Tag Archives: advertising

3 components for perfect m-commerce

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Every day I receive a link to a news article describing how powerful mobile shopping, or m-commerce has become. 98% of mobile commerce revenue is from iPads and there were $240 billion of mobile payments in 2011 – rising to $1trillion in 2015, Amazon have sold $1bn of products in the last 12 months, and eBay sold $5bn of products last year.

However, I think we’re about to see a step change in these revenues, because most m-commerce offerings are simply migrating their web offering to a mobile equivalent – either through app or a web browser. The statistics above are still mightily impressive, however there’s a lot more room to grow.

Amazon’s one click ordering makes it easy to buy a product, and eBay’s feedback rating is a brilliant piece of loyalty marketing – once you’ve won an item via Buy It Now or through an auction, the feedback rating psychologically compels consumers to go through with the purchase without any of eBay’s manual overhead.

Both of these systems are great for impulse buying, but are separated from marketing.

The next version of m-commerce will marry brand marketing and impulse buying. Consider these two scenarios:

  1. A consumer sees a poster advert in a train station promoting a new film. The consumer will soon be able to connect their smartphone to the poster – whether through the camera, wireless or another communication channel, and order tickets to the film at their preferred cinema.
  2. A consumer sees a poster advert of a perfume. They connect their smart phone to the poster, enter a quick and fast security check, and that perfume is then ordered and delivered to the consumer.

These scenarios require a number of barriers to be broken down before the purchase process can be made quickly and easily. Consumers won’t have the time or inclination to enter 4 pieces of information from their credit card for each purpose – it needs to be simplified. A current example of this is PayPal’s mobile app which has been simplified recently to remove long passwords and replace them with a 4 digit PIN number.

In order for this new world to occur, three things need to happen:

  1. The technology needs to be in place. As pointed out, with PayPal and existing smartphones, I think this is already in place.
  2. Marketing agencies need to help design the buying process. The agencies will need to help the commerce store with the actual purchase rather than a brand awareness exercise – and this will be difficult to achieve. It will be a huge educational process and mindset change for marketing and design agencies.
    I don’t think this can be achieved with QR codes because they are still clunky; require their own app and a decent Internet connection. Most consumers still don’t understand what a QR code is. QR codes also fragment the buying process, sending consumers off to websites rather than enabling a one-click, under 20 second buying process.
  3. The single fulfilment store.  One key player that has the infrastructure to do this is Apple. Imagine if they rebranded the App Store as simply ‘The Store’. A consumer sees the perfume poster above, links their iPhone to the poster, and orders through ‘The Store’. Apple already has the payment information and owner’s address – in the App Store. They also have the cash to setup the distribution infrastructure.
    Other contenders to be able to do this are Amazon and possibly Google. Or we could see a new player/ brand emerge, who won’t need to worry about the legacy of ‘old’ e-commerce systems and behaviours. Tesco have tried a system in Korea, however I think it was more of a marketing stunt or a proof of concept. And when I mention legacy systems, the future of m-commerce described above will be single, impulsive purchases, probably linked to brands, unlike the Tesco video which is a small step forward from shopping online.

Once these three component are in place, consumers will consider this as standard shopping behaviour. The holy grail of marketing will have been achieved – Marketing will have become directly linked to the purchase.

Photo courtesy of Eric on Flickr.

 

Personalised advertising is good for users

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Personalised advertising is getting a bit of a bashing in the news recently. The whole question over privacy is being questioned; that it’s an advantage purely for advertisers and no one else.

The critics have got it all wrong. It’s the public, whether they are a mobile, web or TV viewers, are the real beneficiaries.

Firstly, let’s take a look at what personalised advertising really means. When a person buys a car magazine, do they want to see adverts inside of:

  1. Nappies
  2. Washing powder
  3. Cars

That’s an example of personalisation based on personas, or group of people. No one, that I’m aware of, would argue that nappy or washing powder manufacturers would want to advertise in a car magazine. I don’t understand why it’s any different on a website.

Now let’s move forward to personalised network advertising. This technology is based on how users move around a number of websites, who all use the same servers for their large adverts. Say a user visits a football club website regularly, and then they go to another website such as a news portal. They then see some adverts for their favourite team’s new home kit. 

This is still based on personas because it assumes some trends indicate certain behaviour (in this example, a user visits a football club website regularly so they probably support that team). This is an advantage for both the advertiser (no point spending marketing money on loads of advertising banners aimed at everybody and anybody) and also the consumer – they see relevant ads.

The next step is individually targeted, truly personalised content. It’s what many supermarkets do, based on your commonly purchased items. It’s takes into account some trends, but mainly the specific individual. 

