2017 TECH INDUSTRY TRENDS

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WHAT’S INSIDE

• What’s Hot in Tech• The Dish on Devices• Stream and Chill• Connected On-the-Go• Shop Nonstop

• Industry Ad Spending

• Audience Analysis

• Tech + Other Industries

WHAT EXACTLY IS THE TECHNOLOGY INDUSTRY?

Source: Investopedia, 2015.

“….the category of stocks relating to the research, development, and/or distribution of technology-based goods and services. This [industry] contains businesses revolving around the manufacture of electronics, creation of software, computers, or products and services relating to information technology.”

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Ranked by Forbes as one of the most profitable industries, the U.S. technology market sales were valued at nearly $700 billion in 2015.

THE TECH INDUSTRYGROWTH WILL CONTINUE, GENERATING MORE THAN AN ESTIMATED $1 TRILLION IN REVENUE IN 2020.

Source: Forbes, 2015; Deloitte, 2016; Mintel, 2016.

Best- and Worst-Case Forecast Value Sales of Technology and Communications

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WHAT’S HOT IN

TECH

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OUR FAVORITE ELECTRONICS AREN’T GOING ANYWHERE.But TVs, computers, and smartphones need to make room—the newest tech products and markets are proving to be fierce competition.

THE DISH ON DEVICES

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INTRODUCING: THE NEW TECHNOLOGIESTHE MORE CONNECTED CONSUMERS’ HOMES BECOME, THE MORE DEMAND THERE WILL BE FOR CONVENIENT TOOLS AND APPS TO MANAGE ALL OF THEIR DEVICES.

While the traditional TV, computer, and smartphone markets face saturation, there are key growth opportunities for smart appliances such as:• Smart TVs

• 4K TVs and other devices that can handle Ultra-High Definition content

• Wearable Technologies

• Augmented and Virtual Reality

Source: Investopedia; Deloitte, 2016; Mintel 2014-2016; ASIcentral, 2017.

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HOTTEST DEVICES IN 2017

MOBILE-FIRST

65% of consumers use their smartphone to access

the internet.

• 5G networks will be tested in 2017, leading to increased mobile network speed and higher quality video and audio.

• Brands now have access to an ever-growing volume of information related to customers’ interests and purchasing habits.

Source: CMO, 2015; Forrester, 2015; Mintel, 2014-2016; Gartner, 2016; cNet, 2016.

INTERNET OF THINGS

Increasingly connected homes and everyday lives require more accessible interfaces to manage

these connected ecosystems.

• More than two-thirds of consumers plan to buy connected technology for their homes by 2019.

• An estimated 275 million wearable devices were sold in 2016—smartwatch ownership particularly saw a rapid increase between 2014-2016.

HI-TECH TVs

85% of consumers own atelevision that is more

sophisticated than a basic TV.

• TVs are increasingly connected to other devices, smart technologies, and apps.

• Appealing to parents and families the most is the growth of 4K video content—meaning higher image definition quality,more detailed picture, and larger, better fast-action projection surface visibility.

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IT’S EASIER THAN EVER TO WATCH TV.Today’s connected consumers are turning to all devices, everywhere they go, to watch their favorite videos, shows, and movies.

STREAM AND CHILL

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TV HAS SERIOUS COMPETITIONONLINE AND MOBILE VIDEO TAKE OVER.Many consumers are cord cutting and arewatching content on other devices instead.

Attitudes Toward Televisions, by Gender and AgeConsumers are controlling their TVs with their mobile devices and streaming content from other devices to their TVs.

Source: Mintel, 2014-2016.

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STREAMING IS THE WAY TO WATCHWATCHING STREAMED VIDEOS IS ONE OF THE MOST POPULAR ONLINE ACTIVITIES.82% of consumers access both free and paid streaming video at least some of the time—over 30% do so daily.

WHAT’S COMING5G networks will be tested in 2017, leading to increased mobile network speed and higher quality video and audio.As a result, it will be easier for advertisers to deliver richer and more personalized media, using the same technology.

Source: Mintel, 2014-2016.

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PEOPLE NEVER LEAVE THE HOUSE WITHOUT THEIR SMARTPHONES.Consumers are constantly plugged in, whether it be via laptop or smartwatch—in such a connected world, portability is key.

