TRS 001: Digital Marketing Prediction Rundown with Mike Canarelli and Matt Burkarth
At the beginning of 2018, the team at Web Talent Marketing set out to make some pretty bold predictions about the future of digital marketing. Now that 2018 has come to a close, our CEO Mike Canarelli and lead PPC expert Matt Burkharth are taking a look back to see which of our predictions really came true and which have left us scratching our heads.
Our team explores what Amazon’s unprecedented growth means for e-commerce businesses as well as how we see AI changing the agency industry in the future. If you like to dream big, get out your crystal ball and join us for this episode of forward thinking.
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Marcus: Hello, marketers and business leaders. I’m Marcus Grimm, and welcome to The Revenue Stream, the podcast from Web Talent Marketing. Here we discuss everything you need to know to build brands, generate leads, and convert sales from some of the brightest minds in marketing.
Marcus: Hey, welcome marketers and business leaders. And you know what? It seems like this time of year prediction posts are all the rage. There is absolutely no better link bait than pulling out the proverbial crystal ball and saying what’s coming next? And well, one of the reasons we do that is because with very, very limited exceptions, nobody ever looks back to see just how well they did. Well on this episode of The Revenue Stream, we’re going to do just that. We’re going to revisit the predictions we made one year ago, evaluate their effectiveness, and then, well, because it is good link bait, we’re going to throw a few darts at 2019.
Marcus: So last year, Web Talent Marketing, we released a slew of predictions, penned by a wide variety of members of the Web Talent Marketing team. And today I’m joined by two of the most senior guys who, if they didn’t make these predictions themselves, well they certainly blessed to them. So we’ve got Mike Canarelli the CEO of Web Talent Marketing and Matt Burkharth, the Manager of Paid Advertising. Matt, did you ever think this day was going to come when people would actually say, let’s see how we did on these predictions?
Matt: I did not. You typically don’t see the followup. Uh, nearly every agency does their predictions, but this is a first for seeing the actual follow up.
Marcus: Well, we’ll see if it’s the last. So the format for this is pretty simple. I’m going to read the predictions and give you three choices: either nailed it, whiffed on it, or I still really, really like this one, but maybe I was just a little bit too early. Maybe that crystal ball was looking too deep into the future. Mr. Canarelli, as CEO, we’ve got your name on a lot of these. Are you okay with that format?
Mike: Looking forward to it. Absolutely.
Marcus: All right, let’s dig into it then. Well, the first one was a bold one. Amazon is going to use video in a big way. Again, we said this last year, Amazon is going to use video in a big way, especially for user reviews. One of the most swift growing categories of work that Matt’s team manages is in fact are growing Amazon account management department. Matt, how did we do in this one?
Matt: I would say that we nailed that one. Um, the key term of “big way,” I’m not quite sure if that’s correct. But Amazon has definitely increased their video usage. I think one of the biggest areas that we’re seeing an increase is the customer reviews. They’re actually called related video shorts, and you’ll see them on the product pages of any given product. Users can actually submit their videos, and there’s different categories of things that you can submit. So you can do an unboxing video, a product demonstration, or the setup. There’s a couple other categories there, but those are picking up a lot of traction. I’ve been seeing them, just from my own personal shopping, on nearly every single that I’ve been looking at.
Marcus: Interesting. Yeah. Would you expect this one to continue up through the next year as well?
Matt: Absolutely. I don’t have any numbers, but I would assume that these videos are really increasing the conversion rates for products. People want to see the product in use. Typically people go to YouTube for that. They first find the products on Amazon, and then go to YouTube to actually look for the product to get some reviews. Now all of that’s available on Amazon. So yeah, I would expect that to continue.
Marcus: So we nailed that prediction. We’re off to a great start guys! Uh, well here’s prediction number two. Amazon will become the third largest digital advertising platform on the web behind only Facebook and Google. Now, technically this one was a little bit of a no brainer. As according to eMarketer, it actually happened in 2017, but nevertheless, Amazon was a distant third in 2017. Matt, did they close the gap in 2018, and what do you foresee for 2019?
