The Interactive Advertising Bureau (IAB) has released a report demonstrating how much COVID-19 has impacted advertising.
As the coronavirus pandemic began impacting businesses, advertising was one of the areas hardest hit. The IAB conducted a survey of 242 companies to see how the pandemic has changed advertising, and how it will continue to do so going into 2021.
In a bit of good news for the industry, the IAB projects that digital advertising will see an overall increase of 6% in 2020, compared to 2019. That’s where the good news ends, however, as overall advertising across all mediums is expected to drop by 8%. Traditional media advertising is to blame for the drop, experiencing as much as a 30% decline.
Looking ahead to 2021, as much as 70% of businesses have ballpark estimates of their budget at best, are not clear or have no idea how much they plan to spend. Those buyers that do have some idea of their 2021 budget, plan to spend 5.3% more than in 2020.
While the pandemic continues to take an obvious toll, one thing is clear: digital advertising is coming into its own as a result.
Stitch Fix founder and CEO Katrina Lake says that “we are still early in the journey but have learned a lot in the last couple of years on the marketing front.” Stitch Fix, an online subscription and personal shopping service, was established in 2011 in San Francisco and went public in 2017.
Katrina Lake, founder, and CEO of Stitch Fix discussed their current marketing strategy on “Squawk Alley” earlier today:
Stitch Fix Enters the UK Market
I’m excited about heading into the UK. What we see in Stitch Fix Mens has given us a lot of confidence as we think about a new client base and a new set of inventory. We are now coming up on the two year anniversary of Stitch Fix Mens and now that we are in a place where that business is more mature and contributing to the business you can actually see it in our gross margin. We had the highest gross margin this quarter than we had in the last six quarters.
Then to add kids and now to add the UK we are really excited about planting those seeds. I think that the UK it is so important in the business of personalization which ours is. We understand each client and understand what each client is looking for.
There’s a lot of investment in localization, of localizing stylists, of bringing on merchants who understand the market and are buying from brands that our clients in the UK will expect. All of that localization definitely requires more work but we think really sets us up for greater success.
Revenue Per Client is Up
We are really excited about seeing revenue per client higher this quarter. What that means is we have high-quality clients that are spending more with us. Right now is a great time to see that because Men’s is getting to a place where we see greater maturity in that business. Kids, our newest business, has not blended into those client numbers yet.
Internally, figuring out how we can capture more wallet share and how we can make sure we are getting clients more what they love and capturing more of that revenue per client is a really big effort for us.
We Are Still Early in Our Marketing Journey
We are still early in the journey and we have learned a lot in the last couple of years on the marketing front. We’ve brought channels in-house. We have a lot of efforts around diversifying our channels. In the last quarter, we had national TV off for 10 of the 13 weeks which really helped us understand regional impacts, how much TV is adding directly and much it is helping our other channels.
We already knew that TV was an important part of the mix, but it really validated those learnings. It definitely helped us to plan in an accurate way going forward. That being said, even on the TV front, there is still a lot of opportunities as we think about diversification and different tactics.
Planning Brand Marketing Push Soon
What we haven’t done any of to date is brand marketing. We have a CMO who has been in the role for three or four months and as we are able to hone that marketing muscle and learn more about what’s working and what’s not working brand marketing is actually going to be another tactic that will be really helpful. This will not just be for activating and generating awareness but also driving more reengagement and driving retention.
We are part way on the journey on the marketing front but we are still really early. There’s still a lot of the addressable market out there, our awareness is still really really low. We are really excited how much more opportunity there is on the marketing front.
Using spatial reality to combine the virtual and physical world, Sony’s new Spatial Reality Display creates an incredible 3D optical experience that is viewable to the naked eye.
“It’s unlike any conventional display,” says Sony Product Designer So Morimoto. “It’s like you’re looking at the real thing. The Spatial Reality Display compared to other displays is amazing. Obviously, conventional 3D displays can show things in 3D, but this actually follows your eye movements, making it feel like a real object. I love that the display feels so natural to the human senses.”
For designers, this is a huge breakthrough says Sony Product Designer and Mechanical Engineer Tatsuhito Aono. “If we could share designs that are life-size with this kind of clarity, it would make things much smoother. We could get the planner, the designer, and everyone else on the same page, so I think efficiency would improve and so would the quality. It’s almost like you are looking at the same image side by side.
“I quickly realized that I’m seeing a whole new world here,” says Morimoto. “
https://youtu.be/HY2uI39-r9I
“Every single person I’ve seen observing this display is just like wow… I’ve never seen anything like it,” says Dan Phillips, Executive Producer for Emerging Technology at The Mill, a technology creative partner for agencies, production companies, and brands. “I mean you are literally looking at magic happen on the screen. At The Mill, we always take a brief and try to expand on it, whereas this is no kind of precedent.”
“We’ve all seen holographic effects but this is one that you can see with your own eyes in a very physical sense. It tracks your eyes and it’s just got this depth that is just pretty magical.”
“Seeing it was kind of mesmerizing and kind of mind-blowing,” says The Mill Creative Director Andrew Proctor. “You’re not designing a set frame but you’re giving a window. Look deeper, look further. You find yourself leaning around and seeing something.
https://youtu.be/lBnJ9PV6OMA
Here’s how it works according to Sony:
High-speed Vision Sensor – The SR Display is based on an innovative high-speed vision sensor that follows exact eye position in space, on vertical, horizontal, and depth axes simultaneously. The display monitors eye movement down to the millisecond while rendering the image instantaneously, based on the location and position of the viewer’s eyes. This allows creators to interact with their designs in a highly-realistic virtual, 3D environment, from any angle without glasses.
Real-time Rendering Algorithm – Additionally, the SR Display leverages an original processing algorithm to display content in real-time. This allows the stereoscopic image to appear as smooth as real life, even if the viewer moves around.
Micro Optical Lens – The micro optical lens is positioned precisely over the stunning 15.6 inches (diag.) LCD display1. This lens divides the image into the left and right eyes allowing for stereoscopic viewing with just the naked eye.
In a struggle to display authenticity without resorting to obvious pandering, while still hitting ROI targets, some brands find Facebook Ads difficult to approach, especially in a politically and culturally sensitive era
Numerous reports can be referenced highlighting the importance of authenticity within marketing as a whole. This advice is doubly true when attempting to appeal to demographics that may span numerous cultures and socioeconomic backgrounds. The only way to truly be authentic is to have representation within these diverse groups of people that can tell their story about your brand in a way that is unique to them and their coveted audience.
The way for such brands to avoid failure is to adopt a UGC ad approach utilizing influencers. Influencer marketing, as you may recall, can be distilled in having someone else tell your brand story for you, which is precisely what UGC created ads are.
There are multiple methods that influencers can utilize in the Facebook ecosystem, including live streaming collaborations, fan page postings, and group advertisements. However, the method we have found particularly effective involves using Facebook’s internal brand collabs manager as a multi-step campaign process.
