WHITE PAPER The Future of Digital THE FUTURE OF DIGITAL MARKETING

Every day, it seems, there are new “game changing” technologies, trends, and transformational marketing techniques to learn about. We are flush with innovation. It never stops.

All this flux makes predicting the future of digital marketing a murky proposition, but there’s plenty we can glean from our current milieu to forecast where we’re heading.

In this white paper we’re going to put on our swami hats (Millennials: Google ‘Johnny Carson’) and make some bold predictions about what is to come. Fortune favors the bold, right? We hope this serves as a helpful guide as we navigate the exciting, ever-changing world of digital technology together.

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Concepts Bound for Big Change The way we see it, there are seven major factors that will shape the digital marketing landscape in the coming years. In no particular order of importance, they are: 1 Cross-device challenges 2 Role of data pre-campaign in targeting 3 Role of data post-campaign in attribution 4 Predictive 5 6 Retargeting 7 Buying outcomes rather than channels/products

Let’s start with the cross-device conundrum.

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1 Solving Cross-Device Challenges Google’s own research has shown that upwards of 90% of people start a purchase cycle on one device and finish on another. That fragmentation presents a major challenge for marketers. It’s no wonder eMarketer anticipates digital display ad spending reaching $26.78 billion by 2017.

Cross-device targeting is all about: • Campaign execution • Structuring campaigns to change delivery as users switch devices • Major increases in contextual information • More efficient marketing • Improved user experience • Measurement of results • Removing the major hurdles to lead attribution • Lifetime values becoming easier to ascertain

Of course data will play a key role in cross-device efforts moving forward. It stands to reason that sharing and matching will become the normal workflow, with a premium on sharing back with vendors and traffic generation partners to ensure success.

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2 Use of Data for Pre-Campaign Targeting The era of ‘tailored audiences’ is upon us. Thanks to Facebook, who made it possible to get anonymous match counts from a list of known users (emails, phone numbers, mobile device ID), the use of first- and second-party data for targeting is now mainstream. Twitter and Google have followed suit. Now it’s a matter of wrangling that data to determine who you want to target and how you’d like to allocate your resources.

Targeting using data According to a 2015 Duke CMO Survey, slightly less than half of all respondents were currently using data to target customers. But nearly 90% said they saw use of this kind of data increasing. Starting with customer data will become the norm in years to come. Even when leveraging third-party data, you will also useyours to build the model. Or as an Experian executive stated in the 2015 DMA Fact Book: “It’s very reasonable to assume that at some point in the near future, most media will be transacted around a household-level audience and resemble something that very much looks like a mailing list.”

Instead of being channel-focused (be it Facebook, Twitter, , email, search, YouTube, or display), the future is trending toward using audience data to drive channel strategy. In terms of what marketers have to be best at, the channel-focused approach is shifting toward an audience-focused approach. In other words, people over platforms. This is great news for B2B marketers.

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3 Role of Data in Post-Campaign Targeting The feedback loop doesn’t stop at campaign optimization. It’s important to spend time analyzing conversions, and piecing together how you reached that point. With the advent of cloud computing, which makes modeling cheap and easy to perform, there’s no excuse not to analyze data after your campaign ends. It’s also important to make sure you’re examining different kinds of data. If you want to give broader insight, consider incorporating phone or registration data. There are plenty of tools to help you integrate your phone data into . Make a plan to define a channel for phone calls and push data in.

Post-Campaign Data Example Let’s say you’re starting with a list of successful conversions (hires, purchases, etc). You can take the phone numbers from those conversions and: Match to campaign data • Phone fields on lead forms, warranty filings, etc. • Caller ID from phone call data Match digital and non-digital channels with calls

The resulting matches give great profiling on both prospects that are more likely to turn into successful outcomes, as well as on the channels or campaigns that are producing those prospects.

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4 Predictive Analytics We like to think of predictive analytics as automation of the current digital marketing workflow. It can help you: • Manually analyze data from the customer database • Segment strategy on customer attributes • Execute multi-channel campaigns • Measure effectiveness with web analytics • Derive insights from web analytics (especially key behavioral markers) • Tweak campaigns as you go The implications of predictive technologies for your clickstream and conversion data remains to be fully seen, but you better believe Google (and others) will be heavily investing in this area for years to come. Welcome to the world of buying and selling behavioral web usage data that correlates with purchase intent.