CONNECTED ON-THE-GO

Laptops are more favored than desktops—more than 80% of consumers own a laptop, while 61% own a desktop.

2017 TRENDS• Easy integration among

all devices is key.• Younger consumers

prefer portable.

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PEOPLE WANT PORTABLEWHEN IT COMES TO DEVICES AND ELECTRONICS, A BALANCE BETWEEN PORTABILITY AND FUNCTIONALITY IS REQUIRED.

Household Laptop and Desktop Ownership, by Age

Source: Mintel, 2014-2016.

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REACH CONSUMERS ANYWHERE

REACH THEM AT THE STOREOne-third of cell phone users are interested in using their mobile devices to make payments.

REACH THEM AT THE GYMOver a quarter of adults take their smartphone with them when exercising, representing about half of adults who exercise on a regular basis.

REACH THEM IN THEIR CARSOne-in-three internet radio listeners typically stream music in their cars.

Approaching saturation, growth for mobile devices has slowed. Consumers are now buying newer devices, such as wearables, as well as traditional devices like laptops and smartphones, instead of larger desktops or even hybrid 2-in-1 devices.

Source: Mintel, 2014-2016.

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CONSUMERS BUY ANYTHING ANDEVERYTHING WITH THEIR MOBILE DEVICES.Augmented and virtual reality, beacons, and other smart technologies are increasingly enhancing the shopping experience—shop anywhere, at any time.

SHOP NONSTOP

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TECHNOLOGY IS CHANGING THE WAY CONSUMERS SHOPU.S. mobile shopping sales are expected to grow from $76.8 billion in 2015 to $201.8 billion in 2020.

Source: eMarketer, 2015, 2016; Mobile Commerce Daily, 2015; Mintel, 2014-2016.

APPS FOR PHONES, SITES FOR TABLETSThe future of mobile shopping via smartphone will rest more with apps than websites—shoppers are more likely to head to a retailer’s website when they are at home and on a larger touchscreen tablet.

THE NEW SHOPAHOLICS:Kids are increasingly asking for products that they find online.

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UPCOMING SHOPPING TECHNOLOGIES

Augmented and Virtual RealityVR is immersive, impactful, and memorable—making it easier for shoppers to get a virtual sense of items. User profile data helps marketers serve VR-enabled ads to the audience segment(s) that matter most to their brand.

Beacon TechnologyMarketers are able to send targeted offers to users’ mobile devices when they’re at retail locations, reaching consumers at the very bottom of the purchase funnel.

Smart TechnologiesConsumers are taking advantage of virtual sales representative assistance and the ability to use mobile devices for payment. Marketers are more accurately targeting shoppers thanks to wearables’ data offerings and location tracking.

Source: eMarketer, 2015, 2016; Mbryonic, 2016; Mobile Commerce Daily, 2015; Mintel, 2016.; MNI Data Download White Paper, 2017.

TECHNOLOGY IS UNDOUBTEDLY ENHANCING THE IN-STORE EXPERIENCE—BENEFITTING BOTH MARKETERS AND CONSUMERS.

TECH INDUSTRY AD SPEND

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THE TOP TECH COMPANIES INVEST IN MARKETING AND SALES

Source: Vital, 2015; Gartner, 2016.

9%

33%

6%2%

2%

48%

Magazines TV Newspapers Radio Outdoor Digital

MEDIA SPEND ANALYSIS In 2015, the technology industry spent over $4.7 billion toward advertising, an increase of 27% since 2012.

FROM 2012-2015:

DIGITAL SPEND INCREASE

TV SPEND

OUTDOOR SPEND

RADIO SPEND

NEWSPAPER SPEND

MAGAZINE SPEND

2015 Spend: Technology

20Source: Kantar Media, full years 2012-2015.

234%

9%

17%

21%

30%

37%

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THE KEY PLAYERS

Source: Kantar Media, full year 2015.

