As Technology Defeats Ad Blocking, Online Ads Must Improve

A roundtable of key cross-industry stakeholders has put forward a four-point plan to rescue the credibility of the online advertising experience in the face of ad blocking, intrusive tracking, and poor metrics.

Representatives from the World Federation of Advertisers, the World Economic Forum, and the Interactive Advertising Bureau Europe met in London this month with other key stakeholders — advertisers, agencies, consumer groups, publishers and a government representative.

All parties agreed on four main points: the user must have immediate tools to reject and complain about advertising; only a limited number of premium advertising slots should be displayed; use of contextual targeting should be increased to end over reliance on behavioral tracking; and better metrics of advertising success are needed to improve online advertising.

Companies such as anti-ad-blocking firm PageFair, which put together the roundtable event, have developed the technology to bypass ad blockers altogether. And services like AdBlock-Plus routinely allow ads that meet nonintrusive criteria.

Chris Payne, public affairs manager and head of the digital advertising unit at the WFA, said, “There is a big question around whether consumers would be comfortable with marketers and agencies trying to shoehorn advertising back into the experience without them choosing to have it happen. Bypassing could be the best way to further frustrate consumers, and that is an outcome we would wish to avoid.”

PageFair’s head of ecosystem, Johnny Ryan, however, said the ability to bypass ad blockers is a way to clean up the web, by reinstating only a small number of premium ads. “The dawning technological irrelevance of ad blockers should not allow a return to the situation before ad blocking,” he said. “It’s not [PageFair’s] job to decide what quality is — we need to make sure a legitimate set of parties does that.”

The discussion addressed the importance of allowing consumers to express their frustrations without resorting to ad blockers, and the responsible use of data to avoid clumsy tracking behavior.

Poor metrics, it was agreed, reduce the incentive to make good online ads. Mr. Payne said, “Ultimately, how we measure success within the industry will affect behavioral change. The industry has struggled to come up with metrics that reflect the real value of advertising in the eyes of the consumer. Current indicators of success, such as pay-per-view, aren’t necessarily indicative of a happy consumer.”

Individuals and groups at the meeting are now presenting the four-point plan to peers and colleagues as they work out a way to put it into practice.

Dr. Ryan added, “Hundreds of millions of users have rebelled against the status quo in advertising. We are seeing the collapse of the mechanism that has supported the diversity of content on the open web since the 1990s. Blocking is an opportunity to undo the mistakes of the first 20 years of advertising on the web.”

Key Findings: Digital Marketing in the Telecom Industry

Like last year, we wanted to get the industry’s perspective on the challenges, opportunities, and digital-marketing priorities for the future. In collaboration with Ovum, we surveyed 250 marketers from telecom companies — fixed-service providers, mobile-service operators, mobile virtual-network operators, and integrated fixed- and mobile-service providers — across EMEA and the US. The survey was conducted during November of 2015. Here are our favorite themes and findings from the study.

Our new research on the telecom industry revealed some fascinating insights in this hyper-competitive and dynamic industry. Digital leaders in the telecom industry are focusing on and investing in improving customer experiences as a means to improve their bottom lines and differentiate themselves in an increasingly crowded market.

Competition Will Increase in the Hyper-Competitive Telecom Industry

Telecom companies were asked to rate the current and expected levels of competition, with 10 being the highest level and 1 the lowest. As the figure below shows, respondents reported that competition is currently within the mid to high levels, and 60 percent of respondents expect competition to rise to the highest range of 8 – 10 by 2016.

Telco 1

Revenue cannibalization from established and new OTT (over-the-top) players will continue to cause downward pressure on financial performance. This, in turn, fuels the need for telecom companies to constantly innovate with respect to their offerings and the operations that support the sale, delivery, and support of these services. However, given the current flat-to-declining performance of the overall telecom market, operational and cost efficiency have become core requirements of every transformation project. As a result, cost reduction is now an important component of internal business cases and a key motivation for investing in new technology.

Experience Is the New IP (Intellectual Property) | Differentiation Through Customer Experience

Though cost reduction is imperative, telecoms are willing to invest in improving customer experiences as a means to offset competitive threats, and ultimately, to differentiate themselves in the marketplace. When asked “What is the most important strategic response your company is taking to counter competitive threats and rising expectations?” the majority of respondents (25 percent) indicated that investments in improving customer experience was of utmost importance.

