Nielsen believes in addressable TV

 Even though an average person nowadays have multiple devices and more and more time is spend looking at a phone, TV remains very important channel of interaction with potential customer. Average TV watch time per day is forecasted to be 46 minutes in the US (Nielsen). Addressable TV is one of the most discussed topics in this field. Sceptics often argue that it is impossible since many households have multiple viewers each of whom needs individual approach. Moreover, they claim that it is difficult to measure the effect of this tool and that it is quite expensive. However, according to adage addressable TV has a higher CPM then traditional television.

Nielsen strongly believes in the future of addressable advertising and highly invest in this idea.  The company acquired Qterics (Smart TV software and privacy management company), Gracenote (automatic content recognition technology) in 2016, and recently Sorenson Media for $11.25mln (leading addressable TV technology). The idea is to leverage the best technologies to provide real-time optimization, deliver relevant content, and make results measurable.

Down With the Ad Agency! Long Live the Ad Agency!

Ad agencies have lived a long and glorious life with plentiful profits and very high margins for years from big-name client accounts promising guaranteed annual revenues.  During recent years as clients have become wise to the fraudulent ways of the ad Agency world and started developing their own internal MarTech capabilities the landscape has shifted from outsourcing everything to an Ad Agency to hiring them for project-based work. 

One of the most well known agencies, 72andSunny has gone through their second round of layoffs in twelve months as a result of shift in client demands and behavior.   Like many ad agencies, they have found themselves in a place where the Customer Data, Customer Experience and other Marketing and Media strategy and operational execution activities, are being brought back in-house with a focus to use Ad Agencies for their areas of strength - creativity and ideation.  Clients are looking to be more effective, efficient an cost conscious but use the agencies for campaign ideas and creative development.

What does this mean for the agency world?  If agencies want to survive, they need to realize that the days of 'skimming off the top,' fraud and other non-value add activities are gone.  Clients have learned the game and if they want to continue working with an agency, the agency needs to be honest and transparent about their cost structure, fees and where the client's money is going as well as improving their own internal operations to keep pace with an agile business world.  They need to improve their internal capabilities and build up strength in areas clients will demand from them - creative design and campaign strategy.  If they do not evolve and adapt to the new ways of working, they will eventually fade away into the business history books as another example of industries past like coal and steel in the US.

Digital Marketing bigger than traditional Ads for the first time in '19

Digital marketing spending will surpass traditional ads for the first time in 2019 based on the latest forecasts and trends.

It's pretty interesting to look at the trends, where the mobile is by far the fastest and largest component captured almost two-thirds of the market. The growth of Amazon is a positive sign for a lot of advertisers as a way to diversify away from Facebook and Google and adds more competition to the marketplace. As a number of subscribers for traditional media shrinks, online streaming services like Hulu and Netflix can be another way for them to monetize their offerings.

Finally, while both Facebook and Google have been extremely profitable, their market share stays flat and the growth has come from an overall larger growing digital marketing pie. Once digital marketing fully reaches its potential, it will be interesting to see where the tech giants turn for their next growth opportunities.
 

Facebook strategy shifts away from public posts to private encrypted messages

Facebook CEO, Mark Zuckerberg announced this week that the company would increase focus on private, encrypted services shifting emphasis away from public posts. Zuckerberg said he was changing the company to focus less on sharing and more on creating private experiences. This reflects the shift in behavior of people online which has shown a reduction of growth in social media. While public sharing of data is slowing down, growth of private messengers such as WhatsApp and WeChat have seen strong growth, especially outside the US. Zuckerberg said Facebook would achieve the shift partly by integrating it’s multiple existing messaging platforms -  Instagram, WhatsApp and Messenger.

Zuckerberg in a Congressional hearing few months back famously gave a one-line answer to describe Facebook’s business model saying “Senator, we run ads”. The social media giant, valued at $490 billion, currently depends on people openly sharing posts to be able to target advertising to them. While the company will not eradicate public sharing, a proliferation of private and secure communications could seemingly hurt its business model. Other firms that depend on Facebook to harvest data based on material that people openly share will also need to evolve based on this new strategy.

