The Future of Mobile Advertising…Unless We Screw It Up

Screen Shot 2016-05-17 at 5.09.17 PMOne morning a couple of months ago I got in the car and my phone said travel time to my office 20 minutes and traffic was normal. A new feature of iOS9 is the ability for Apple Maps to detect when you enter your car by syncing with Bluetooth. I didn’t find it invasion, in fact, living in one of the worst cities in the country for traffic, I welcomed the information.

Now that I’ve had a taste of IoT and “things connecting to things” I want more, and it’s given me a glimpse of what the future of mobile advertising might look like. Ads will go from being disruptive to being useful, perhaps even helpful. Mobile devices will become your digital doppelgänger signaling to other devices your presence, preferences and patterns.

For example, I’m on my way to LA for a meeting. My United app holds my flight itinerary, terminal and gate, Google/Apple Maps knows my current location, and my Starbucks app knows my buying behavior. My phone holds my intent, location and past purchasing history that could trigger opportunities to give me promotional messages as I journey to my gate.

Given the early morning departure, I’m in desperate need of coffee. The wall-mounted screens on the “people mover” (in the future) could flash me offer as I pass, inviting me to stop at a convenient store location by my gate. In this new world, my order would be ready and waiting for me when I arrived. Being between two locations, and missing the closest one, I would of appreciate this information as I have no time to backtrack.

Here’s the point — we are quickly moving to the ultimate marketing goal of getting the right message, to the right person, at the right time, and in the right place. But to enable this future, which will be data driven and permission based, the challenge for marketers is — how do we enbable it and/or keep from screwing it up?

Here are four things to consider:

  • Retargeting – we have to stop being “creepy” by being better at targeting and knowing when to turn the “switch off.” Enough said on this topic, I think we all know the issues. Trying to be “personal” without having a relationship will get you into trouble.
  • Overemphasizing AcquisitionIAB reported that digital advertising increased by 20%, and mobile by 66%, in 2015. Yes, there are certain elements of digital that deserve the investment, but attribution issues still exist. Take a hard look at your revenue mix and understand the most productive lead sources. Place your bets on improving conversion metrics, not just increasing volume. Don’t create a bunch of unnecessary noise at the top of the funnel.
  • Undervaluing Upsell, Cross Sell and Renewal – With a future built on “permissions” existing relationships are the perfect starting point. Invest in helping customers become better consumers by thinking for them. Reposition marketing activities from being interruptive to being helpful, innovative and informative. Proactively reach out to them with offers based on their behaviors, focusing on how it will help them in their role, and not necessarily how it directly benefits your organization. Trust me, it will come back to you.
  • Scrutinize Technology Investments – ChiefMarTech estimates that there are now over 3500 MarTech providers. It’s a “killing field” as Larry Ellison once described it. Over the next 2-3 years companies will either 1) run out of money, 2) merge or 3) be acquired. Carefully consider and select partners that will help build new mobile platforms, capabilities and tracking. Invest the time to get to know their business/funding model, existing customer base, and account team.

In the near future, highly personalized ads will spawn in real time based on consumer’s intent and location… and they won’t just appear on devices.. Let’s hope that point arrives soon. I really could of used that Grande Dark for the plane ride. Airline coffee may say it’s Starbucks, but it really doesn’t taste the same.

Why Apple’s Touch ID Could Be Huge – and It Is Not The Reason You Might Think

Like much of the world I tuned in last week to watch Tim Cook unveil the latest Apple products and services. Afterwards, I was curious to see the analysts and so called “tech experts” reactions on the announcement. Most were ho-hum “nothing new here”, and “it was what we expected,” the market response was similar, with the stock getting a small bounce then falling after the announcement.

Apple, better than anyone, gets the “use case” right for its technologies. And it is why I was surprised by the media and analysts reaction. Listening to the announcement and recap, most of the focus on Apple Pay was on Retail use. In the press release, Apple discusses the near field communication (NFC) technology, names its retail, credit card and bank partners. Pointing out that there are merchants ready to accept Apple Pay as a very secure payment method. But nothing that really got the media excited, go into any Starbucks on any day and you will see plenty of mobile transactions.

Digging a little deeper, buried at the bottom of the announcement is something more intriguing – “Touch ID” which enables “one touch checkout” for Online Shopping Apps. Say good-bye to the hassle of entering your credit card information on the small screen. See something you like, touch it, and it’s yours!Screen Shot 2014-09-14 at 3.49.05 PM

App developers have already started building Touch ID into retail apps. On the same day of Apple Live, Target announced that it has adopted the Like2Buy platform that which allow the chain’s Instagram followers to buy products featured in photos and Target is now integrating Touch ID into its mobile app. Touch ID for mobile apps is the big deal, but not for the reasons you might think.

Apple is a “big play” kind of an organization. A $349 watch, and people upgrading to an IPhone 6 isn’t going to move the needle for a $171 billion dollar company. Apple Pay helps but that’s a basis points play that gets split multiple ways between the service provider, credit card company, the bank, etc., and it will take years for it to be widely accepted. So where’s the “big play” with Apple Pay?

It’s mobile advertising. According to Mary Meeker in her 2014 Internet Trends report, mobile advertising represents a $30B opportunity in the US alone, based on time on device. Ad spend has lagged because of issues relating to tracking and measurability.