Telecom Companies’ Key Strategies for Countering Competitive Threats Are Based on Improving Customer Experience

Telco 2

Investments in improving the customer experience fall into three different departments within a telecom business:

  • Networking: Networks are being monitored and maintained consistently.
  • Customer Service: Customer care is administered quickly and precisely.
  • Marketing: Products and services are targeted, providing a high level of accuracy to ensure customers receive relevant information and offers.

Improved digital experiences continue to rise in importance as telecoms try to move much of their customers’ journeys to digital. Being able to identify and target prospects, convert visits to sales, and up-sell current customers has become the table stakes in this competitive market. Telecom digital leaders have made considerable progress here as well as with post-sales activities such as self-service capabilities, which enable their customers to add new features (such as roaming), monitor data usage, and buy more data. Easy and convenient methods to perform simple tasks result in higher customer satisfaction and reduced cost to serve.

Adobe has a rich history of working with the telecom industry to achieve their digital-marketing objectives; 92 percent of Brand Finance’s top-25 global telecoms have invested in Adobe Marketing Cloud. For example, Verizon Wireless, a long-standing Adobe customer, wanted to increase engagement and enhance customer experiences within sales, customer support, and branding sites.

“We want to help customers reach their goals quickly and easily on our website — whether that means finding the right phone or changing their account information,” says Chris Hansen, associate director of the digital design and development group, Internet sales operations at Verizon Wireless.

Investments in Adobe Experience Manager enabled Verizon to deploy video and dynamic media across Verizon’s digital properties, resulting in a 16 percent increase in conversions on product pages that featured video and a reduction in call-center volumes. Read more about Verizon and Adobe Marketing Cloud HERE.

Bringing great customer experiences to life has, in effect, become a new form of Intellectual Property. “Experience is the new IP” is a topic that I introduced and have been talking about for some time now. Experiences that meet and anticipate a customer’s need, enjoyment, and engagement are difficult to replicate, but if done well, provide substantial differentiation in the market.

“People-Based” Data is Puncturing Classic Marketing Myths

Moms have a lot to teach us about the future of marketing.

Old-school demographic segmentation left marketers with a badly misleading impression of this group’s digital life. We knew, for instance, that non-millennial women owned fewer electronic devices, didn’t really care much about screen size, and hesitated to try new technology. With that information alone, it didn’t make much sense for marketers to use digital video advertisements to reach them.

But a new, “people-based” approach to marketing has proven this a myth. This kind of marketing examines consumers’ online choices to better understand how they value everything, from price to convenience. Done right, people-based marketing can anticipate needs, craft tailored responses, and reach target audiences at the best possible time and place.

In the case of moms, anonymous data collected by Facebook for Deloitte showed, unexpectedly, that mothers are vibrant online consumers. They spend loads of time on Facebook, post an outsized number of photos, and avidly watch web videos. Facebook’s ability to focus on actual people as opposed to broad “types” of consumers unraveled the myth that digital dollars are wasted on moms.

Much of this data comes courtesy of “cross-device tracking,” which lets brands seamlessly carry on a conversation with consumers anytime, anywhere—when they open a mobile app, for instance, or even when they stand near a digital sign in a public space, like an airport.

This tracking is quickly replacing the “cookies” that brands long used to monitor consumers while they browsed the Internet on their desktops or laptops. Thanks to the ongoing mobile revolution, marketing dollars spent on cookies are no longer as effective.

According to Adobe’s Digital Index data, today’s consumers have 7.2 electronic devices on average, and engage with three of those devices on a daily basis. Additionally, almost a third of consumers are juggling two or more smartphones. And 20 percent are device-switching fiends while online shopping.

The insights driven by people-based marketing are unprecedented. People have always had habits, choices, wants, and needs. But now, marketers have the ultimate tool: context. Rather than blindly chasing after the one-time site visitor, they can target potential buyers with relevant ads, guiding them to the perfect product. And they can do it all while saving money.

A highly personalized approach to advertising pays off. Travelocity, for instance, boosted sales of flight and vacation packages by 15 percent just by using individualized data to customize how consumers navigate its website.

It’s no surprise that seemingly 24/7, hyper-personalized tracking has led to some wary consumers. About three in four are uneasy about their personal information being “out there” in the great unknown, according to an Adobe survey. But a whopping nine in ten are willing to trade a piece of personal info for better, more relevant online content.

This makes sense. Consumers, too, recognize the promise of people-based marketing. There’s a growing desire to be remembered across digital platforms. So long as marketers avoid privacy pitfalls, consumers are happy to have a relationship with marketers.

Demographics still matter, of course, but consumers will never perfectly match the stereotype assigned to their “type.” People-based marketing understands that and allows marketers to create more nuanced, personalized portraits. It is marketing grounded in the realities of everyday life.

