The power of propensity: Understanding this measure’s role in your marketing efforts

Almost every marketing leader and expert will tell you that modern marketing is all about measurement. Being able to estimate the ROI of marketing spend by attributing customer actions to tactics has given companies a reason to allocate bigger budgets to marketing each year.

A 2018 report from Kantar, a global media research consultancy, predicted that the measuring tools and methods marketers rely on will evolve rapidly in 2019. While most marketers remain fixated on standard metrics — cost per click or cost per impression, for example — technology is allowing us to incorporate a wide new range of factors into our measurements. Chief among them is consumer propensity.

The term may be familiar, but not everyone fully understands it in this context. In general, propensity refers to the natural tendency of customers to convert without exposure to additional media. Quantifying this tendency is tricky because consumers are constantly exposed to media, but it helps to think in terms of “incrementality.” That is, will spending an extra dollar here drive more conversions?

If you’re spending a lot in a place where customers already are likely to convert (i.e, consumer propensity is high), it’s going to look like that money is well-spent — even though it likely is not. On the flip side, spending in a place where consumers are less likely to convert but are more affected by your media might look like a bad investment on the surface — yet it may not be.

Perspective is critical

Optimising media spend is an ongoing, complex problem for marketers. Because there are many possible ways to spend more efficiently, the key is to pursue constant improvement rather than one perfect solution. To do this, marketers need timely and accurate feedback on their media performance. That’s where multitouch attribution comes in, but attribution models are only as valuable as they are accurate.

Marketers ultimately must generate more sales while spending more efficiently — reaching the right consumers in the right place at the right time in the face of ruthless competition and constant change. A major component of this is understanding the momentum of consumers moving toward conversions.

If that momentum is already in the direction of a conversion, why invest more resources into a sale that was likely to happen anyway? If momentum is not working in your favour, you have to consider how your resources can best work to build traction.

When calculating propensity, acknowledge that every person has a natural likelihood to convert — regardless of whether that person is exposed to advertising. If someone is an existing customer, then the propensity to convert is different from that of a prospect. Historical consumer activity (such as previous purchases or website visits) and known consumer factors (geo, activity online) are critical to determining consumer propensity and the true incremental contribution of marketing.

The bottom line? You need to understand the big picture (and work hard to mitigate unconscious biases) if you want measurements to be useful. If you were tracking body weight as a measure of health without also knowing people’s height, for instance, you would make a lot of misinformed judgments. As a data point, consumer propensity provides critical context and puts the rest of your data into perspective. Here are three ways to incorporate it into your measurements:

Factor in your evolving brand equity

Building brand equity typically requires a lot of upfront spend. Once it’s established, you can taper spending while still getting most conversions — but your data may not reveal that.

If you’re a new business or in a highly competitive space, you may need to spend a lot to generate interest and awareness; it might also take many years to build that brand equity. Once you establish it, though, you’ll have customers who know your brand and want to buy what you’re offering. If you’re still spending heavily on them, you’ll need to make adjustments.

By calculating consumer propensity to make a purchase and incorporating it into your measurement models consistently, you’re able to detect when the tides shift. You can then adjust and reallocate your spend according to what’s happening currently instead of relying on insight that is a year or two old.

Accept that there are no timeless solutions

Many executives struggle to grasp this fact. In reality, current solutions might not work a year from now — you constantly should be trying to figure out the right solutions, and calculating for propensity is one way to do that. Knowing who’s showing up with a high propensity to buy can help you decide whether you’re spending ad dollars effectively — you don’t want to be wasting limited marketing resources on customers who will be converting regardless.

You do still need to generate interest, and people need to show up with an intent to buy. Understanding the time component of propensity (knowing when customers are likely to buy or when interest tends to subside) will enable you to spend more efficiently.

Don’t ‘set it and forget it’

It’s marketing. You’re not mapping the human genome or measuring the force of gravity. You’re measuring interest in buying something that you have to sell, which is always changing.

Even if there were a “perfect” solution, hypothetically, it wouldn’t stay perfect for very long because of fluctuating variables. No single measurement technique will work for the next five years, which can feel overwhelming — but it shouldn’t. Find a partner firm that can help you develop and implement solutions that will work today but also can evolve for tomorrow.

Markets are always changing, which makes constant measurement critical. Tastes change, preferences change, ads get stale, new competition emerges. Complacency leads to failure. The need to measure your efforts is unlikely to change, but the accuracy of your measurements can increase if you begin to factor in consumer propensity.