The Promise of Predictive Clearly the potential of predictive analytics is enormous. The possibility of true one-to-one marketing – to actual people instead of ‘personas’ or groups – is pretty exciting. All in an automated fashion, no less.

The power of predictive may also inform how we stay on top of channel preference – which is always one of the hardest things for us to do as a media company. Gaining insight into content consumption preferences, including time or location data, could be a boon for marketers.

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5 Ad Blocking vs. the Free Web You’ve likely read about the foreboding ‘Ad-Blockalypse’ – or the ongoing war between advertisers, publishers, and ad blocking software – which PageFair estimates cost ad publishers $22 billion in 2015. This is an epic battle with colossal, industry-shaking implications.

Google ads SVP Sridhar Ramaswamy put it this way: “There needs to be more of a sustainable ad standard that we voluntarily define, and things in that standard should not get blocked. I think this is essential to us all for survival.” Try as they (Google) might, there is no easy resolution to the ad blocking issue in sight. Ad blockers are increasingly popular with younger users, which means the issue isn’t going away. By one prediction there will be 87 million ad blockers in use by 2017. There may be room for middle ground, however. At the recent OPS Conference in New York, Forbes reported that 43% of their users agreed to whitelist ads on their site — on the condition they pledge not to serve annoying ads (videos, interstitials, etc.) or ads that might affect load time. In the meantime, there has already been a major shift toward ads that can’t be blocked, like native and text ads.

Stay tuned, because the ad game is quickly evolving. Google has already decided to remove Pay-Per-Click ads from the right side of a search engine results page on desktops and tablets.

It’s a ‘developing situation’ to say the least.

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6 Retargeting The mechanics of how retargeting works may change in the coming years, but there’s no going backwards here. Customers will continue to be targeted based on previous activities and interests.

Keep in mind: Cookies have already been largely replaced Major platforms like Google and Facebook now have built-in solutions (though Apple’s iAd app network has been discontinued) that can track device IDs and decipher device recognition. And Single sign-ons (SSOs) will continue to offer up troves of customer data.

Tagged audience exchanges are big business Many media companies already operate based on the exchange, purchase, and/ or sale of harvested customer data. This means media companies may have information about how someone is about to behave.

Retargeting from a brand site is targeting based on what already happened.

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7 Buying Outcomes The ‘you get what you pay for’ model of digital advertising doesn’t appear to be going anywhere any time soon. Whether you’re most keen on cost per click, , cost per call, , return on ad spend, or measuring lifetime value, there are tangible outcomes you can pay for and work toward.

There will undoubtedly be innovations in this area. There are multiple outcome-based ad extensions to choose from, not to mention Facebook’s Lead Ads program, which can help you ‘retrieve and respond to leads in real time.’

From Facebook’s Lead Ads page: “Advertisers with the Facebook pixel implemented on their website can set lead ads to be shown to people who are likely to sign up for information and are also able to measure cost-per-conversion from lead ads.”

Welcome to the future. Maybe…

Randall-Reilly | randallreilly.com 9 THE FUTURE OF DIGITAL MARKETING Final Thoughts There’s an optimistic vision to be gleaned from all of this. The future of digital marketing is trending toward technology getting out of the way, in favor of seeking a more user-friendly, user experience-based approach. That’s a good thing for all of us. All the technology in the world can’t help us if we lose track of that fundamental question: Why do people buy from you in the first place?

That’s still the crux of the matter. Doing business is still about building trust and genuine connections with the people you’re trying to reach. Technology is just a complement to help you do that better, and perhaps more efficiently. No one can predict the future (just ask Nate Silver). Humans are not robots. But we are, as they say, creatures of habit. We just so happen to live in an age where those habits are tagged, harvested, tracked, sold, and utilized to predict buying behaviors. The future of digital marketing will be a complex, data-driven game of anticipating what people want, and how they prefer to be communicated with.

Doing that without being creepy or intrusive is, and will remain, the real trick.

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