However, some analysts believe that the advertising business model which Facebook has created over the years may not need to change too much. Facebook doesn’t need to know exactly what people are messaging to each other. According to Zuckerberg, Facebook doesn’t use message content to target ads. Many app developers unconnected with Facebook share personal data with the social media giant. This sharing has become so common place that its considered as “industry standard practice” to share data with Facebook. This means you might be seeing an ad based on activity completely outside Facebook. This coupled with techniques such as location targeting makes Facebook quite independent of public posts on its own platform to profit from ads. Also moving to private messaging may result in a higher conversion rate. It allows for much more granular targeting. The potential of someone paying attention to an add on a private messenger is higher than on a public platform. This new strategy shift will create unique challenges as well as potential opportunities for the digital marketing industry.

Will Anyone Beat Google and Facebook?

With Google and Facebook taking a HUGE percentage of all the digital advertising revenues, leaving the rest of the world to fight after the ad revenue. The question is, looking 5 years ahead, will there be anyone else that can compete with them? Will there be a new venue for advertising? Will Google and Facebook lose market share? And if so, will they make moves to acquire those companies? Only time will tell.

Google Shifted Ad Manager to First Price Auction

In a timely announcement on March 6, 2019, Google announced that programmatic ad sales through Ad Manager will be shifting from second price auction to first price auction. In a first price auction the winner pays what they bid. In a second price auction the winner pays what the second highest bidder bid.

Programmatic display is the ability to automate ads for your target audience. Traditionally sold in a second price auction, the changing landscape, complexity and nuance of the advertising space has created a need for more accurate pricing. Advertisers can purchase impressions for advertising space on chosen websites, with the auctions happening in a fraction of a second.

In general with this type of auction, clearing price will rise which will benefit the seller. However it will also allow buyers to target their money at ads that are the most worth it to them and yield the best results.

Google will be giving time for bidders to adjust to the new market rules and necessary technical requirements to adapt to the new auction format.

Mediums For Digital Marketing

Currently, there are some pretty standard mediums for digital marketing, being computers, smartphones, tablets, and to some extent, television. But how will this change in the future? How will marketers find new ways to market their product to consumers outside the normal venues. When you think about the rapid changes in technology today, I believe there are huge opportunities for new mediums. Digital marketing is already being used in planes and elevators, but what is next? How about cars (with larger screens like Telsa)? Could you one day turn on your car and before the screen opens up you are hit with some digital marketing? What are the limits?

$170 Million in Advertising Attrition for Publicis Groupe

A recent article by Fast Company reported that major advertising conglomerate Publicis Groupe announced $170 million in attrition in traditional advertising in 2018. This is mostly to do with current consumer goods clients moving significant portions of their advertising dollars to digital advertising.

Luckily for Publicis, they were well positioned for this transition, with their digital transformation division, Publicis Sapient. This group reported a 28% increase in revenue in 2018, impressive having been one of the original leaders in digital since 1998. They mention a couple important notes about how the industry and competition is changing. The first is that every interaction we now have with a brand is considered marketing. This ranges from traditional consumption of print or TV advertising, to a customer’s experience in a store, to the seamless process of ordering or returning goods from online or a mobile app. Agencies can no longer provide just one portion of what a company needs to guide a user through their brand journey. Second, because of the necessity to deliver the full experience, agencies have been in a rush to incorporate digital as part of their suite of deliverables for clients. This has led to companies traditionally outside the realm of digital advertising to jump in for massive market share (Accenture Interactive, PWC Digital Services, Deloitte Digital). Accenture Interactive leads the revenue game at over $6.5 billion in 2018 and Publicis Sapient is ranked number 12 in the annual revenue list.

All of this is to say it is not a simple as saying advertising agencies are going digital – this is a market to be disrupted (and really has been disrupted already) by players who have diversified business lines like Accenture. Time to get in the game.

Commuter-shoppers form a niche market

If you have a mobile device with an internet connection, you've most likely used your device during your commute to the office, to school, to class, to your interview, on the train, etc. If you have, you're not alone. In fact, Marketing Tech reveals that commuter-shopping is gaining swift and incremental momentum as a result of the widened access to mobile devices. More and more people have the opportunity to sell and purchase items on the go; buyers now have access to digital credit cards, apple pay, and paylater among other options. Some journalists claim that commuter buyers make a niche market for a playful, easy to view/mobile friendly product that is not too costly and can be purchased without the need to take out one's physical credit card. The rise in shopping while commuting is telling and I'd be interested to see how far companies are willing to go to sell their products on the go. Will more investment go into train and bus-stop marketing? will wifi-accessible trains and buses increase? the future is definitely interesting for your everyday commuter.

