8 Digital Advertising Predictions for 2020

8 Digital Advertising Predictions for 2020

Advertising

Google takes control of advertising. More businesses feel the heat over consumer privacy. Voice search gets smarter. These are among the trends influencing digital advertising in 2020, according to True Interactive. Here’s a sample of what’s on our minds:

1 Google Takes Control of Advertising

Google is taking away manual control of Google Advertising with the removal of the average position metric and by continuing to implement automated bidding tools and metrics such as top impression share that make measuring search ranking less transparent. As a result, CPCs are going up.

Going forward, Google will continue to push automated bidding strategies. Google’s rationale is that its algorithms are smarter, making it possible for Google to adjust bids per auction. But smarter bids are not necessarily less costly ones in the short term, and there is still much trepidation by marketers in handing total control over to Google, who stand stands to profit from an increase in CPCs and overall spend. Bottom line: as Google continues to make manual bidding more challenging, advertisers will be forced to buy into automated bidding with less transparency.  Expect CPCs to increase at least in the short term as businesses hand more control over to Google.

— Beth Bauch, senior manager

2 The CCPA Throws Down the Hammer on Big Tech

By July 2020, we will see the first major lawsuit against one of the big technology firms – likely Facebook or Google – over a violation of the California Consumer Privacy Act (CCPA). The CCPA, which goes into effect January 1, is evolving. Businesses are still figuring out its vagaries and requirements. Google and Facebook are in interesting and vulnerable position because they touch so much audience data for businesses, increasing their risk level. And we know Facebook’s track record for privacy violations, don’t we? Watch for it: a major lawsuit will happen that forces businesses to come to terms with the CCPA.

— Tim Colucci, vice president

3 Netflix Adopts Advertising

Netflix will need to adopt some form of advertising. Netflix has achieved phenomenal growth, to be sure. But the entertainment company also faces unprecedented threats with Disney+ and, eventually, Apple+ once Apple figures out a long-term strategy that works. (Apple has a lot of cash and time to get Apple+ right. Just wait.)

In addition, the cost of creating content is putting Netflix in an interesting bind: when Netflix has a hit show, it has to spend more money to accommodate audience demand, creating even more costs. On top of all that, for the first time in a long time, Netflix has reported drops in membership levels.

Netflix will likely introduce a less-expensive ad-based model, but the company will also do something it has avoided pursuing: product placements in shows like Stranger Things, which popularized brands such as Kellogg’s Eggos without earning Netflix a dime in return. Those days will come to an end as Netflix responds to pressure from investors to cover its costs and respond to the threat of Disney.

— Héctor Ariza, manager

4 Voice Search Gets Smarter and More Useful

I’ve written often about the rise of voice search, and I continue to see more people using their voices to find things with their smart speakers, phones, and in-car devices. But what’s changing is that people are getting more comfortable buying things, not just searching for things, with their voices. That’s happening because as we get accustomed to the ease of using our voices to manage our lives, we are gradually becoming more comfortable accomplishing more complex tasks. In addition, thanks to improvements in artificial intelligence, voice-enabled devices are getting smarter and more capable of managing purchases and product orders. Frankly, the market got flooded with smart speakers such as Amazon Echo and Google Home before AI was adequately advanced to make a voice-activated speaker as smart as we’d like them to be. Those days are rapidly drawing to a close.

— Taylor Murphy, manager

5 Google Monetizes Maps and Google My Business

We recently blogged about the fact that half of searches on Google stay on Google properties such as Google Maps, YouTube, and a business’s Google My Business (GMB) listing. In other words, half of searches are not resulting in clicks on a business’s website. In addition, Google My Business is the most important local search signal according to the Moz Local Search Ranking Factors. These data points mean that businesses need to invest more time and energy maximizing the value of their presence on Google. Google knows this reality and is getting more aggressive about offering advertising products for businesses on these sites. Earlier in 2019, Bloomberg discussed how Google is evolving Google Maps with more advertising tools. Especially as more cars integrate mapping technology, Google is going to place even more advertising emphasis here. I also expect Google to provide more advertising options for businesses to promote themselves on their GMB listings. I also would not be surprised If Google introduces a premium version of GMB in which businesses will enjoy more features for a cost.

— Mark Smith, co-founder

6 Cause Marketing Faces a Reckoning

Cause marketing has been around for years. Businesses have learned they can create stronger emotional ties with customers and job seekers by associating themselves with a topical issue such as sustainability. In 2019, businesses were falling all over themselves to promote a position on sustainability as the topic reached all-time levels of public awareness. But there’s just one hitch: we’re seeing a glut of cause marketing campaigns, and they’re not necessarily connecting with consumers. I was reading a recent report from DoSomething Strategic that discusses how businesses have struggled to make their cause marketing connect with young people. Gen Z definitely wants to associate with purpose-driven companies. But businesses still have a lot of work to do in order to convince them that they’re aligned with Gen Z values. Businesses are going to become more careful about how they do cause marketing. I believe we’ll see fewer online ads and a more thoughtful use of content marketing, PR, social media, and native advertising in which a business can spend more time having a longer-term discussion about issues it cares about. Businesses will humanize these conversations by sharing their position through the voices of their people.

— Kurt Anagnostopoulos, co-founder

7 Agile Advertising Takes Hold

We all know about real-time marketing, in which a brand uses social media to turn a news event into a marketing opportunity. Agile advertising occurs when a business acts on a recent event and creates a connected marketing experience that endures well beyond a single tweet, Facebook post, or other digital impression. We saw Bud Light exercise agile advertising during the World Series when it capitalized on the fact that a fan in the stands stopped a home run ball with his chest while holding two Bud Lights in his hands. Bud Light created a series of marketing moments including creating a branded T shirt depicting the fan stopping the home run ball. Bud Light paid the fan to attend another World Series game sporting the Bud Light attire. We also saw agile advertising in action when Aviation Gin created a slick ad online that gently made light of the controversial Pelton cycling ad. I see more businesses adopting this practice because the digital production tools have evolved to the point where talented storytellers can quickly conceive of an idea and get it into market with an ad that taps into current events and endures for days and weeks.