Matt: They did close the gap. Revenue this year, for Amazon ads, is really exceeded everyone’s expectations. It’s predicted to be at about ten billion in revenue this year. Everyone was saying that they’d be around five, so-
Marcus: They doubled it?
Matt: Yes. Nearly doubled it. I’d love to see the final numbers at the end of the year, but I think they’re going to be around ten billion. To put things in perspective though, you know, ten billion is a lot, but last year Facebook did about 20 billion and Googled did about 40. So they’re closing the gap, but they’re still a far third.
Marcus: But I think even when they passed and became third, it was only like three billion…?
Marcus: And you’re saying they finished up last year at five?
Matt: Yup. They did three billion last year. Amazon did three and they’re going to do about ten this year.
Marcus: Outstanding. Wow. That’s a big one.
Marcus: Okay. The third prediction, this one’s another one about Amazon and another one about video, that Amazon would at least announce, if not roll out, all video ads on Prime. Now this one was hinted about in Ad Age all the way back in November of 2017. At the time Ad Age speculated that there would be a supported FREE version of Prime. Now that didn’t happen, but nevertheless, we did see video ads hit Prime as of a few months ago. Mike, are you surprised that Amazon has found yet another way to turn a buck?
Mike: Absolutely not. And I think we’re still at the beginning of Amazon’s kind of innovation and iterating their models on all of their sub-channels within.
Marcus: Absolutely. Absolutely. So prediction number four, um, and this was an interesting one. Amazon will give viewers discounts exclusively for interacting with ads. In other words, if I interact with this ad, I get $2 off, or 20% off, or whatever. If I watch the video, I will save money on this product. Matt, how’d we do on that one?
Matt: To the best of my knowledge, we whiffed on that one. I have not seen anything along these lines. I’ve researched it, and I’m pretty sure we whiffed this.
Marcus: Any thoughts on, do you still like that prediction? Would you like to keep it in for next year?
Matt: Well, I did not give my blessing on this prediction. I don’t think that this will ever be a thing. Yeah, I really don’t. What I do see is Amazon using things like video and other types of formats to increase engagement and increase conversion rates, but I don’t think they’re going to offer incentive-
Marcus: Any reason behind that belief?
Matt: Well, I mean it’s taking away from their profit margins. Why would they offer discounts when they’re already doing so well and seeing these huge growths? You know, maybe ten years down the line when their revenue stops increasing at this rate, they may start to get creative there, but there’s no need for it right now.
Marcus: Mike, do you agree?
Mike: I do. I think it has potential that, you know, you’re incentivizing somebody to interact with an ad which could potentially skew metrics from an advertiser’s perspective and it would be a little bit tricky to roll that out I think.
Matt: Yeah. I’m not sure how advertisers would feel about that either. I know, as an advertiser myself, it does, I skews the metrics and you can’t get a true gauge of how effective your ad is if they’re, you know, starting to incentivize it to get clicks.
Marcus: Mm-hmm. So we have another prediction that was an interesting one – and yet another Amazon one! We predicted Amazon would expand its private label lines by 25% and that food and beverage would be the logical places for them to do so. How’d that one work out, Mike?
Mike: So it turns out we weren’t bullish enough on that. By April, Amazon had nearly doubled their private label lines to more than 75, but at the same time, only two of them were in grocery. So I think we’re absolutely going to continue to see more and more and more of that. What categories we’re going to see that growth, you know, that that’s yet to be seen.
Marcus: Taking a look at food and beverage. Matt, what would have been some of the reasons that we were looking at that category, and would you expect more white label on that side over the next year?
Matt: In food and beverage? Yeah, I would assume so. I mean, the acquisition of Whole Foods throws a wrench into everything. I’m not quite sure where they’re going to take that yet. There’s a lot of speculation that they’re going to really increase their storefront footprint there, similar to a Target or a Walmart, and start offering Amazon stores where you can purchase food. Um, I don’t know that that’s a good question.
