Top 5 Canadian Media Trends For 2016
As we approach the end of the year and the start of a new one, we’ve decided to set aside some time to review the past year with an eye toward forecasting the key Canadian media trends to watch for 2016. There’s no question that the media landscape is changing rapidly – so rapidly in fact that it’s difficult just to keep up. That’s why we’ve prepared this blog post of the 5 key media trends to watch in the coming year. They are by no means the only important trends, but they are – after internal discussions and some additional research – what we have deemed the most important to watch for 2016.
One of the key themes that has been driving changes to the media landscape over the past several years has been the shift from manual media planning and buying to a highly automated process, enabled by the growth of ad networks and exchanges, and programmatic media buying technology. We are also seeing that the distinction between online and offline is getting more and more fuzzy, with both converging through interactive digital out-of-home advertisements and local advertising based on geo-targeting.
Canadian Media Trend #1 – The continual rise of programmatic
Spending on programmatic advertising in Canada is growing every year, and in 2014 it represented nearly half of all digital display ad spending. The same is happening in the US: in 2015, 55% of US digital display ad spending will go to programmatic ads. Programmatic is becoming the new essential digital strategy. But not just for large companies: it’s expanding to a broader base as the technology matures and implementation costs go down.
Programmatic is no longer just for traditional web display ads. The technology is now being used for video ads — both online and on TV. The growth of programmatic video is on track with the overall growth in programmatic advertising. We’re expecting to see a lot of programmatic video activity in 2016, especially given that 88% of Canadian internet users are digital video viewers.
Canadian Media Trend #2 – Hyper local data, geo-targeting, and tracking
The growing use of mobile devices is driving what is being called ‘proximity marketing‘, enabled by improvements in data collection and transfer technology through GPS, Wi-Fi hotspots, and social media sites with location check-in features. Other emerging tech like the connected car and home (through products from companies like Nest, Dropcam and Google) are contributing to the growth of proximity marketing as well.
One thing advertisers that choose to venture into proximity marketing should keep in mind: avoid intrusive tactics. The industry is working to gain public acceptance of targeted advertisements, particularly through the Digital Advertising Alliance of Canada (DAAC)’s AdChoices initiative. And consumers seem to be opening up to targeted ads — after all, aren’t they better than a constant flurry of irrelevant ads?
Also take note: the DAAC has developed a mobile app call AppChoices, designed to help give consumers control over online behavioral data collection from mobile devices. Clearly, there are still hurdles to overcome, as many mobile users have so far refused to enable location services for mobile apps.
This trend is an important one to watch for 2016: smartphone penetration in Canada is expected to grow from an already very high level of 71% in 2015 to 83% in 2019 — representing 25 million Canadians.
Canadian Media Trend #3 – Online and mobile ad spending growth continues without relent
TV, radio, and out-of-home advertisement spending in Canada have been relatively steady between 2007 and 2014: TV spending fell slightly from its 2011 peak of $3.55 billion to $3.36 billion in 2014; spending on radio ads has risen slightly over 2007 levels to $1.59 billion in 2014; as has out-of-home spending, which reached $521 million in 2014 (compared to $422 million in 2007). Meanwhile, newspaper and magazine spending continues its slow decent, but still represents a combined total of $2.8 billion in 2014 (compared to $4.4 billion in 2007).
Where we are seeing significant growth is in online spending, which continues its relentless climb, reaching $3.8 billion in 2014 (compared to $3.4 billion in 2013). That’s already $400 million more than TV ad spending, and $1 billion more than traditional print advertising.
But the most compelling growth story is mobile, where we have witnessed ad spending doubling over 2013 levels, reaching $900 million in 2014. Mobile ad spending remarkably continues to grow at an exponential rate — 2014 spending levels are 45,150% higher than they were in 2007.
Canadian Media Trend #4 – The integration of marketing and technology for measurable results/transparency
Improvements in marketing technology have given media planners access to an unprecedented amount of data, as well as new ways to leverage this data for improved advertising accuracy (hitting the right target audience) and efficiency (getting the best ROI). The marketing technology business landscape is being reshaped before our very eyes.
For instance, BBM Analytics recently rebranded as NLogic, and NADbank and PMB merged (forming Vividata) to address the need for more comprehensive and actionable consumer research data. 3rd party ad tracking software providers are seeking to capitalize on the huge amount of data created by search engine and social media companies for intelligent ad management services. The number of 3rd-party software providers has skyrocketed over the past several years, and now number more than 1,000. While many of these companies sell marketing software packages, there are also many free tools available such as Google Analytics.
The bottom line is that media planning software is facilitating the data-driven media buying process through tools that combine ad performance data with internal data on ad expenditures, sales, and inventories. Watch for improvements in ad tracking and media planning technologies through increased investments and consolidations in the industry.
Canadian Media Trend #5 – Mobile and desktop video outpace TV
As previously noted, 88% of Canadian internet users are digital video viewers. The opportunity for directly targeting consumers through online video ads (addressable TV) will therefore continue to be an important component of marketing strategies in 2016.
It turns out that Canadians are global leaders in online video viewership, spending on average 22.4 hours per month watching online videos — far higher than the global average of 14.8 hours and the US average of 20.4 hours per month. A lot of these video hours have moved to mobile devices over the past few years, and as such the reported online viewing numbers have actually gone down; but the data is deceiving: over 50% of broadcaster video is viewed “in-app” and cannot be measured by existing syndicated sources. Moreover, viewership on devices such as Chromecast, Xbox, AppleTV, and Roku are not currently tracked.
Two websites are leading the online video transition: YouTube (for PC viewing) and Facebook (for mobile viewing). These websites, among others like Netflix and Twitter, are benefitting from faster broadband speeds, huge mobile device adoption rates, and the emergence of new video platforms on social media websites and smart TVs.
Though this is an important trend for marketers to watch, there are many challenges ahead. For one, the quality of online video content varies, and is typically lower than video on traditional TV. Some brands worry that low video quality could hurt their image.
What’s more – as previously noted – measurement standards for video ad impressions are very low (and non existent for mobile videos), which is making it difficult for marketers to measure the ROI of their efforts. Cross-platform video data is needed for online video advertising to reach its full potential.
There you have it: our top 5 trends to watch for 2016.
In case you skipped to the bottom of this article . . .
Watch out for opportunities to leverage programmatic advertising technology and targeted/proximity advertising, make a plan to capture the explosive mobile advertising market, be sure to leverage the latest media planning technology for a higher ROI, and keep a close eye on online video advertising in 2016.
Contact us to explore how can we help your company navigate the ever-changing Canadian media landscape.