As 2017 draws to a close, we’ve once again asked Street Fight staffers, columnists, and friends to look into their crystal ball and offer prognostications for what they thought will be the biggest story (or stories) in local in 2018. This is the second part of a two-part series — click here to see the first round of predictions.
From all of us here at Street Fight, we wish you a happy and prosperous 2018. We’re excited to see where the industry is headed next.
Last year, our columnist Damian Rollison predicted that voice search and artificial intelligence would top the list of major trends in local marketing for 2017. He wasn’t wrong, especially if one were to add augmented and virtual reality to the list. 2017 has shown us that voice, AI, and AR/VR are here to stay as fundamental factors in the evolution of local marketing. The question for 2018 is how businesses — from local players all the way up to Google, Facebook, and Amazon — will convert these technological advances into material gains.
Now that voice is accounting for more of search, potentially hitting half of all searches by 2020, businesses will need to adapt their advertising strategies to the new channel just as they once pivoted from desktop to mobile. Brands such as Ikea are spicing up in-store experiences with virtual reality, but 2018 will likely see more aggressive strategies that deploy VR in stores and outside of them to do more than entertain. Some brands will also look to amplify the impact of these technologies by leveraging them alongside one another, seeing what AR and VR can do when combined with the power of artificial intelligence. The greatest successes of 2018 will belong to the companies capable of showing us just what these technologies can do to drive customers into stores and grab their attention online.
Why Seeing Hope for Local News in 2018 Is Not Cockeyed Optimism
I don’t want to sound like a cockeyed optimist (apologies to love-crazy Nellie Forbush in “South Pacific’”), but I predict 2018 will be a good year for the local news industry.
It’s not that revenues will necessarily surge during the year — but that the industry is already in the middle of actually implementing, not just talking about, strategies that are likely to lead to blacker bottom lines.
The chief indicator is that local publishers, step by step, are setting up revenue programs that go beyond selling inventory to marketers.
Tronc, which publishes 11 major daily newspapers, including the Chicago Tribune and Los Angeles Times, reported a 90% year-over-year increase in its digital subs – to 220,000. Gannett’s more than 100 dailies reported a 60% year-over-year increase to 312,000. McClatchy’s 30 dailies reported a 15.6% increase to 92,000 in the third quarter of 2017.
Pure-plays are not moving into paywalled digital subscriptions as aggressively as daily newspapers. They’re mostly relying on voluntary programs that don’t produce as effective results.
Bklyner, which covers 11 neighborhoods in New York City’s most populous borough, has set a Dec. 31 “drop-dead” deadline to attract 3,000 subscribers. With about a week to go, it has about a third of that number.
Even a cockeyed optimist couldn’t ignore the dark headlines that pure-plays had to write about themselves in 2017: The shutdown of DNAinfo, the staffing cutbacks in operations at new Spirited Media (Billy Penn in Philadelphia, The Incline in Pittsburgh and Denverite in Denver) and, of course, the threat of a Dec. 31 shutdown at Bklyner.
But daily newspapers, while certainly not thriving, did not produce such dark headlines this year. One of the formerly most troubles operations – the network comprising the Philadelphia Inquirer, Daily News and philly.com – spent the year going through a massive editorial disruption.
Site by site, group by group, the industry is committing itself to building trusting relationships with present and future readers and advertisers. Of course, it’s a long leap for any news publisher to go beyond lip service and actually build trust into what it does every hour of every day of its operations. And daily newspapers have more resources than most pure-plays to commit to publishing trust-building content.
But there’s no alternative. When a news publisher builds trust, it widens and deepens its audience and creates stronger brand relationships with advertisers. Commodity content, when its sensationalized, can generate impressive pageviews. But those PVs end up produced a thin soup of CPM revenue.
I saw one large newspaper group bragging publicly that it generated 250 million page views monthly. But if many of those page views are priced at, say, $1 to $2 per CPM – which can and does happen in programmatic ad sales – the yearly revenue totals can end up being anemic.
When I think about how the local news industry will fare in 2018, I think about Nellie Forbush — the Nellie in the second and final act, who waits for her lover to come back from the war zone, not the cockeyed optimist of act one.
1. Artificial Intelligence and Machine Learning. Long-term investments are likely to bear fruit. AI and Machine Learning will increasingly help marketers integrate their media planning with Big Data analysis; and help connect local consumers with brands, stores, services and information.
2. The Use of Bots and Messaging. Local begins to scale better for many companies with the use of AI-driven Bots and messaging services. Many of these can intelligently deliver scripted answers to customer questions, send them more quickly to online shopping carts, and solicit valuable customer reviews.
3. Enterprise SMB Channels. “One size fits all” isn’t working for larger SMBs that have different needs than corporations (and much higher technology costs per employee.) Increasingly, they also need technology services. Companies like Dell, Lenovo, Sprint and Office Depot are investing heavily in customer support channels (CSRs, social media, Webinars, videos etc.) Will they also add meaningful service capabilities that bring them more into the “local” sphere?
Algorithms and Augmented Reality Will Team Up
Better forecasting of the offers consumers want and painting those ads into their landscape are much closer on the horizon for 2018. We have arrived at precipice where machine learning can assemble detailed patterns of consumer behavior to make predictions about where they will likely be on a given day. Coupled with the increased exploration of augmented reality for local marketing, overlaying content targeted at the consumer, it will possible to create road maps of virtual marketing tailored to individuals—while maintaining their privacy.
There is an opportunity for local marketing to not only prompt consumers with relevant ads during the course of their day, but to add AR overlays that make the campaigns immediately relevant to them. Glimmers of such possibilities have been depicted in science fiction movies such as Minority Report (2002), where holographic ads personalized to the individual appear as the pass by beacon-like scanning devices. Rather than push that content out into the public for others to see as depicted in the movie, the real world version will be much more private and contextual to the moment.
Imagine campaigns that adjust over the course of the day, introducing consumers to offers or guiding them to nearby businesses that address their needs at that time, coupled with AR that showcases directly to them where to find it and how they can take advantage of it. That is the promise dangling like a ripe apple on the branches of 2018.
Local Trends Toward Pay to Play — And Google Gains Local Trust
The biggest stories in 2018 should be that government reigns in the duopoly to truly protect consumers and gets serious about protecting privacy. Ok. That’s not going to happen.
What I think you will see, at least from Google is more of the same… Local will continue to become more pay to play. And more than that we will see the beginnings of Google becoming the brand of trust (as opposed to the local brands) in the local markets.
Google will take a very aggressive local approach with a ton of new SMB and enterprise features that engage businesses worldwide with their dashboard to buttress their local data lead.
Google will continue improving the machine learning capabilities of their low end AdWords Express products to the point that agencies begin to realize that the low end has been totally taken away from them.
And we will see more along the path started with Local Services ads with the disintermediation of local brands. Google will strive to pull an “Amazon” and become the goto local services marketplace in areas well beyond plumbing and locksmiths.