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How marketers can prepare for the rise of ‘hyperpersonalisation’

If you’ve ever noticed an email from a brand addressed directly to you or based on your prior purchases, then you’ll be familiar with marketing personalisation. This was an early broad approach, and we have seen personalisation evolve as organisations have brought new types of data into the mix, including contextual and location specific information, followed by analytics and machine learning for more real-time customer data.

This one-to-one approach was cited as having the power to enhance brand loyalty by delivering a better customer experience (CX). Now, with artificial intelligence (AI) moving into the mainstream, connecting with customer journeys is becoming a reality and is proving a boon for real-time personalisation, or what is now being termed as hyper personalisation.

The benefits for businesses include a positive boost to both customer experience and the bottom line. However, hyper personalisation isn’t as widespread as it should, or could, be. Like the adoption of all new concepts there are challenges, opportunities to be realised and some critical initial steps that need to be put in place.

What is hyper personalisation?

Hyper personalisation is more than just putting the right name on a marketing email. For personalisation to be truly ‘hyper’, it requires multiple types of technology and data to come together to adapt the customer experience specifically for each customer, where they’re engaging, what they’re buying and how they want to experience your service.

Hyper personalisation requires not just data but most importantly the artificial intelligence to make use of it.

Personalisation in real-life

Hyper personalisation is more than just a concept with limited real-world applications. Consider the example of a quick service restaurant. Hyper personalisation might mean a dynamically adapting menu which changes in real time depending on how long the queue is, whether it is breakfast or dinner time, and which ingredients are in the kitchen. Additionally, because the restaurant has a number plate recognition system in place, it can recall your recent orders and offer a quick choice menu to repeat the last thing you bought. It might also be able to up-sell by recommending new items to try that those with similar tastes have also bought.

The impact for both the business and customer is positive. Customers don’t have to swipe through a multi-page menu to find the same thing they order each and every time. Simultaneously, the restaurant can create a more efficient system and increase sales, while the data they gather can be fed into other marketing and operational processes.

As the customer experience is frictionless, customers can feel the significant benefits without realising it. Solutions and pilot ideas are rapidly being implemented into leading marketing and automation platforms. The financial services sector is a prime testbed for this, where cross-selling is an important part of the business model. Consumers who take out a mortgage, for example, may find themselves with personalised offers for relevant services, such as contents insurance.

Similarly, chatbots are an area within which predictive personalisation has thrived. Applying AI has allowed marketing teams to anticipate customer needs and respond with tailored offers, dynamic pricing and more relevant content.

Of course, none of this would be feasible without the consumer demand to support business investment. The principles of customisation and recommended picks, pioneered by the likes of Netflix, are prime for other industries too.

Putting hyper personalisation into practice

Given how quickly consumers have embraced personalisation as offered by services such as Netflix, we know demand exists. The concept also makes business sense; the technology is available, and the platforms are there to integrate and support it. However, as with all new technology there are barriers and challenges for marketers and customer service teams to overcome to successfully adopt a hyper personalised approach.

Integrating data from sources across a business, both physical and digital, internal and external, is an important first step. Algorithms are needed to filter and understand the data and feed it back into the customer touch points. It’s likely that you’ll need multiple iterations and tweaks to get the process right.

Artificial intelligence, real results

Building an effective customer experience strategy using artificial intelligence to deliver hyper personalisation offers significant potential. Aligning with the needs and expectations of consumers is crucial. Organisations set to maximise these opportunities are those that put AI as a strategic priority within their business, scale up AI projects from pilots to business-wide best practice, align to consumer expectations and keep the customer experience central.

The way that consumers buy today is unrecognisable from a decade ago. The concept of personalisation which brought new marketing and customer experience strategies is on the verge of another, even more significant change as we move from personalisation to hyper personalisation.

Customers know their experience is changing. It started with the content suggested by streaming services, and they’re ready to embrace the change more widely. Aided by a boom in AI startups, analytics and machine learning are now being applied to customer data in real time, and organisations leading this revolution are well placed to reap the rewards. Will you be one of them?

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Money matters: How sharing financial metrics and KPIs builds stronger teams

The all-hands meeting is a staple of businesses for sharing important financial information and progress. Smaller companies typically bring staff together on a fairly regular basis. Larger organizations may sync up several offices at a time or hold an annual company-wide conference. There’s good reason why these meetings haven’t fallen out of fashion – they get everyone on the same page.

However, many owners and CEOs grapple with the question of how much financial data they should share with their teams and how often, regardless of their town hall or all-hands meetings approach. Research studies points to being as transparent as possible, as long as the right context is in place. 

