Should you Take your Product to Retail or Ecommerce first?

*This article first appeared on the Web Talent Marketing blog. This is just a repost of this piece on this blog.*

The retail Home Run moment.

According to the latest data from Google, 90% of purchases happen in a retail environment. Despite the watershed of digital, retail reigns supreme for purchase intent. The niche product market is no exception. Despite a seemingly endless selection of products, the retail shelf is shrinking. More brands are paying slotting fees for placement, bigger brands are creating niche products to earn placement in Organic and secondary aisles and retailers are less interested in issuing a chain-wide distribution for a product without a limited store ‘test.’

Let’s outline an example, food. While many feel Amazon’s purchase of Whole Foods Market signals ecommerce disruption for the food market, estimates predict that 80% of food purchases will remain in retail by 2025. However, according to a Harris Poll, 48% of respondents state a major reason for purchasing online has to do with difficulty of finding the product in store. A long shelf life is the other major contributing factor. Add to that the fact that 34% of these consumers are more inclined to purchase a new brand online means that discovery and ultimately conversion can happen online, without a retail presence.

Wait, ecommerce vs. retail?

Keeping on our food example, consumers are increasingly interested in what they are putting in their bodies. Is the food made from sustainable ingredients? Are the ingredients of Organic origins? Basically, these individuals want to know if what they are about to ingest or apply to their body will not have a irreproachable reaction.

However, those promoting a product of this sort have to understand the moving target that is present in today’s market. Consumers are increasingly fleeting from the retail experience, of which they are exposed to a bevy of products, brought to you by the ever-increasing slotting fees paid by the world’s largest retailers to earn the coveted chest-high placement. The sheer nature of retail makes it difficult to keep up with the nebulous consumer demand for a particular niche sector. Unsatisfied with the selection in retail, consumers are moving to platforms with an endless shelf, ripe with a virtual kaleidoscope of options and a story unable to be told by retail, primed for their discerning palette.

We attend a great deal of trade shows and have had hundreds of conversations with many aspirational brands hoping for the home run placement in retail, thousands of consumers are not even considering retail for their niche product interests. Search is their primary vehicle of discovery. If brands offering discerning products for discerning people would realize the inherent serendipity of being present for these niche searches, in which the story and ingredients are even more important than a presence in retail, then they would realize the fleeting importance of home run placements.

As a former Brand and Product Manager, I get it… Placement for my flagship product historically would make or break my career. But we are in an age of discovery, of information, of the endless shelf in which products from the darkest depths of our existence, are delivered to your door in 1-2 days. The home run of retail no longer has a relevancy in today’s search market. The grocery store or mass retailer is no longer our medium for product discovery.

Here are reasons why marketers of a niche product should be in an ecommerce first mentality:

A variety of innovative products with niche audiences and limited distribution opportunities. While the general retail (or even niche retail) experience might not provide the level of volume required to justify placement fees, the low risk elements of ecommerce provide a viable option to even fundamentally prove concept and then, look to retail for scale.

With such a discerning product offering, education and story are fundamental to justify the pattern interrupt required to entice trial. These stories can’t be told in retail and lend themselves naturally to ecommerce. Remember when brands used to try QR codes to tell a larger story? Yea.. that didn’t work either, but a reading a blog article, Q&A, product highlights, and reviews prior to purchase… easy in the ecommerce marketplace.

The home run of placement is also missing one of the core necessities for retail, demand. Just because a product is on the shelf doesn’t mean it will sell through. Having an ecommerce first mindset will allow you to understand consumer demand, establish your flagship products, and allow you to bring your owned audience to the retailer.

This ecommerce to retail concept has been proven

Starting with an ecommerce first mindset isn’t anything new. Organizations like Bonobos, Warby Parker, Athleta, BaubleBar, and JustFab built an audience online and then further monetized that audience by creating unique retail experiences, of which they own the entire experience. And it doesn’t have to be a complete retail experience, brands like Bark Box started online and are now selling in retailers such as Target. Just look at the cosmetics space, as more than a dozen brands have started online and earned retail placement in Ulta and others.

ecommerce to prove concept, retail to scale

Retail penetration is important, but what is even more important is sell through. Marketers who are selling a unique, niche product that might require some education and storytelling prior to trial must think ecommerce first. This helps the marketer build an audience that will drive retail demand, which only comes from online and not exclusively social media. Building an audience of their existing and prospective clients, convince them of USPs, and then drive the retail demand or even earn the margin by selling direct to consumer. Retail placement is not required in the potential e-commerce disruption of food or any other niche retailer.

What Amazon’s Prime Day Means for eCommerce

Disclaimer: This post was originally found on the Web Talent Marketing blog.

Interested in an automatic egg poacher? Or, maybe a set of USB-c cables? Better yet, a giant swan raft? Anyone who shopped Amazon’s Prime Day surely noticed the eclectic variety of products featured by the eCommerce giant.

