December 18, 2008
Turning Points 2008: Digital Media Evolution
Commentary by Tom Ryan
Editor’s
note: In what we plan to make an annual end-of-year tradition, RetailWire
has compiled a list of the most significant retail industry “Turning
Points” of 2008. (See our news
release…) What follows is the seventh in a series of discussions
based on the list.
While digital media at
retail hasn’t arrived in full, the hype around it certainly did in 2008.
Rarely a week went by without the arrival of some innovative campaign to
reach consumers through web video, mobile phones, video games or social
networking sites.
For retailer and brands,
the emergence of social networking sites, as well as the acceptance of
web video, carries the potential to tailor messages in entertaining
fashion to individuals at a level traditional media can’t come close to
matching. That opportunity was clearly heightened as older and even much
older people starting increasingly visiting and communicating through YouTube, Facebook and MySpace or
other websites aimed at their own generation and interests.
At the same time, the
proliferation of cell phone use and other mobile devices, as well as the
growing acceptance of text messaging, promises to enable brands
to reach on-the-go consumers with targeted messages at or near the point
of sale. Particularly driving the appeal of mobile devices (and the marketing
opportunity around them) was an explosion of cool and even useful mobile
applications, represented by the stunning success of Apple’s iPhone.
While still in the early
stages, it isn’t hard to find those who see a future where digital tools
will transform retail.
For instance, Eric Holmen,
president of SmartReply (a sponsor of RetailWire), believes the time for
mobile coupons has come.
“Mobile couponing
is gaining acceptance among retailers as they recognize the mobile coupon’s
ability to promote sell-through, contribute to an opt-in database, introduce
new products or trials, and track consumer behavior – all at a significantly
lower cost-per-touch than traditional print coupons,” Mr. Holmen wrote
in Mobile Marketer.
John Gaffney, senior
analyst at Retail TouchPoints, pointed
to three innovative holiday campaigns on the iPhone from
Target, Amazon, and The Gap as proof that mobile phones have become a legitimate
media channel for retail consumers.
For instance, the Target
ad makes use of the iPhone’s “accelerometer” app.
Users offer a few bits of information about the person they have in mind
and, when shaken, the image on the iPhone screen
of a snow globe presents gift suggestions.
Amazon’s app includes
Amazon Remembers, which uses the iPhone’s camera
to help create visual lists of products you want. Take a photo, and the iPhone app uploads the image to Amazon.com; and then tries
to match products in the same category.
The Gap’s mobile app
features music videos with Christmas carols being sung by popular artists.
The videos can be sent to friends via email. Another app allows users to
mix and match clothing on male or female models, and then tap to buy the
items.
“It’s a very similar
market to ten years ago when retailers started flocking to online advertising,”
Chris Negron, sales executive for online music service Pandora, told Retail TouchPoints.
“Now everyone wants to be mobile. I would say 50 percent of our online
clients are looking to develop a mobile application and a good number of
those are retailers.”
Discussion Questions:
To what degree do you think the arrival of digital media will transform
the way retailers and brands communicate with customers? What digital
technologies hold the most potential in reaching consumers?
BrainTrust
Recent Discussions
Discussion Questions
Poll
The smart ones are already investigating the best techniques and working on databases to support this, such as gathering email addresses and cell phone numbers. This is a new era for many and doesn’t fit in the current mode of marketing…but it is the new era.
The adoption of such marketing depends on the demographic to be persuaded. Certainly this may not be the best way to market to boomers but the millenials are there. Retailers seeking to attract this demographic should have a significant contribution on their marketing teams and staff from that group. Boomers are having a hard time understanding and relating to this group. Email and text messaging have the greatest potential and can be used effectively with WOM marketing.
Digital media is just like all media: already glutted with trash, the response rates are declining. How many people really need gift ideas from their cell phone? If a new billboard goes up in a forest of 10,000 other billboards, will anyone care? If a market already has 14 radio stations broadcasting ads 20 minutes per hour, how effective will radio station #15 be, if it runs 20 minutes of ads per hour? If a Sunday newspaper already has 10 color circulars, how impactful will the 11th be, if the merchandise shown is just like the merchandise in the other 10 flyers? Hot news flash: most folks already know what’s on the shelves of most chain stores and they only care if it’ll be a loss leader.
