Posts Tagged ‘mobile’

« Older Entries

How New Media Is Eroding the Mass Interruption Model

Friday, March 4th, 2011


(Warning: This is a #longread that I’ve been marinating on for about a month now. I would highly advise you, dear reader, to take advantage of the Print functionality below or use a service such as Instapaper to enjoy when you have some good thinking time. Have a look and please share with others and share your thoughts in the comments!)

From time to time we all take some “facts” for granted and fail to question them until it is too late to adjust. For example, many of us grew up hearing the repeated fears that we will see human population grow at an increasing rate, and past the point of resource exhaustion. Futurists predicted that current growth trends would continue unchecked. This led to much worry over the past several decades, and even inspired the government of China to create a one-child-per-couple law.

But now we know better. We were silly to miss the fact that rising standards of living around the world would lead to a natural reduction in birth rates. While population is still growing, the warning signs are pointing in the opposite direction: Birth rates in some countries are declining at a rate below what is needed to sustain the current population, and some United Nations scenarios show that our population could shrink from a little more than 6 billion today to 2.3 billion by 2300. While there will be less traffic on your great-great-grandchildren’s daily commutes (by hover car, of course), a population implosion has its own dangers and would dramatically reorder societies and economies. I believe the false inevitability of population growth is mirrored by the false inevitability of advertising impression growth—and if you don’t readjust to this new reality, your business could be left in the past.

For ages we have heard the siren song of growing advertising spending, powered by the digital media shift and rise of ad-powered start-ups. Nearly everyone in our business excitedly shows upward trending prediction graphs of marketers’ new outlays on mobile, social, virtual gifts—you name it. Just this week Eric Schmidt, outgoing CEO of Google, spoke before the IAB to share his firm belief that the online display ad market—what many of us call “traditional digital” at this point—could rise to $200 billion in the near future.

This seemed high to me, so I went a-Googling to discover that J.P. Morgan claims today’s global display market is only $25 billion. Further, the global TV commercial market is $169 billion, and the entire advertising market has been fairly flat for years at a total of $500 billion. Unfortunately, Schmidt did not share his model with the IAB audience, but I do wonder how digital display advertising could grow at a 700% rate. In fact, I believe that the media trends we see today and increasingly in the future point to a world in which advertising spending might just shrink. Much like the false claims of population explosion, I believe a new world order is resetting old assumptions and the next evolution of marketing will usher in a world of fewer advertising interruptions. Heresy, I know, but please allow me to make my case…

Consumer Media Choices Make Mass Advertising Harder

One of the reasons we are accustomed to 3,000 ad messages per day and buy into the assumption that ad spending will only increase is that it has been relatively easy to create and distribute advertising over the last few decades. Mass media arrived in the form of newspapers, magazines, radio, and television. Following closely was the chance to do mass advertising; brands could create a print ad once and run it across a critical mass of millions of eyeballs. Enough people were moved to purchase products by these handful of ads that marketers could see sales as a direct consequence. Life was good.

But today, fundamental shifts in media habits and practices are making it much harder for mass marketers to hit their target audiences with impressions. Here are just some of the changes, which are only accelerating:

  • We have gone from three television channels to more than 1,000 on most cable systems. Brands now need to negotiate media buys across dozens of networks in order to hit a similar critical mass. Many are now spending more for less in a handful of “mass-like” television programs. For example, viewership of this year’s Academy Awards was down 10%, while the cost for a 30-second ad was up 20%. Because audience is not guaranteed for advertisers, this translates into a 33% year-over-year increase in the cost per impression.
  • People are multitasking in ways never seen before, and clearly at the expense of ad impression impact. In the near-past, some people flipped channels or walked out for a beer or bathroom break, but today’s TV viewer is habitually distracted. A recent study in the U.S. by Deloitte shows that 42% of people surf the ‘Net while watching, while 29% talk on the phone and 26% text.
  • Our consumers have decided to use digital technology to shift media to their needs—not marketers’ needs. Once a group of people are given freedom and control, a funny thing happens—they like it and want more of it. So it’s not a surprise that time shifting of media consumption has grown thanks to DVRs, DVDs, Netflix, and Read It Later. Conveniently, these media shifting tools allow the consumer to skip over advertising messages. When we had no choice but to watch or page through advertising, we couldn’t complain much—but once we have the freedom to control what media we consume, we guard it jealously—and advertising feels much more painful to sit through.  And no matter how “must see” a particular program is, there is simply too much other good content out there to hold people hostage to 20 minutes of commercials for every 40 minutes of content.
  • People are employing tools to actively avoid advertising. A rising number of people are moving from “passive” to “active” advertising avoidance thanks to simple technology. Take Adblock Plus, for example, a free plug-in for the Firefox browser that removes 100% of banner ads from a Web page—often putting useful content and links in the ads’ place. You might think this is deployed by only a small fringe group of users—and you would be wrong. Adblock Plus is used by 12 million people on average each day, and has been downloaded 112 million times (84,000 per day). Compare that to a tool that has gotten 10 times the hype: Foursquare has only about 600,000 daily users, and it is downloaded 25,000 times per day.
  • Government is limiting the number of impressions we see. Democratic governments usually listen when voter trends emerge. Europe continues to pass laws limiting everything from TV commercial time to product placement. In the U.S., the Do Not Call list was an overwhelming success, and now legislators are eagerly considering a Do Not Track law that will prevent banner ad targeting that our industry claims will help drive ad spend further.
  • And while new media offers new advertising opportunities, it is still exceedingly hard to make them work. Take gaming, for example. This is one of the media choices that young men are leaving TV for. And for years we have read hype about how in-game advertising networks would be the prime time of the future. But then reality caught up. Game companies have found that it is too hard to build big enough scale to win mass marketer dollars, and the people who have paid $60 for a game don’t like the idea of having additional ads forced upon them. The general manager of EA says, “We actually aren’t getting much from ad revenue at all”—while his competitor at Activision laments that, “There was a time when we thought advertising and sponsorship was a big opportunity…”

New Media Can Make Fewer Impressions

Aside from these fundamental changes in consumer behavior, there is a dramatic change in how new media alternatives behave in terms of advertising: They allow for a lot fewer impressions, often of poorer quality. Let me take this as the cue to tear down the age-old assumption that advertising dollars will follow consumers’ media attention. Again and again we have been subject to a PowerPoint slide showing the percentage of time people spend with various media in comparison to the percentage of marketers’ budgets that go against advertising in them. Most recently, industry guru Mary Meeker presented this argument in an otherwise strong deck about trends in mobile.

