Successfully understand and use virtual reality

Virtual reality (VR) is unavoidable at the moment. It is one of the industry’s most discussed topics. The spectrum of devices spans from Cardboard to the Oculus Rift, and Google introduced a new VR concept called Daydream at their I/O developer conference a few days ago. The technology is market-ready, and looks for new creative possibilities with which to address consumers, whether at home, in store, or on the go.

Not all places where you see the words virtual reality are also virtual inside.

Because not everyone who discusses and reports on VR means virtual reality in a strict sense; they also mean 360-degree video, or augmented reality (AR). Two factors help to differentiate these: the user’s environment, and the kind of experience.

With augmented reality, the real environment is enriched with computer generated content that blends with the user’s vision via AR headsets or corresponding apps. The virtual enhancements come in various forms, such as an overlay with additional information, or 3D objects with which you can interact. Often, they are directly connected to the environment (location-based services), or to objects (beacons/QR codes).

With virtual reality, a user is taken out of their physical reality and transported to a closed virtual environment, where they can freely move around. Additionally, the visual sensation can be supported by sound or other stimuli, such as temperature, wind, or smells; enhancing the fantasy, and giving the user an impression of being in the middle of things. This is referred to as an immersive experience.

On the contrary, 360-degree videos, which are filmed from a fixed camera position, provide only a limited experience. The user can’t move freely; they can only change their point-of-view through head movement.

The crucial added value of VR against other technology is immersion. The feeling of being in the middle of things lends itself amazingly well to creating surprising and compelling brand experiences, and also to interacting with the consumer in a special way. But 360-degree videos and AR apps also offer exciting use scenarios. They differentiate themselves from other communication channels through three unique selling points.

1. AR and 360-degree videos make classic communication channels interactive and digital

Digital AR and 360-degree videos enhance the spectrum of classic media, and make newspapers or TV sports interactive, for example. With the help of AR apps that are used with a smartphone or tablet, products from print advertising can be experienced in 3D. Integrated buttons point to a website with more information, or directly to the company’s e-commerce shop.

The New York Times enhanced its print offerings with 360-degree reportages that can be viewed with Google Cardboard. The Guardian has also recently published a reportage of this kind, where the audience can find out how it feels to be in a 6×9 feet solitary confinement cell. All this creates an emotional kind of reporting, and is exceptionally well suited to storytelling.

2. VR and 360-degree videos overcome spatial distances

An attractive advantage of 360-degree videos and VR is that spatial distances can be overcome; even YouTube recently started to offer live-streaming in 360-degrees. This means that brands can take customers to almost any location, and allow them to take part in exclusive events that increase brand interest.

VR and 360-degree videos are particularly exciting for the tourist industry. In order to speak to young travellers and position themselves as an innovative hotel chain, Marriott in New York created a kind of telephone booth that transported visitors to a beach in Hawaii via Oculus Rift. The special thing about this was the additional support given by audio-visual sensations from external stimuli. The visitors sensed warmth and spray mist on the skin, and a salty breeze in the nose. With this, Marriott gave them the feeling of being in another place without leaving their physical location.

3. AR and VR intensify the product experience, and turn products and services into something that can be experienced 

Virtual reality makes it possible to intensify the product experience at the point of sale. For the launch of their new hiking boot, the outdoor supplier Merrell sent shop visitors on a virtual hike in the Dolomites. They had to run across a rickety  bridge, and feel their way around a cliff.  The connection of audio-visual with tactile stimuli makes the experience extremely immersive. These virtual experiences demonstrated the places to which the new hiking boot could take them. With this, Merrell focused on their roots, and spoke to exactly their core target group. Because they supplied an Oculus Rift, the company made the technology available to many visitors that were not (yet) ready to invest in VR glasses.

In 2014, Serviceplan used VR to stage a virtual test-drive together with BMW. With the help of Oculus Rift and a wind machine, ‘Eye Ride‘ achieved a realistic driving encounter that was an at-the-time unparalleled immersive experience.

It’s not just in-store where technology offers added value to potential customers, it can also offer it at home. With the Makeup Genius App from L’Oréal Paris, users could try out different make-up looks via AR. Through realistic product presentation, the customer’s uncertainly, which can occur before a sale, was taken away. This was particularly effective during sales.

IKEA is currently testing how customers in the future will be sent on virtual shopping tours through their stores. For this, IKEA had a free app developed for the HTC Vive VR system. With the app, one can freely move in the midst of a true to scale kitchen, choose different materials with the HTC Vive controller, open draws and even cook food. Additionally, the company plans a series of furnishing solutions that customers can virtually explore before buying. This way, interested parties can view products in detail without having to travel to the store.

Involvement, Immersion, Impact

Developments around the theme of VR create completely new ways of staging interactive brand experiences. Targeted approaches follow three stages. To generate involvement, it is necessary to have a concept and promise of experience that lead to the user’s active engagement with the brand; only then will they take the step towards this technology. Maximum immersion has to be focused with the implementation, so that the user also takes part into the emotional aspect of the brand experience, and this new kind of brand staging achieves optimal impact. The proof of efficiency?  The expression on the user’s face when they take the virtual ‘Eye Ride’ on a BMW motorbike, for example 😉

First published in German by internetworld.de.

When campaigns with third-party data pay off

In recent months, the keyword “big data” was the Holy Grail of sorts in the marketing realm. But until now, many discussions around the topic were primarily carried out at congresses and conferences in the more theoretical form of the Knights of the Round Table. This is especially so when it comes to external data (third-party data) which advertisers purchase in addition to their own data (first-party data), in order to control more targeted online campaigns.