But according to numerous reports, consumers turned out in droves to purchase products which is evidenced by Amazon’s sales on Prime Day jumped a reported 60% YOY, with estimates highlighting $2 billion in sales. This is the largest in the event’s short history.

Amazon’s Hallmark Moment

While the summer season may be slow for many online retailers, Amazon’s creation of a Black Friday-esque event in the middle of the year showcases the retail giant’s stranglehold over our consumer shopping behavior.

Much like Hallmark’s creation of special days like Grandparents day or Home Depot’s ‘Spring Black Friday,’ or most similarly, Alibaba’s Single’s Day, Amazon’s Prime Day highlights the excitement, attention, and transactional consumer mindset they have over their flock of loyalists; and the promise of good deals.

Amazon Owns Product Searches

According to ComScore, product searches generally start at Amazon, earning twice as many search initiations as the next closest competitor. A few years back, you remember making a purchase on Amazon because you were more interested in the deep discount. Amazon famously set their sights on less profit margin with the goal of changing consumer behavior by altering their perception of eCommerce purchases of everyday items, and doubling down on highlighting the convenience as a unique selling proposition.

This strategy has obviously paid off as data supports that Amazon Prime members make twice as many purchases per month than non-Prime members.

Changing Consumer Behavior starts with a Vending Machine

One of the highlights of Prime Day was the most successful product, Amazon’s own Echo (more specifically the Dot) which is powered by voice assistant Alexa. While this doesn’t surprise many that the Echo was the top selling product, this doubles down on Amazon’s interest in becoming your one-stop-shop for everyday items, as well as dispels rumors about Google’s Home product earning increased market share of the Voice Assistant market.

If Amazon is able to insert their passive listening voice assistant in more homes, sell the value of its problem solving capabilities, couldn’t Amazon earn an even larger share of your consumable purchase behavior?

In my eyes, the Echo is Amazon’s vending machine. It is the device that allows you to easily purchase and dispense products you place little thought into, such as consumables. We rarely deviate from our favorite brand of Almond Milk, Protein Bar, Facial Tissue, and other everyday items. So, if Amazon can bring those to you at a relatively similar price point and delivered to your door in 2 or less days, why fight the crowds in big box retail? Amazon is continuing to adapt consumer behavior and the Echo is their device to execute this adaptation.

Room for more Saturation?

What we found to be the most telling statistic from the numbers following the event is that it appears traffic to Amazon from existing Amazon users was down from prior year, despite the massive increase in sales. Does this mean that consumers went to Amazon and purchased at a higher rate then previous years? Does this mean their cart size was larger? Both could be true, but the fact Amazon surely earned a higher share of new audience, given its saturation in the consumer mindset, should at least make other online retailers take notice.

What Happens When Search Marketers Buy TV ads

While still a small percentage of total television viewers, the numbers around cord cutting are staggering. 1/3 of American adults have a subscription to Netflix, 400,000 people cut the cord in 2015, the average cable subscriber has 200 channels, yet only watches 17. Couple that with the fact that the average cable subscription has increased 5% in the past year and you have a recipe for discourse. (source) Fortune boasts that 1/5 of all U.S. households have cut the cord. These are staggering numbers. Numbers that are forcing the traditional TV media buyer to find new ways to reach the same audience. Luckily, there is still 4/5 of the U.S. households to target, but with things like completely addressable TV media buying is becoming a much different place then buying audience based on gross rating points (GRPs), the question is not if the traditional TV market will continue to erode, but a matter of when. Even in its current state, buying ads on TV is significantly different then it was a few years go. Yet the same strategies and methodologies to buying TV ads remains the same, while the need for more advanced skillsets is present.

What is addressable TV?

According to Google, Addressable TV advertising is the ability to show different ads to different households while they are watching the same program. With the help of addressable advertising, advertisers can move beyond large-scale traditional TV ad buys, to focus on relevance and impact. Now I purposely selected this source from Google since they really pushed this addressable TV tactic back when they launched the much-hyped, poorly received Google TV.

Why is addressable TV important?

Let’s take the season finale of the critically acclaimed show “This is Us.” I purposely picked this show because it is one of the big network darlings, while Amazon and Netflix’s original programming are winning many of the awards, “This is Us,” dominates viewership and buzz. According to Nielsen, 12.84 million people tuned into the “This is Us” season finale. Now think of the “This is Us” audience. Is it families, interested in watching a heart-heavy show boasting the highs and lows of marriage, family, and life, is it the single love thirsty person longing for their chance to enjoy that sector of life, or is it the casual one-time viewer, interested because of the hype, yet hasn’t watched a previous episode; they just want to fit into the water cooler conversation.
These can be very different audiences, with different brand profiles, different income levels, different needs, yet we market to them with the same creative, promoting the same message. Doesn’t this feel clunky just saying it out loud? Our typical bet is to just bank on the primary audience it reaches and hope for the best. A show like “Empire” did a great job of targeting the young, urban group and brands flocked and drove up the cost per commercial rates. Addressable TV allows you to implement targeting to show a different creative/message/show your ad altogether to one audience and not the other. This is the thing that could make TV advertising more palatable for the small/medium/local business.

