Last year around this time, I published a post titled How I’m investing in 2017 and see you at CES. In it, I tried to predict how various market segments (data techs, AR/VR, attribution techs, blockchain) would perform in that year. Looking back, I’d grade myself with a solid B -- take a look and LMK what you think.
As we go into 2018, I’d like to focus on the advertising industry and try calling some shots that seem obvious (Snapchat = loser, podcast ads = winner), and some that may be a bit farther out there (Disney buying Fox = meh, Microsoft = emerging social powerhouse). As always, your thoughts are most appreciated.
Whatever 2018 brings in your personal and professional life, may you kick its ass fully!
1. Amazon will come to Madison Avenue like never before.
Amazon is about to take major advertising share from Google and Facebook. Why? The incumbents are fatigued, whereas Amazon has tons of cash, a solid identity graph, they understand purchase behavior, and can compete on a recommendation level. This shift will squeeze mid and long tail ad tech players. Content is still king and the most original stuff will still win, but there simply won’t be enough money generated to feed everyone that’s dependent on a media buyer.
2. Snapchat will tumble even deeper.
Given how well Instagram suits me I've never been a user, so I am biased, but Snapchathasn’t been able to scale beyond tweens and teens so far, and I don’t see their ad business turning a corner in 2018. They have no real social graph or purchase behaviors to work from. It’s a cute technology, at best.
3. Bad apples will try to worm their way into the location space.
As President of Unacast, I’ve been living and breathing the location data ecosystem for the last two years. In that time, I’ve formed the opinion that we may need to live through the same challenges the ad industry had with the media ecosystem, i.e. a few bad apples taking advantage through fraud, bots and a lack of transparency. That’s created widespread havoc and wasted millions - if not billions - of ad dollars. That led to opportunities for companies like Moat to help fight media fraud, and Uru Video to support brand safety. The parallel?
With location data so hot right now, there is an urgent need for scale and accuracy, leaving cracks in the market. No doubt, shady players will manufacture false interpretations of data lacking verifiable provenance. On the flip side, this will sharpen the opportunity for companies like Unacast that provide buyers of data with better quality and more transparency when engaging third parties. The space will remain white hot, just keep an eye out.
4. GDPR ends up being like Y2K.
The new General Data Protection Regulation (GDPR) being led by EU nations is set to kick-off in Spring of 2018. The buzz is loud and ubiquitous that GDPR means it’s instant-Armageddon for those reliant on location sources and user opt-in. I’m calling B.S.
It’s going to be like the Y2K build-up when we were going from 1999 into 2000 -- a slow burn with lots of doomsday predictions, then nothing much happens, at least not this Spring. GDPR have some fallout but it will take some time for those ripples to make their way around the world.
5. Netflix continues to dominate, Disney just gets bloated.
There’s a lot of reasons Disney bought Fox for north of $52 billion, but what it boils down to is that Disney and every other traditional media company with any common sense should fear Netflix. High 5’s to Peter Naylor and the Hulu ad team for excelling here, as well. Netflix and Hulu users are always-on, always demanding choice, and always getting what they want. That’s the future.
While the Disney/Fox deal is massive and will evoke change, it’s not going to cause a mis-step in the Netflix march to the winner’s circle, because you can't rattle a business with a core focus. Disney will be bigger and more bloated but it won’t overtake Netflix in content consumption. No chance.
6. Podcasts and all things audio/voice take a big chunk out of publishing readership.
We’ve already seen every major trade publication in technology, advertising and almost every other vertical move to add podcasts to their free editorial content. With increasingly more people mobile and connected, earbuds in, the demand to capture attention via bite-sized pieces of podcast consumption will skyrocket.
Ad dollars to voice and audio will rise, shifting share for middling and major publishers alike as user’s preferences for how they like to get their news and information continues to evolve. P.S. get used to hearing a lot about ‘dynamic insertion’ for podcasts (sounds dirty; will make some people filthy rich).
7. Old schoolers, such as IBM Watson, Oracle, NYT and GE will continue to leverage their scale and encroach in new innovation.
The ad industry is always quick to label companies as dinosaurs and discount large corporations that have had their bumps in the past, but time is a great healer and it takes a long time to create a diamond. Perhaps because of new leadership, a willingness to move faster, and the evolving means to leverage their tech DNA to win, GE, IBM and NYT have new life.
Thanks to Linda Boff, Deon Newman, and Meredith Kopit Levien, digital natives with the power to think big and evoke change are at the helm and driving market share, while the Buzzfeeds of the world who laying people off.
8. Blockchain is coming, but not for a while.
While blockchain technologies are without a doubt the wave of the future, this shit doesn't happen overnight. It’s going to take three or four years time to cement change. This is particularly true in the ad tech world (despite already being blockchain saturated), where it will take time to change how transactions occur, ads are traded, etc.
Just like it was with mobile (I think it’s been the year of mobile since about 2008 now), blockchain will take longer to evolve than anyone thinks, and will be bigger than anyone can imagine. Full disclosure: via my investment platform, C2 Ventures, I have skin in blockchain through Monetago and others.
9. A post-M&A Linkedin will continue to win.
LinkedIn takes some lumps, but come-on, man! Does anybody else like this platform as much as I do, not just for the professional side of things, but people discovery, content discovery and messaging? Don’t get me wrong: random people emailing saying they like my profile is lame, and I laugh at some of the non personal messages I get, but if you look beyond that and get active, LinkedIn is better than Facebook.
That’s why people like Jon Steinberg, John Battelle and Gary Vaynerchuk use its feed and scale to publish shit. Don't sleep on Linkedin in 2018 -- Microsoft is finally going to gain major share in the social game.
10. AR in mobile ads is going to be a thing.
Right now, celebrities and influencers metaphorically stand behind a products. In 2018, you’ll start seeing them standing right beside it. They’re going to show you how to get to the store and walk you down the aisle, all while holding a two way conversation, answering questions, smiling and posing for as many selfies as you can snap.
AR ads are the technical convergence of high speed mobile, location data, AI, chatbots and about a dozen other things. It will forever change the way brands, influencers and users tell stories and interact with one another, and it’s going to produce a whack of money.