Frankly I am a little concerned.
I attended a program on the Business of Design here in Hong Kong last week. It was an Internationally attended event with New Media discussions playing a major role in the event. Regional and international ad agencies showed how they were using the Internet to communicate brand message on YouTube, virally, and other methods. I was disappointed by the lack of ‘good taste’ demonstrated in the examples showed. Individual personality traits were mocked and often ridiculed on the so called niche-oriented campaigns. I asked a question to one of the presenters as to when a production had gone ‘too far’, the answer was of course that the company didn’t want to embarrass anyone, and they held their own standards as to what was too far.
Now I am not asking for watchdog intervention, but without control, accuracy, ethics, and truthfulness on messages being delivered goes out the window. I love wikipedia, but I have to remind myself that some of the input is unsubstantiated. No one is out there checking the facts or truthfulness of what is being put on the Internet. It is easy for inaccuracies, rumors and even biases to show up in articles, advertisements, and of course pitches. And of course no one is setting the standard of ‘good taste’. I grew up being taught manners and how to act in public. Many of our media leaders seemed to have been absent from school that day.
And who is going to be caught up by this? The young who are naive and inexperienced and the elderly who are aged but also inexperienced as to how the same old scams are just re-clothed into something new. And of course everyone in between who believes in the trust and good nature of humanity.
Who is watching the watch-watchers, watch-watching?
The iPhone apps are cool and creative and some may stick, but mobile couponing using cell phones is for real. Here’s my scenario looking a mere two years ahead:
The next wave of mobile handsets (most of us replace ours every 2 years or so) is already spec-ed with NFC (near field communications) chip sets. Widespread already in Europe and Asia, these chips permit “tap and go” interaction with other devices and support electronic wallet capabilities. Folks overseas use their NFC-enabled phones to make vending machine and other small transactions, for example.
This is the same technology already embedded in Visa PayWave, Mastercard PayPass and Mobile SpeedPass cards. You tap the card (or phone) on the reader at POS and the appropriate debit is taken in an instant.
The same technology may be used to capture a unique electronic coupon to the phone from the Internet, by scanning a 2-D barcode in an ad with the phone’s camera or by tapping on a digital sign or promotional display unit. Integration with retailers’ frequent shopper programs is a no-brainer. The coupon values are stored in the phone until pre-set expiration times and are redeemed at the checkout with another tap-and-go.
Since each coupon is numerically unique and tied to a POS transaction, counterfeiting is impossible, and clearing is automatic and electronic, completely bypassing the present ponderous system of clearinghouses. The phone itself can be secured with simple biometrics–a tiny fingerprint reader–that makes fraud all but impossible.
Sound far-fetched? Well I’ve seen working prototypes programmed into phones brought over from Europe. All the technical elements exist now, and at least one company I know is well along in perfecting the business model. (Email me and I’ll tell you who.) This is a potential paradigm breaker, mark my words.
Today’s under-twenties simply cannot imagine a life without digital tools. (I described the ways we made telephone calls when I was a teenager, with a telephone on the wall, consulting a telephone book, and my teens looked at me as if I’d come from Mars.) Digital media isn’t a fad, or something that’s coming–it’s real, it’s here now, and it’s an essential for business.
I just read a very interesting report from Pew Internet Life Project that posed a few scenarios projected out to 2020. The scenarios were evaluated and discussed by industry experts, many of whom have been a part of Pew’s previous two Internet studies.
It’s a provocative read, well worth it even if you just peruse the first 20 pages. Mobile is the ubiquitous app, but there are caveats!
