The Future of Media Series4C’S 4PS: FOUR PREDICTIONS FOR 2018

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2018

ContentsIntroduction .........................................................1

4C’s 4Ps: Four Predictions for 2018 .....................21. Marketers — and their agencies — will thrive by optimizing around audiences to deliver bespoke experiences. ....................................2

2. Social platforms will live — or die — based on how well they can deliver the experiences that audiences want from them. .....................4

3. A new golden age of TV has arrived, making way for a new golden age of TV advertising within private marketplaces. ........................6

4. Artificial intelligence will become the new competitive differentiator by enabling real-time, audience-specific experiences. ..........8

In Conclusion .......................................................9

The Future of Media Series: 4C's 4Ps: Four Predictions for 2018 ©2018 4C Insights, Inc. Page 1

IntroductionAs 2018 kicks off, it’s time to take a step back from the day-to-day and reflect on the bigger picture. A look at the most prominent business headlines over the past year paint a complex scene for the year ahead:

Brands are evolving to keep up with consumer expectations — Amazon’s head-turning purchase of bricks-and-mortar grocer Whole Foods is just one example — or suffering the consequences, as there were more retail bankruptcies in the first half of 2017 than in all of 2016.

Advertising on social platforms continues to reach all-time highs as companies like Facebook and Snapchat vie for both consumer attention and advertising dollars, continuously launching new features and functionality to stand out.

Concerns surround digital advertising — with issues such as viewability and brand safety — meaning that premium inventory like television remains critically strategic. Advances in the way TV ads are bought and sold also makes television even more appealing to advertisers.

Through this complexity, we at 4C see all of these trends centered around one major theme: audiences.

Consider this: traditionally, direct marketing — such as direct mail, email, or SMS — is where marketers took an audience-based approach, due to the 1-to-1 nature of these channels. And direct marketing efforts work: the average email open rate sits at 25.8%, while the average display click-through-rate is only 0.09%. However, there’s a limit to the number of direct messages a brand can send to a consumer. Plus, consumers are spending more and more time engaged not with channels like email but with rich content experiences through TV, social, and video.

So why has there been such a disconnect between where marketers apply audience data and where consumers spend their time? Direct marketing strategies have seeped into social advertising over the past few years, led by developments like Facebook’s Custom Audiences. But thanks to advancements in technology, 2018 will see a breakthrough in audience-based marketing, with marketers now able to find and apply audience-level data to television and all social channels, finally bringing the precision that has only been available through direct marketing to the reach powerhouse that is broad-reach advertising.

2018’s best marketers will use audience data as the driving force behind campaigns, creating compelling and impactful consumer experiences that will move the needle on business performance and drive change in their industries. “The future of marketing is all audience-based. It ties all channels together,” says Kyle Jackson, SVP Group Director, Performance Marketing, Spark Foundry. “Marketers finally have the data they need to understand their audiences and more effectively target them, telling a uniform story all the way from the first touchpoint until the purchase.”

Read on for 4C’s 4Ps — four predictions that will explain more about how marketers will leverage audience-based marketing to create stand-out customer experiences in the year ahead.

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The Future of Media Series: 4C's 4Ps: Four Predictions for 2018 ©2018 4C Insights, Inc. Page 2

4C’s 4Ps: Four Predictions for 2018

1. Marketers — and their agencies — will thrive by optimizing around audiences to deliver bespoke experiences.

Call it the Amazon affect: focusing on individual channels is no longer effective when a seamless omnichannel experience is expected by consumers. The internet behemoth is perhaps the most well-known master of the audience-centric experience, optimizing every user interaction with data, and expanding into virtually every realm of a consumer’s life – from groceries to entertainment to everyday needs.

Amazon is well on its way to fully integrating online and offline offerings to optimize around prescriptive audiences, delivering seamless experiences that continually push the envelope. This new status-quo has only increased the urgency for other companies to catch up, making 2018 the year we predict that brands will undergo a significant shift from channel-focused organizations to audience-oriented teams. In fact, Forrester predicts that smart executives will implement an internal disruption around customer experience next year.

