Predictions 2017:
Digital & Tech

AGENDA
1. Tech Trends - what to look for
2. Digital Marketing Strategies - what you need to know
3. Key Takeaways

Tech Trends
What to look for

Traditional media consumption begins to catch up
OTT and Connected TV
Internet-connected entertainment devices are now in 73% of US households. Connected TV accounted
for about 20% of weekly viewing time and has increased by 2.5 times in the last two years. Smart TVs
are also taking over against gaming consoles as the primary device used to view Internet content
delivered to TV. The penetration of connected TV devices and the expansion of over-the-top (OTT)
services have further fragmented the viewing TV audience, and the impact will accelerate in 2017 and
beyond as consumers continue to take control.
Cord-cutters and Cord-Nevers
The number of cord-cutters increased by over 15% in 2016, resulting in pay TV operators’ total
subscriber count declining 0.6% (about 1.3M subscribers), and a more rapid decline may come in the
next few years as consumers try alternative sources of content and the new VMVPD (virtual
multichannel video program distributor) offerings. The pay TV business is in the early stages of a major
disruption, declining from 94.3% penetration in 2011 to 87.5% in 2015.

New media consumption becomes the norm
Snapchat streams over 7 billion videos per day. Twitter and Facebook
are snapping up rights to stream live sports content, and YouTube is
stronger than ever. You can broadcast live on Facebook Live, Twitter and
a host of other social networks.
TV will continue to entrench in streaming environments and digital
publishers will move to the TV screen. The technology is relatively new,
but the trend is clear. We can expect extreme growth in all forms of
social video aided by ever-evolving network-connected cameras and
ever-expanding social networks.

By 2020, smartphone traffic will exceed all PC traffic globally, and 66% of all traffic will be either
wireless or mobile. Importantly, smartphone data usage has nearly tripled since 2015.
With more connected devices and the slow but increasing prevalence of the IoT, the smartphone’s
dominance extends into the offline world as well. It is the default remote for all connected devices.
For marketers, this means that the focus of their marketing efforts must remain on the smartphone, the
primary connected device for most consumers. 80% of millennials use their phones in-store, according
to DMA, as part of their purchase process, providing marketers with plenty of opportunities to
appropriately target these consumers and effect real-world purchases.
For everything from couponing to receipt processing to promotions, brands will increasingly adopt
mobile as the platform of choice for their shopper marketing efforts.
Smartphones as the hub for our digital lives

Prediction 1: Artificial Intelligence gets serious...
Machine learning, using large volumes of data to recognize patterns based on
similar experiences and predict responses, will deliver the largest productivity
increase in 2017.
Personified AI assistants, such as Amazon’s Alexa, Apple Siri and Google
Home, already have access to billions of users via smartphones and other
devices. An increasing awareness of, and openness to virtual tech behaving in
a human way is happening, especially beyond teens and gamers. Even bigger
profound changes are on the way as levels of human control are ceded directly
to AI.
Investment in artificial intelligence will triple as firms look to tap complex
systems, advanced analytics and machine learning technology. We’ll also see
the continued emergence of verticalized AI (highly specialized agents that do
one job exceptionally well).

...and gets a Voice.
Enabled by the fast evolution of Natural Language Processing (NLP), voice is the next wave
in human/machine interaction and becomes the primary UI for the smart home and
connected lifestyle.
Currently, voice recognition is at about 92 to 94% accuracy, but within the next 12 to 18
months it will approach 99% accuracy, which will make voice a seamless interface.
Consumer adoption of digital voice assistants from Google, Amazon and others will grow
large enough to create a competitive market between the assistants. The device
ecosystems of consumers will move toward consolidating to devices connect to and driven
by a certain platform. Sticking to a single brand will become the standard when it comes to
consumers outfitting their homes with connected devices. As a result, the competition
between brands vying to become the ecosystem of choice will be strong within the smart
home. This will lead to brands leveraging bundle discounts and exclusive services in
products with their digital voice assistants.