Addressable TV and Targeted TV Ad Buying Is Just not Their Bag

Yet targeting isn’t necessarily a skillset that comes natural to the media buyer; since they are taught to focus on GRPs and mass awareness. While the idea of targeting based on previous user behavior, user location, user interests, serving the best ad to the consumer at the best time, and platform specific messaging, it does to another group of advertising professionals… the Search Marketer. 
When Google released information about YouTube TV, my head instantly went to a world in which you are buying ads within the Adwords interface, addressable to targeted consumers (much like a YouTube ad would be), self service with actionable measurement and delivery insights, on-demand. Think about that for a second… that could definitely happen, and it would change everything you know about TV advertising. Addressable TV is available now on OTT devices, Smart TVs, and Video On-Demand, so if Google is building a platform in which they control the ad content, couldn’t they sell ads against it in their own platform?
Facebook is now doing it with their Mid-Roll ads within ‘Live’ broadcasts. Facebook is controlling the content, controlling the environment, and ultimately controlling who and when you can buy ads. Why can’t the largest digital advertising platform in the world do it?

The Ultimate Omnichannel Marketing Mix

Digital is slowly (or not so slowly, depending upon who you ask) eating away at the budget dollars previously allocated to TV, yet marketers that require mass reach find traditional TV a mainstay in their marketing mix. Smaller advertisers who have a product that does not appeal to the general population are usually boxed out of TV due to cost restraints and the lack of targeting available. By introducing a way to buy TV ads, inclusive of targeting they know and love from Adwords/YouTube ads, marketers could extend their message across channels and devices, thus delighting the consumer, and allowing the marketer of a true way to improve reach and frequency.
The search marketer, historically known as a specialized skillset fluent in keywords and feed management, could be the same person employing their targeting first mindset to an audience bored with irrelevant ads, increasing commercial breaks, and a cord cutting mindset. By focusing on them and serving them ads relevant to their geographic market and interests, could be an answer to the disinterested consumer, drunk on ad blockers, and a binge watching mentality.

When SEO Organic Rankings Mean Nothing: The Future of SERPs

**This post first appeared on the Web Talent Marketing Blog and is being republished here.**
Despite the consumers search evolution and never-ending quest for answers to questions, products, and services; the act of search continues to increase. Fueled by constant connectivity, we increasingly seek to answer our queries by turning to a magical machine based answering device. Whether that is the traditional search engine (mainly Google) or the new in-home personal assistants such as Google Home and Amazon Echo, our insatiable desire to obtain the correct answer pushes us more and more to our devices. Powered by machine learning and artificial intelligence, these devices are better understanding our language, our nuances, our feelings and ultimately answers to the questions we might seek before we ask them, and through passive listening, know the context of our conversations.

Rankings: The only metric that matters right?

Ask any marketing manager, brand manager, business owner, or other digital marketer what the one thing that will help them earn more business online… chances are, they will talk about rankings at some point in the first 3 minutes.
Rankings have been the most important conquest of any digital agency, consultant, or internal staff due to the old adage that if you rank in the top 3 positions, you will earn the most traffic, which will then allow you to earn the most conversions from that traffic. Obviously, marketers want to rank high for the highest volume of queries, but those who are smart, make sure that relevancy is the most important metric in that keyword selection. However, working with clients, I have seen why this is a very flawed mindset. I have seen clients rank in the top position for EVERY query they want and still see flat or declining entrances from organic search. No longer should rankings be the primary metric to define success of an SEO campaign.

Enter Position Zero:

The entity called Position Zero, Featured Snippets, Answer Graph, or whatever you want to call it today has gone from being the most sought after entity, to the least sought after entity (looking at you IMDB), back to the most sought after entity again. Much has been covered on this topic so I won’t go into great detail here, but fundamentally, the goal of any website owner is to answer questions that consumers have and type into the search bar. With that being the goal, everyone who isn’t selling advertising based upon impressions should be trying to earn position zero, but also not give the complete answer. Give enough of an answer or even the process that wets the appetite for them to click through to your site to learn the rest. Remember how important click-through-rate is relative to Google’s Search algorithm. If you are selling a product, even better… your goal is to connect their query to your products, so earning position zero allows you to connect them to your products for queries where Shopping isn’t the primary result (think a query like best running shoes for ultra marathon runners) and if you can have your product featured in there, you are winning, and chances are you might even earn the conversion.
Position zero should be one of your targets for SEO success, since it doesn’t always go to the top spot, but to the result that is formatted in a manner that best pleases the bots, provides steps for answer (numbered/non-numbered), and obviously satisfies users. Even if you do not rank in the top 5 positions, you can still earn the position zero and potentially ‘outrank’ all of those other sites.