This is because up until now, campaigns with third-party data only existed in the specialist lectures of most international advertising service providers, but unfortunately, had far too little presence in the German online advertising market. The infrastructure stemming from ad servers, data management, and demand-side platforms was available, but data suppliers were missing who could help a market to get off the ground.

But this situation is changing and more and more companies are also offering data for sale which is relevant to the German market. This provides a good reason for advertisers and their service providers to ask two central questions in particular:

  1. How much uplift is third-party data expected to supply to my campaign?
  2. With that in mind, how much might third-party data cost, in order to ensure that the campaign remains at least as efficient as it was before — and in an ideal case, even more efficiently?

The answer to the first question in particular is a difficult one, because, for one thing, “the ultimate campaign” does not exist. By the same token, as a general rule, advertisers have little to no empirical knowledge regarding the use of third-party data.

Therefore, I recommend that the question be asked differently and restated in terms of the second point below: If third-party data costs a specific amount, then how high must the uplift of the campaign be, in order that efficiency remains at least at the current level? And if the result is that there must be a minimum uplift of over 30%, then at such a point in time at the latest, an additional purchase of external data should be more closely scrutinised or all media alarm bells should ring.

In order not to surrender in advance, I thereby offer—without obligation and free of charge—my three rules of thumb which can be helpful in the use of third-party data in digital marketing.

1. Examine data quality very carefully!

Data offered from a supplier or data management platform must absolutely be put to the acid test before purchase. Enquire about how the data is labelled and if it really comes from the market in which it is to be later used.

Pay attention to how the data was generated: Is it “hard” data, or were projection algorithms used in the generation of data? If the data was originally collected in the offline world, it must also be examined as to whether the matching procedures conformed to data protection laws. And, last but not least, the question arises as to whether the specified quantity and granularity of the data profile is truly credible in relation to the total size of the target audience.

It is essential to consider in advance how you can analyse the quality of the purchased profiles. For example, measure the hit rate of the purported characteristics, e.g. via a panel or an online survey. Or, alternately, are there other measurable key values (KPIs) in the campaign which are to be improved by the data? If the answer to both questions is “no”, then steer clear of this data.

2. Choose the shortest path!

Campaigns that rely on third-party data can run into a quantity problem very easily. Why? Because the quantity of available profiles are generally less than the desired amount. This is particularly the case if the target audience is especially narrow and, at the same time, the data quality is expected to be high.

In order to explain why the quantity of available data is so important, a small technical digression is unavoidable: In the use of external data in a campaign, unfortunately, all acquired cookies are never obtained. This means: Some data sets are purchased, but cannot be used. This occurs, for example, when a portion of the cookies have been deleted by the users since then, or originate from another group of users, who are not in the environments in which attempts are made to find these users again.

This shrinkage is exacerbated by the fact that during the transfer of data from the supplier’s system to the buyer’s system, a synchronisation of cookies must take place over the user’s browser. Both systems must exchange their cookie IDs as well. The quantity of data is reduced considerably by means of this cookie synchronisation, because at some point, every user must be found on the website by the system for this purpose. Our experience shows: Even in the best-case scenario, about one-fifth of the available profiles are lost during this process. If the cookie synchronisation is poorly implemented, then very quickly, more than half of the profiles can be lost.

The risk of loss can be minimised by allowing the cookie synchronisation to occur as near as possible to the place that the data was generated or put online. Thus, all unnecessary partners within the supply chain are eliminated! These only cost money and reduce the quantity of usable data. In case the data supplier already employs a data management platform, the data can possibly be transferred directly into the delivery system, and in this way, you avoid an additional data synchronisation process.

3. Recalculate in advance!

A simple calculation can decide the fate of your data campaign: Set the price that you should pay for third-party data in accordance with the added value that you must achieve by the use of external data. Do data costs eat up the performance improvement that the campaign is meant to achieve? In this case, the use of third-party data would not improve the campaign’s efficiency. If you still have no empirical knowledge as to whether the uplift that must be generated by the data is realistic, then ask experts who can present you with benchmark variables.

In the purchasing of third-party data, take profile quantities and target audience sizes into account. The acquisition of data does not always pay off. Thousands of users that were, for example, identified as clear-cut interested parties for an especially strong-smelling type of stockfish might be a valuable target audience. However, it is rather unlikely that it is worthwhile to address these people though a narrowly focused re-targeting with a display campaign. Here, it would be better to search for other, more cost-efficient methods of reaching these fish aficionados.

Whether the use of external data in online marketing is worthwhile can generally only be assessed by companies in retrospect. However, it does not hurt to carry out a few simple calculations in advance. At any rate, the hardest currency is the experience gleaned with the performance values of campaigns. Wherever suppliers of third-party data can provide satisfaction—both when it comes to the quality of data as well as the price—then they have a rather good chance to belong to the Round Table of advertisers in the future.

First published in German by internetworld.de.

Why a media planner talks about Search

Just why is it called a search engine and not a find engine? Why do people google Google? Why does someone from the media write about Search? All of these are valid questions, but I will leave the first two on the roadside and concentrate on the last one. The answer is just as trivial as the other two questions: because Search is fundamentally not at all different from an advertisement driven customer journey in a well aired closed environment.

If this threw up questions, you can start wondering if Google has an answer for you.

