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Trends 2017: Italy 4.0

2016 has been a good year in terms of the Italian economic upturn, thanks to a government that has made important reforms to work, recruitment and retirement, so (hopefully) we are finally seeing the light at the end of the tunnel: after years of decline and stagnation, in 2016 investment in advertising is expected to grow by 3%.

Media planning is getting ready to capitalise on the opportunities: investments in digital have been growing rapidly in recent years, and in 2017 they are expected to make up a quarter of all communications investments. It’s also worth noting that mobile web has grown to make up more than twice the extent of PC use, and next year will absorb a third of all digital resources. We are experiencing significant developments in live videos, fresh daily content with Snapchat, Instagram and Telegram, and new scenarios such as native advertising and chatbots.

Nonetheless, TV is expected to still play a major role in the landscape, representing half of total investments though with one key difference compared to past situations: forget about wide audiences. In the meantime, unlike TV, other traditional media are not showing any significant signs of evolution. Their trend seems irreversible: fifteen years ago print represented a third of total investment; now it’s only 13%.

In such a challenging scenario, it’s no surprise that Programmatic is increasingly gaining share of use vs. traditional media planning: in Italy, Programmatic spending has grown from €42 million in 2013 to €260 million in 2016. Reports predict that next year Programmatic advertising will be worth €360 million, and €515 million in 2018.

Live videos

Mobile video consumption is forecast to grow by 33% in 2017, and by 27% in 2018, reaching 33.4 minutes a day. In this context, live videos will continue to grow among brands over the next few years. Social media users love to feel “in the moment,” and live videos give them that sense: rather than seeing a recorded event, they want to experience something immediately.

Live events foster engagement. When large groups of people are concurrently watching a live stream, it is a far more social experience than when they watch an on demand video on their own. Social connections and interaction during a live event are very attainable and extremely valuable.

Fresh daily content

Snapchat, Instagram and Telegram offer the chance to tell stories in posts, videos or photos that self-destruct after 24 hours. This means that each company must create fresh daily content for its users.

In addition, this volatility makes any content more interesting and appealing to the eyes of your followers. The knowledge that tomorrow will be too late to take advantage of the experiences, stories or snaps clicked today is dependent on curiosity, and creates urgency around the need to stay up-to-date.

Programmatic buying

In Italy, Programmatic spending has grown from €42 million in 2013 to €260 million in 2016. Reports predict that next year Programmatic advertising will be worth €360 million, and €515 million in 2018. As has already happened in more mature markets, the Italian panorama of Programmatic is becoming increasingly crowded, so in 2017 the big operators will redouble their efforts to increase the efficiency and customisation of their solutions, while clients will continue becoming increasingly aware of the offer.

Native advertising

Ad blocking is a phenomenon that continues to grow in Italy: currently, ad blocker usage is at 13% among PC users, while on smartphones it is at 7.6%. The prevalence of ad blockers is provoking serious reflection on the nature of online advertising. With an average click rate at 0.06%, it is now clear to everyone that online display advertising has to change. And so, native advertising is forecast to grow by 156% in the next 5 years, overwhelming the 52% market share that display advertising in Europe currently has.

Chatbots

Brands are beginning to use artificial intelligence for their customer service. The main advantage from using chat-based assistance is a speedier response, which could reverse the trend of consumers pouring out negative feelings about the company on social media. The Italian startup Responsa has created a Messenger chatbot to offer self-service customer care with high conversational content. The technology combines contextual analysis and natural language algorithms (NLP), ensuring a spontaneous and immersive experience for customers.

YouTuber licensing

In Italy, licensed products represents business worth €3.18 billion, while the global licensed products business hit €214 billion in 2016. A new trend is for “co-branded” YouTuber-licensing. To take one recent example, the Favij nickname, featured on various products, has proved to be a winning formula: the licensed Panini collection has received more than 1 and a half million sales. If at first no one wanted to produce a book with a YouTuber, today they are queuing up for the chance.