More than two decades ago, John Case of Inc. coined the phrase open-book management. He noted, “a company performs best when its people see themselves as partners in the business rather than as hired hands.” He felt employees make better decisions when they have relevant financial information about their organization such as profit, cost of goods, cash flow, expenses, and of course, revenue.

So, what should leaders share? Below are a few examples of what and how to share metrics with your team.

A shared purpose

At the close of 2016, BetterWorks released results of an employee survey in which 92% said they’d work harder if they knew company goals – yet 64% didn’t think their organization was transparent. Visibility on metrics cultivates an environment of engagement, delivering benefits from increased employee retention to better job effectiveness to 2.5x more revenue versus companies without this focus.

Information gains buy-in, a commitment to a shared purpose, and it shows progress towards a result. It turns a staff of workers into a team on a mission.

While a complete open-book approach might give you pause, you might wonder what information to share with the broader team. As a senior agency executive, you’re familiar with tracking project results and costs, reporting on the status of client relationships and projections and more.

Is this detail important?

Of course, the answer is yes, and a static “state of the agency” financial report isn’t enough for employees, either. Common questions owners and leadership teams ask and manage for their companies include:

  • Do you have enough resources to meet future demand?
  • Do you have the capacity to take on more work?
  • Are you under or over-servicing clients?
  • Is the right amount of time being spent on the right projects?
  • What kind of work is most profitable and where do margins stand?

These questions and the data needed to answer them shed light on a team’s progress and vulnerabilities, and in making relevant information available, employees become vested in finding a solution and moving the needle. And, armed with such knowledge, teams are empowered to identify issues and make decisions, much faster and more effectively.

It’s all there

When you tie finances to functions, you understand if personnel are properly utilized or if outside help is needed. With real-time context on accounts receivable or sales about to close, you can better plan for delivery, handle peaks and ensure you’re not wasting money during lulls.

Employees, with insight – into the agency as a whole, other functions and project status – can do the same. That frees up agency leaders and makes an organization more responsive and nimbler.

And, the fact is, this data is already available at your agency.

The problem owners face is that this data is not all in one place, and often compiled using multiple software tools and manual calculations. It’s time-consuming, error prone and causes unnecessary cycles. Breaking these insights out of spreadsheets or ad hoc, hidden reports and sharing them in real-time is imperative for greater collaboration and decision-making across agency functions.

Further complicating the situation is that there are literally thousands of solutions offered for every possible financial, time billing, project management and marketing function. As a result, pockets of information are created and trapped, making it harder to share across teams and departments.

Owners and their employees need access to the same data at the same time, providing the right conditions for companies to  accurately forecast demand, revenue and hiring, resource allocation and more. The data is all there.

Know it, show it

Once you have the ability to integrate technology, you can better prevent siloed information across CRMs, resource and project management, time tracking, finance and other systems. With real-time insight, forecasting is accurate, personnel utilization maximized, delivery of projects is on time and within budget – productivity and margins grow.

The information we’ve discussed should all be shareable with your employees – so show it. Analysts at SPI found organizations with such an integrated approach do better because visibility increases performance, leading to a 31% increase in profitability.

As companies manage ever-changing industry shifts and demands from clients, the need to share financial data on a consistent and ongoing basis is critical to success in today’s agency climate. Putting everyone on a singular path is critical and sharing financial information can increase efficiency and enable precise decision-making.

The all-hands meeting has its place. However, when employees can connect their function back to a unified business purpose – not just for an hour or two year, but at any time – you’ll gain many awareness-producing benefits that’ll also motivate employees every minute of every day.

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What Salesforce, Google and Microsoft’s acquisitions tell us about CRM – and why data is the new capital

This week’s acquisitions by Salesforce (Tableau), Google (Looker) and Microsoft (PowerAI) all point to one critical change in the business environment – that data is the new capital. We have financial capital and human capital – now we have data capital.

Using data properly allows large enterprises to better predict what their customers need. In the good old days, circa five years ago, you only used addresses to mail invoices. Sometimes it was used in demographic segmentation for marketing purposes.

Now using state-of-the-art AI models, it can have a seriously important impact on making predictions about the customer’s behavior. The press is full of comments on the negative side of large enterprises having too much data about us. But how about they stop spamming us with useless emails that we do not want?

For those customers who want to continue commercial conversations with their preferred providers, how should companies engage effectively, while also respecting the spirit of laws like CCPA or GDPR? One obvious option for companies is to cut back on unsolicited emails, SMS messages or contact-center outbound calls.