Now.. I bring you…. Recommended Answers

While the Featured Snippets are only 2 years old and according to data from Stone Temple Consulting, they are on the rise. But I think there is something else on the horizon that could be the next significant focus of SEO time, recommended answers on in-home personal assistants like Google Home and Amazon Echo.
These in-home personal assistants are experiencing volatile growth and with the holidays here and the promotions that Google and Amazon are running, we will be hearing more of that automated Google voice or Alexa. These devices are really doing one thing… making us a bit more lazy by preventing the need to actually place our fingers (so incredibly tired from scrolling) onto our devices to type the same question we are verbalizing. Additionally, our phones have Siri, Cortana, and Google Now, all capable of doing the same thing that Echo and Home does, yet the large audible speaker and returning voice makes it easier.
Recently, brands and agencies are staffing up on those who are able to work with AI to provide recommendations. Brands like Tide and Johnnie Walker have been creating campaigns for these in-home personal assistants. Think about this scenario… you spill red wine on your couch and instantly, you turn to Alexa and ask, “how do i remove a stain from my suede couch?” You immediately receive a response developed by Tide, features a Tide product, and informs you of the steps you need to take to remove the stain. Or in the case of the liquor brand, you have friends over and want to know how to make a traditional Manhattan. Immediately a recipe from your favorite Whiskey brand is there with a delicious recipe. The possibilities for ‘Featured Recommendations’ are endless and you need to think about how you can connect those queries to your brand/products/services.

A new KPI for your SEO campaign?

When we are no longer looking at a sea of blue links and relying on a device to make the best recommendation for us, earning the position as that recommended choice will be even more important than position zero. This could replace the local pack for localized queries and with advertising options SURELY going to make their way into these devices, earning that ‘organic’ recommendation could drive significant offline growth, through an online channel.
Gone are the days of the traditional SEO goal, earn high rankings and watch the traffic flow. Consumers are increasingly changing their searching behaviors, to that of devices not include mobile phones. Earning THE recommendation on the in-home personal assistants and continuing to strive for position zero adds 2 new goals for your SEO campaign, further muddies the water with regards to how you handle those conversations with your agency or partner, as well as makes it even more difficult for you to illustrate the story relative to the ROI of SEO, however, the stakes are increasingly higher.

Hey Brand Marketers: You STILL don’t understand Video Advertising

We started with text based ads, then visual ads, and then motion visual ads. Video advertising allows us to take a 5,000 word post and convert it to motion graphics in a way that tells a story, compels, and entertains. While video advertising is still in its relatively nascent state, the symmetry to traditional TV advertising has caused brands and agencies to re-purpose those mass media assets and showcase movement to the new digital front lines.
Social and video advertising platforms quickly adopted terminology and buying methodologies that matched those used by mass media buyers and the like. This further increased the adoption of video advertising and more money continues to flood towards video advertising platforms and social networks. Now with programmatic making its way to video advertising, this meteoric rise is only set to further increase.

Focusing on the wrong performance target

However, while reviewing the study from Sequent Partners and Eyeview, published by Emarketer relative to how Brand Marketers Measure Success from Digital Video Advertising, the number one item… the most important metric they are measuring is…
Measuring Site Traffic at 71% of the respondents.
Items such as ROI, CPA, and ROAS come in much lower. This tells me that brand marketers are more interested in a potential vanity metric such as site traffic than they are that their advertising dollars are generating the revenue and return that they hope for.

Brand Marketers just don’t get it

This continues to showcase the misalignment of brand marketers when it comes to performance, which is driven by the insatiable need of the C-suite to deliver audience increases. The size of the audience continues to be the most important metric, whether it is page likes, followers, pins, site traffic etc. All of these metrics denote the size of the audience, yet are not indicative of a consumer, actively interested in your brand.
All of these metrics denote the size of the audience, yet are not indicative of a consumer, actively interested in your brand.
This arms race relative to audience size continues to follow traditional mindset of mass, while niche focused brands such as Warby Parker, Dollar Shave Club, and others focus less on audience size and more on audience relevance.

What the platform is supposed to be used for

Video advertising on a social platform or video platform such as YouTube, offer you targeting options that are borderline creepy. Big Data sets and consumer self-disclosure allow us digital marketers to pin point a advertising target so refined, that it ensures the highest relevance of impressions.
However, the misalignment of performance targets from brand marketers prevent the platform from being used for what it should be used for, and not following in the footsteps of other mass media channels such as TV.
Come on brand marketers… you know better. Combat the C-Suite’s thirst for audience size with several micro-audiences of extremely relevant consumers; evangelists for your brand, empowered through custom made video ads that speak directly to their loyalty and interests. These well placed ads are cost effective and highly valuable.

Is the Real TV Killer Hidden in Plain Sight?

The impending death of TV due to cord cutters is a story that’s long been told. 2013, 2014, 2015, and even this year, pundits have been proclaiming that the cord cutter movement is well on its way to putting an end to TV. Then the UpFronts and NewFronts happened in 2016 and the renaissance of TV posts came flying from countless purists.

