Later this week, BIA/Kelsey will release its annual analyst predictions. As always it will aggregate the coming year’s outlook in all of the key areas that analysts cover.
As a sneak peek, below are the predictions in the mobile, social and emerging tech categories. Some of the predictions are already playing out in these fast-moving sectors.
Stay tuned for the full report, and ongoing coverage into ’17.
2017 Predictions: Mobile, Social & Emerging Tech (Mike Boland)
1. U.S. mobile ad revenue will surpass $40 billion in 2017. Search will continue to hold the leading share of this total (40 percent in 2017) but it will continue to be chipped away by Native social ads (35 percent in 2017) such as Facebook News feed ads, Instagram ads and Snapchat. Facebook’s revenue growth will drive much of this, but it will have to extend beyond the company’s owned and operated properties by relying more on the continued build out of the Facebook Audience Network. That will include third party apps as well as advertising that Facebook will facilitate in other places such as over the top TV apps on AppleTV an ROKU. It will form these deals using the appeal of its granular audience targeting from being the world’s social graph.
2. Voice search will reach 25 percent of mobile search volume. This will mostly happen through personal assistant apps such as Google Assistant, Microsoft Cortana, Apple’s Siri and Amazon’s Alexa. Google will emerge as the winner in what will be known as the “personal assistant app wars.” This war will be won on data, which Google possesses from its search index and knowledge graph. Amazon’s Alexa will shine for product and commerce applications while Microsoft and Apple will exceed with vertically specific content niches where it can establish best of breed content and data partners (i.e. weather). Though Siri lacks comprehensive data, the wild card in the personal assistant app wars will be Apple’s Airpods. They’ll emerge as a pervasive and ambient audio channel to inform consumers about their surroundings. AirPod usage behavior will be established in 2017, with ad models to follow in later years. Based on growing prominence for these channels, AI will become the next battleground in local commerce.
3. Chatbots and conversational commerce will grow into a meaningful local commerce channel, especially for simple consumer requests like appointment scheduling. But it won’t be the dominating force that its 2016 excitement levels suggested. Mobile messaging revenues in the U.S. will total roughly $630M (2 percent of U.S. mobile ad spending), which includes sponsored/paid placements in conversational commerce and chatbot interfaces. Consumers — driven by a human need to converse — will opt instead to call businesses in many cases, meaning voice will sustain its position as a primary local commerce modality. This will especially be the case in high value verticals with complexity and high-consideration cycles (autos, financial services and healthcare). Global Click-to-call spending will exceed $8 billion.
4. Facebook will continue to pull ahead from the pack as the leading local marketing channel, reaching 70 million worldwide Pages, 7 million of which are paid. It will add to Pages and ads utility by adding more action buttons beyond “buy, “call” “message” and “book”. These action buttons will grow into a broader range of consumer options. To get there it will both build these internally and partner with best of breed startups in the service-commerce realm, to bring added functionality to pages in different verticals (restaurant bookings, service appointments, etc.).
5. Snapchat will emerge as the fastest-growing localized mobile marketing channel of 2017, with ad revenue that exceeds $1B. This will build from its geo-filters product, as well as Stories. It will start with brands, which will build localized campaigns around native and content marketing. This will bring back the golden age of quality creative to mobile for the first time. It will be driven by thoughtful multimedia creative, which will resonate with buying-empowered millennials who are prevalent on Snapchat. Snapchat will also launch additional ad localization features this year as well as commercial and transactional features such as Pinterest-style indicators of product identification, local availability and transactional capability. It won’t yet be adopted in these ways by SMBs in 2017, except for a few early adopter exceptions.
Bonus Prediction: In the world of Call Commerce: Facebook will acquire a call analytics provider. This will happen as a result of Facebook’s continued push into connecting consumes and businesses. It will bring more functionality to both, through Pages (see above) and messenger, by having better call functionality and analytics. The former will attract users in the midst of the “messaging wars” land grab, and the latter will help it to continue to attract businesses to use these tools for marketing and presence.