The50MostImportant
MarketingChartsof2016

Every year, we look back and analyze the biggest trends that shaped
marketing. We also look ahead to how they’ll impact marketers in the coming
year. Last year was the year of mobile, as messaging apps exploded and started
to converge with social networks.
Another standout trend was ad blocking, as software became easily accessible
to both desktop and mobile browsers. For marketers and publishers, this
means a readiness to innovate is key. And speaking of innovation, new media
formats gained popularity in new apps like Snapchat, and were experimented
by stalwart platforms like Twitter and Facebook. So in a world where brands
can get their message across on a multitude of channels, how much does it cost
to create this content?
We undertook our largest study to date, surveying over 300 CMOs and senior
marketers about the costs of producing content — and the results show that
content costs are on the rise across industries. This year, we’ve included new
categories on creative workflows, customer experience, and streaming media
– three things that are of increasing importance to marketers. Jump right in.
Inside this collection

For brands to succeed today, they need to
communicate effectively with their mobile
consumer. These charts illuminate mobile web
behavior and content consumption patterns.
Mobile

60%
40%
Total Mobile Minutes
Total Computer Minutes
65%
35%
Nearly two-thirds of all internet time is spent on mobile
December 2014 December 2015
Percentage of total Internet minutes — Monthly minutes spent online, Dec 2014 vs. Dec 2015
Source: IAB Digital Trend Usage Report, 2015

Mobile will account for half of e-commerce by 2020
US Mobile Commerce Forecast, 2015-2020
Source: Mobile Commerce Daily, Forrester Research Mobile and Tablet Commerce Forecast, 2015-2020
2015 (F) 2016 (F) 2017 (F) 2018 (F) 2019 (F) 2020 (F)
$79
$69
$60
$51
$43
$35
$173
$156
$138
$119
$99
$80
Tablet Smartphone
F = Forecast
Share of mobile commerce by 2020
49%

0
60
120
180
240
300
2015 2016 2020
58.3
31.4
25
63.7
36.3
27.7
162.2
79.6
58.5
APAC EMEA Americas
111.2
147.3
284.3
Asia Pacific will become the world’s largest app market…
Source:App Annie
App downloads by region, in billions

0
60
120
180
240
300
2015 2016 2020
194.1
98.3
73.2
90.2
4938
China Rest of World
…led by China, with 51.9% of global app downloads
App downloads by region, in billions
Source:App Annie
111.2
147.3
284.3

Apps, not browsers, get the lion’s share of mobile usage
Mobile Time Spent In Apps Vs. Browser; Daily Minutes Per User Per Day, US
Source: Company Filings, News and Company Announcements, GlobalWebIndex
Minutes
30
60
90
120
150
180
210
240
270
300
Q1 2013 Q2 2014 Q2 2015
Mobile Browser Mobile Apps

Which brands win on messaging apps?
Snacks
Restaurants
E-Retailers
Movies
TV Shows
Millions
0 10 20 30 40 50 60 70 80 90 100
35-49 18-34 Total
Source: MEC
Brand categories messaging app users are most likely to interact with

87% of millennials say they’re never without their smartphones
Millions
0 10 20 30 40 50 60 70 80 90 100
My smartphone never leaves
my side, night or day
When I wake up, the first thing
I do is reach for my smartphone
I spend more than two hours
every day using my smartphone
In the next five years, I
believe everything will be
done on mobile devices
Source: Mary Meeker’s 2015 Internet Trend Reports

The second screen is alive and well
Percent who strongly agree with the following statements:
Source: Nielsen Global Digital Landscape Survey
Global Average
Asia-Pacific
Europe
Middle East/Africa
Latin America
North America
Percent of respondents who strongly agree
0 15 30 45 60 75
"I browse the internet while watching video programming"
"I like to keep up with shows so I can join the conversation on social media"
"I watch live video programming content more if it has a social media tie-in"

ShareofPlays(Percent)
0
10
20
30
40
50
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
4%
6%
7% 7%
8%
10%
13%
15%
17%
22%
27%
30%
38%
42%
44%
45% 46%
Source: Ooyala
Percentage of Video Plays on Mobile Devices, Global
Watching mobile video has never been more popular

CMOs think mobile marketing can perform better
“Rate the performance of your company’s mobile marketing activities (1 = Poor, 7 = Excellent)”
Source: The CMO Survey by the Fuqua School of Business at Duke University
1
2
3
4
5
Customer acquisition Customer engagement Customer retention Delivering your band message Sales Profits
2.742.90
3.44
3.14
3.46
2.92
2.642.74
3.47
3.12
3.56
2.89
August 2015 February 2016