COMPANY TOTAL 2015AD SPEND

2015 MAGAZINE AD SPEND

2015 DIGITAL AD SPEND

%Magazine

%Digital

$627,685,292 $46,258,741 $119,026,490 7% 19%

$172,800,454 $5,016,472 $76,696,810 3% 44%

$146,603,000 $6,426,040 $59,345,507 4% 40%

$134,558,577 $3,245,713 $43,737,334 2% 33%

$125,134,620 $869,445 $36,426,316 1% 29%

$116,075,846 $154,508 $2,716,031 0% 2%

$98,045,045 $15,751,166 $19,709,351 16% 20%

$80,153,689 $1,930,447 $66,691,951 2% 83%

$49,666,842 $19,629,120 $14,498,297 40% 29%

$46,795,541 $3,191,839 $11,015,233 7% 24%

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SPENDING MORE AND SPENDING DIGITALLYTECH IS THE ONLY INDUSTRY INCREASING THEIR AD SPEND BOTH ONLINE AND OFFLINE.

U.S. marketing executives in the technology industry forecast a 22% spend increase in digital,and a 0.3% spend increase in traditional offline advertising.

Source: GfK MRI, Spring 2014; eMarketer, 2016; Gartner, 2016.

65% of marketing leaders plan to increase spending on digital

advertising in 2017.

TECH AUDIENCE ANALYSIS

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CONSUMER SPEND ON TECHNOLOGYConsumers spent nearly $700 billion on technology in 2015, and they’re expected to keep spending—the market is anticipating 23% growth over the next five years.

Perceived Change in Spend on Technology and Communications

BIG SPENDERS58% of consumers are willing to pay more for top quality electronics.

Source: Mintel, 2014-2016.

%

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REACH TECH INTENDERS THROUGHOUT THE PURCHASE FUNNELSHOPPERS EXPLORE VARIOUS INFORMATION SOURCES—INFLUENTIALS, FORUMS, REVIEW SITES, VIDEOS, AND MORE—TO RESEARCH AND MAKE DECISIONS ON TECHNOLOGY PURCHASES.

UPPER-FUNNELWhen it comes to technology, consumers are both

online and offline searching for information and reading related content.

MID-FUNNELConsumers enjoy learning about technology

and electronic products from others, to see how they’re working for others and to judge whether it will work for them.

LOWER-FUNNELOver half of consumers feel that if they will be able to use a

new technology product, someone has to show them how to use it.

FUNNELbe able to use a

technology product, someone has to show them how to use it.

SEARCH, NATIVE, MAGAZINES

SOCIAL MEDIA,INFLUENCERS

VIDEO

Source: GfK MRI Spring, 2016.

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MILLENNIALSMEET MICHELLE AND CODYKEYWORD: MOBILE • Grew up with the evolution of the internet• Very attached to their smartphones • Shop primarily online

RELATIONSHIP WITH MEDIA• Strongly tied into digital• Dominated by mobile• Will purchase magazines occasionally• Listens to the radio

(1977-1994)

WHO IS THE CONNECTED CONSUMER?

MILLENNIALSMEDIA USAGE

OFFLINE72% READ MAGAZINES

Readership Groups• General Editorial (32%)

• Women (31%)

• News and Entertainment Weeklies (30%)

Magazine Titles• Cosmopolitan (145)

• Elle (132)

• Marie Claire (132)

• Shape (129)

They Appreciate Print• 56% take note of magazine ads.• 49% take action after seeing a

magazine ad.• They read about eight issues

each month.

ONLINE96% ARE INTERNET USERS

Daily Device Usage• TV (77%)

• Laptop/PC (58%)

• Smartphone (77%)

• Tablet (30%)

What Apps Are They Using?• Weather• Social Networking• Banking/Finance• Music• Games

Social Networking• 84% visit social networking sites.• Facebook (68%)

• YouTube (58%)

• Pinterest (21%)

MEDIA CONSUMPTION(SCALE OF VOICE)

RA

DIO

DES

KTO

P

TAB

LET

Source: GfK MRI, Spring 2016.; Nielsen, 2016.; Millward Brown Digital, 2016.

33%

29%

12%10%

9%7%

TELE

VISI

ON

SMA

RTP

HO

NE

TV-C

ON

NEC

TED

D

EVIC

ES

RA

DIO

DES

KTO

P

TAB

LET

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WHAT DEVICES DO MILLENNIALS OWN?

MNI Online Network Deck_021715

54%ANDROID

SMARTPHONE

53%iPHONE

20%WINDOWS

SMARTPHONE

33%iPAD

20%ANDROID TABLET

Source: Adweek, 2015; Forrester, 2015.