In this new, fast-pace, fully digitized global economy, there’s only one way for firms to stand out and thrive: become an experience business. Companies have to create a compelling customer experience at every link of the relationship, from the marketing materials to the sales interaction. The insights gleaned from people-based data empower firms to engage in exactly such a customization.

The sooner brands start marketing to individuals, rather than demographic slabs, the sooner they’ll turn prospective buyers into loyal customers. This is the future of marketing. And if businesses don’t transform their companies to embrace people-based approaches, they’ll fail.

If mom truly does know best—and is digitally savvy—you certainly want her to know your brand.

New Design & Developer Tools Transform Apps for the Experience Business

As more and more companies transform themselves for the Experience Business, mobile apps play a central role in connecting with customers and employees on the devices they use the most. There’s one problem though: creating mobile apps today is too difficult and disjointed to fully take advantage of the mobile opportunity. Mobile app tools need to change to allow business owners, designers, and developers to collaborate together to make more usable and useful apps – and to do it quicker and at lower cost.

Today at Adobe Summit we’re connecting design workflows from Adobe Experience Design CC (Adobe XD) with production-ready apps in Experience Manager Mobile. This is one several Adobe “Sneaks” we’re offering at Summit – previews of groundbreaking ideas and technologies percolating inside Adobe labs.

With Adobe XD, designers can use a beautiful, interactive design tool to prototype and wireframe mobile app screens using live enterprise assets. They can design screens for multiple device types and sizes, and quickly arrange assets in “artboards” to preview the app hierarchy. Through integration with Experience Manager Mobile services, you can compile the screens and assets created in Adobe XD, and then render them as a live, production app. This integration significantly reduces the time spent designing, developing, and previewing the app experience – allowing you an iterative workflow that generates a real app to test and deploy.

Check out the Adobe XD and Experience Manager Mobile workflow in this short video:

In addition, on March 29, 2016 we’ll also release the integration of the Cordova framework into the Experience Manager Mobile app runtimes. With Cordova integration, developers can extend native apps to use device-level features – accessing the camera, contacts, location services, files, and more. With device-level integration, you can have your apps deliver additional impact to your business, and you can do it using developers that know HTML and Javascript. Read more about our support for Cordova plugins here and watch a short overview video below.

These two videos show a production process for mobile apps that is expressive, efficient, and powerful. In addition to using Adobe XD to create mobile app screen prototypes, you can also use the Adobe XD/Experience Manager Mobile integration to transform those screens into real native apps for testing and deployment. With these apps in hand, developers can extend them using Cordova functionality. The result is not only faster time-to-market for your mobile apps, but more powerful mobile experiences that help transform your organization to an Experience Business.

The death of Instagram for brands

Earlier this week Instagram updated its news feed algorithm. Posts will no longer appear in chronological order and instead be sorted “based on the likelihood you’ll be interested in the content, your relationship with the person posting, and the timeliness of the post.”

What this means is that Instagram will choose what to surface and when – essentially mirroring Facebook’s news feed.

This change is being spun as a way to optimize a user’s feed, when actually it grants Instagram the power to control ad content. “On average, people miss about 70 percent of the posts in their Instagram feed,” says Kevin Systrom, the co-founder and CEO of Instagram. “What this is about is making sure that the 30 percent  you see is the best 30 percent possible.” While this certainly is true, make no mistake, Instagram is about to do this for monetization.

Why does Facebook care?

Facebook, which owns Instagram, just announced $5.8 billion in Revenue in Q4, a staggering 51 percent growth over the prior year. While Facebook’s growth rate has consistently been over 40 percent, maintaining that growth is not simple by any means.

By applying Facebook’s historical growth rate, it needs to produce an incremental $2 billion in growth next quarter and another $3 billion in growth in this quarter next year.

In the most recent earnings call, Facebook’s CFO mentioned “core Facebook is really driving the top line”. This growth is being driven by an increase in average revenue per user, not an increase in user growth. Can this growth continue to be driven by core Facebook?

Facebook needs to grow an incremental $3 billion more in this quarter next year. If we apply historical user growth numbers, of 13 percent that would mean average revenue per user would need to increase 33 percent. Can Facebook continue to do that given that Facebook has already increased Rest of World growth by 4x since and U.S. & Canada growth by nearly 5x since Q1 2012? How much further can Facebook average revenue per user growth grow before that too reaches a saturation point?