Marcus: No, that’s outstanding. Okay, so like most marketers last year, we placed a large bet on AI suggesting that, after the analytics intelligence option was added to Google Analytics, that AI might, and I quote, “fundamentally change the way we measure performance.” That was a bold prediction. Where are we on that one, Matt? Is that new feature in Google rocking your socks off yet?
Matt: No. Again, fundamentally change: that’s a pretty aggressive word. Now we do use the AI in Google Analytics, but at this point as an agency we’re using it more as a safety net. So we’re using it for things like we get custom alerts when traffic is down. If revenue sees like a 30% dip a day over day or week over week, then we’ll get an alert to maybe notify us that something is wrong on the website. We get a lot of alerts for if page speed starts to decrease, then we know we may have to fix some Java script or, you know, maybe some images are too large and they needs some work. But fundamentally change? Not yet. I do like the feature. It gives some really good insights, and it could point you in directions of some problems that you weren’t previously aware of, but it hasn’t changed the day to day.
Marcus: Do you still think it could fundamentally change?
Matt: Yes. I mean AI is the factor that everyone’s talking about in digital marketing, and the rate at which AI learns and really improves is just outstanding. I think I would put a five year timeframe on AI before it fundamentally changes the digital marketers day to day.
Marcus: And it would also seem to me, it seems like where AI is really getting traction, you need a lot of data, right? So if you’ve got a smaller B2B brand, what’s going to fundamentally change if you’re only getting 10,000 website visitors a month, is what I’m getting at.
Marcus: Okay. Well, marketers, we love the chase, those shiny things. And one of our predictions last year, this one almost cracks me up a little bit, was that retailers were going to begin thinking more deeply about crypto. Is it me, Mike, or when the bitcoin bubble burst, did some of that thinking kind of move to the back burner of the news?
Mike: I’m almost speechless on crypto. I mean, it is one of those things that it’s hot, and then it dies, and then it’s hot again, and people are still talking about it. And you know, in my day to day conversations, people are still buying Bitcoin and Ripple or whatever the other currencies are. I will reserve judgment for probably about 25 years on crypto.
Marcus: Matt, do you concur?
Matt: Yeah, I don’t put too much thought into crypto. A couple of years ago, I was interested in it, and I wanted to purchase, but I’m really glad I didn’t- at least at least Bitcoin. Yeah, I try not to get too into that market; it’s really volatile.
Marcus: Alright, so fair to say we’re going to leave crypto off the 2019 predictions?
Mike: Fair to say, Marcus.
Marcus: So we had to relate to predictions within last year’s report. The first was that voice search would account for more than 40% of traffic on mobile, and that marketers would become more concerned about it. How we do on that one, Matt?
Matt: I don’t know, Marcus. Google really hasn’t released that data, I think, since 2016, but I can tell you that we are seeing an increase, at least in Google, when we mine our search query reports. Particularly in the past year, we’re seeing a lot more of the “Ok, Google” types of queries. So I am seeing an increase on my end. I don’t know the exact number.
Marcus: Makes sense. Makes sense. We may as well be optimistic and say we nailed it. It’s hard to discuss voice without discussing the smart home, and in our report we predicted 30% growth in smart home listening devices. How did we do on that one?
Matt: Well, as we record this, we don’t really have the final figures, but the estimates at the beginning of Q4 had it in about the 32% range. So I don’t know. I’d say we nailed that.
Marcus: Nailed it? That’s very accurate! Within 2%; Outstanding. Well here’s an interesting one to unpack. When our report came out, we did predict that some major brands would leave Facebook over a lack of transparency. And again, you’ve got to think of things contextually. It was a year ago that there were some Facebook scandals going on, and the prediction, Mike, was that some major brands would leave Facebook over lack of transparency.