Digital D2C Looking at Physical Retail due to Rising Paid Ad Costs

Many direct to consumer or digital brands are having to think very carefully about their advertising budget. Many are even looking at traditional brick and mortar as the cost of customer acquisition online is getting so high. Not only is paid advertising via Instagram and Facebook getting so expensive, it is also translating less into customers. Consumers are bombarded with paid ads and it is not authentic for them. The cost to acquire customers online is rising significantly, and it's at a place now where it's just unsustainable for many brands. Brands that have historically relied on traditional advertising methods are now shifting their ad dollars to online and to Facebook and Instagram. When that marketplace gets flooded with demand, it raises the price to connect with and acquire customers.

Youngest billionaire accredits wealth to "social media"

Whether you like her or not, you can't deny that Kylie Jenner is both famous and wealthy. The model, actress, turned businesswoman, now historical figure was just named the youngest billionaire by Forbes magazine. The article spurred controversy as it presented Jenner as a 'self-made' success. Arguably, her fame can be attributed to multiple sources, including her family's name, her big sister Kim K. West's scandalous sex tape, their documentary-esque series KUWTK, and her relationship with iconic pop figures such as Travis Scott and Kanye West. But the question becomes, why did Kylie, the youngest of the sisters, outdo Kim K., the sister that started it all? Both Kylie and Kim have makeup lines and both share an entrepreneurial interest. Yet, only one sister has skyrocketed at such a young age.

In an interview, Kylie explained that her success was driven by and through social media. Admittedly, she's won many accolades in digital platforms, such as receiving the most likes in an instagram picture and the millions of followers in snapchat, youtube and facebook. Jenner's popularity grew before her cosmetics line, however, as she repped brands such as Nike and Puma for a profit. She was an influencer in many platforms and made nearly 1M per picture endorsing a product, says Netbase.com. Jenner's token lip kits became the foundation for her make-up line; she started selling 15,000 kits online for $29 each, "teasing her followers." Once these sold out in minutes, Jenner got the hint that she had something valuable to offer, says the Washington Post. By Feb, she "stocked 500,000 more" kits and by the end of the first year, she made $307 Million in sales. Jenner has now expanded to other products and has partnered with brick and mortar stores such as the ULTA branch among others. It is indeed impressive how this star made her fortune, and now she's known to have reached the billion mark before Mark Zuckerberg, the previously named youngest billionaire.

Trend Towards Personalization Accelerates

Most marketing campaigns aim to target specific segments of potential customers – obviously the ones most likely to buy the product or service in question. But many traditional and digital marketing techniques have been fairly blunt instruments, making it difficult to address specific consumers – and make them feel special.

Now, new methods of personalizing marketing outreach are trying to change that, and many are being adopted quickly by companies seeking an edge over their rivals.

The biggest players are able to use the mountains of data they have to do this. For instance, Amazon curates lists of recommended products based on browsing and purchase history, and other variables. What is more, some companies have found ways to send more personalized thank you messages to their customers post-purchase, either by e-mail or regular mail.  

Being able to tailor communication with customers at a personal level is a huge advantage for the companies that are able to do it. It is a way to build much stronger relationships with people and give them exactly what they want, or even extrapolate other data to tell them what they want before they know it themselves.

Done in the right way it is also a way to maximize the effectiveness of the advertising spend. That’s because it allows companies to get their message in front of a customer base that’s most likely to make a purchase– those who are already familiar with the business and have a clear understanding of its value proposition.

It’s an obvious strategy in the abstract. But it is of course easier said than done. For all companies, big or small, the key to being able to make it work is recording as much information as possible about the ways customers interact with the company’s products, brand, and marketing campaigns.

The more data a company possesses, the more easily it can create campaigns based on customer attributes and past behavior. One approach is to cross-reference sales data with information from digital marketing campaigns and website traffic.

Armed with this kind of information, the company can then send specifically tailored offers to individual customers that have a much better chance of hitting their mark – because they are based on the tastes and preferences that the customer has already shown.

In the same way, rather than employing one-size-fits-all messaging, different messaging can be developed for a greater variety of different types of customers. In some cases, even messaging can be completely personalized based on the capacity and resources of the company.

The trend toward personalization is only going to increase. Right now, it works well either for very big but extremely sophisticated companies like Amazon; or for small companies whose customer base is limited enough in size for them to know well.

It’s many of those in the middle that still need to catch up.