The reality is that people are not cutting cords, they are shaving cords; but not at the rate that everyone feels. The losses in TV subscribers due to cord cutting is less than a rounding error for the big Telcos.

Even with Digital Video spending increasing tremendously each year, advertising spending allocated to TV is not going anywhere; actually it is also increasing. A ‘dead’ platform with increasing allocation of spend? Hardly.

What most feel will kill TV

While most traditional TV providers such as Comcast, Time Warner, DirecTV, Dish, etc. are worried about Netflix and Amazon Prime causing the end of cable television watching as we know it; the real disruption vehicle to television remains hidden in plain sight.

Facebook, Twitter, Twitch, Snapchat, and highly trafficked social media platforms similar to them (and even those still to come) are the ones who are going to disrupt the television industry and do something that all of the other ‘TV killers’ before it have not been able to do, change consumer behavior, at scale. Let me explain… but first.

TVs and Dishwashers

Now let me clear something up right away that you are surely asking. TVs aren’t going anywhere, how they receive their content, is. Chromecast, Apple TV, and other devices allow you to take content from your smaller screen and ‘throw’ them up to your TV, thus making your TV less of a content delivery vehicle and more of an appliance. A medium for which you use, solely for its format. Additionally, while many consumers are viewing digital video content on smaller screens, the lion share of video content viewing still happens on what we know of as a TV set. But in there lies the disruption point for Telcos.

If your TV is nothing more than an appliance that displays the content brought to it by another connected device, then is it just a monitor? What happens if the device that connects content to our viewing appliance comes from multiple sources? It is already happening today with Smart TVs and the ‘traditional’ streaming services such as Netflix, Hulu, Amazon Prime and the like. Why can’t it come from more traditional websites instead of ‘apps?’

The disruption of TV will not come in the form of direct appliance and format disruption, as it will come in the form of content delivery.

According to GfK’s recent study, 49% of the sampled American population has a subscription to at least one Over-the-Top service, such as Netflix, Amazon Prime, Hulu, etc. 17% has subscriptions to 2 services and some even subscribe to 3 or more. This new consumer phenomena is dubbed the ‘self-bundlers’ and while it shows an age of discerning consumer, it doesn’t allow scalability. The average income for ‘self-bundlers’ comes in at about $90k a year, quite a bit more than the average American household. Again, self-bundlers will not provide a big enough disruption for TV and is nothing more than another rounding error. Interestingly enough, the largest over-the-top provider Netflix, just has over 80 million subscribers, compared to roughly 100 million pay-tv subscribers, according to Business Insider. In order to combat this, companies like DirecTV are launching a ‘skinny bundle’ which includes limited channels delivered multi-device.

Disruption, hidden in plain site

All this chatter about skinny bundles, cord shavers, cord cutters, time shifting and over-the-top solutions make up such a small percentage of disruption to the TV giant, but receives all of the press. The unfortunate nature is that everyone is missing the biggest potential disruption, hidden in plain site… Social media networks as the content delivery method.

We can all agree that internet connectivity has never been easier to obtain and with easily accessible internet-enabled television appliances, internet connected devices a plenty, and connectivity dongles such as Chromecast, Apple TV, and Amazon Fire Stick, and you have a recipe for “if there is internet, there is TV.”

At this year’s Republican and Democratic National Conversions, something very interesting happened… News outlet CNN was live streaming the whole event; not on their traditional network, but on Facebook Live. While this seemed like just a smart usage of social media and another way to sell ads, it fundamentally poses a significant threat to TV and with an audience of 1.7 BILLION on Facebook, does the piddly 55-100 million cable TV subscribers who could watch your traditional channel even matter?

I like butter and precedents

When the Southern cooking maven Paula Dean was removed from her position on the Food Network in 2014, she started her own channel, available completely online. This business soon after showcased strong growth and with someone like Glen Beck’s BlazeTV earning 300k subscribers (in 2014) and the WWE channel boasting close to 1 million, there is demand for online content, and those willing to pay. Not to mention the juggernauts already mentions in Netflix, Hulu, and Amazon Prime.

The Live Sports Tipping Point

Live sports is one of the few sacred places left in TV, since you can’t easily timeshift a live sporting event AND be online at the same time. All it took was someone like the NFL or NCAA College Football to start opening their walled gardens to allow streaming, such as what is happening today with Twitter’s Thursday Night Football and you bring streaming on social, to the mass. This social streaming allows users who do not necessarily own a pay-TV service to watch one of the most restricted events, the NFL, for free (ad supported). Add in the partnership deals between Twitter and College Football finalizing and you add yet another seminal event that was once strangle-held by ‘traditional’ Telco delivery networks, to be distributed to the masses, on a free channel, with connectivity as the only barrier to entry.

Election 2016: The Happening?

While the streaming of NFL games on a ‘free’ ad supported social network seems like a huge jumping off point, ratings for those games have been less than ideal, yet consistent with rating declines felt by the NFL in general, perhaps the 2016 election in early November will be the ‘event’ that brings ‘streaming social’ content delivery to the masses. Their live streaming of the Presidential Debates, has been a tremendous viewing success, outpacing that of the NFL game streams.

