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2013 – Looking Back at the Year’s Biggest Game Changers

Date: December, 2013 --

December is the month of reflecting back on the year and taking stock. How far have we come? What obstacles have we overcome? Which ones are left? What were the waves that lifted us up and crashed us down? For marketers, this was an incredibly powerful year of evolution. It was substantially about technology and data, especially Big Data, with a little bit of politics thrown in. And we’d be remiss if we neglected to mention the mobile story.

Data. Data. Data.

In October, the DMA’s new Data Driven Marketing Institute published its landmark economic study of Big Data. It showed that in the “Data Driven Marketing Economy” (DDME), goods and services producers added $156 billion in revenue to the US economy and created or drove 676,000 jobs in 2012 alone. Fully 70% of this economic activity could not have occurred if individual-level consumer data was not available to be shared or exchanged. This is good reason for our legislators to go slowly in tinkering with privacy legislation and data exchanges and another reason to question the motivation of Canadian and EU regulators who are even now on the verge of adopting more strict data “protection” laws.

In that respect, we look back on the increasing scrutiny by the Federal Trade Commission of consumer data collection and exchange by “data brokers”. This included investigative questionnaires sent to ten of the largest companies in this industry which is so critical to effective marketing. The public also appears to be more concerned about the market in personal information, reflected in numerous bills being put forward in Congress advocating enhanced personal privacy rights.

And of course the level of public and official scrutiny and insecurity rose with the disclosures of Edward Snowden of the spying activities of the NSA.  But should it really be any surprise that government gets caught with its hands in the cookie jar and then tries to point the finger at private industry as the ones who are really violating the public trust? Just another instance of a maneuver commonly referred to in Washington as the “Potomac Two-Step.”

Mobile. Mobile. Mobile.

While data is a cross-media subject, the medium that we think was a “power point” of 2013 was the mobile phone, especially of the “smart” variety. In November, the periodic report by the Internet analytics company comScore disclosed that the favorite tool of our data-driven society, the smart phone, now dominates the personal phone market (further signaling the trend that seems destined to leave word “telephone” going the way of “typewriter”).

Moreover, mobile traffic as a percent of Internet traffic indicates the speed of our adoption of this technology to keep ourselves informed and connected. This is projected to reach 20% by the time you are reading this, up from only 8% at the beginning of 2012. Furthermore, fully 62.5% of the mobile market used smart phones as of the end of October. Apple phones lead this market with a 40.6% share, followed by Samsung at 24%. The most popular platform used on these phones is Google Android at 52.2% followed by Apple at 40.6%.

Woe to you if your website does not incorporate some level of responsive design or at the very least is not mobile-friendly. 

Increasingly, we use these phones as much to find information as to stay in touch, perhaps even more so. Google’s reach is over 92% and Facebook’s is 84.6%, nearly universal in each case. And these are certainly significant enough to support the consistent demand of advertisers for presence in those environments (this in spite of the somewhat lackluster figures regarding social media advertising ROI).  

This observation, of course, brings us to the size of this ad market which according to the Interactive Advertising Bureau had grown by 145% to $3 billion through June alone. This number suggests that the big brands were discovering the medium.

The Global Ad Play

Not least in importance, the two largest mobile phone markets in terms of phones in service are India and China. These BRIC’s are taking up more space, but China takes up the most. Mobile aside, it is now the third largest advertising market in the world, after the US and Japan, and ad spend reflects its rapidly developing consumer market.  The three largest advertisers are Yum Brands (KFC), with nearly a third of the spend, beverage company Red Bull, and watchmaker Swatch Group.  Many observers predict China will surpass Japan in 2014 as the world’s second largest ad market.

Swan Song for Papers?

In 2013, the largest advertising medium world-wide has ceased to be newspapers and is now the Internet. According to Ad Age, 20.6% of 2013 global ad spending was devoted to that medium, with 21.7% of ad spending in the U.S. being there. This doesn’t mean newspapers are finished, of course, but it tells us they need to evolve to engage new revenue streams to continue their undeniably valuable role.

All in all, the year gave the direct marketing industry slow growth in general with pronounced exceptions, mainly digital ones, and some difficult bumps as the industry and the public came to grips with the implications of the Internet and new digital technologies. Marketers struggled with Big Data and how to manage and use it with a sizable percentage of marketers slated to make investments in data management technology and services in 2014.  

Here at Data Services, Inc. we have stayed on the cutting edge of those developments to continue to bring our clients the best data hygiene, database management and analytics tools available to meet their evolving requirements.  We thank you for giving us the honor of serving you and wish you the very best for the Holiday Season and a Happy New Year!