Welcome, 2017! Some bold martech predictions for the year ahead
What's in store for the martech space this year? From exciting innovations to potentially troublesome developments, columnist James Green discusses the trends that will dominate 2017.
The New Year is a great opportunity to reflect on progress and challenges from the previous year and prepare for what’s ahead. Even with all the trends that helped marketers navigate through 2016, there are some big ones to consider and prepare for in 2017. I’ve rallied together my top predictions for martech trends in 2017.
1. Ad blockers will force publishers and people to make a choice
In 2017, we should expect to see two types of websites and publishers: those that charge people a fee to view content and those that are open (no fees attached, but force people to disable ad blockers).
As a result, consumers will have a choice: potentially pay for an “ad-free” or ”reduced ad-infested” environment, or be served an experience with whatever ads publishers choose to deliver to their audience. Keep an eye on Facebook — one of those companies that can stop ad blockers in their tracks — as well as some of the other top 20 publishers, such as The New York Times, GQ Magazine and Wired.
While ad blockers fight tooth and nail to exist, more publishers will focus on creating better content to keep people engaged and coming back for more, both those that pay for a more ad-free experience or those who choose to tolerate advertising.
2. Subscriptions will be an incredible source of innovation
Although you may not have something different to sell, you do need to think about how you can sell things differently. We saw subscription models ramp up in 2015 and 2016, and we will continue to witness how subscription models drive innovation across verticals.
Amazon is a great example. Data shows that more than 50 percent of US households have Amazon Prime memberships. The move by Walmart to acquire Jet.com was a big nod to the subscription and e-commerce category in 2016.
Products that were typically bought in-store have become easily accessible online and very much on-demand, such as meals, groceries, and even gasoline.
E-commerce growth has also led brick-and-mortar stores to re-evaluate their national footprint, with Nielsen showing that while stores are still opening, square footage is declining.
The availability of products online, specifically through subscriptions, will impact what stores are used for. We should expect them to function more like showrooms, promoting brands and featuring some inventory, but not all. Overall, people want convenience and have come to expect it.
3. Yahoo/AOL/Verizon will fall farther behind as Google, Facebook and Amazon outpace the market
Winning companies typically have code that is less than four years old. As an example, in the martech and ad tech space, Google bought DoubleClick and Admeld, then froze development and rebuilt tech from scratch and relaunched it. We haven’t really seen the same behavior from companies like Yahoo and AOL.
When you look at the Verizon deal, which was very much about scale, it didn’t focus on the way products would be re-established and new code would be built.
If companies aren’t rewriting their code to keep up, they will fall farther and farther behind. Simply think about services you use every day; everyone reading this probably uses Google and Facebook daily. Can you say the same for AOL or Yahoo?
There’s also far too much competitive pressure from the successful behemoths. Google is stirring up the mobile phone market with its own handset, which will disrupt companies like Verizon.
Similarly, AOL never really got behind the compelling content model, and instead focused on generating traffic and selling ads. In the end, that was not a successful recipe.
In our recent webinar (registration required), BounceX CEO Ryan Urban points to the shift that HBO made: HBO was originally a distribution channel for movies, but then launched original content with TV shows like “The Sopranos” and “Sex and the City.” We will see more companies like Facebook and Google create compelling, original content, but I just don’t see Yahoo, AOL and Verizon being able to keep up across code, product and content.
4. Consolidation will be rampant in 2017
There are about 4,000 companies in martech, so we should expect to see mergers and acquisitions accelerate in the coming year. Some companies will do it for scale, while others will do it by geography, to expand into new markets and expedite their traction and market share.
The big incumbents will continue to buy little pieces of products they don’t own to bolster their platforms and overall product suite.
Consolidation is a good thing for marketers because it allows them to plug the services they use into a broader platform. It’s also better than the alternative, which would be the death and destruction of companies that would otherwise not survive.
5. The new administration will disrupt net neutrality
Net neutrality means that any piece of web traffic must be treated the same. It’s a principle that was put into place to ensure that Internet Service Providers (ISPs) and the government could not charge differently by content, site or platform that was attached to equipment or a certain type of communication.
Millions of people supported the passing of net neutrality, but it’s no secret that Republicans were never fans. With the new administration, net neutrality may go away at some point. It’s easy to block advertising and say you have to charge for it, and companies will be forced to pay a toll to deliver advertising.
This will be terrible for innovation, marketing and content. In fact, it’s only good for the ISPs, and there’s very little an individual company can do.
Regardless of what the year ahead brings, there are always ways to help foster change and contribute to writing the future of martech. While some predictions for 2017 will do nothing but excite us about innovations and trends in the market, others address more serious concerns.
Whatever the year has in store for us, we must remember that at the end of the day, a free and open internet provides the most choices and conveniences, and above all, that’s what people want.