Search engine marketing is much too complex for a well-versed ordinary person like me to handle. It is its own science, but still follows a few economic ground rules. It is all about AIDA when the journey goes from generic terms toward brand keywords. When asking myself how high I want to scale my budget, the answer is all about diminishing returns. For this, the cost for that last final sale/click/so on is the base for my future actions – and not the average. And yes, it’s also about might makes right. Whoever is more publicly known, has the best optimized website (this is where buying power is surely not a handicap) and is generally more competent, will disproportionately profit. Taken at its core, Search is advertisement ecology in a microcosm. That said, the industry I just labelled a microcosm is actually a monopolistic billion dollar business.

But this is not the end: it is not only a catch basin for generated interest through other web actions and thus close to the sale. It’s also – as described above – a complete sales funnel on its own merit. This versatility is the reason that this channel is so hard to grasp and pin onto a snazzy strategy chart.

Add to this that it is not only a good sales story from Mountain View when you are told that even non brand search engines can help advertisers. This message can be confirmed from our own in house information, because especially this source of advertisement has shown an incremental growth of capital influx for the likeable data kraken. If this helps or how much more help this provides in comparison to other media channels is something that can only be gauged on a case to case basis.

For this, the devil is in the detail: A short glimpse into online attributions often fails, in particular for multi-channel offerings with a high offline advertisements and assets such glimpses often lead to misallocation.  Only in depth, sophisticated modellings can alleviate this problem and separate the intrinsic use from incidental gains.

How will this continue in the future? People will get lazier and the search function will become increasingly mobile (android) as well as increasingly voice activated. Add to this that Google learns more from us than some of us might like. Despite this many will enjoy the more personalized search results, which will lead to increasing relevance with competing search engines. This will ultimately lead to a more target oriented phase of inspiration and that will mean good things for a further growth of relevancy this channel. Google is hardly known for standing still, which means you can already prepare yourself for future innovations.

Deep Learning – Machines are learning how to learn

Deep Learning is a sub-discipline of artificial intelligence (AI), whose basic idea harks back up to the 1950s. Although, mass suitability has as of now not been reached. With sinking costs for computer chips and thus also for networks, as well as the constantly growing amount of digitally available data, machine learning has been undergoing an impressive renaissance over the last few years. Deep Learning enables computer systems to recognise certain patterns in volumes of data through iteration, in this case the repeated execution of commands, and to further and further refine these. In short, Deep Learning machines are learning how to learn. The range of applications is sheer endless with only one requirement to be met: data in digital form should be available in large amounts to extract useful patterns.

Especially companies in the Silicon Valley are currently betting on this reawakened trend. The pace of evolution with which new insights can be won from the now massive amount of available data is enormous: In 2009, a team around Geoffrey Hinton from the University of Toronto delved into the topic of speech recognition. After intensive training, the software was in a much better position to convert spoken words into written text than all of its predecessors combined. Two years later, Google applied Deep Learning to data of its service YouTube and let it separate the data into several categories. The result saw next to categories such as ‘human faces’ also the category ‘cat’ appear, which led to a considerable degree of amusement.

Deep Learning has evolved enormously since that time. Only a few weeks ago, the Google computer programme AlphaGo beat the until then dominating champion Lee Sedol in the strategy game Go. Many consider this a milestone of AI, even if such excursions by Google should be seen rather as a gimmick. Google’s actual fields of application lie in the areas of search and the presentation of search results. For the company, the so-called Rank-Brain – which leads to even better search results – is much more important, because it is supposed to guarantee future domination on the search engine market.

Deep Learning is booming

The list of other current examples is already a long one – and it will grow even further in the future.

  • Facebook‘s new messenger M for instance, is being fed Deep Learning insights, which can result in entirely new services. Via machine-led interactions, the user can for example comfortably create a digital assistant, who facilitates everyday life through interactive calendar and reminder functions. As recently presented during the yearly conference, Facebook’s chatbots are becoming more powerful due to machine learning. Until a full-fledged assistant, able to make travel arrangements and administer an account, comes into existence, not that much more is needed.
  • IBM, Oracle and eBay are working on new solutions that are only possible because of Deep Learning. The goal is to make technology even more efficient, to customise search results or lists of suggestions according to the needs of the user.
  • Siri, Majel and Cortana are speech input systems, designed to facilitate input and search in smartphones of the platforms iOS, Android and Microsoft. The vision are devices that can be operated by only using one’s voice. These applications do not only revolve around a results list driven by an algorithm, but also around recognising semantic connections faster and better to further and further increase the programme’s intelligence.

It is also conceivable, that Amazon uses this technology to further refine the flow of goods. In doing so, the online merchant can get closer to its dream of delivering goods virtually in real-time. Should Amazon be capable of developing new prediction models to store goods in the respective warehouse before the customer orders his goods, the merchant must not stock the entire inventory in each warehouse. While this is still a dream of the future, it is already certain now that Amazon is working on speech input devices like Alexa, that are connected to the internet and as such, are supposed to facilitate everyday life.

The world will see lasting change because of Deep Learning within the next five to ten years. These innovations will also have consequences for job development. We will gain new insights through Deep Learning that would not be possible without it. In particular, data protection represents a big challenge, because not everything that is possible is being applied to the advantage of the consumer. The challenges consist of finding the correct norms. This is because there are no technical limits or industries, in which Deep Learning could not be used. As soon as – in whatever field – certain patterns have been identified, a huge potential for optimisation exists. These new insights will then be used in the most diverse fields, to exhaust its complete potential, increase reliability and to design the technology in an easier and easier way.