More than 20 billion devices are expected to be connected to the IoT by 2020, meaning
that more than 5 million devices will be brought online per day.
Stagnation in the mature market of consumer electronics will force manufacturers to focus
on new product categories and ecosystem strategies to compensate.
Rather than just being expected to function as a remote control, users will soon expect
smartphones and connected devices to learn what they do and perform activities for them
automatically.
The growing demands of the IoT will drive the need for more antennas. LTE cellular
systems will soon require two antennas instead of one, and GNSS antennas will need to
have wider bandwidth to receive upcoming satellites. 2017 will be the year of low-power
wide area network deployments that will fill the gap left between high-cost, high-function
cellular and low-cost, localized Wi-Fi and Bluetooth connectivity.
Prediction 2: The Internet of Things goes mainstream

The global market for smart home products is projected to grow from $25B today to a
$122B market by 2022.
The two main drivers of smart home device purchases are safety and comfort.
Convenience, security peace of mind, energy management and lighting will be
leading categories in that growth.
Compatibility will still be a significant issue because of competing standards of
communication and consumer interfaces. So will more basic concerns such as physical
space, additional power adapters/outlets, and all the other aspects of owning lots of
individual devices.
Thus we’ll start to see new “converged” versions of these products that combine a lot
of functionality in 2017. IoT data will be coupled with increasingly powerful A.I.
capabilities as teams will search through new wireless connectivity choices and
protocols to support a diverse set of IoT devices.
Prediction 3: Smart home products strengthen

...and Amazon Echo becomes their gateway.
Though the Echo and its siblings are expected to see a great deal of competition in 2017, the device’s
overall capabilities, in conjunction with the open-ended Skills platform that Amazon created for it, are
proving a winning combination.
The Echo’s Smart Home Skill API is becoming the center point through which many other smart home
devices can work together. This is turning the Echo into the key gateway device in the home, allowing it to
essentially “translate” between devices that might not otherwise be able to easily work together.

VR and AR gain greater awareness and excitement among early adopters, creating opportunities for
social VR experiences. Technologies need to improve, prices need to decrease and the range of
software options needs to widen, but the future is promising for this industry.
While most developments within the VR markets were hardware-based thus far, content creators are
expected to move to the immersive medium. In addition to the gaming industry, the media and tourism
industries are expected to commit to incorporating VR into their strategies.
Going forward, the market will broaden to include AR and perhaps MR. The initial success of Pokemon
Go is a wakeup call to any business that hasn’t evaluated the potential of AR as a mass consumer
platform. And because AR allows users to see the world around them rather than being completely
immersed in a virtual space it is likely to be most interesting to businesses.
Moreover as the overall game market decreased in 2016, a healthy AR/VR hardware environment will
depend on the non-gaming applications to be released.
Overall the real growth for VR, AR & MR is likely to come from commercial applications, which will
provide funding for technological advances that will also be reflected in the consumer market.
Prediction 4: Virtual, Augmented and Mixed Reality...

...surpass wearables.
Wearables and smartwatches expand as healthcare tools and will be
integrated with other IoT applications. But they continue to face
lackluster demand from most consumers after years of mainstream
exposure.
Revenues for VR and AR-based hardware devices (and accessories) will
surpass revenues for the wearables market in 2017. We can expect
about $4B worldwide for AR/VR hardware, versus $3B for wearables.
Because of lower prices per unit for fitness-focused wearables, the unit
shipments for wearables will still be higher, but from a business
perspective, it’s clear that AR/VR will steal the spotlight from wearables
in 2017.

Worldwide smartphone growth has stalled, app stores have become bloated and difficult
to navigate and the general excitement level about mobile app has dropped. The vast
majority of apps that get downloaded rarely if ever get used, and most people
consistently rely on a tiny handful of apps.
Apps account for more than 85% of all mobile usage compared to the mobile Web.
Despite the popularity of apps, app usage remains highly concentrated (the top 5 apps
accounts for 80% of usage time). Most brands and businesses have found it challenging
to actually justify the dollars spent on app development.
However, the launch of Google Instant Aps - no app store, no purchase, no download -
could reinvigorate app usage into the future. Brands could create one-time, single-use
apps that consumers can consume easily and effectively.
Prediction 5: Mobile apps will decline...

