Commentary

What I'm Excited About For 2018 -- And What Worries Me

by Dave Morgan , Featured Contributor, December 21, 2017

As 2017 comes to a close, I’ve been thinking a lot about the future and what next year might have in store. Net, net, I’m very optimistic.

For those who know me, that’s probably not too surprising. I’m an optimist by nature and have been an entrepreneur for more than 20 years. As you would expect, start-ups and pessimism are pretty much mutually exclusive.

Here’s what I’m excited about for 2018:

Advertising will get better. For so many of us, it seems impossible to make ads truly more relevant, placements more effective, campaigns more efficient and ad experiences more delightful. There are so many barriers, so much inertia in the status quo. However, it is getting better. We are all getting smarter. There are small victories every day, and things will get even better next year.

Consolidation in TV means change and innovation in TV advertising will come faster. The TV landscape will be dramatically reshaped before the end of 2018, with planned mergers among AT&T and Time Warner, Discovery and Scripps, Disney and much of Fox, Sinclair and Tribune. Consolidation will bring change. Change brings disruption. Disruption breeds innovation. We will see a lot of innovation in TV, particularly in TV advertising since it’s a key driver of the majority of the new company combinations.

More talent. This consolidation and disruption will not be a pleasant story for everybody. Many jobs will be dislocated in the process, but there is a silver lining. Many very talented people in advertising will come into the market looking for new opportunities. That is great for disrupting companies that are growing. We thrive on talent.

Also, disruption can be great for those talented folks who needed a nudge to jump out and try new things, leveraging their skills and experience in more fulfilling ways.

What I’m worried about for 2018:

Fraud, viewability issues and bots aren’t going away. As long as two companies help 75% of the online ad market and drive 85+% of its growth, the market will seek alternatives, and it will seek them cheap. This means we will keep seeing lots of folks selling the dream of better, simpler, cheaper online ads that perform at twice the ROI of Facebook ads at half the price, with lots of folks buying into that impossible dream. Result: more fraud, viewability problems and more bots. If it seems to good to be true, it is.

Headwinds in the economy. The past seven or eight years have brought pretty steady economic growth to the U.S., and very strong growth to the equity markets. We are probably going to see some buffeting on both fronts — not good for our industry, since advertising tends to suffer the most in times of economic uncertainty.

Little progress in marketers’ transforming their departments from cost centers to profit centers. This issue worries me the most. For the advertising industry to achieve its potential, marketers need to define themselves and their efforts by how much growth they deliver for their corporations, not how cost-effectively they allocate and deploy budgets. Nothing holds us back more than the focus on CPMs rather than ROI.

I’m not certain we’ll see nearly as much progress in this area in 2018 as should. More old-line marketing companies probably need to go out of business before we see real change.

What do you think? What does 2018 hold in store for the advertising industry?

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4 comments about "What I'm Excited About For 2018 -- And What Worries Me".

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deepak jayaram from i-spectrum innovations PTE Ltd., December 22, 2017 at 7:32 a.m.
Dear Dave,

Loved the article . . Adding my 2 bits basis trends that I am seeing break thru to the surface .
Tech especially AI and connected devices will probably dominate conversations . . However the other area I am finding exciting is the opportunities that Blockchain will bring to the table . . At this point there seems to be a lot of noise on the development and proof of work space . . As the conversation moves to a space of aggregation of audiences across the trust protocol we could be looking at some serious disruption . .At this point it is looking like we are far away from that space if my interactions at the recent conferences are any indication but that is a space that we should not slip between the cracks . .

deejay
deejay@minersinc.io
+919820380740
Reply

Dave Morgan from Simulmedia replied, December 22, 2017 at 8:51 a.m.

Thanks Deejay. I do think that we'll see & hear a lot of conversations about AI and blockchain aorund the ad business in 2018 ... though, I'm less certain how much those conversations will translate into meaningful initiatives that will actually make a difference. Our industry loves to talk about bright shiny objects.

Ed Papazian from Media Dynamics Inc, December 27, 2017 at 1:27 p.m.

Interesting views, Dave. For my part, I don't see much changing in the ways that most national advertisers buy TV time, nor in the ways it is packaged and sold. The almost total lack of interest in the media planning function as well as the corporate buying mentality by advertisers, with bean counting being their primary "value" metric seem to well entrenched. I also doubt that what is dubbed "advanced TV time buying", will make major inroads, even with some of the planned media mergers as once the sellers weild more power, they will be less, not more, inclined to bow to advertiser wishes. What is really worth watching is the coming onslaught by the movie and TV biggies into the streaming and digital arena. Here, we will see Netflix and others denied the option to csrry many "off-network" shows as well as movies, forcing them into the very costly ---and much riskier----option of buying "original" content. Also, as more and more people sunscribe to the new streaming options by Disney, CBS, and others this will decrease their reliance on ad revenues as the subscription fees will add a new dimension to their business models. As more and more people "cut the cord" to take advantage of smaller content bundles, this will lower the number of channels competing foir viewers, which can mean higher ratings for the broadcst TV networks and some cable channels, making them more, not less, attractive to national advertisers. If this happens, coupled with new subscriber incomes attained by the TV ad sellers via streaming bundles, most of the predictions about Google, Amazon, etc. competing with "the TV establishment" for ad dollars by buying "original content" may not come close to materializing. So many possibilities for disruption---so many players all going in different directions. 2018 should be an interesting year.

Dave Morgan from Simulmedia replied, December 28, 2017 at 10:16 a.m.

Great points Ed. I do agree that the biggest disruption will be all of the new streaming services, most of which will have little or no ad support (at least for now). However, I am hopeful that advanced media buying will become more prominent in TV, probably not for old-line marketers who still view it at "buying TV time," but for those who care more about TV's capacity to drive sales and desired outcomes - retail, financial services, e-commerce, travel. No matter what, it will be fun to watch!