Marketing for mobile products: More instinct prompted

It was time again. In Barcelona, ​​the global mobile community met at the Mobile World Congress (MWC) in order to present and discuss the latest smartphones, gadgets, business models, concepts and infrastructures.

Whereby: It is not solely community, because the times in which there were a sworn group of nerds and “mobilized” are gone. 101,000 visitors from 204 countries, watched by 3,600 members of the press. This is no longer a niche, here it’s about big business – about the future of the digital economy, which is largely driven by mobile trends and their big and small protagonists. Market leaders can no longer be permanently sure of their market position. Disruption is the key word, just at MWC. You can feel it clearly, everyone is on alert in order not to miss the next important step.

Mobile is everything. That was the very pertinent theme of this year’s fair. What pleases the mobilized, can be a little scary to the rest. Mobile is changing the world. This is also the tenor of numerous high-profile keynotes: Mark Zuckerberg, Sir Martin Sorrell, Brian Krzanich and many others speak of an all-encompassing sea change. And these dimensions are clearly on show at the fair. Solutions for mobility, healthcare, gaming and security, for jobs and payment systems and lifestyle were presented. In short: rather for all sectors.

Like at CES, in January in Las Vegas, Virtual Reality (VR) was omnipresent and a real crowd pleaser in Barcelona. The “Roller Coaster Ride” in Samsung’s Gear VR 4 D theatre was a must. This contrasted against the disappointing and somewhat careless VR appearance at LG with their VR goggles LG 360 VR, which was unfortunately extremely uncomfortable and out of focus and also the environment was not sealed off by their small size. The unmotivated “Cheerleader” with megaphone had apparently already tried it himself and was already disillusioned. Point at this point by the way again for Samsung and their presenters.

Also impressive are the new “Internet of Things” products: Like in Vegas this hot topic continues this trending in Barcelona. Our environment gets crosslinked. Whether we like it or not, it just happens. Perhaps we can decide how active we want to play  part in it and if we want to shape this networked environment and regulate it if necessary. But it is clear that in the coming months more and more deals will emerge: Jewelry, more elegant Smart Watches, toothbrushes and maybe even clever garbage cans, as they were presented at the Telekom.

Related to the Internet of Things (IoT) is the Smart Home. Again, the journey continues and after the first prototypical years we can expect that in this area, there will be an enormous range of options to upgrade our living rooms with technology – for more convenience and more security. Due to the amount of new products, it is quite likely that the prices of new “standard” technologies, such as networked sockets, lights and heating thermostats will fall.

The “Rolling BOT”, a rolling robot from LG on the other hand is likely to remain a rarity in the near future. But there is at least one interesting area of application, if you believe the manufacturer: He will provide safety in your absence, by patrolling the apartment. And besides, in time he could even amuse the pets, so that they’re not bored.

Well then.

In this light, the Smart Fridge by Samsung appears almost reasonable again. For about 5,000 dollars, he will be available in the USA in the near future. And MasterCard has developed a direct billing system so that I can order food smoothly and, therefore, supplies for the refrigerator and the family. Yes, that would be good.

And so that the (mobile) world turns even faster, the development of mobile networks and transmission speeds is being worked on. 5G was the ubiquitous keyword at MWC. The fifth generation mobile network is expected to reach one gigabit per second, so about ten times faster than LTE. The first prototypical approaches were presented at the fair, including the stand of the telecom or the South Korean SK telecom. Both are part of the recently formed international network alliance “ngena” which, from 2017, will offer cross-border mobile network services for business customers.

At the end only one thing was missing: Apple. Traditionally, one of the major players staged exclusively their own events. And many are panting after the previous guarantee of success. Particularly in the smartphone segment you want more (design) confidence rather than a uniform look. Samsung with the S7 Edge and the Gear 360 camera, but also for Sony or LG it is sometimes good to go their own way.

Now, what are the Learnings for the marketing world?

The new platforms of mobile service and interaction world must be played purposefully by brands and media. As in the “traditional” mobile marketing all new mobile gadgets and the IoT world have to be more value oriented. This requires clever concepts and tact, so we don’t overwhelm, intimidate or even annoy users. A careful handling concerning the contents is the new challenge, because in a market where everything is suddenly possible, everything will probably be tried out first.

And it requires new forms of organization to be able to rise to the challenges of the future. There have to be flexible, interdisciplinary as well as brand-, technology- and agency-overlapping dynamic teams, to work out the solutions. The times in which one part of the chain acts as sole knowledge holder are over. Therefor the market is moving too fast – too fast for one alone.

Mobile is everything. And Mobile is the time of collaboration. And that I am looking forward to it.

Five tips for integrated Google Shopping Campaigns

The step was not unexpected, but its consequences are nevertheless striking. For a few days now, the Google search engine is no longer showing paid AdWords ads to the right of search results. Google made this change as part of its endeavors to adapt search results to mobile devices, departing from the classic desktop experience.

The conversion substantially squeezes the ad space available for advertisers. It reduces the overall available count from up to ten text ads across the entire page to a mere three positions above the search results. According to Google’s announcement of the changes, only “highly commercial” queries will be given a fourth central spot. The move will increase competition for the remaining positions, so customers and agencies must expect higher CPCs and thus more expensive AdWords.

Stronger in the focus of digital marketing planning

To cope with the intensifying competition for Google AdWords, it is worthwhile to take a fresh look at Google Shopping. Unlike AdWords, the image-supported ads do stay in the right-hand column and thus become more prominent from the point of view of digital marketing.