...as AI-based chatbots move to the mainstream.
Many different flavors of services will grow stronger in 2017. From new
types of bot-based software to “invisible” voice-driven interaction
models, the types of services that we spend a lot of our 2017 computing
time on will be much different from those in the mobile apps era.
Chatbot use becomes more widespread. As the capabilities improve,
chatbot adoption will grow, with use cases in eCommerce. Chatbots
integrated into social platforms can bring consumption directly into
those platforms. In addition to possible voice interaction capabilities,
chatbots can also become personalized by analyzing available
information on the social platform.
From customer assistance and technical support agents, through more
intelligent personal assistants that move with you from device to device,
expect to have a lot more interactions with AI-driven bots in 2017.

It is not a question of “if” vehicles will drive themselves but a matter of when and how will the world
change in consequence.
Autonomous vehicles begin to see government regulations. Although a commercially available
self-driving vehicle will likely not be a reality in 2017, the government will begin to make headway on
autonomous vehicle regulation. Lobbies are expected to lead an effort to push for broader availability
for testing autonomous vehicles on public roads.
Driver-assist systems already in place are gaining strong consumer support and some critical
technological advancements in the field are being made. Automatic breaking, car-assisted crash
avoidance and other practical assisted driving benefits that can leverage the same kind of hardware and
AI-based software that’s being touted for fully autonomous driving will likely have a much more realistic
impact in 2017.
Most consumers are more interested in assisted driving enhancements, so this could be a case where
the current technologies actually match the market’s real needs. Consumers are also increasingly
expecting connectivity in their cars but pricing, safety and data privacy concerns inhibit market growth.
Prediction 6: Autonomous & assisted vehicles will
drive the future

Prediction 7: Smart City implementations will advance
connected thinking
Smart City implementations finally start to yield a real
impact on the citizen experience. Advancements in mobile,
sensor, and IoT technology will change the way we interact
with the world around us, streamlining everything.
Behind the scenes, network management, billing, predictive
analytics, machine learning, border control, and advanced
security technology will all need to work in harmony to
make this a reality. The first implementations will come as
municipalities finally dig in and build the network
infrastructure needed to support intelligent elements.

It’s projected that by 2018, approximately 69% of all Internet traffic will be for video content. The rise of
video is transforming the way people engage with content and with each other. It’s becoming the most
viewed and shared content in the news feed. Brands will become more sophisticated in their use of
video and at grasping the importance of crafting work for the mobile feed.
New platforms such as Facebook Live and Instagram Stories are quickly becoming some of the most
popular ways for people to discover and share content. With 87% of consumers using a second screen
while watching TV, social platforms have an exciting opportunity to provide a full viewing experience
through live streaming. Brands are also starting to use these platforms to tell stories and engage with
customers, and these platforms will take off in 2017. This will be aided by new streaming technologies,
better content, faster connection speeds, and bigger data plans, which will lower the barriers for
adoption and enable more brands to experiment with real-time campaigns.
Ad expenditure on mobile video is expected to grow more than 30% next year, according to eMarketer.
Expect to see more innovation in pre-roll, live video and video embedded directly into email. Creating
video that leverages the buying power of the second screen will enable an increased engagement,
expanding sales, and ultimately what we call “return on content.”
With the growth of mobile, we expect to see expansion of video in marketing experiences.
Prediction 8: Mobile video rocks on...

...and messaging is the new medium.
As 2017 approaches, more people are talking about expanded functionality in mobile messaging. More people use
messaging apps today than they do social media. Further, the messaging apps are slowly but surely evolving into full-fledged
marketing and commerce platforms. Moving transactions and engagement onto messaging platforms is likely to have
seismic and long-lasting impact on mobile.
In 2016, brands were wondering how to get into the mobile messaging space and how to integrate messaging apps into their
existing marketing strategy. In 2017, brands and marketers will ask themselves how they can deploy dollars in mobile
messaging in a way that is authentic and complimentary to their overall digital strategy. Branded content experiences in
messaging apps will now be favored.
Messaging apps will become the new operating system. The possibility to create branded content experiences will now be
favored (e.g., emojis, GIFs, photo frames, photo filters, chatbots).