As brands reorganize to optimize around audiences, not channels, it only makes sense that one of their most-used resources – the agency – must reorganize as well. “It is easier said than done but agencies should break down all the barriers and have no separate digital department, no separate social team, no separate creative team and no separate analytics team,” said Aaron Goldman, CMO of 4C, in a Q&A for IT Pro Portal. Agencies are focused on remaining strategic partners with advertisers: recent research found that 84% of UK agency professionals are concerned about the added value their agency provides to clients. Agencies can combat this concern by creating integrated teams built around audiences, aligning with client initiatives to continually add strategic value. “Ultimately, marketers are working in a crowded market where agency partners that can truly engage and captivate customers across all paid media channels are harder to find,” Goldman continued. “For agencies looking to stand out, this is the perfect opportunity to organize all disciplines around the client and the customer journey.”

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The Future of Media Series: 4C's 4Ps: Four Predictions for 2018 ©2018 4C Insights, Inc. Page 3

Brands like Clorox and Electrolux are leading this change with their agency teams, with a reorganization around the customer journey instead of individual brands. And forward-looking agencies are already moving to an audience-focused approach. “We look at a full 360-degree view of audiences, whether reaching them through programmatic, search, social, or even organic channels,” said Liz Brock, VP, Group Director of Social Media at Socialyse, part of Havas Media Group. “Everything we do in one channel has an impact on another, so we must look at reporting, measurement, and creative holistically to ensure it is audience-centric and ladders up to one objective.”

The bottom line: whether brand or agency, new audience-centric organizational structures will help deliver seamless experiences across screens, positively impacting marketing performance and ROI across all channels. As Ian Kooperman, Associate Director at Rise Interactive, put it, “connecting online behavior to offline purchases will help marketers understand the impact that digital and social are having on the business as a whole.”

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For agencies looking to stand out, this is the perfect opportunity to organize all disciplines around the client and the customer journey.

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2. Social platforms will live — or die — based on how well they can deliver the experiences that audiences want from them.

Instagram Stories. LinkedIn Video. Pinterest Lens. Facebook Watch. Snapchat Lens Studio. Twitter’s 280 characters. The major social media platforms have started moving away from the all-encompassing “social media” label by playing to their individual strengths and providing what their audiences want and need from them.

But 2018 may be the year we stop calling these platforms “social” altogether. “Save for the fact that content is largely organized around connections and they’ve managed to capture

lots of people’s time and attention, there’s not much these platforms have in common when it comes to how they operate and how consumers use them,” Goldman wrote in Adweek. And, in Mediatel, he argued, “thinking of them as social networks and approaching them with the same strategy as Facebook or Instagram does everyone — consumers,

brands, and platforms alike — a major disservice.”

Whatever you call them, “social” media platforms remain some of the biggest marketing channels of our time. According to Viji Davis, CMO at Resolution Media, “when we think about the platform explosion that’s been happening over the past couple of years, a lot of experiences are curated towards their unique audiences and unique consumers.” People who spend 3 or more hours per day on social media aren’t only spending that time interacting with their friends: 39% of these heavy social media users find interacting with a brand an important part of the process of finding out about products and services.

Instead of strategizing ways to simply increase time spent engaging with social media, the focus should be on truly delivering on the unique needs of each platform’s individual audience.

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However, social media platforms are also competing in an attention economy: 67% of social media users anticipate spending about the same amount of time on social media as they do now over the next 12 months. So instead of strategizing ways to simply increase time spent engaging with social media, the focus should be on truly delivering on the unique needs of each platform’s individual audience.

Social companies are already making strides in this direction. “With their Lens technology, Pinterest has an opportunity to be part of the shopping process and gather data more than any other social media network. Will they integrate with other brands outside of Target, will they integrate more with Search functionality? They have options,” explained Fidess Ferrer, Director at Performics. “For Snap, Bitmoji lens and World lens are changing how people can interact with brands. Brand Lens has so much potential — Bud Light’s talking beer vendor is just the beginning.”

