Nanoinfluencers, native and Amazon all set for further growth

In the latest in our series of predictions pieces running between Christmas and the New Year, Kazu Takiguchi, CEO and founder of Creadits, says watch out for nanoinfluencers, and for Amazon continuing to disrupt the duopoly.

With 2019 just around the corner, it’s important to look ahead and see what the big trends in digital marketing will be next year. Whether it’s the rise of native advertising or the ongoing evolution of influencer-based marketing, 2019 will be full of new ideas, and it would be wise to start preparing now.

The rise of video and voice search
When it comes to marketing strategies which boost a company’s brand and motivate consumers to take a desired action, video is king. The concise and compelling nature of videos and their ability to create emotional connections with viewers make them a far more effective digital marketing strategy than text-only content.

In a survey conducted by Hubspot, 80 per cent of marketers reported a boost in sales when using video marketing, while 76 per cent believed that using video increases website traffic. Videos are particularly effective on social media: 45 per cent of consumers watch at least one hour of video every week on Facebook or YouTube, and 82 per cent on Twitter.

For businesses of all sizes, video ads are a supremely effective means of advertising products to broad audiences, and this type of marketing will only continue to grow. By 2022, video is expected to make up 82 per cent of IP traffic, and Ericsson recently forecasted a 35 per cent annual growth in video traffic through 2024.

For marketers, this growth will translate to a host of new opportunities to deliver engaging content across a variety of devices, as video expands into more diverse forms of online content and as 5G services emerge. New innovations, such as 360-degree video, augmented reality (AR) and virtual reality (VR) will strengthen the quality and appeal of video ads, especially on eCommerce platforms, where direct engagement is critical.

Another facet of the ongoing evolution of video marketing is the increasing ability of marketers to measure the effectiveness of their video campaigns. In 2019, a lot of attention will be paid to the tools developed by major tech players such as Facebook and Google, which have invested heavily in video marketing analytics and now provide cost-free tools for marketers hoping to assess the return on investment (ROI) of their campaigns.

These heavy investments are, in fact, a response to the numerous claims of ad fraud levied against both Facebook and Google, which have damaged the reputation of the two most important digital marketing platforms in the world.

By developing tools to better analyse ad campaigns, both companies hope to improve clarity and transparency, and thus repair their reputation among consumers and advertisers alike. For marketers, this is a significant development, as the ability to quantify the power of video marketing will give marketers the confidence to double-down on their campaigns and invest more in this form of digital marketing.

2019 will also see voice-activated technology such as Amazon’s Echo gain importance, as a growing number of consumers buy such devices for their home. For marketers, this means figuring out how to adapt their brand searchability so that they can be easily found by consumers using voice-first technology and so that a voice search returns their brand name and not that of a competitor.

Both native and rewarded ads will keep on growing
Many consumers may be unfamiliar with the term native advertising, but they will almost certainly have seen such ads when scrolling through their social media feed, or as recommended content when browsing a website.

Native ads are inconspicuous when compared with display ads, as, to quote Outbrain, they are designed to “match the look, feel and function of the media format in which they appear”. This capacity to blend in with a website’s content is exactly what makes native ads so effective, as they present marketers with an opportunity to promote a product or brand, without disrupting a consumer’s browsing experience.

Recognizing this potential, marketers are now spending more and more on native ads. These ads are particularly effective on social media and mobile devices, two media forms where advertising has grown at a rapid rate and native advertising now accounts for more than half of all digital display spending by US marketers, according to eMarketer. This level of spending will likely increase. Native advertising is expected to be at the forefront of digital ad market growth between 2019 and 2020, forecast to grow from $15bn (£12bn) to $85bn by 2020.

Enthusiasm for native advertising has also been spurred on due to consumer skepticism towards traditional display ads, and a lack of public confidence in major ad hubs such as Facebook, which has spent much of the past year embroiled in various data privacy scandals. Many consumers are also bored of displays ads, and the sum of these factors is a marketing climate in which ads perceived as normal website content enjoy greater success. According to Outbrain, consumers look at native ads 53 per cent more than they do display ads, and native ads generate an 18 per cent increase in purchase intent.

Rewarded ads are also making inroads into the advertising market. These ads are typically found in gaming apps: for example, users who engage in a playable ad or watch the entire video receive a reward which allows them to continue playing a particular game. The idea is that by offering users a reward, it will increase consumer engagement and completion rates.