Prediction 9: Native ad formats grow, but further fragment
Display ad formats are likely to continue to decline in relative value. Native ad formats will continue
to grow and multiply, creating both opportunities and challenges for advertisers and publishers.
On the one hand, advertisers will continue to innovate with less intrusive but more effective
advertising formats. On the other hand, the complexity of managing the messaging becomes much
more difficult with each new format and platform.
More publishers will get on board, including B2B, local, and smaller verticals. Focus will shift to a
mobile-first perspective. Visual content, notably video, will rise in relative importance and video ad
formats will continue to be reinvented. Pricing models will increasingly move from CPM to CPV
models and conversion metrics that put value and premium on engagement. Thus there will be
enhanced focus on attention metrics.
New ad formats will continue to be invented. Virtual reality native ads will become more of a reality.
More DSP prioritization will support in-app native buying. Emergence of more native advertising
options in messaging apps and also with p2p marketplaces that are experimenting with new
advertising models.
Programmatic solutions will increasingly allow for data driven content optimization in near real time.

The continued deployment of 4G LTE-Advanced network will lay the foundation for the evolution of
carriers to 5G. A&T, Spring and T-Mobile already announced plans to achieve gigabit speeds in the
coming year. Virtualization will further the transition to 5G.
More trials will be held to stream live TV over a fixed wireless 5G connection, leading us closer to the
“next-generation entertainment services”. Indeed the surge in video traffic is a key driver of the push
toward 5G.
5G deployments will move quickly beyond fixed wireless applications and will likely focus on a micro
network approach. As part of the race to 5G, gigabit deployments will take off (25-35% growth).
Mobile network operators (MNOs) will fully embrace shared infrastructure in 2017. Coverage and
capacity challenge for serving large venues and congested areas will continue to grow, driving a need
for more economical small cell solutions. To meet this need, MNOs will gravitate toward a shared
infrastructure model -- neutral host. This will enable cost-efficient access to the increased network
capacity needed to solve these challenges for all operators.
5G’s promise of greater speed and overall network performance brings huge opportunities not only for
video but in the IoT, 4K video, A and VR, smart home and cities, autonomous vehicles, and much more.
Prediction 10: 5G becomes a reality

Prediction 11: Google’s search dominance disrupted?
Voice search specifically has the potential to disrupt Google. Providing a non-visual connection to contextual content,
assistant such as Alexa and Siri coupled with the Air Pods are set to revolutionize search.
Increasingly, as shown in Google Now, we expect answers before we query the search box. Voice interaction experiences
represent a small window of opportunity for competitors to loosen Google’s stranglehold on the search market. For the most
part, voice interaction remains an exercise in precision and contextual search results. Just as everyone got hooked on
Googling for information, they could easily get hooked into a new interaction habit with a voice assistant that isn’t powered
by Google, like Alexa.
AirPods, which have been called a computer for your ears, present an always-on, always at-the-ready opportunity for
personal connection to content. In 2017, we will see this new product become more and more useful as an interface to AI
assistance.

Digital Marketing Strategies
What you need to know

2017 is the year when both clients and audiences will demand new forms of creative work
– faster, more relevant and more personal.
Storytelling will become a key part of content marketing. To engage with and answer the
demands of their audience, brands will have to provide intelligent content and
experiences.
We’ll see customer service transformed online through the proliferation of chatbots. At
first, conversations with these robots may be inferior to service from a human, but will get
better as machine learning develops. Getting the tone and content of this conversational
commerce right will mean that marketers need to understand the personality of their
brands inside out. Brands will have to decide how best to keep up and stay true to
themselves as they do.
The rise of a new brand experience

Data becomes more human
The state of the science is advancing to a point where we can really
speak to a ‘segment of one’, harnessing data and tech capability to a
much deeper understanding of people and the relationships they
really want with brands at different moments. This should make
communications more human, not less.
An estimated 77% of marketers plan on increasing content production
in the next year. Competition will be tight and many sectors are
already over saturated to gain customers attention. Automation
creates a more efficient process and maximize the content production
ability of the brand, allowing them to compete against others in their
industry.
80% of today’s consumer data is unstructured. The ability to sift
through this data and develop an understanding of an individual in
context, will be a key differentiator for marketers in 2017, and the key
to this lies in the analysis of unstructured data, image tagging and
NLP. Deeper contextual insights will drive customer engagement,
notably via mobile.

