Ashley Friedlein’s marketing and digital trends for 2018

1. My 2017 highlights

As we go into 2018 these were the pieces from 2017 which I found most fascinating from a digital and marketing perspective:

• Amazon – pretty much everything to do with Amazon is fascinating and instructive when it comes to digital. A highlight last year was Stratechery’s analysis of the Whole Foods acquisition. 
• China – forget the US, if you really want to see disruptive innovation in digital you should go to China. At once exhilarating, illuminating, and completely terrifying. This Wired piece on the Chinese government’s Social Credit System plans should blow your mind. 
• Marketing Ops – just as marketers are borrowing agile from their developer colleagues, I like the idea of ‘marketing ops’ which borrows from ‘dev ops’. This presentation on marketing ops from Justin Dunham is a great intro on how to think about this.  
• Agile Transformation – speaking of agile… there is a lot of talk of ‘agile’ and ‘digital transformation’ in marketing and more widely across organisations. But not that many great case studies. This McKinsey interview with two ING senior executives is definitely worth a read. 
• Physical / Digital – also lots of talk about multi- or omni-channel and physical/digital integration, particularly in retail. Amazon isn’t the only one doing interesting things in this space. This Business of Fashion piece about Farfetch’s vision for the store of the future, an ‘operating system’ for physical retail, is really interesting. 
• Modern Marketing Model (M3) – yes, this is one of mine but at least I put it last. I think marketing as a discipline does need to get past its ongoing existential or organisational troubles around integrating ‘digital’ and ‘classic’ and emerge, butterfly-like, with confidence and clarity, as just ‘(modern) marketing’. 

Econsultancy’s Modern Marketing Model 

2. Still not significant for 2018

Augmented reality (AR), virtual reality (VR), blockchain, Internet of Things (IoT), wearables, 3D printing… they are all hot topics and fascinating in their own right. 

But I am not convinced that 2018 will see these technologies have a big day-to-day impact on what marketers or digital marketers are doing. Experiments and innovation, yes, but not yet significant enough to warrant as much focus and resource as other developments I outline below.  

Perhaps by 2019 marketing will be more directly impacted by these technologies – certainly this first-ever blockchain marketing technology landscape analysis shows how fast things are moving and the BAT (Blockchain Attention Token) shows promise.

Note, however, that we do cover some of these topics in our Opportunities and Challenges for Marketers in 2018 report if you want to learn more.

3. Artificial Intelligence (AI)

Artificial intelligence, on the other hand, is something that I am excited about. And it is already impacting marketing. 

However, it is hard to know where to begin or end with AI as it will impact everything to a lesser or greater degree. Generally, our marketing should get smarter. There is a lot of AI, or at least machine learning, in the technology we use for marketing already. That might be intelligent email subject line optimisation, AI-driven ad tech, content that is optimised using AI, social media optimisation using AI, smart pricing, intelligent product recommendations, image/speech recognition and so on.

I think one of the biggest applications of AI with the clearest returns on investment (ROI) for marketing is around customer service and support. Are you properly leveraging all the content, insights, staff knowledge, previous customer queries that you no doubt have across your organisation to help answer prospects’, and existing customers’, questions and needs? AI can definitely help and seems to be most successfully applied in a hybrid human-automation model where humans are assisted and augmented by AI (KLM is a good case study) often with some kind of conversational interface.

A stylised representation of DigitalGenius’s work with KLM (watch the excellent explainer video here)

AI is a broad trend that we will all be impacted by. General AI is not quite here yet (this presentation talks through the different likely eras of AI evolution) so we can keep our marketing jobs for now. We need to understand how ‘narrow AI’ applies to our area of marketing to make it smarter this year.

(We cover AI use cases for marketing in more detail in our Opportunities and Challenges for Marketers in 2018 report).

4. Two big strategic focuses for marketing / digital in 2018

4.1 A new operating model for marketing

Our Modern Marketing Model (M3) seeks to integrate ‘digital’ and ‘classic’ marketing in a single framework. This defines what marketing now is, what disciplines and capabilities are required. 