I have a 7 year old son and a 4 year old daughter. I hear marketers talk all the time about “millenials”–today’s teenagers. I hear all this talk about how my generation is the generation of digital nomads vs. the millenials that are digital “natives.” That’s all fine and dandy, but I am telling you that today’s teenagers have nothing on what’s coming next. My children–and I swear through no active encouragement on our part–think that everything is “on demand.” My son got mad when I told him that he had to listen to what the radio played instead of what he wanted to hear in the car. It took him less than 30 seconds to then say, “Can I have an iPod?” The world of entertainment for him is already more centered around the computer than it is the TV, and thanks to Blu-Ray interactive elements on DVDs now, he’s rapidly learning to expect TV to be interactive too. While he does consume passive content–he loves going to the movies–it is a very small fraction of his total time. He doesn’t have a cell phone yet, but I shudder to think what he’ll think of to do with it (besides take it apart–a very distinct possibility).
Digital Media has a lot of hype because it is THE future. Even traditional forms of delivering content will have to adapt and evolve to meet the expectations of kids like my son–millenials may be digital natives, but the next generation will be digital civilians, aware of and adapted to much more sophisticated uses of technology than their older cousins. Of course it will develop more slowly than our imagination, but the hype is justified. My kids tell me so.
Digital anything is hardly my forte’, but Phil Rubin’s comment sure got my attention. Why is it that with all our industry’s discussion of “target marketing” and “efficient message delivery,” etc, we are still pretty much “spamming” our messages–even the digital ones? Is it that we still believe in mass marketing? Has the cost of reaching that next thousand consumers become so low that we just can’t resist taking a shot at them? Could it be that what we have habitually blamed on lack of technology is really due to lack of discipline?
Over time digital media will transform advertising, much like the Internet before it. But just like the Internet, it will take experimentation and trial and error to discern what consumers will respond to. One tactic will not fit all consumers. And many consumers may opt out from ads and interaction with brands and retailers on their mobile phones.
As with all advertising, one of the key drivers of consumer acceptance will be value. Consumers will want to realize value for their attention to mobile communication. They will also want customization–only those efforts that have a direct appeal will be accepted.
I look forward to seeing how this category develops, with the hope that brands and retailers realize how easily their efforts can be perceived as spam and turn consumer off to what could be a promising new medium.
It is going to take a while still–at least 3-5 more years–before digital media truly begins to transform how most brands communicate with and engage customers. While certain apps like mobile coupons will absolutely drive traffic, brands–and especially retailers–are still not fully utilizing the data they have at hand.
As digital media broadens its reach and deepens its penetration, it must go beyond the current advertising-esque paradigm of simply being a more targeted spray gun in order for it to be effective for both customers and the brands. While there is a lot of novelty and “coolness” around some of these apps, at some point marketers, or at least their CFO counterparts, will demand accountability and ROI (net of dilution).
If you look at email as an example of a more “mature” channel, brands, and especially retailers, are simply spewing offers without regard to relevance and incrementality. As marketers get more able (i.e., with the right tools, metrics, learnings and sophistication) this should lead their ability to maximize the impact of all digital media.
Although mobile messaging and mobile couponing is still in the early adoption phase in retail, we do have 15 major retailers this Holiday engaged in some form of mobile couponing and mobile marketing. This is up from 3 last year.
This dynamic transformation is less about the economy or lower cost (as mobile marketing is a fraction the cost of direct mail, i.e. 10 mobile coupons for every 1 direct mail piece) and more about being able to connect with opted-in customers and cut through the clutter of message irrelevancy and lazy marketing practices. It’s takes time, money and commitment to build a cell phone database–but the payoff is response rates 2x-3x higher than direct mail at 1/19th the cost. There’s a reason you see the major brands that sustain and innovate like Walmart and Target investing in the marketing process of mobile marketing.
More Discussions
As Boomers ‘Age Out of Peak Purchasing,’ How Can National Brands Retain Interest With Gen Z?
According to a recent First Insight study titled “Is Gen Z Still Choosing Your Brand,” while…Is Supply Chain Volatility Here To Stay?
Can we expect an ongoing volatility to remain in terms of retail supply chain?Has Same-Day Delivery Become an Expectation Across Retail?
Are expectations around retail delivery speed in flux?
The smart ones are already investigating the best techniques and working on databases to support this, such as gathering email addresses and cell phone numbers. This is a new era for many and doesn’t fit in the current mode of marketing…but it is the new era.
