Barclays: Agencies need to evolve as digital marketing spend rises – but don’t get too close to the behemoths
Digital advertising spend in the UK is set to beat £15 billion in 2019 – but we’ll still have to wait a while before commercial applications of machine learning and augmented reality (AR) will seriously bolster the figures.
That’s the primary finding from Barclays in its latest report. Titled ‘Adtech ascendancy: The next wave of digitalisation in marketing’, the study focused on various market forces, from the technology itself, to those at the sharp end of making it happen, as well as how it will impact future working methods.
The report, which augmented its analysis with opinion from industry leaders across marketing services, looked specifically at the relationships between both the FAANGs (Facebook, Apple, Amazon, Netflix and Google) as well as their Chinese competitors, Baidu, Alibaba and Tencent (BATs).
Ultimately, for many marketers and for those in agency-land, the message is simple: stay close enough to keep warm, but don’t get your fingers burned. “It’s imperative to be very close partners with a FAANG. That relationship is essential,” said Rob Pierre, CEO of agency Jellyfish. “As a tier one partner of Google, we get early access to the alpha and beta rollouts of the latest technologies. It allows us to develop our capabilities and gives us and our customers the inside edge on emerging features.”
On the flip side, Luke Smith, CEO of Croud, noted pragmatism as key. “Getting too close to the FAANGs takes away your objectivity and discretion – it’s important to take a pragmatic view of the relationship,” he said. “We have the expectation to build solutions seamlessly across all platforms.”
Looking at the new technology stack which will form part of various digital campaigns, Barclays explored them under the overall umbrella of ‘customer experience marketing’ (CXM). For some technologies, like VR and AR, the mood is one of cautious optimism. “With VR and AR we are still deciding whether it’s practicality or novelty,” added Smith. “Longer term though the opportunities for these platforms seem limitless.”
For artificial intelligence (AI), and particularly chatbots, study respondents felt on much surer ground. According to the report, in five years’ time 80% of business communications with customer will be performed through bot messengers, while almost half of all searches will be voice searches by 2020.
Executives are increasingly aware of their responsibilities with regard to the safety aspects of emerging technologies, the report noted. The prevalence of bot activity, as well as ad placement and visibility, are key concerns. Pressure will ‘intensify to remove the client-hostile practices’ that ‘bedevil’ the adtech industry, the report added. “Programmatic can be presented as deliberately complex and opaque,” said James Booth, CEO of digital marketing service provider Scoota. “As such, brands can struggle to get access to full transparency and robust real-time brand safety; they have little control unless they bring technology in-house.”
If you have the right mix of technology and have ensured safety protocols are met, an organisational challenge still remains. The report called it ‘almost a Moore’s law of digital marketing’; key players have to change their business models and market proposition regularly as the rate of change in marketing services is still high.
The report noted how the ‘global boutique’ is gaining traction. “These digital marketing agencies have the scale to engage with global brands – their core target strategy – but retain sufficient focus to have a single view of the customer’s needs,” it read. “This lean and agile approach to full-service offering across data, creative and programmatic/media is the wave of the future and will disrupt the hegemony of the [biggest] agencies.”
This is ultimately the main point from the report, as Sean Duffy, head of technology, media and telecom (TMT) at Barclays Corporate Banking noted. “Our conversations with marketing leaders revealed significant optimism in the sector and a clear recognition of the need for agencies to evolve constantly to meet client needs,” he said. “Brands today want to know what they’re paying for, understand who their campaigns are reaching and have access to credible performance data on campaign effectiveness.”
Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.
- » How Slack can streamline your marketing channels – rather than being just another headache
- » Why market research and marketing research are very different disciplines - and how to utilise them best
- » The CMO’s blurred lines: Power without influence means innovation is needed to secure value
- » Sisca Margaretta, CMO, Experian APAC: On increasing customer expectation – for insight and privacy
- » Key areas of focus for retail advertisers in 2020: Cross-channel strategies and delivery models