A lot of smart people have pointed to this “gap” in spending, but I have heard none of them spend as much as one additional slide considering what could lie behind it. Allow me: This is not an apples to apples comparison. Advertising spending amounts are guided by much more than how much time consumers choose to spend. First, there is the quality of the creative platform—TV and print allow a much higher-quality ad experience and are much more “interruptive” than typical banner ads. Second, a lot of marketers are still struggling to build ROI models for digital while they have decades of experience and test results from traditional ad platforms.

And the future of digital marketing does not necessarily spell more opportunities for closing this perceived gap. The shift to mobile offers a perfect case study. This is another specific area that has gotten prognosticators excited. eMarketer predicts mobile will be a $2.6 billion market in the U.S. by 2014, and one mobile expert, Paran Johar of Jumptap, claims that, “Mobile advertising will eclipse traditional PC ads very quickly.”

Johar might be right, as each dollar to mobile could take $3 from display. The mobile screen (whether phone or tablet) is significantly smaller than a laptop browser window. By my back-of-the-envelope calculation, a consumer’s shift from a PC to mobile Web page is at least a 3-to-1 reduction in the amount of space available for banner ads. So, at consistent CPM rates, the move to mobile could shrink the ad market dramatically—or they would have to be 3x the CPM of display ads, which is so far not close to holding true.

Or perhaps mobile will get bigger because there will be a lot more ads squeezed onto the tiny screen, and ways for businesses to helpfully alert passersby of what is on sale inside their stores. Unfortunately, there’s another problem: Consumers already find mobile advertising to be the most disliked marketing platform, per this research by Advertising Age.

Other new media similarly might mean a trade down in the number and/or price of advertising impressions, and thus a contraction in the global market. For example:

  • Hulu—One of the fastest growing “channels” is only willing to show one-third the number of commercials as network broadcasters show during the same programming. Its CEO has boldly claimed that “Traditional TV has too many ads. Users have demonstrated that they will go to great lengths to avoid the advertising load that traditional TV places upon them.”
  • Groupon—Only one offer per city per day. This might grow to more offers, but they will increasingly be personalized—so you will get one, more-relevant offer per day.
  • Twitter—Has added and plans to expand Promoted Tweets program to try to monetize the service. It will interrupt your Twitter stream with advertising, but if these are more than a handful per person per day, there will be a mass exodus of users.
  • Facebook—Current advertising formats are few, small, and out of the way on the right. The company learned from MySpace that ad clutter leads to lost users. Unfortunately, that means fewer clicks and low CPMs. With more than 600 million highly active users, and an ad-building tool that can have your small business up and running in minutes, the company only reached $8.9 billion in display sales in 2010.
  • Pandora—If you are a frequent user like me, you have likely noticed more ads between songs lately. But, again, there is a natural limit of only a handful of interruptions per hour of listening or you lose people to one of the many ad-free alternatives.
  • AOL—Well, AOL isn’t a new company, but it is reinventing itself with a model that has a lot less advertising. AOL CEO Tim Armstrong strongly believes that, “There are just way too many impressions on the Web.” And he has put his money where his mouth is by redesigning AOL to reduce the number of banners per page—to the tune of a 25% drop in ad sales.

Efficient Targeting Means Less Spending

We’ve all heard the old saw about “half your advertising spending being wasted; you just don’t know which half.” Well, with the increase in targeting information and new ways to track actual purchase behavior, there is growing hope that marketers will be able to discover and eliminate the 50% (or likely much more) of spending that is wasted. So the multi-billion-dollar question is: What will they do with the savings?

I believe that the majority of saved dollars will be taken to profit, thus removing a significant amount of money from the $500 billion global advertising market. Shareholders have this odd desire to see companies improve profits, and too many CFOs are closely eyeing the marketing budgets.

What This Means to You

My first hope at this point is that you have become a little more wary of the hype that continues to plague the digital marketing world. I know it might sound crazy for a leader working in a large, global digital advertising agency to sound pessimistic, but the reality is that we all suffer when companies make poor business decisions. The last thing we need is another digital bubble that will cause marketers to overreact in a very negative direction. Instead of falling for the hype, marketers must examine the bigger trends and changes in the landscape and take the time to shift how they go about their jobs.

Here are three implications of the shifts in media and marketing that you must begin adjusting to today:

  1. From Impressions to Engagements—Now is the time to choose a new common denominator for marketing performance across media. As I hope the 2,000 words above made clear, the impression—while somewhat measurable—is more and more meaningless. Instead, a growing number of marketers and media companies are moving toward Engagement-based planning. I wrote a lot about this in my book and in this blog post, and just this week YouTube and the IAB came together to suggest a new engagement measure: the Cost Per View (CPV). The CPV is a way of pricing advertising or other videos in which a consumer actively chooses to push the play button. It is meant to complement an impression-based plan, adding some further performance data. Marketers must begin to measure engagements and start to build financial models that allow them to uncover the value of an engagement.
  2. From Paid Media to Earned and Owned—In a world where it becomes harder and harder to track down your customers and interrupt their attention, it becomes imperative to attract them with content that they choose to engage with. Of course, this is the story behind Marketing with Meaning—but it is even clearer in the growing recognition that marketers must create Earned and Owned media. Earned and Owned is not only often cheaper than Paid, but it delivers a higher-quality experience—whether it is Charmin’s iPhone app for finding a public restroom or Red Bull sharing “Drunkish Dials” from its consumers on Facebook. (Disclaimer: Both are Possible Worldwide clients.)
  3. Relentlessly Track to Sales Results—One of the most exciting things that I have seen in business is the rise of e-commerce, which allows companies to closely track the price and performance of every marketing decision and investment all of the way to the final sale. This is the main reason search marketing took off and Google is now a $30 billion/year company. I believe that every large-spending company must invest in tools and models to apply this way of making marketing choices—whether or not e-commerce is the way a sale is made. In this future, brand managers will come into the office and get a heads-up display of the previous day’s sales results, quickly alter spending on the fly, and measure the response in real time. If the Shake Weight can do it, you can do it. And we’d love to help you.

