Apple lays the groundwork to kill online advertising

techcrunch.com

Their products help us learn, communicate and navigate the world. While we tap away, the companies behind these innovations are battling for the future of computing. Each and every one is actively defending their core businesses while placing bets on the future.

Their tangled business relationships help mask the underlying strategies that drive them; however, Apple’s strategy and upcoming tactics to stifle Google’s chief revenue source are becoming clear.

As technologists and consumers, we’re lucky to be around to watch one of the most exciting games of corporate chess unfold.
As I see it, Apple has four moves left until they can call check on Google’s king, search. I’ll go through some of the high-level landscape and assumptions that are driving the strategy before I dive into how it could all play out.

A caveat for readers

Before we dive down this rabbit hole, there is one thing you should know. We’re not stumbling into another “Apple will kill Google” post. There are far too many assumptions to be sure Apple will execute on this strategy. This post is speculating based on a range of facts and public statements from Apple.

Apple’s search tax on Google

Apple has a quiet search deal with Google that prints them a hefty amount of cash. Pundits have tried to understand the structure of the deal, but most agree that Apple has the leverage. What’s relatively known based on leaks is that there is more than $1 billion paid each year by Google to win the default search option on Safari. Based on more recent leaks from Google’s Oracle trial, a revenue share number of 34 percent came out. It wasn’t clear whether that was Google’s or Apple’s take, but logic leads me to think that it is Apple’s.

Putting that in perspective, Google admitted they crossed a threshold where they are receiving more queries on mobile than on desktop. In 2014, Goldman Sachs estimated that more than 75 percent of mobile revenue for Google was coming from iPhones. It’s unknown how much of that is via mobile Safari versus the Chrome app on iOS.

It may be fun for Apple to look at their financials and remind themselves that Google is footing much of their marketing tab.

Based on public filings, Goldman stated that Google had roughly $11.8 billion in mobile search revenue and more than $200 million of other mobile advertising revenue. Of the $11.8 billion, 75 percent, or approximately $8.85 billion, was believed to come from iOS devices. Goldman continued to predict that about half of that was from users who were using Google, solely, because it was the default option. That places the estimated total value for Google of being the default option at $4.4 billion.
Revenue on mobile has gone up since 2014 as Apple continues to grow and mobile usage increases.
If Apple were indeed getting the $1 billion plus a 34 percent revenue share, that would earn them as much as $4 billion in cash for directing users to the best option for search. This number is a high bound. People searching directly through Chrome and Google apps on iOS lessen the impact; however, it’s not feasible to break down how much the apps save Google on their search tax.
Two facts help put the estimate in context. In 2014, Google raked in more than $66 billion in revenue, so this would’ve reduced their margin by up to 6 percent. In the same year, Apple’s total advertising budget was around $1 billion, or 0.6 percent of their annual revenue. That rose nearly 50 percent to $1.8 billion in 2015. It may be fun for Apple to look at their financials and remind themselves that Google is footing much of their marketing tab. It reminds me of how the tax on tobacco funds anti-tobacco education.

Apple positions on privacy and against targeted advertising

You don’t need to work at Apple or Google to see how different they are culturally and philosophically.

Apple CEO, Tim Cook, stated the difference plainly in their public privacy statement:
Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t “monetize” the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.
Apple took direct shots at all advertising-powered companies, like Facebook, Twitter and Google.

Apple is one of the most prominent brands, and they reach hundreds of millions with their products. They wield an enormous megaphone as they argue that advertising companies aren’t aligned or concerned with user privacy. They take every opportunity to remind users that local processing means they’re safe, private and secure. The fingerprint scanning was the first time I picked up on this narrative, then again at WWDC 2016 when they spoke of their new facial recognition capabilities. They make sure to promote how they leverage local processing and local storage. In turn, they allude to cloud processing being less private and unsafe.

Google has always bet on cheap hardware with cloud processing, and Apple has been their foil. In Google’s ideal future, devices are a commodity that relies on the cloud. The more this future is realized, the less value the world will see in Apple’s high-end hardware and local processing.
In the end, Apple’s hard line on privacy and love of local processing foreshadows a future where Apple could turn even harder against the behavioral advertising industry with their products and services.

The “know-it-all” versus multiple experts

Part of Apple’s strategy stands on one big assumption — we will prefer to search in a context where we trust and understand their relevance ranking.

Google has been open that a threat to its long-term growth is verticalized search and has focused on solving for context and intent within a query. Historically, they limited that threat by doing everything they could to keep their search inventory as close to the top of the funnel for a user engaging with an internet-enabled device. For example, on Android phones, the search is on the home screen, and there’s voice-activated “OK Google” search. With Chrome and other browsers, they took over the URL input field and made great efforts to be the default search. On many Android TVs, voice search is a prominent feature on the screen and the remote.
Because Google sits so high in the funnel, they have little to no context for what query is coming. Solving that problem has required the scale and infrastructure that they worked tirelessly to engineer over the past 18 years.

Vertical search is growing, and behavior is surely changing.

Google continues to be the king of building context on-the-fly and accurately understanding the intent of the searcher. They’re maniacal focus on machine learning and bet on Google Assistant demonstrates they’re doubling down on building context within a conversation with Google rather than betting that people will prefer multiple assistants.
Nevertheless, the best way to beat Google is within a known context with catered result formats.

We’ve all been there. When we want food, clothing, an OCD fix or visual inspiration, we search Pinterest; for video tutorials, we go to YouTube (a Google property); for products, we hop over to Amazon; for a restaurant, we launch Yelp; looking for someone, we search Facebook, LinkedIn or Twitter.
Vertical search is growing, and behavior is surely changing. The New York Times reported in 2013 that Amazon had overtaken Google in shopping searches. The growth of all the services mentioned earlier reminds us that it’s possible that people, going forward, may trust a brand with each specific intent rather than trusting Google for everything.

The four moves

Predicting what’s next for a product or company can be obvious when it’s incremental, evolutionary or a major feature disparity with a competitor. In the case of Apple, the question isn’t what’s next as much as when. They release new features at a cadence that leaves the market wondering if they have something else up their sleeves.

Move 1: Apple Pay on the Web

The most recent move that guides the prediction was the World Wide Developer Conference (WWDC) 2016 announcement that Apple Pay would come to Safari on the Web in the fall. The assumption is that it will only be available on Safari for stated privacy reasons. Apple Pay is the first move that will begin to steal market share from Chrome.
Moreover, it gets Apple a strong foothold across the web as a widget and library that web developers learn to install.

Move 2: single-sign-on across the Apple ecosystem

The second move was foreshadowed at WWDC 2016, as well as by the addition of single-sign-on (SSO) to tvOS, and the opening up of Siri, Messenger and Apple Maps to developers. All these moves show Apple understands the more they can open up their tools to third parties, the richer and more powerful those services become.

The future is a lot more open and flexible than it may seem.
As developers find growth through these new channels, an apparent hindrance for them will be maintaining identity. Sign-up is a massive barrier to entry, and Apple could take SSO to iOS and subsequently to the Web.
To protect users, Apple can argue users should always log in with TouchID. Moreover, on the web, they can claim that users must use Safari to secure the handshake between their device, the computer, the browser and the third party.
One could say this would be more of an attack on Facebook than Google, but both are threats to Apple. Maintaining control of the ecosystem by enabling fragmentation under their terms seems like a good strategy.