So this places an importance on monetization in new areas such as Instagram. According to eMarketer, Instagram revenues hit $600 million in 2015 and are forecasted to grow by 149 percent in 2016. Surely this will not be driven by user growth as a 149 percent growth in users would equate to nearly 600 million new users just in the next year.

Implications for brands

Here’s where Instagram comes in. Over the past few years, thousands of brands have joined Instagram after realizing that it is the social media platform brands and consumers engage in most. What happens when Instagram begins to monetize? The path of least resistance would be to follow a path similar to Facebook and limit organic reach — we have seen this story with Facebook before.

So what happens to brands that have heavily invested in creating wonderful content on Instagram? While larger brands have the marketing budget to pay for what was once free media, blogshops and other small businesses may not be so lucky.

Consider this your wake up call, because if your business relies heavily on Instagram as a channel, customer acquisition is about to come with a hefty price tag instead of a perfectly edited photo.

For more on how Instagram and Twitter’s recent changes could hurt brands, read “Algorithmic Feeds Force Us To Compete

Pinterest debuts step-by-step How-to Pins from 25+ brands to help keep users around longer

DIY_How-to_Pin

As Pinterest continues to ramp up the parts of its business that generate revenues, it’s also expanding the free features that might entice users and brands to linger around for longer and engage more on it’s image-based social network for sharing ideas.

Today, Pinterest unveiled a new kind of dynamic Rich Pin called a How-to Pin, which provides step-by-step instructions for cooking, crafting, grooming and other activities shown off in the Pin. The How-to’s can be seen, followed and shared without ever leaving Pinterest.

How-to Pins are launching today in the U.S., France, UK and Germany on Android and web, with iOS to come in the future, the company said. Jason Costa, product manager for Pins, said that in all more than 25 brands and organizations are providing content for How-to’s free of charge (that is, it costs nothing for the brands to create these Pins in their own Custom Feeds).

Participating businesses include Brit & Co — which coincidentally acquired tech from a startup called Snapguide that pioneered this very feature and found a big audience on Pinterest for sharing its content. Among the others are Home Depot, Food.com, Martha Stewart, Cosmopolitan, and more.

But while individual users can repost these, they will not be able to create How-to Pins themselves, Costa said. The content will come up in your home feed if you follow the brand, as well as in a search on a specific topic or keyword, or by visiting a participating brand’s profile.

Just as notable is how the How-tos will work: Costa says that while Pinners will be able to click through to hosting sites by clicking on the Visit button or on the image itself, what’s interesting is that “the step-by-step information on the Pin will help people take action without leaving Pinterest,” he said.

This potentially moves Pinterest away from being as much of a referral site and more of a destination in and of itself, much like Twitter or Facebook when they launched their own hosted video to keep users on their own sites for longer.

To date, Pinterest — which counts more than 100 million monthly active users globally and 1 million businesses — has collectively racked up 50 billion Pins on more than 1 billion boards.

That data has been feeding into the products that Pinterest has been building to expand not just the amount of Pinning that a person does, but the time that users are spending on the site beyond glancing at the Pin itself.

Dynamic Rich Pins that lead to further actions underscore that strategy. They include app, movie, recipe, article, product and place Pins, which link through to previews of the wider content.

Costa says that article-based Rich Pins are currently the most popular of these, but there seems to be a lot of data that points to How-to Pins potentially becoming very popular: there are already more than 4 billion recipes and another 4 billion DIY Pins already on Pinterest, and 1 billion hair and beauty Pins, and another 500 million dedicated to health and fitness — all topics ripe for more explanation, or so Pinterest hopes.

(While Recipe Pins and How-to may feel like an overlap, Costa said that one is not replacing the other.)

As with the other Rich Pins, with the launch of How-to Pins, Pinterest is leaving the door open to add significantly more functionality into the Pin in the future. In the case of the How-to, Costa said that the ability to buy items featured in the steps won’t be there, “not at this time.”

This could imply that expanding Buyable Pins to work with Rich Pins could be something it has considered for a future rollout.

And while they are free to create today for big brands, you could imagine a tier for prosumer users, who look to Pinterest to build their own businesses, might be offered the ability to set up these pins as an ad unit.

(Indeed, trickling down to smaller businesses’ versions of products originally created for larger ones is a route that Pinterest has taken before, such as with its advertising management tool.)

Ramping up advertising and other commercial opportunities is likely an imperative for the site. Pinterest to date has raised $1.32 billion in funding. It reportedly projects some $3 billion in sales by 2018, although in 2015 it generated only about $100 million from advertising, currently its main source of revenue.