Ad Age's Marketing Predictions 2016

From Super Bowl to Volkswagen to Retail and More

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Expect Volkswagen to increase ad spending in 2016.
Expect Volkswagen to increase ad spending in 2016. Credit: Volkswagen of America, Inc.

Volkswagen Will Boost Ad Spending
Even as Volkswagen curtails capital spending to account for losses stemming from the emissions cheating scandal, the German automaker will significantly increase ad spending in the U.S. as marketing becomes a key plank in its strategy to regain favor with American consumers. –E.J. Schultz

Smaller Restaurant Players Will Play Up Value
As much as restaurants say innovation and newness entice diners, value bundles are in play in early 2016 and are likely to persist in the shaky U.S. economy. Patrons like to feel like they're getting bargains even when treating themselves. Chains have largely moved away from a $1 price point but still emphasize the price of a bundle, whether that's $2, $4, $5 or even $20. Chances are, smaller players will follow the leaders and play up their pricing. –Jessica Wohl

Celebrities Take Over Super Bowl
Celebrities have always been a big part of Super Bowl advertising, but this year, marketers will seek to leverage famous faces in their ads like never before. Bud Light is among the marketers using the game to launch a new campaign, and celebrities will play a significant role. –E.J. Schultz

Mallification of Department Stores
Department stores, dinosaurs of a long-ago era, are facing sluggish sales as shoppers move online and buzzier startups attract younger consumers. In 2015, we saw some marketers use one of their greatest assets—real estate—to improve their chances of survival in the retail race. After buying cosmetics company Bluemercury, Macy's opened the beauty brand's shops within its own stores, and partnered with Sunglass Hut and Best Buy for other shop-in-shop collaborations, essentially becoming a mini mall of other stores. JC Penney, which has housed Sephora outposts for more than a decade, is now adding salons from In Style to its stores. This year will only see the trend continue, as department stores transfer some of the sales risk to other retail partners in a potentially synergistic relationship. –Adrianne Pasquarelli

Relaxed Rule 40 Will Cause Olympic Marketing Hurdles
Rivalry at the Rio 2016 Summer Games between Olympic sponsors and athlete sponsors will likely be as strong as competition among the Olympians themselves.
In mid-2015, the International Olympic Committee and its U.S. counterpart issued new, less strict guidelines around Rule 40, a regulation that previously prohibited athletes from promoting nonofficial sponsors during the Olympics. The rule, which athletes have hotly contested for years and which even sparked a social media rebellion at London 2012, now allows Olympians to promote personal sponsorships leading up to and during the sporting event. In the past, athletes could have been disqualified from the games or had their medals taken away if they appeared in any marketing from non-Olympic sponsors.

With the updated guidelines, athletes will gain additional financial perks and be freer to participate in social media, building their own brand voices. However, stipulations still exist around Rule 40 for the upcoming Rio Games: Campaigns must be continuously running no later than March 27, and assets must be generic and have no direct connection to the games or any Olympic intellectual property. While the relaxed rule will definitely benefit athletes and their individual sponsors, it's likely to cause a number of disputes with major Olympic sponsors, such as Procter & Gamble and McDonald's. For example, long-term Olympic partners may nitpick about terminology or images athlete sponsors use in ads or on social if they too closely link to the games. –Lindsay Stein

Agency Shakeups in the Food Sector
Consolidating companies are likely to shed some of the agencies they've relied on in favor of cost cuts and quicker campaign turnarounds, especially as smaller shops tout their in-house editing suites. Kraft Heinz is reviewing its spending following 2015's massive merger and layoffs, while ConAgra is slimming down to focus on brands and looking for ways to cut more costs and please investors. Plus, executives keep saying they want to be less reliant on in-store promotional pricing, but let's wait and see on that. Actions speak louder than words. –Jessica Wohl

Marketers Will Embrace Authentication
More than ever, marketers want to know exactly who their customers are, and authentication will help them get there. Stricter rules in Europe and government scrutiny in the U.S. have limited the value of cookie-based targeting and lookalike modeling. Marketers can be expected to gather even more first-party data, the stuff that allows them to communicate with consumers more directly, because they have established relationships and can readily conduct data matches to find consumers in digital channels. Website logins via Facebook and other social accounts is one way corporations are gathering more of this information in order to authenticate users and learn more about them through their social data.
–Kate Kaye

State Farm: One to Watch
State Farm has had a good neighbor in its "Get to a Better State" campaign. But the initiative is now in its sixth year, and the nation's largest auto insurer is looking to refresh its brand by replacing its current message with one that markets to younger consumers. That's a tall order, when faced with a growing mass of budget-friendly competitors that boast seamless online services in an increasingly digital world. Yet the Bloomington, Ill.-based company, which appointed veteran employee Michael Tipsord as CEO last year, could pull it off—if State Farm continues to capitalize on its agent-led model. –Adrianne Pasquarelli

It's About to Get Personal in the U.K.
As the U.K. gears up for a referendum on whether or not to stay in the European Union, both "yes" and "no" marketing camps will get down and dirty in their attempts to win votes. The refugee crisis, the Paris attacks, the possible breakup of the United Kingdom: Nothing will be off limits as the arguments get personal and emotional. –Emma Hall

The Trouble With Teenagers
In today's digital age, fickle youngsters have long been gravitating away from traditional mall-based teen brands—Aeropostale, American Eagle and Abercrombie & Fitch—toward fast-fashion players such as Zara, Forever 21 and H&M, and moving a bulk of their shopping online. The A's are left holding the bag with a surplus of stores in shopping centers few consumers visit, and excess inventory of graphic T-shirts, stonewashed jeans and skimpy tank tops. In 2016, teen retailers will need to further develop their marketing message, especially on the technology side, and figure out their target audience. The category could also see some consolidation as brands combine to better their chances of survival.
–Adrianne Pasquarelli

France Back in the Spotlight
In June and July, France will host the 2016 UEFA European Championships, a soccer tournament that attracts a global audience of 300 million. It could turn into a security nightmare. After the terror attacks of December 2015, France will be in the spotlight again, and we will see efforts to be both compassionate and inclusive from sponsors including Adidas, Carlsberg, Coca-Cola, Hyundai and affiliate Kia, McDonald's, Orange and Turkish Airlines. –Emma Hall

Amazon Will Force Walmart's Hand
Walmart, under growing pressure to keep up with Amazon and make its growing investment in e-commerce show up on the top line, will expand its ShippingPass pilot, which in its current form costs roughly half what Amazon Prime does annually ($50 versus $99), for a slightly slower shipping speed (three days versus two days).

Walmart already has demonstrated it's willing to invest and lose money to compete with its fastest-growing big retail rival. But sales growth has been slipping of late, even as Amazon sales appeared to accelerate over the holidays. Target already responded with more generous free shipping terms, and Walmart appears to have no choice but to follow suit. –Jack Neff

European Data Laws Will Influence U.S. Marketing Decisions
Companies typically don't like government regulations, but what they dislike even more is navigating a variety of regulations depending on where they do business. In October, the EU ended a longstanding agreement allowing for easy transfer of data across the Atlantic. Now U.S. companies operating in Europe have a new, albeit anticipated and more streamlined, set of rules governing consumer data use in the EU that broadens the definition of personal data, restricts data profiling and bolsters "right to be forgotten" rules. Not only will more companies consider storing their EU consumer data on servers based in Europe, they will consider altering how they use consumer data in the U.S. according to European restrictions rather than working under multiple sets of rules. –Kate Kaye

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