Mike: Yeah. And I think that did happen. You know, there was a lot in March and April in the news about, you know, some brands pulling away and certainly a lot of opinion and noise out there about it. But, you know, Facebook’s second quarter ad revenues were up more than 40%, and that’s where they expect to finish the year. So, I guess there are some brands that left, but apparently not quite enough to matter.
Marcus: I guess, regardless of what industry you’re in, if your revenues are up 40%, those losses don’t really sting so much.
Mike: Right. 40% is fine.
Marcus: So many online, pieces of predictions here. Let’s close up with a couple that we had regarding bricks and mortar because, of course if you’re selling more stuff online, how is that impacting the offline? The first would be that Google would include physical store visits as conversion data- trying to tie together that online world and the offline world. This has been discussed for a while so it wasn’t a complete surprise when it happened. Matt?
Matt: Yeah, we’ve been talking about this for about three years now, and it is starting to become more prevalent and a lot of the accounts that we’re seeing. To be more specific, there’s a feature in Google Ad Words where you can track in-store conversions, and you can tie that back into your ad spend and ultimately your revenue.
Marcus: That gives you a huge holistic picture.
Matt: It does, it does. It’s great for brick and mortar because that piece has always been missing. You know, you could get the traffic to your website and you can get phone calls. And let’s say you were an e-comm store, you can get purchases online, but you would never know how many people actually came to your store.
Marcus: So is this available for everyone?
Matt: It’s not. To the best of my knowledge, we’re seeing that it takes about a thousand clicks a month to actually get that feature. So campaigns and accounts that generally have less than a thousand clicks, we’re not seeing at all. Um, you also have to link to your Google My Business extension and have location extensions enabled in your account. And, yeah, those are really the only two qualifiers, I think. But something that I am excited about in this particular, I guess realm, of Google Ad Words is the new Google Project Beacon. So a lot of our clients this past year have been getting, in the mail, this little- it almost looks like a Google home- device, and it’s a bluetooth beacon. And what it does is it allows you to ping cell phones that are nearby, and then ultimately tie it back to an ad words account. So, hypothetically speaking, what we should be able to see in the very near future is how many actual people that clicked on your ads were in, I don’t know the exact radius of your store, but I would assume within like a hundred feet of your store and then ultimately you could use that as in-store conversions.
Marcus: So I remember about five years ago when I was doing a predictions report, I was super bullish on beacons, and I kept tabling that bullishness. Are you telling me, that for 2019, can I be bullish on beacons?
Matt: I think can be bullish on beacons, yeah.
Marcus: Outstanding. Well that’s the plan. Yeah.
Matt: Google is pushing them hard. So when Google pushes something that hard, I think we can chalk that up to a strong prediction.
Marcus: That’s my big one for 2019: bullish on beacons.
Mike: I like it.
Marcus: All right, so speaking of those bricks and mortar stores closing, here’s the last one of our predictions from last year that we’re going to go through. In 2017, keep in mind there were more than 5,000 retail store closures. So when you drive down the street and you see those big dark windows, that’s why. Last year we predicted that there would be even considerably more in 2018. Now at first glance we might be right: Lowe’s, Foot Locker, JCPenney, Macy’s. All of them and more took it on the chin, Mike.
Mike: And yet the data shows overall store closings are down a third this year, suggesting that potentially this trend is starting to flatten out a bit. Possibly retailers have found a way to really kind of bring the experience from, you know, shopping in, store shopping online, to really kind of create a hybrid that that is kind of helping them figure out how to keep the doors open or be a little bit more intelligent about it. So, you’re bullish on beacons. I am going to make this my prediction for 2019.
Marcus: Outstanding. And, Matt, as we wrap up here, we’ve extended some of our predictions into the new year already on the program. Any you would like to add for next year?
Matt: Yeah, I don’t know if I’ll call them predictions yet, but I’ll tell you some things that I’m really excited about that I think are going to be huge in 2019. First of all, the new Bing and LinkedIn integration. So we’ve been talking about this, again for years, since Microsoft purchased Linkedin, but it is now here. So you can target in your Bing Ads account demographic data from LinkedIn. So things like job title, company, company size, you can specifically only target those individuals in your Bing Ads account. o this is a big play in the B2B realm, and I think advertisers are really going to make a push for this.