Conclusion

To quote Sir Martin Sorrell, “The 21st century is not for tidy minds. It’s messy.” The wrong way to behave is to sit on the sidelines and wait for new advertising media to evolve to meet your historic marketing model. On the other hand, just jumping on the bandwagon of hype can end up burning your business as well. I believe the right answer is to step back and look at broader trends in how people live and society works today—then invest time and money into building a new approach that beats the competition and meets customers’ needs.

This is what our agencies recently did by combining into a new global digital network with a purpose to create interactions between our clients and their customers. We saw a future and shifted multiple organizations into a position to survive, thrive, and lead. What will you choose to do?

Tags: , , ,
Posted in mobile, Organizational Behavior | 1 Comment »

Questioning QR Codes on Billboards

Wednesday, November 17th, 2010

Just in case you just crawled out of a cave, October was Breast Cancer Awareness month. A bevy of brands painted their products pink to draw awareness and raise funds to the issue–including everything from packaged goods to vacuums to the National Football League. My job is to notice companies’ efforts to create meaningful marketing like these tie-ins, and it is also to watch for examples of companies’ clever use of digital technology to bring it to life. So I had to pull over and get out of my car (literally) when I saw this billboard for ConesfortheCure.org a few weeks ago. While certainly clever, this example unfortunately shows how some companies are making basic mistakes with new technology, even when using it for good.

As you can probably tell, this particular billboard features a QR Code in the middle. Also known as a 2-D bar code, the role of it here is to access information via a mobile device. Here’s how it works: First, you must have a smartphone. Second, you download a QR code reader. I personally use this one, but there are many of them and they seem to work similarly.  Then you open the reader app and take a photo of the QR code. When it works correctly, you are taken to some kind of content–usually a mobile-friendly webpage.

Confused and exhausted yet? I thought so. You see, QR codes are smart in theory–they can allow you to quickly and easily go to mobile content without having to type in a website on your phone’s browser.  But as you might start to notice in my description, problems abound.  Here are some of the issues in QR codes overall and in this execution in particular:

  • Most people still don’t know what the heck QR codes are.
  • Most people still don’t have a smartphone or a QR code-reader app.
  • It’s not easy to scan QR codes when you are driving a car. In this case above, I had to literally pull over on the side of the road, activate my hazard lights, and walk up closer to get my reader to work.
  • The result is not that impressive. In the example above, the mobile page below was pulled up, offering me the chance to fill out a form, to receive an email, to click to get a webpage coupon to bring in for a free scoop of ice cream.

I would venture to say that very, very few of these billboards were scanned. People don’t have time to do what I did, and the vast majority simply drive by; possibly some notice a funny symbol and then they go on about their lives. It is unfortunate, because the “Cones for a Cure” idea by my beloved Graeter’s Ice Cream brand is a great example of meaningful marketing. But by rushing to try out this new technology, the brand has hurt the impact of the program.

Instead, why not just use the billboard to do what billboards do best: In big words write something like, “Free Scoop when you say ‘Cones for the Cure’” this month at Graeter’s.”  Crazy-simple, I know; but it just might work.  This is the kind of thing that a commuter in her car might actually notice and remember. No need to go through 10 steps to make a difference and engage with consumers. Or if you want to make people work a little bit to get the free scoop, abandon the QR code process and just ask people to email a photo of the billboard.  This is much easier, safer, and more effective. For example, check out this Cannes Lion-winning example from James Ready beer:

New mobile tools and technology are great and very promising, but I fear that companies such as Graeter’s that jump in without thinking things through will end up frustrating themselves and their customers. To be meaningful, marketing must have more than a great idea in the center–execution is everything.

Tags: , ,
Posted in Achievement, Apps, mobile, Outdoor | 4 Comments »

Weather Channel App Ad Analysis

Wednesday, September 29th, 2010

A few weeks ago I wrote about how mobile advertising is failing to work for either consumers or marketers, and today I wanted to quickly share another example of how it is falling down in other places.

As a frequent traveler, I have really enjoyed the Weather Channel app for my new iPad. It has a beautiful interface that quickly allows me to pull up local weather conditions, forecasts, and a predictive radar map. In fact, the app is much better than the Weather Channel website, which is cluttered with ads and links. However, its iPad app advertising model is cloudy, and I don’t see the forecast getting much better.

Naturally, the Weather Channel is trying to turn its app into an advertising medium, and it includes a marketing message on the loading screen and an ad unit in the lower left-hand corner of the local conditions page. However, there are a few obvious problems that should turn off marketers and consumers alike: First, I have been getting the same ad for the Cadillac CTS-V Coupe ever since I first downloaded the app. It is pretty obvious that The Weather Channel either has had no other advertisers embrace its iPad app, or the Cadillac brand dumped a ton of money to buy up the inventory in an effort to “own” this new channel. Either way, it’s a waste of their money and my time.

The second problem is that the ad itself feels very heavy-handed and simple-minded. As you can see from the screen shot above, the same “Perfect Conditions” ad unit is displayed no matter what the weather forecast is. Whether it’s beautiful and sunny or rainy with flood warnings, it’s always “perfect conditions” for a CTS-V Coupe!  Both Cadillac and The Weather Channel would have been smart to have a few versions of the banner creative that actually change based on the weather conditions you pull up. For example, if the rain is pounding, the ad unit could describe a safety feature of the car. Just acknowledging the current forecast adds relevancy, which rewards the user and increases the likelihood of action.

