Resetting the Conversation Around Marketing Privacy in the Metaverse

With the increasing interest and investments from many companies into this relatively nascent space, there's an open question around how privacy will be treated once or if the adoption picks up. Like we've seen in the past, whenever there are technological shifts, challenges emerge. In this case the challenges revolve around a lack of fundamental technical knowledge around virtual reality, limited exposure of the ecosystem to policy makers and general lack of confidence in consumers' mindsets. 

That said, the metaverse could offer the opportunity for companies and brands to learn from their past digital marketing efforts and create a privacy compliant marketing environment from the start. The development of the metaverse may be similar to the development and evolution of the internet including the role that advertisers play as new ecosystems are developed. It is therefore important for brands to actively engage in privacy conversations and play an active role in shaping the privacy framework for this new digital world.

Earlier, web cookies used to play an important role for tracking consumer behavior. However, Google plans to wind this down by 2023 which offers the opportunity to incubate safer methods for tracking such as contextual marketing that can be implemented in the meta verse. Another avenue to explore is to integrate community based decision making such as "community-based commerce" on TikTok that brands have leveraged to promote their products.

https://www.marketingdive.com/news/why-metaverse-could-be-breakthrough-privacy-compliant-digital-marketing/610661/

Basics of virtual economy to create demand

A lot of apps nowadays are testing out gamification mechanics hoping to improve and diversify their monetization channels. Implementing virtual currency is a common technique. An app or a game without virtual currency basically have to either charge people upfront or everywhere would be blocked by pay-walls. Virtual currency consolidated microtransactions to be a lot more manageable to the developer and a lot less intimidating to the users. 

The key for a virtual economy to work is demand. 

To understand demand in a particular ecosystem, one has to understand the user motivation. What is it that the users want in your app? For example, in a game, people want to have fun. There are many different ways your product can entertain a user. Understanding those motivation means you can identify the points of demand in which virtual currency can be placed. The more your user base uses those virtual currency, the probability of them purchasing more of those currencies would be higher; hence, increasing revenue. That is one high level perspective on how to tune for demand / sink of virtual currency.

To keep a level of good retention and engagement, the app or game would need to "source" the economy a bit - to provide some currency channel for the user to earn some currency as rewards for actions done. The amount rewarded would depend on the intrinsic motivations for users to engage with a particular feature in your product. High intrinsic value, you can source less or none; low intrinsic value should be sourced more. 

Amazon SEO & A9 algorithm

 

Amazon search engine optimization (Amazon SEO) is the process of optimizing your Amazon product listings to rank more highly in Amazon searches for related keywords. When you optimize your product listing, you make it easier for Amazon to find your listing and show it to shoppers who are looking for something like your product. 

Amazon SEO involves:

• Amazon keyword optimization
• Amazon product title optimization
• Product image optimization
• Backend keywords
• Pricing strategy
• The Amazon A9 algorithm

A9 is the algorithm Amazon uses for product searches. The Amazon A9 algorithm is a ranking process that influences where products appear for a particular keyword on the Amazon search engine results page (SERP).

Amazon ranks related to how likely the searcher will be to purchase the product.

How does A9 algorithm work? 

1. Amazon looks at the keywords in the shopper’s search query. If your product listing doesn’t have every keyword in the search query, it probably won’t appear in the search results, which is why keyword optimization is a big piece of Amazon SEO.

2. Amazon tries to assess purchase likelihood based on how well your product has performed in the past. To do this, the algorithm looks at these metrics at the keyword level: 

• Search result click-through-rate (CTR)
• Conversion rate on the product page
• Overall sales

Reference: https://tinuiti.com/blog/amazon/amazon-seo/ 

Chipotle Turned Its Cilantro Soap Meme Into A Real Product

 

https://www.mashed.com/676528/chipotle-turned-its-cilantro-soap-meme-into-a-real-product/

Nowadays, brands continually leverage social network and other emerging channels to engage young customers, who spend a significant amount of time in their digital life. In August, chipotle put up a controversial Instagram post making fun of cilantro, which is often seen as an ingredient in chipotle’s menu. The post showed a chipotle branded cilantro Soup. In the caption, chipotle states “OK but what if soap tasted like cilantro?” The post created lot of excitements on the internet, receiving 22.5K likes and 632 responses from cilantro lovers and haters. On Dec. 2^nd, chipotle announced that they bought this popular meme to life and started to sell it on chipotlegoods.com. The news got a lot of attentions from many networks, including cnn, fox news, CBS Boston, etc. This is a very successful digital marketing campaign focusing on creating native culture content. It also highlights the importance to connect online experience and social buzz with real life experience. These marketing activities are very effective and efficacious in building the brand's culture and value, particular appealing to young customers.

