The Consumer Electronics Show in Las Vegas earlier this month was bursting with phones, tablets, e-book readers and TVs. After consuming the offerings, three themes with real significance for marketers and advertisers became clear.
First, consumers are more mobile than ever. Content - especially video - is unlimited and no longer constrained to TV and the arrival of cloud computing will change the relationship between marketers, consumers and distributors.
Telecoms carriers and manufacturers all showed the next generation of super-fast broadband 4G LTE-enabled mobile devices. This means large and fast-growing audiences consuming ad-supported content and branded programming in places and contexts never seen before. Consumers will have access to copious amounts of content in airports and coffee bars, and when commuting to work and out enjoying nightlife.
Video no longer means television and DVDs, it is coming to mean anything with sound and moving images. And this year's CES showed that there is no limit to where they can be viewed.
One of the splashiest innovations shown at CES was internet-connected TVs. Manufacturers and carriers are recognising consumer demand for even more content and their desire to take the content with them via mobile and tablet. They've responded by creating "TV everywhere", which essentially means that the era of on-demand content consumption is officially here. Expect Google to play a significant role in how consumers navigate the wide open world that these new internet-connected TVs offer.
Probably the most significant change to how marketers engage consumers will come from the other big story from CES this year - cloud computing. This will enable most consumer entertainment, information and data to be accessed on-demand, through the internet, rather than sit in individual channels or devices.
An increased number of advertising, brand marketing and media professionals attended CES this year, highlighting the recognition that new opportunities for branding and connecting with customers were to be found throughout.
1. The development of 4G LTE- enabled mobile devices will significantly change the economics and pricing of advertising units as they shift away from being ratings-driven and are fast converging with downloads, views and other digital metrics.
2. Consumers will have applications and websites open in a browser window on their TV screen at the same time as they have broadcast programming running. This "two-screen" behaviour opens up fascinating creative opportunities for brands to have ads that combine the ability to reach large audiences with the interactivity of direct response advertising.
3. It is very likely that the search dialog box will become the way consumers find content on their TVs. Not only does it change the way programming and content are promoted but also how brands are displayed. Ad units from commercial pods to pre-roll, paid search and sponsorship will all have different roles and values. New ad formats will have to accommodate the new ways of navigating and consuming content. Of course, the data that the likes of Google and others will generate and collect as a result will open up opportunities for targeting consumers. Each screen will serve a different purpose and the creative, messaging and engagement tactics used will need to be designed for the unique environments.
4. The "cloud" will significantly change the economics of brand advertising. It will change the media we buy, from whom we buy it, and how it is displayed when the consumer accesses it. It may still be too early to know absolutely what will happen to TV networks, news organisations and movie studios in this new access and distribution environment, but the one thing that is clear is that it will change the economics of creating and distributing content.
5. The current rules of media will have to be reconsidered. Marketers will need to develop new models for creative assets, formats, media economics, measurement and data management. Buying will change as platforms such as auctions reward risk-based models rather than principles of leverage and clout.
- Eric Bader is the chief strategy officer at Initiative Worldwide.
WHAT IT MEANS FOR ...
- Consumers can be reached in many different contexts and locations.
- Unit costs of paid media will change as content moves across multiple screens.
- Data will produce valuable consumer research.
- The roles of PR, customer service, media and advertising need to be realigned as consumers participate with brands through new channels and devices.
- Cloud computing, and the on-demand content consumption it will enable, will break down the walls between media creators, owners, channels and distributors and change their relationships with consumers. Media costs, values and measures will change accordingly.
- There are multitudes of new situations in which agencies can reach highly mobile consumers. Agencies must focus on enhancing targeting capabilities.
- Relationships with existing media owners will become broader, covering more channels and platforms, and there will be new and probably unusual media owners emerging.
- All of these channels will produce a flood of new data, which needs to be managed. But there is an opportunity to turn data into valuable consumer research.
- The new emerging channels demand new strategies around paid, earned and owned media. Agencies need to be prepared for the analytics that are required to master these new creative and media forms.