The heavy-handedness continues in the links under each day’s forecast–note the “Perfect conditions for a dream drive” repeated three days in a row, again, no matter what the forecast is. This was obviously something The Weather Channel threw in to make the Cadillac team feel even better about its media buy; however, it is irrelevant for the user and looks lame. This makes one remember that checking the weather does not mean someone is in the mind-frame to start exploring new car options.

Yes, it’s still early for this new medium and over time improvements are likely. However, there really is no excuse for this ad overload out of the gate. The Weather Channel should not make the same mistakes on the app that it has made on its website; and if Cadillac is the only advertiser, then use the extra impressions to advertise new cable channel shows or explain in-app features. Finally, Cadillac should take the time to try something new and relevant in this new medium, rather than repeating the same, tired single banner ad.

Tags: , , , ,
Posted in Apps, mobile | No Comments »

Why I’m out of Foursquare, and Why Some Apps Succeed

Wednesday, September 1st, 2010

And so another personal venture into the new is complete. Following in the footsteps of services such as Second Life and Pointcast, I have now decided that Foursquare is no longer for me. It has gone down a personal “hype cycle” in my life–going from interesting to integral to ignoble in just a few months. Where once I was checking in with glee and sharing my whereabouts with new collections of friends, now I’m moving on with life and onto Facebook Places. My personal journey is one that others have also reported, and I think a look into why Foursquare worked for a while, and how others continue to be a part of my life, shows a path to meaningful platforms.

What I Loved About Foursquare

I got into Foursquare big-time back in March 2010 during the annual SXSW event. I attended with a small group of Bridge people and we had fun checking into new places and tracking each other’s locations around Austin. I was immediately attracted by the fact that you could walk into a restaurant and find a digital trace of other people who had been there in the months, days, or minutes before. The app allowed me to share my experience with Facebook friends and Twitter followers, and I was delighted by the chance to earn fun badges. And as a digital marketer I also saw firsthand the promise of location-based services.

Over time I tried to build Foursquare into my routine around town. I would meet people for a drink at a bar and excuse myself to check in, and I would dutifully add new locations to the service in order to “get credit” for my appearance. As a digital marketing consultant, I also began to speak glowingly of the possibilities of this new service

Where It Fell Apart

But soon the bloom came off the Foursquare rose for me. The first negative came in my attempt to work with the company on behalf of some of our very large clients. Phone calls went unanswered and scheduled phone calls ended with me sitting on the line waiting for their side to pick up. I quietly advised my teams and clients to wait until the company got its act together before we went further down this road. As a user, I also started doubting the value of this once-cool toy. I began to hear stories of people getting burglarized when they were not home, and my wife wondered why I was telling the world when I was out of town and she and my girls were alone.  The “Honey, I need to understand what’s new in digital because it’s my job” excuse goes only so far, especially when there is no real utility in Foursquare at the end of the day.

And here we come to the real issue: There is no clear reason to install and use Foursquare. It is a toy that entertains for a few days or weeks, but at the end of the day there is no reason to make this a habit. Hardly any stores or restaurants pay attention to the service by, say, offering free offers with check-ins. The mayorships and badges seem silly after a while.  And your friends tend to get tired of seeing where in the world you are.

Meanwhile, Facebook has come into location services with something that works much better. You can utilize your current friends list rather than starting from scratch with a new network, and check-ins can link directly to the Facebook pages of where you happen to be. Stores and restaurants can do marketing on their Facebook pages and offer information or special deals. Foursquare is still figuring out how to build a business and service users and marketers. But Facebook has this down already.

The Lesson: What New Apps Need to Succeed

In looking at a wide range of new digital services, I believe some patterns begin to develop. And the biggest one that I see right now, across everything from mobile apps to social media services, is that success comes in degrees based on whether the new company has the following:

  1. The Toy Factor — When people can download your app, try something new, and show their friends you have yourself a great “toy.”  Foursquare is a toy. It has novelty, a link to the real world, and some games including the chance to earn badges. This is enough for people to download and play with for a few days or weeks, but it won’t last forever. The gang at Foursquare is still keynoting conferences and now has some investment dollars, but I believe the time has gone. The company should have built these next two factors into their initial design.
  2. A Valuable Tool–Once past the toy factor, your app needs some kind of useful service in order to succeed. Facebook, for example, started out for most of us as a clever toy that allowed us to play with self-expression. But many of us started using the service to communicate regularly with our friends. And because it was so useful, we built it into our daily habits and rituals. Foursquare could have created a simple way for retailers to communicate with the people checking into their businesses. Or it might have been launched with a focused purpose of helping people find money-saving offers on the places they visit. Now an app called Shopkick is showing it the way in this direction.
  3. Meaningful Marketing Model–Here’s where a lot of services have still not cracked the code, and where there is still tremendous opportunity for today’s start-ups. For marketer-supported services, you need a business model in which the advertising itself adds value to the service. Facebook is a great tool, but it still hasn’t shown that the little-seen ads on the right-hand side can drive marketers’ business. The best example of success here is Google and its AdWords service. The company started with a new search algorithm based on human link sharing. This was immediately a new “toy”–and because the results were so much more accurate, Google became a valuable tool. When the company created an advertising model based on search, everything came together; Google search ads are relevant to the searcher, and the marketer pays only when a desired action takes place–so there is a win-win-win that has created a +$20 billion business for Google.

I’m obviously simplifying the world of digital services and apps here, but I think this list helps to put a lot of things competing for our attention into their place.

