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The 50 Most Important Marketing Charts of 2016

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The job of the marketer is never static: it changes in response to shifting patterns in consumer behavior, content consumption, and device usage. Every year, we compile the 50 most important trends for marketers across mobile, social, content marketing, and advertising. This year, we bring you a collection that includes newer trends that made a mark last year — including customer experience and ad blocking — and whose impact will continue to be felt.

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The50MostImportant MarketingChartsof2016

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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

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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

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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

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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%

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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

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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

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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

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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

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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

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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"

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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

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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

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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

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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)

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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%

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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

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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

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“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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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?

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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

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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

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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

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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%

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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%

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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%

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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 or request a demo today at percolate.com/request-demo Mihika Barua Mihika Barua is a member of Percolate’s Integrated Marketing team. Her focus areas are content marketing and social media management.

More Related Content

The 50 Most Important Marketing Charts of 2016

  • 2. 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
  • 3. 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
  • 4. 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
  • 5. 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%
  • 6. 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
  • 7. 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
  • 8. 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
  • 9. 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
  • 10. 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
  • 11. 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"
  • 12. 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
  • 13. 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
  • 14. 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
  • 15. 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)
  • 16. 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
  • 17. 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
  • 18. 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
  • 19. 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
  • 20. 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
  • 21. 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
  • 22. 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
  • 23. 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
  • 24. 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
  • 25. 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
  • 26. 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
  • 27. 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
  • 28. 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%
  • 29. 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
  • 30. 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
  • 31. “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
  • 32. 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
  • 33. 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
  • 34. 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
  • 35. 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
  • 36. 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
  • 37. 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
  • 38. 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
  • 39. 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
  • 40. 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
  • 41. 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
  • 42. 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
  • 43. 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?
  • 44. 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
  • 45. 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
  • 46. 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
  • 47. 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
  • 48. 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.
  • 49. 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
  • 50. 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
  • 51. 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
  • 52. 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
  • 53. 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
  • 54. 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
  • 55. 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
  • 56. 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%
  • 57. 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%
  • 58. 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%
  • 59. 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 or request a demo today at percolate.com/request-demo Mihika Barua Mihika Barua is a member of Percolate’s Integrated Marketing team. Her focus areas are content marketing and social media management.