Imagine a world where a marketer gets ten chances a year per customer to offer a deal and hit their revenue targets. In this scenario unsolicited email and text do have a cost – well, not really a cost, but an opportunity revenue problem. If you waste an attempt to convert a customer, you lose a shot at revenue – you lose the “opportunity.” That means every slot is important and “valuable.” 

In this new era of privacy primacy, when it comes to contacting customers, B2C companies cannot afford to miss the bullseye, since their supply of marketing ‘darts’ will no longer be unlimited. However, get the balance right and brands can stop spamming you with useless emails, because they offer insight on what you might like to buy. They can time their approach, so they send you marketing content when you are more inclined to buy.

Cerebri AI has one customer in Europe, where under GDPR, their marketing team is only allowed to send 10 unsolicited communications to a customer, even if they opt in. That means understanding what their customers might need is more important than ever.

So, the large software vendors are loading up, they need tools that address the widest horizontal markets possible. There will always be room for specialized vendors who focus on specific verticals like Cerebri AI that focuses exclusively on customer engagement driving financial results.

One thing we have noticed in the past two or three months is customers we present to are increasingly aggressive in sourcing analytics and AI-based software. Our last major presentation, to a multi-billion-dollar, market cap customer, saw them flat out ask: “are you a rules-based vendor, and BS, or do you actually have AI-based solutions?”

There is a wide gap between “analytics” and AI technology. Analytics is not AI. It is usually rules- based. Buyer beware.

Today everyone is a data scientist, AI is as hot as anything. And it is the first technical discontinuity that is being attacked on a global basis. This is not an American revolution exclusively like so many others in the past. The 2019 Turing Prize, the “Nobel Prize of Computing,” was awarded to Professors Hinton, LeCun & Bengio, for academic work largely done in Canada.

AI is a truly global deal today.

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Who’s taking it to the next level in customer experience? Well… nobody, says Forrester

Amazon may have stolen the crown as the world’s most valuable brand, but who are the companies pushing the boundaries with regards to customer experience?

According to the latest analysis from Forrester, Lexus, Regions Bank and USAA are among the best performing US brands – but nobody is taking things to the next level.

The 2019 US Customer Experience Index ranked brands out of 100, with 75% or above being designated as ‘good’, and 85% or better as ‘excellent’. Not one organisation achieved this latter category, with the industry averages – 74.3 for luxury auto manufacturers, 73.5 for banks – usually equating to slightly above average performance.

A noteworthy outlier was airlines, whose industry average slumped to 61.9 with only three making the cut of 65 or above. Federal government (average 59.7), health insurers (65.3) and rental cars (64.2) also performed poorly.

The good news is that averages have gone up slowly over the past 12 months. Wireless service providers, banks, and health insurers saw healthy changes; yet airlines saw the only major drop, to 61.9 from 63.1 in 2018. Ultimately, the report noted, despite these small changes the industry still holds a ‘leadership gap’; brands that have risen to the top of the rankings have remained mostly stagnant.

The good and the bad – and a lesson for brands

Two interesting case studies leapt out from the analysis showcasing improvement and decline respectively. Whole Foods, having been bought by Amazon, improved from a 2018 rating of 68.7 to 72.3 this time around, moving above the industry average in the process.

According to Harley Manning, vice president and research director at Forrester, the good ultimately outweighed the bad with the acquisition for users – as well as providing an interesting note for brands.  “The changes included many price cuts but also some serious digital/physical integration,” wrote Manning. “[The score] is a serious vote for taking a strategic approach to connecting digital and physical channels.”

At the other end of the scale was Southwest Airlines, which dropped from 72.4 to 69.5 despite remaining in the top three airlines overall. Manning cites the troubles regarding the Boeing 737 MAX aircraft – of which Southwest is the biggest US customer – as key to the downturn, noting the customer experience ecosystem includes everyone, from suppliers, to partners and employees, as well as customers.

According to Rick Parrish, principal analyst and report author, the key to getting CX right is emotion. “How an experience makes customers feel has a bigger influence on their loyalty to a brand than effectiveness or ease – in every industry,” Parrish wrote. “Brand performance in the US CX Index 2019 reflects this: elite brands provided an average of 22 emotionally positive experiences for each negative experience, while the lowest performing 5% of brands provided only three emotionally positive experiences for each negative experience.”

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Amazon beats Apple and Google to world’s most valuable brand ranking

Amazon has overtaken Apple and Google to become the world’s most valuable brand, according to a new report from WPP and Kantar.

The 2019 BrandZ Top 100 Most Valuable Global Brands ranking was as ever dominated by technology, with five of the top 10 designated as tech providers. Amazon and Alibaba (#7) were designated in the retail space, while McDonald’s – whose recent purchase of personalisation software provider Dynamic Yield was well documented – Visa and AT&T completed the top 10.