This makes it an advertising format with many advantages. Finally, there is hardly a channel as goal-oriented and platform-independent in its approach to users such as Google Shopping ads. Not only do Google Shopping’s graphical results visually stand out in comparison to classic text ads, their usage is continuously increasing as well. According to a 2014 study by the advertising technology company Marin, more than 30% of all ads in the retail sector were placed through Google Shopping, with more than 45% of Google Shopping clicks coming from mobile devices.

Optimize product data towards a targeted customer approach

However, the success of a Google Shopping campaign is not sure-fire. For best results, various disciplines of online marketing must work in synergy. To permanently achieve high click-through rates at the top of search results, you should optimize all product data for a targeted sales approach and provide them through platform-specific data feeds.

In addition, smart bid management makes all the difference when you want to get the maximum return on investment (ROI). In general, you need to consider the following five aspects:

1. Feed relevance
All information relevant to an ad is sent to Google via the data feed. It might need to be changed more or less often depending on the industry — for example, if the price changes or specific product versions are sold out. It is important that the data sent in the feed to Google Shopping stays up-to-date at all times. You must ensure round-the-clock monitoring of data feeds to avoid downtime and to be able to update prices and offers quickly and smoothly. The goal must be to have context-specific offers displayed to potential customers at any time and in any place.

2. Feed content
The integrity of the feed is just as important as its relevance. In this context, all product specifications defined in a Google Shopping feed must contain all relevant product information, such as its description, availability, price, or category. This applies in particular to optional configurations. Such custom data feed columns are used, for example, for top-performing products, brands, or to introduce other meaningful criteria to optimize the campaign. Product texts and descriptions must be analysed and published based on actual user search behaviour. This step is crucial to enable the tracking of ad visibility and shop purchases. Finally, high-quality pictures top off a positive user experience.

3. Keyword control
Advertising campaigns are controlled based on product information. In doing so, Google analyses behavioural signals to decide whether a particular product fits a query: If a product is especially often clicked in combination with a certain request, Google gives such ad a higher priority. But high click-through rates do not always mean high margins. Thus, it is better to have a product displayed when it leads not only to a click-through but also an actual sale. By properly controlling the keywords you can make it so that a data feed-based ad is preferably displayed when the product is searched in combination with its own brand. Here, the conversion rates are generally higher than those of organic entries or text ads without product images.

4. Reviews
64% of all E-commerce users state that product reviews are among the top two criteria in making a decision to buy. For women, this value is even higher, reaching up to 70%. In Google Shopping, you can configure the integration of product reviews graphically and in close connection to ad content. Good usability on smartphones and tablets maximizes the user’s awareness of and attention to product reviews, bringing them much closer to an actual transaction.

5. Bid management
As Google Shopping campaigns often generate a large part of sales in the long tail, it is essential that you use technology to recognize and analyse patterns in the bulk of individual values. Based on these findings you can not only optimize daily budget allocations and bidding strategies, but also forecast upcoming developments and seasonal trends by analysing recurring behaviour patterns. Furthermore, in order to control the campaign’s budget in a more efficient way, it is advisable to separate branded keywords, generic search queries, and, where appropriate, product-related keywords.

Bottom line

On the way to a data-driven marketing, one that focuses on compelling, cross-platform user experience, Google Shopping should be a staple in any marketing mix, as it is currently the most efficient and wide-ranging advertising channel. But from creation to delivery to reporting, this requires a complex process that takes into account a lot of different aspects. If such a process is in place, Google Shopping ads can also yield exceptionally high click-through and conversion rates. The effort is worthwhile.

Instant Messenger: The new kings of communication

They already made traditional text messaging via SMS obsolete. And now instant messaging apps on smartphones are ramping up serious pressure on established social networks like Facebook and Twitter.

Messaging apps have become an essential part of our private conversations. Apart from the rapidly growing install base of smartphones, their success can be attributed to one simple fact: Compared to SMS, the overall cost of usage is very low and in most cases even free. 75 per cent of all onliners worldwide use mobile messengers, according to Global Web Index. WhatsApp alone reaches more than 23 million users in Germany, and the average user sends over 1.000 messages per month.

But WhatsApp is not the only relevant player in a rapidly growing market. Among young target groups, a new generation of messenger apps is quickly gaining popularity. Snapchat, kik Messenger and Kakao Talk court the mobile generation with a strong focus on audiovisual communication and a wide range of additional features like games and photo albums.

According to the latest JIM study, an annual report on media and communication habits of 12 to 19 year olds in Germany, messenger apps have long surpassed social networks as the communication tool of choice for teens. The rate of success is not that surprising, considering how the apps cater towards central communication needs of their young audience. In times, where more and more parents are active on Facebook and potential employers are checking out the user profiles of future employees, younger users want to protect their privacy. At the same time, messengers act as a very informal way of meeting new people. And last but not least images, videos and emojis enable the users to express their thoughts and feelings a lot more individually, than texting ever could.

From SMS replacement to full-fledged communication- and service-platforms

Currently there are two major developments in the messaging world, that are highly relevant for brands and marketers: On the one hand, many apps try to foster growth by attracting new user groups and to monetize their often free services. Traditional display advertising is a very limited option, so many services try to make their profits with micro transactions, selling games, digital stickers or emojis to be used within the apps. Others focus on additional services beyond traditional communication like mobile payment solutions, music and video streaming, taxi services or grocery deliveries. Especially Line and WeChat, two very popular apps in Asia, are turning into central one stop solutions for every need.