For this process to work, a brand will need to only have access to an account with Facebook Ads management credentials. However, in multiple tests, we have found it is faster and more efficient to prequalify influencers through an external network prior to engaging, rather than relying upon the Facebook marketplace alone for the selection process. The importance of this step is predicated on the importance of first calculating the probability of influence based on your predetermined campaign goals. The reasoning for external vetting prior to ad collaborations is as follows:
1. While approximate reach and engagement is discernable through the brand side of the Facebook collaboration marketplace, what isn’t obvious is relevance. By first vetting Facebook influencers, a brand will likely find the self-identified categorical selections and content focus is not always congruent with the information displayed in the collabs marketplace.
2. The next issue is cost. Once again, testing has determined that price is not as static as one might assume when simply utilizing the brand collabs marketplace. The reason for this is reflective of fit. As a thought exercise, imagine a digital marketer is being asked to set an hourly rate for her services. The ads collabs manager in this analogy represents the expected blended rate for all activities the aforementioned marketer would be asked to perform. The reality is her distaste for a service such as site infrastructure auditing may make other activities she enjoys more expensive on that blended rate. The same is true of influencers. A blended rate exists to satisfy the vast majority of collaboration pitches the influencer is expected to receive. Therefore, approaching an influencer external to the collabs marketplace can often result in a lower starting price point.
The only caveat to this approach is not every Facebook influencer in external networks is a member of the ads collabs marketplace. If time is of the essence, it is recommended to ask on the status of this membership when pitching. However, as Facebook is willing to let most applicants into the program, if a brand feels strongly about an influencer, it can be worth pursuing the relationship while urging the influencer also gain membership into the program.
Once an influencer has been selected based on campaign criteria of fit, economics, and expected outcome, the process for using this influencer in an ongoing ad is remarkably similar to that of a normal influencer campaign. The critical difference is centered on ad quality guidelines, as some industries are more heavily regulated from an ad copy perspective. Presumably, a brand will evaluate the true impact an influencer provides prior to elevating into an ad unit. Additionally, running a postmortem analysis in the event expectations are not in line with reality helps for future transactions. After initial satisfaction has been reached the next steps are simple:
1. Approve the collaboration in the Facebook collabs manager interface
Branded Content Approval. Source: Facebook.com
2. Create a new ad utilizing the influencer via the boost post ad type. Simply set a budget and you’re done.
To test this concept for yourself, simultaneously run this process against a fresh ad campaign on the same exact topic. You may find, as we and others have, that the UGC-elevated ads end up outperforming the conventional ad types. The often occurs without running into the pitfalls of a brand trying to target multiple demographics, which can often come off as inauthentic. All that was required was simply incorporating some influencers into the process.
To learn more, take a self-guided demo of Intellifluence, which will help you understand how influencers can be applied to virtually any marketing use case in a simple campaign creation process.
“There’s a real recognition that digitization and transformation are not doing what you used to do in the physical world,” says Publicis Sapient CEO Nigel Vaz. “Digitizing that and translating that is essentially the journey of going from being a caterpillar to a butterfly. Real transformation. How do you reimagine yourself in the context of a world that now is entirely digital? Customers are thinking very actively about how they actually create products and services that essentially create value for customers entirely digitally.”
Nigel Vaz, CEO of Publicis Sapient, discusses how the current pandemic has forced organizations to reimagine their businesses digitally. Nigel works closely with clients such as McDonald’s, Nationwide, and Unilever to deliver transformative experiences and business models:
https://youtu.be/VOKcTLcxHXw
Businesses Being Reimagined In A World That Is Now Entirely Digital
Digitization Has Become Existential For Business
I think Digital has always been important for business. Now more than ever what’s becoming very clear is this has gone from being something that’s important to something that’s existential. How do you support customers to make orders entirely online when your stores are closed? How do you create mashups with other partners to be able to facilitate deliveries when your own deliveries don’t suffice? How do you try to create experiences online through self-service that minimize the impact of people calling your call centers?
All of these things are things clients are facing on a regular basis. Most CEOs I’m in conversation with are acknowledging the fact that this has now got to be a priority, that they have to be ready more so than they’ve ever thought before.
3 Key Things Happening With the Transformation
There are three things happening here in terms of transformation. The first is the change in human behavior where I think there’s a recognizable shift now. We’re seeing significant accounts of over-70s, for example, ordering from retail and ramping that up. We’re seeing a big shift in institutions like schools and educational institutions, which historically had not thought about transformation as particularly applicable to them.
We’re also seeing a shift in industries like leisure looking at creating virtual experiences since physical experiences are essentially restricted and people can’t use them. The human behavior shift is translating to big investments in technology and technology platforms that enable this.
Businesses Being Reimagined In A World That Is Now Entirely Digital
Then lastly, new business models. There’s a real recognition that digitization and transformation are not doing what you used to do in the physical world. Digitizing that and translating that is essentially the journey of going from being a caterpillar to a butterfly. Real transformation. How do you reimagine yourself in the context of a world that now is entirely digital?
Customers are thinking very actively about how they actually create products and services that essentially create value for customers entirely digitally. There are plenty of examples in this from telemedicine and from the educational space with new courses coming online which can scale faster than traditional courses limited by a classroom and a professor.
Marketers often think that their voice is not listened to and that there is often a disconnect with C-suite execs. Unilever CMO Keith Weed said, “I often joke with my CFO, he counts where the money’s going, I say where the money’s coming from.” How can you as a marketing executive effectively get through to others in your organization?
Marketing Week recently asked several prominent marketers how they ensure their voice is heard by the rest of the C-suite:
The key thing is to talk to them about how you can help them achieve their objectives rather than trying to convince them to help you achieve yours. Many people approach marketing with an open mouth but in reality, many people don’t understand it. Business leaders see it as a tax on their business. The role of a marketing leader is to help them understand that marketing is an enabler that helps them achieve their business objectives and their business strategy. Once they see it as something they own then they’ll be prepared to invest in it.
The secret to having your voice heard in the C-suite is caring passionately about what all the other people around the table do. If you’re myopically focused on just the marketing then you won’t be taken seriously. You need to understand everything about the finances of the business, about how the sales channels are working, about the HR problems, and the organizational opportunities. You need to understand the whole thing.
Debrah Dolce, SVP, Group Brand & Marketing Director, TJX Europe
I think to be effective in the C-suite, clearly, it’s going to be about relationships and a business approach that can showcase the impact that marketing can have on the commercial side of the business as well as the long-term brand building and customer engagement that we’re obviously all responsible for.
For me, it would very much be about the partnership and the relationships within the C-suite. As the world becomes more connected and more integrated I see that only becoming more and more important. To function as a high-performing exec team it’s going to take everybody to care about the customer. I think that’ll be critical for all marketers moving forwards to share that passion.
Keith Weed, Chief Marketing and Communications Officer, Unilever
There is no stainable growth other than consumer or customer demand-led growth and marketers should be at the core of consumer demand-led growth. If you can do that you can tell the people around the table where the growth is coming from. I often joke with my CFO, he counts where the money’s going, I say where the money’s coming from, and that’s important for business.