Twitter's new CEO innovation focus

Twitter had a big shake up this week when they announced their former CEO, co-founder Jack Dorsey, would be stepping down. Twitter's stock had a rough week, trading down 10% on the week and now sits down more than 20% on the year. The new CEO, Parag Agrawal, has his work cut out for him as he tries to improve the companies performance. This Barron's article touches on how Twitter is working on improving its product innovation. One of the areas they are focusing on is Brand advertising innovation, where their performance has lagged its competitors. Twitter's brand ad revenue currently dwarfs its direct-response ad revenue; direct response only makes up 15%. The new CEO needs to continue putting effort behind improving direct-response ad revenue to reach their target goal of a 50/50% revenue split. https://www.barrons.com/articles/twitter-stock-ceo-51638548530?tesla=y

BAT is surging, should Ad platforms be worried?

Basic Attention Token or BAT has increased in value recently as more retailers are accepting it as a form of payment.  BAT has had an impressive year, surging about 50% in the past week and 700% year-to-date, spiking to $1.85 this past week.  So why the spike? This past week Regal Cinemas announced that it will accept BAT as a form of payment at its movie theatres for ticket and snack purchases.  Other reasons for the surge include the expanding popularity of Brave and its challenge to Google Chrome.  Brave gives users control over ad frequency, ad scheduling, and control how much or little information they provide to brands. Users earn BAT by selectively choosing to view ads.  This behavior is likely very attractive to advertisers because this selection shows high intent from customer.  This is likely not an immediate threat to traditional browser advertising models, but this recent growth should be concerning to Google and others.  Not only because more retailers may begin to accept BAT as a form of payment but also given that Web3, specifically the terms crypto and block chain, are expanding outside of the niche technology world and into the mainstream consciousness.  

Source: https://marketrealist.com/p/basic-attention-token-bat-price-prediction-10-dollar/

Nestlé Thinks Ecommerce is Pretty Sweet

The multinational food conglomerate Nestlé is doubling down that Ecommerce will be a major source of its sales by 2025. Targeting that online sales will make up 25% of all sales by that year, the company is making significant investments in the digital marketing space. The proof is in the pudding too as Nestlé intends to increase the amount of money spent on digital marketing from 47% of the marketing budget to 70% in four years. Those investments intend to be spent on content, search, and customer feedback. Data acquisition is a big part of this initiative as Nestlé hopes to leverage information about their customers and turn it into sophisticated data science models that highlight purchase behavior and product selection. It's clear the company knows that investments made in this space has a bit of a flywheel effect: Acquire customers successfully online, capture their data, learn from their behaviors, build products and experiences that serve those customers and behaviors, and do it all over again. In order to get that off the ground though, investments must be made and that's just what they're doing. 

Source: 

https://www.reuters.com/business/retail-consumer/nestle-aims-generate-quarter-total-sales-e-commerce-by-2025-2021-11-17/

With Jack Dorsey Out, How Will Twitter Change?

 

Twitter is an online news and social networking site where people can communicate in short messages called “tweets.” Tweeting is posting short messages for anyone who follows you on Twitter or searches for content, with the hope that your words are useful and interesting to someone in your audience.  Some people use Twitter to discover interesting people and companies online, opting to follow their tweets.

One of the criticisms against Twitter was the lack of big innovations.  That said, the platform ran its first livestreaming event during Black Friday partnering with Walmart and Jason Derulo highlighting some of the best deals.  This type of change to the platform can mean significant changes to how the consumer shops.  This will also influence the way companies advertise.

What’s exciting to see is if Twitter can use its platform and transition moments of breaking news into targeted ads for new retail products.  This change could challenge social platforms, like Instagram and Tik Tok.  The future will be told, one tweet at a time…

Facebook’s new haptic glove lets you feel things in the metaverse

Facebook has been developing a haptic glove which allows users to feel bursts of air to simulate the sense of touch. This effort has been in progress for about seven years. With it's debut, Facebook is looking to create a virtual space to simulate real like experience without physically being anywhere expect the comfort of your own home. The glove is expected to integrate into Meta's virtual reality technology offerings.

This technology may not be appealing to people outside of gamers initially as putting on large goggles and wearing big gloves may not serve as the best customer experience. Not to mention, as the article discusses the feeling of being more invasive. The technology also can track and collect data about a person's movements. As privacy and data protection begin to be more of a focal point, this technology opens up the door for more of a concern.