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This is why Apple Touch ID is so important; it has the potential to improve tracking, measurability and ROI significantly. With TouchID the buyers never leaves the screen to transact. Attribution, tracking and conversion rates will improve, but the challenge remains — how do you get consumers to transact?

According to McKinsey’s From solutions to adoption: The next phase of consumer mobile payment, you give them a special deal or offer – an ad. There’s the closed loop.

Most important Drivers of Mobile Payments

Respondents ranking most important (light blue) and least Imports (dark blue)

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Apple has had a long history of introducing products at the beginning of the “hockey stick”, usually relating to the consumer adoption curve of new technologies, this time the hockey stick is mobile advertising. The real payoff of Apple Pay for now, in my humble opinion, is not retail, it’s mobile and it is about buying on your phone versus paying with your phone.

Could Advertising Pay for Your Child’s College Education?

Years ago, a friend of mine sold his company to national telecommunication company.  With time on his hands, and being a serial entrepreneur he set out on his next project.

Watching his two children come home every night with overstuffed backpacks full of books, he decided his next venture would be to lighten their load. With a track record of technology innovations, he developed an e-reader years before the IPad and Kindle.  The reader had an interactive note pad on one side and the e-reader on the other side.  He provided much of the funding and line up production in South Korea and China.

Next, he would need the education system to play along.  And that’s where the story ends.  He preached of the value of democratizing education to school systems, locally and nationally.  The opportunity to generate new revenue streams by promoting college professors, courses and information beyond the classroom to the reach of every student with internet access.  But the old guard was too wedded to their legacy business models, and their traditional thinking of a “campus education” and as a result, they never got onboard.

That was until now.  Massive Open Online Courses or MOOCs are changing the mindset of some of the most prestigious colleges in the US.  Leading universities like Harvard, MIT and Johns Hopkins are now putting some of their marque courses online, and many of them for free.

MOOC platform providers like Coursera, edX and Udacity believe higher education is a basic human right and, as a result, have seen a surge in interest.  Coursera now has more than 1.7 million registered students.   Brian Caffo, a professor at Johns Hopkins University, teaches what he calls a “math biostatistics boot camp” that usually draws a few dozen graduate students (found 15,000 students from around the world had signed up for the free online course).

Bringing higher education to the masses also comes paradigm-shifting challenges. It has the potential of redefining the value of a “campus education” and to disrupt the traditional business model.   Nick Anderson of Washington Post suggest that MOOC platforms pose a key question for universities “Are they undercutting time tested financial models that relies on students willing to pay a high price for a degree from a prestigious institution…or are they accelerating the onset of a democratized, globalized version of higher education?”

Burck Smith likens it to the challenge newspapers faced when they first launched web sites.  Smith, the CEO of StraightLine, which sells low cost online courses says, “Free content has never really been a successful business model.”

Perhaps Mr. Smith is wrong.  With two kids not far from college, I’d like to suggest that there could be a new business model built on free content – Advertising.

In this new world, Universities become, in a sense, content houses, similar to publishers.  By making the best universities, courses and professors available to the masses, the opportunity to draw huge audiences and to build brands worldwide is created.

For example, the eight courses made available by Johns Hopkins have drawn more than 170,000 students from around the world.  And where there are highly engaged and defined eyeballs, there are advertisers waiting, and wanting to gain access, especially given the fact that courses are available in multiple formats and devices.

Although this “revolution” is in its early stages, it has to the potential to redefine the college experience, education and business model.  And, as the story of my friend attests, the industry is slow to change, but with cost of an average public college education at $27,435, “free” sounds pretty good to me.

How the Big Agency Model Really Works

Original post on January 5, 2007

Caveat: I wrote this post 2 years prior to joining an advertising agency. It was based on my experience working with clients and their agency “partners.”  Having now been “in the business” for close to 3 years now (with a mid-size agency), I wasn’t too far off the mark.

The Big Agency Model

Dissatisfaction with the “Big Agency” business model has recently made the news. Some are calling for a new advertising model, that the old global network model is dead.  Here’s one man’s cynical view of why and how the “game” really works.

The Game

Big agency wins account with contract “pitch team”, innovative creative, and a promise of a global platform designed to create consistent communication, production efficiencies, and improve program/people spend, etc. The client drinks the “kool aid” but then quickly comes to realize that it was a sham.

The first play of the game comes with the introduction of the lead account manager, who looks nothing like the person introduced as the account manager in the pitch.  Shortly afterward the signed scope of work, they start to doing an impression of the “invisible man.”  And the once senior and experienced account team also starts disappearing, only to be replaced by fresh faced staff of kids just out of school.

The account relationships sputters along with marginal program/campaign performance. The client BU’s and regions get fed up with the “Global Platform” (never getting the attention and team promised) and start going outside using smaller, more responsive agencies (who happened to be the talent that left the big agency).

The innovative “creative” shown to win the account turns out to be the only truly creative thing produced in the last few years and it gets recycle in multiple pitches.

Big agency realizes the account is at risk and begins acquiring the smaller agencies serving the client to secure the account.  If the client is willing to commit to retaining the agency after all this…they promise to win them an award and get them really good concert tickets.

Again, this is just one man’s opinion…I could be wrong.