The way marketing leaders can ensure that their voices are heard in the C-suite, number one is they’ve got to be able to talk the language. So really understand what the business is about, understand finance, and then think about you know what is core to making that business grow. If you can combine all those three you’ll have a great voice in the C-suite.
Tony Miller, VP, Digital Marketing & CRM, EMEA, Disney
In order to make our marketing leaders’ voice heard to the rest of the C-suite group it’s about really open dialogue, being honest with your peers, and having the ability to have debate and encourage debate and discussion around things that are happening in the industry and specifically within your brand and your sector.
I think marketers today need to ensure that they have everything backed up through data and insight, whether it’s about kind of proving return on investment of that marketing value through brand engagement or customer satisfaction or sales and return on investment. Having the data and letting that help speak and guide those conversations.
John Rudaizky, Partner, Global Brand and Marketing Leader, EY
I would say from point of view, how does your marketing and your brand contribute to the growth agenda? You really have to work hard at making sure that that’s clear. Most businesses are looking at growing through very disruptive times at the moment. The next thing is from a digital transformation point of view, I think marketing has never been more relevant in the boardroom.
When you think about the total customer experience being changed through digital and technology, marketing has probably got the best ever moment in time to have a seat in that conversation. Thirdly, I’d say trust, every business is going through change and if you think about digital things reputations can be affected overnight. From a brand point of view, marketing and brands can play an active role in helping the boardroom navigate through these disruptive times.
It was a merger that started out nearly a year ago as a perfect idea and was even approved by the U.S. government. In the end, it turned into a perfect storm because of the ad industry upheaval caused by the coronavirus and subsequent business closures followed by massive unemployment and fewer clicks on ads. Ad prices then dropped dramatically which changed the value proposition for both Outbrain and Taboola.
The world’s two leading companies in the discovery & native advertising industry will remain fierce competitors in what still is a chaotic and unpredictable ad market.
“As part of the process we exchanged financial information with each other,” says Taboola Founder & CEO Adam Singolda in a blog post. “Based on the relative performance of the two companies, we decided the original deal does not make sense anymore. We could choose to pay the same price of 30% in equity + $250M, but our shareholders thought it’s too much for what we would get based on the relative contribution of the two companies. Nothing emotional, not about culture fit, just data.”
“Out of deep respect, we tried to do a deal that was equity only (but less equity), or equity and cash (but less cash) that matched Outbrain’s financial contribution to Taboola. We failed, and we called it off.”
“It is now public news that Outbrain’s planned merger with Taboola is heading to termination in the near future. This isn’t the outcome any of us anticipated for this process. We believed when entering this deal that there is great potential value to be had for our employees, our marketers and publisher partners, and our shareholders. However, this combination apparently was simply not meant to be. We worked hard to mix water and oil, but ultimately the companies proved to be too different to be mixed.”
“During a very stormy year for the Outbrain team, due to both the pandemic and the cloud of the merger, Outbrain’s character as the #1 most trusted partner for the world’s best publishers has shone through very brightly. We’re excited to continue innovating and building the best native advertising products for publishers and marketers as an independent company for many years to come.”
There are six things that you need to think about with employee engagement and customer engagement says Andrew McMillan, a renowned customer experience expert based in the U.K. “The most important thing is what you do for each other is actually what you do for customers.”
For me, customer experience is simple. I think the first part is to know who you are as a business and to know what your personality is going to be. Friendly, kind, thoughtful, helpful, or forward thinking? What’s the personality of your brand? Then come up with some attributes and behaviors that are going to enhance that personality. That’s what you then start to try and recruit in terms of your employees.
How You Treat Employees is How Employees Treat Customers
The most important thing, I think I learned from John Lewis, was actually what you do for each other is what you do for customers. Create that working environment for your employees so they find their managers are friendly, thoughtful, and kind to them. I believe then, it’s just a leap of faith but I proved a ton time again, that they will then be friendly, thoughtful, and kind to their customers.
What is Your Companies Vision?
The North Star, some people will call it visions and some people call it purpose. It’s just why do we exist? Why should anybody care about this? Why should anyone want to do any business with us? John Lewis’s was a bit of a strange one actually. The purpose in 1929 was to have an organization where employees were happy.
So these can be really highly aspirational and lofty or they can be very very simple. But having something there, the idea is that people come to work inspired and having a sense of purpose.
John Lewis Partnership – Vision
6 Ways to Achieve Employee and Customer Engagement
There are six things that you need to think about with employee engagement and customer engagement:
The first one is to define what your personality is going to be in terms of behavior and attitude. It can be friendly, kind, thoughtful, whatever you want to be as a business.
The second one is to measure that and measure it with employee surveys and customer surveys. This is inside-out. This is what you do for your employees and what you hope they’ll do for customers.
The third thing is to communicate it. Communicate it at inception. Then continue to tell stories about people who’ve lived up to those behaviors and attitudes to see what it’s done for customers and what it’s done for them to bring it to life, so people can see what it looks like.
The fourth thing is leadership. That’s probably one of the biggest things I see that’s lacking in organizations. There should be leaders modeling the behavior that we talked about and then actually coaching it in their team’s to encourage them to deliver that behavior for each other and for their customers.
The fifth thing is HR really. It’s a Reward Recognition Appraisal to make sure those are links to not just the outcomes people achieve but the alignment with the behavior with which they achieve those outcomes. So it’s about how they do things, not just what they do.
Finally, the sixth part is the recruitment. If you’ve done the first five really effectively and really built a cohesive network around those first five, you’ve got a great blueprint for exactly the sort of personality and individual you want to recruit into your business.
“The pace of change, the disruption in our industry, it’s manic,” says Ogilvy Global CEO John Seifert. “We’re all trying to get our arms around it. The hope I have for convening moments like Cannes is the clients and their partners in tech and creative communications and data start to come together and work harder as partners to design the models of the future.”
John Seifert, Global CEO of Ogilvy, discusses how technology such as AI is disrupting the advertising industry in an interview on CNBC International on location in Cannes:
The Disruption In Our Industry, It’s Manic
The pace of change, the disruption in our industry, it’s manic. We’re all trying to get our arms around it. The hope I have for convening moments like Cannes is the clients and their partners in tech and creative communications and data start to come together and work harder as partners to design the models of the future.
Some have predicted AI will eliminate jobs or reframe jobs that require intense new levels of training. So far that is not the challenge we’ve had. It’s really about how do we think about the impact AI can make in making work and doing better work and getting insights that we can translate throughout marketing and communications. It’s additive at the moment, at least for us and for our business. I think it’s like everything else in life. These things are changing, they’re very dynamic, and how we apply and learn them in real time with clients on everyday big important challenges is going to be critical.
Generation of People In Our Company Who Are Thirsty For the Change
We’re just trying to get everybody very externally focused. We’ve had a couple of years in our transformation. We did a lot of change on the inside that was obviously disruptive for people, unsettling sometimes and makes you insecure. But there is a generation of people in our company now who are thirsty for the change and want to apply it. We’re at that moment of transition now where a lot of the what I call, rewiring the company, is done. Now it’s about how do we work together differently? How do we execute to a new level of ambition that our clients are asking for? Then frankly, how do we show the accountability of that work through better results?