Tags: , , ,
Posted in Apps, mobile | 6 Comments »

Early iPad Impressions: Not an “Ad” Medium

Tuesday, June 15th, 2010

A little more than a week ago I purchased an iPad. Typically I am an early adopter for tech toys such as this for a few reasons: First, in my job as strategy leader of a digital agency, my team and clients are eager to hear our take. Second, I am always looking for tools that will help me be more effective and/or efficient in what I do for a living. In this case I have been increasingly feeling the limitations of my laptop, especially when I want to, say, show a few slides or websites to a client over breakfast or lunch; the last thing you want to do in those situations is haul a heavy bag around and wait 10 minutes for the thing to power up and down. But I was really most interested in purchasing an iPad to understand for myself whether this promising/hyped new category of devices would be dominated by the old, interruptive model of advertising or start with a platform for Marketing with Meaning. And after a few days of use I can safely include that the latter is the case.

So far, the interruptive model for iPad advertising seems to be moving quickly up the hype cycle. Some people actually believe that this will—finally!—be the year of mobile advertising, even before Apple got into the game. Apple is preparing to launch its own advertising network for iPhone and iPad apps with special creative formats, dubbed iAd. It has raked in $60 million in commitments already from some of the biggest brands in the world who want to test it first, including Unilever, AT&T, Sears, State Farm, and Disney. The hope is that millions of app developers will earn a living out of turning a percentage of their mobile pixel space over to new ad networks and wait for the money to roll in—and marketers can reach people closer to where and when they actually pull out their wallets to buy stuff.

But a few of us are warning that mobile advertising is not necessarily the next big thing. Along with many others elsewhere, I wrote in this blog back in May about the limitations of iAd as an advertising option. The Wall Street Journal blog recently featured an interesting quote from Kevin Ryan, former CEO of online-ad company DoubleClick: “The answer that people want to hear is that mobile is going to be huge.” “The People” obviously means investors who hope to sell their mobile-ad companies to the highest bidder. But it also includes the largest advertisers in the world—who are watching TV commercial ratings and print subscriptions sink and know that they need to figure out a mobile solution quickly.

The central challenge, however, is the lack of “scale” in mobile marketing. At the end of the day, traditional advertisers such as the big names above depend on an interruptive model in which many millions of eyeballs are exposed to a short message in hopes that some small percentage leads to a sale. Just because they long for this scale does not mean it will actually arrive. There are already too many ad impressions to compete with, too many media options for consumers, and too many mobile-phone platforms to allow for such scale.

The alternative choice for mobile—and advertising overall—is Marketing with Meaning. In mobile devices this looks like creating value-added apps that a smaller percentage of people download (as compared to mass interruptions), but because the brand engagement is so much superior, this small group buys products and services at a much higher rate, over a much longer time period. This is the bet being placed by brands as diverse as Charmin (public restroom finder), Nationwide (car accident guide), Starwood (loyalty points tracker), and REI (ski report). The Gilt Groupe, a high-end online retailer, is now seeing 10% of its sales come from the iPhone and iPad. The reason? A killer interface made specifically for these platforms, and a business that has great deals for a limited-time only—i.e., if you wait to log on at your desk to check out the specials they might already be sold out.

Now to my handful of impressions after using an iPad for a few weeks:

  • First, the device is exceeding my expectations. I do love it! I expected to have a tool that would allow for easy reading of email, books, and websites, as well as something simple for presenting slides. It does that more than adequately, and so much more. The keys to greatness lie in a brilliant piece of hardware. The device is thin, lightweight, features an incredible screen quality, responds well to the touch, and you cannot beat the easy on/off button. This is really what computing should be about in 2010, rather than the endless boot-up of bloatware operating systems and unknown creatures in the taskbar bin. With this platform and basic OS, the possibilities for developing apps that make best use of it are limitless. So far I’m loving Netflix, Kindle, The Weather Channel, TweetDeck, and GoodReader. And I’m now reading the paper newspaper again thanks to USAToday and WSJ apps. So many great apps and we’re only in the first couple of months of this thing, folks!
  • The “magazine” model of advertising is weak. I have downloaded a few magazines such as Wired and Esquire to test what this experience is like. Chris Anderson, editor of Wired, talked at an Ad:Tech speech a few months ago about how his company was betting heavily on the iPad and promised to have many cool bells and whistles in its digital version. I also checked out Esquire on an app called Zinio that lets you subscribe to digital editions of many popular magazines. At Ad:Tech, Anderson was excited about the fact that people would be “forced” to flip past each full-page ad in his virtual magazine. (See more on his speech here.) In my experience, the iPad magazine reading is fine, but I hated having to swipe past each ad. This is a worse experience than a physical magazine, which you can simply shuffle past quickly. In this case you’re likely to get a finger cramp with the number of ads crammed in! Again, maybe people notice such ads in the short term because this is a novel experience, but after a while we will all just tune out another piece of unwanted clutter.
  • Improved websites might eliminate the need for apps. What I mean here is that the Web-surfing experience with the iPad is so strong (despite the lack of Flash) that you might not need to develop apps to provide similar value to users. For example, I considered buying the ESPN app for iPad, but then I just pulled up ESPN.com on my iPad’s Safari browser. The latter experience was outstanding because the network has built a site optimized for iPads. So there’s no need for the $4.99 app. Remarkably, this is something I have not heard in relation to the launch of the iPad. It could be a threat to Apple’s desire to “control” the user experience for its own profit, as there is no need to purchase or download a special app. For consumers, it means you skip finding/downloading/updating apps. We are already working on making iPad-ready adjustments for some of our clients.

Despite marketers’ desire to make the mass/interruptive model work in mobile, and Steve Jobs’s record of overturning and improving business models, my advice to brands is to create an app (or an optimized website), not an ad buy, as a way to connect with consumers on the iPad. There are simply too many challenges of making an interruption pay out—and too many opportunities to delight people by creating added value on the iPad platform.