Of those in the top 10, Google – last year’s victor – fell to #3, while Tencent dropped to #8 from fifth position in 2018 and McDonald’s fell a place to #9. Despite the latter’s drop, the report noted McDonald’s brand value had increase 3%. Amazon, by comparison, saw a 52% brand growth.

The biggest winners were Instagram, which climbed to #44 with a yearly growth of 95%, Netflix (65% growth, #34), and Uber (51% growth, #53).

The report noted how Chinese brands were beginning to make their presence felt. Of the nine newcomers in the ranking, many – including Xiaomi, Haier and Meituan – were from the Asian country. The report emphasised the importance of disruptive business models to making progress. Haier (#89), a provider of consumer electronics and home appliances, has ‘committed to co-creating an open ecosystem brand in the IoT era with its customers and partners’, as BrandZ puts it.

One example of how tech has conquered all is with the story of Coca-Cola. In 2013, Interbrand ranked Apple as the world’s most valuable brand, putting to an end 13 years of domination from the soft drinks behemoth. According to the 2019 BrandZ ranking, Coca-Cola sits at #14, a ranking unchanged from the previous year.

This is not to say everything is rosy in the garden for the biggest tech brands. The report noted how social media platforms in particular are facing continual challenges to retain trust and desirability; a more ‘volatile world…in which brands must continually anticipate evolving consumer needs and expectations.’ As far as Instagram is concerned, research from Rakuten Marketing in March found the social platform had toppled YouTube as the best place for influencer content. The report praised brands’ heeding of consumer interest and moving more towards ‘honest disclosure’ of partnerships.

“The growth in value of this year’s top 100 brands to an all-time high proves the power of investing in brands to deliver superior shareholder value,” said David Roth, chairman of BrandZ. “Behind this headline growth figure lies the success coming from a new phenomenon of ecosystem brand building.

“We’re seeing a move from individual product and service brands to a new era of highly-disruptive ecosystems,” Roth added. “Brands need to understand the value this type of model can create and should embrace its approach to be successful in the future.”

You can read the full report here (pdf).

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Salesforce to acquire Tableau for $15.7 billion to combine Einstein’s AI with BI bulk

Salesforce is to acquire business intelligence (BI) visualisation software provider Tableau in a $15.7 billion (£12.4bn) all-stock deal – with the aim to improve customer journeys through the fusion of artificial intelligence (AI) and big data.

The acquisition, which was announced by both companies earlier today (June 10), will see Tableau’s data visualisation tools baked into Salesforce in order to further the latter’s mission to ‘deliver customer success by enabling a truly unified and powerful view across all of a customer’s data.’

Here’s the key quote from the press materials:

“Salesforce pioneered AI for CRM with Salesforce Einstein, and today delivers AI-powered analytics for sales and marketing. With Tableau and Einstein together, Salesforce will deliver the most intelligent and intuitive analytics and visualisation platform for every department and every user at any company. Tableau will make both Customer 360 and Salesforce’s analytics capabilities stronger than ever, and enable the company to reach a much broader set of customers and users.”

Alongside this, the two companies see synergy in their communities. Salesforce has more than 1.4 million users of its educational Trailblazer tool, with an additional million cited as part of the Tableau community.

Writing a letter to the more than 4,000 Tableau employees – or ‘tabloids’, as the company curiously calls them – president and CEO Adam Selipsky noted the rationale behind the move. “Our mission remains the same,” Selpisky wrote. “We have much work left to do to help people see and understand data – and to make the world a better place in the process. Now we will be able to dramatically accelerate our ability to pursue that mission and become the defining company that ushers in the era of analytics ubiquity: accelerated ubiquity.”

“We are bringing together the world’s #1 CRM with the #1 analytics platform,” added Marc Benioff, Salesforce chairman and co-CEO in a statement. “Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers – bringing together two critical platforms that every customer needs to understand their world.”

Tableau is bringing its own AI expertise to the table. The company acquired Empirical Systems, an MIT-originated startup, this time last year, with Empirical’s automated statistical analysis technology being used to give customers greater insight into their data.

A report into the state of enterprise software published by venture capital firm Work-Bench in August noted Tableau was ahead of the curve. Data visualisation is one aspect, but getting reports in natural language, or ascribing even greater insights? “Expect all modern BI vendors to release an [automated machine learning] product or buy a startup by [the] end of next year,” Work-Bench wrote.