Move 3: new Siri voice intents

At the present moment, Siri hasn’t opened up yet to the developer community. When she does, she will be handling some basic use-cases, or what voice developers call, intents. They are launching with the ability to activate messaging, ride booking, workout, payments, photo search, climate and radio for CarPlay and homeOS.
With the first intents, Apple isn’t eating a lot of Google’s lunch because most don’t use Google for these activities. However, it’s inevitable that Apple will release new intents that would be fielded directly by verticalized apps:

• Place Search – Yelp and Apple Maps by default
• Business Search – LinkedIn
• People Search – Facebook, LinkedIn or Contacts Book
• News Search – Apple News
• Product Search – Amazon
• Travel – Expedia, Orbitz or Priceline

It’s open to discussion whether Apple will pick winners as “default” options or they’ll require the user to install a given app and state the app name in their voice request. In the case where Apple decides, it would make sense for them to strike a few more distribution deals. Note that Amazon, alone, spends more than $150 million per year on search advertising.
Nevertheless, the more intents Siri handles, the fewer queries Google may need to field.

Move 4: native ad and content blocker on Safari

The simplicity of Apple Pay and the fact that users may prefer TouchID SSO to passwords would drive growth in Safari’s share of the market. In the near term, more searches through Safari puts pressure on Google’s margin with the search tax.

It’s prudent for Apple to continue to limit Google’s ability to advertise on Safari by creating their own native ad and content blocker within Safari. They’ve already blocked Mac addresses, turned off third-party cookies and opened up Safari on iOS to blocking extensions. It aligns with their strong stance on privacy and user control that we discussed earlier.
The reason, I believe, Apple is waiting is they don’t want to attack publishers’ ability to monetize their work. They want to come out with a “privacy friendly” alternative. The inventory may find new creative from Apple’s new App Store ads or existing iAds. The change would hopefully come with an additional carrot to move content into Apple News where they’ll provide additional distribution and monetization opportunities for publishers.

Building a blockade

Apple’s strategy isn’t a big overnight win. It’s a slow squeeze or blockade that hopes to stifle, frustrate and distract Google. The biggest impact on Google is limiting their growth by minimizing their ability to hold their massive margins for searches within the Apple ecosystem. Limiting Google’s growth affects their ability to look as attractive to public markets which, beyond the financial implications, hurts their capacity to attract and retain the best talent. Google realizes and has disclosed in public SEC filings that their core business is at risk and continues to invest in their moonshots in wearables, mobility, transportation and expanding internet access.

Google’s defense

Google won’t sit idly by as their business is cannibalized. It’s likely that they too will integrate with any new Siri voice intents like any other third-party developer. It would be a way for them to save money on the search tax — assuming they can snatch searches that would otherwise go through Safari to their search engine. They can tie themselves in so someone can ask, “When is my next meeting via Google?” or “Where is the closest grocery store via Google Maps?”

As technologists and consumers, we’re lucky to be around to watch one of the most exciting games of corporate chess unfold.
Google should be working on the universal way for Android devices to sync with the mobile and desktop browsers to authenticate with the fingerprint scanner that’s available on many of the devices. They already have more than 1 billion users using their identity system and OAuth on millions of sites, so they’re well-positioned for the opportunity.
It’s noteworthy (pun unintended) that newer Samsung devices already have this ability within their native browser. Moreover, Android and iOS users can install LastPass or 1Password (on iOS, as well) to use their thumbprint to unlock the correct password and autofill it for a given site.

Conclusions

The path I’m suggesting may or may not be what pans out in reality. However, the fact that it’s reasonable to believe that the plan is feasible reminds us how quickly the landscape can change in technology. Flanking a seemingly invincible giant in our industry is not only possible, but probable.
My biggest takeaway is that the future is a lot more open and flexible than it may seem. Every technology is perched insecurely on an eroding foundation waiting to tumble inevitably into obsolescence.

Why marketers need humans behind the programmatic steering wheel

cityam.com

One British Airways ad urged consumers to “escape the commute and discover the Indian Ocean" not long after the missing Malaysian airline MH370 was rumoured to have crashed there (Source: Getty)

Laura Bowen

Automation has transformed the marketing industry. Last year, programmatic trading reached an all-time high, making up 60 per cent of the £3bn of transactions around UK display advertising, according to the Internet Advertising Bureau.
Programmatic can be more efficient and cost-effective method for both buyers and sellers of online advertising. But it has its limits. As with any form of automation, programmatic trading is only as useful as the humans behind the wheel.

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The problems with automation

Consumers are hard to follow. They jump from one channel to another, and in the struggle to keep up, more marketers are turning to automation. What many are yet to recognise, however, is that while machines respond well to patterns, human behaviour is not as predictable. Programmatic may provide marketers with greater scale, but they must not sacrifice quality for quantity in terms of the eyes their ads are reaching.

This is easier said than done when marketers are under increasing pressure to deliver measurable results and in a shorter period of time.
But a number of infamous cases illustrate how algorithms can produce messaging which is accidentally offensive. Microsoft’s chatbot Tay was issuing racist and sexist messages shortly after its launch earlier this year, causing the company much embarrassment on social media.
Solid Gold Bomb, a T-shirt making business founded in Melbourne, set up an algorithm to generate thousands of variations on the “Keep Calm and Carry On” slogan for its T-shirts. Unbeknownst to the firm, one slogan encouraging rape had been published. When this came to the public’s attention in 2013, Solid Gold Bomb went bust.

Garbage in = garbage out

The information you put into a machine dictates what you get out. If there are errors or gaps in the data and instructions you input, the results will reflect this. A human-led strategy is the only way to give machines the information they need to work at optimum performance.
It is universally accepted that retargeting customers with products they expressed an interest in makes sense. It is also accepted that spamming those customers with the same message (sometimes after they’ve actually bought the product) causes irritation.
But machines have no idea about these things. They lack the ability to predict and detect subtle nuances and changes in circumstance or opportunity which might affect how someone could respond to an ad. When seasonality, fraud, or sociopolitical events threaten to change the context of a message or call to action, it’s up to us to bring the technology up to speed.
Remember the US presidential ads, which ran alongside Isis propaganda on YouTube? Or when one of British Airways’s ads urged consumers to “escape the commute and discover the Indian Ocean" not long after the missing Malaysian airline MH370 was rumoured to have crashed there? The company subsequently apologised and explained that it was "pre-scheduled content".
This is what can happen when algorithms go AWOL. For a brand, it can be unexpectedly damaging.

Creative context

Automation provides efficiency, but this shouldn’t come at the expense of creativity. Programmatic advertising will help identify and precisely target a chosen audience, but if creatives forgo the human touch, ads won’t perform as well as they could.
What tech can accomplish in hyper-local targeting and optimisation. But humans must still lead with their knowledge of language, ideas and originality.
It’s easy to spot the difference between an ad “designed” solely by the tech, and one that has been collaboratively developed through both artificial intelligence and human insight. Machines don’t produce great ideas; this is the job of your creative team or agency.
Read more: AppNexus CEO Brian O'Kelley lays out his vision for the programmable age
If successful automation is your goal, the answer is to create teams with different skill sets. The right mix is one that boasts amazing creative people and data analysts that can collaborate on the end solution, along with a dedicated and knowledgeable ad ops team.
Machines and algorithms have a crucial role to play, but we still need skilled drivers to win in this race.

One British Airways ad urged consumers to “escape the commute and discover the Indian Ocean" not long after the missing Malaysian airline MH370 was rumoured to have crashed there (Source: Getty)

Laura Bowen

Automation has transformed the marketing industry. Last year, programmatic trading reached an all-time high, making up 60 per cent of the £3bn of transactions around UK display advertising, according to the Internet Advertising Bureau.
Programmatic can be more efficient and cost-effective method for both buyers and sellers of online advertising. But it has its limits. As with any form of automation, programmatic trading is only as useful as the humans behind the wheel.

We are having trouble showing you adverts on this page, which may be a result of ad blocker software being installed on your device.