I’ve said to everyone in the company, in fact, I just came from talking to someone who’s reinvented a service model in Singapore for one of our largest clients, that you just have to get to the coalface of experiencing what people who are driving change are going through every day. Then frankly, my job is to just take the noise and the pain out of the process, the more that I can be serving them, making it easier for them to get what they need in the company. We’re a global company of 14,000 people. We have tremendous assets but sometimes people find that hard to navigate. My job is to make sure that they can navigate it easily, get the tools they need and feel the support that they have from me to just get on with it.
We’ve Got To Prove That What We Do Matters
We have to get back to revenue growth in the range of two to five percent. We’re a big company, we’re a $1.7 billion business. We’ve got to get out of the flat era and get back to sustainable growth. We’re going to do that I think fundamentally by reinventing our model to serve clients more effectively and efficiently so they want to spend more and do more things that the marketing environment right now calls for. I’m hugely optimistic about the future but we’ve got to continue to prove that what we do matters to clients and building their brands.
The Disruption In Our Industry, It’s Manic, Says Ogilvy CEO John Seifert
OTT is increasingly being tested by advertisers as more inventory becomes available, says Nicole Whitesel, SVP of Enterprise Strategy at Publicis Media. “In the past, OTT was seen as a nascent channel with limited reach,” said Whitesel. “I think now you’re seeing a lot more inventory there available to them to buy. I think their willingness to test things where they’re unsure of outcomes has been increased more than ever before.”
Nicole Whitesel, SVP of Enterprise Strategy at Publicis Media recently discussed the increased experimentation with OTT by agencies and their clients in an interview with BeetTV:
OTT is the Next Step in the Digital Revolution for Ad Buyers
One of the things we’re seeing is clients appetites being larger than ever before to explore. In the past, OTT was seen as a nascent channel with limited reach. I think now you’re seeing a lot more inventory there available to them to buy. I think their willingness to test things where they’re unsure of outcomes has been increased more than ever before.
We’re really talking about kind of the next step, the digital revolution maybe seven years ago and people were early movers in that space and they had an advantage.
We’re thinking about the space in a similar way. There’s an opportunity to get in early and test things, build operational muscle between teams that maybe haven’t worked together as closely before. We really see that as an opportunity this year to do a lot of that work.
Agency Teams Working Together to Buy OTT Inventory
You have teams where historically broadcast teams and national teams have bought broadcast. Then you have teams that are more precision or audience driven that buy programmatic. You’re seeing a lot of work between those teams now to think about the way we’re buying connected TV, inventory if you will, or OTT.
You have a broadcast team that might be negotiating as part of an upfront and then you have an activation team who’s actually activating within a quarter against a specific audience, buying that inventory in-quarter.
Those are teams that historically don’t work as closely together on an ongoing basis outside of upfront. We’re seeing that that’s an opportunity to bring those teams closer together and working more closely with clients who learn these new channels and understand that. That goes as well to analytics and measurement. How are we measuring them? What’s the contribution when compared to historically traditional channels like linear TV?
Opportunity for Direct to Consumer Companies
I think there’s an opportunity for direct to consumer companies (DTC) to enter the space through these new channels that didn’t exist before from a linear broadcast perspective. A lot of inventory was sold in the upfront and there was limited inventory available on an ongoing basis. That’s changing with these new channels in inventory that’s available through connected TV or FEP inventory.
They have an opportunity to buy that in a way that benefits their business model and works with the way that their business has set up to run with retail quarters, seasonality, the things that make sense for them. They don’t have to make a commitment a year in advance. They can do it when it makes sense for their business.
Getting Smarter With Broadcast Partners
I think there’s an opportunity for us to get smarter about the way we partner with our broadcast partners. Historically we’ve gone in and we say we want this CPM and this flexibility and this is the programming or dayparts we want to buy.
I think there’s an opportunity for us to say, hey, we want to buy this from an upfront perspective, but here’s all the other inventory that you manage that we also want to think about buying. We can collectively leverage dollars and get things that are valuable for our brands and our clients that allows them the flexibility to test these new channels.
TV Attribution – A Big Next Step for Ad Buyers
I think TV attribution is one of the big next steps for our industry. Being able to understand a contribution of a specific channel and its cost and associated with an outcome the brand’s care about is I think the next big opportunity for us. Then we’ll understand investment in media mix across those different video channels.
OTT is the Next Step in the Digital Revolution for Ad Buyers
Mobile has become the focus of marketers worldwide because it goes with all of us, wherever we are and whatever we are doing. It seamlessly and ubiquitously is with us as we move from work to home and in between.
At Salesforce Dreamforce, Stephanie Buscemi, CMO of Salesforce, and Susan Prescott, Vice President Product Marketing at Apple discussed how mobile is changing the world of marketing. In particular, how mobility is setting new standards for customer expectations and how the is impacting the customer experience.
Apples VP of Product Marketing, Susan Prescott, explains:
An opportunity from a marketing point of view with mobility and with the technologies, the information you have about customers in the cloud and the devices that we have in the hands of customers, is the ability to personalize it. Rather than a marketing world where it’s just about driving awareness and trying to drive a generic action you have the opportunity that will help you deliver an even better more personal experience understanding things about that user.
From a marketing point of view, the power of combining the Salesforce Cloud and all of the things that are all of the insights and information that are there together with the intuitive familiar experience of the ubiquitous device that brings information to your fingertips all the time, it’s so powerful. This idea of having information when you need it, where you need it, on the device you have with you, is powerful.
As a consumer, obviously, I have that when I walk in a store I can have information right on my phone about items in the store, some of which have smart tagging so I can see the availability of the item and colors it comes in. Once the consumers have that kind of information we have to be smart as marketers to help them take the next step and not just feed them with generic awareness tools.
We as marketers have the opportunity to leverage all of that into more personalized experiences that benefit the user and also can benefit businesses. The idea of mobility isn’t just that it’s fun and easy, it’s that it’s creating value, value for the consumer, value for the business, and value for the customer.
The four pillars of measuring marketing ROI are key to improving sales says Jonathan Rowe, Chief Marketing Officer at nCino. “It’s really understanding your costs specific to the activities you are doing in marketing, tying those activities to your sales opportunities, and then measuring results.”
Rowe says that taking in data on sales prospects and making it available to salespeople can drive results: “When you are bringing all of the data into one real-time place, then you can start empowering salespeople to use the data. You can track your customer journeys in real-time.”
There are four variables that we use to measure ROI that have proven very successful for us. It starts with your costs. Whether it’s headcount costs where you are investing in people, whether it’s the cost of investing in PR, whether you are doing webinars or podcasts, whether you are advertising, etc., it’s really making sure that you have a good understanding of here’s where I’m actually spending my money and how much. So it starts with your costs.
Identifying Marketing Activities
The next step from there is here are all the different activities that we are spending money on. It’s advertising, attending conferences, or doing podcasts. Here are the activities. You have your costs and you have your activities.