On election night, millions of Americans flock to their TVs to see who is going to be the next president of the United States; an event made for TV. However, BuzzFeed announced that they are going to live stream their election night coverage on Twitter; free to users, but ad-supported. Users will follow.

The Social Networks are Hustling

Twitter has its partnerships with the sporting associations and news outlets to live stream events for free on Twitter (ad-supported), and now Facebook is allowing users to ‘throw’ Facebook Videos up on their TV (appliance) using their Chromecast or Apple TV. Soon it will be Facebook Live streams ‘thrown’ onto TV (appliances) and voila… you have a TV delivery network, without Telco interaction.

Social networks such as Facebook and Twitter have the audience and a growing share of our time everyday. Publishers are having an increasingly more difficult time creating content that receives strong ratings and generates a profit. If a producer or publisher of digital video content took their show and brought it live to Facebook and Twitter as an original program (similar to what Netflix, Amazon, etc. have done with their own original programming), could we be seeing the rise of a new ‘cable’ network? One with well over a billion people worldwide and over 200 billion within the United States who care more about revenue per user, than they do about charging for the content. There, we will have disruption brought to Telcos by organizations who have substantially deeper pockets, and a dead set mission of providing a vertically integrated solution to consumers. Telcos… I’d be cautious and holding onto my internet connectivity deals because in a world with freely distributed content to TV appliances, whoever owns the pipes, owns the content.

The Future of Google AMP: Taboola and Outbrain Killer?

With Google expanding their AMP project to sites outside of news and initial test sectors, released AMP for Ads (A4A), AMP Ad Landing Pages, and is rumored to be placing  articles from AMP into native apps, curious marketers surely have the following question…. Are they going to monetize these content placements, similar to their other products?  It is no secret that Google wants to speed up the web experience, from content consumption, to advertising, speed is paramount. Now that Google has brought AMP to one of their other profitable properties (Search), it shouldn’t come as a major surprise that other properties could be on the horizon. There is one in particular that could bring the much-maligned Google Display Network back to the forefront as marketing cache.

Why couldn’t Google use AMP to build a better content recommendation engine? A better Taboola? A better Outbrain? Let me explain.

I thought Display Network didn’t work? 

Every digital marketing pro knows Google display network is one the most overused, misused, and misunderstood medium digital marketers have at their disposal. Brands and clients request awareness and what says awareness more than slapping banners on a few hundred thousand websites, accounting for millions and millions of impressions, even if they are wasted impressions with terrible targeting (That’s a discussion for another day). Blame it on TV and the way that TV was bought historically, I guess? 

But the best part about GDN is the ability to rent attention earned by the website owner using Adsense and put your brand in front of their consumer. You get your brand in front of their consumer, they make some money, and everyone is happy. This transaction means Google already has all of these websites in their inventory, an understanding of the user base, the content they consume, and ultimately, what value that website would have for content that matches the consumer’s interest, if the advertiser is using Google Analytics.

Content has a Supply and Demand Problem

According to Nielsen, in Q1 2016 U.S. Adults spend more than 10 hours a day consuming content, up over an hour from Q1 2015. It isn’t television driving that growth either, as online content makes up for over 3.5 hours of content consumption everyday, up almost an hour from the prior year and driving the year over year growth.

Couple that with the fact that marketers produce at least one piece of content EVERY DAY. According to Content Marketing Institute, 76% of B2B marketers said they plan to produce MORE content in 2016. This combination proves that we have an ever-increasing gap in supply then we do demand, even with consumers foaming at the mouth for more content and consuming it at a higher rate each year.

If we have learned anything from Social Media and Search, it is that producing MORE content isn’t necessarily the driver of growth. Producing GREAT content, even if less frequent, is how you allow your content to be consumed. And let’s face it, most of the content that is produced everyday goes unnoticed by consumers.

According to a CMI study, 66% of marketers promote their content with Search Marketing, and if you are able to give them yet another promoted outlet to share their content, of course they would sign up and join the auction.

But why Content Discovery Engines

Outside of click-bait images featuring persons in varying stages of dress and what feels like completely completely irrelevant articles, Content Discovery Engines (or whatever you want to call them)  do what their name suggests and do have the potential to provide significant consumer value. Consumers have an unquenchable need for content and are apt to look for additional content when they conclude consumption of that particular article. If served with relevant information, additional consumption would be in order.

Content Discovery Engines also allow you to place your content on high-trafficked, authoritative sites, without requiring substantial budgets for native ad buys. This makes them almost a text based, article sharing, Content Network….. almost like GDN, but for text/content.

The case for AMP as the Next and KILLER Content Recommendation Engine

Let me make the case for why AMP would be a great Content Recommendation Engine for Google and a potential growth platform for them.