While consumers are the main audience for social media platforms, advertisers are the audience that keep the lights on. So, as these companies hone in on what consumers want out of them, they set up advertisers for increased success. Over 65% of media and agency professionals ranked the ability to reach target audiences as a key factor in media budget allocation.

By listening to audiences and increasing engagement, platforms will be in a position to build continuously improved targeting opportunities, therefore securing more ad dollars from brands and faith from Wall Street

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3. A new golden age of TV has arrived, making way for a new golden age of TV advertising within private marketplaces.

In the past several years, headlines have been all about digital advertising taking over TV ad dollars. The industry has predicted the death of TV as we know it, but as these predictions roll in, so do the reports that people are still consuming television content. Perhaps the disconnect here is in how the industry defines “television.”

Premium content used to be limited to broadcast networks like NBC or cable networks like CNN, but in an age of “binge-worthy” programming, new players like streaming services and technology companies are jumping into the fray. Netflix, Hulu, and Amazon received a combined 125 Primetime Emmy nominations in 2017. Apple has already ordered three original series since announcing its video programming division in June. Heck, even the “social” platforms are spending massive sums to produce original content, as evidenced by Facebook Watch and Snap Discover.

The reality is that consumers are more engaged with TV and TV-like content than ever before, but the ways they watch are changing:

• In Q4 of 2016, 82.1% of video, or over 500 trillion minutes, was consumed via traditional television. The remaining 17.9%, a still-impressive 110 trillion minutes, was a combination of OTT, tablets, mobile, and desktop screens.

• 87% of people use a second screen while they watch TV, meaning competition for attention is fierce — but so is the opportunity for impactful cross-screen consumer engagement.

All of this underscores the fact that TV advertising isn’t dying in favor of digital advertising. In fact, it remains a hugely significant part of ad spend, with nearly $200B spent on TV ads in 2017 — a number that is still growing year over year. However, that doesn’t mean that TV advertisers can’t learn a thing to or two from their digital counterparts.

The reality is that consumers are more engaged with TV and TV-like content than ever before.

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The benefit of TV advertising has historically been reach, but new technologies allow for the same overall reach, with more precise, efficient targeting to specific audience segments – similar to the advancements pioneered in the digital industry over the last decade. For example, advertisers can now find and reach Soccer Moms or Dog Lovers across a wide array of networks, programs, and genres instead of simply targeting females 18-34 across a few blockbuster shows.

This level of targeting happens in a few ways. One huge opportunity is applying audience insights from digital to television targeting. “As things become more programmatic, audience-centricity is the core. How do you build audiences that matter? That’s where data sets come in,” per 4C CPO, Anupam Gupta on Beet.tv. “If you look at the activity consumers have on social media – what kinds of brands, celebrities, TV shows they’re engaging with, that tells you something about their interests.”

Advertisers can also use their own customer information to reach specific audiences through TV. “Buyers can bring their own data to the table, giving them the tools they need to make smart decisions about which networks, programs, audiences and dayparts to use, and in which combinations,” Lance Neuhauser, 4C CEO, explains in a Media Village article. “That data will also enable TV ad buyers to know the habits of viewers, creating a more effective measurement base than any standardized approach could ever provide.”

The ability to create targeting criteria using social, TV, and marketer-owned data, and programmatically buy TV placements on whichever screen captures their audiences’ attention, is changing the game by bringing the best of TV and digital advertising together. This new approach also creates new publisher opportunities. “For publishers, operating a private marketplace is crucial to maintaining the value of inventory and avoiding a race to the bottom,” Anupam Gupta, 4C CPO, wrote in MarTech Advisor. Expect to see more private marketplaces (PMPs) developed across linear television and digital video throughout 2018 to address this opportunity.