Take the car example above. A user sees an advert on a website for a car. They end up buying the car (probably not based purely on the advert!) Personalisation will then stop the user from seeing worthless, same ads for the car and may replace them with insurance companies that specialise in that car market, and maybe even the demographics of the user.

This is an advantage of personalised advertising. It’s what shop keepers have been doing for centuries – understanding customers who walk into the shop (browse their website) and make targeted recommendations.

Car ad courtesy of Georg Schwalbach (GS1311) on Flickr

Review of my 2011 predictions

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Back in January I made 12 predictions for digital media for 2011. I did the same for 2010 – i.e. I made the predictions and then analysed them in December, and faired well. How did I do this year?

1. Rapid demise of Flash

Bang on here. We’re witnessing HTML5 rapidly overtaking Flash, mainly because users want to view sites on their iOS devices, which don’t support Flash. Flash for mobiles has been dropped in favour of Adobe Air – the problem with Air (an irony in the product name) is that it’s too heavy for downloading over mobile: Adobe Air apps are very large. HTML5 is both very powerful and not linked to a specific vendor, which is exactly the type of technology web developers embrace quickly.

Prediction rating: 10/10

2. Local local local

The use of Google on mobile devices is increasingly rapidly, and one of Google’s most powerful functions is to provide local results on mobile devices. Facebook Check In and FourSquare will continue competing in the future, providing more relevant functionality which is only good for end consumers.

Prediction rating: 10/10

3. LinkedIn to IPO

Yes, LinkedIn IPO’d in the summer at a market capitalisation of around $6bn. At the end of the first day of trading, shares were selling at over $94. They are now worth just under $65. The actual variance has been from $55 to $122. Personally I think the future is very bright for LinkedIn, as long as it sticks to it’s core, professional-only values and steers cleer of Facebook.

Prediction rating: 10/10 

4. More “paywalls” will increase the expectations of having to pay for content

I predicted that we’d see at least six mainstream publications start charging for online content. What was very difficult to predict was that this was going to be made possible via the iPad. The iPad has been the saviour of global newspapers by offering a simple charging model for content owners. Many newspaper websites are still free, but most apps charge for content. The main point is that user now expect to pay for content, but it took the shift to a new platform to illustrate this.

Prediction rating: 8/10 

5. Financial Services move into social networks

Banks have had other things to worry about this year, and whilst many are dipping their toes into the water with Twitter and Facebook, I’m not aware of any doing it particularly well. Searching for the popular high street banks on Facebook returns a rather fragmented list. I expect this to change in the near future. 

Prediction rating: 2/10 

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6. Facebook to follow Compuserve even more

Try and name a brand that isn’t on Facebook. In January I said that we should expect a Skype messaging style interface and in July, we got Skype inside Facebook. I predicted we’d have a billion users by the end of the year, although this is unlikely to come true because in September, Facebook announced they’d broken through 800 million users – still an amazing feat. 

Prediction rating: 8/10

7. A clear leader will emerge in Interactive TV

Interactive TV is now firmly called Smart TV, and no, a clear leader hasn’t emerged yet. The remotes all look different, and operating systems are different, and with the latest XBox release, Microsoft is putting up a decent fight to use your games console as the Interactive device.

Prediction rating: 0/10

8. Rapid rise in CPC

I said that CPC rates would rise, and noted the cost of some terms. Here they are:

keyword

Cost in
December 2011

Cost in
December 2012

ebook  £0.55

£0.74

sandwich  £1.00

£1.05

drink  £1.00

N/A

laptop   £1.25

£1.31

paper  £0.75

£0.76

I estimated costs would increase at least 50% over the next year however they have mostly gone up a much smaller amount, with the exception of the highly competitive ebook market.

Prediction rating: 2/10

9. A $50 A5 eReader

I was $10 out – Walmart are selling an eReader for under $60. Bearing in mind there was nothing available for less than $120 at the start of the year, this demonstrates how mainstream eReaders have become. 

Prediction rating: 6/10

10. App stores will decentralise, leading to confused customers (again)

The term app store has become abused. Now everyone has an app store whereas a year ago their product had an ‘add-on’. If you go into a car showroom I’d half expect the optional extras to be available from an app-store! Fortunately the market hasn’t become decentralised as predicted – to the benefit of end users.

Prediction rating: 0/10

11. The economy will continue to splutter

Obviously this has come true. I predicted that companies would need to start demonstrating clear revenues, including Twitter, and this has materialised as $140million this year.