Walmart Move Will Shake Up the Digital Advertising Market

Walmart’s announcement last week that it is getting into the digital advertising business could have major implications for the marketplace and for the company’s arch competitor, Amazon.

At the same time, it reflects a growing trend of “legacy” brands that are not naturally associated with digital beginning to realize the power that their huge customer base gives them.

That may be why Walmart is not only looking at getting into digital advertising but is exploring other crossover businesses such as creating its own video streaming platform, Vudu.

Essentially, Walmart’s foray into digital advertising will see its online properties become a network on which hundreds of thousands of other firms can advertise  – similar to the way that Amazon works now.

Walmart has made the decision that its online assets, including its shopping sites and Vudu are a rich ecosystem that it can monetize by opening up to advertisers.  The company’s core business gives it a rich trove of consumer data, allowing it to offer bespoke, targeted on-demand and native advertising to its new advertising customers. Those clients can pay for ads to sell products across the entire system, or target just a specific part of it.

The potential upside for Walmart is huge. More than 300 million shoppers visit its stores every month and millions visit its different shopping brands websites each month. For the most part, Walmart has not really made the most of all the data that this provides.

But that is changing dramatically with this new initiative. A new internal structure will help promote the new push. For instance, Walmart is now consolidating teams into a single group for ad sales and operations. That includes bringing its digital ad business under its banner and ending its relationship with marketing giant WPP.

So, in launching its digital marketing business with such a public display, Walmart has thrown down the gauntlet to its great rival Amazon. But, more than that, the company may well have shown other old economy brands how they can unlock a ton of value from their day to day online business activities.

Do you want to rely more on content-based marketing? So does everybody else.

A recent study by backlinko.com and BuzzSumo shows that 94% of content gets no external links and only 2.2% draws external links from multiple sites. External links are critical to improving the content's search ranking and for enabling readers to organically locate the content. 

So, why is it so hard to get backlinks? There has been a dramatic rise in the amount content that is being created as content-based marketing continues to rise in popularity. As the amount of content has risen, it has become harder to get your content noticed. The good news is that despite the intense competition for readers and links if you can stand out from the crowd succeed it is possible to win big. For example, the study found that 1.3% of articles get 75% of the social shares.

So, what should you do about it? Before you dive in an assume that content market will be the solution to all your digital marketing woes it is critical to consider the baseline success rate. Given the low baseline rate, creating content without a distribution strategy is not likely to lead to the desired results. Additionally, should follow best practices to ensure that your content has the best chances of success. 

Other interesting findings:

• Favor long-form content: Long-form content gets on average 77.2% more links than short articles
• Write longer titles: 76.7% of the social shares came from headlines that are 14-17 words in length
• Adding a question mark to the headline had 23.3% more social shares than headlines without
• “Why” and “What” posts got 25.8% more links than “How to” posts 

Google Ad Manager is Now Adopting First Price Auctions for Programmatic

Google Ad Manager - formerly known as DoubleClick - is now adopting first price auctions as means of simplifying programmatic buying and making it more transparent. 

What are first price auctions, you say? It's when the buyers pay the actual price they bid - so gone are the days where you could bid a ridiculously large amount and then end up paying half of that because the second competitor isn't as crazy as you (but still, thanks for driving up the average bid). While the old second price auction create date foundation of programatic buying (which also conveniently allowed publishers to fulfill their remaining inventory), this new method allows for Programmatic's increasing complexity to be addressed and make it easier for the publishers and advertisers to properly value their inventory. 

While Google wasn't the first one to adopt this, as a market leader, it is sure to create the biggest wave, so it'll be interesting to note how the ecosystem responds to this. 

“Since the change from second to first price will require both buyers and sellers to make changes in their programmatic strategies, we’ll give everyone time to prepare over the next few months before we start testing. During this time, publishers and app developers will need to rethink how they use price floors and technology partners will need to adjust how they bid for Google Ad Manager Inventory,” Google said.

Programmatic is expected to account for 86 percent of US digital display media buying by 2020, according to eMarketer, so this move is only for display and video inventory sold though Google Ad Manager. Search, YT, Adsense are still untouched - for now. 

Power of People-Based Marketing

This post provides highlights from BounceX's Manual to People-Based Marketing. The introduction starts out by providing a bit of background:

"As marketers, we’ve become distracted in recent years. Our marketing strategies have been muddled by the overwhelming technological advancements and emerging channels available to market our brands. As a result, it’s likely that your marketing team has been focused on creating optimized digital experiences and become silo-ed between the various marketing channels you’re relying on to up the bottom line for your business. I’ve got news for you, my friend – this approach to marketing is wrong. It’s outdated and it’s in dire need of rejuvenation. It’s time for a change; it’s time for People-Based Marketing."