In 2016, organizations have been taking the steps needed to develop and upgrade their
staff, toolset and the amount or type of information they collect, to enable them to really
take their data capabilities to the next level.
As a result, we’re on the threshold of moving from Big Data 1.0 to Big Data 2.0, and
significant, real benefits will soon be commonplace across the business world. 2017 will
be a landmark year for data where those companies that take the right steps will be best
placed to reap the rewards, both in the next twelve months and beyond.
The most crucial issue to tackle will be to redefine our expectations – and understanding
– of Big Data. Data’s biggest opportunity is to identify hidden patterns that allow a
business to outperform in the future, and correctly highlighting these patterns requires
comprehensive data that spans a long time. Businesses need big data management
solutions right away.
Big Data 2.0 - get your DMP ready

Deeper metrics and audience insights
In 2017 social platforms will expand into a richer set of publicly accessible video metrics.
Platforms have also began rolling out deeper audience analytics and data signals so
brands can see more information about their consumers. We’ll see this expand with
features like Facebook's Audience Insights API becoming generally available in the first
half of 2017.
As publishers, media owners, and app developers see continued growth, they will
become more sophisticated in their collection and use of mobile data. Location data,
sensor data, and other forms will become a normal trading currency for improving
content and advertising. Those that embrace this trend will be long-term winners.
2017 may be the year we finally see actual widespread implementations and usage of
beacons and other location-based technologies. In particular, in-store implementations
will provide consumers with enhanced shopping experiences. Local-based services fully
leverage mobile capabilities outside of the internet.

Teams which are able to adapt at speed, who are comfortable with fluid identities and
ways of working, and that genuinely empower diverse backgrounds and diverse ways of
thinking are the only ones that will be able to maintain momentum in a volatile external
environment.
To help brands keep pace with the changing demands of consumers, agencies will
evolve their talent profile and we’ll see the emergence of marketing technologists and
data scientists in media and creative agencies. Next year will see fresh, innovative ways
to collect, interpret, analyse and act on the data available to them.
CMOs will be expected to have a blended skill set to drive digital business
transformation, design exceptional personalize experiences and propel growth. There
will also be a doubling of business-head turnover as CEOs come to terms with what’s
needed to propel their company forward in a customer-led, digital-centric business.
Agility is the key to momentum

Brands & agencies collaborate
and relationships get complicated
Collaboration and a move to a new communications business model will be one of the
key trends of 2017. Clients are increasingly looking for ways to make their budgets
work harder.
We will see more insourcing and outsourcing on the client side, as brands navigate this
new environment and adapt the way they work with agencies. Agencies on the other
hand will be looking to respond by further expanding their offer to adapt and take a
larger slice of the increasingly fragmented pie.
Another trend we are seeing is that the competitive set is growing, with management
consultancies coming downstream, challenging the existing agency model. We will see
an increase in this type of M&A activity. Those agencies that can adapt their model and
show truly agenda-free thinking and seamless execution will win.
In 2017, we’ll see more innovation from brands that aren't afraid to give direction to
their agency partners. By the end of 2017, they will look markedly different from one
another, creating more choice for key accounts and continuing the account shifts
we've seen in recent quarters.

Cross channel marketers need to get it together on mobile
for their users
Many channels, many devices, one customer.
Consumers are increasingly using multiple devices to remain connected - at least 5 according to the DMA. 2017 will be a year
for customers to be treated as individuals, with a consistent brand experience regardless of what channel they’re using.
Furthermore, customers continue to transact in the offline world with a multiplicity of different identities and across multiple
different channels. As marketers become increasingly comfortable managing Big Data and vendors create systems that can
target marketing efforts down to the individual, there is a need to have a consistent, unified view of the customer across all
those devices and to be able to track all their actions across all channels – offline and online.
In 2017, cross-channel marketers — retailers in specific — need to prepare for mobile, the fastest-growing channel in
user-shopping experience. Marketers need to show their products quickly and effectively with purchase decisions being
made in real-time. The mobile shopping experience will be cross-platform via search, mComm, in-app and social shopping.