Source: Facebook’s new haptic glove lets you feel things in the metaverse - Vox

Drones and its use in Digital Marketing Campaigns

While watching YouTube last week I came across a video of drones used for a marketing campaign. The Shanghai-based company used the drones to form a QR Code in the sky which can be scanned to lead to their site. This was so astonishing to see that I started researching and found out that many companies in Hong Kong are using these drones to light up the sky to promote their brands.

Drones can be used for various marketing strategies in promoting your digital marketing agenda. Commercial drone usage is spiking in a variety of industries, including agriculture, real estate, construction, news media, entertainment, film production, energy, and many more. Before drones became a commercial asset, it was hard to effectively display the depth or expansiveness of the products, properties or projects that many industries need to demonstrate to audiences. As part of the emerging technologies, this can be an excellent source of generating more traffic to your websites and showing off creativity.

Link to the QR Drone video: https://youtu.be/mj8uIr4oQRU

Digital Marketing Goes Physical

Digital Marketing Goes Physical 

One of the big selling points of digital marketing is attribution.  Digital marketers can granularly track the connectivity between marketing spend and revenue. Being able to construct these ROI analyses enables them to justify increasing spending and informs shifting spend between multiple channels.

This success has driven the search to add quantification and enable ROI calculations for offline advertising mediums as well.  One way this has been accomplished is through unique QR codes that brings the potential customer online and into the trackability-**LIMELIGHT**...enabled by the built-in QR reader in smart phones and the ubiquity of those smart phones.

And of course, MarTech / AdTech companies (e.g., Tapple) have sprung up to enable this trend seamlessly. Whether billboards, subway benches, on-product, or physical media this same QR-code driven tracking enables the ROI calc's at scale and in a standardized platform.  In essence taking the complexity of tracking across many physical channels and digitizing & centralizing them.  Cool, huh?

But, the trick is getting people to actually scan the QR codes...these are the 'clicks' but how many impressions are there and how many purchases/conversions did that drive outside of the narrow lens of QR world?  Marketers are still using 'multipliers' based on one-off studies or rules of thumb, the opportunity still exists to go further with offline quantification.  

This blogger is eager to see how that evolves.

Source: https://adage.com/article/tapple/how-use-qr-codes-achieve-experiential-roi/2384196

CMA:1 - Facebook: 0

 https://on.ft.com/3obnFzL

Someone once mentioned in conversation that Mark Zuckerberg's only reason for acquiring Instagram was so that it would not become something significant. A killer acquisition, as they call it. Luckily for Zuckerberg and Facebook (or, Meta, as we are forced to called it now), that deal went through without any regulatory pushback. Much as the company's acquisition of Whatsapp...

But those days are over. The UK's competition regulator, the CMA (Competition Marketing Authority) has effectively blocked a deal for Meta's acquisition of GIPHY, an online search engine for GIFs. 

Blocking the deal is a blow to Facebook (Meta) because it signals the end of an era when the company was able to make moves in a relatively unchecked market. All bets are on the table. Companies that seem to pose little to no competitive advantage are now being thought of as what they could represent (read: Instagram) if Facebook (Meta) were to own them. At 315M dollars, the deal would have represented another important consolidation for Facebook (Meta) to control the digital marketing space. Even though GIPHY does not run advertisements, and of course Facebook (Meta) is obfuscating its reasons for purchase interest in stating that GIPHY could never have competed with them on advertising, who is to say it couldn't have gotten there in the future... That is exactly the kind of scrutinizing questions that the CMA is asking, and will continue to do so from now into the future.

What's FB worth to you?

 I was in a different class recently and the topic of paying for free services came up. Basic outline of the conversation,  you don't like Google or FB or whoever tracking your data, then pay for it!

First, do people actually want this? And two...assuming you trust the polls...what would people actually be willing to pay?

On the first question, despite how little folks trust FB, a whopping 77% said they wouldn't pay to use the service free of ads. Now, part of me is not surprised by this but maybe not for the most obvious reason, i.e., people just prefer free over paying. I think it is more a statement that we all utilize the "free" model from many companies and simply cannot imagine having to make the choice of whether to pay or give them up. It has become cultural in a way to expect services to be free. It has become expected that companies will harvest the data. So why fight it?

Second, of the 23% who said they would pay (not that I really trust this number or group's sincerity lol), 41.6% said the would pay $1 to 5 / month, 24.9% said they would pay $ to 10 / month and the remaining roughly 1/3rd said they would pay above $10. 

I guess my conclusion really is already spelled out: we hate FB or tech companies or FAANGs, etc., but their business model is culturally accepted. Not loved but accepted. 

https://www.vox.com/2018/4/11/17225328/facebook-ads-free-paid-service-mark-zuckerberg