From Salesforce’s perspective, the deal dwarfs that of its previously most expensive purchase, of application network platform provider MuleSoft for $6.5bn last March.

You can read the full announcement here.

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How can marketing experts overcome social media censorship?

Like cigarette smoking, social media use has proven to be addictive. Yet it’s much easier to say “no” to nicotine than to eschew all online chatter. The world runs not just on designer juices and caffeinated everything but on real-time news, analysis, and opinions. Ducking out from under social media’s umbrella takes deliberate energy; most people stay dry under its cover.

Marketers know that the majority of consumers live online. So we push products, services, and announcements out through paid ads, organic content, social media influencers, and other means. But this process is becoming tougher in an era fraught with social media censorship, regulation, and privacy concerns.

As globally popular as Facebook, YouTube, and the other biggies are, their CEOs and companies recently have faced intense backlash. Though their services aren’t causing lung cancer, they are affecting everything from teens’ healthy self-images to international election results. At TED2019, Twitter’s Jack Dorsey promised to fight abuse through stronger algorithms and monitoring that could detect harassment and bullying faster. Similarly, Instagram is experimenting with a design that de-emphasises a page’s number of likes to put less focus on social validation and competition.

That’s a good start. But marketers will find it murky to navigate what’s coming down the pike: full-blown censorship.

Marketing fallout when social gets censored

Social media is ready-fire-aim capitalism in action. Tech companies split test mercilessly to see what sticks. Then, they backpedal to fill in gaps with knee-jerk solutions. But sometimes the innovation obsession prevents them from seeing the forest for the trees. And sometimes users tragically take the platform to places it was never meant to go, like the live murder that hit Facebook.

At the time, Facebook said it couldn’t make the system airtight against such egregious outcomes. But it promised progress. Two years later, the company’s progress under Mark Zuckerberg’s leadership seems to be the act of removing content at will. Political posts and rants have been taken down without warning, leaving some subscribers without a voice. News stories that don’t fit certain slants have also been buried. The United States White House has vowed to collect data from silenced people and organisations, which the American government says goes against freedom of speech.

Here’s the bottom line, though: Facebook is a private company. Users sign away some rights to be a part of the system. This means Facebook has every right to censor its news feeds. And you know what? As frustrating as it is, Facebook has the right to be biased and game its tech algorithms as long as it doesn’t violate data security legislation or the European Union’s General Data Protection Regulation.

So if Zuck wants to promote fake news, he can. And as marketers and publishers, we have to acknowledge and accept that it’s Facebook’s platform, not ours.

For instance, most content marketing experts decree that no matter how often Facebook changes its algorithm, not every ad, live event, or group will be ghosted. There will always be a place for favorable short-form and long-form content; writing for audiences will never go out of style. The key for marketers is to take steps to stay ahead of the censorship process to avoid being flagged, buried, or removed from the social media platforms we work so hard on.

But how do you do that? Start with these three guiding principles:

Put a high price on never-ending education

However much money you spend on the development of your publishers is probably not enough. The only way to remain relevant is through serious education and passion for improvement. Everyone involved in a digital marketing company should be prepared to pivot at a moment’s notice. Fortunately, leaders seem to understand this. 68% of grads from a well-respected global management development program cited the advancement of technology as a primary concern for success.

Put a premium on your own digital real estate

If a company can build a bustling website or sticky mobile app, it can control the conversation despite censorship on other platforms. Big tech’s algorithm changes will never affect your ability to email your subscriber list. Companies that provide a valuable, self-owned community experience pay far less “big tech tax” than the average publisher.

Feel obligated to your audience, not entitled to a platform

Twitter and Facebook owe advertisers very little. Those companies will continue to grow and morph as needed to run their businesses, just like you and yours. In 20 years, Facebook might not even be a social platform; Google is a car company now, after all. Besides, newspapers that once jerked around advertisers learned that reader loyalty is fleeting; social media sites will be no different. Marketers need to investigate new processes. The way to disrupt and win will be to adopt a fresh, positive mindset rather than devolve into unproductive hand-wringing.

As frustrating as censorship can be, it looks like it’s here to stay on social media. With that in mind, marketing leaders must resist getting trapped in the noise and must seek out ways to get the job done — with or without the help of social platforms.

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Let’s get away from ‘digital transformation’ – and move towards key marketing moments

Digital transformation has had its day. In fact, the term ‘transformation’ itself is giving way to a new era as organisations across a wide range of sectors reach what can only be described as digital saturation.

As we move collectively into the post-digital era, the digital capabilities and advantages that were once seen as differentiators are now available to every organisation. Marketers and advertisers now have the tools to understand their customers with a new depth of granularity and they have more channels than ever to reach them too.