Loyalty embraces mobile
Thus far, mobile’s role in loyalty has been limited to creating apps that enable consumers to view and manage their loyalty
accounts. Expect that to change in 2017, as smart brands realize that loyalty is more than simply collecting points for
transactions, but also about engagement and advocacy. The majority of U.S. marketers intend to allocate more of their
budgets to customer loyalty in 2017, and about 13% said they anticipate significant increases in spending on such programs.
Mobile is the perfect tool to reward brand interactions beyond just transactions. It allows multichannel brands to
communicate with and capture transaction information directly from consumers through receipt processing, thereby enabling
whole industries to create their own loyalty programs.
Forward-thinking brands are re-imagining their entire loyalty programs from top to bottom with a view towards deeply
integrating mobile into their programs. 2017 will pave the path for becoming more agile and making data real-time and
actionable in the mobile first world.

The continued growth of Programmatic &
Header Bidding
In 2017, we will start to see the evolution of data science applications as they become more embedded in
platforms—“AI layers” that leverage machine learning within platforms, and make things like user scoring,
propensity modeling, lifetime value (LTA) analysis, and next-best action recommendations less manual and more
automated.
2017 will see programmatic media buying cement itself as an infrastructure that paves the way for traditional
channels to move into a programmatic format capable of learning, optimizing and reacting, considerate of data
made available from other programmatic enabled formats.
The advent of header bidding has created a relatively efficient auction for programmatic ad inventory, increasing
ad inventory revenue and decreasing the management time required for optimizing ad performance. These
advantages are likely to cause more and more publishers to switch to a header-bidding-first strategy.
The current implementation requirements for header bidding are slowing adoption, but the advent of 3rd party
tools to streamline implementation will likely overcome these hurdles. If header bidding continues to grow
quickly, the traditional ad network model may likely be squeezed out of the industry entirely, as they are unable
to bid in the auction for the best inventory, and they have less data on which to bid because they are not in the
header on the page. The second likely outcome is that publishers will work with a limited number of header
bidders on the page--reluctant to load so many 3rd party javascript tags in the header of their page--and start
hosting private exchanges that allow for server-side integrations for new bidders.

Security and Privacy
Privacy and security were already a big deal in 2016. In 2017, they will be an even bigger
deal all around.
As mobile devices continue to become more intimate and indispensable, they capture
increasing amounts of highly sensitive data. Random apps that we download will often
routinely ask for access to highly personal information.
Mobile ransomware is expected to rise with the increase back ups in the cloud by mobile
users As IoT devices become common-use, the will also continue to come under attack.
Drones will also become more ubiquitous in their use for surveillance.
Internet liberty crackdowns such as the introduction of strict data retention laws and laws
attacking communications apps as well as attempts to increase mass surveillance will
induce a decline of Internet privacy around the world in 2017.

Key Takeaways

People are getting used to living in a world where their
demands are instantly met and things are beginning to
work automatically in every aspect of our daily experiences.

Machines are learning to think with us and for us. Anything
you can talk to will understand and talk back. No matter
what you do, there’s a thinking machine in your future.

Iot, bots, AR/VR app and so on are exploding the number of
digital customer touch points to consider for marketers.

Anything that can be connected will be connected.

The velocity of data is increasing and
distribution channel disruption is accelerating.

Good news: the continued boom of mobile advertising
By 2019, mobile advertising will represent 72% of all US digital ad
spending, reaching an unprecedented $65.87bn. On a global scale,
especially with growing internet accessibility on mobile, we will
continue seeing soaring budgets in mobile ad spend.
But this also means a growing number of adblockers, and more than
419 million people are blocking ads on smartphones, almost double
that of desktops. This tells us is that the quality of ads is not quite
matching the momentum of the mobile platform as a whole, and
represents a serious call-to-action for both publishers and
advertisers to react effectively, otherwise 2017 will be marked by
soaring numbers of adblocker users.

InThank You