Madison Ave Insights

2012: A Retrospective

Posted in Advertising, Marketing

It’s hard to believe 2012 is coming to an end. It was a big year for us here, with the launch of Madison Ave Insights in October, and a notable one for the advertising industry. As always, agencies tried to top the year before with bigger and better creative, regulatory agencies stepped up oversight and enforcement, and technological advances happened at a pace that seemed like every minute. From the Super Bowl to Cannes to the Summer Olympics to the Presidential election, marketers have been busy year-round with how to balance rapid change and new technology with threats from regulators and competitors while doing great creative and effective advertising. This has been a very hard dance to learn.

Among countless others, here are a few key trends and developments from 2012 that will have long-lasting implications for the advertising industry (that is, if the Mayan calendar is incorrect).

Data: Data is without a doubt changing the advertising industry. With more platforms and devices collecting consumer data, including smart phones, tablets, and mobile apps, data has increasingly become a critical tool for marketers and advertising agencies. Of course, we are all still learning the best ways to collect, manage, and use data without violating basic data security and consumer privacy standards. This year, data brokers have faced scrutiny for selling consumers’ data, and brands have been questioned for data collection practices. With data collection and management tools advancing, and data analytics becoming the “it” profession, all of us are eager to see what will be next and how the advertising industry applies and develops data to benefit all of the constituencies – consumers, marketers, agencies, publishers and technologists.

Mobile: Star Trek – Kirk’s Communicator is a device of the past. Our mobile devices are so much more for consumers, and they are certainly a treasure trove for advertisers. Consumers use mobile devices to call home, text their kids and access apps, but they also use them for research and transactions.  Mobile payment is a reality and mobile commerce is growing.  Starbucks is offering mobile payments and major retailers are offering mobile gift cards, and advertisers are learning how to make the most of this.  Mobile apps have continued to expand and brands are launching mobile apps for targeted advertising, consumer data collection and customer engagement.  Mobile app developers have seen increased scrutiny and regulation in light of privacy standards and among consumer protection advocates.  Just this month, the FTC released a report of dismal findings regarding mobile apps directed at children and indicated that it is investigating a number of companies in the mobile app marketplace for failing to protect children’s privacy or not disclosing what information is collected from users under the Children’s Online Privacy Protection Act.  Beyond app makers, mobile ads have increased in popularity over the past year, both to consumers and to advertisers.  Proof lies in the increase in costs, particularly around target days for consumers. On Black Friday, mobile ads’ effective cost-per-thousand-impressions hit 76 cents, up from 68 cents the week prior and 63 cents averaged during the month of October, according to mobile ad exchange MoPub.  This past year, mobile has become a vital platform for advertisers, and it will be interesting to see the ways the industry adopts to a wireless world.

Privacy: At the beginning of 2012, many thought this would be the year for privacy legislation in the U.S., seeing as it’s a bipartisan issue in a Presidential election year.  Though this was not the case, the FTC has made significant strides in regulation and enforcement.  The FTC released its final privacy report in March, which pushed for privacy by design, consumer notification of privacy practices, and increased transparency regarding the collection and use of consumers’ data.  It also raised red flags regarding the practices of data brokers, which the FTC has since acted on in a number of enforcement actions.  The White House also released its own privacy report in February of this year, calling for industry “codes of conduct” to improve consumer protection.  Outside of the U.S., in January, the European Commission released a proposal to overhaul its privacy regime to make it more uniform and to impose stricter requirements, offering a comprehensive privacy and data protection framework viewed by some as an example for the U.S. and international regulation. Beyond regulation and legislative action on privacy, the advertising industry has been working over the past year to determine the ways to best achieve privacy standards and protect consumers through self-regulation, while also ensuring access to critical data for targeted advertising and other consumer indicators.  Microsoft revealed that “Do Not Track” will be the default setting on its upcoming Internet Explorer 10, which met criticism from industry leaders and executives who say that this could prevent companies from collecting data on up to 43% of browsers used by Americans. The industry has much to do in order to preserve its flexibility to act on its own and preclude the government from telling the industry what it must do in privacy.

Digital: We live in a digital world.  Social TV became a business this year, with what marketers call the “second screen” taking off.  According to a recent report by Nielsen, nearly 40% of Americans now use tablets or smartphones while watching TV at least once a day; 62% do it multiple times each week; and 84% do it at least once a month.  Consumers are no longer just tuning into their favorite TV shows, they are engaging in Twitter conversations about them, taking to Facebook to share jokes and opinions from the current episode as it happens, and “checking in” to the show via GetGlue.  Most recently, advertisers are trying to get TV viewers to shop online during shows. During episodes of Fox’s “New Girl”, a pop-up asks consumers if a certain article of clothing or jewelry a character is wearing is something they want; they’re then able to use a new app to purchase it.  2012 marked the first year that the Super Bowl was live-streamed online, offering advertisers the opportunity to buy digital inventory in addition to traditional, big-ticket TV spots.  The time difference between live events and broadcasting for the Summer Olympics in London posed challenges for advertisers who had bought high-priced TV spots during main events like swimming and gymnastics, with social media and digital news conversations leaking medalists in real-time, hours before the event aired on TV in the United States. With digital media changing constantly and social media changing the way consumers interact, the advertising industry is continuing to find creative ways to take advantage of all of the opportunities – and meet the challenges – posed by digital.

2013 – So welcome 2013, it’s going to be one heck of a ride.