Tags: , , , ,
Posted in Apps, mobile | 1 Comment »

Why Foursquare Ruled #SXSW

Thursday, March 18th, 2010

foursquare sxsw

Late Sunday night I got back from my first-ever trip to the much-discussed South by Southwest (SXSW) conference for Film, Music, and Interactive in Austin, Texas. After seeing many friends and other folks in the business rave and tweet about this event for a few years, I felt compelled to add yet another conference badge to my collection. Overall I found it to be one of the best conferences for digital marketing that I have attended in some time. That means something, because I think I’ve been to more than a dozen different digital shows in the past 24 months alone. Over the course of the next few blog posts I plan to share some of my biggest takeaways and examples of Marketing with Meaning.

First up is an example of a start-up digital service that used meaningful marketing to make the conference better for nearly everyone involved: Foursquare. For those who haven’t heard, Foursquare is a mobile tool that allows you to “check in” at locations where you physically appear—essentially a way of broadcasting to friends that you are, say, having a coffee at Starbucks, or waiting in line at the DMV. This is the leading brand in a new category of “geo-location” services. You might call it “Geo-Twitter”—in fact, you can update your Twitter and Facebook accounts with Foursquare when you check in around town.

SXSW is a very big event for the folks at Foursquare for many reasons. It is the place where partners and customers gather to see what’s new. Investors are lurking everywhere to spy the next hot winner. And some of the earliest early adopters and trendsetters (including a few celebrities) share their latest findings with their friends at SXSW.

So it is a clear business objective to own this event in every way possible. For most companies, this means paying sponsorship dollars to put your name everywhere, employing booth babes to walk around with branded snacks, and maybe hosting a giant beer-for-all for everyone at the event. But not Foursquare. Instead, Foursquare stuck with what makes its service special, and spent most of its time and money making it more so.

Foursquare is already a killer app for conferences. It is most effective when a large group of people who know each other and want to get together are located in a pretty close environment. This is exactly what conferences are all about. So instead of calling or texting to find out where your friends and contacts are, you simply see where they have recently checked in and walk over to the conference room, bar, or restaurant where they happen to be. This even makes it easy to “run into” people who you might unable to reach via email or telephone.

This is why Foursquare became so popular at SXSW in 2009. So the business decided to do more with this hyper-engaged, ultra-important audience in 2010. When we got off the plane in Austin and checked into the airport, we noticed that Foursquare had created special new features for SXSW participants. The main add was a set of special “badges” that you could unlock by performing various check-ins during the six-day event. Badges are a key element of the basic Foursquare service—providing you a fun way to show that you have, say, checked in at 50 different total places or from five airports or from a boat. They are fun for the user, and cleverly (and cheaply) train people to make Foursquare check-ins a habit. Some of the special SXSW badges include the “Austin Explorer” for hitting five locations in the city, and the “Hookup” for checking in at two different hotels. For me and our team, we found that these badges turned Foursquare into a living game that made some of the boring moments between sessions and meetings much more tolerable.

Foursquare did more than virtual badges, though. The firm partnered with specific locations such as the Pepsi Refresh Cafe and SXSW Web Awards to give people temporary tattoos to match their unlocked badges. And it partnered with PayPal to donate $.25 for every check-in to Haitian relief efforts. Foursquare even reported a running total of how much you had earned for Haiti. (I believe I hit more than $8.)

Only the folks at Foursquare know how much this modest expense in programming time delivered for its business at this big event. One key data point reported on its site shows that there were more than 15,000 badges awarded, including 6,025 versions of the Austin Explorer. That means that roughly 50% of the 12,000 people who went to the Interactive conference tried Foursquare.  According to this article, there were 300,000 check-ins in Austin during the event, and Foursquare added 100,000 users overall – “likely as a result of check-ins being broadcast to Twitter and Facebook.” This might have even helped the nascent company establish a business model; TechCrunch made the case that Foursquare could create a business around building similar special apps for other conferences.

So many thanks to Foursquare for helping me get a more out of my company’s significant time and money investment in sending me to SXSW. I will certainly repay the favor by giving this new service major attention in the months ahead.

Tags: , , ,
Posted in Agency Marketing, Applications, Conferences, mobile | 2 Comments »

AT&T Tries to Reach the “Minority Report” Mobile Future

Monday, November 9th, 2009

One of my favorite things to do in presentations about mobile and the future of marketing is to replay the scene above from the movie Minority Report (play above), in which Tom Cruise walks through a subway station and is bombarded with personalized 3-D ad units that scan his pupils and attempt to entice him to buy one of many products. Director Steven Spielberg actually got help from the MIT Media Lab to come up with the advertising concepts used in the movie. The movie was set in 2054, but here, today, aggressive companies want to make it a reality now. They dream of a world where our mobile devices are alerted to coupons, deals, and promotions as we walk by store fronts. Last week AT&T showed off such a mobile couponing concept at its Tech Showcase. But here’s the reality for today and tomorrow: These ideas will fail completely.

At the link below you can see a very short video of the AT&T concept, which is consistent with an idea that dozens of futurists, entrepreneurs, and big marketers hope will come true one day:

Next time you hear someone claim that this is the future of advertising, kindly beg to differ. The big problem with this concept is that people don’t like to be interrupted by advertising! I know, I know; it’s hard for us lifelong marketers to deal with, but it is absolutely true. To put this in perspective, let’s imagine that you could give out your home phone number to any number of marketers, and when these marketers have a “great deal” for you, they could call your home phone and speak to you when you answer, or leave you a voice mail message. Sounds great, right? Not really. In fact, more than 76% of Americans have registered their home phone numbers on the National Do Not Call Registry, which shows two problems with this future scenario.

First, the telephone is a very personal tool that people are extremely protective of. We look at the phone as our window to the world, our way of communicating with the people who we want to talk to. We own our phones and our numbers; we even pay to keep these numbers by moving them from phone to phone and address to address. It is literally a lifeline in some cases. When Congress overwhelmingly passed the Do Not Call Registry legislation, they established the fact that a telephone line is something that the homeowner “owns,” rather than a public space such as the street in front of your house. And this and other laws have ingrained the “right to phone control” in people’s lives.