There’s huge scope for mobile banking in emerging markets
Emerging Market Penetration: Bank Accounts vs. Mobile Phones, 2014-2015
Source: World Bank, Communication Authority of Kenya, TRAI
0%
14%
29%
43%
57%
71%
86%
100%
Kenya India
80%81%
53%
75%
Bank Account Penetration Mobile Penetration

But for many, data is too expensive relative to income
Cost of 500MB of data against hourly minimum wage in USD
Source: Jana
5
10
15
20
25
Mexico South Africa Brazil Nigeria Philippines Turkey India Indonesia
$0.43$0.2
$1.29$1.18
$0.46
$1.04$1.22
$0.56
$2.39
$3.38
$9.98
$11.76
$12.88
$13.77
$16.47
$23.41
Cost of 500MB of data Hourly minimum wage (USD)

A multitude of new media formats lets brands
amplify their reach, but they need to be prepared
to be innovative in order to combat ad blocking
and the costliness of new media formats.
Digital Media

Current Levels Over Next 12 Months In Next 5 Years
10.6%
13.2%
20.9%
% of Marketing Budget
Social media spend will increase to 20% of the marketing budget
Social media spending as percent of marketing budgets
Source:The CMO Survey 2016

Brands outsource up to 22% of social media to agencies
Percentage of company’s social media activities performed by outside agencies
Source:The CMO Survey 2016
Feb-14 Feb-15 Aug-15 Feb-16
17.4%
18.9%
21.7%
20%
% Outside Agencies

Creative alert: Brands are using more emojis in their content
Top global brands that use emojis in posts
Source: SocialBakers
Sessions
0
50
100
150
200
250
300
350
Facebook Twitter
Q4 2014 Q4 2015
Note: Top 500 brands based on followers

Twitter’s user growth continues to stall
Twitter Monthly Active Users (Global)
Source:Twitter
Millions
Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Monthly Active Users (Global) QoQ Growth
$305$307$304$302
$288$284
$271
$255
$241$232
$218
$204
$185
320M
Monthly Active
Users at Present

Ad blocking is on the rise, and it isn’t going anywhere
Global Monthly Ad Blocking Software Users (desktop)
Source: PageFair and Adobe | 2015 Ad Blocking Report
GlobalMonthlyActiveUsers
Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
21M
30M
39M
54M
121M
181M
198M
Monthly Active Users

BillionUSD
0
10
20
30
40
50
2013 2014 2015 2016
The global cost of ad blocking will almost double this year
Global Economic Cost of Blocking Ads
PageFair and Adobe | 2015 Ad Blocking Report
90%Increase in ad blocking cost
from 2015-16

But ad revenue is still growing — along with subscribers
New York Times Digital Revenue (Global)
Source: The New York Times
Millions
$20
$40
$60
$80
$100
$120
Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14
Advertising Subscriptions

For most news websites, over half of mobile data is spent on ads
Time to load editorial content versus advertising content for major news publications
Secondstoload
0
3
6
9
12
15
18
21
24
27
30
The
Daily
Beast
C
hicago
Tribune
N
ew
York
Post
Salon
C
N
N
LosAngelesTim
es
Vox
The
Atlantic
Vice
The
H
uffington
post
The
N
ew
York
Tim
es
Buzzfeed
Seconds to load advertising content Seconds to load editorial content
Source: The New York Times, The Cost of Mobile Ads on 50 News Websites | October 2015

Facebook and Pandora are the most used on mobile
Monthly mobile minutes (Billions), Dec 2015 (to any site or app via mobile device)
Source: IAB Digital Usage Trend Report Full Year 2015
BillionsofMinutes
210
Facebook Pandora Google Apple Spotify Yahoo Sites Amazon Sites Netflix Snapchat Twitter Microsoft Sites
6.87.210.911.113.7
19.419.8
74.6
92.295
200.7
984.3B
Total monthly mobile minutes

What drives people to block ads?
Why consumers tried using ad blockers (Percentage of respondents)
Found out ad blockers exist
Got a virus from clicking on an ad
Got tired of low quality ads
A friend recommended an ad blocker
Don't like seeing behavioral targeted ads
0 4 8 11 15 19 23 26 30
Source: IAB

Visitors to social networking sites are more likely to block ads
Global share of ad blocking rates by site category (Q2 2015)
Source: PageFair and Adobe | 2015 Ad Blocking Report
0
6
12
18
24
30
G
am
ing
SocialN
etw
orking
Tech/Internet
Education
Sports/Recreation
FinancialServices
Restaurants/Dining/Food
C
haritable
O
rganizations
G
overnm
ent/Legal

User experience is now on marketers’ radar, thanks to ad blocking
Almost two-third of marketers surveyed said UX is a high priority
Source: Celtra
We don't think about it
It's somewhat important
It's high priority
It's our highest priority
X
22%
48%
26%
4%