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4. Artificial intelligence will become the new competitive differentiator by enabling real-time, audience-specific experiences.

You’ve heard it before: data is the new oil. Marketers have access to more data than ever before, and that data is critical for delivering a holistic experience. But how can marketers realistically sift through all of that big data to make it smart data? Welcome, artificial intelligence.

Innovative platforms have started rolling out AI-powered technologies to allow marketers to use data to dynamically cater experiences to specific audiences in ways that have never been possible. Facebook, for example, uses AI-fueled technology to serve contextually relevant images and videos in ads. And self-serve sync technology allows marketers to automatically trigger ads based on real-time, real-world signals like TV, sports, and weather moments. But as marketers become increasingly focused on creating audience-centric experiences, we expect that 2018 will be a breakout year for AI. “The future of marketing will be automated. It will be a world where data is talking through AI to target people with a 1:1 conversation,” said David Dweck, Partner, Group Director of Search & Social at Mindshare.

When polled on the areas in which AI will have the greatest impact, 61% of marketers said “delivering the right message, on the right channel, at the right time.” This concept inherently includes understanding who your audience is, how they spend their time, and the media they are consuming. Some brands are already doing this:

• MTV used 4C Social Sync to serve Snap Ads promoting Just Tattoo of Us to address fans of tattoo-related competitor TV shows while they were airing. The campaign saw a 174.1% increase in swipe-up rate and a 100% view rate, up 19.1% from previous ads. “We achieved amazing results in this campaign, with our activity cutting through in a cluttered and very competitive market.” – Mohammed Kibria, Social Media Planner, PHD

• Using Facebook Dynamic Ads, BookingBuddy used browsing activity to target Facebook, Instagram, and Audience Network users who had expressed an interest in travel – and saw a 2x increase in revenue as a result.

78% of B2C marketing technology decision-makers plan to expand on or implement AI in the next 12 months. Kooperman says Rise is working to, “personalize ad and content experiences to each individual user as much as possible,” and sees AI and automation as emerging technologies that will continue to be leveraged and taken to the next level throughout 2018. With the ability to find audience attention across screens already in play, personalizing any and all parts of an ad will give marketers an extra boost towards success.

Emily Kramer, Senior Director of Media Services at Merkle, certainly sees it that way, commenting, “As we continue to see the convergence of marketing and advertising together, that data is going to be at the core of everything we do.”

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In ConclusionMarketers who don’t embrace opportunities to deliver hyper-personalized, audience-specific experiences in 2018 will fall behind. “The brands that deliver the best experiences will make every decision based on the data they have access to – data on their audience, on lookalike audiences, and modeling those two together,” said Scott Shamberg, US CEO for Performics. Will you be one of them, or will you be left in the dust?

Here at 4C, we’re always focusing on how to help marketers get to know their audiences better and find them efficiently on whichever screen has captured their attention. Get in touch for more information on how 4C can help you make the most of your campaigns.

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The brands that deliver the best experiences will make every decision based on the data they have access to – data on their audience, on lookalike audiences, and modeling those two together.

ABOUT 4C

4C is a global leader in data science and marketing technology with solutions for multi-screen convergence. Brands, agencies, and media owners rely on the 4C Insights Affinity Graph™ to identify their most valuable audiences and improve effectiveness across channels. With more than $1.7 billion+ in annualized media spend running through its software-as-a-service platform, 4C offers activation on Apple News, Facebook, Instagram, LinkedIn, NBCUniversal, Pinterest, Snapchat, and Twitter as well as TV Synced Ads across display, search, social, and video. The company also provides paid, earned, and owned media analytics leveraging its Teletrax™ television monitoring network which detects over 400 million TV asset airings on an annual basis. Founded in 2011 and based in Chicago, 4C has staff in 15 worldwide locations across the United States, United Kingdom, the Netherlands, France, Hong Kong, India, Singapore, and the Philippines. Visit www.4Cinsights.com for more information.

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