As City A.M. relies on advertising to fund its journalism, please disable any ad blockers from running on cityam.com, then reload the page to see the rest of this content. More info here.

The problems with automation

Consumers are hard to follow. They jump from one channel to another, and in the struggle to keep up, more marketers are turning to automation. What many are yet to recognise, however, is that while machines respond well to patterns, human behaviour is not as predictable. Programmatic may provide marketers with greater scale, but they must not sacrifice quality for quantity in terms of the eyes their ads are reaching.
Read more: Why publishers need to keep pace with programmatic
This is easier said than done when marketers are under increasing pressure to deliver measurable results and in a shorter period of time.
But a number of infamous cases illustrate how algorithms can produce messaging which is accidentally offensive. Microsoft’s chatbot Tay was issuing racist and sexist messages shortly after its launch earlier this year, causing the company much embarrassment on social media.
Solid Gold Bomb, a T-shirt making business founded in Melbourne, set up an algorithm to generate thousands of variations on the “Keep Calm and Carry On” slogan for its T-shirts. Unbeknownst to the firm, one slogan encouraging rape had been published. When this came to the public’s attention in 2013, Solid Gold Bomb went bust.

Garbage in = garbage out

The information you put into a machine dictates what you get out. If there are errors or gaps in the data and instructions you input, the results will reflect this. A human-led strategy is the only way to give machines the information they need to work at optimum performance.
It is universally accepted that retargeting customers with products they expressed an interest in makes sense. It is also accepted that spamming those customers with the same message (sometimes after they’ve actually bought the product) causes irritation.
But machines have no idea about these things. They lack the ability to predict and detect subtle nuances and changes in circumstance or opportunity which might affect how someone could respond to an ad. When seasonality, fraud, or sociopolitical events threaten to change the context of a message or call to action, it’s up to us to bring the technology up to speed.
Remember the US presidential ads, which ran alongside Isis propaganda on YouTube? Or when one of British Airways’s ads urged consumers to “escape the commute and discover the Indian Ocean" not long after the missing Malaysian airline MH370 was rumoured to have crashed there? The company subsequently apologised and explained that it was "pre-scheduled content".
This is what can happen when algorithms go AWOL. For a brand, it can be unexpectedly damaging.

Creative context

Automation provides efficiency, but this shouldn’t come at the expense of creativity. Programmatic advertising will help identify and precisely target a chosen audience, but if creatives forgo the human touch, ads won’t perform as well as they could.
What tech can accomplish in hyper-local targeting and optimisation. But humans must still lead with their knowledge of language, ideas and originality.
It’s easy to spot the difference between an ad “designed” solely by the tech, and one that has been collaboratively developed through both artificial intelligence and human insight. Machines don’t produce great ideas; this is the job of your creative team or agency.

If successful automation is your goal, the answer is to create teams with different skill sets. The right mix is one that boasts amazing creative people and data analysts that can collaborate on the end solution, along with a dedicated and knowledgeable ad ops team.
Machines and algorithms have a crucial role to play, but we still need skilled drivers to win in this race.

Ad Buyers Plan To Increase Programmatic TV Spending In 2017

mediapost.com

A new study by WideOrbit finds that 73% of media buyers expect to spend up to half of their TV advertising budgets on programmatic TV in 2017. In fact, the percentage of ad buyers who plan to spend more than 5% of their TV budgets on programmatic will jump from 22% this year, to 64% in 2017. The ad-tech firm said that the increases will be generated by shifting spending to programmatic TV from other media, including digital video.

The findings are based on a March survey of 215 media buyers’ attitudes about programmatic TV, how they plan to use it, and its potential impact on their overall media strategy.

Among the survey’s highlights:

• An overwhelming majority of those polled, 93%, said it was important to buy TV and digital video together. While programmatic is becoming mainstream for purchasing digital advertising, ad buyers are just starting to use it for TV. The survey found 89% of respondents use programmatic today to purchase digital display advertising, while less than half currently use it for TV.

• The primary reason ad buyers gave for programmatic TV adoption was greater precision in ad targeting, with 58% saying that improved targeting is the most important benefit of programmatic TV.

• Programmatic TV is viewed by buyers as a way to run across screens and increase the impact of campaigns. More than two-thirds of ad buyers (68%) said they will use programmatic TV to extend audience reach. Respondents also expressed interest in learning how TV and digital video campaigns work together (58%) and amplifying digital campaigns with TV (38%).

• While there is near-unanimity that TV and digital video are converging, campaign success will be defined by digital metrics. Buyers plan to use a variety of digital performance metrics to evaluate programmatic TV ad performance.

• Respondents were almost evenly split between the top four answers for what was the most important metric: brand lift, increased purchase intent, better media efficiency and improved direct response metrics. Twenty percent said brand lift is the most important metric; 18%, increased purchase intent; 17% better media efficiency; 17% better DR metrics; 10% incremental audience reach; 7% brand recall; 6% don’t know, and 5% other.

"This study shows that ad buyers are planning to dedicate more of their overall budgets to programmatic TV,” Eric Mathewson, founder and CEO, WideOrbit, told Real-Time Daily via email. "Eight years ago, there was no such thing as programmatic digital. Now fully two-thirds of ad buyers use programmatic in the normal course of business to purchase many different flavors of digital advertising. Even if programmatic TV doesn't follow that same explosive growth trajectory, this research shows very plainly that it will be a significant portion of how all TV spots are purchased in the very near future.”

The Future of the Native Ad Business

business2community.com

Native ads, or ads that are made to look like the content that surrounds them, are a growing business. Discussions surrounding native ads have increased as well, with publishers, readers, and content creators alike weighing in on the pros and cons. No matter where you fall on the debate surrounding native ads, the numbers prove that this business is beginning to boom.
According to new BI Intelligence estimates, native ads will drive 74% of all ad revenue by 2021.

It’s noted that native video ads will be the main driver of this growth. Given that social media platforms gain most of their revenue from native ads, social native ads will most likely account for the largest chunk of this revenue.

Native Ads and Programmatic Buying
An interesting addition to the native ad trend is its combination with programmatic buying. These two remained somewhat independent of one another until Google added programmatic support to native ads in mobile apps back in November of 2015. Jonathan Bellack, director of product management who oversees DoubleClick for Publishers and the DoubleClick Ad Exchange explained:
“Native has been a huge focus of ours for a while now, and there are several pieces that have to come together to make this work at scale programmatically.”
Sponsored content done manually is just one part of native advertising. Other types of ad content such as content recommendation, search, and promoted listings will do well with automation.
What’s going to be important in the combination of native ads and programmatic buying is adding automation that allows native ads to become a more scaleable business, and many technology companies are noting this opportunity.

Why It’s Important to Follow Native Ad Trends
Customers thus far have a positive attitude towards native ad content. This positive attitude will only continue if advertisers and publishers ensure that content is relevant, trustworthy, and timely to the consumer. Since native ads are performing better than traditional display ads, especially on mobile, the ability to fit the customer’s’ needs becomes even more important.
If you haven’t thought about a native ad strategy already, this will be an important addition to advertising campaigns in 2016.

