Wednesday, November 24

2011's Mobile Killer App

It's the time of year when everyone publishes their 2011 Internet Predictions. I might as well start with Mobile.

2010 has actually been the Year of Mobile. First, this requires that we stop making fun of everyone who predicted it last year. Second, it requires that we actually figure out how to fit mobile into our marketing programs.

The Mobile Hype of the Year award was easily won by location-based social networking: Foursquare, Gowalla, Facebook Places, Twitter Locations. Some marketers experimented with it, while the majority waited to see if anyone would actually use it.

According to Pew, only 7% of mobile users check-in anywhere. This isn't the mass audience required for mobile to be an effective marketing tool, although it hasn't stopped the Location Czars. Yelp now allows businesses to offer special promotions/offers to users who check-in. Foursquare is playing the loyalty card angle. Gowalla offers custom sponsorships of digital rewards. Facebook is testing Deals.

What about QR codes? These are the little square symbols showing up all over magazines and outdoor advertising. They are big in Japan. The idea is simple: take a picture of the symbol with your phone, send that image to the Interweb, and receive specific content back (video, text, link to mobile site). At least it sounds relatively simple until you realize that you first need to download a QR code reader to your phone -- of which there are many apps to pick from.

It doesn't help that Microsoft developed their own custom QR code format requiring their own proprietary mobile app, which they are aggressively promoting through print media partnerships. Anyone who lived through the Netscape/IE/AOL browser wars in the 90s knows how this will end. Nothing drags out technology adoption and stifles consumer usage like competing technologies that all do the same thing.

Consumers are Technolazy. They don't want to learn how to do something new. They don't download and install things without a real good reason. It isn't a surprise there are no published case studies on QR marketing programs. Its most effective result is freaking out your competitors and making them spend time rushing to launch their own QR-enabled print ads.

Mobile commerce has its place for some marketers, but only 20% of retailers currently offer it. Recent research shows that mobile has its largest opportunity in the aisle as a final point of purchase influence:
  • More than one third of smartphone-carrying consumers (who represent 24% of all U.S. consumers) are ready to use their mobile devices in ways that transform how they shop everywhere and, in particular, how they shop in retail stores.
  • New behaviors facilitated by mobility, all of which can take place in stores, include searching for price and product information, checking merchandise availability, and comparing prices at nearby stores, browsing product reviews, and purchasing goods.
  • Consumers using multiple channels sequentially as they move from Web to store will give way to concurrent omnichannel behaviors as consumers bring their comfortable use of m-commerce with them into the store. These new behaviors will exert pressures that weaken the store's immediate influence on purchase decisions "at the shelf."
Influencing in-aisle purchase decisions is the Holy Grail for marketers and the reason so much money is spent on shelf talkers, hang tags, and end caps. Mobile offers the ability to deliver content to consumers in-store, without being subjected to the retailer's promotion restrictions and costs. Marketers should focus their mobile efforts on delivering branded content in this environment.

The majority of mobile users plan to leverage their phone to compare prices and read product reviews. This could provide enough value for even the Technolazies to try it out. There are already a couple apps available to scan UPC codes and receive competitive pricing, although they also suffer from the QR Code Clutter adoption barrier.

Amazon just upgraded their iPhone app with UPC scanning/price checking capabilities. eBay recently acquired RedLaser, which will allow their apps to do the same thing. Enabling existing apps with these features will be much more successful, since users won't need to download anything additional. Their success is only limited by the number of users who have them installed.

Which brings me to the Killer Mobile App for 2011 = Facebook. Yeah, I know, Facebook was the killer mobile app of 2010. They already have the largest penetration and usage of any mobile app. Their users are already accustomed to interacting with the real world via their phones (taking pictures) and uploading images via the app. Introducing new techno-functionality is as easy as the next app upgrade.

Facebook is in a unique position to push any mobile technology they want. It doesn't mean everyone will use it. How many of your Fbook friends have checked into a Place recently? But enabling a consumer behavior that is already ingrained -- in-aisle mobile information -- is much easier than trying to create new ones.

In order to avoid being trumped by the Next Big Internet Thing, Facebook must expand their reach beyond a big website. Don't scoff, AOL, Yahoo, MySpace, and GeoCities all thought they were irreplaceable also. Mobile is a natural for reaching consumers beyond their computers. Facebook is a natural for reaching consumers with mobile.

Facebook has been very public about their intent to not rely on advertising dollars as a revenue source. Even less so for mobile advertising. Mobile commerce could become Facebook's killer revenue stream. Maybe direct sales (but probably not). Maybe commissions based on mobile shopping referrals (more likely). But offer marketers the opportunity to influence purchase behavior in-store? That provides a social ROI that would actually be worth spending money on.