Prediction rating: 10/10

12. Chrome to far exceed Firefox market share

Perhaps ‘far exceed’ is an exaggeration, however in early December Chrome overtook Firefox for the first time, and it’s here to stay. I’m a big fan of Chrome for a number of reasons (all the settings are stored centrally “in the cloud”, it auto updates seamlessly and it’s very fast), and hardly use Firefox any longer.

Prediction rating: 8/10

So there we have it. Overall I was reasonably accurate with the predictions. I’m working on 2012 predictions, which feels more difficult at this time. Maybe it’s the economy/ general outlook. Any help would be appreciated!

Photo courtesy of lacomj on Flickr

The best starters guide to online marketing

If you’re looking for a “How to” guide to online or digital marketing, I recommend the following graphic (care of Unbounce). I’ve sent this to many people by email and Twitter as the best starting point for any online marketing campaign. It doesn’t necessarily need a large advertising budget behind it – it just needs some time. 

There’s so much information in the graphic that I’ve tried printing it on several A3 sheets but it didn’t look particularly great. My brother-in-law (thanks to PhotoPaperDirect) has managed to print it as a 6 foot long print on a screen printer however there resolution isn’t good enough to remain clear (it’s OK, but not brilliant).

The Noob Guide to Online Marketing - Infographic
Unbounce – The DIY Landing Page Platform

Re-educating clients on statistics

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Ten years ago I remember sitting with our clients and trying to prise them away from hits to page impressions (which later became ‘page views’).

Now, we’re doing the same by moving from page impressions to insight.

Page impressions are great for advertising. Well actually they’re OK for advertising for two related reasons:

  1. As long as adverts are sold in per-thousand-impressions (CPM), advertisers will stick with page impressions
  2. Ad agencies have historically been very slow to adopt new business models and retrain their sales staff. See the slow adoption of CTR (Click Through Rates) as one of the most recent examples.

Insight is far more important as a measurement than page impressions. Consider what’s more important: gaining more information about a specific behaviour or preference about all your customers so that you can understand them better, or knowing that you have n million page impressions per month, and that traffic has changed by x% last month?

It’s a very interesting debate. I remember having heated discussions with customers ten years ago after they’d gone white after hearing that their traffic went from x million hits to y thousand page impressions per month. However once they had understood the new metrics, they found their rewards in the new CPM advertising business models of the day.

The new debate is a fundamental shift. We’re not talking units of measurement any more. The calculations for insight are more difficult to quantify. However the brands that adopt true consumer insight are going to be making profits in different orders of magnitude to the old models.

Twelve Digital Media Predictions for 2011

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Well here we are. 2011 predictions below. My 2010 predictions worked out pretty good and I’ve been asked for the 2011 predictions for the last six weeks.

1. Rapid demise of Flash

Flash has two big problems in 2010: Apple (specifically, the iPhone and iPad) and HTML 5. I don’t see Apple relenting on their decision to enable Flash (specifically pre-compiled code), and users will start moving away from Flash sites out of necessity. Developers already like HTML 5, and it looks reasonably flexible to replace a lot of what Flash has historically need to be used for. YouTube is already using HTML 5 to deliver video. If the BBC iPlayer is using HTML 5 next year, let’s award 10/10 for this prediction!

2. Local local local

Local businesses will ‘never have had it better’. FourSquare, Facebook Pages and Places, and Google Places can all help local businesses. My local sandwich shop at work can now have a digital relationship with consumers for no cost. The rising use of smartphones will continue to provide more local results when searching (for example, type in hospital into Google on your smartphone – even at the moment it produces a list of local results).

3. LinkedIn to IPO

The Facebook for business, the most useful social network of them all if you want to hire staff, track companies, keep in touch with former colleagues, research ‘people’ will float in 2011. 

4. More “paywalls” will increase the expectations of having to pay for content

Paywalls will undergo new branding, and together with mobile apps charging a subscription fee, the days of free content will start coming to an end. I’m not saying all sites will become pay only within a year, however expect to see at least another half dozen main titles beyond Murdoch’s empire start charging for their hard work.

5. Financial Services move into social networks

Financial services are walking around social networks scratching their heads wondering how to approach the biggest B2C of all time. I predict at least one Financial Services organisation will get it right, and everyone else will copy and improve. Expect some big announcements of huge Financial Services brands linking together with the big social networks.

6. Facebook to follow Compuserve even more

I’ve likened Facebook to the walled garden environment of Compuserve before. Expect to see ‘new’ features in Facebook like sending files to friends, Facebook wireless access points or even broadband provision (remember – Compuserve started life as an ISP), premium (paid entrance) Facebook Pages, offline browsing or a phone service (think Google Talk or Skype). We’ll all think it’s brilliant, and then read the Wikipedia Compuserve article and realise we’ve been here before. I also expect Facebook to break into China and reach 1 billion global users.