Marketers Aren't Waiting for Pokémon Go's In-App Advertising to Arrive

adage.com
T-Mobile Exempts Game From Data Charges, Malls Promote PokéStops

The Service King chain of auto repair centers quickly adapted digital billboards across the country last week to tap into Pokémon Go. Credit: Lamar Advertising
Brands aren't waiting for Pokémon Go to activate its promised in-game advertising, not when the craze is white-hot today -- and could burn out tomorrow.
Marketers from T-Mobile to Simon Malls are capitalizing on the smartphone game, which sends players roaming the real world to catch virtual creatures like Jigglypuffs and grab virtual objects.
Niantic, the Google spinoff that developed the game, says it will let marketers pay to become locations that will attract players. It will charge marketers by the visit, the way search ads charge per click.
The McDonald's name and logo are already embedded in the app's Android code, observers said last week, as Gizmodo reported. But there was no sign of sponsored locations in the game yet, or of negotiations to sell them. On Friday, McDonald's declined to comment. Niantic did not respond to requests for comment.
Marketers were left to improvise, or else potentially miss out on a phenomenon so big that 5.9% of Android users in the U.S. played it last Monday, according to SimilarWeb, an analytics company.
Yelp added a feature to let consumers find restaurants or stores that have nearby PokéStops, the locations where players scoop up in-game goods.
T-Mobile will use its T-Mobile Tuesday promotion this week to exempt the game from data charges for a year, provide $15 Lyft rides to key locations and offer discounts on chargers and battery packs—a nod to the game's notorious battery drain.
Rival telco Sprint and its Boost Mobile brand are inviting people to their local stores to capture Pokémon Go characters, which they promised to attract by purchasing the game's "lures." They also dangled on-site "Pokémon Go experts" and free charging stations.
Simon Property Group has been promoting its malls with PokéStops via social media and is looking into the idea of sponsoring locations. "It's adding a layer to the shopping experience that everyone is looking for," said Gabriella Santaniello, president of retail researcher A-Line Partners.
"Mall traffic has died down because it's boring and sterile, but this is something all-encompassing that makes the mall more exciting and social." Because many players will use the mall's Wi-Fi, and are often required to include their email addresses to do so, there's an opportunity for data collection as well, she added.
JC Penney is not only considering using lures to drive traffic but also promoting its Pokémon merchandise, a spokeswoman said.
Real estate site Trulia, meanwhile, built maps of the most likely places to find certain kinds of Pokémon. The Service King auto repair chain and agency Blue Fountain Media updated the brand's digital billboards in 20 markets to read "Let's Not Meet by Accident -- #Don'tCatchAndDrive," with Poké Balls standing in for the letter O.
Even Hillary Clinton latched on. "I don't know who created Pokémon Go, but I'm trying to figure out how we get them to have Pokémon go to the polls," she joked during an event last Thursday. The campaign also scheduled a voter-registration event at a PokéStop in Ohio.
Not every brand should be a PokéMarketer. Alcohol brands have advertised in Snapchat, but are staying out of Pokémon Go. "We're very mindful of ensuring the people we're reaching are of an appropriate legal drinking age," a Heineken USA spokesman said.
Then again, booze-subscription app Froth organized a bar crawl in New York last Thursday, encouraging attendees to hunt Pokémon in and around the selected establishments.
The bars visited were located strategically near PokéStops or PokéGyms and, conveniently, the first drink at each was on the house for Froth users. The 20 or so attendees did their hunting while en route from one bar to another. The event featured several Pokémon-themed details, including free Ash Ketchum hats and fruity red Pokéball cocktails.
A number of small businesses have taken advantage of the app's popularity in a similar way -- that is, by purchasing lures and watching potential customers pour in in search of Pokémon. The ad agency Huge bought lures last week for its Atlanta cafe.

Cellphone carriers T-Mobile and Sprint are both trying to cash in on Pokemon Go. Credit: Nintendo

It's anybody's guess how big the game will remain over time, but marketing opportunities will likely extend beyond sponsored locations.
Mortimer Singer, CEO at consulting firm Marvin Traub Associates, predicted that it will incorporate mobile commerce using digital payments. "If you take this Pokémon Go thing forward, you're a participant in your own retail theater," he said. "It'll go beyond just marketing, it'll be able to activate sales."

Programmatic advertising increases globally

bizcommunity.com

In 2016, more than 60% of global digital display advertising will be made up of programmatic ads - online display ads placed using a combination of artificial intelligence and real-time bidding.

© Karolina Grabowska via Pixabay

In the US, the biggest market for programmatic advertising, this represents a total spend of $22.10bn. While this automated strategy of targeting and reaching customers is the norm in countries such as the UK and growing rapidly in the Asia-Pacific and Latin America, digital marketers in South Africa are still struggling to understand the technology.

Jessy Severins, ad operations and yield manager at eBay Emerging Markets and Gumtree South Africa, explains how it works.

“Programmatic advertising is a way of getting rid of the administrative slog of buying digital advertising, while still maintaining the ability to buy the exact impression (i.e. view) they want from the customer they want to speak to. It is a means of making advertising more relevant to the consumer.

Programmatic advertising provides ads users want

“In response to criticism that banner advertising is becoming less effective, new research into the ‘banner blindness phenomenon’ show that low click-through rates are not a testimony that banner advertising does not work, but rather that digital advertisers are not targeting web browsers correctly. Web users naturally tune out information that does not provide them what they need, so the frequency of irrelevant ads (1,700 per user per month) has only contributed to the problem. Programmatic is a means of providing users with ads they actually want to see and this is particularly true for an information-rich site, such as Gumtree.

“The effectiveness of any platform, as a digital advertising vehicle lies in data. Gumtree has the ability to target extremely narrowly, using psychographic information. For example, we not only can target individuals according to the items they are viewing (e.g. cars), but according to the price range they are considering. There is a huge difference between an individual looking to buy a five bedroom house and one who is looking at student digs or a room to let. If someone has R5,000 to spend on a second-hand smartphone, we know that he or she probably does not have an existing cellular contract, but could definitely afford one. This way, you are targeting individuals who are ready and able to buy your product or service.

“The secret to a successful campaign is collaboration between the advertiser and the platform. The advertiser knows who their typical customer is. They know what car he or she drives, where they live, what they enjoy and what they need. The platform knows where to place banners so that someone matching that profile will find it. Combining those two data sets in order to reach the campaign target is crucial.

Launching a programmatic campaign in practice

“The easiest way to get started would be to get in touch with us to set up a deal or opt into a private auction. Tell us your objectives and target (e.g. to complete a call back request, visit an e-commerce site or simply click on the banner) and we will set up a customised inventory package accordingly.

“With programmatic advertising, one can choose between a private auction or a preferred deal and both have advantages, depending on one’s objectives. A preferred deal is really a fixed price agreement, during which an impression goes to the AdExchange, so buyers do not need to outbid others. They get a first look opportunity for the selected impressions. You are certain of how your budget will be spent, so it is a good option for someone with a set budget and CPM.

“A private auction delivers higher quality impressions, but you are bidding against other buyers. We’re happy to advise clients according to their needs to make sure you get the best value for your spend.

Programmatic uptake in South Africa

“The market is still in its infancy and unfortunately there is a dearth of skills, which means that few publishers are using the data at their disposal effectively. Additionally, many agencies are not performance-driven as of yet and approach digital advertising the same way that broadcasters do. They cast the net widely – making assumption about the readership of a platform, using a metric such as LSMs, which leads to wasted impressions and irrelevant ads being shown to browsers. Effective advertising is not a numbers game; we should aim to deliver conversions - not just impressions.

“Advertising is only going to get more and more automated. Some publishers in Europe are already 100% programmatic and do not even run IO-based campaigns. In order for this to happen, publishers need to make sure they can offer the right inventory for a campaign, and advertisers need to know where to find it.

Mistakes to avoid

Do not take the easy route of bidding on an open auction or just sticking a banner on a high-traffic site. The biggest assumptions advertisers make about their target audience is platform-related. Shift your focus from which website you should be placing your ads on to one that focuses on which audience you want to reach.

If done correctly, digital advertising can speak to the exact person you want to target – so do not just aim for eyeballs on your banner, aim for results.