MILLENNIALS USE AN AVERAGE OF 4.5 DEVICES EVERY DAY

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TECH INFLUENCES

OTHER INDUSTRIES

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FIERCE COMPETITIONTechnology is making it easier and cheaper for companies to provide food options in more and more places—as a result, convenience stores, vending machines, food trucks, and food delivery services are all competing with restaurants.

RESTAURANTSSTAY CONNECTED WHILE DINING OUT.Younger generations like Millennials and the iGeneration,men, and individuals with a lower income are the most interested in restaurant technology offerings.

Free WiFi and the ability to charge electronic devices are the top technology offerings motivating consumers to visit a casual dining restaurant—other offerings include restaurant mobile apps, table-top devices, and more. Technological advancements are leading to more competition among restaurants.

HOW DO RESTAURANTS STAY STRONG? HERE ARE THE TOP TECH-BASED MARKETING TRENDS IN RETAURANTS:• Advertising on Vine, Pandora,

and Hulu• Interactive video games to build

excitement around brands• Social media contests

and engagement• Gathering info about customers

and their purchase behavior to better advertise

Source: Mintel, 2014-2016.

63%49%

42%57%

39% 33%

Urban Suburban Rural

A tracking device (e.g. Nike Fuelband, Fitbit)

Clothing with sensors that can detect diseases, conditions, or ailments31

HEALTHCARETHE TREND: WEARABLESTHE AUDIENCE: Urban and affluent consumers, ages 18-34.

Driven by personal health and fitness goals, consumers are interested in monitoring their bodies and health at the same time, using smart devices to monitor heart rate, exercise, and even correct their athletic form.

THE TREND: MOBILE APPSTHE AUDIENCE: Larger families, parents of multiple children under age 18.

Nearly half of all consumers are using or interested in mobile apps that help manage their health. The top health-focused apps include food apps, diagnosis apps, and health coaching apps.

Any Usage or Interest in Technology to Manage Health, by Number of Children in Household

%

%

53%61%

83%

43%

64%

29%

40%45%

50%

75%

38%

52%

27% 29%

All 18-34, <$75K 18-34, $75K+ 35-54, <$75K 35-54, $75K+ 55+, <$75K 55+, $75K+

Any Usage or Interest in Wearable Technology, by Gender/Income and Area

Source: Mintel, 2014-2016.

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Smartphones and tablets are evolving the way consumers shop.

RETAIL

THERE’S AN APP FOR THATShopping apps are being used just as often as other popular apps—a majority of consumers are interested in using apps to:

• Compare Prices

• Accumulate Rewards or Points

• Receive Offers

HOW WILL THEY FIND YOUR APP?The Apple Store recently launched a shopping category—over one-third of mobile app users discover new apps by browsing app stores.

Mobile Geo-Fencing and Beacon Technology help retailers engage with consumers by offering:

• Customized promotions and offers as they pass by certain areas of a store.

• Data-Mining opportunities to better understand the effectiveness of store layouts, promotional campaigns, and product placement.

• Messages sent to a consumer’s phone as they pass by a given store.

• The ability to lure customers with better deals if they approach a competitors’ store.

Source: BusinessInsider, 2016; Mintel, 2014-2016.

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BEAUTYCONSUMERS PREFER TO USE THEIR SMARTPHONE, OVER ANY OTHER DEVICE, TO PURCHASE COSMETICS.

Behaviors and Attitudes Toward Using Mobile Devices to Shop for Beauty Products

Beauty apps offer great value to consumers:• Brand Engagement• Appointment Bookings• Tutorials• Product Trials• Inspiration For New Looks• Virtually Try On Products

Before Buying

Source: Mintel, 2014-2016.

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TECHNOLOGY INFLUENCES EVERYTHING FROM DESTINATION AWARENESS TO PLANNING AND BOOKING TRIPS.

TRAVEL & TOURISM

AWARENESS• Artificial intelligence will more accurately suggest accommodation, transport,

and package holidays, while virtual reality provides highly immersive 3D travel presentations to simulate vacations and get travelers excited.

BOOKING AND PLANNING• When it comes to travel sales channels, metasearch engines will be

a key channel of the future, as will online travel agents (OTAs) and booking online directly with the travel supplier.

• Online travel sales—especially via mobile device—will continue to skyrocket.