  1. Ad Blockers: Let’s face it; one of the primary reasons that Ad Blockers came into existence is partly due to the speed delays caused by ads on publisher websites. Users block ads, they speed up their experience. While many claim that ads are the problem, the latency might be the more important issue, of which Google is working to remedy with AMP. If an advertiser uses an AMP Landing Page from the AMP Content Discovery Ad, the experience is still promising for the consumer, without the negative connotation of the traditional banner ad. A business could easily drop a form on this AMP page for conversion, and everyone wins. This could negate the primary uses of an Ad Blocker.
  2. Personalization: One of the things Google could provide over the likes of Taboola and Outbrain is years worth of searches and personalized results. Google knows the content you like and they could use that data to recommend content you are interested in, and one they can charge a higher CPC/CPM for. By deploying AMP cards at the bottom of articles, pointing to personalized content relevant to the target audience, you have a positive, content first experience, which Google can sell that inventory to advertisers.
  3. Inventory Available: Additionally, the SERP change (elimination of right rail ads) in February put a higher relevance on the top 4 ad positions and expansion of the Shopping ads (PLAs) from 8 to upwards of 16, allows Google the opportunity to recommend 4, 8, or 16 positions for promoted AMP content, with an auction for each.
  4. Reward those already Advertising on Google Platforms: By taking one of the mediums garnering an increasing share of budgets, Google is able to bring yet another piece of the marketing budget onto one of their platforms. Couple that with rewarding advertisers who are already active on their owner properties, such as Adwords, YouTube, DoubleClick, etc.and you have that one platform home that all marketers request.
  5. Helps Google stay in front of Facebook: Quality score could follow a similar model to what it does today, with a higher preference towards Landing Page experience, allowing advertisers yet another medium to promote multi-touch marketing strategies, and staying in front of Facebook.

Google expanding AMP further into their advertising properties, but focusing on content as the product, provides them another product they could sell advertisers, allows advertisers a way to promote their content, provide users with a positive experience, and allow website owners (publishers) another revenue source from Adsense, while keeping money away from Taboola and Outbrain.

New customers are the ONLY customers that matter

O the infamous introductory offers; benefits for new customers and the aggressive drive for acquisition, our eyes are solely focused on the untapped farmland of new customers.

Eyes faced forward without the notion of looking back at the seas of satisfied (or dissatisfied) customers who have already fell victim to your marketing and promotional messaging, this is the successful model used by an overwhelming majority of businesses and pressed on heavily from the C-suite.

New is the only barometer for growth right??

As Joseph Jaffe brilliantly communicated in Flip the Funnel, why spend high sums on new customer acquisition when some of your biggest potential evangelists are sitting in your AS400 and CRM software, waiting to be engaged?

These consumers saw value in your product and service, trusted your messaging, and parted ways with their ever shrinking dollar to buy your wares. Once they have entered your store and purchased your widget, you pass them off like a bad one night stand…..never looking back.

While particular industries feel that the new consumer is the ONLY consumer (one time and seldom purchase categories, please stand up), some of your most engaged consumers are sitting silent on the backlines, completely satisfied with their purchase and your product.

Why not speak to them, thank them for their loyalty to your brand and look to reengage and create a community of completely satisfied customers. If these people all spoke up and shared to their community the benefits of your product and how wonderfully your product satisfied their needs, you would be on board right?? Why not create that environment?

Why we don’t care about existing consumers…

Attracting new customers is fun…and the thrill of the kill is more engaging them dipping your toes in the water of a previously visited lake. The thirst for newness and untouched farmland seduces us into creating a tunnel vision approach on the unknowing prey.

The thrill of obtaining a new customer or a new lead is a high that many marketers consider to be euphoric. It makes you feel like you just slaughtered the unknowing bison. You pillaged the weak town and took all of their assets. You are the king of the jungle….

All of the effort you put into finding and capturing that new consumer, could have went into rekindling the old flame of your previous customers and created an army of “I will do anything for you” consumers willing to spread your message at the drop of a hat. The acquisition cost you are saving from now just focusing on the new prey, can be used to incent your existing customers to reach out to the new customers. The multiplier effect from this practice makes your quest for the new fruit, feel like a bad pick up line.

Treat your existing customers like new customers

Loyalty and rewards are the new currency. Incent your consumers to do something they have already agreed to do (trust you and purchase from you) and the ROI speaks for itself. Why climb the mountain on foot, if you have a ATV right next to you? O because the thrill of climbing the mountain makes the victory lap that much more exciting….

Do you know what I think is more exciting…. Loyal customers willing to pay FULL PRICE for your wares… profit margin and low acquisition cost… that is exciting.

Facebook and the Media Identity Crisis

Do consumers really know the media outlets they view content on?

Recently, Vice CEO Shane Smith made the comment that Facebook bought 2/3 of the media companies in the world without spending a dime. His point is that Facebook is taking over the media business. And he is dead right….

Do you know what you read?