However, M3 does not explicitly address the process of marketing (how marketing gets done), nor how the marketing function should be structured and organised. On this latter point we are doing some research and benchmarking to be published soon. Actually, we are looking to interview some senior marketers to discuss how marketing is organised in their organisation. If you would like to participate, you can email my colleague Seán Donnelly who is leading this project.

2018 will see continued efforts to transform the marketing function, often as part of a broader digital transformation. We believe M3 is a step forward but what is now needed is a new operating model for marketing which addresses the following five areas:

1. People, Culture & Capability – what is the remit of the marketing function and therefore the necessary skills and competencies, should you consider a ‘marketing ops’ capability, how do you attract and retain the best modern marketing talent, what marketing training and capability development should you provide, what are the career progression opportunities, is your culture holding you back, is your senior leadership team setting the right example?  
2. Organisational Structure & Design – what organisational structure is right for your marketing/digital function (see my blank sheet thought experiment), do you need a Chief Digital Officer, of Chief Customer Officer, what are the reporting lines, how can you be more organisationally fluid and adaptive (like Spotify), should you have a more networked model, does ‘social’ sit in marketing (or Customer service? or Sales? Or editorial? Or all of them as a horizontal capability?!), and who owns ‘mobile’?
3. Process – how are marketing decisions made, to what degree should marketing use agile approaches, how should marketing operate given a shift from linear campaign focus to ‘always on’ demands, how should marketing orchestrate and manage programmatic programs, how is marketing involved in the process of governance and compliance around data, how does marketing respond to the increasingly 24/7 realtime expectations of customers and live media like messaging and chat? 
4. Partners – there has been a lot written about the future of agencies (Econsultancy, PwC etc) so how should you work with them? The trends seems to be towards building in-house digital skills but what is the right mix? How should you remunerate partners (revenue share?)? How do you increase levels of collaboration, agility and transparency with suppliers and partners? 
5. Technology & Data – how does marketing work with the technology function, what levels of tech competency and executional capability are needed within marketing, what control and governance does marketing have over marketing/customer data, who owns ‘martech’, where does product management and customer experience fit between marketing and tech, is there a need for ‘marketing ops’ to connect the data dots?  

4.2 Data

The only entirely new element of our Modern Marketing Model (M3) is ‘Data & Measurement’. Marketing has always included data and measurement, of course, but never before have the depth and breadth of capabilities around data, as applied to marketing, been so great. 

Indeed, I believe data is the new digital.

Just as digital became a ‘thing’, with its own teams, plans, budgets, job titles and board positions (Chief Digital Officer), in earnest around a decade ago, the same thing is happening with ‘data’ now. CDO is as likely to be Chief Data Officer as Chief Digital Officer. Expect dedicated data roles and teams and expect the same challenges around talent, silos, integration and matrix-working, that we have experienced, and continue to have, with ‘digital’.

If this is true then perhaps we can plan better for the rise of data having learned the lessons from the rise of digital?

Here are some of the areas of focus around data that I expect to see over 2018:

• Privacy and regulation. If you are in Europe you will, of course, be acutely aware of GDPR and the new ePrivacy regulation. But even outside the EU privacy is a hot topic and big players like Apple and Google are taking more stringent approaches (not good news for adtech). 
• Trust and transparency. Relates somewhat to privacy but also to dramatically increased media transparency, pricing transparency from new entrants like Brandless and Beauty Pie, and Blockchain’s decentralised and distributed trust model encouraging us to use data to help us decide who, and how, to trust.  
• First party data focus. In part because of privacy and regulation, but also because of a loss of trust in the transparency of the digital advertising ecosystem (the subject of Marc Pritchard’s seminal speech last year), expect to see marketers increasing focus on making sure they more directly collect and own customer and marketing data.  
• Identity management. Again, in part because of regulatory requirements, but also because of increased complexity and fragmentation across channels and media, expect to hear a lot more about digital identity management this year. A bonanza awaits tech vendors in this space. 
• Biometric data. Used for authentication (e.g. Atom Bank’s ‘blink to login’ facial recognition feature), for product customisation (e.g. Nike’s Advanced Apparel Exploration 1.0), or even permission marketing (e.g. Loomia tracking how people wear their clothes to provide that data to brands). 
• Metadata. I fear I will die before I get marketers as focused on metadata as I think they should be. But if you care about image search, or voice search, and you should, then at least look into structured mark-up, including Schema.org. 
• Dark data. Much customer activity is disappearing into messaging apps and the like. So what happens when your marketing data goes dark? Read our Marketing in the Dark report to find out. 
• Realtime data. Full disclosure… I am an investor in Ably, a realtime data delivery platform. Last year I wrote about examples of realtime digital experiences we can expect more of. Hooks.data is an interesting new start-up that gives you an idea of the kind of realtime experiences we, as marketers, should now be enabling for our customers. 
• AdTech & MarTech data. we will see more expertise in managing the data associated with advertising and marketing being taken in-house this year (including programmatic). This Econsultancy article on the MarTech stack gives great insights into martech data management. And a good piece on AdWeek exploring ‘signal planning’ – an approach to segmentation and contextual targeting that is uniquely digital.  
• Personalisation. We will still be trying to get better at personalisation this year. And personalisation needs data of course. Personalisation efforts will rub against much of the above: privacy, identity management, metadata. 

In case you think you are already pretty smart with your use of data then these two examples might give you something to aspire to:

• Artwork personalization at Netflix – visual evidence, signal searching, cold-start speed, contextual bandits, testing ‘regret’, randomisation schemes, data tuples, ‘replay’ evaluation, take fractions. Now that’s what I call data. 
• ASOS – customer lifetime value prediction using embeddings – more sophisticated ways to predict customer lifetime value from etailer ASOS. It’s marketing, Jim, but not as we’ve known it. 

A high-level overview of ASOS’s CLTV system (from Chamberlain et al. 2017)

5. Tactical opportunities and trends for marketing / digital in 2018

5.1 Mobile

“It’s still not too late to be early on mobile” Thanks to Google’s Jason Spero for that one. 

Re-read my section on mobile from my 2016 trends – not that much has changed. Just do it.

Some useful recent mobile usage stats and insights from Deloitte if you need them. 

5.2 Messaging and chat

Bots were hot in 2017, particularly chatbots. I agree with Accenture that thinking about conversational interfaces more broadly is much more interesting than chatbots per se. 

Messaging was already huge last year but things are only accelerating. 1.82 billion people worldwide are projected to use a chat app this year. Apple Business Chat will launch this year and Instagram started testing a standalone app for private messages called Direct very recently. According to Facebook, 330 million people used Messenger to contact a business for the first time last year. 

To date, messaging has been largely consumer-to-consumer. However, 2018 will see a lot more activity that is consumer-to-business. Enterprise messaging is also exploding with innumerable Slack clones and competitors, not least Microsoft with Teams which is set to replace Skype for Business.

As marketers, we need to consider more carefully in 2018 how we will participate in the explosion of messaging that continues to occur without us getting much of a look in. Customers may not let us in on their Messenger or WhatsApp groups but they may well want to interact with us via messaging for customer service or even promotions. WhatsApp is exploring ways to connect businesses and customers and we should keep an eye on that as well as Apple’s Business Chat. 

Whatsapp Business launched in January 2018

And I have an insider tip for you. Remember those poor web chat experiences from over a decade ago? They disappeared for a while. But they are back. And they are much better. And I have yet to meet anyone who has not experienced a leap in conversion rates on their websites by implementing such solutions (if executed and supported correctly). Visit most tech start-up websites and you will see what I mean. Last year 34% of tech businesses used real-time messaging to start sales conversations online. Vendors like Intercom and Drift are booming. 