Programmatic video - the real-time future of visual brand storytelling has arrived

bizcommunity.com

The revolution of the future may continue to be televised, but more and more consumers will be watching it unfold on their mobile devices rather than on their TVs. As marketers, we need to be preparing ourselves for a profound shift in consumer behaviour as our customers stream more video and watch less linear television.

With the shift to streaming, video-on-demand and catch-up viewing, TV advertising’s role as the premier place for visual brand storytelling is under growing threat. Many consumers are ingesting video on their smartphones or tablets rather than on a television screen, often alone rather than in the family room. Our storytelling via video can thus become increasingly personalised, targeted and measurable.

The good news for brands is that digital video is better at grabbing consumers’ attention, provoking engagement and driving purchase intent than traditional banner formats. The result is that many advertisers and agencies are already shooting television and movie commercials with the consideration of repurposing the content for digital use at the front of their minds.

©Andrea De Martin

Digital video advertising and marketing is increasingly intersecting with the other trend that defines the zeitgeist in digital marketing – the rapid rise of programmatic buying. As automation eats the rest of the digital advertising market, it will eat video, too. If video is about visual storytelling and creating compelling brand experiences, programmatic video buys are about targeting the right video content to the right person at the right time, and with minimal wastage

Looking at the international market, the massive move away from linear TV to streamed media is already well underway. In turn, it is causing a massive surge in programmatic video advertising, which is emerging as one of the most powerful solutions in the digital marketer’s toolbox. According to eMarketer, US advertisers will spend $5.5bn on programmatic video this year – more than half of total digital video ad spending.

Two trends of the moment

In Europe, meanwhile, IHS expects programmatic video to grow from €375m in 2015 to more than €2bn in 2020. South Africa is lagging in the global trend, but forward-thinking agencies and advertisers are looking at how they can unleash the value of programmatic video in their marketing mix.

Of course, the relatively high cost of bandwidth is an obstacle for digital video in South Africa, but continued drops in mobile broadband prices and a proliferation of fibre will change that faster than many marketers imagine. Already, we’ve seeing many consumers – and especially younger people – turn away from TV in favour of digital media.

What makes programmatic video such a great opportunity is the way it creates efficiencies through the automation of the media buying process. The value of each ad purchase is calculated individually, offering advertisers the ability to target their ad impressions to specific audience segments rather than needing to buy large numbers of impressions at the same time.

The result is that advertisers can buy inventory across multiple websites, mobile sites, and mobile apps from a single automated platform. This saves them time and money, while allowing them to take advantage of a diverse selection of low-cost and premium advertising inventory from a range of publishers.

It’s all about the data

In addition, programmatic video offers us access to rich, actionable data about the consumers they are targeting. For example, we can look at behavioural data (anonymised data about which other sites customers have visited, the devices they are using etc.) and demographic data (like age, gender, location). With mobile, we can leverage richer and more contextual data for even more accurate targeting.

That means we can advertise in more effective ways by targeting messages to consumers, depending on who they are, their behaviour and where they are in the purchase funnel. The result is less wastage and better performance as a result of targeting customers more efficiently and effectively.

And the more a brand uses programmatic video, the better it will get at using the data sets to target customers in the right environment and with the right message. Brands can use the data to sharpen creative messaging, focus on high-performing placements, and move away from placements that are not delivering results.

Right, now programmatic video is about reaching a select market in South Africa, but video will become more prevalent as data costs fall. Digital natives – the customers of the future – are setting the pace for video and marketers can’t afford to fall behind. By embracing programmatic buys, South African advertisers can get ready for the future, using the same programmatic platforms they use to manage their display buys.

What is predictive analytics and how could you use it?

econsultancy.com
Predictive analytics. What is it? What can it be used for in marketing? Is it easy to implement?
As the technology edges closer to maturity in digital, here's an introduction to predictive analytics.

What is predictive analytics?

Predictive analytics is the use of models to predict future outcomes. In business and marketing, this entails the use data and statistics to stereotype customers.
A user's profile and behaviours should allow companies to predict how that user will behave, by looking at the historic behaviour of other users.
This means a company can change how it communicates with that user or discount them altogether, based on the user's propensity to undertake a particular action.
Machine learning continually refines a predictive analytics model as more data (such as the success of its outputs) is fed into it.
It's a relatively simple concept but one that has many implementations. I've listed a few below.
Much of this information is taken from our new Predictive Analytics Report, published in association with Redeye as part of Data Month.

How can I use predictive analytics? 

Credit scoring
Okay, this isn't a marketing implementation but it is one of the early uses of predictive analytics.
Assigning a customer a credit score is a prediction of the likelihood of repayment.
Increasing the accuracy of the prediction allows for more revenue to be made as fewer customers default.
Predicting customer lifetime value (CLV)
Predictive analytics can help to gauge the likelihood of repeat purchase or even CLV.
Whilst a simple RFM matrix (recency, frequency, monetary value) is the basis of prioritising customers, so much more data is now collected by businesses (and available from third parties), that CLV can be based on much wider metrics.
Predictive analytics greatly augments a simple RFM matrix

Estimating churn propensity
This is the other side of the CLV coin. Companies such as telcos want to know if customers are set to cancel their contracts or jump to another provider.
Knowing this allows these companies to incentivise such customers to stay, and to forecast more accurately.
Targeting offers
This may be the most infamous example of predictive analytics in marketing and retail, thanks to the apocryphal (?) tale of a teenage girl being sent maternity offers by Target before her own father even suspected she was pregnant.
Supermarkets that use loyalty cards have so much transactional data on their customers that they can create incremental revenue with targeted offers, encouraging more frequent shopping.

Display ad targeting
Just like with 'old-fashioned' paper vouchers, programmatic advertisers want their display ads to achieve a high redemption rate (clickthrough and eventual conversion).
Because programmatic advertising allows targeting by demographic and behaviour, predictive analytics can be used to optimise this targeting.
Lead scoring
An oldie but a goodie - ascertaining which of the leads delivered to your sales team should be prioritised.
Where tech and data is being integrated and shared across Sales and Marketing, these departments are working closer together to maximise efficiency.
Sentiment analysis
Analysing reviews, social media commentary, call centre scripts etc. can allow companies to produce sentiment analyses which in turn can be used to suggest improvements to communications.
Recommendations
30% of Amazon revenue reportedly comes from its recommendation engine (various sources).
Netflix and Spotify generate vast engagement through recommending content. This is all predictive analytics.

Optimising PPC campaigns
How does the weather affect clickthrough rate might be one question to ask.
There are, of course, many other variables that affect keyword volume, clickthrough and conversions, which can be optimised for.
Forecasting inventory
For big retailers and manufacturers, being able to forecast demand and therefore also the requisite inventory will prevent popular items from selling out and impacting revenue.
Segmentation
A broad area of predictive analytics which encapsulates many of the other examples in this post.
When predictive analytics is plugged into CRM and marketing automation tools it helps to divide up your audience into segments, to which tailored messages can be delivered.

How do I implement predictive analytics?

Traditionally, the big beasts of IBM, SAS and SAP have provided predictive analytics solutions.
However, it's now hard to find a big marketing tech vendor that doesn't include this type of functionality in some of its products (e.g. Adobe).
There are also relatively new, dedicated software-as-a-service solutions available (e.g. Mintigo) that plug in to popular CRM and marketing automation platforms.
As for how an organisation goes about implementing these solutions, the tale is a familiar story, one of aligning data sources, tech platforms and ultimately changing organisational culture.

