The Holiday issue.
We’re driving to Cornwall when we would normally be writing this. So the new news is a bit shorter. But we have added a selection of posts from recent months that we think merit some renewed attention.
The most surprising news this week was that Yahoo poached one of Googles top people as their new CEO. Whilst Yahoo have their problems, they are still a big player on desktop and on the web. If Marissa Meyer can reignite the innovation and continue to deliver big audience they have a chance. John Battelle looks at how Yahoo can be a tech business and a media business.
Ofcom have published their annual look at the communications market. At 400+ pages there is lots of data on digital, mobile, TV and everything else in media. Well worth flicking through. The stat that stood out to us was that 11% of the UK population already has a tablet and 10% have an eReader. And most people use their tablets at home.
People sometimes forget that the mobile revolution we are going through, isn’t about devices – it’s about the new behaviours that these devices have enabled. Digital Don David Armano reminds us that the future isn’t about mobile – it’s about mobility.
And John Donahue of eBay (talking of $10bn in mobile revenue in 2012 – double last year) puts it this way;
“Mobile is becoming the digital nexus of consumers’ lives. They want what they want when they want it.”
The new Think Quarterly from Google is out. As ever it’s a good read, spoilt only by some quotes from us on Olympics mobile and social.
Worth another look
We have pulled some posts around subjects that keep coming up in our work with clients.
A new study from Deloitte suggests that mobile already influences about 5% of all US retail purchases and this is forecast to grow to between 17 – 21%. That sounds pretty significant, right? If you look at it in actual sales, this suggests mobile will influence $159bn in sales this year and around $700bn by 2016. As Forbes said Amazon Price Check may be evil but it’s the future.
John Battelle has written a typically thoughtful piece on why we need advertising to work online – otherwise the content creation that drives the majority of the eyeballs could cease. He doesn’t have the answer though – I think that’s our challenge.
We’ve talked in the past how the $50 billion gap between time spent online and the money spent online is having a corrosive effect on content creation. As analogue dollars turn into digital cents, the media organizations creating the content that people value, are struggling with the need to produce more content for the same or less money.
Michael Wolff has written a great article on how the business model for news is imploding as mobile grows. He does the math and shows how mobile is getting a fraction of the revenue of online, which was already much lower than print. In effect $100 revenue in print shrinks to a $1 on mobile.
Of course every agency and every client now includes digital in their thinking but money hasn’t yet followed audience. Morgan Stanley still talk of the $50bn gap between how people spend their time and where advertising spend goes.
We’re convinced that the mass market adoption of smartphones will accelerate the closing of this gap, but we think every element of the marketing industry is going to need to change. Sounds farfetched? Smart brands are already changing;
P&G; Mr Pritchard (P&G Global Brand Builidng Officer) pushed P&Gs recent digital-is- more-efficient strategy, saying digital and public relations give P&G the greatest return on investment and ”go hand in hand”
Coke “All advertisers need a lot more content so that they can keep the engagement with consumers fresh and relevant, because of the 24/7 connectivity. If you’re going to be successful around the world, you have to have fat and fertile ideas at the core.”
The two videos in this article are well worth watching; Coke VP of ad strategy Jonathan Mildenhall talks about Liquid and Linked Content as he explains their new marketing mission statement very eloquently. And he has kept his Leeds accent rather better than I have.
General Mills; With digital our packaging is becoming a platform for us.
Unilever;In a digital age, that means inviting and empowering people to own our brands – their brands – and shape them alongside us. Creating marketing that is social by design. Helping people tell their brand stories, not just hear ours
Adage has this great Unilever quote;
a December investor presentation by Chief Marketing Officer Keith Weed in which he noted several digital programs that produced north of $3 in revenue for each dollar spent.
I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we’re quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available. In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.
P&Gs CEO on an analyst call this week.
And a Nike marketer said this;
“A whole industry is stuck on trying to force old metrics on to new channels”
“once you have established a direct relationship with a consumer, you don’t need to advertise to them”
So these brands aren’t looking at business as normal. They are recognising that the new digital opportunities are driving a rethink of what marketing means.
Jeff Dachis – who’s first digital agency Razorfish was one of our key competitors when we were running Modem Media/Poppe Tyson in the 90s – now runs Dachis Group, one of the smartest social media “agencies”. Talking about Facebook, APIs and big data he had this to say about social in general;
Previously, brands could either get scale (e.g. buy a Super Bowl ad) or deep engagement (i.e. street teams and events). I believe social represents the key to brand marketers achieving engagement at scale.
Our friend Faris Yacob has developed a beautifully simple model of how brands need to organize their marketing.
How does digital advertising work?
A personal example of the potential of the Facebook ads; Of the thousands of ads served to me on Facebook I have noticed very few. When I see that my friends like a brand, that catches my eye, but I can’t really recall any of the brands. But this week I have seen ads for an imminent Soul11Soul concert. I can’t imagine they have a big budget, so they have used really effective targeting – which I can’t imagine any other media being able to deliver.
That’s advertising so good, it’s a service.
But why did I notice this ad when I have not ‘seen’ so many others? As the new book from measurement guru Robert Heath points out, it’s all about Perceptual Filtering.
Cocktail party syndrome …one can concentrate on the voice of the person talking…But it is not as if we have closed our ears to the other conversations – they can easily intrude unasked, as for example if one hears ones own name mentioned elsewhere in the room….So the incoming information, in sound and vision, is entering our brains and is there being filtered for relevance by processes of which we are largely consciously unaware
So of all the ads seen, my unconscious knows I love Jazzy B etc and alerts my conscious brain about this one. This is how we believe online advertising works and why Comscore and DunnHumby research can show that much maligned banners and buttons can perform just as well as TV for CPG brands. More to come from us on this topic.
Although this thinking is around digital we’re seeing clear evidence that mobile can play it’s part. A new study from research firm Insight Express shows how over the past few years Mobile has outperformed Online in its ability to drive brand attributes like awareness, favourability and purchase intent.
So as well as getting response, mobile advertising can drive the brand too – we just need to improve the standard of creative work.
People use their smartphones to solve problems – Where am I? When is next bus? What should I buy? Is this is a good price,? How can I kill 10 minutes? Has anyone commented on my Facebook update yet?
Brands need to find ways of helping people solve these problems. The technology used to make that happen is not that important. Which ad network is selling the ad inventory is not that important. What’s important is that the brand objectives are met.
As Jazz legend Charlie Mingus said;
“Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity.”
We’re with Charlie.
Is Marc Andreessen the smartest man in tech? Well he did invent the browser and went on to launch Netscape - the first internet IPO. He came up with the idea of cloud computing before anyone else. And he was very early into social – launching Ning in 2004 enabling people to build their own social networks. He also invested in Skype, Twitter, Groupon, Instagram and AirBnB.
This Wired Interview with him is fascinating – especially his theory that technology wants to be free; where he feels that -when the connectivity is good enough – the processing should take place in the cloud rather than on the device. Which means the web model works better than the native app model – but we need the connectivity to catch up.
And if you have some time it’s worth reading a fascinating Malcolm Gladwell article on the pioneers of infomercials, as they were the people who first worked out that combining product and marketing can be really profitable.
Rory Sutherland is probably the smartest guy I have ever worked with, and this interview is a good take on his current thinking about how human behaviour can be used to drive innovation
Finally, given we’re on our way to the home of the Pasty we thought we would repeat this..
Our favourite story this week is about the Sky owned WiFi provider The Cloud signing a deal with Greggs Bakers. So when you are waiting for your pastie to cool to avoid paying VAT, you’ll be able to check your emails. Their press release had a classic headline – There’s a Bap for that.