Connecting Activities to Sales Opportunities
Then the next big step is connecting those activities to actual sales opportunities. As a B2B marketing organization at nCino, we are selling and marketing to banks. Whenever we initiate a conversation with a financial institution it often takes us 9-12 months from that initial interaction to hopefully when they become a nCino customer.
Over that 12 months, there are hopefully going to be a lot of different marketing activities where that bank and different individuals at the bank interact with nCino. We want to be able to capture that information. So we take the activities that we are doing and we actually connect them to a specific sales opportunity at the financial institution and the individual at the financial institution.
ROI: Measuring Results
The fourth pillar is the results, where we actually turn that prospect into a nCino customer. Then we can say that marketing played this role. At the end of the day, we are in a business where it’s more than marketing. We have sales groups and others involved.
When we sign a financial institution to become a nCino customer I’m always very proud to say here are all the different marketing activities (that led to the sale). Whether it’s white papers and thought leadership or press releases or attending a conference in a booth, how all those activities played an influential role.
It’s really understanding your costs specific to the activities you are doing in marketing, tying those activities to your sales opportunities, and then measuring results.
You Have to Be Committed to Data Analytics
One, you have to really be committed to data analytics. You want to have that marketing driven organization knowing it’s going to take time and costs to get there. Then two, you want to make smart decisions around the technology you use because connecting all of the dots around your data is probably the most important thing. I want to be able to go onto two or three systems which are what we have at nCino and be able to look and see all that data together.
I can see, for example, that Mary who works at a financial institution that we are talking to was on our website yesterday, that she looked at all of these different pages, that she spent seven or eight minutes on each page, and she actually downloaded one of our whitepapers. Then I find out that we are going to see Mary at a banking conference that we are going to in a few weeks.
With all of that automation, I know that the salesperson will log in and see all of that information on the financial institution and Mary.
Track You Customer Journeys in Real-Time
That sales rep will have literally on their phone before they have that face to face conversation at the conference all of Mary’s interactions. Some things you probably don’t want to tell Mary, which is hey, by the way, we’ve been tracking all of your website activity on the nCino website. But what you can have is a conversation around the fact that she downloaded our artificial intelligence whitepaper around banking and you can talk about that.
When you have fewer systems and you’ve made the commitment and you’ve gotten to the place where you are bringing all of the data into one real-time place, then you can start empowering people to use the data. You can track your customer journeys in real-time.
Many companies are working to build authentic and trusted brands with consumers. This is especially true with pharmaceuticals, biotech, and med-tech companies. The CEO of Sparrho, Dr. Vivian Chan, says that their approach combines artificial intelligence and 400,000 Ph.D.’s to deliver scientific data to companies. This data helps companies back up their marketing messages which enables them to more effectively build that vital trust with their customers.
Dr. Vivian Chan, Sparrho CEO, recently discussed on CNBC their unique hybrid AI approach to helping companies use science and information to back up their brands messaging:
AI Enables Humans to Make Better-Informed Decisions
Artificial intelligence is really about algorithms and how we can use data that we collect to enable humans to make better-informed decisions. I not at all about having computers make decisions on behalf of humans. In a way, I think it’s machines that will be helping evolve the tasks and not actually replacing the human roles. Human roles themselves will be evolving also as the technology improves. This allows humans to have more headspace to be thinking about things that machines can’t do right now.
Machines can’t necessarily summarize a lot of pieces of contextual analysis very well yet to a 100 percent accuracy and humans are still better at making nonlinear connection points. For example, being able to say that this mathematical equation is super relevant to an agricultural problem. If we don’t have the tagging and reference and citations humans are still better at making those nonlinear new connection points than machines.
Humans are still good at coming up with the questions. If you actually pose the right question and you train the data and the algorithms you might actually get the right answer. However, you still need to have the humans to be thinking about what the questions are in order to ultimately get the answers.
It’s About Using AI as a Means to an End
I think the angle is really thinking about using AI as a means to an end and not just the end. Ultimately, this is a hybrid approach and various different people are calling it differently. Even MIT professors are calling it a hybrid approach. We’re calling it augmented intelligence. We need to come up with a good relationship between humans and machines. Marketing is about building relationships. It’s about building relationships between brands and consumers and now how do we build that relationship digitally?
Using Science to Build an Authenticated Brand
In this digital age, consumers are a lot more tech savvy but are also information savvy. They want to know what the is science behind certain things. Even if you’re talking about CPG, consumer packaged goods, what is the science behind a shampoo product right now when it claims 98 percent prevention of hair loss? What is the real science behind that and how do we actually bring that simplified science-oriented message to the consumer? How can consumers educate themselves and make informed decisions based on the products and thereby build a stronger brand relationship?
Ultimately what we’re trying to do at Sparrow is simplify science to build trust in brands. Especially for marketing departments and brands, it’s really allowing them to have the evidence-based science and the facts because building a very authenticated brand is what is meaningful to consumers. Research says that about 71 percent of consumers immediately reject content that looks like a sales pitch. Building a relationship and having an authenticated brand and content is super important in building that relationship between brand and consumers.
Sparrho Provides Content as a Service On Demand
We’re going even wider with that by providing what we call content as a service or relevant content on demand. We then integrate that into the digital platforms or the brands. We have what we call augmented intelligence with over 16 million pieces of content that is augmented by a network of more than 400,000 monthly active PhDs in a150 countries. They curate and summarize what’s actually happening in the latest of science.
We know that in about 60 percent of pharmaceuticals, biotech, and even med-tech companies, are spending more than $50 million per year just in content. Content has been the major driver for a lot of their marketing. In pharmaceuticals, they’re trying to really bring that relationship that they have offline to online. It’s at the heart of this digital transformation age that we are going through. This is really helping bring that relationship online by using the right engaging content. Our goal with Sparrow is to drive more engagement and ultimately more sales.
Yesware Founder Matthew Bellows says that it’s important that the relationship between the salesperson and the prospect is authentic, genuine, and honest. That’s why Bellows advocates a sales prospecting concept he calls ‘Authentic at Scale’ which uses Yesware technology to have genuine authentic communications with customers and prospects.
Matthew Bellows, Founder & Chairman Of The Board at Yesware, recently talked at Web Summit about salespeople being ‘Authentic at Scale’ and how Yesware can help companies and their sales teams more effectively drive lead generation:
Important for Salespeople to be Authentic
There’s not only just the business model which is changing the relationship between the salesperson and the prospect but also the fact that information is freely available, that your reputation sticks with you much longer now, and all pushes towards more power to the customer. Therefore, it is more important for a salesperson to be authentic and genuine and honest and a long-term partner for success as opposed to a transactional sort of guy.
Whether we’re working with a brand new startup who’s just implementing Yesware for there one or two or three person sales team or the CRO of a publicly held company like Twitter or Yelp, salespeople are always changing stuff. They’re always trying to find out a new angle, they’re always moving territories, always changing a training program or changing their comp structure.