9%
24%
21%
46% Content blocking
Subscription models
Paywalls
Using an ad block vendor
X
Most publishers will turn to content blocking
Publishers’ preferred response to ad blocking
Source: Celtra

Cord-cutting isn't just a buzzword anymore:
people are choosing on-demand streaming
services over cable subscriptions, leaving
advertisers wondering how to fill the gap.
Streaming Media

“Cord-cutting” is on the rise as cable subscriptions decline
Cable subscribers, by service
Source: Leichman Research Group
Millions
40
42
44
46
48
50
52
54
56
58
60
Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
TV Broadband Internet

Spotify is still the leading streaming music service
Paying subscribers in Q1 2016
Source: Spotify, Apple
Millions
0
10
20
30
40
Spotify Apple Music
11M
30M

Podcasts are increasing in popularity
Share of U.S. population that listened to podcasts in the last month
Source: Edison Research
PercentofU.S.Population
0%
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015 2016

Netflix is aggressively adding content
Netflix cost of content streaming
Source: Company Filings, Statiista
Billions(USD)
0
4
8
12
2010 2011 2012 2013 2014 2015

Higher income households stream more video
On-demand streaming and high-speed internet penetration are income-related
Source: Nielsen
18%
15%
35%
32% 29%
19%
31%
21%
4%5%
23%
68%
<$40k $40k-$75k $75k-$100k $100k+
Have broadband, but don’t
on-demand stream video
Stream on-demand video Don’t have broadband

Short-form video streaming is on the decline
Share of video content type streamed globally per year
Source: Conviva
Millions
20%
40%
60%
80%
100%
2014 2015
Live Movie Episodic Short-form

Marketing budgets may be going up, but are those
dollars being invested wisely? Knowledge
management and process inefficiency can drive
down high production costs.
Marketing Spend and Strategy

Search Ads
Social
Traditional 22%
12%
Display Ads
13%
Brand Publishing
14%
Programmatic
10%
Website & Ecommerce
15%14%
Social
Traditional 22%
12%
Display Ads
13%
Brand Publishing
14%
Programmatic
10%
Website & Ecommerce
15%14%
How does the average advertising budget break down?
Source: Percolate

Marketing represents an increasing percent of firm budgets
Marketing budget as percentage of firm budget
Source:The CMO Survey 2016
7
9
11
13
Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 Feb-16
8.1%
10%
10.4%
11.4%
10.6%
9.4%
10.9% 10.9%
10.1%
11.4%
12.1%
% Marketing Budget

Marketing budgets forecasted to increase 6.9%
Percent change in marketing budgets in next 12 months
Source:The CMO Survey 2016
Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15
0.5%
1.1%
5.9%
9.2%
6.7%
9.1%
8.1%
6.4%
6.1%
4.3%
6.7%
5.1%
8.7%
5.5%
6.9%
Change in Marketing Spending

New media formats are driving growing production costs
Top 5 Responses: “What are the top drivers of non-working spend for your team? (Select up to three.)”
Source: Percolate
Emergence of more expensive
media formats
Brief creation, planning,
and media evaluation
Employee talent costs
Agency costs
Lack of defined process
for newer media
Percent of respondents
0 5 10 15 20 25 30 35 40 45

B2C brands expect the most growth in marketing costs
Non-working spend growth trends (n < 12 excluded)
Source: Percolate
Percentofbudgetconsumedbynon-workingexpenses
0
10
20
30
40
50
60
70
80
90
100
Banking Consumer-Packaged Goods IT & Technology Manufacturing Retail Professional Services
37%
57%
51%
60%
78%
25%
51%
62%61%65%
89%
42%
Non-working spend has increased in the past year Non-working spend will increase in the next year

Production cost growth isn’t under control
Source: Percolate
How have non-working spend levels
grown in the last year?
2%
10%
26%
40%
22%
Increased signifcantly Increased
Stayed about the same Decreased
Decreased significantly
Have seen growth
in the past year
62%
4%
13%
33%
40%
11%
Will increase significantly Will increase
Will stay about the same Will decrease
Will decrease significantly
Expect non-working to
grow in the next year
51%
How do you expect non-working spend
levels to grow in the next year?