On the other hand, the borders between messenger apps and social networks become blurry. Well-established social networking features such as user profiles, photo albums and friend finder tools start appearing in messengers. Snapchat enables media brands to publish their content in the discovery section within the app to reach new users and benefit from viral sharing.

CRM to branding: Messengers offer a wide range of marketing possibilities

Instant messengers also offer many interesting features for branding and advertising. Direct user access means messaging is an excellent channel for customer service, recommendations and promotions. Some retailers even go beyond that and have started to integrate messaging functionalities into their own apps. The Swedish retail platform TicTail enables users to contact customer support and ask questions directly from within the TicTail app.

Especially in Asia, messengers start to play an important role in e-commerce. McDonald’s uses the popular messenger WeChat for promotions, couponing and mobile payment in China. And the Britsh luxury brand Mulberry is running a virtual store within the WeChat app.

But messengers also are very useful for branding. H&M Poland utilized Snapchat to promote their new collection and Burberry let fans take part in a fashion show in Shanghai on WeChat.

On kik messenger, brands can run their own profile pages and use them for promotion activities. The British band One Direction shared exclusive photos and videos with fans on kik to promote their new album. Und Hellmann’s Mayonnaise enabled customers to chat with real chefs on WhatsApp to get cooking recipes in real time.

In comparison to those cases, developing branded assets in the form of digital stickers or emojis that can gain viral traction by being used in messages, is an easy and ideally very efficient branding activity. WeChat and Line already offer standardized interfaces for branded assets, on other platforms third party services are required, however.

Most marketing functionalities are still in earlier stages of development on many platforms, but the potential is significant as more and more digital communication, especially in young target groups, is going to continue to shift towards messaging platforms.

Why the vistit of the CES is still a good idea!

This year, the Consumer Electronics Show (CES) numbered more than 3.800 exhibitors and over 170.000 visitors. In addition, keynotes came from companies like Netflix, Samsung and IBM. The trade fair in Las Vegas is the worldwide biggest exhibition of the Consumer Electronics Industry. Anyone who’s anyone and wants to present a new product, a new technique or just a crazy new knick-knack, makes it there.
It is, at the same time, also true if you summed up this year by saying: one might not necessarily have to take on the long journey in order to see the individual exhibits live. There are rather developments than really new, breathtaking products. And if you were pulled under the spell a little, it would be in particular for the more trial products such as interactive kitchens, the VW Budd-e or a fantastic new Screen from Panasonic, that was incorporated in a shelf unit, which at the touch of a button would be completely hidden and left behind only a panel with beautiful vases. Or a wardrobe, in which someone throws his washing, which would then be automatically folded. At least in theory, it is truly great, even though they are only trials.

Why it is still worth seeing, has less to do with the individual products that will be presented there. In reality it is the feeling that one takes away from such an event: for trends, for the state of affairs and with this what potential relevance that technologies will soon have.
For me it was decisively less about the shining individual examples from the Virtual and Augmented Reality, Wearables or Connected Everything areas, that ranged from the home, through the car, right up to networked toy ducks. This can indeed be much more conveniently gathered from the relevant trade press in a short summary.
It is more the impression between the lines – since these fields of technology were justifiably awarded a niche role, the offer is nowadays universal. Most notably, networking appliances got squeezed straight out of their niche and into the market. It is no longer only the nerds who dim their light bulbs at home with an App. Max Mustermann is now also one the verge of a Smart Home Shelf, in which the offer is no longer assessable and will also no longer be exorbitant. The masses are doing it.

These will be the impacts for us as a communications industry – if the “Internet of Things” actually arrives in our lives now, if everything is networked these days, and if we have to confirm simultaneously that it will even leave its mark on advertising.

So let’s gear ourselves up for the fact that everything is able to communicate. However it will only communicate thus far as the consumer will approve in future.

The user will want to take more and more control over which news and content reach him or at the least he wants to have the feeling of control. Advertising will then often no longer be noticed as such at all. The forerunners are perhaps InGame-Ads or Product Placements in games. In the world of mobile marketing you always should have already asked: Where is the added value? And does it justify the investments for the sender as well as for the user.

For us this means: Advertising as a Service and Digital Products and Services will be central media and formats in the near future.

After a whole generation that was “spoilt” with free Online-Content in the boom times of the stationary web, a new generation is growing up already with digital pay-worlds: Games, Spotify, Netflix and Apple iTunes to name a few examples. If the content is good, it will be paid.
In this world, brands can develop new sources of digital revenue for themselves. In the Internet of Things (IoT) there is also still abundant space for good concepts. At the same time, it must not always be the Mega-Innovation. Often the potential new use or combination of various, existing solutions will already generate a product advantage – or an especially user-friendly interface. You could smell these new chances at the CES at every turn, creating a positive mood within a market of innovations and disrupters.
Agencies that have realized this are also one step ahead tomorrow. They are very well situated as partners for these new challenges anyway. Target audience analysts, technology specialists and creatives bring with them the perfect setup for the design of the networked communication of the future.

Twitch your Brand? Check this out!

Who remembers the Old Spice Man? In 2010 the actor Isaiah Mustafa conquered the net with lots of charm and his good looks, and Wieden + Kennedy set a milestone with the Old Spice campaign Smell like a Man, Man in terms of content marketing and the social web.