I was interviewing a recent college graduate looking for an opportunity in digital marketing and primed with a hint to do some homework, we ask the candidate what pieces of content they have been consuming. They express they have been reading hours of content everyday and I ask, “What is your favorite site to read content and who are some of your favorite authors?” The response I received? “I have no idea.” I initially thought he didn’t actual read anything and thought he was not being truthful.

But then I thought about Mitch Joel….

Almost a year ago on the Beancast (or maybe longer), Mitch Joel made the comment that to many people “Facebook IS THE INTERNET.” This comment is a perfect segue to Mr. Smith’s point.

Facebook’s Catch 22 User/Attention/Advertising Problem

Facebook has always had the audience, but lacked the rich content consumers wanted to enjoy. Facebook was great at putting this content in front of their massive audience, but what was Facebook’s problem? You leave the site to go to the media platform. Exit Facebook’s experience and enter the media company’s funnel. Bad for Facebook.

Facebook slowly pinches off organic reach until the media outlets (and brands) need to pay Facebook to reach the same customer. If you are Facebook, why wouldn’t you charge them. You are using YOUR platform to drive customers to their funnel. People bark and complain, but quickly adopt to the pay for play model and Facebook’s revenue from advertising continues to increase.

But Facebook still has the fundamental problem, users leave their site. Why can’t they keep the customer within the Facebook ecosystem and still enjoy the content? Enter Facebook Instant Articles. Now you do not have to leave the Facebook walled garden to enjoy the content that OTHERS already created. The media outlets initially jumped on board, drunk off of the previous success they saw with Facebook and googly eyed over the audience. Until the constant stream of consumers slowed down.

Now, media outlets are less likely to put content directly on Facebook and they are going to go back to using Facebook as a customer acquisition medium, through advertising. This is bad for Facebook.

However, Facebook continues to hold the cards because the consumers want content and they do not care who they get content from. Thus, the identity crisis amongst the media landscape today.

Commoditization of Media

Think back to the last few articles that you read. Do you remember where you read them? Was that site syndicating the content or were they the author of the piece? Are you sure? Many media sites are syndicating content originating on other sites and masking it as their own and continuing to increase the identity crisis.

Facebook is in a ripe position to absorb media companies/publications/etc. and bring the content that consumer request, native to their platform. Why hasn’t Facebook done this yet? Perhaps they are trying to squeeze media outlets tighter and tighter until they lose their value, or Facebook wants to preserve the advertising revenue. If publishers top buying ads in search of customer acquisition, no revenue increases every quarter.

This is quite the predicament for Facebook, but with the unwavering interest of consumers thirsty for a constant stream of new content from countless sources makes the stakes quite high. If consumers never have to leave ‘the internet’ and could consume their content, quickly and easily, from outlets they trust (even that isn’t necessarily required), and it is easy to share, they would surely spend more time on the platform and allow more monetization of their attention.

When Facebook is the landlord, be prepared for rent increases, and dwindling apartment sizes, especially when they are buying up all of the available units in town.

 

WhatsApp: Next Round on Facebook’s Unquenchable Thirst for Monetization

1.71 Billion Users on Facebook (as of Q2 2016)
1 Billion Users on WhatsApp
500 Million users on Instagram (as of May 2016)
Facebook (as an organization) has amassed an audience so great in a short 10-ish years, that they are going to get to a point of saturation. A point in which growth slows and shareholders squawk about long term valuation. According to Statista, Facebook earns roughly $13 per user in the US & Canada, however, roughly $4 per user Worldwide, with Asia/Pacific driving the lower average.
Since becoming a public company, Facebook has increasingly brought more revenue generation strategies to market. A few examples are bringing ads into the Timeline, adding remarketing, Facebook Audiences, and monetizing their other own assets, such as Instagram. Estimates show that Instagram will generate over $3 billion in advertising by the end of 2016 and since Facebook earned over $17 billion in 2015, up from roughly $10 billion in 2014, Instagram is a strong driver to keep that number growing.
Facebook Revenue Growth

Mission: Monetize WhatsApp

With the recent announcement that Facebook’s WhatsApp will be sharing data with Facebook, this is the inevitable next step for Facebook finding a way to monetize the ‘pseudo’ non-monetized application. As of right now, WhatsApp is monetized by users who have been a member longer than 1 year, who are charged $1 a year. But without a timeline or right rail region for ads, it makes it difficult for Facebook to find a place for ads…. unless… they introduce a timeline or even place ads within messages.
This would allow Facebook to use similar methodologies for Messenger, which has been the platform Facebook has been innovating a great deal. Could they find a way to monetize yet another platform in Messenger with a similar methodology that they could use for WhatsApp? Chances are Messenger would be first, but this could allow them to grow beyond the Timelines.

Another random thought…

With Ad Blockers (and Facebook’s public battle with them) all the rage and consumer adoption reportedly increasing, if Facebook is able to monetize messaging, the encryption could prevent Ad Blockers from getting in and could provide the advertising ‘safe haven.’
If this could work, it allows personalization and arms marketers with the targeting that makes Facebook Advertising so much more beneficial and could allow a one up over Google.