What US marketers face in 2018: the year of the ‘sophisticated consumer,’ indie agencies and Amazon

Consumers grab the controls

Last year, a heavy focus on digital brought an increase of platforms for quality content, and the Internet of Things (IoT) started to take shape. These and other innovations forced consumers to become more selective and sophisticated in how they interact with brands. As a result, brands should be expected to be on their toes and look to measure ROI differently this year.

“Everything got much more real in 2017," says Jun Group founder and chief executive officer, Mitchell Reichgut, who notes the current shift from what he calls an "image-based perspective" to a "performance-based perspective.”

Marketers will also have to be as forward-thinking and as genuinely conscious about the content they put out into the world moving forward. Mary Cass, a futurist and trends analyst for J. Walter Thompson’s intelligence team says: “Topics like veganism, diversity and intersectionality have come to the forefront." This almost forces brands to start taking stances that don’t alienate consumers.

Also adding to the cluttered space that consumers and brands live in is the maturation of the Internet of Things. Cass believes that it’ll be on steroids, noting: “The next generation of data will come via voice assistants like Alexa and Google Home, or as we call it at JWT, the 'internet of ears and eyes.'" Hence, people-based marketing (potentially via algorithm) that’s more individualized will become more of a focus for agencies and brand-side marketers alike.

The conversational ability of these voice assistants, in return, will lead to data that comes from a more subconscious mental space instead of from survey data or market research, an imperfect process where consumers tend to think more about the “right” answer instead of giving an honest one. Jason Chebib, vice president of consumer planning for Diageo, thinks: “Technology is allowing us to get more implicit data from consumers, which is more important than the explicit data we've received from them the past."

Reichgut of Jun Group agrees, saying that this power consumers now holds, forces agencies to make better work. “I think for the first time, consumers have the control and power to demand great advertising, 'cause if it’s not great, we’re just not going to respond to it.” He believes there’s a system in the works that keeps creatives from reaching their potential. “As you see consumers take control, as you see targeting mechanisms get much more sophisticated, I think we’re going to see much more enlightened, much more real, much more fun advertising. And that’s kind of what the industry should be.”

A challenger approaches: indie agencies and consultancies

On the topic of creative talent, 2017 was filled with marketing consultancies like Accenture's new shops, in-house creative offerings from publishers and scrappy independent agencies jockeying for clients and massively shaking up the status quo established by holding companies. Chebib considers 2018 a major crossroads for a talent pool hindered by the industry’s stodgy old guard. “I reckon that the people to watch next year are in small, creative agencies. At the moment,“ he says, “there is a real problem in the creative world, in which the creative talent sits at big agencies that don’t know how to address creative for modern media, and particularly not for digital media.”

On the flip side, he notes: “The agencies that do know how to do social, brand messaging and content creation for any brand in that domain, don’t have the creative talent," Chebib says. "So, something has to give at some point, and there will be moves within big and small agencies that take the pockets of creative talent to the places that know how to create digital media. And those people will be the ones to watch,” due to their unique blend of traditional agency experience and new digital skills.

All eyes (and ads) on Amazon

It’s become rapidly clear that Amazon is just as ubiquitous as Facebook and Google, even though, in Chebib’s estimation, the e-retailer only makes 4% of its revenue from advertising. This will change, with Jeff Bezos’ giant poised to make a push to advertise more, according to CNBC. Chebib’s also fascinated by Amazon’s push into brick and mortar after solidifying status as a top online marketplace for most consumer goods.

Mary Cass also has her eyes on Amazon’s move to the physical space, including the implications of the Whole Foods deal. "You can already get an Amazon Alexa speaker there,” she says, “but we’re also curious to see whether Amazon starts selling the Whole Foods private labels at lower prices.”

There’s a tension between the massive conglomerates of Amazon and Walmart, which have the inventory to cut down on prices, versus brands such as The Ordinary beauty line and Brandless. “Their selling point is that they’re taking the brand labeling away.” Cass says. “They sell high-quality products without spending money on the marketing and the logo and packaging. That direct-to-consumer movement has been huge, and millennials really respond to that straightforward, ‘we’re bringing you the best quality at a reasonable price, which is very fair’ vibe.”

This is similar to talks in the UK, where packaging regulators look to enact plain packaging laws, posing a threat to the bottom line of major brands such as Coke and Pepsi. With Amazon lowering its prices, Walmart looking to catch up, and retailers overall trying to make prices for quality goods cheaper for a more informed consumer, an industry already in flux will have a lot more shaking up before the chaos fizzes out.

See the views of all four contributors in the video above around the most important developments they expect to see take shape in advertising and marketing in 2018.

The views were taken during a panel session presented by The Drum and sponsored by Jun Group and Adara in Manhattan in late December, 2017.