Friday, November 19

Relegating Banners to the Kids Table

My former colleague Scott Johnson and I have an ongoing competition to determine who hates online banner advertising the most [Scott's latest volley, mine]. We love online media. We just think banner ads are an archaic format for advertisers. It's amazing how little they have evolved since 1994.

Everyone seems to take it for granted that banners must be the cornerstone of an online campaign. Media agencies assume they are expected to buy them, marketers assume they are expected to pay for them, creatives assume they have to animate them. In the spirit of Thanksgiving, they are like the guy who keeps showing up at family holiday gatherings over the years. He's always been there so we keep letting him in the door, even though he may not be related to anyone and we really hope he doesn't sit next to us.

It doesn't help that our industry is built on the backs of banners: publisher site revenue, 3rd party media reps, ad networks, rich media vendors, measurement companies, behavioral targeting specialists, real-time reverse-auction bid systems run by rocket scientists... The list goes on. Heck, even Google recently placed bets that banners will drive their business forward.

All in the face of declining clickthrough rates (see Mr. Johnson's bashing) and plummeting CPMs. According to Adweek, 1.3 trillion banner impressions in Q3 this year? That's a whole lot of clutter. It is good to know that the "success" of this influx of banner media is exactly why CTRs are so crappy:
According to “Standard Banners—Non-Standard Results,” it was the success of online display ads that caused the drop in clicks to begin with. As users saw more and more ads across the internet, many continued clicking, but not fast enough to keep up with the expanding inventory. Clickthrough rates fell steadily until reaching an equilibrium.
This is the most blatant banner denial that I have seen in a long time, but at least the research report came with charts. I still hold to my theory that the majority of online consumers ignore the non-clicked banners anyway.

Behavioral targeting has long been touted as the savior for banner media. Hey, if we can at least serve you banners that we think you are interested in, then maybe you will actually acknowledge their existence. Unless, of course, we aren't allowed to (courtesy of the NY Times):
After “do not call” lists became popular, more than 90 percent of people who signed up reported fewer annoying telemarketing calls. Now, privacy advocates are pushing for a similar “do not track” feature that would let Internet users tell Web sites to stop surreptitiously tracking their online habits and collecting clues about age, salary, health, location and leisure activities.
Online privacy issues are as old as the banner ad. They have been a constant drone in the media and something most consumers claim they are concerned about. Facebook's recent user data leaks only add fuel to the topic. For most of us, the need to delete browser cookies or reject Facebook application requests is greatly outweighed by our desire to play Mafia Wars and not have to remember website passwords.

But give me a chance to opt-out of having anonymous site usage info collected by marketers? Not exactly sure what that means, but I also hate telemarketing calls so sign me up! Those ad units would probably set a record for engagement rates. Which in turn would guarantee the death of behavioral targeting and all the companies whose revenue flow depends on it.

But what to do with all those media dollars? How about using it to pay media sites to create branded content for you. Not just sponsored content, but content created from your creative brief. And guess what? Those same media sites are pretty good at distributing that content for you as well, which gives new meaning to the term added value. I hate banners less if I'm not paying for them.

The demise of banner advertising is coming. Scott and I aren't the only ones who think so (requisite Wired link, read the last paragraph). You can huddle in your bomb shelter with your stockpile of backup GIFs and pretend it isn't happening. Or join us in our revolution. The future will not be clickable.

Wednesday, November 17

The Simple Challenge

Pssst! Listen up. Here's the most important lesson that I've learned in the last two years on the client side:

Interactive marketers make things
way too difficult for themselves

We have a tendency to put together complex digital strategies that beget complex user experiences, which in turn beget complex creative solutions, which then require complex measurement programs. All in a channel that is already overwhelming for the traditional marketers who pay most of our bills.

It's no wonder brands haven't migrated more marketing dollars online. It is just so damn complicated to explain. I worked with a great offline GCD awhile ago, who I started dragging to client interactive presentations. His summary of our Interweb world converted me:

When I present a print ad concept, I don't have to first explain
how paper is made, how a print press functions, and the
200 different ways someone might read a magazine.

If you can't present your digital strategy in 5 PPT slides, then it is too complicated. If it takes 10 minutes to describe how an interactive ad/game/viral social app will work, then it is too complicated. If your online promotion requires more than 2 clicks to engage with, then you need to make it more simple. If your measurement dashboard is set at 8 pt type to fit on the screen, then simplify it.

Don't worry, simple doesn't mean you aren't doing your job. Your clients will love you for it. It makes their lives more simple as well: They can actually explain it to their boss. They can cut the creative review meetings in half. The odds of consumers actually engaging with it (and not publicly bashing it on the brand Facebook wall) will be much better.

As an agency, your life will be more simple also: Less production hassles, less account management anxiety, 10 minute measurement report meetings. And you will probably get paid the same amount for the project.

Here is my ultimate personification of simple. No instructions required. Takes 30 seconds to figure out. Completely addictive.