The year in digital: What tech has had the biggest impact on the ad industry?

Compelling "new" tools will make what we do an even better opportunity for powerful storytelling, says Digital 40 Over 40 alumni Winston Binch, chief digital officer at Deutsch NA.

A lot happened in the tech world over the last year, beyond cryptocurrency and the breakout success of apps like HQ Trivia, and it’s worth reflecting on how those changes will impact our industry moving forward. There are a lot of compelling "new" tools for us to tap into as we kick off this year that will make what we do an even better opportunity for powerful storytelling.

Facebook had PR issues over the last year related to fake news, Russian trolls and offensive content, so much so that Zuckerberg has said he’s going to make fixing Facebook his priority for 2018. But it was also a year in which they, along with Instagram, ate Snapchat’s lunch and cemented itself as a digital advertising juggernaut. It didn’t happen overnight, but Facebook’s no longer a community-building tool. It’s a sophisticated and robust ad tech platform designed to make lots and lots of money.

According to eMarketer, Facebook has 20.9 percent of the US digital ad business now, and revenues grew by 40.4 percent. Instagram’s ad revenue grew by 90.7 percent, and "stories" now have more than 300 million daily users. Even more remarkable, according to Instagram, people under 25 are spending up to 32 minutes on its platform daily. Two-thirds of users access the platform daily, 60 percent say that they discover new products and 70 percent take action. Together, Google and Facebook now make up 63 percent of the digital ad spend. The duopoly reigns supreme in advertising, and our digital addiction has reached staggering and unprecedented heights.

It means that advertisers have incredibly powerful advertising tools at their disposal unlike anything we’ve seen before, but they’re also very likely going to pay an increasingly higher premium to reach their customers and, at the same time, things aren’t going to get easier. The digital ad environment will get noisier as more brands spend on these channels and the formats mature. 

Most of what you heard last year was "data, data, data" but in an age of algorithms, the fact is that branding and creativity matter more now than ever. The best targeting in the world isn’t worth a damn if you don’t have something awesome, provocative or helpful to say. 

Emerging and millennial-focused brands like MVMT, Casper and Away Travel, to name a few, get it. They’re making smart use of these channels but are doing it artfully and with a clear sense of purpose. Brands that adopt a design-centric approach to digital marketing will come out on top even as we see this technology get more intelligent and dynamic in the coming months. People buy with their eyes. 

2017 was also significant for AI. It’s still in the early days, kind of like the web in 1995, but things are moving insanely fast, and if CES is any indication, the virtual assistant arms race and battle for smart home supremacy is in full swing. Chatbots didn’t blow up to the extent some had predicted, but more brands placed bets and had success, including 130-year-old ones like National Geographic with its Albert Einstein bot. But the real story in AI is voice.

There are now more than 25,000 skills on Alexa, and according to RBC Capital Markets, Amazon sold 33 million Echo devices in 2017, up from 4 million the prior year. Google Assistant handles 13 languages and works across 400 million devices, including Sony Android TVs. Amazon and Kohler announced a $1,000 smart bathroom mirror, and Alexa will be integrated into Toyota, Fiat, Chrysler, Ford, Hyundai, BMW, Mercedes-Benz and Nissan cars in the not-so-distant future. This is a game-changing development for advertising and marketing. We’ve entered the era of voice branding, and it will require us to reimagine much of what we do.

This year, we need to think differently about brand strategy and shift from brand personas to personalities. Brands are no longer just ideas. They’re characters that customers have intimate, dynamic and ongoing conversations with. We need to rethink product naming strategy. Without visual cues, every product will need what Amazon calls a "golden utterance," a sticky and easy-to-remember name or phrase. UI design also needs reconsideration. Brand experiences have to work not only across devices but also by using video, voice, image and text, seamlessly. Most significantly, we need to change the way we approach storytelling. With voice, stories are no longer finite—they’re long-form and potentially endless, guided conversations.

In his book, "The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google," Scott Galloway says, "Your new favorite brand is what Google returns to you in .0000005 seconds." Yes, the future of advertising will be increasingly determined by the tech giants, and machine learning is going to take decision-making steps out of the shopping process, but branding and creativity are far from dead. As witnessed in the growth of specialty and direct-to-consumer retail, emotion still sells, and I can’t think of a more exciting time to be in the creative business. 

There are so many big and important questions that need to be answered on behalf of brands and so many new and interactive media formats that have yet to truly be explored. Moreover, AI represents a renaissance moment for creativity. These new technologies are amazingly capable, new creative canvases and opportunities to innovate the customer experience and create business change. It’s the Wild West all over again—the exact type of conditions that attracted me to the business in the first place. Giddyup!

Winston Binch is Chief Digital Officer, Deutsch North America and a 2017 member of Campaign US' Digital 40 Over 40.

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