Luxury brands embrace digital, but still wary of programmatic

thedrum.com

The enormity of the internet poses luxury brands - many of whom rely on limiting their brands to controlled environments as the bedrock of their aspirational status – with a marketing quandary. While no other media is as ubiquitous, and commonly used by their target market, then again none is harder to control. The Drum explores how brands in this sector are wrestling with the issue.
Luxury brands in a digital environment
Luxury jeweller Cartier recently won a High Court case battle where it successfully argued that internet service providers should block websites selling counterfeit versions of its goods.
The case highlights some of the difficulties luxury brands and their marketing teams face when composing an effective digital strategy, especially that given the enormity of the internet, it is almost impossible to police. Yet passing up on its massive potential as a means of communicating with their target audience would be folly.
Natalie Mortimer, a reporter at The Drum who covers the luxury marketing sector, gives further insight into some of the thinking within the marketing departments at luxury brands, explaining that such brands were some of the slowest to adopt digital and social media, with this reluctance driven by a desire to retain control.
Yet, attitudes are beginning to change, according to industry sources consulted by The Drum, even if brands such as Burberry and Hublot remain reticent on just how they are beginning to embrace marketing automation.
A report launched earlier this year by ZenithOptimedia found that luxury goods manufacturers, despite lagging behind the wider advertising market, are starting to take a leaf out of their peers’ book and invest increasing amounts of their ad dollars in digital at the expense of offline channels.
Digital set to become the dominant luxury advertising medium
In fact, the Publicis Groupe media agency forecast that digital will be the largest luxury advertising medium in 2017, overtaking print and TV, accounting for 32.1 per cent of total spend by such brands.
“We expect digital media ad spend by luxury advertisers to increase by $837m between 2015 and 2017. Over this period, television, radio and cinema will increase by a total of $26m between them; outdoor will shrink by $10m; and print will shrink by $150m,” reads the report.
It goes on to forecast that by next year, print will account for 28.6 per cent of total luxury ad spend (compared to 31.9 per cent in 2015), while TV’s share of this market will also decline over the same period, from 32.7 last year, to 30.7 per cent in 2017. By comparison digital’s market‐share will increase from 26.3 per cent in 2015 to 32.1 per cent in 2017.
ZenithOptimedia echoes Mortimer’s point, emphasising luxury brands’ desire to ‘control’ the environment they’re exposed to audience, with the agency noting that glossy print titles – especially glossy magazines – provide “high‐quality, immersive yet relaxed reading experiences, a particularly suitable environment for luxury advertisers wishing to showcase their brand values”.
If digital is the default, what is the view of programmatic?
Given the dual rise of luxury brands embracing digital as part of their wider comms strategies, as well as the rise of automated – or ‘programmatic’ – media buying (60 per cent of digital display ad spend was automated last year), just how trusting are they of such technologies?
Many advertisers that were early adopters of programmatic buying were left red-faced given the (near inevitable) gremlins in the works, with brands’ ads appearing in sometimes embarrassing situations, such as airline ads being served next to news reports of plane crashes. At times ads were also appearing – more detrimentally – on completely nefarious sites (such as those espousing violent extremism).
This is collectively referred to as ‘ad misplacement’, and was explicitly referred to by ISBA president Simon Litherland at the trade body’s annual conference earlier this year.
Media buyers tight-lipped on the role of programmatic within the luxury media mix
The Drum consulted several parties on the ‘buy-side’ of the equation (including Hublot and Michael Kors, plus ZenithOptimedia) for comment on their attitudes towards some of the potential risks of using programmatic media buying technologies, but all declined the opportunity to comment on record.
“The wariness around programmatic is understandable for luxury brands, given their innate need to protect their reputations, which in many cases have been cultivated over the space of centuries,” says The Drum’s Mortimer.
“How fast the adoption of an uncertain medium like programmatic will be remains to be seen, but as the advertising industry makes further digital dives in that direction, luxury brands will need to figure out how to replicate the brand experiences that form their heartland in today’s media landscape.”
Lisa Barnard, chief executive of Luxury Content Network (an ad network selling native ad units), explains her view that there is “a move away from programmatic” given that luxury brands want to have control both on the sites they appear on and how they appear.
"Obviously all marketers are wary of horror stories around programmatic and brand safety, but in our experience luxury marketers are concerned not only where their ad is served but what advertisers it appears alongside,” she says.
“I have recently seen examples ads being served from the likes of Matalan and KFC on major luxury magazine sites. It’s not about where you go, but the company you keep. If you are a luxury brand or media site and you accept programmatic advertising, it will kill your brand equity. A very short-term win for a long-term lose.”
Premium media owners move to build trust with programmatic
However, media owners (many of whom accept the necessity such technologies will play in facing down the disruption the internet poses to their traditional business models) are more upbeat in their assessment.
Jacqui Cave, group publishing director at Elle magazine (which works with ad tech outfit Exponential to deliver behaviourally targeted ads) reports that while a large proportion of its advertisers are buying online media directly, an increasing number are beginning to automate this process.
“I think it is like every sector – some are very developed in terms of their digital strategy like Burberry, and then you have some advertisers that don’t even advertise on a website let alone do social or programmatic,” she adds.
New trading models winning over advertisers
Similarly, Emma Winchurch-Beale, Bloomberg’s client sales director for EMEA, also cites luxury fashion brand Burberry as an enthusiastic participant when trialling such new technologies. Additionally, she reports that improvements in viewability, plus advancements in billing models (such as a cost-per second model) are improving brands' willingness to invest in such tech.
“What you are seeing with the evolution of video, with the changes in measurement of ad space such as moving metrics to viewability, that brands are able to do more branded campaigns than they were previously and actually get a measure of that; it's not just always about picturing,” she adds.
Meanwhile, speaking recently with The Drum, Elli Papadiki, the FT's global head of programmatic, described how as programmatic becomes a more critical part of how brands buy media, the title has seen an increase in the use of PMPs [private marketplaces, where premium publishers offer their highest-paying customers first choice on its most prized inventory] as a means of using automated technologies to guarantee the most prized inventory.
According to Papadiki, the FT's aim is: "To show that brands understand that when they set up that one-to-one conversation with a publisher, that it’s a brand safe environment."
Luxury brands mulling an in-house model?
“From there, they can cherry-pick the audiences that truly matter to them,” she adds, adding that many luxury brands are beginning to explore taking such capabilities in-house, but that staffing is still proving a barrier to a more rapid rollout of such a strategy in many cases.
“I feel at this point in time, that a lot of them are looking for people that have either worked on the tech side, or they have worked on a publisher side, and had a knowledge of programmatic. It’s probably still too early to tell if some of them will build a DSP [demand-side platform that enables them to bid on media placements, and audiences across a number of different sites],” she says.
“Although, I have had clients ask me for advice, so certainly while many are still quite green, there’s certainly an appetite to understand a bit more.”
Further assurances needed
Speaking as to whether or not the rise of more closed trading environments such as PMPs (as opposed to open ad exchanges that are more exposed to nefarious players) could offer more control, Nigel Gwilliam, a digital consultant at the IPA, says they do have the potential to offer more control and better quality inventory (albeit they are nascent in the UK, compared to the US).
Discussing high end media owners’ increasing experimentation with programmatic, Gwilliam also warns of the importance of providing advertisers with guarantees over traffic quality, particularly when it comes to employing methods such as audience extension (ie where they sell its readers on third-party websites).
“Many premium publishers package off-site inventory into their deals. There is nothing wrong with this in principle, however publishers need to: A) be clear to buyers this is taking place; and B) ensure brand safety measures are in place,” he says.
Premium publishers should sign up to the Digital Trading Standards Group’s Good Practice Principles and have their brand safety policies and processes independently verified, if they are to continue to win over the trust of luxury advertisers, but “to date, none have ,” he exclaims.
