Amazon on the Box
Whilst we have given lots of attention to Google and Facebook in recent weeks, we haven’t had too much from Amazon to think about.
But there is lots going on here. Amazon has hired quite a few smart sales people here in the UK recently – paying well above the competition seemingly. Their ambitions in advertising have been well discussed, with their data their main advantage. As Razorfish put it;
“In today’s marketing world, data is gold and Amazon is Fort Knox,”
We remain convinced that a priority for Amazon will be to get brands to use the data Amazon has for targeting, with the intention to drive sales on Amazon. A digital equivalent to Tesco or Walmart encouraging brands to invest in instore promotions (Gondola ends of BOGOF) that drives instore sales –so both the retailer and the brand benefit. For Amazon the whole web is their store.
And another tenet of their vertical stack strategy has emerged with stories that they plan to launch a set top box enabling them to stream video. Given their investment in Lovefilm and their move into commissioning programming , controlling distribution on TV is just as crucial as controlling distribution on mobile devices. So just as the Kindle is the Amazon response to the iPod, iPhone and iPad so this could be their response to Apple TV.
GAFA need to be present throughout the value chain of digital content and services if they are to avoid being pushed out. As Amazon saw Apple develop into a major retailer of digital music with iTunes, they have to fight back and TV is the next arena.
One other rumoured move is Amazon physical stores. You can build a reasonably compelling case why Aamzon might consider buying the HMV stores to act as a hub for their business – but it’s not that convincing – yet.
So this recruitment ad for an Amazon store at Westfield probably isn’t kosher. It has now been taken down and we suspect it is more likely a scam to get people to divulge the details of their Amazon accounts; a clever attempt to get credit card details.
(stop press – their latest results show sales up 22% at $16bn in the first quarter of this year)
Talking of retail we chaired the afternoon sessions at the excellent Mobile Retail Summit this week and learnt lots from presentations by supersmart retailers Schuh, Pizza Express and Morrisons Kiddicare.
One interesting theme was that QR codes are still alive and kicking; Kiddicare use them instore and a Waitrose client in the audience shared her experience was that they were incredibly effective both in store and in advertising. I asked about the TV ads from a couple of years ago where they featured QR codes and was told they had worked well – the third most clicked code of the whole campaign was the TV ad.
The Pizza Express client was less convinced about QR though – they have found them to be really ineffective. Maybe we’ll learn more when the 10000 adshels with both QR codes and NFC tags start to get traction with advertisers.
Pizza Express are a real pioneer with mobile and we learnt that their app has had 500k downloads and has around 200k users a month. Yet 80% of their mobile traffic is via their mobile optimised site. And since they made free WiFi available in all their stores they have 600k users each month – spending an average of 38 minutes connected. So now they are running instagram and Twitter promotions instore and getting good engagement.
What is refreshing about this brand is they have followed their gut – based on their good understanding of their customers – and it’s working really well. What are you waiting for?
Morrisons focused on how they use mobile in their Kiddicare stores and again we saw some great thinking driven by customer insight – and an approach built around testing and learning. As Morrisons get closer to launching online grocery shopping (with an Ocado partnership rumoured to be close) they are using Kiddicare as an R&D Lab.. They describe themselves as a tech company that happens to sell baby stuff.
The two key take outs for us were around testing and learning and that mobile is one part of a multi channel approach – something that Googles Nikesh Arora is pushing as they seek to break down the silos around each device.
But the truth is we won’t build the future of advertising device by device. We need to learn to look at these devices as a way of understanding the context in which consumers are looking for information. Real people use these newest devices — phones, tablets, “phablets”, touch-screen laptops and Web-enabled TVs — to connect with each other, shop, navigate the world, watch videos, play games, and take pictures. It’s how, when, and why people use their devices we should be paying attention to and less so the devices themselves.
We increasingly see mobile as a key part of an overall digital strategy but find that knowledge and expertise across both areas is rare.
So following the news last week of keyword targeting coming to Twitter and the launch of Twitter Music, we got some more news this week with the announcement of a major advertising partnership between media agency Starcom Mediavest and Twitter valued at “hundreds of millions of dollars over several years”.
Some question quite why agencies announce major deals and what the implications are for those agency clients; will twitter feature heavily in future media plans because its the right thing or because they need to meet the agency deal?