• Blogs, social media platforms, and other websites with user-generated-contentwill increasingly drive travel and tourism bookings as they provide tourists with a more personal and social travel experience.

THE TRIP ITSELF• Mobile apps help travelers find addresses, translate local languages, convert

currency, locate WiFi hotspots and ATMs, keep track of spending, and much more.

• Smartwatches can help visitors find their way around new destinations, keep in touch, access flight updates, and assist with language translations.

Source: Mintel, 2014-2016; GfK MRI, Spring 2016.

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AIRLINESSTAY CONNECTED IN THE AIRNearly half of consumers want to stream entertainment in-flight and nearly one-in-five flyers say in-flight WiFi and streaming entertainment options are a reason for choosing one airline over another.

Airlines are developing self-service technologies that provide value to flyers from booking to boarding:

Attitudes Toward Technology, by Generation

• Online Discounts & Promotions• Power Sockets & USB Ports• Online & Mobile Check-In• Mobile Boarding Passes• Select Your Seat Online• Baggage Tracking• Social Media Engagement

• Apps that: • Help travelers manage bookings

and obtain flight updates.• Provide access to in-flight

entertainment using apersonal mobile device.

• Process in-flight purchases.

WHO’S YOUR TARGET?• Younger Generations

Especially Millennials

• HispanicsEspecially bilingual/English-dominant.

60% OF PLANES WILL HAVE WIFI BY 2018,a dramatic increase from just 16% in 2014.

Source: Mintel, 2014-2016.

OVER 50% OF HOTEL BOOKINGS TAKE PLACE ONLINE, WITH 21% OF THEM BEING MADE ON MOBILE DEVICES.

To save costs and enhance the customer experience,more and more hotels are implementing technologiessuch as remote guest access to hotel systems (e.g., changing room temperature and curtain configuration via smartphone), universal adaptors and battery chargers, in-room tablets, and more.

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HOTELS

WHAT PEOPLE LOVEHotels with mobile apps offering mobile check-in, mobile payments,e-menus, and more, are ahead of the game, influencing consumers when making decisions on where to stay.

WHAT PEOPLE LOVEHotels with mobileegame, influencing consumers when making decisions on where to stay.

Source: Hospitalitynet.org, 2015, 2017; Mintel, 2014-2016.

WHAT HOTELS LOVEFocus is concentrated on access to more intelligent databases and more in-depth analytics, to discover hotels’ most valuable consumers and allow for better targeting in their marketing campaigns.

FINANCE

TOP AUDIENCES• Millennials

• Parents—especially Dads

• Educated Individuals with Higher Incomes

THANKS TO TECHNOLOGY, BANKING IS LESS OF A BUZZKILL.

THE TREND: ONLINE BANKS

Lower rates, combined with the ease and convenience of internet-only banks, makes new finance technologies extremely appealing to consumers living busy lives.

THE TREND: MOBILE PAYMENT

Consumers are trading in their credit cards for mobile wallets.Incentives for using mobile payment systems, like rewards or discounts, make consumers much more likely to use mobile payment methods.

37Source: Mintel, 2014-2016.

THE TAKEAWAYS

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More than ever, the technology industry’s horizons are broadening. Digital solutions are shaping both consumers and advertisers in countless ways.

• Traditional technologies are reaching saturation, making room for hot new devices such as wearables, hi-tech TVs, smart home appliances, virtual and augmented reality, and more.

• The Internet of Things continues to rapidly expand, with more devices, sensors, and data, creating improvements in everything from traffic flow and healthcare to security and manufacturing. The growth of Connected or Smart Homes is just one example of the IoT takeover.

• Cord cutting is on the rise, as online and mobile video take charge and streaming video services continue to see gains in both subscribers and revenue.

• Technologies like augmented and virtual reality, beacons, wearables, and mobile software are vastly changing how consumers shop.

• With tech ad spend on the rise, multichannel engagement will become the expectation. More and more consumers will research brands, products, and services using a multitude of resources. Integrated media plans, including social media, blog content, magazines, influencer reviews, and more, will be most successful.

• Reach consumers throughout the purchase funnel using search, native, and magazine ads to drive awareness; social media and influencers to advance consideration; and video to prompt purchases.

• Technology is unique in that it influences every other industry, and it will increasingly continue to do so.

QUESTIONS?