The adoption of such marketing depends on the demographic to be persuaded. Certainly this may not be the best way to market to boomers but the millenials are there. Retailers seeking to attract this demographic should have a significant contribution on their marketing teams and staff from that group. Boomers are having a hard time understanding and relating to this group. Email and text messaging have the greatest potential and can be used effectively with WOM marketing.
Digital media is just like all media: already glutted with trash, the response rates are declining. How many people really need gift ideas from their cell phone? If a new billboard goes up in a forest of 10,000 other billboards, will anyone care? If a market already has 14 radio stations broadcasting ads 20 minutes per hour, how effective will radio station #15 be, if it runs 20 minutes of ads per hour? If a Sunday newspaper already has 10 color circulars, how impactful will the 11th be, if the merchandise shown is just like the merchandise in the other 10 flyers? Hot news flash: most folks already know what’s on the shelves of most chain stores and they only care if it’ll be a loss leader.
Frankly I am a little concerned.
I attended a program on the Business of Design here in Hong Kong last week. It was an Internationally attended event with New Media discussions playing a major role in the event. Regional and international ad agencies showed how they were using the Internet to communicate brand message on YouTube, virally, and other methods. I was disappointed by the lack of ‘good taste’ demonstrated in the examples showed. Individual personality traits were mocked and often ridiculed on the so called niche-oriented campaigns. I asked a question to one of the presenters as to when a production had gone ‘too far’, the answer was of course that the company didn’t want to embarrass anyone, and they held their own standards as to what was too far.
Now I am not asking for watchdog intervention, but without control, accuracy, ethics, and truthfulness on messages being delivered goes out the window. I love wikipedia, but I have to remind myself that some of the input is unsubstantiated. No one is out there checking the facts or truthfulness of what is being put on the Internet. It is easy for inaccuracies, rumors and even biases to show up in articles, advertisements, and of course pitches. And of course no one is setting the standard of ‘good taste’. I grew up being taught manners and how to act in public. Many of our media leaders seemed to have been absent from school that day.
And who is going to be caught up by this? The young who are naive and inexperienced and the elderly who are aged but also inexperienced as to how the same old scams are just re-clothed into something new. And of course everyone in between who believes in the trust and good nature of humanity.
Who is watching the watch-watchers, watch-watching?
The iPhone apps are cool and creative and some may stick, but mobile couponing using cell phones is for real. Here’s my scenario looking a mere two years ahead:
The next wave of mobile handsets (most of us replace ours every 2 years or so) is already spec-ed with NFC (near field communications) chip sets. Widespread already in Europe and Asia, these chips permit “tap and go” interaction with other devices and support electronic wallet capabilities. Folks overseas use their NFC-enabled phones to make vending machine and other small transactions, for example.
This is the same technology already embedded in Visa PayWave, Mastercard PayPass and Mobile SpeedPass cards. You tap the card (or phone) on the reader at POS and the appropriate debit is taken in an instant.
The same technology may be used to capture a unique electronic coupon to the phone from the Internet, by scanning a 2-D barcode in an ad with the phone’s camera or by tapping on a digital sign or promotional display unit. Integration with retailers’ frequent shopper programs is a no-brainer. The coupon values are stored in the phone until pre-set expiration times and are redeemed at the checkout with another tap-and-go.
Since each coupon is numerically unique and tied to a POS transaction, counterfeiting is impossible, and clearing is automatic and electronic, completely bypassing the present ponderous system of clearinghouses. The phone itself can be secured with simple biometrics–a tiny fingerprint reader–that makes fraud all but impossible.
Sound far-fetched? Well I’ve seen working prototypes programmed into phones brought over from Europe. All the technical elements exist now, and at least one company I know is well along in perfecting the business model. (Email me and I’ll tell you who.) This is a potential paradigm breaker, mark my words.
Today’s under-twenties simply cannot imagine a life without digital tools. (I described the ways we made telephone calls when I was a teenager, with a telephone on the wall, consulting a telephone book, and my teens looked at me as if I’d come from Mars.) Digital media isn’t a fad, or something that’s coming–it’s real, it’s here now, and it’s an essential for business.