Creativity is Matthias Harbeck´s profession and calling

First published in Red Bulletin Innovator.
Interview: Christoph Kristandl

Creativity is elusive. Only too well we know of situations where it abandons us. If we need an idea, if we brood over the solution to a problem – simply nothing comes to mind. It happens. But what if creativity is your occupation? If you have to drive yourself to peak creative performance every day in order to create something new, something as spectacular as possible, and to convey a message as well. And what if it’s a message that nobody wants to see? – Advertising. A conversation with the multiple award-winning Matthias Harbeck.

The Red Bulletin Innovator: You were honoured with more than 600 national and international awards, including 22 Lions in Cannes. Do such honours mean something to you?

Matthias Harbeck: Naturally. If you win a Golden Lion, that’s a feather in your cap. There are people who say that Cannes is something like a parallel society. The true needs of the client would not count for anything there, and it’s a vanity exhibition of creatives who celebrate themselves there. There is even a grain of truth in that. But apart from the fact that quite excellent work from day-to-day business is also honoured in Cannes, you have to view it as similar to prototypes at an auto show or the haute couture of the great fashion shows. What you see there you will never encounter on the street.

Why produce it then?

What’s extremely successful moves the industry forward. Sometimes the idea is so extraordinary, often the technology too. It works with media innovations that can set trends for everyday life.

With what, for example, have you been successful in that regard?

With real-time advertising, for example. With Serviceplan we were able to score a coup with that a few years ago: over 90 minutes of the Champion’s League Match of Arsenal against FC Bayern we switched six 60-second live spots directly into commercial blocks of Free-TV channels. You’re watching normal advertising, for example, on PRO 7, when suddenly an announcement comes, the game is seen live for 40 seconds, and at the end, the Sky-Order Hotline appears, so that in the future you can see such games completely live. The response was huge. Also because, of all things, in one of the slots Lukas Podalski scored the goal which left Arsenal only one down at 1:2!  The idea was relatively simple, but the technical implementation was complex. But that’s the sort of thing we’re attempting: something extraordinary, which makes the industry sit up and take notice and which can then take a pioneering role, too.

What advertising trends can we expect in the coming years?

Consider the films in our newsfeeds on Facebook, where you only hear the sound when you intentionally click. That’s not a trend that comes from advertising, but it changes the thinking of the creatives. You have to succeed in being so good in the first two, three seconds that people click on that video. That also means that the sources of inspiration change. You focus on silent film, for example, and why Buster Keaton or Charlie Chaplin were so good at it. Perhaps we’ll soon also produce moving images in 15 different versions in order to optimally satisfy users’ differing expectation profiles and to be able to address them digitally in individual ways. And then there are hardly any campaigns that are originally made for the mobile phone screen. That is a big issue.

“Advertising must be so good that, ideally, people even actively search it out.”

How do you deal with the fact that nobody wants to see advertising?

It is a step forward that increasingly we can provide people with customised content. In the past that was not possible technologically. But that does not make good ideas superfluous, on the contrary. More than ever, we have to surprise and involve people through a new kind of staging. The trouble is that we’re in a permanent competition with thousands of advertising messages, indeed, messages of every sort. On top of that is the public’s practised avoidance of advertising. Therefore, the good idea, the great story, the fascinating staging is more important than ever. Advertising must be so good that people don’t want to just see it and share it, but rather, ideally, they even actively search it out because people are talking about it.

With all the staging, doesn’t the product sometimes get left behind?

That is the great challenge. On the one hand, communication has to become ever more entertaining. On the other hand, there are clients who pay for it and say, “Now where is my product that I want to sell?” Just to say that a screw costs 2.99 Euros is not communication, that’s information. You have to do a balancing act: to maintain contact with the brand and at the same time deliver a certain factor of desire.

