and apps themselves go the other way and will be driven about content and functionality.

Search and Local Results

Mobile is the new battle ground in search, with Google openly admitting it is a major area of focus for 2011. According to analysts, mobile search queries have increased five fold in the past two years and, as smartphone and tablet penetration increases, that rate is accelerating. These searches tend to seek fresh; real time information that is relevant to the user’s location meaning fast, tailored local results and reviews (and advertising?). 2011 will see consumers start to expect this as the norm via mobile search.

This is mirrored in the success of US-based social networking, user review and local search site The site had more than 31 million monthly unique users last year and it is all about being local. The search engine asks users what they are looking for and the location from which the search should be performed. Listings include a rating, user-reviews and details such as opening hours. In terms of social networking, Yelp has taken this one step further than an online community by holding offline events in various cities for its most prolific users, creating an “elite” circle of advocates and reviewers.

“Location-based search can be incredibly powerful,” says Holst but he warns that existing services can still be viewed as intrusive with results often not accurate or relevant enough. “There is obvious potential for mobile platforms but it has to be done in the right way.”

Real Time Marketing

Another growth area but also another that has the potential to spark controversy, brands are increasing expected to engage in real time marketing. Last year’s Old Spice campaign, which started as a TV campaign and moved into social media with videos posted to YouTube in response to messages on Twitter, showed how to do it with much humour and panache. Other examples are sadly lacking at the start of 2011.

James Kirkham, managing director at digital agency Holler, says the inexorable rise of Twitter and Facebook means people expect a real time response, and savvy brands are beginning to realise that they can not only use it to arrest negative chatter but to tap into consumer whims.

He explains: “If someone expresses their hunger, how nice to be sent some cereal bars? Brands can combine clever sampling with new direct marketing and smart guerilla ambient stunts all in one – all by listening in on the conversation.”

But he adds that brands also will get sick of appeasing those that moan for the sake of it and, as a result, marketers will work out how to use these mechanics, tactics and channels for more positive but tailored means. “This should be the year brands use real time marketing for smart positive effect,” Kirkham says.

Digital Experiential

With people increasingly spending their free time indulging in two screen activity, using a mobile device or laptop while watching TV, exploring a brand after being prompted by an advert is becoming the norm.

According to Holler’s Kirkham, 2011 will see a more general convergence as the division between activities and channels dissolves. “Digital isn’t just a channel, instead it just permeates everything everywhere, so it isn’t about print or TV or online.”

He points out that QR codes, which will make a successful comeback in 2011, and Facebook Places have already begun to appear on outdoor ads, and this will mean that consumers will expect to be “surprised and delighted” not just by a TV ad but by how campaigns are extended to other devices and into different parts of consumers lives.

Meanwhile, as touch screen technology becomes the accepted method of interaction, particularly on mobile devices, brands will be expected to have a tactile, engaging online experience to match. Holst says that this will become more exciting now the limitations of Adobe Flash, which has been shunned by Apple in favour of HTML5, have been removed.

He predicts that 2011 will see more brands using touch-screen technology, 3D and augmented reality and, in the first instance, it will lead to a significant change in how consumers interact with online shopping mechanisms.

Interactive TV

Developments in the internet TV space will offering exciting opportunities for advertisers, who will reap the benefits from an unprecedented level of targeting.

YouView, which got the green light from UK media watchdog Ofcom in October, is hotly tipped to make IPTV mainstream in the UK. Due to launch this spring with partners including the BBC, ITV and Channel 4, it will bring video on demand and web content to TV.

For advertisers this presents a single platform on which they can hone in on niche audiences, provided that the competing broadcasters on its board can agree on a unified strategy for the project.

“For advertisers, VoD will become a serious business for service providers looking to increase audiences and brands looking to get a bigger return for their marketing money. Broadcasters need to get their service offering just right if they’re to grab a sizeable chunk of this business,” says Tom Cape, managing director of digital agency Capablue.

Successful online TV streaming will be placed behind paywalls. Google TV, when it launches this year, will be the Internet TV platform to watch. Google is great at generating revenue from advertisers, search and recommendation – something that walled garden content providers are still getting to grips with.

Social Gaming

Social gaming is being tipped as one of the fastest growth areas in digital – a report released last week by Juniper Research suggests that in the next five years, ad spend on mobile gaming alone will increase ten-fold to be worth £574m.

For brands, social gaming offers entertainment – a means of creating emotional connections with many consumers simultaneously. Zynga, creator of the immensely popular FarmVille amongst others, dominates the social gaming sector. But there are a wide range of developers and a plethora of popular gaming titles flooding the market – a trend set to grow in 2011.

Embedding games into social networking sites has allowed it to become main stream – and the element of being able to share the experience online with friends is giving rise of a whole new type of gamer.  Do not think geeky teenage boy locked away in the bedroom – research suggests that men and women of all ages are equally likely enjoy social games.

The opportunities for marketers in 2011 will be numerous. Within social games branded content, the sale of virtual goods and in-game advertising are all possibilities to be explored.

Ones to watch and learn from include Disney and McDonalds, both of whom are showing their belief in the power of social gaming by investing in the channel. Whilst Disney has acquired social gaming startup Playdom, McDonalds has created a branded farm within FarmVille.

Branding through digital reaches a tipping point driven by FMCG

After a faltering start in the world of digital advertising, FMCG companies have finally managed to make their mark through social media. The level of news, such as product innovation and marketing and advertising stories, churned out by these companies suits social media’s appetite for more and more new, real time information.

That said FMCG clients remain unconvinced about digital as a brand building tool. Mark Brown, strategy director at digital agency Weapon7, says FMCG marketers know that they have to learn to understand it but the historical stumbling block remains – how to measure the effectiveness. “That is the real challenge,” he adds.

“Digital is always seen as the cheaper media that can produce some ‘cool’ stuff but any campaigns almost always have to be smaller scale. These tend to be highly effective but against a small scale.”

To reach the tipping point, he adds, a fundamental shift in client thinking is necessary so they realise the importance of allocating budget to developing research and tracking methods to measure effectiveness. “For that to happened,” says Brown. “FMCG companies need people who recognise how brands are built and how to measure that but also understand that digital can be a powerful brand building tool.”

Will that happen in 2011? “I am convinced this year will see some strong case studies about innovative ways to measure the brand effect.”

Iain MacMillan

Iain founded RMM in 2006, with the objective of providing good, strategic advice across all areas of digital and social media. Nowadays, the focus is entirely social and involves the provision of more than just advice – insight, inspiration and expertise in social media. Iain leads the strategy development and training teams on most client projects.

He specialises in leading client strategy projects in a number of sectors, including finance and gambling, where RMM has conducted studies into social behaviour in highly regulated environments. He also leads projects for travel sector clients, a sector in which RMM works in partnership with eCRM sector specialist, Spike Marketing. They work together across a number of clients, most recently including Neilson Holidays, Thomas Cook’s ski and active holidays division.

Prior to RMM, Iain spent five years helping to run the web design business, Tonic, winning and managing accounts such as Vodafone, GE, GAP, MTV and Barclaycard. Before that he worked at Tribal DDB London, working on Volkswagen before heading up the Victor Chandler, Sony Europe and Guardian accounts. And before that he had a colourful career in music promotions, running the annual Soho Jazz Festival in 1997.

Iain spends quite a large amount of time trying and failing to explain to his long-suffering wife why he really loves golf, seventies hard rock and eighties pop. She remains none the wiser.

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