This is not to say digital is old or over. On the contrary; digital transformation has shaped everything all the way through to people’s expectations, and now marketers must set their sights on shaping the market. Companies face a world of renewed expectations and core digital technologies are going to be more critical than ever.

However, the time for pilots and experimentation is long gone. Marketers now have to usher in the new strategies that will allow them to set their brands apart from their competitors. The playing field may have levelled out – but now comes the really exciting stuff.

Think of the last decade as a steep learning curve. Now that marketers have mastered many game-changing tools they need to learn how best to shape the world around consumers down to picking the right moments to offer their products and services.

Let’s start with these digitally mature consumers, after all they have been on a parallel path with organisations, incorporating new technologies at an increasingly rapid rate. It took 12 years for mobile phones to reach 50 million users and the internet took just seven years to get to the same point. If we look at purely digital technologies, the rates take off: Facebook reached 50 million users in four years; WeChat, one year, and that almost forgotten augmented-reality gaming app, Pokémon GO, gained the same traction in 19 days.

People are now adopting new technologies both quickly and completely, and whether they’re customers, employees, or even competitors, they are beginning to outpace enterprises in their digital transformations. They are increasingly knowledgeable about technology itself and how companies use it and are becoming selective and demanding of what they adopt, challenging companies to work with them or adapt to them in different ways.

We are shifting beyond hyper-personalisation to an era where each individual customer has their own reality and every moment will soon represent an opportunity for marketers to play a role in shaping it. This may sound like quantum physics to some, yet the truth is that technology is creating a world of intensely customised and on-demand experiences. Which is why marketers should view each opportunity as if it’s an individual market—a momentary market.

Let’s take a closer look at some of the best ways to harness this.

Keep it human

One of the first things to remember is that we are not throwing the baby out with the bath water. Consumers may be digitally mature, but this does not mean they have lost any human traits such as a good sense of humour, a desire to share and a thirst for authentic, innovative and thought-provoking content.

Just check out the 3.8 million (and growing) shares of the recent heart-warming video BMW put out when Mercedes CEO, Dieter Zetsche, stepped down, to confirm that. If anything, now that marketers have refined the art of reaching their target audiences, they have even more responsibility to bear when it comes to what they serve them.

Unique opportunities for unique customers

The technology-driven interactions we now take for granted have created an expanding technology identity for every consumer. This should be viewed as a living foundation of knowledge to gain an accurate understanding of the next generation of consumers. This pivots marketing towards developing rich, individualised, experience-based relationships as marketers meet consumer’s needs at the speed of now.

Brands across sectors such as beauty, fashion, entertainment, retail, health and wellness are already demonstrating the value of fluid consumer touchpoints that evolve and grow alongside this new breed of data-driven consumer who is constantly in flux.

Responsive content

Consumers have been submerged in digital products and services. A stream of new social media brands has become go-to destinations for finding and sharing information; Consequently, where once the content we consumed followed a fixed course, we now experience content that responds to real-world environments.

Add to this the raft of smart home devices that enable contextual interactions between the digital and physical world, and we step into an entirely new era for content and how it is consumed. As direct requests for physical products and services as well as digitally driven social interactions from wherever people choose become the new normal, marketers will need to rapidly adapt to these distinctive new ways of communicating.

Cutting edge insights

Faced with this unprecedented choice of technology, people are now expressing their strong sentiments about which technologies they will or won’t adopt to get the experiences they want. This offers marketers powerful new insights about new market opportunities.

Managing expectations

An interesting fallout is that having fostered the illusion that most needs can be met, no matter how personal or customised, organisations now need to meet these expectations. Marketers have to turn that illusion into reality. That means understanding people at a holistic level and recognising that their outlooks and needs may well change at a moment’s notice.

In the post-digital world, every moment will represent a potential new market of one. It’s where demand is communicated instantly, and gratification is expected immediately. What’s more, both are constantly changing, creating an infinite and never-ending stream of opportunities to be met.

Finally

Of course, realistically, the world is not yet at the point of everything being instantaneous. But post-digital companies are already playing a different game. Whilst those organisations that may not have quite reached digital maturity are still looking for a competitive edge, be it innovation or increased personalisation, post-digital companies on the other hand, are looking for much more. They are poised to overtake the competition by changing the way the market itself works. From one market to many custom markets— on-demand, in the moment.

Marketers may feel like they are repositioning themselves as the curators of reality, however this shift brings with it a new requirement, which is to responsibly pick which opportunities to target.