Further good insights in this State of Messaging 2018 report from Smooch. 

5.3 Niche Social

Rising awareness around privacy, concerns around trust and transparency, more concerted efforts to avoid social media distractions and saturation, are unlikely to dent the likes of Facebook quite yet. But there are signs that consumers are seeking more closed networks and more private experiences, particularly ones that are relevant to their interests and circumstances.

As some of these emerging social platforms scale we should be aware of them as marketers, particularly those that are relevant to our brands. For example, Nextdoor which is like a hyper-local and more quality-controlled Facebook. Or if you were trying to reach runners or cyclists then Strava and others should be on your radar. 

5.4 LinkedIn

There is a lot of talk about Google and Facebook as marketing platforms to reach consumers. But if you are in B2B, or targeting professionals, then you should spend 2018 getting much better at exploiting the opportunities LinkedIn offers. 

LinkedIn is not new, of course, but it has reached huge scale, and has introduced a lot of new marketing tools and techniques that you might not even know about. My personal experience, and those of other B2B marketers I talk to, suggest that there is significant ROI to be achieved through the smart, sophisticated, use of LinkedIn. And my guess is that this effectiveness might fall as a) more marketers get involved so prices go up and b) LinkedIn members risk getting fatigued with the increased levels of advertising they get. Get in there while the going is good. 

LinkedIn themselves provide some good guidance on how to get the most out of their platform e.g. this guide with six different marketing activities you can steal and apply to LinkedIn.  

5.5 Amazon  

We cover the rise of Amazon as a media player (so increasingly relevant to marketers) in more detail in our Opportunities and Challenges for Marketers in 2018 report. 

Amazon’s media business is expected to be at least $5bn this year and, whilst still small compared to Google or Facebook, Amazon’s Echo/Alexa voice platform gives them a good position in voice search and their intent and purchase data is very attractive to marketers. 

Last year Amazon became the top place consumers go to search for products with various research studies putting Amazon’s share of product search over 50% whilst Google’s share declined to below 30%. This is a multi-year trend that looks set to continue in 2018. 

In 2018 I expect to see more agencies offering Amazon-specific services and in-house teams building capability dedicated to getting the most out of the Amazon Marketing Services (AMS) platform. 

As with LinkedIn, it likely you are not optimising your use of Amazon as a marketing platform, not least because a lot of what is on offer is new and fast evolving. There is Amazon Media Group, Amazon Marketing Services, Amazon Advertising Platform… with various remarketing, contextual and lookalike targeting services available.  

A good place to start is to look through Amazon’s Advertising Pitch Deck. 

5.6 Voice & Audio

Audio is the new video! 

Audio content is making a comeback. The FT has audio articles and FT Labs is exploring whether subscribers are interested in listening to good quality audio versions of FT articles at https://listen.ft.com/.

Apps like Curio are bringing the written word to our ears and podcasting is booming. This IAB Podcast Ad Revenue Study from last year shows the growth and opportunities for marketers in this medium. 

But voice as an interface is perhaps the most exciting aspect of audio. Amazon’s Alexa platform has over 20,000 third-party ‘skills’ and Alexa now also supports “routines” which are customisable or scheduled tasks. Google’s Echo competitor, Home, uses Google’s AI-powered Assistant technology and can translate over 40 languages in realtime, identify music, be activated by squeezing the Pixel 2 phone and much more. 

All this opens tantalising opportunities, and indeed threats and challenges to brands and their marketers. Things to consider for 2018 include:

• Voice SEO – how can you start better optimising for voice search on search engines?
• Voice-optimised content – how does your content need to evolve to suit voice and conversational interfaces and interactions? 
• Voice in the customer journey – what moments in the customer journey are most likely to suit a voice interaction and how can you optimise for these moments? Is voice changing how your customers shop? 
• Your brand’s voice – brands should have voices and personalities that fit and enhance the brand. So how are you going to develop the tone and personality for your brand for voice interactions?

As ever, exciting times, and I look forward to your comments below.