And here’s how much goes toward ad production
Source: Percolate
Averageshare(bymediacategory)
20
40
60
80
100
Traditional media Brand publishing Social Website & E-commerce Programmatic Display ads Search ads
38%38%40%40%42%43%
50%
Share of non-working spend Share of working spend

How Non-Working Spend Consumes Budgets Across Industries (n < 12 excluded)
Ad production costs don’t have an industry bias
Source: Percolate
Percentofbudgetconsumedbynon-workingexpenses
0
5
10
15
20
25
30
35
40
45
50
Banking Consumer-Packaged Goods IT & Technology Manufacturing Retail Professional Services
24%
19%
16%17%
23%
14%
42%
46%
32%
37%
41%
38%
Advertising Budget Marketing Budget

Production costs don’t have a revenue bias, either
How Non-Working Spend Consumes Budgets (By Revenue)
Source: Percolate
Percentofbudgetconsumedbynon-workingexpenses
0
5
10
15
20
25
30
35
40
45
Less than $50M $50M to $249M $250M to $999M $1B to $4.99B $5B or More
25%
21%
19%
17%
23%
42%42%40%
34%
40%
Advertising Budget Marketing Budget

Percentofbudgetconsumedbynon-workingexpenses
0
5
10
15
20
25
30
35
40
45
50
Less than $10M $10M to $50M $51M to $100M $101M to $500M Over $500M
27%
22%20%18%17%
46%
43%
38%36%37%
Advertising Budget Marketing Budget
…But they grow with a larger marketing budget
How Non-Working Spend Consumes Budgets (By Annual Marketing Budget)
Source: Percolate

How low can production costs get?
Non-working spend as a share of advertising budget vs. marketing budget
Source: Percolate
Percentofbudgetconsumedbynon-workingexpenses
0
4
8
12
16
20
24
28
32
36
40
Non-working as a share of advertising budget Non-working as a share of marketing budget
8%
24%
20%
40%
Average High Performers*
*High performers are respondents who disagreed that non-working spend
is too high, reported no growth in non-working spend levels in the past year,
and said they were confident in their ability to control non-working spend.

Marketing has a knowledge management problem
“Rate your company on each marketing knowledge metric during the last 12 months (1 = Poor, 5 = Excellent)”
Source: The 2016 CMO Survey by the Fuqua School of Business at Duke University. Note: Question asked irregularly.
AverageRating
1
2
3
4
5
February 2011 Agust 2013 August 2014 February 2016
Sharing valuable marketing knowledge Developing and using customer insights

0
10
20
30
40
50
Brand Marketers' Expectations Agency Marketers' Expectations
4%
16%
28%30%
Significant Shift Moderate Shift
Is a shift to in-house creative agencies imminent?
How marketers expect assignments to shift to in-house agencies
Source: RSW/US

Globally, venture capitalists are optimistic about
IoT startups, as recent funding increases show. But
enterprises are still cautious about IoT for data
security reasons.
Smart Tech and the Internet of Things

IoT startup funding has risen rapidly in the last five years
IoT Global Quarterly Financing History, Q1’10- Q3’15
Source: CB Insights
$Billions
Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15
Deals Investment ($M)
$434
$626
$428
$602
$548$547
$284
$350
$277
$479
$219
$199
$363
$301
$99
$268$262
$244
$165
$184
$270
$163$151
34
63
44
6565
54
37
64
42
54
29
38
30
43
26
28
33
26
2121
25
232222 23
25
21 21
26
33
28
26
43
30
38
29
54
42
64
37
54
65 65
44
63
34

Enterprises are concerned about IoT data security and privacy
Top Enterprise IoT Security Concerns (Global)
Source: Varmetric Data Threat Report, 2016
Protecting sensitive data
generated by IoT Devices
Privacy Violations
Identifying which
data is sensitive
Priveleged user access to
IoT data and devices
Attacks on devices may
impact critical conditions
0 5 10 15 20 25 30 35 40
n = 1100

Not so fast: Wearables will depend on connectivity through 2020
Wearable devices with and without connectivity (millions)
Source: Cisco
0
140
280
420
560
700
2015 2020
41
3.2
601
97
Dependent wearables Wearables with connectivity

In the age of the hyperconnected consumer,
brands have to design customer experiences
that ensure they meet customer expectations
and provide a seamless experience on all channels.
Customer Experience

Customer service: People still reach for the phone first
Customer Service Channel US Customers Use First for Urgent Issues (2015)
Source:North Ridge Group
Social media Email Live chat Phone
77%
8%8%2%

Facebook is the go-to channel for customer complaints
Social media platform US consumers are most likely to use for customer service (2015)
Source NM Incite
Facebook Twitter YouTube
29%
12%13%

Pricing, not advertising, influences purchase the most
Most important factors that influence US consumers’ purchase decisions (2014)
Source Accenture
Sales/ competitive pricing Superior products Superior customer experience Loyalty programs Relevant promotions Engaging advertising campaign Celebrity endorsement
61%
3%6%
26%31%35%36%

Percolate is The System of Record for Marketing.
Our technology helps the world's largest and fastest-growing
brands at every step of the marketing process.
Want to learn more?
Contact learn@percolate.com for more information
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Mihika Barua
Mihika Barua is a member of Percolate’s Integrated
Marketing team. Her focus areas are content
marketing and social media management.