I just read a very interesting report from Pew Internet Life Project that posed a few scenarios projected out to 2020. The scenarios were evaluated and discussed by industry experts, many of whom have been a part of Pew’s previous two Internet studies.
It’s a provocative read, well worth it even if you just peruse the first 20 pages. Mobile is the ubiquitous app, but there are caveats!
I have a 7 year old son and a 4 year old daughter. I hear marketers talk all the time about “millenials”–today’s teenagers. I hear all this talk about how my generation is the generation of digital nomads vs. the millenials that are digital “natives.” That’s all fine and dandy, but I am telling you that today’s teenagers have nothing on what’s coming next. My children–and I swear through no active encouragement on our part–think that everything is “on demand.” My son got mad when I told him that he had to listen to what the radio played instead of what he wanted to hear in the car. It took him less than 30 seconds to then say, “Can I have an iPod?” The world of entertainment for him is already more centered around the computer than it is the TV, and thanks to Blu-Ray interactive elements on DVDs now, he’s rapidly learning to expect TV to be interactive too. While he does consume passive content–he loves going to the movies–it is a very small fraction of his total time. He doesn’t have a cell phone yet, but I shudder to think what he’ll think of to do with it (besides take it apart–a very distinct possibility).
Digital Media has a lot of hype because it is THE future. Even traditional forms of delivering content will have to adapt and evolve to meet the expectations of kids like my son–millenials may be digital natives, but the next generation will be digital civilians, aware of and adapted to much more sophisticated uses of technology than their older cousins. Of course it will develop more slowly than our imagination, but the hype is justified. My kids tell me so.
Digital anything is hardly my forte’, but Phil Rubin’s comment sure got my attention. Why is it that with all our industry’s discussion of “target marketing” and “efficient message delivery,” etc, we are still pretty much “spamming” our messages–even the digital ones? Is it that we still believe in mass marketing? Has the cost of reaching that next thousand consumers become so low that we just can’t resist taking a shot at them? Could it be that what we have habitually blamed on lack of technology is really due to lack of discipline?
Over time digital media will transform advertising, much like the Internet before it. But just like the Internet, it will take experimentation and trial and error to discern what consumers will respond to. One tactic will not fit all consumers. And many consumers may opt out from ads and interaction with brands and retailers on their mobile phones.
As with all advertising, one of the key drivers of consumer acceptance will be value. Consumers will want to realize value for their attention to mobile communication. They will also want customization–only those efforts that have a direct appeal will be accepted.
I look forward to seeing how this category develops, with the hope that brands and retailers realize how easily their efforts can be perceived as spam and turn consumer off to what could be a promising new medium.
It is going to take a while still–at least 3-5 more years–before digital media truly begins to transform how most brands communicate with and engage customers. While certain apps like mobile coupons will absolutely drive traffic, brands–and especially retailers–are still not fully utilizing the data they have at hand.
As digital media broadens its reach and deepens its penetration, it must go beyond the current advertising-esque paradigm of simply being a more targeted spray gun in order for it to be effective for both customers and the brands. While there is a lot of novelty and “coolness” around some of these apps, at some point marketers, or at least their CFO counterparts, will demand accountability and ROI (net of dilution).
If you look at email as an example of a more “mature” channel, brands, and especially retailers, are simply spewing offers without regard to relevance and incrementality. As marketers get more able (i.e., with the right tools, metrics, learnings and sophistication) this should lead their ability to maximize the impact of all digital media.
Although mobile messaging and mobile couponing is still in the early adoption phase in retail, we do have 15 major retailers this Holiday engaged in some form of mobile couponing and mobile marketing. This is up from 3 last year.
This dynamic transformation is less about the economy or lower cost (as mobile marketing is a fraction the cost of direct mail, i.e. 10 mobile coupons for every 1 direct mail piece) and more about being able to connect with opted-in customers and cut through the clutter of message irrelevancy and lazy marketing practices. It’s takes time, money and commitment to build a cell phone database–but the payoff is response rates 2x-3x higher than direct mail at 1/19th the cost. There’s a reason you see the major brands that sustain and innovate like Walmart and Target investing in the marketing process of mobile marketing.