In addition to an excellent creative idea, it was the clever networking to the target group on particularly trendy social channels (especially YouTube and Twitter) and the active involvement of users which contributed to the campaign’s success, which, in subsequent years, was often used as a best practice example for digital marketing.

#twitchplaysoldspice

Here we are, five years later, and we could be standing before a new highlight. But this time it is not YouTube and Twitter which are the channels of choice, but the live streaming platform twitch.tv, where you can watch others playing computer games. From April 16th to 18th, Old Spice ventures with Twitch under the crowd sourced gaming promotion #twitchplaysoldspice, a trip into nature. The viewers are called upon to direct a real man through a forest over three days using the Twitch chat control and can participate with him in prepared events and activities.

The inspiration for the campaign seems to have come from Spring 2014, when thousands of gamers converged to play together on a virtual Gameboy Pokemon in a live stream. The control commands were received in the game characters chat, processed in a short time and then passed on to the game – with correspondingly unpredictable consequences. A completely absurd idea, which is probably why it spread like wildfire within a few days over the net and thereby also brought every facet of Twitch to the fore: gaming, community interaction, live entertainment and a good deal of chaos.

Live-Streaming is in

Currently live streaming is arguably one of the most important trends in the net. With Meerkat and Periscope two companies struggle for dominance in mobile streaming and it was no coincidence that Amazon paid almost a billion US-Dollars in August 2014 for twitch.tv and thus outmanoeuvred competitors Google.

How seriously Google takes twitch.tv can also be seen in that a few weeks ago it became known that the YouTube live streaming service plans to strengthen its position in gaming and eSports and thus become a direct competitor of Twitch.

This development is also interesting in that in recent months Twitch has carefully made first attempts to broaden its fairly strict gaming alignment through transfers of film and music events without alienating its important core target group and damaging the essence of its brand.

The success of Twitch is attributable, alongside the transmission of popular eSports events, to a loyal fan base of many small and large content producers who broadcast their gaming sessions on a daily basis. Meanwhile streaming has become much more than just fun for bored teenagers: If streamers achieve stable numbers of regular viewers, they can participate in the Twitch Partner programme and fans can support them by subscribing to their channels for five dollars a month – about half of the revenue ends up with the content producers, the other half goes to Twitch. Loyal fans can thus provide, in contrast to the often fluctuating ad revenue for moving image ads, an additional, stable revenue base for streamers, a number of whom have already made their hobbies into professions and who provide elaborate productions on a daily basis.

Meanwhile Twitch hosts regular gaming talk shows, live coverage of gaming conventions like PAX or  Gamescom and numerous gaming publications have discovered the platform as a way to interact with fans and readers.

Pioneer work: streaming platforms marketing

Twitch now reaches about 100 million viewers worldwide per month. In Germany, according to AGOF internet facts 2015-01 it has about 1.7 million unique users in an average month. Unsurprisingly for a platform with a strong focus gaming, a good 90% of users are men under 30 years.

Twitch has now become an indispensable platform for many gaming companies for promotion of new games. Many manufacturers of hard- and soft-ware, as well as consumer goods have also long been active on Twitch. But it would be a big mistake to use Twitch only as another placement location in the media plan for display and video advertising because the true strength of the platform lies in the relationship between the streaming personalities and the audience.

Tech-savvy young men are not usually distinguished by their high acceptance of advertising. It is thus even more important for brands to develop stream sponsorship, events and promotions together with the streamers and tailored to fit the special culture of the platform. The related expenses may seem daunting, as many channels have only a few thousand viewers per day. However many experiments can be implemented on a small-scale with a manageable budget to gather experience for larger promotions. You do not have to dump a man in the forest for three days and leave his fate to the sometimes anarchic Twitch-chat. But it is definitely worth taking a look at.

Mobile World Congress 2015 – the “Outernet” is coming

Once more, the mobile industry has got together in Barcelona for the annual Mobile World Congress. The beginnings of the congress reach back to the year 1987.  I myself have now been there ten times as a visitor. In the early years, the event was primarily a technological performance show of, at that time, pure mobile and infrastructure providers. So companies such as Nokia, Sony, Alcatel, Samsung and co. presented their latest models, and T-Mobile, Vodafone, Telefonica and co. did some purchasing. On the sidelines Cisco, Qualcomm and other system vendors showed their servers, masts and the like.

Especially in recent years, since smart phones have taken over the mobile phone market completely, the event has increasingly evolved from a technological to a technical performance show. This year it is particularly noticeable that manufacturers such as Sony, with a wide range of devices from TVs to cameras, are showing us every possible application scenario and operation of their devices.

The top theme of 2015 is the Internet of Things: smart wearables, smart home, smart PoS, Smart Car, Smart City, Smart-anything And the message on the side — yes, we still have a few very chic, new smartphones!

But at the time when smartphones are only being tweaked. Features such as waterproofing,   powerful processors, NFC, Dolby Surround and the like have almost become standard everywhere.

The shape factor has also been resolved; it stays with the touch / slate format. The screen diagonals have grown, but should stabilize at about four point seven to five inches as everything else is somewhat unwieldy.

Depending on manufacturer and model, there are a few special features in the high-performance camera direction such as 4K recordings on Sony, curved display at LG or casing upgrades such as the S6 devices from Samsung, which are now delivered in high-quality aluminium – but all this is still only fine tuning. There have been no major innovations this year.