Marcus: I think what it also will do is it’s going to really lower that floor for people that want to get serious about Account Based Marketing-
Marcus: Where we’re lots of these platforms require some big upfront spend. I don’t have to do that to participate in this program.
Matt: Yeah. There, there is no minimum spend. You can spend as little as $500 a month, and let’s say you want to target big Pharma. You can absolutely do that. So it’s exciting. We’re testing it out with a couple clients at the moment, and we’re seeing some really good data there.
Marcus: Very cool. Anything else you’re looking at?
Matt: Yeah. There is a new feature in Google that I’m excited about. It’s pay per conversion. So Google traditionally has been pay per click and pay per thousand impressions (AKA CPM). In display campaigns, there’s a new option where you can only pay when a conversion occurs. So in other words, your display campaigns are completely free if nobody converts off of them. Now the term conversion, you know, that’s the key here. It’ll probably be what we call a view through conversion, but still that’s huge. And Google’s doing a lot of things like that to make them more attractive, I guess, to potential advertisers. So we’re testing that out as well. I don’t have a lot of data yet to share, but yeah, I like it.
Marcus: But it sounds like, the one prediction we can all agree on for 2019 is more innovation, more change.
Marcus: All right, well that’s going to do it for the predictions on this program. However, we do get to my favorite part of the program, which is the marketing minute where I’m going to do rapid fire questions with my two guests: Matt Burkhart and Mike Canarelli, both from Web Talent Marketing. Gentlemen, I hope you’re ready for this because it’s my favorite part of the show. Okay. Matt, you’re going to go first. First question is Apple or Android?
Marcus: We had two Apples. Outstanding. Okay. Well this is a tough one for a PPC guy: ad blocker or no.
Matt: Oh, you’re killing me. Um, ad blocker in my personal day to day life, ad blocker.
Marcus: Sure. Mike?
Mike: Same ad blocker.
Marcus: Email or text?
Mike: Text… but both? Let’s go with text.
Marcus: Facebook or LinkedIn?
Matt: If you had asked me last year, I would’ve said Facebook, but LinkedIn now. Facebook is becoming less and less attractive.
Marcus: Interesting. And, I’ve asked a similar guest, is it because LinkedIn is getting better or is Facebook just getting worse?
Matt: I would say both.
Matt: Yeah. LinkedIn’s targeting options are getting great. I’ve noticed that they’re becoming less expensive- they’re notoriously expensive. And Facebook, on the other hand, the costs are increasing there. They’re taking away a lot of our targeting features and a lot of the metrics are just super vague.
Marcus: You’re such a professional, though. This question really is about you as a person.
Marcus: Facebook or LinkedIn?
Marcus: Mike, how about you?
Marcus: Outstanding. All right. Snapchat or Instagram?
Marcus: All right, Mike?
Marcus: Steve Jobs, Elon Musk, or Don Draper.
Matt: Hmm. Uh, I would say Elon.
Matt: All right, we’ve got a musk fan in the house. Mike, what about you?
Matt: Don Draper.
Marcus: Alright, nice. Timex, smartwatch, or bare wrist.
Marcus: He’s holding up a Timex! Mike?
Mike: Bare wrist.
Marcus: And as our final question: Matt, are you a cable-holic or a cord cutter?
Matt: I have been a cord cutter for years!
Marcus: Proud, card-carrying cord cutter! And, Mike, you’re nodding emphatically, right?
Mike: Cord cutter.
Marcus: Outstanding. Well, hey, this is, this has been a very, very fun episode of The Revenue Stream, which we are calling “the reckoning,” and gentlemen, I think, I think we can all agree you did a pretty decent job on the predictions from last year, and we’re looking forward to an exciting new year. My name is Marcus Grimm. You’ve been listening to The Revenue Stream from Web Talent Marketing.