The enormity of the internet poses luxury brands - many of whom rely on limiting their brands to controlled environments as the bedrock of their aspirational status – with a marketing quandary. While no other media is as ubiquitous, and commonly used by their target market, then again none is harder to control. The Drum explores how brands in this sector are wrestling with the issue.
Luxury brands in a digital environment
Luxury jeweller Cartier recently won a High Court case battle where it successfully argued that internet service providers should block websites selling counterfeit versions of its goods.
The case highlights some of the difficulties luxury brands and their marketing teams face when composing an effective digital strategy, especially that given the enormity of the internet, it is almost impossible to police. Yet passing up on its massive potential as a means of communicating with their target audience would be folly.
Natalie Mortimer, a reporter at The Drum who covers the luxury marketing sector, gives further insight into some of the thinking within the marketing departments at luxury brands, explaining that such brands were some of the slowest to adopt digital and social media, with this reluctance driven by a desire to retain control.
Yet, attitudes are beginning to change, according to industry sources consulted by The Drum, even if brands such as Burberry and Hublot remain reticent on just how they are beginning to embrace marketing automation.
A report launched earlier this year by ZenithOptimedia found that luxury goods manufacturers, despite lagging behind the wider advertising market, are starting to take a leaf out of their peers’ book and invest increasing amounts of their ad dollars in digital at the expense of offline channels.
Digital set to become the dominant luxury advertising medium
In fact, the Publicis Groupe media agency forecast that digital will be the largest luxury advertising medium in 2017, overtaking print and TV, accounting for 32.1 per cent of total spend by such brands.
“We expect digital media ad spend by luxury advertisers to increase by $837m between 2015 and 2017. Over this period, television, radio and cinema will increase by a total of $26m between them; outdoor will shrink by $10m; and print will shrink by $150m,” reads the report.
It goes on to forecast that by next year, print will account for 28.6 per cent of total luxury ad spend (compared to 31.9 per cent in 2015), while TV’s share of this market will also decline over the same period, from 32.7 last year, to 30.7 per cent in 2017. By comparison digital’s market‐share will increase from 26.3 per cent in 2015 to 32.1 per cent in 2017.
ZenithOptimedia echoes Mortimer’s point, emphasising luxury brands’ desire to ‘control’ the environment they’re exposed to audience, with the agency noting that glossy print titles – especially glossy magazines – provide “high‐quality, immersive yet relaxed reading experiences, a particularly suitable environment for luxury advertisers wishing to showcase their brand values”.
If digital is the default, what is the view of programmatic?
Given the dual rise of luxury brands embracing digital as part of their wider comms strategies, as well as the rise of automated – or ‘programmatic’ – media buying (60 per cent of digital display ad spend was automated last year), just how trusting are they of such technologies?
Many advertisers that were early adopters of programmatic buying were left red-faced given the (near inevitable) gremlins in the works, with brands’ ads appearing in sometimes embarrassing situations, such as airline ads being served next to news reports of plane crashes. At times ads were also appearing – more detrimentally – on completely nefarious sites (such as those espousing violent extremism).
This is collectively referred to as ‘ad misplacement’, and was explicitly referred to by ISBA president Simon Litherland at the trade body’s annual conference earlier this year.
Media buyers tight-lipped on the role of programmatic within the luxury media mix
The Drum consulted several parties on the ‘buy-side’ of the equation (including Hublot and Michael Kors, plus ZenithOptimedia) for comment on their attitudes towards some of the potential risks of using programmatic media buying technologies, but all declined the opportunity to comment on record.
“The wariness around programmatic is understandable for luxury brands, given their innate need to protect their reputations, which in many cases have been cultivated over the space of centuries,” says The Drum’s Mortimer.
“How fast the adoption of an uncertain medium like programmatic will be remains to be seen, but as the advertising industry makes further digital dives in that direction, luxury brands will need to figure out how to replicate the brand experiences that form their heartland in today’s media landscape.”
Lisa Barnard, chief executive of Luxury Content Network (an ad network selling native ad units), explains her view that there is “a move away from programmatic” given that luxury brands want to have control both on the sites they appear on and how they appear.
"Obviously all marketers are wary of horror stories around programmatic and brand safety, but in our experience luxury marketers are concerned not only where their ad is served but what advertisers it appears alongside,” she says.
“I have recently seen examples ads being served from the likes of Matalan and KFC on major luxury magazine sites. It’s not about where you go, but the company you keep. If you are a luxury brand or media site and you accept programmatic advertising, it will kill your brand equity. A very short-term win for a long-term lose.”
Premium media owners move to build trust with programmatic
However, media owners (many of whom accept the necessity such technologies will play in facing down the disruption the internet poses to their traditional business models) are more upbeat in their assessment.
Jacqui Cave, group publishing director at Elle magazine (which works with ad tech outfit Exponential to deliver behaviourally targeted ads) reports that while a large proportion of its advertisers are buying online media directly, an increasing number are beginning to automate this process.
“I think it is like every sector – some are very developed in terms of their digital strategy like Burberry, and then you have some advertisers that don’t even advertise on a website let alone do social or programmatic,” she adds.
New trading models winning over advertisers
Similarly, Emma Winchurch-Beale, Bloomberg’s client sales director for EMEA, also cites luxury fashion brand Burberry as an enthusiastic participant when trialling such new technologies. Additionally, she reports that improvements in viewability, plus advancements in billing models (such as a cost-per second model) are improving brands' willingness to invest in such tech.
“What you are seeing with the evolution of video, with the changes in measurement of ad space such as moving metrics to viewability, that brands are able to do more branded campaigns than they were previously and actually get a measure of that; it's not just always about picturing,” she adds.
Meanwhile, speaking recently with The Drum, Elli Papadiki, the FT's global head of programmatic, described how as programmatic becomes a more critical part of how brands buy media, the title has seen an increase in the use of PMPs [private marketplaces, where premium publishers offer their highest-paying customers first choice on its most prized inventory] as a means of using automated technologies to guarantee the most prized inventory.
According to Papadiki, the FT's aim is: "To show that brands understand that when they set up that one-to-one conversation with a publisher, that it’s a brand safe environment."
Luxury brands mulling an in-house model?
“From there, they can cherry-pick the audiences that truly matter to them,” she adds, adding that many luxury brands are beginning to explore taking such capabilities in-house, but that staffing is still proving a barrier to a more rapid rollout of such a strategy in many cases.
“I feel at this point in time, that a lot of them are looking for people that have either worked on the tech side, or they have worked on a publisher side, and had a knowledge of programmatic. It’s probably still too early to tell if some of them will build a DSP [demand-side platform that enables them to bid on media placements, and audiences across a number of different sites],” she says.
“Although, I have had clients ask me for advice, so certainly while many are still quite green, there’s certainly an appetite to understand a bit more.”
Further assurances needed
Speaking as to whether or not the rise of more closed trading environments such as PMPs (as opposed to open ad exchanges that are more exposed to nefarious players) could offer more control, Nigel Gwilliam, a digital consultant at the IPA, says they do have the potential to offer more control and better quality inventory (albeit they are nascent in the UK, compared to the US).
Discussing high end media owners’ increasing experimentation with programmatic, Gwilliam also warns of the importance of providing advertisers with guarantees over traffic quality, particularly when it comes to employing methods such as audience extension (ie where they sell its readers on third-party websites).
“Many premium publishers package off-site inventory into their deals. There is nothing wrong with this in principle, however publishers need to: A) be clear to buyers this is taking place; and B) ensure brand safety measures are in place,” he says.
Premium publishers should sign up to the Digital Trading Standards Group’s Good Practice Principles and have their brand safety policies and processes independently verified, if they are to continue to win over the trust of luxury advertisers, but “to date, none have ,” he exclaims.

