Without Walls

“All the world’s a stage, And all the men and women merely players…” – Shakespeare

For mobile shoppers, the world is a showroom without walls and their devices merely players.

Advances in mobile computing and augmented reality are liquifying the shoreline between physical and virtual reality, casting new shadows of enlightenment in the cave of Plato — like information, transactions and brand communication.

There was a time, when the department store was the epicenter of all things sales. For instance, when the Transformers Constructicons (6 construction cars that transformed individually and merged into one massive robot) came out, kids had to dig deep in retail crates with other miscellaneous toys to get all the parts.  And if unlucky they bounced from store to store until all the parts were found and purchased.  Otherwise the painful alternative: kids would have to confront derision from friends for their transformer robot missing an arm, a leg or worse, a head.

Today, big-box retailers like Best Buy are showrooms for Amazon, and marketers are trapped under the Omni-channel wheel.  Customers browse aisles with their fingers walking on glass interfaces, not their feet.  Mobile is a concierge to numerous channels — websites, stores, kiosks, call centers, social media, game consoles, and TV. According to a 2014 study by Deloitte Digital, digital interactions will influence 50 cents of every dollar spent in retail stores.  Merchants must adopt a one-click, one stop shopping mindset that seamlessly integrates all these disparate channels.

However, one line continues to calcify against the trends of mobile shopping and Omni-channel surfing: it is the line of channel conflict, where new revenue streams threaten to cannibalize existing revenue sources at the same business.  While digital is a more cost effective way to manage supply chain, directly engage consumers, fatten margin and generate instant cash, it can undermine other lines of business.

Digital is the one horizontal that enables cost savings across all channels, but the economics of retail does not always agree with it.  Merchandisers are measured by how many products can be sold per hour, same store sales, and four wall contribution. High fixed costs of retail have to be spread over large customer traffic.  If Digital takes traffic from retail stores, the return on capital invested is low.  In many ways digital cannot take away from retail otherwise money is lost.  Without a positive return on capital retailers are wasting money.  Thus retailers have to lower fixed expenses to their lowest level while managing the growth of variable expenses to increase profits.

The truth is that even although Digital can cannibalize retail sales, once a customer is in your store they are yours to lose.  No excuses.  And the line of channel conflict between physical and digital, if leveraged properly can cause positive tension.  Yes smartphones have torn the four walls of retail stores down, providing price comparison and shopping assistance to fickle customers.  But a company’s sites and apps should work in harmony with the human touch of a sales clerk to provide the perfect sensory, omni-channel experience. With the proliferation of device to device connections over the next 5 years, more channels will open up for conversations with brands, not less.  If your brand is strong and stands for something, customers will flock to it.  No business worth its salt will want to put up walls to block customers from doing that.

Banner Blind

blind-leading-blindWho’s got banner blindness?

Do you got banner blindness?

I got banner blindness.  We all got banner blindness.

In fact, in 2013, Infolinks released a proprietary study that 86% of consumers suffer from banner blindness, yet some marketers choose to remain blind to this fact — a sad case of the banner blind leading the banner blind.   And I am guilty as well….

I used to work for an ad tech start up that served up banner ads on publishing sites.  In defense of that company we made beautiful video banner ads that did not suck!

Like any start-up, ambling towards growth, there were long days and nights. Fears of ad inventory shortage, and workers churning and burning out.  But life was simple. The business model, and the math was straight forward.

High click through rates for pennies on the dollar piled up fast into gobs of money and secured growth for acquisition.  Content was king and page views were the holy grail of ad effectiveness, birthing millions of robot sites hungry for a click.  DoubleClick (now part of Google) ate the lion’s share of page impressions, organizing the web with its millions of pages into a standard ad unit.

Since then the ad tech ecosystem has evolved immensely with more players like Verizon, an old guard mobile carrier purchasing AOL for its ad stack and audience reach.   Facebook as well with its universal id and fund of user data is automating buys and retargeting across its ad network and exchange. Consequently, I am excited that marketers are surfing the technology wave beyond the banner ad and seeing the value of surgically reaching audiences at scale.  They are building a better customer mouse trap, with buzzwords like “automation” and “big data” leading the way.

Advanced ad tactics like programmatic ad buying are mainstream, no longer the private asylum of tech-geeks, trading algorithm notes around a water cooler.   According to eMarketer, in 2015 programmatic will comprise of 1/3 of the $60B total digital ad spending pie.   Marketers have become mad data scientists applying data to everything–ad campaigns, social media, PR and sales techniques.

At the same time as machines rise up to streamline the buying and selling of digital media,  ad agencies (paid on commission of spend) are being disintermediated.  For instance, the promise of programmatic ad buying removes the need for  RFPs (request for proposal), FTE negotiations, manual insertion orders, paperwork and trafficking.   It is software using machines to buy ads, place them on websites and optimize them against inventory available.

The online advertising world is so much more complex and variable than I remember it, in a way that makes it impossible for individuals to make targeted ad insertion decisions.  Ad serving is but a tiny slice of an ecosystem which now includes ad exchanges, analytics platforms, ad networks and then some; more akin to trading desks on Wall Street than a 30 second compelling video ad during the Super bowl.  There are a plethora of acronyms of technologies one must master before setting bids and campaign budgets:

  • DSP – Demand Side Platform
    • Decision engines that calculate the best value of an ad impression
  • DMP – Data Management Platform
    •  Facilitates access, organization, analysis and segmentation of data
  • RTB – Real Time Bidding
    • Real time auctions of online ad impressions
  • SSP – Supply Side Platform
    • Facilitates the buying and selling of inventory from many ad networks
  • PMP – Private Market Place
    • Private closed premium exchange where buyers and sellers interact

It is simply not enough for agencies to launch sexy creative campaign unless it generates measurable sales.  The old adage, “I know half of my advertising works, but I don’t know which half”, is unacceptable as agencies sit atop of ad exchanges and technology, crunching real time data for brand clients to use in cross-device campaigns.  I don’t miss invasive pop ups and ad units blinking neon and spinning like a pinwheel.  With consumer pressure to deliver the right messages on time,  data science with some good story telling can bury the banner ad for good.  Stop the blindness.  The data shows it is dead.