Delivering for specific and constantly changing moments creates challenging additional questions for organisations that are used to one market of many. No one said it would get easier, moving beyond digital will require its own set of transformational strategies. But the journey will be worth it.  

Interested in hearing leading global brands discuss subjects like this in person?

Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.  

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Examining the second cycle of programmatic – and the effects for end users and advertisers

If economic cycles turn on average every six to eight years – growth, leading to a tightening or even recession, then to a reset and regrowth – then 2018 was the crescendo in the first cycle of programmatic. Since its early days, programmatic has improved advertising in both process and efficiency, delivering targeted advertising and reducing wasted spend, but over the last year the sector saw rapid growth followed by a peak in the challenges facing it.

The programmatic industry is now at a stage of maturity where I am reflecting on the consequences of innovation and expansion, and contemplating how we as an industry can take steps to create a more stable environment for all sides of the market. As we progress into the second cycle of programmatic, we should home in on a few core areas of industry focus. 

Regulation

2018 saw the GDPR come into effect, with a view to ensuring a higher level of transparency between publishers, brands, and consumers, specifically regarding the use of consumer data.

In the second cycle of programmatic, Xandr, along with IAB Europe and other industry players and their customers, has invested thousands of hours into developing a unified transparency and consent framework. We believe that using streamlined methods and language to describe the parties in the ecosystem and data – ranging from collection and use to user choice and control over the parties collecting it and how they’re using it – will help to avoid mass confusion in the ecosystem. Without a streamlined approach to user transparency and choice, advertising technology solutions will become fragmented and unable to interoperate with each other, potentially reducing or eliminating publishers’ and advertisers’ ability to choose the partners they want to work with.

No one should want to see that happen.

Transparency

Transparency is a relevant topic throughout the advertising ecosystem. Any lack of transparency can be attributed in part to disintermediation of buyers and sellers, in some instances by their technology partners, some of whom are directly competing against the clients they work with.

Thankfully, in the face of fragmentation, the industry is rebuilding more direct relationships and creating a more open dialogue. Technology companies are responsible for helping their clients and partners navigate this complex ecosystem. So, for our part, Xandr is continuing to work on policies that improve supply chain transparency for both buyers and sellers, including an initiative to amend our publisher contracts so that we are able to share sell-side technology fees with buyers.

Control

Inappropriate content or the lack of control over where your ad is placed should not be tolerated under any circumstances, as made clear by many large and vocal marketers. Viewability, ad placement, and brand safety are now table-stakes for any brand or media seller. Tools such as “guaranteed views” have improved CTR and CPMs for clients in the past, and our focus in the second cycle will continue to be on building tools that give marketers increased control over their campaigns rather than just a view on how campaigns have performed. This approach is in direct response to brands that are now demanding more in-depth insights into the “how” and the “why”, which by default improves transparency and control.

Global vs. local

The first cycle of programmatic was characterised by rapid scaling, which involved a lot of testing, learning about automation, and the development of new skillsets, largely within big global technology companies.  

However, it’s becoming clear that a strictly global approach is not ideal for the growth of the second cycle. As the digital and addressable ecosystem increasingly encompasses TV, digital, video, audio, and OOH, we will need to pay attention to differences between markets, which can be dramatic in areas like regulation, measurement, trading nuances, content consumption, and consumer behaviour. As a result, these cannot, and will not, be solved by a ‘one size fits all’ strategy and data approach.

Content is the new battleground

In digital advertising, the battleground has shifted: the challenge is to win eyes on screens, and those screens can be through multiple channels all within the same household. This is resulting in a never-seen-before convergence of traditional broadcasters, telco companies, and gaming manufacturers. While consumers will benefit from the price wars and battles for their eyeballs, advertisers will need to embrace increased fragmentation for attention with a wide variety of pricing and remuneration models. 

As such, brands will need consultation more than ever on their creative strategies and technology relationships, paving the way for the evolution we are seeing of traditional agencies and holding companies. For Xandr’s part, I am finding that advertisers are leaning into opportunities where they can learn more about digital buying and the programmatic ecosystem. We have been having productive conversations with marketers directly, educating them on topics like auction dynamics, supply chain transparency, and buying on outcomes.

Finally, to navigate and leverage media and content fragmentation, a layer of simplification will be critical. The second cycle of programmatic will provide less room for superfluous intermediaries, non-transparent behaviour, and distrust between brands and consumers. While it will take time for the right advertising currency, creative opportunities and consumer value exchange to emerge, we must capitalise on them when they do.

Interested in hearing leading global brands discuss subjects like this in person?

Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.  

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