Direct carrier billing makes the transition from digital content to physical goods (Part 2)

mobilepaymentstoday.com

By John BaRoss, founder and president, Fincclude Inc

As more consumers and merchant accept, appreciate and understand direct carrier billing, regulators and telecoms are making the necessary changes to deal with this payment method's rise in popularity. 

Lawmakers are adjusting regulations while carriers modify their economic models to help unleash the potential of direct carrier billing for online merchants selling physical goods. I've spoken with global industry leaders involved in emerging direct carrier billing for physical goods initiatives and two (parallel) value propositions are evident:

1. Physical goods harness the array of direct carrier billing benefits (merchants realizing incremental revenue, reaching larger addressable markets, superior conversion rates, etc.). There is also an increased focus on direct carrier billing helping to advance financial inclusion, which is a differentiated strength of direct carrier billing as its purpose since the beginning was to reach the unbanked.
2. This combination of direct carrier billing for physical goods also shows a new twist for those familiar with carrier economic models because it involves margin advantages. Carriers have established a reputation for charging a premium for direct carrier billing. Merchants decide whether the incremental business via direct carrier billing was worth its premium (lower margin to merchant).  As a variety of environmental factors have evolved over time, a trend is emerging with carriers becoming more competitive with their margins, and in some markets the direct carrier billing margin is providing a better margin compared to certain alternative payment options.

What does the current global landscape look like for direct carrier billing and physical goods? 

There are several of these partnerships, including ARPUPLUS/T-Pay, Bango, Boku, Centilli/Infobip, Danal, DIMOCO, Docomo Digital, Fortumo, Mobile Embrace, SLA Mobile and others. In the 12-to-18 months prior to 2016, some examples of direct carrier billing for physical goods included: 

• Singapore: Singtel, Fortumo and Rovio partnered to support direct carrier billing for Angry Bird toys
• Spain: Docomo Digital and three main carriers (Orange, Telefonica and Vodafone) for over a year have successfully helped National Express (ALSA in Spain) riders use direct carrier billing from the mobile web or the native app. This is a unique case in Europe with multiple carriers at the same time for private/non-public transportation).  
• U.S.: Sprint and Danal BillToMobile partnered with LevelUp to support in-store purchases. Danal recently sold that division to Bango.
• Japan: KDDI, Docomo and Boku enabled direct carrier billing to reload gift cards for Ueshima Coffee Co., the country's largest coffee house chain.
• Sweden: WyWallet enables users of Telia, Tre, Tele2, Telenor, Comviq, Raspberry and Halebop to fund their wallet via direct carrier billing for remote digital and physical goods.
• Turkey: NeoMobile's OneBip and Turkcell used direct carrier billing for BiTaksi, Istanbul Ferry Services and the Turkish Football Federation. NeoMobile recently sold OneBip to DIMOCO.

In 2016, the pace has picked up with more examples: 

• Germany: DIMOCO and the Verkehrsverbund Rhein-Sieg transport network support direct carrier billing for a four-trip ticket using the SWB easy.GO app.
• Switzerland: Swisscom and Docomo Digital support direct carrier billing for online purchases of physical goods from MediaShop Group.
• Lithuania: Tele2 secured an e-Money license
• Finland: Gemalto Netsize supports tickets for the Helsinki Transport Network
• Japan: NTT Docomo supports Suica, a transportation card/mobile app for Japan's biggest rail company. Riders can use direct carrier billing to top off their balance. Users can also buy physical goods at convenience stores, grocery stores, electronics stores, restaurant chains, vending machines and more.
• Singapore: Singtel Online Gifts, the first digital gifting/digital voucher buying platform in southeast Asia, offers gift cards from over 35 merchants including Apple. Consumers can use direct carrier billing to buy the gift cards, which can then be used to buy physical goods. Singtel's Dash mobile app supports direct carrier billing as a funding options. Dash users can use the app for train and bus tickets, taxis, and at over 20,000 locations FairPrice, Watsons, Food Republic, BreadTalk, 7-Eleven and more.         
• EU: At least Docomo Digital and Boku have secured e-Money licenses and passported their respective licenses E.U.-wide.
• U.K.: Boku has partnered with O2, EE, and Vodafone to support companies selling magazines and bus tickets. Boku and major carriers will also support direct carrier billing purchases for foods and beverages at sporting and entertainment venues via Verteda's innovative Qjacker app.  
• Estonia: Tele2 secured an e-money license
• Singapore: Singtel’s Singtel Dash mobile payment app supports the DCB funding option. A Singtel Dash user can make payments on buses, taxis and trains as well as at over 20,000 locations including 

Of special note is the pioneering leadership of direct carrier billing in Japan. 

NTT Docomo has championed extending the upper bounds of direct carrier billing for physical goods by providing an example to carriers worldwide that committed leadership is key. Consumers use direct carrier billing in Japan to purchase clothing and shoes, kitchenware, cosmetics and similar items, electronics, exercise equipment, food, home goods, toys and much more.  

Another pioneering direct carrier billing initiative is Mercari, a fast growing flea market that allows users to both buy and sell clothes and goods. Consumers in Japan have direct carrier billing post-paid spending limits of between $500-to-$800 on certain demographics. 

The growing success and knowledge of direct carrier billing is now going through a significant phase of accelerating expansion thanks to more permissive regulations worldwide, to evolving DCB tax policy (the recent debut of Google Play in India that found a way around a tax barrier), to visionary pioneering leadership at carriers, carrier-partner/suppliers, merchants and others in the ecosystem.

Leaders from carriers that encourage and reward innovators help leadership at other carriers where the task of building leadership alignment backing has a vastly greater probability of success when proof-of-concept evidence is demonstrable. However, as leaders of initiatives know, issues with go-to-market planning and execution, through scaling can be countless.  A traditional companion for helping an industry to advance is via the assistance of industry associations which can help assist with at least common problems (lobbying, awareness driving, advocacy, etc.).

Direct carrier billing, along with carrier-backed mobile money schemes, are two multibillion dollar sectors of a rapidly emerging space increasingly being recognized as carrier commerce. These two established sectors, along with about three dozen emerging carrier commerce sectors, are helping to advance global financial inclusion.

Financial inclusion is a top global initiative for the Global Partnership for Financial Inclusion, which includes all G20 nations, the United Nations, 100-plus donor foundations, bi-lateral and multi-lateral agencies, private donors and investors who have contributed over $31 billion annually in recent years to help advance financial inclusion to reach some 2 billion consumers who remain unbanked worldwide.

The Bill & Melinda Gates Foundation has assisted the non-profit Alliance for Financial Inclusion with millions of dollars in funding. A major role of the AFI is to help facilitate the cross-pollinating of financial inclusion success-knowledge to policy makers (government, carriers, banks, etc.).  Downstream from policy is operational execution financial inclusion strategies and tactics (spanning proactive planning to reacting to time sensitive challenges that arise).

Non-profit FINCCLUDE (Financial Inclusion Now, Carrier Commerce Leading a Ubiquitous Digital Economy) is downstream from AFI, uniquely exclusively serving the carrier commerce industry at the intersection of financial inclusion by helping to facilitate the cross-pollinating of financial inclusion success-knowledge to operational leaders in carrier commerce (when necessary, as a rapid response unit). FINCCLUDE’s growing base of free members in carrier commerce  are experienced, insightful and passionate about this space, willing to help global stakeholder colleagues by sharing relevant (non-proprietary) success-precedent/knowledge (for no fee or obligation) to help the industry advance at a greater pace, thus helping advance financial inclusion faster. You can learn more at www.fincclude.org.