7. A clear leader will emerge in Interactive TV

Buying a new TV at the moment? Which Internet/Interactive TV standard are you going to buy? There are so many types available, it’s really confusing to consumers. By the end of the year (Christmas 2011) there will be one or two clear leaders. And expect to see a wireless keyboard lying on your sofa next year or 2012 instead of a simple remote.

8. Rapid rise in CPC

Ad CPC (Cost Per Click) rates are rapidly rising. Take the biggest network, Google AdWords. The cost per click of the following items as of 29/12 is:

  • ebook – £0.55
  • sandwich – £1.00
  • drink – £1.00
  • laptop – £1.25
  • paper – £0.75

I estimate costs will go up at least 50% over the next year because of the growth of online businesses, and they will all want to advertise their products.

9. A $50 A5 eReader

eReaders will hit a critical mass when the price point is low enough. I estimate this to be around $50 (£35) because this is a reasonable price point where a consumer won’t be too upset at losing their eReader. At that point, schools will seriously consider replacing paper books with eReaders. Expect more mainstream books to only be available electronically.

10. App stores will decentralise, leading to confused customers (again)

The beauty of the iPhone’s app store is that all apps come through the store tested and vetted. It also provides a full backup solution if you regularly synchronise your iPhone with a computer. The Android Market is the opposite – it’s like anarchy! Apple are releasing their own full app store for Apple computers. Amazon will do something similar. You’ll have lots of app store logins, and it will all be confusing. In fact it will become so fragmented that it will be similar to how you buy software at the moment – one piece comes from Amazon, another from Apple, another from eBuyer, and so on.

11. The economy will continue to splutter

It doesn’t take a brain surgeon to work this one out. However the implications will be that brands will drive their marketing organisations to produce clearer ROI on campaigns (especially Facebook, to pay for the expensive UK based full time Community Managers). This is currently difficult to do, but marketing departments will drive analytics vendors to improve their products beyond just referrer stats. Despite huge funding increases at the end of 2010, Twitter will need to start generating some serious revenues, so expect ads on Twitter similar to the reach blocks on Facebook.

12. Chrome to far exceed Firefox market share

Chrome is here to stay, and will only increase market share when the new Google laptop (and tablet) arrives. Microsoft won’t back down on Internet Explorer either. Which leaves Firefox in third place, and will just slide further down because users won’t know why they’ll want a third browser on their computer.

Leaflet drop v AdSense

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A neighbour of mine is a videographer. They recently paid for a leaflet drop where they paid a company to put a paper leaflet through 2,500 local homes.

The cost of the leaflet drop was £77 (including VAT), and they had to pay for the design and printing themselves.

This type of advertising model is the absolute opposite of Internet advertising as follows.

Internet Advertising

  • Targeted on demographics, geography and keywords (i.e. what people are already looking for – either proactively in Google, or passively on Facebook)
  • Variable cost (Pay Per Click)

Leaflet drop

  • Untargeted (except for geography)
  • Fixed cost per 2,500 leaflets

Of course, these differences apply to sites such as Google or Facebook (which for a wedding videographer is a huge opportunity, where they can target a specific geography, timing, and be pretty smart about finding those newly-engaged couples).

The end result for the leaflet drop was even worse though, because they didn’t receive a single lead. Not ‘sale’ or ‘conversion’ – but LEAD! Not one phone call! So that £77 plus printing cost was an expensive untargeted gamble which they won’t be repeating again.

Spotify Freemium rebalance

Spotify

I see that Spotify is trying harder and harder to convince more subscribers to pay for the service, rather than rely on advertising income.

Tonight the new Brandon Flowers album is only available to Premium users. Spotify are [perhaps rightly so] preserving many of the advanced features and new content solely for their tenner a month subscribers.

If I worked at Spotify, I would try and poach experienced ad sales people from traditional radio stations such as Absolute or Global Radio (owners of Capital FM, Classic, XFM and others).

Clearly those stations have a ad sales business model which keeps them afloat. Those radio stations would love to have the CRM information that Spotify has at their disposal, which would further help traditional sales people.

As many people in media have been suggesting for a while, New Media companies have a lot to learn from traditional media companies – many of the business models are the same.

What keeps the Google CEO awake at night

During this interview on the Guardian website with Google CEO, Eric Schmidt, he is asked about advertising vs paywalls, his relationship with the Murdochs, and what keeps him awake at night.

The answer – mainly around lack of innovation and pushing forward, he says, is the main reason that all IT companies fail – and the fact that it’s self inflicted. The fact that it’s self inflicted is what keeps him awake at night.