For those of you who have read all the blog post about how you just got to get a repeatable scalable model then pour money on top of it, that is not true. You need to actually continue to iterate and make up stuff and try different experiments with your sales program. That’s the kind of thing that our software tries to enable, basically getting the data from your activities and seeing what works and doing more of that.
Authentic at Scale is What We Advocate For
For those of you who are just starting your businesses and getting going, you are faced with a dilemma which is I want to grow really fast. One approach to that is what we call spray-and-pray. Buy a big list, blast out a ton of emails, and hopefully some people respond. If they don’t keep blasting them out. That is a short-term successful strategy with a medium-term disaster. It burns your brand. As a sales person who’s in that organization you’re ruining your reputation potentially for the rest of your life, and obviously in Europe it’s illegal.
What we advocate for our customers is something we call authentic at scale. Use technology to have genuine authentic communications with customers and prospects in a way that shows that you’re actually paying attention to who they are. You’re recognizing what they need and what they’re interested in and what you can offer or not. But do it at a scale that actually helps you build a business. That’s the binary choice that I think most startups are faced with. You can go either way but authentic at scale is what we advocate for.
When Building Your Team Incrementally Hire
In the very early stages, one one of the mistakes I made early very early on was when I got the board approval to hire our first sales team. I was the first sales person for Yesware and then I hired this kid straight out of college who blew up and was amazing. He closed Box on his own and it was sort of like, oh this is great, this is ready to go. I went out and hired eight other sales reps and it was way too many.
So the big thing I I coach people who are just building their team for the first time is really go two by two by two by two and incrementally hire. Even though you never know if it is the market or the person, at least with that sort of slower incremental sales build you get more feedback and have more time to correct as opposed to going in and hiring a big team all at once.
We Make Software that Helps Salespeople Make Money
Yesware is software for sales people. We help sales people communicate better with customers and prospects and we’ve been doing this for about eight years. I started as a SaaS business and still are.
In the early days, there was very little competition for what we were doing. We were getting a lot of inbound interest from companies that just heard about Yesware. They were like, I gotta try this thing. There was a lot of good word of mouth from the very early adopter kind of companies. Now the market is more mature. We’ve probably crossed the chasm in terms of technology adoption curve and we’re into the early majority and those companies think about things differently and they have a different buying process.
At the end of the day what it turns out to be is if the end users like your product and if we’re helping the salespeople make more money then we’ve got a business. So my first business plan for Yesware as I explained to our early stage investors was we make software that helps salespeople make more money and they’ll give us some of it and that is sort of still what we’re doing.
It’s Hard to Know What Makes a Good Lead
For folks out there who are reading blog posts and just getting your company started it’s harder than it looks. When you read the thing about Arg or whatever, it’s hard to know what makes a good lead. You have to keep revising it. We just did a big data science project to try to figure out of the 2,000 leads that closed in the last 18 months, which were good leads? We had a data scientist work on this problem for three months to figure it out because it’s not obvious what a good lead is actually. You’re going to be frustrated but know that everyone else is frustrated with you.
I think the most important thing is just to get your motivations right. Be clear about why you’re doing this because it’s a long slog and the clearer you can be about why you’re doing this project the more effective you can be when you’re talking to other people about why they should do it too.
At the recent Social Media Day Jacksonville 2018 conference, Carlos Gil, founder of Gil Media Company, spoke about current social media marketing strategies. In an entertaining and informative talk, Gil spoke about the challenge of getting companies like Win-Dixie to understand that they should be engaging with their customers on the device their customer is always paying attention to, and that’s the cell phone.
It’s not about advertising either, it’s about being part of the conversation, being a brand that matters. Here are selected excerpts from Gil’s talk below that highlight this challenge:
The Only Metric that Matters Is Sales
The only metric that matters today is sales. Most of us, if not all of us, know that the reason why we’re on social media is that we want to drive more revenue for our businesses. You go to any CMO or CEO and for them, social media is just nice to have. The reality is that social media is the lifeline between you and your customers.
Oftentimes, we see metrics being referred to as reach, clicks, impressions, but the only metric that really matters is the sale.
I often get asked by businesses and marketers, should I be on Instagram, Snapchat, or something else? My answer to them is very simple, go where your audience is. Each one of these social networks gives you reach and helps put you in front of people who are potential buyers or existing buyers from your brand or your competition. If you are targeting millennials, Snapchat and Instagram might be good to focus on.
Simply think about your business and go where your audience is.
Revise Strategy from One-To-Many to One-To-One
We’re talking about sales, we’re talking about driving revenue. Since the beginning of time sales has always been one-on-one. I think the biggest mistake that marketers are making is they think I’m going to get on social media and I’m gonna have access to reach all of these people. I have all of these followers, but the reality is that most people are not paying attention to the content that you’re posting. This is why you should revise your strategy from being about one-to-many but more one-to-one, and you should stop focusing on the numbers.
Recently, I was working with a client that said to me, we have 30 million social media followers globally but we’re reaching a very small percentage. I looked at the CMO and said, you don’t have 30 million followers, in reality, you have like 300 or less. Their jaw dropped and they were shocked because the reality is that you can’t touch everyone that’s out there.
Social media operates in real time, and with the way content moves, content is relevant today and it’s irrelevant 15 seconds from now.
Millennials Don’t Want to be Sold, They Want to be Engaged
Millennials don’t want to be sold, they want to be engaged. Millennials are really at the forefront of a lot of what we do. For example, I work a lot with real estate agents and they often say that you have to look at the data of who is your target buyer. In the case of realtors, 30 years old is the average age of a first-time homebuyer. You’re not going to reach that customer sending them direct mail.
However, if you run Facebook Ads, if you have any sort of presence in social meeting, you can find a way to get in front of them then. You have a much higher likelihood of promoting your brand and getting that lead. The same thing applies to most businesses.
Go Where Your Customers Are… the Mobile Phone
I work with both B2B and B2C and you have to go where the current is, you have to go where the customers are. The reality is this is your audience today. People aren’t paying attention to really what’s in front of them besides their cell phone.
I’m sure if you go to any boardroom meeting today and you look around, what do people do when they show up, they put their iPhone first thing in front of them.
When I was working at Winn-Dixie back in 2014, we’re doing this campaign where we’re trying to take market share away from Walmart, Target, Burger King and McDonald’s, I made a comment to our CMO at the time. I said why are we focusing so much on doing direct mail at home marketing and instead, why aren’t we doing SMS and push notification ads? Why aren’t we reaching people on the device that they go to the bathroom with and that they use all the time?
We use cell phones for virtually everything that we do, so guess what, the light bulb has to go off if people are using this device all the time and they live by it your marketing has to now appeal to the device itself.
It was funny because in 2014 that CMO looked at me and says huh, SMS is never gonna take off, mobile marketing is never gonna take off!
Marketing is Like Finding Your Match on Tender
You’ve got this high propensity of customers, Millennials, they’re all using social media. I think the biggest challenge that we all face is how do we reach people at the right time and ensure that our content resonates with them? This is why I say that marketing is like finding your match on Tinder.
