How to Execute Against the Digital Trends of 2016

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Digital in 2016: The year of consumer-led communications marketing Executive Summary Find the full trends forecast at edelman.com JANUARY 2016

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What’s Next in Digital Marketing? We looked at consumer insights to predict the biggest trends for 2016. Influence: What inspires them? Behavior Engagement Communication How are they behaving on and offline? What content and experiences engage them? What are they saying? 2

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Consumers Want More From Brands 90% of consumers expect brands to innovate with societal impact in mind* *Edelman. **Edelman. 70% want brands to communicate openly about their products** Innovation and the Earned Brand. 2015. Brandshare. 2015 3

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Today’s consumers are more powerful than ever. Implicitly through behavior and data — and explicitly through direct communication — consumers are telling us what they want. 2016 is… THE YEAR OF THE CONSUMER MARKETING DIRECTOR

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Key Learnings for Marketers in 2016 Evolve to meet consumers’ high expectations for brands—from responsiveness to social action Engage influencers to address consumers’ rising skepticism of media and advertising Leverage emerging technology to better listen to and engage with consumers Deliver real, contextual value when and where consumers demand it most 5

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Key Digital Trends Put Consumers at the Center of Brand Marketing 1 VIDEO, VIDEO, VIDEO 4 2 INFLUENCERS AS CREATIVES SOCIAL LISTENING AS SOCIAL INTELLIGENCE 5 3 THE BUY NOW REVOLUTION CROSS-DEVICE CONSUMER JOURNEY MAPPING And, we’re keeping an eye on virtual & augmented reality, beacons, esports 6

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Video Engagement Dominates Digital Platforms Views Per Day Estimated 10-20 Billion 8 Billion 6 Billion 4 Billion 80% of all consumer internet traffic will be dedicated to video consumption by 2019* *Cisco Visual Networking Index: Forecast and Methodology, 2014-2019 White Paper. May 27, 2015. 8

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Trending Formats Engage Consumers Livestreaming 360-video Crowdsourcing Video Influencers Short Form Bits & GIFs 9

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How can brands keep up? Build a holistic, storytelling strategy with your consumer in mind Make the most of your investment with a multi-platform approach Drive discoverability via organic optimization and paid media 10

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Influencer Popularity Is On The Rise 12

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Influencer Engagement Supports Business Objectives 93% 75% of marketers believe influencer marketing is effective in raising brand awareness* of marketers believe influencer marketing generates sales leads* 5x ROI Marketers are making $6.50 for each $1 spent on influencer marketing** *Augure. State of Influencer Engagement 2015, conducted by Schlesinger Associates. June 18, 2015. Via eMarketer, Inc. **Tomoson. Influencer Marketing Study. 2015. 13

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The Influencer Should Be an Extension of Your Creative Team Petco* Comedy Series with YouTube Star Toby Turner • 2.2 million views • 98% positive sentiment • +65% subscriber growth • 300% increase in views of catalog content *Edelman client 14

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How can brands keep up? Choose influencers who will resonate with your consumers through strategic data analysis Put storytelling at the heart of it Grant the influencer creative license Get a good deal by partnering with experts 15

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Nearly Every Major Platform Supports “Buy Now” Functionality $30BN Projected 2015 income from social commerce* *Statista. Worldwide social commerce revenue from 2011 to 2015. 2015. 17

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Consumers Want Exclusive and Limited-Time Shopping Incentives Free Shipping Offer Factors that Would Encourage US Digital Buyers to Make a Purchase via Social Media When Holiday Shopping, Sept 2015 (% of Respondents) 63 Exclusive Discount (Only Members Of Social Network) 56 Daily Deals 55 Seeing A Unique Product 55 Rewards/Loyalty Points 52 Seeing A Product I Had Recently Viewed When Shopping Online 52 A Product Has Received Numerous “Likes” 37 Ability To Vote On Which Promotion Company Offers To Social Network 35 MarketLive. 7th Annual Holiday Research Study. Oct 14, 2015. Via eMarketer, Inc. A Friend Has “Liked” A Product 33 18

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How can brands keep up? Understand your consumers’ shopping behaviors Create contextual “buy now” opportunities that improve the shopping experience, not detract from it DRIVE DISCOVERABILITY Build a seamless VIA ORGANIC omnichannel experience OPTIMIZATION AND online and offline PAID MEDIA 19

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Consumers Want Brands to Listen 78% Of consumers think it’s important for brands to listen and respond thoughtfully BUT ONLY 17% Feel that brands are truly listening* *Edelman. Brandshare. 2015 21

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Social Listening Should Guide Your Business Customer Service Product Development Product Improvement Cause & Social Purpose 22

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Technology Enables Better Business Practices TECHNOLOGY OUTPUT Visual Listening uses computer vision to recognize brand presence in photos. Facebook Customer Service tools award a “Very Responsive to Messages” badge to brands who maintain a 90% response rate within 5 minutes. Social Listening tools provide insight into conversations, perception, competition, influencer identification and more. Broader Contextual Insights Better Consumer Experience Stronger Business Intelligence TOOLS 23

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How can brands keep up? Operationalize social listening with the right technology Pair social listening with traditional market research DRIVE Be open to consumer DISCOVERABILITY insights that may VIA ORGANIC disrupt OPTIMIZATION AND your business for the PAID MEDIA better 24

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Cross-Device Consumer Behavior Has Been the Norm for Several Years 90% of users start an activity on one device and finish on another* *Google. The New Multiscreen World. August, 2012. 26

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Emerging Technologies Enable Cross-Device Consumer Tracking Like Never Before SAMPLE QUESTIONS TO UNDERSTAND THE CONSUMER JOURNEY: TOOLS: How does a consumer find out about my product? Do they conduct research on their phones, tablets or desktop? What ads do they see? What motivates them to make that final purchase? Do they purchase on a desktop or in-store? 27

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How can brands keep up? Keep an eye on emerging tracking technologies as this trend becomes more sophisticated Test and learn with targeted messaging as you start to build an attribution model DRIVE Be authentic and DISCOVERABILITY transparent to VIA ORGANICaddress OPTIMIZATION AND consumer privacy PAID MEDIA concerns 28

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WATCH THIS SPACE VR and AR Beacons eSports Changing the Future of Storytelling Adding Value in Context while Yielding Behavioral Insights Amassing Huge, Captive Consumer Audiences 29

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Read our full digital trends forecast at edelman.com

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