By only focusing on the performance of each marketing channel silo (e.g., e-mail marketing, website analytics), however, we lose site of the bigger picture. Marketing "channels" have been replaced by the concept of individual human "connections". People now access digital content across multiple devices & browsers and consume content across channels such as TV ads & social media. The single constant throughout this content consumption is the person. Enter People-Based Marketing, the one connection to rule all channels, devices and browsers.

To illustrate the power of People-Based Marketing (PBM), consider the below use case depicting SuzieQ's eCommerce shopping experience. While shopping online, SuzieQ becomes interested in an item. Imagine the scenario, however, wherein she is unsure about whether or not she would like to purchase the item. Perhaps she's not sure about one of the product's attributes (e.g., size, warranty, quality). She could then potentially become distracted by the desire to navigate to another website or instant message a buddy. A potential sale is lost with little hope of revival. With People-Based Marketing, however, a triggering event can be set to indicate SuzieQ's interest in the product (e.g., when she makes it to a specific product page and hovers over the image). This would prompt a sales associate to message her online so that her questions could be answered right then and there. She is suddenly greeted with a more personalized experience similar to what she would expect at a brick and mortar store. The probability of SuzieQ's completion of the purchase has increased dramatically. This sequence of events is illustrated in the first screenshot below. In the event that she still abandons her purchase, PBM empowers your brand to follow up with emails and advertisements to sway her back towards buying your product (per the second screenshot below).

Google Adds New Function to Google My Business

In class we’ve talked about how Google My Business helps boost traffic to the local business substantially. Detailed information about your business, along with organic customer reviews, are almost the prerequisite for customers to evaluate whether to pay a visit or not when they have never encountered/heard your business. Yesterday, it’s reported that Google has added a new section for“Special Offers” under Google Business’s listing.

Now vendors can easily showcase their special deals on Google results – whether the users get that from search or Google Map. The new user interface allows business/brands to customize offers with specific time period, optional coupon code and website link. The offers section is juxtaposed right under the basic profile information in the overview tab – almost indicating a solid high exposure. I think it’s a great tool for local business to attract both newcomers and existing customers when doing seasonal/festival/short-term campaigns along with other initiatives like SEO.

Social Media Landscape in Japan

I thought it would be interesting to introduce the more important, popular and commonly used social media platforms in Japan, and see how they showcase different dynamics and usage purposes compared to the U.S. 

LINE

The instant message service LINE is the most widely used SNS app in Japan; it has the highest penetration rate and also the largest monthly active users of 76 million people, which is more than 60% of the whole population.

Brands can set up official accounts on LINE and send promotional messages to users as long as users add the brand accounts as their “friends” first. LINE also has incredibly high daily active users, and I think it’s a platform for really intensive and intrusive communication with audience since it’s basically a Facebook messenger, just the brands can send you messages whenever they want.

Twitter

Twitter is the largest social media platform in Japan if we don’t count instant message services in. It’s the app where the 20s go to. It’s widely considered as an alternative source for daily news digest and THE portal site for the nation’s word of mouth. It tells you what’s trendy in Japan at the moment, and also enjoys a high monthly active user base.

Instagram

Next, Instagram! Same as everywhere else, Instagram plays a big role in manipulating, influencing the real-world purchases in Japan. Instagram is a highly female dominant social media site among 10s, 20s, 30s users. The monthly active user % is the highest among all platforms – almost 85%. And 40% of female users said they have purchased something influenced by Instagram. Given its popularity and characteristic of being very visual, I think Instagram should be a good corner stone for overseas brand's promotion in Japan.

Facebook

Finally, Facebook. In Japan, Facebook’s users fall into the middle-aged groups like 40s, 30s and 50s, so it’s a slightly older platform in terms of its demographics, and also a slightly male dominant platform for 40s, 50s, and 60s age groups. The total users in Japan remain stagnant for a while and the monthly active users are only half of the total users, so it’s really just dying down.

Walmart Joins Amazon in Chase for Ad Dollars

Retail giant Walmart wants to sell more digital and store ads based on its shopper data. Walmart looks to increase its online and eCommerce business, like Amazon, and wants to use its vast trove of shopper data to sell marketing opportunities.