Business marketing is very much like dating. You’ve got a lot of people out there in this digital ocean and if your content is not appealing to that audience then they’re gonna keep swiping.
He made a name for himself as THE Apple design guru, bringing to life such iconic designs as the iMac, iPod, iPhone and iPad yet, as with all good things, Jony Ive’s time at Apple has drawn to a close.
Ive had been with Apple since 1992 and began leading the design team in 1996. Upon Steve Jobs’ return to the company in 1997, the two began what would be one of the most creative partnerships in tech history.
“If I had a spiritual partner at Apple, it’s Jony. Jony and I think up most of the products together and then pull others in and say, ‘Hey, what do you think about this?’ He gets the picture as well as the most infinitesimal details about each product. And he understands that Apple is a product company. He’s not just a designer. That’s why he works directly for me. He has more operational power than anyone else at Apple except me.”
After Jobs died in 2011, Ive continued to be the dominant force behind Apple’s designs for several years. In June 2019, however, it was announced that Ive would be leaving the company to start his own design firm, LoveForm. The firm would continue to work with Apple, with Ive’s former employer being his new company’s primary client.
In an indication that his departure is now complete, Ive has been removed from Apple’s leadership page, marking an end to an incredible era at Apple. Here’s to hoping the company continues to build on Ive’s brilliance long after he’s gone.
“Retailers and brands took advantage of the buzz, the demand, the awareness, that Amazon has created and really rode that wave for great growth,” says Rob Garf, VP of Industry Strategy and Insights for Salesforce. “Retailers didn’t just ignore Prime Day, but they leaned into it. They really recognized this manufactured holiday, recognized the demand that was being created, and really took advantage of the consumers and their willingness to look for a good deal.”
Rob Garf, VP Industry Strategy and Insights for Salesforce, discusses how retailers “leaned into” Amazon Prime Day, taking advantage of the buzz and overall consumer interest, to initiate their own Prime marketing. Rob was interviewed by Owen Milbury, Senior Manager, Analyst Relations for Salesforce:
Retailers Didn’t Just Ignore Prime Day, They Leaned Into It
What we saw is that this manufactured holiday, Hallmark has to be proud, really rose all ships if you well. The tide has risen where we saw 37 percent year over year growth for global retailers other than Amazon. What’s really interesting is that it just didn’t take place over those two days, but rather the entire month of July. We saw July having a ten percent higher growth rate than any typical month. Retailers and brands took advantage of the buzz, the demand, the awareness, that Amazon has created and really rode that wave for great growth.
Retailers didn’t just ignore Prime Day, but they leaned into it. What we found was that emails were at a heavy double-digit increase week over week. The other really interesting thing is our team stepped back and we actually looked at the Internet Retailer 500. We subscribed to all of their email lists and we went to their homepages over the last week. What we found was 51 percent of the IR 500, more than half, did some sort of promotion either on their home page or through email.
They just didn’t ignore it, they leaned into it. We found that 17 percent of the IR 500 mentioned either Prime Day or Black Friday in July as part of those promotions. They really recognized this manufactured holiday, recognized the demand that was being created, and really took advantage of the consumers and their willingness to look for a good deal.
We Saw Two Breakouts, Apparel, and Footwear
Consumer electronics was certainly big. But we also saw two breakouts, apparel, and footwear. That’s really important because Amazon is leaning into their own private label. So these brands need to think how to differentiate. They didn’t just go to market and give deals. They also promoted limited edition products, special assortments, customizable merchandise, and even looking for subscriptions to be able not only to attract but to retain them over time.
The other one was consumer product goods. What was interesting about that was typically what you find in a grocery store they use the retailer as the intermediary, they’re looking generally to leapfrog these retailers. According to Salesforce research, 99 percent have some sort of active direct to consumer (D2C) type of initiative underway. That was no different this Amazon Prime Day. They were taking advantage of the buzz and really looking for ways to engage the consumer directly.
49 Percent of Orders For Non-Amazon Retailers Were On Mobile
When you think about the time of the year, most of Europe was on holiday, most of the US was taking time off as well, they’re not tethered to their computer. They don’t have the luxury of sitting down and searching that way. That showed in our data. In fact, 49 percent of orders for all non-Amazon retailers were done on a mobile device. This just speaks to the fact we’re on the go, the phone is the remote control of our daily lives.
We’re using it to break through the friction that usually exists between inspiration—I like something and I want to buy it—and then actually purchasing. Just for a point of context, that was a 20 percent increase year over year. It’s become a bellwether for shopping not only during the rest of the year but in particular on Prime Day.
Retailers Saw Prime Day As a Test Run For Holidays
Retailers are seeing this as really the test run for the holidays. They’re looking at their mobile strategy. How are they going to breakdown their friction? They want to make sure that they have mobile wallets so that they can really get through the checkout process. They are incorporating artificial intelligence so not forcing the consumer to swipe five times down the phone to find if you like this you might like this. Instead, putting it right above the fold.
They are also looking for fulfillment as well. As you are thinking through towards Cyber Week and the overall holiday season, and with it being five or six days shorter between Thanksgiving and Christmas, how are we going to use the store as a fulfillment center? You really bump up against that shipping deadline and need to also be able to fulfill that for several days after. Retailers are really cutting their teeth. They’re really bearing down. They’re looking at Prime Day as a way to get ready and gear up and go full force to back to school, Halloween, and through the holiday season.
https://youtu.be/JHm8PZ2z1xU
How Non-Amazon Retailers “Leaned Into” Prime Day To Increase Sales – Salesforce Execs Explain
Peter Naylor, SVP Advertising Sales at Hulu, says that they are “exploring new ad experiences for binge watchers.” Naylor indicated to AdAge that Hulu may introduce a binge ad product to advertisers at the upcoming NewFronts. The challenge for Hulu is how to capitalize on consumers who are binge-watching shows without raising their annoyance level too high.
In 2013, Netflixbegan releasing all the episodes of its original programming in one batch. This practice quickly became known at binge watching. The concept was used by Netflix as a way to quickly hook viewers and reduce subscription churn. It also made the service distinctly different from regular TV networks. It was clear from the start that subscribers loved binge-watching their favorite shows on Netflix.
Bulk releasing of a seasons worth of shows is now standard practice on many subscription platforms including Amazon Prime and Hulu.
Hulu is exploring new ad experiences for binge watchers, according to Peter Naylor, head of ad sales, as the streaming TV service looks for ways to insert brands into shows without being too intrusive.
As Hulu prepares to pitch advertisers during the NewFronts, it is thinking about ways to create a less interruptive experience. While there is no specific product for marketers to buy currently, Hulu is analyzing what the commercial experience might look like when it is clear the viewer is committed for the long haul, Naylor says.
“We know if someone watched the first, second, third episode in a row, they’re binging,” Naylor says. “That’s an opportunity to create some kind of binge advertising.”
“The invite-only auction, which is I would say our new shiny toy that’s getting wrapped in the PMP, provides us the opportunity for a variable floor price,” says Doug Fleming, Head of AdvancedTV at Hulu. “So now the advertiser pays what they deem appropriate for that specific audience. It gives them more choice and control. When we look at our offering that’s what it’s about. It’s the genesis behind us rolling out a programmatic offering. Advertisers want choice and control and we want to allow them to have that.”