We will need, however, to get used to being flooded in the coming months by smart watches and smart bands. Every manufacturer has dozens of different models on offer, from pure fitness trackers to the fashion statement. Even the classic watch manufacturers such as GUESS watches or Kronoz  were there, showing their smart watch interpretations. The crux of the matter is, however, that most people currently don’t actually see any benefit in smart wearables.

Fitness trackers can obviously record their own movement and provide data for analysis, but beyond that things get vague. The development of these devices will depend on what benefits are attributed to them by end users.

 

Megatrend: The Internet of Things

What was really new at the show was that manufacturers have comprehensively adopted the theme of cross-linked life and the Internet of Things. How do I network my living room, control the TV or manage audio, video, and photos? How can I dock my phone, for example, on the Playstation 4 and take my games directly from the large to the small screen without much effort? Where will it all lead to and whether every toaster really needs a Wi-Fi connection remains to be seen. But as so often, manufacturers tend embrace the theoretical possibilities with their enthusiasm for technology leading them to overdo it at first

The central device, which breathes the intelligence into all the new IoT (Internet of Things) gadgets,  remains the smart phone. We all take it for granted and it stands at the centre of every application. It is the basic prerequisite which allows watches, toothbrushes or houses to be smart at all.

Further innovations are expected in the coming years on the software side. The device itself has developed into a swiftly changing tool. The operating system, the Internet and a couple of particular apps bring it to life.

As in previous years, the Google’s green Android bot was almost omnipresent. The operating system dominates the smartphone market in an almost frightening way. However young, fresh operating systems like the Linux-based Ubuntu Phone or the Firefox OS are more than confident. But for users it continues to be a major to impossible effort to change the operating system on their smartphones or to change so as to have about an alternative to Google’s Android.

Real competition for Google could develop in the coming years – from Samsung, which currently produces about 70 percent of all Android smart phones.  Samsung is a company with healthy aspirations which feels its dependence on Google as rather suboptimal. Not least for this reason, Samsung has become a major developer of the independent operating system, Tizen. It has presented a complete Tizen Eco System ranging from smart phones and smart watches up to apps and cameras in Barcelona. It is only a matter of time until Samsung feels strong enough to consider turning their backs Android. At least then the balance of power caused by a reshuffle in smart phone operating systems will make it really exciting again.

 

The Potential of the Outernet

The question arises for us today what these developments will mean for us, but more importantly for our customers, the advertisers.

Well, first of all we need to understand that the Internet is no longer trapped in a box called a PC or laptop. It is small-scale, colourful, exciting and “happens” absolutely anywhere, anytime. There are devices that generate data or content (e.g. wearables, clothing, etc.) and there are devices (e.g. TV, screens, sound boxes, etc.), the process or output such content. Mobile terminals have brought the Internet to places that have been completely analogue to date. Many speak in this context of “Outernet”.

This trend was particularly clear in Barcelona at a side event of the exhibition, “4YFN – 4 Years From Now – Connecting start ups,”.

The current generation of business founders work in some cases with completely undeveloped markets and will develop business models that will appeal to new audiences and which we still do not dare to dream of today.

Already disruptive business models have emerged from these developments, such as car sharing á la car2go or DriveNow, which were made possible by the mobile Internet. Also services such MyTaxi or Uber have completely overthrown old business models. It’s no longer about digitization; it involves mobilizing – and we are still at the very beginning of it.

And all these new and in some cases really fascinating business models will attract more people to a more intensive use of smart phones. So many more target groups will be devoting more and more time to the screens in their hands!

Until now brands have presented their messages on their websites and other media channels. In future this will be complex. Users or customers are using the Internet increasingly and the diversity of devices continues to grow. Critics see this as an even more fragmented device market, which makes mass communication more difficult. I see it more as a great opportunity for companies to take their first steps with the likes of Branded Services or Content-Marketing and to live the much-vaunted customer relationship. That is because the “bombard everything with advertising until the last person knows the claim” approach is not about customer relationship! Whereas so far a company website optimized for desktop or laptop was the focal point, now it will be the “touch-friendly” website or apps for smart phones and tablets.

At the moment, many companies see mobile Internet as only just another media channel for bannering or search. In my opinion this is a fatal miscalculation that ignores the vast potential of the mobile Internet. Many smart people are currently worrying about how to connect the analogue world of brand communication, i.e. print, radio, OOH or TV, to the digital world, and then invent such great things such as the Red Button on TV. The problem is: No one needs this Red Button. Why? Because we already have one in our pockets: our smart phone. It can see (camera, image recognition, etc.), hear (microphone and sound recognition, is always connected to the internet and, moreover, is absolutely personal.

But also the other way, i.e. from the network to the analogue world, can and should be ventured by companies. A major area is, for example, “ROPO” (Research Online – Offline purchase). Consumers can use their smart phones to get “Real World cookies”, e.g. digital loyalty cards with which customers can take their search and purchases history from the online store into the dealer’s shop.

This could finally give each channel its proper meaning in the customer journey! This in turn will lead to massive structural changes. Dividing retail stores and online shops into separate channels or even companies will, in future, make a lot less sense. Instead, intelligent, networked solutions are required. We have already shown how some examples of this can work in our weShop (www.weshop.vision) – but there are still many other ways. The “Outernet” will be the big trend in the coming years.

My tip for the advertisers: mobile marketing will permanently change the way we have, till now, communicated with customers and call into question ecosystems, billing models, departments, etc. which have evolved over the years. For this reason, it is advisable that mobile receive complete “management attention”, as that is where foresight is required, not to miss out on such developments, but to position ourselves and our companies for it.