Given the deal was announced through the FT rather than AdAge or Campaign and on the morning of the Publicis results (Publicis is the Starcom holding company) suggests PR was an issue.
Especially as Publicis made a big thing about their focus on digital, inviting comparison with rivals WPP. Given Martin Sorrell stated he sees Twitter as a PR medium rather than an advertising one, it feels there is some point scoring going on.
So it’s not a huge surprise that Sorrell was talking up the WPP digital push this week too. He claims that shortly Google will surpass News Group to be the biggest media customer of WPP. As we’ve point out before, this sounds quite impressive until your realize that the combined WPP spend with Google, Facebook and Twitter is just 3% of their overall media spend. To be fair Sorrell was warning the traditional media owners on the same panel they were being complacent. You can watch the whole session from the FT Media conference with Sorrell, and the CEOs of Bertelsmann and Time Warner here.
For more on how digital marketing is shaping up the FT have published some good articles this week summed up well with this quite from the CEO of Razorfish
“In the last 50 years, we have been working in black and white,” . “What technology does is it brings you new talent and it brings you into colour.”
And from the Omnicom head of Digital;
“You are seeing the industry really shift fast right now, the budgets are moving really quickly to digital. But we’ve only just scratched the surface.”
We live in interesting times but you have to wonder whether traditional agencies are well placed to advise their clients about these changes.
The Social first generation
Some fascinating new research from Deloitte suggests that the UK population is characterised by the under 24s who are social first in their internet usage whilst over 25s are search first.
They also show the usage of various social platforms across early adopters, early majority, late majority and laggards. No surprise that Tumblr and Pinterest score most heavily on early adopters. And Facebook too performs best amongst this group with nearly 70% using Facebook. But Facebook also has around 60% of laggards too. Truly the ITV of social
Book of the week
We haven’t actually read this one yet as it is brand new, but it feels like a safe one to recommend. Eric Schmidt gets it and his thinking about the future of people nations and business has to be interesting. And the recommendations of the book support this; if Tony Blair, Bill Clinton, Henry Kissinger, Madeline Albright, Mayor Bloomberg and the former head of the CIA all say read it, who are we to argue?
So our book if the week this week is The New Digital Age: Reshaping the Future of People, Nations and Business by Eric Schmidt and Jared Cohen
We keynoted a Yahoo internal conference this week and as well as sensing the renewed energy and momentum of the company heard some fascinating research. Whilst looking at tablet usage amongst consumers Yahoo have seen that they embrace more of the senses than other media. The thing we were excited by was their view that sound has a role to play in advertising on mobile and tablets. Having spent lots of time working on campaigns where music was crucial and not been able to use it in digital this feels like a really valuable insight. Whether or not this means the Yodel is back, we don’t know.
A couple of weeks ago we spoke at the MAP 2013 conference and in our research for a deep dive into tablets we were quite impressed by Pulse, a news aggregator app that has had some decent investment and was used by around 30m users. Linkedin has now bought them for $90m. Compared to the valuations given to those traditional media companies who do old fashioned things like actually create content, this does seem slightly crazy.
Facebook keep up their push into mobile with the acquisition of Parse – enabling them to offer mobile developers a richer range of backend services. A big problem for Facebook is their developer community has been very Flash orientated and obviously that doesn’t play well on mobile. Finding the talent to convert all those desktop flash apps to work on Facebook mobile too is a challenge – and deals like this improve their attractiveness to mobile savvy developers.
Finally ….our friends at eConsultancy have developed a Manifesto for Modern Marketing – which is well worth reading. It makes lots of sense and we particularly like their thinking on multi screen world;
We believe that the mobile revolution is only just beginning. But we see beyond just ‘mobile’. TVs are screens, books are screens, in-store kiosks are screens, billboards are screens. We believe we are marketing in the context of different screens and experiences rather than different devices or channels. Customers do not recognise lines and nor should we. Online, offline, above the line, below the line… we need to think and deliver customer experiences without delineation. Modern marketers think about the whole customer experience and the many screens that control and mediate it.
This Big Picture thinking chimes with our approach. Mobile and social are now just modern digital and the silos are (slowly) starting to disappear.