Since the inception of programmatic advertising, the goal always was that it was on equal footing with direct sold. We didn’t separate it. This wasn’t a remnant solution. As we’ve grown to 25 million subscribers we now have enough inventory and enough access that we have decided to create a team under me to go out and affect those agency trading desks and those folks that have decided to bring programmatic buying in-house.
When we look at the landscape you can see this march towards automation and we’re not going to get in the way of that. We’re going to embrace that and we’re going to do it in a very private curtailed way. There is no concept of a remnant provider reselling our inventory. Everyone has to be blessed and driven through the Hulu process.
Hulu Works with Telaria But Owns the Delivery Logic
On the demand side, it’s a mix of everyone. There is client direct, there are agency trading desks, and then the DSPs are good partners too. In each of those scenarios, we need and identify the brands before they come in so that they are attributed to the appropriate seller on our side. There’s no semblance of a DSP just hanging on and reselling in an always-on situation. We actually curate that environment and make sure that all of our t’s are crossed and i’s are dotted so that we know who the advertiser is coming in and we can manage that.
What’s unique about our work with Telaria is really that the Hulu ad server owns the delivery logic. So in this case what separated Telaria was that they enabled us to do things the way we wanted to do them. They kind of powered us. We have very smart people in place who oversee these positions and they came in and worked with us to develop the appropriate technology for us to go to market the way we wanted to go to market.
Hulu Private Marketplace Gives Advertisers Choice and Control
What it’s given us is the ability to take all advertising in. We can category block appropriately, so people maintain their category exclusivity within pods. We have the ability to take multiple advertisers and a single deal ID and manage all that blocking. It also allows us to open up to the programmatic marketplace a full suite of products. We’ve always run a private marketplace. However, in the past, we had automated guaranteed and unreserved fixed. Those are fixed price deal types. Unreserved gave you the ability to make a data-driven decision and if you chose to take that impression you paid the fixed price that we agreed on.
The invite-only auction, which is I would say our new shiny toy that’s getting wrapped in the PMP, provides us the opportunity for a variable floor price. So now the advertiser pays what they deem appropriate for that specific audience. It gives them more choice and control. When we look at our offering that’s what it’s about. It’s the genesis behind us rolling out a programmatic offering. Advertisers want choice and control and we want to allow them to have that.
“The biggest pain point for media companies today with regards to cross-media campaigns is the execution,” says Susie Hedrick who is SVP of North America Sales at WideOrbit. “The more complex the sale, the more complex the buy, the harder it gets.”
I think the most interesting observations from the conversations I’ve had with customers are the new sales organizations. They’re creating organizations that are matrix. You have a team that may go across many different products and then you have specialists that come in and go deep within those products. But the expectation isn’t that the sales team can go wide and deep. They’re able to go wide where we have people who are very good at going deep.
My take on the data issue is that there is a ton of data out there. We haven’t quite figured out how to use that data in the day-to-day sales effort in adding value to the products that we’re trying to sell. It’s there, we can present it, but we haven’t automated that through software.
Automating Sales Processes is Huge
There’s a lot of technology available that makes selling easier and more efficient. Automating that process is huge and it’s a huge driver for us within WideOrbit. If we can solve that we can create an environment where salespeople are able to use their time doing more revenue-generating activity and more strategic activity.
What we don’t want is to promote an industry where we’re doing a bunch of busy work or we’re swivel-chairing between systems because we can’t enter something in one system and have it go out to digital and traditional broadcast.
Cross-Media Campaign Execution is a Pain Point
The biggest pain point for media companies today with regards to cross-media campaigns is the execution. It’s simple. Not that the selling or buying is simple. Where it really gets complex is when you have different media types and you have to go through the execution process through delivery, invoicing, attribution back into the system, and collection. So that full process, the more complex the sale, the more complex the buy, the harder it gets.
It’s more complex because the execution system for every single media type may be different. You have a different ad server for digital versus streaming versus TV. There are all different ways to execute across different platforms and the more that fragments the more work there is to do on the backend.
Domino’s software engineers and digital ad team have created a unique AI-powered ‘Piedentifier’ to launch it’s Super Bowl week marketing blitz. Domino’s is encouraging people to send in a photo of any pizza, even if you made it yourself, and it’s system will determine what type of pizza it is and give you ten points toward a free pizza in their rewards program.
‘Piedentifier’ launching for Super Bowl week marketing blitz
We’re going to give Piece of the Pie Rewards points for any pizza. Our customers are going to be able to use our great technology to take a picture of any pizza, send it up to us, and earn ten points toward a free Domino’s Pizza. The great thing about this is our team got together and created something called the ‘Piedentifier.’ What it does is it uses your phone to look for what they have referred to as the open-faced expression of crust sauce and cheese. Anything that looks like a pizza and you’re getting ten points.
Today we’ve got more than 20 million active members of our Piece of the Pie Rewards program. We don’t know the exact number of how many customers will come on board with us, but as the leader in the pizza category, we see this as a great opportunity not only to grow the overall pizza category, but also to invite new customers in to download our app and to try our product. We feel that when customers try our product we’ve got the opportunity to bring them back again and again.
This Sunday is a huge day for us. On Super Bowl Sunday, we’re typically up about 40 percent over a normal Sunday. We’ll sell about 2 million pizzas and about four million chicken wings. Each year, it’s the biggest day of the year for us. It tends to not matter which teams are in the game. Certainly in individual cities maybe it does, but broadly across the US it’s a huge day no matter who’s playing.
Average Franchise Makes $140K Per Year EBITDA
Opening up a Domino’s Pizza store is still a terrific return for our franchisees. Across the globe cash on cash returns are better than three years in our business. Just a few weeks ago at our Investor Day, we released again our unit level average for our franchisees in the US. Once again it went up. We’re expecting it to be somewhere between $137,000 and $140,000 a unit in the US on EBITDA on a Domino’s Pizza store that you can open for $350,000.
Driving is Still a Great Opportunity
Driving for Domino’s is a great opportunity because of the volume that we do out of our stores. In a lot of cases, drivers are able to come in and earn a lot more than they can driving for some of these other businesses. As we continue to tighten down our territories through our fortressing program, it’s giving our drivers the opportunity to get more runs per hour. That means more tips per hour and in turn, higher wages.
In addition to a job that earns a decent wage driving at Domino’s is also an opportunity potentially to be a franchisee in the long term. Over 90 percent of our franchisees today started as drivers or started in as CSRs answering our phones in our stores.
Self-Driving Cars Will be Here Someday
Self-driving cars will be here someday. We don’t exactly know what day but we’re working hard to really try to understand how our customer interface with that car when it pulls up to their curb. They’re used to having a uniformed Domino’s pizza delivery expert bring that pizza to the door. So we’re learning. As the technology evolves we’re going to learn how the customer wants to interact with us and we’ll be ready when it does get here.