Advertisers love rewarded ads because the rewards motivate users to complete an ad, thus resulting in higher engagement and an improved ROI. The results are already positive: a study by Google revealed that 50 per cent of users “would be less satisfied with the app experience if rewarded ads were removed.” Their popularity among users and advertisers alike is likely to fuel the growth of rewarded ads into 2019.

Influencers are here to stay, but the game is changing
The strategy of hiring influential individuals with a large social media following to promote a brand or product is one of the most significant trends in digital marketing. Around the world, a growing number of businesses are transferring funds from traditional to influencer marketing in an attempt to capitalize on the exponential growth this type of marketing has seen over the past two years.

Yet some question whether shelling out for expensive ad campaigns with the most popular influencers is worth the investment. Indeed, as an influencer’s follower count grows, so does the amount of money a company must pay them to promote a particular brand or product, thus diminishing ROI. In 2019, we are going to see a lot more scrutiny on the effectiveness of influencers, not only in terms of returns, but also on how well an influencer matches a business’ brand.

One key trend to look out for is the emergence of nanoinfluencers – social media celebrities with 10,000 followers or less, to whom marketers are increasingly turning to promote their products. “Nanos” appeal to marketers because their comparative lack of fame makes them appear more authentic to audiences than celebrity influencers, who are often accused of selling out as their follower count grows and subsequently risk losing their connection with target audiences. Maintaining authenticity is crucial for establishing trust between the audience and the influencer, and trust is crucial for achieving high rates of audience engagement.

Nanoinfluencers are also cheaper to hire, due to their smaller follower counts, meaning that businesses can afford to pay multiple influencers at the same time, and thus reach a more diverse set of consumers. In some cases, average engagement rates using nanoinfluencers can be as high as 8.7 per cent, compared to 1.7 per cent for celebrities. For this reason, we will likely see the gradual phasing out of marketers hiring influencers purely based on follower reach. Instead, a smaller following and more apt brand suitability will become more desirable.

Amazon disrupts the Facebook-Google duopoly
Retailers are increasingly seeing the benefit of placing direct ads on Amazon, instead of on Facebook on Google, which until now have dominated the digital advertising landscape. This trend is a logical step for many retailers, especially those selling products on Amazon, as consumers browsing the eCommerce site are likely to be in a buying mindset. The chances of ad engagement and purchase are therefore higher than they would be if the same ad were placed on Facebook or Google.

Although it is still early days for Amazon’s advertising platform, it is already making headway into Facebook and Google’s dominance of the US advertising market. eMarketer forecasts that by the end of the year, Amazon will overtake Oath and Microsoft to become the third-largest US digital ad platform, at the same time reducing Google and Facebook’s combined market share from 59.1 per cent in 2017 to 57.7 per cent. If Amazon continues to focus its attention on increasing its advertising revenues, the company will continue to shake up the marketing duopoly which has now been in place for several years.

AI hits the mainstream
Artificial Intelligence (AI) applications can now tackle several of marketing’s time-consuming and repetitive tasks, such as market segmentation, content curation and predictive analysis. As AI applications become more sophisticated, they are beginning to take on tasks which require creativity, affording marketers more time to focus on perfecting campaigns and coming up with new ideas. For example, Narrative Science has created a program called Quill that can analyze data and facts and create insightful, natural language text for ads. Another company, EyeEm, has developed AI-based image curation software that helps companies find high-quality images from a database of photos and designs. The software selects photos related to a business’ brand and messaging, then figures out which ones will best suit a particular audience.

In addition, AI is becoming more accessible to the average business, thanks to major players like Facebook and Google. These companies have invested heavily in AI marketing tools, some of which can now be used by advertisers at no cost, thus lowering the barriers to entry for AI applications and democratizing the playing field. By leveraging accessible and cost-free tools, small businesses can find out for themselves if they want to invest more in AI marketing technology.

Although the rapid development of AI is exciting, this technology is by no means perfect. Even as AI applications start to take on progressively more complex tasks, human input will undoubtedly remain the most important part of the creative design process. But markets that succeed in combining the powerful precision of AI with human imagination will be able to create ads that are better received and more powerful than ever. Here, marketers need to find a balance between process optimization and customer desire for human interaction to avoid creating content which seems overly robotic.

Bring on 2019
Keeping up with the latest trends in digital marketing is crucial for any business that wants to stay ahead of the game and maintain a competitive edge. As in previous years, 2019 will see the continuation of rapid technological developments which alter the digital marketing playing field and make sure that marketers are constantly kept on their toes. Those caught snoozing will pay the price, both in terms of reduced brand exposure and customer engagement, as well as money squandered on ineffective campaigns.