The year of the Rooster is officially in full flap, but we’ve been up since the Q3 crack of dawn to ready our thoughts on the year ahead. In our planning sessions we gathered a handful of insights for what the industry has witnessed and what’s yet to fully emerge. But before we get into the future, we need to get an understanding of where marketers placed their budgets in 2016. First and foremost, let’s accept and agree to the fact that digital continued its march to the top of the ad spend charts. Last year, digital ad spend in Canada grew by 10% in 2016 to CA$4.8 billion.
So where did the dollars go in 2016?
The biggest (yet, least surprising) stat of 2016? TV ad spend continuously declined while digital soared as the top media category with investments reaching CA$3.75 billion. While digital chugged along the tracks, mobile was the express train to Grand Central with +55% growth in spend from 2015. Based on that stat alone, we’d like to propose 2016 be heralded as The Year of Mobile, full stop. Mobile is everywhere and everything. Going forward, mobile will no longer be an afterthought but rather a necessary part of any digital plan. Need more proof? Mobile ad spend made up almost half of total digital ad spend in 2016. If mobile continues to grow at its current pace, this channel will overtake TV spend by 2018.
Coming in third place for 2016 standout channel of the year is social media. Social has become a more common choice for advertisers with spend reaching CA$767.7 million in 2016. Although this shows growth in spend, many advertisers are still not sure about its return on investment. We attribute this doubt to new and emerging platforms. Just when advertisers think they have it all figured out, the next platform or format thunders into the arena. We’re looking at you Snapchat.
So what can we expect for 2017?
Mobile use continues to soar, with the rise of utility applications such as mobile wallets and consumption through social media. Major brands are also driving growth with entertainment company Ticketmaster as well as airlines like Air Canada and Porter making it simple to track key documents through your wallet. With social and mobile on the rise, Canada was named one of Instagram’s top 5 global growth markets in 2016, officially tipping off marketers to the platforms potential and massive audiences.
Although mobile continues to grow into a dominating device, desktop still remains number one in terms of time spent and continues to be important through 2017.
Research indicates that native has emerged as a preferred ad type, particularly with the young adult audience. The platform has gained so much popularity with advertisers that the Federal Trade Commission in the US set out new guidelines around how brands use with the format from a transparency perspective. The increased use of out-stream video ads and in-feed premium video on social platforms will help further drive this growth in 2017.
The demand for premium online video continues to grow and YouTube continues to increase supply as the key inventory operator. Currently, supply for mobile specific video is lagging but we expect this to change as two key factors evolve: publishers become more comfortable with programmatic media buys and as a result, make a more premium portion of their inventory available to advertisers on the open exchanges.
As social media usage continues to surge, Facebook will remain the reigning king of among its peers. However, we expect that emerging contenders such as Snapchat will make a run for the throne as marketers begin testing new ad formats. Unfortunately, Twitter’s future looks uncertain as analysts predict network usage will steadily decline through 2020, adding users at a slower rate than other platforms.
Data will emerge as the common currency amongst top platform owners Google, LinkedIn, Facebook and Amazon. While some of these platforms offer deep levels of reporting and analytics, we believe increased competition for ad dollars will encourage greater depths of data across all, opening up new planning possibilities, especially in search and e-commerce categories.
Lastly, in 2017, we expect traditional channels such as TV and Radio to continue their digital transformation. In Canada specifically, programmatic audio is leading the pack with high growth operators such as Spotify and its single product approach and Triton’s sophisticated network at scale strategy, forging a new offering for savvy marketers to exploit. Alternatively, addressable and advanced TV are taking baby steps with each major broadcaster beta testing different methods of offering data and inventory simultaneously.
So what’s next?
There’s a lot of noise about the the potential of up-and-coming technologies. Virtual Reality, Augmented Reality, Smart Objects/Internet Of Things, Artificial Intelligence and Chat Bots will be the hot topics of 2017 that we’re excited to see unfold. At this point its hard to predict which is here to stay. One thing is for certain – early adopters are pushing the industry forward and it seems only natural to rise at the crack of dawn with a fresh perspective and a few key insights to help kick off the year ahead.