E-commerce is transforming Black Friday

Long hours of waiting in the queues for the bargain deals in Black Friday weekend is becoming a thing in the past, according to this FT article. Early indications show that online sales in Thanksgiving increased by more than 25% to $1.73billion in 2015, according to an Adobe Digital Index research which tracked an online traffic of 180 million visits through the day. Mobile sales increased from 29% to 37%, showing yet again that m-commerce is now a prominent channel by itself. Black Friday sales also saw an increase of 14% in online sales, reaching $2.74 billion. The shift to e-commerce and m-commerce is definitely a threat for traditional brick-and-mortar stores, which are continuing to invest on omnichannel capabilities in order to address consumers with a more integrated value proposition. Multichannel efforts seems to be paying off for retailers; according to Walmart’s Chief Merchandising Officer, Steve Bratspies, “more than 25 million customers accessed store maps and promotions through Walmart’s online and mobile tools for Black Friday.” 

TV ads will now be re-targeted through mobile channel

Millennial Media, a leading advertising network, has now started to allow advertisers to retarget their customers by combining the traditional and the upcoming channels in advertising. Customers will now be retargeted through their mobile devices with the ads that they have seen on television. This novel advertising technique resulted from a vertical integration of services, as Millennial Media was recently acquired by AOL, which was recently acquired by Verizon. As Tim Armstrong, the AOL Chief Executive, puts, “this is the year when TV and web budgets are going to collide.” This is by no means a surprise; mobile advertising is the fastest growing channel but the majority of ad spending is still on broadcast and cable channels. Millennial’s move will accelerate big brands’ spending in mobile, as retailers will now be able to follow up a TV spot with a mobile video ad, in ways that traditional TV channel would never be able to achieve, like location-based offerings.

Uber is outpaced by 'the Google of Russia'

Russian search engine company Yandex, as we know, is one of the very few examples of success against Google domination across the world. What most of us probably don’t know is, Yandex is also pushing in other frontiers to put pressure on other global tech companies as well. Yandex has not only beaten Google in Russia, but has now entered the $1billion Russian taxi market to outpace and dominate Uber. According to an August article, Yandex taxi fleet is now more than 15,000 vehicles in Moscow, more than the combined fleet size of Uber and Gett. By the end of this year, Yandex plans to expand its coverage to 25 cities across Russia, while Uber is still conservative in the market, available only in 3 cities. Taxi market seems to have become a core element of Yandex strategy now, as the company also invested in another taxi software BiTaksi in Turkey, where Yandex search engine has also reached a considerable market share.

Yandex value proposition is quite obvious for Russian customers, as the typical wait time for taxis is 30 minutes in Moscow. Yandex has developed a software to integrate various taxi fleets in the city to reduce the wait times to 5-7 minutes. While Uber and Gett is mostly present around the city center, Yandex’s coverage is much wider, making it the top choice for many Russians. Yandex also uses an interesting marketing strategy to acquire customers in Russia, where Uber offers free ice-cream and movie tickets to its customers. Yandex, on the other hand, added two Tesla cars, which happen to be the only Tesla cars in Russia, to its fleet. Random rides with Tesla cars seem to have amused Russians, not to mention the hype they create as Yandex Tesla cabs drive around the city.

Yandex, just like Google, is trying to diversify from search engine revenues, which still accounts for more than 90% of their portfolio. It will be interesting to see how Yandex, and other search engine companies, will continue to diversify through expanding into and disrupting other businesses.

Click to see the Bloomberg article on the subject

Publishers are in peril from annoying ads

Sale of Business Insider shows the challenge facing anyone that relies on digital advertising, an interesting article from this week’s Financial Times explains.

Non-subscription based publishers’ revenue models seem to turn into a vicious cycle of crowded ad placements and upset customers. Relying only on display ads and crowding the websites push viewers more towards ad-blocking extensions, which, according to the article, cost $22bn of advertising revenues last year. For publishers like Business Insider, this might imply a long-term risk of value destruction. As the article puts:

“Publishers, which have a long-term interest in not alienating users, need to impose tighter rules for advertisers themselves. If they do not, the tensions will descend into warfare among advertisers, consumers, ad blockers, and software companies that nullify ad blocking, such as PageFair.”

Link to FT article

Google charges for YouTube ads even when viewed by robots

An interesting article in today’s Financial Times shows that while Google takes advertising fraud very seriously and shows deep commitment in fighting it, digital marketers are far from absolute protection against fake views by bots, even against the primitive ones.

The article explains how European researchers’ findings “raise questions about whether Google is doing enough to protect advertisers from deception”, as an experiment recently showed that Google currently charges customers for YouTube views generated by a robot. The most striking aspect of the research is that the bots used in the experiment are not sophisticated at all. Ruben Cuevas, the lead-researcher in the experiment explains, “It’s not like we found a weird corner-case vulnerability. Anyone with a little knowledge of coding could do this kind of thing.”

Google could be the clear market leader now, but this also implies that Google is the primary target for such abuses. Google’s business model would be under a considerable risk if such researches continue to point out to similar findings. It will be interesting to see if security and anti-fraud issues will be a key competitive lever to shift the market dynamics.

Link to the FT article