Cannes 2016 – a summary

Two weeks of Cannes are over – an extremely great, exciting but also exhausting time. Strenuous for the brain and the creative muscle. 25 judges from 25 countries. 25 completely different minds with different views, with statements, inflammatory speeches and discussions; simply fantastic.

My conclusion from the area “Direct”: there weren’t any radical, major trends, but there certainly was a “hidden trend”, namely Gender Equality. This issue is becoming more and more important. No matter whether female, male, transgender or homosexual – every person has the same rights.

This is recognised not only by the NGOs but also more and more Super-Brands are showing a clear stance and taking a stand.
A great example is Doritos:

My other highlights

Snapchat, WhatsApp, mail and Facebook … That all trends in communications bring a work that Grand Prix shows that our voice is our most original communications organ, proving “The Swedish Number”:

And yes, breast cancer prevention can be fun. A lot of fun even:

My personal favourite is Case OPT-Outside of REI: it’s incomprehensible when an outdoor retailer abolishes its strongest sales day of the year and thus triggers a whole movement. And with a clear message: do not go shopping – go outside on Black Friday. Enjoy your life, your loved ones and nature. Great great great!

Until next year!!

Sustainability and advertising

Anna Gauto, editor at “forum Nachhaltig Wirtschaften”, spoke to Pavan Sukhdev and Florian Haller on advertising and sustainability. Pavan Sukhdev is a former manager at Deutsche Bank and founder of the “Corporation 2020” sustainability campaign. Florian Haller is CEO of the largest independent advertising agency in Europe, the Serviceplan Group. Both will speak at SusCon 2012 in Bonn.

 

Anna Gauto: Advertising does whatever you ask of it. Is advertising blameless?
Florian Haller
: Advertising is not blameless. It is responsible for how a brand is perceived. Our task is to support and guide it with this in mind. For this reason, advertising cannot be blameless.
Pavan Sukhdev:
Advertising is certainly not blameless. Advertisers like to think of themselves as experts, who cater only to the needs of their clients. In order to break through the system of reckless consumption, however, both advertising agencies and the companies they represent must consider the message they are sending out.

 

Today, companies are effectively adopting the concept of sustainability for advertising purposes. How has sustainability become a sign of a company’s prestige?
Haller:
The trend towards a sustainable way of living comes from people, not companies. Well-managed brands are using this desire for sustainability as a business opportunity.
Sukhdev:
We have numerous hard-working writers, scientists, entrepreneurs and citizens to thank for the fact that environmental issues have become so prevalent. How the term sustainability has become so popular, however, is a mystery to me. It is often used incorrectly. It actually describes activities which have been practised for centuries. Companies must be able to account for any claim to being sustainable. This is why the standardisation and regulation of ratings, rankings and seals of quality is necessary.

 

Cigarette advertising shows that selling well does not automatically mean selling something good. Does advertising need a conscience?
Haller:
Advertising per se is an instrument which can be used in many different ways. For this reason, advertising as such is neither moral nor immoral. Advertising is, however, a powerful instrument, which can be used to turn a moral concept into a business opportunity.
Sukhdev: Advertising does need a conscience, but we shouldn’t leave it to the industry alone to develop it. We need to ask ourselves which advertising techniques are excessively misleading and what sort of information should be included on product packaging.

 

There is an increasing demand for ecological products. Has consumer behaviour changed advertising or is it the other way round – has advertising influenced consumers?
Haller:
I don’t think we can overestimate the influence of advertising. The need for sustainability has been shaped by reports on climate change and wildlife conservation as well as numerous food scandals. For two years we have been using the Sustainability Image Score to investigate which companies in Germany are perceived as sustainable. This allows us to determine how the public perception of a company’s sustainability affects its brand value and therefore its corporate success. One important finding is that companies should not only use the opportunity to put sustainability into practice, but to discuss it intensively and professionally, at the same time winning over consumers. They must practise what they preach.
Sukhdev:
When it comes to the ever more popular topic of sustainability, consumers have far more influence over advertising than the other way round. One should encourage the other. Read more