The second major issue is the fact that when we let marketers start sending “valuable” messages, it’s highly likely to be completely irrelevant and annoying. Let’s use email as the analogy in this case. Soon after marketers gained the ability to send email to customers and prospects, they discovered that they could reach many, many people at the push of a button and at near zero cost. When you have freedom to advertise at no cost, the result is unbridled junk. And despite great data about the value of personalization, most marketers are lazy and would rather just spam millions and hope that some small percentage opens the email and buys a product. And I’m talking about big, reputable marketers here, not just the common spammers.

Doubt me? Well, take a read of my post on how Banana Republic is sending me emails about women’s boots. In this Minority Report world, why would Banana Republic do anything differently? In this AT&T future, when I walk by its store in the mall they will send me the same irrelevant offers that they’re sending me now. And it will take only a handful of these lazy, valueless messages before I unsubscribe to this entire mobile marketing app or end my contract with whatever mobile service is pushing it on me. And even if they do something personalized (say for men’s shirts), the chances that I will be in the mood to stop in the store when I am going about my life and trying to get things done is extremely small. Sure, one walk by out of 100 might find me in the buying mood, but that means 99 messages will simply annoy me.

This brings me to some of the special reasons that mobile is the last place such a service could succeed. The mobile phone is even more personal and private, and people are scared to death that it will be taken over by marketers. A few data points from recent studies by ACNielsen:

  • Mobile marketing was judged to be the “least trusted” form of advertising by consumers in 47 countries.
  • Only 10% of people responded to ads in a test.
  • 67% of people found it unacceptable to have ads on their mobile device.

We consumers really shouldn’t worry about the interruptive mobile future, because it faces two giant barriers. First, the mobile-service providers know that it would be suicide to force such an advertising medium on their customers. Thankfully, we have several choices in which company we go with for service. If any one of them starts spamming, then the move to alternatives would be swift. And there’s just not a ton of money for the AT&Ts of the world to reap from advertising, either. They make $50 to $100 per month on service. But at even a CPM rate of $100 for this “high quality impression,” you would have to hit people with many, many ads for this to earn a few bucks per month.

The second barrier to this future is the highly likely legislation that governments would pass to prevent this from happening. The Do Not Call Registry was the biggest slam-dunk bill passed during George Bush’s eight years. Congress loves to pick on advertisers because their constituents are sick of 3,000 ad interruptions per day, and very few people are going to defend the rights of a group that is respected at about the level of used-car salesmen.

Finally, let’s remember the barrier to all of the greatest ideas in the present and future of marketing: It takes forever for businesses to try something new. People envision a service like this to be a boon to small businesses, but here’s the reality: Small businesses don’t have a lot of marketing dollars, and they are the last to try new marketing. I love how one sandwich place near our office started using Facebook to spread the news of its daily specials. But these are few and far between. Not to mention the fact that they have been using a very, very low-tech way to share offers and promotions with people as they walk by: the sign!

So as much as we marketing geeks think it would be cool to intercept potential customers as they stroll by our stores, this idea is DOA. I think the only possibility for it to work is for services that are completely opt-in. Foursquare is one company that hopes people who have time to kill and want to see some offers will open its app. This is going in the much more meaningful direction, as it means the consumer is choosing to engage. That said, this is an idea on the small side. A store might get one person a week who has the app, logs into the app, sees a special he likes, walks in, and decides to buy.

I’m an enormous believer in the potential for mobile to connect customers and marketers in meaningful ways. But let’s file the Minority Report future somewhere along flying cars and remember to put ourselves in the customers’ mindset first.

Tags: , ,
Posted in Marketing Without Meaning, mobile, small business | 1 Comment »

Blyk Free Mobile Service Finds Few Takers

Wednesday, August 12th, 2009

One of the last great hopes of believers in the interruptive marketing model is that consumers will willingly opt into advertising if there is enough of an incentive to do so. This idea is inspiring a few new business models; perhaps the most-watched has been Blyk, a mobile service in the UK that since 2007 has been offering free calls and texts to 16- to 24-year-olds in return for mandatory advertising. Alas, Blyk failed to hit its growth numbers and was recently absorbed into telecom giant Orange with little fanfare or investor payday. I believe it proves my point that when the price of interruption is too high, the only way forward is Marketing with Meaning.

The business model of Blyk was fairly simple: Offer free mobile service to teens and young adults who are heavy users but have small bank accounts, and use mandatory advertising to lure big marketers eager to engage with an audience that is notoriously difficult to reach. According to Advertising Age, the company expected to reach 4.5 million members and roll out across Europe in its first year. There was even talk of an eventual U.S. entry. Alas, the service hit only 200,000 members in its first year and was unable to attract more users.

There were some good signs from the Blyk experiment. The company launched more than 2,000 campaigns, which included top brands such as Coca-Cola, Colgate, L’Oreal, and the BBC. Clearly the company was reaching an audience that these marketers desire. And the response rates to the forced ads were actually very good. The average response was “at least 25%” and one quiz for L’Oreal got a 70% response rate.

So, WTF? Simple: Most people, even teenagers with more time than money, find the true cost of advertising interruption so high that they will not accept it. In 2005 there were 6.9 million people aged 16 to 24 in the UK, so 200,000 Blyk users represent only 2.9% penetration (assuming 100% of Blyk subscribers fell into this narrow range and the company didn’t kick out users at age 25). Consider the fact that this is a very social crowd, and likely each of the 200,000 users told dozens of friends about the service. The lack of growth shows that the proposition of free mobile service could not overcome the advertising overload.

I think this experiment also shows how personally important the mobile device is in our lives. While we might be OK with zoning out in front of ad-supported passive media such as television (even on Hulu.com), our mobile devices are our active, lean-forward links to the world. As we’ve seen with the tens of millions of people who have signed up for the Federal Do-Not-Call List, we want our phones to be immune to marketing interruption.