— Max Petungaro, associate

8 Hispanic Marketing Hits Its Stride

In the United States, 69 counties are majority Hispanic, doubling from 34 in 2010. Hispanics have increased their economic power, reflecting a growingly diverse U.S. population. In 2020, Hispanics will possess $1.7 trillion in buying power. The United States continues to reflect Hispanic tastes in all aspects of our culture (including and beyond the Hispanic community, ranging from movies to popular music). We’re going to see businesses apply research and targeting to do more effective, sophisticated Hispanic marketing that recognizes the diversity and tastes that reside among Hispanics. Brands are already capitalizing on this growing market. (For more insight about marketing to Hispanics, check out our blog post.) And tech companies such as Google are responding to a more multicultural world in general by making their platforms more open to people who speak languages other than English, an example being how the Google Assistant voice software can interpret 44 languages on smart phones. These types of developments will help bridge the world between businesses and Hispanics in 2020.

— Amanda Cortese, associate

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What Is the California Consumer Privacy Act (CCPA)? Advertiser Q&A

What Is the California Consumer Privacy Act (CCPA)? Advertiser Q&A

Marketing

The California Consumer Privacy Act (CCPA) takes effect on January 1, 2020. The forthcoming law symbolizes how consumer privacy is increasingly taking center stage among governmental bodies in the United States. Preliminary estimates suggest it will cost businesses $467 million to $16.5 billion to comply in coming years.

At this point, it’s safe to say that every major advertiser is aware of the CCPA. But it’s not always easy to understand exactly what this omnibus legislation is all about. So we’re going to answer some question that we’ve been getting. Check it out – the CCPA might apply to you whether or not you do business in California, so it’s important to understand it:

What Is the CCPA?

The CCPA is new legislation designed to enhance privacy rights of California residents. With a population of nearly 40 million, California is considered a bellwether state. Many privacy experts are watching the CCPA closely because of its potential impact on how privacy is legislated across the United States.

How Does the CCPA Enhance the Privacy Rights of California Residents?

The CCPA grants new rights to California consumers, per the CCPA website:

  • The right to know what personal information is collected, used, shared or sold, both as to the categories and specific pieces of personal information;
  • The right to delete personal information held by businesses and by extension, a business’s service provider;
  • The right to opt-out of sale of personal information. Consumers are able to direct a business that sells personal information to stop selling that information. Children under the age of 16 must provide opt in consent, with a parent or guardian consenting for children under 13.
  • The right to non-discrimination in terms of price or service when a consumer exercises a privacy right under CCPA.

What Does the CCPA Require of Businesses?

In a single sentence: the CCPA imposes requirements on how businesses collect, use, and disclose information about California residents.

But the legislation is dense and difficult to untangle. Per the CCPA website, businesses must fulfill these obligations:

  • Businesses subject to the CCPA must provide notice to consumers at or before data collection.
  • Businesses must create procedures to respond to requests from consumers to opt-out, know, and delete.
    • For requests to opt-out, businesses must provide a “Do Not Sell My Info” link on their website  or mobile app.
  • Businesses must respond to requests from consumers to know, delete, and opt-out within specific timeframes.
    • As proposed by the draft regulations, businesses must treat user-enabled privacy settings that  signal a consumer’s choice to opt-out as a validly submitted opt-out request.
  • Businesses must verify the identity of consumers who make requests to know and to delete, whether or not the consumer maintains a password-protected account with the business.
    • As proposed by the draft regulations, if a business is unable to verify a request, it may deny the request, but must comply to the greatest extent it can. For example, it must treat a request to delete as a request to opt-out.
  • As proposed by the draft regulations, businesses must disclose financial incentives offered in exchange for the retention or sale of a consumer’s personal information and explain how they calculate the value of the personal information. Businesses must also explain how the incentive is permitted under the CCPA.
  • As proposed by the draft regulations, businesses must maintain records of requests and how they responded for 24 months in order to demonstrate their compliance.
    • In addition, businesses that collect, buy, or sell the personal information of more than 4 million consumers have additional record-keeping and training obligations.

In coming months, what’s likely going to happen is that businesses will learn through trial and error. Stay tuned. And learn from the inevitable violations that are bound to make the news.

Who Must Comply with the CCPA?

Companies doing business in California subject to the CCPA if one or more of the following are true:

  • Has gross annual revenues in excess of $25 million.
  • Buys, receives, or sells the personal information of 50,000 or more consumers, households, or devices.
  • Derives 50 percent or more of annual revenues from selling consumers’ personal information.

I’m Not Based in California. Do I Need to Worry about the CCPA?

The conditions stipulated above may indeed apply to you if you are outside California. For instance, if you are buying, receiving, or selling the personal information of 50,000 or more consumers, households, or devices in California, CCPA may apply to you regardless of where you are located. Read this insight for more detail.

What Is the Penalty for Noncompliance?

Businesses may be fined up to $7,500 for violation. Businesses could also face civil damages of up to $750 per violation, per user. The key phrase here is “per user.” A major violation could cost a business millions.

Will More States Enact This Kind of Legislation?

They already are. Nevada has enacted its own version of the CCPA already. Here is more information on how other states are enacting privacy legislation.

How Do I Ensure I Am Compliant?

A number of security firms provide compliance services. Unless you have a strong in-house security team, your best bet is to look for compliance help from a specialist.

Contact True Interactive

To manage advertising online effectively, contact True Interactive. We’re here to help!

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