Some might wonder why the response rates to ads were so high. I believe it is just a logical function of the type of people who were attracted to Blyk in the first place; in other words, the (small) audience that bought into Blyk doesn’t find advertising to be that much of a negative. Some of them even enjoyed the advertising. It reminds me of a study AOL did a few years ago on the .2% of people who click on banner ads more than once per month. These rare few are “the same people that tend to open direct mail and love to talk to telemarketers.”

So another ad-supported business model bites the dust. My hope is that marketers and the investment community see this specifically as an example of how interruption and annoyance will fail in new media. As I wrote about earlier this week in my review of Chris Anderson’s book, Free, the price of consumer attention continues to increase. Forcing people to accept a drain on their time and attention (forced ads) in exchange for something of value (free cell service) is likely the wrong way to go. But if the marketing itself can be enjoyable and add immediate value in return for people’s attention, we might just be able to win them over.

Tags: , ,
Posted in Marketing Without Meaning, mobile | 5 Comments »

A Mobile Marketing Perspective

Thursday, June 11th, 2009

Last week I had the chance to lead a workshop on mobile marketing at the 3rd Annual Mobile Commerce Summit in Las Vegas, a conference focused on the financial services industry and designed to help companies figure out how to crack the code on this powerful new medium. My presentation kicked off the conference Wednesday afternoon, and I was able to share the stage with Paul Moore from Fifth Third Bank, a client of ours who we helped on the launch of the bank’s mobile banking platform. While we were nervous about filling up a three-hour workshop window and not losing people to the many distractions of Vegas, we had a nice, attentive crowd and the time flew by.

Embedded below you can see an edited version of the presentation that we gave. Alas, you had to be there to get to see the Fifth Third case and some other goodies that are not appropriate for broad sharing. Overall, the goal of the presentation was to help financial services marketers get an understanding of the way that best-in-class marketers are using mobile, and then provide a framework and industry-specific direction that they could bring to bear on their own businesses. Of course, my overall theme was that mobile marketing must be meaningful in order to earn customer attention and drive sales.

Mobile Marketing Workshop Presentation
View more OpenOffice presentations from Bob Gilbreath.

Let me know what you think, and if you find this useful, please share it with your friends.

Tags: , ,
Posted in mobile, Presentations | No Comments »

Selling Your Marketing—The Holy Grail

Friday, May 22nd, 2009

The most intriguing story I heard last week was that Apple has made somewhere between $20 million and $45 million in revenue from the 1 billion iPhone apps that have been downloaded from its store to date. In blog posts and Tweets about this estimate, the most common reaction was “That’s all they’ve made?” Since most apps are free, and Apple gets only a 30 percent cut of any revenue from paid-for apps, this seems like relative nickels in the grand scheme of things.

But one @reply from my Twitter feed, Rob Saker, had a great point that’s been sticking with me:

“I’d love [$20 million] with no inventory, spoilage, and few promotional costs… They may have found the Holy Grail of marketing, promotion that in itself generates revenue.”

To paraphrase Rob, Apple’s true take from the app store is much higher considering that these apps are the best marketing possible for the pricey iPhones and revenue cut from AT&T service (30 million of which are now in the market). The ulitmate test of Marketing with Meaning is when people actually pay for your marketing. And I believe marketers must set this as a new goal and revenue source for the work they do.

iPhone apps offer the perfect way for companies to create marketing that in some ways pays for itself.  Kraft’s very successful and slick iFood app is probably the best-known example. At the iMedia conference in March, the brand owner of the program, Ed Kaczmarek, said that Kraft chose to charge $.99 for the tool because they felt it was valuable, and putting a price on it actually helped communicate that value to consumers. That’s right-charging for the marketing made it even more valuable and meaningful. The result: iFood hit its three-year download goal in a matter of weeks.

At Bridge Worldwide, we’re developing a few iPhone app ideas, and my strong guidance to clients is to charge at least $.99 for them. Not only do I believe this adds to the value impression, but business managers start to get excited when new revenue comes in. Even if it doesn’t add a lot to the bottom line, the money that comes from selling apps can be directed toward further development and marketing of the app, which, in turn, can drive greater app quality and total downloads.

Another related and exciting piece of news last week was that Amazon has opened up a beta program to allow bloggers to get paid for people who subscribe to their blogs via the Kindle. Subscriptions are priced up to $1.99 per month, and the blogger gets 30 percent of the revenue. Of course, this is small beans right now, as there are likely not even 1 million Kindles on the market yet. But, again, we’re starting to see a model in which people are willing and able to spend a little for blog content. And blog content is almost always considered “marketing.”

In a recent post on his blog, John Gerzema makes a great point about consumer mentality of micropayments:

“The luxury of micropayment pricing is that a consumer can instantly make a low-risk value judgment. Limiting risk allows for product experimentation leading to little failures or successes and the consequent expansion of brand loyalty.”

It’s still too early to make this claim across the board, but I believe most iPhone and Kindle owners do not blink at being asked to spend less than a buck on impulse for a useful service. Frankly, I find it hard to believe that killer apps such as Facebook and Pandora for iPhone do not even charge a penny for their services. Both lack a viable business model today, and it’s so easy and cheap to make a buck through the app store. But I was also disappointed to see that Nationwide doesn’t charge for its very cool Car Accident Toolkit app, and Bloomberg—a company that charges thousands of dollars for its proprietary information and terminals—is giving its milk away for free as well. The industry actually needs these big players to start charging for apps in order to set the bar. Let’s not lose this opportunity to convince people that free is not the standard!

I’m very excited to see where brands play in the world of charging for their content. I’m so excited that I just signed up for the Kindle blog program, and invite those of you who are Kindle owners to subscribe to Marketing with Meaning now. I promise that every dollar that comes will be put right back into making this blog bigger and better. In fact, I will send a free Tide Loads of Hope T-shirt to the first person who subscribes and emails me the receipt!

Tags: , , , ,
Posted in Marketing that Pays, mobile, Solution | 1 Comment »

« Older Entries