Content Roundup: Bots Influence Humans – Amazon Says Yes to the Dress – What does $850mm buy Oracle?

Here come our staff’s fav MadTech news pics from the last two weeks — juicy stuff on programmatic, on-demand retail, robot persuasion…  Plus, don’t miss our blog this coming week as we share insider insights from our Roundtable on Influencer Marketing.

Anything juicy we missed? Tell us on Twitter, Facebook… or button it up on LinkedIn.

 

eMarketer Releases New Programmatic Advertising EstimateseMarketer
Apr. 18, 2017
Despite the negative press around programmatic advertising following the YouTube ad controversy, programmatic isn’t going anywhere…
#programmatic #forecast

How Influencer Chatbots Could Close the Gap Between Content and CommerceThe Drum
Jan. 18, 2017
Brandtech group You & Mr Jones has worked on the “first ever” influencer chatbot for US makeup brand Covergirl. According to them, the next frontier for brands will be…
#influencerMarketing #social #chatbots

Western YouTube Stars Look to Crack the Chinese Social Networks  — Digiday
Apr. 14, 2017
Yoola is localizing select influencer videos from YouTube and distributing them on Chinese social networks. They easily created millions of views in two months…
#international #video #influencerMarketing

Amazon Wins Patent for On-Demand Textile Manufacturing — RetailDIVE
Apr. 19, 2017
Can Amazon slip into something more comfortable? Imagine programmatic retail and garment yield management based on purchase history…
#retail #ecommerce #Amazon

Oracle To Acquire Digital Measurement Firm Moat — AdExchange
Apr. 18, 2017
Someone told Recode that Oracle will pay more than $850 million for Moat. Will the acquisition allow Oracle extend its marketing and data clouds’ abilities?
#financial #Oracle #Moat

 

UPCOMING INDUSTRY EVENTS

May 8 – 9  /  DIGIMARCON EAST, New York, NY

May 9 – 10  /  MarTech Conference, San Francisco, CA

May 10 – 12  /  Gartner Digital Marketing Conference, San Diego, CA

May 24  /  OTT & Audience Targeting for Video Roundtable, New York, NY

 

Ok Everyone, You Missed the Point

Last week Burger King earned significant publicity over their latest ad stunt, in which a TV spot was designed to hijack Google Home devices by asking “OK, Google, what is the Whopper burger?” The hope was that viewers with a Google Home Virtual Digital Assistant (VDA) would hear a list the ingredients back from their device. There has been a lot of news and industry talk about the advertisement itself… the Wikipedia skirmishes… but so far, everyone has missed the point.

This stunt is not about the ad, but about the power of the home-based VDA. Given Google’s insatiable appetite for advertising revenue, Google Home is programmed to use Wikipedia to list Whopper ingredients — a tiny illustration of the power of VDAs. How long will it take for your Google Home, Amazon Echo, or other VDA, to not only link to an advertisement and choose where to direct you, but for Google and Amazon to get paid by brands for your virtual self-space? Imagine you ask for paper towels – let’s say your VDA can choose Bounty or Brawny – what is Amazon’s incentive to pick one brand over the other?

I already say to my Echo, “Alexa, reorder XYZ”, and it does. No price check, no alternative, and when XYZ is a generic item, like sugar, it effectively selects the brand. I know this is the effect of my own laziness, but what I expect to see soon will be nothing short of invasive. Amazon already knows far too much about me. Again, my own choice, but in this “winner take all” economy, our retail choices are going to become limited in an entirely new way. It will not just be the local merchant being pushed out by big boxes and malls. Even they are being shattered as we embrace e-commerce, online price checking, and are swayed by social influencers, changing how we buy. eMarkerter’s recent report on programmatic spending, indicating that 84% of all digital advertising will be programmatic, shows that algorithmically-driven advertising works.  It is coming to TV (already in video) and to every other form of advertising.

What is fascinating about the potential power of VDA as it relates to marketing, advertising, and commerce, is that no one is paying attention. This will be the largest sea change in advertising/marketing and controlled by only a few companies (Google, Amazon, Apple, ???). Both Google and Amazon have reduced the friction of every transaction and are basically selling a BIG EASY BUTTON for shopping. However, the costs of finding alternatives, or actually knowing what the alternatives are, will continue to empower that easy button. This enables yield pricing on every product we buy online.

Many are already familiar with how airlines present different prices to the same person based upon how they search (one price on Kayak, another on the company’s website, and a third price on the company’s app).  When I recently searched Delta for a flight from LaGuardia to St. Louis using these three methods I was simultaneously quoted three different prices (ranging from $171~$187).  In each instance, Delta knew different things about me, and therefor quoted me three different prices. What is to stop Amazon Echo from quoting me a different price? Amazon already changes its pricing in real time – that cookware set you bought yesterday may be cheaper today (and Amazon no longer offers price protection). Why wouldn’t Amazon set pricing based upon willingness to pay? They could tune their margins perfectly.

VDAs are becoming the next narrowing point of the purchase funnel. Limiting selection and actively managing price is simply the next step.

What can we do? The answer is complicated, but it begins with awareness. We professionals in the MadTech world are familiar with how algorithms dynamically bid for impressions, change creative content inside of ads, and generally drive the successful targeting of advertising. But most people don’t know how pricing algorithms discriminate based upon what they know. As these Madtech capabilities continue to migrate to pricing, the most important thing we can do it is not fall into the easy trap by spending a little more time looking for pricing alternatives.

Content Roundup: Chicken nuggets, Google gets a cold shower, Rubicon’s FastLane

In case you missed it, here are our staff’s fav MadTech news picks from the last two weeks. Notice something new? #Hashtags! We want to know what you’ve been reading, and what we missed. Tell us on Twitter, Facebook… or button it up on LinkedIn.  

In case you missed it 2x, here’s our previous Roundup (#redundant).

 

 

News Corp & Unruly seeking to redefine programmatic through new private marketplacesThe Drum, Apr. 10, 2017
Media buyers can now buy inventory that matches a person’s mood…
#emerging #programmatic #partnership

How The NYT, CNN, and HuffPo approach publishing on platformsNieman Lab, Mar. 30, 2017
A study from Columbia University examines how social platforms have changed journalism.
#publishing #study #social

Rubicon Project Announces Early Successes from Video Header Bidding BetaYahoo Finance, Apr. 6, 2017
The Exchange announced the initial results experienced by publishers using its video header bidding product…
#beta #emerging #programmatic

Diana Ionel, Starcom Romania: “The cold shower for Google is a good thing…”iCEE.news, Mar. 30, 2017
“No matter how sophisticated targeting is right now, the association with quality content involves a judgment on that content…”
#content #international

The Kendall Jenner Pepsi Creative BriefMedium, Apr. 6, 2017
This parody brief for Pepsi’s massive tone-deafness is right on the nose… 
#blowingIt #pepsi

World record for retweets could be broken over some free chicken nuggets The Verge, Apr. 6, 2017
A social media win for Wendy’s. Are you in one of the 2.7 million retweets?
#NuggsForCarter

 

UPCOMING INDUSTRY EVENTS

April 19 – 20  /  Conversion Conference, Las Vegas, NV

April 23 – 26  /  Marketing Nation Summit, San Francisco, CA

April 25  /  Empire Startups FinTech Conference, New York, NY

April 26  /  Influencer Marketing Roundtable, New York, NY

 

(Join in! Tweet us or tell us on LinkedIn of some media that you think is worth sharing.)

Let Them Come…Consultancies Welcome!

It is hard to ignore the steady drumbeat of warnings that management consultants are coming to challenge agencies. Management consulting firms are often seen as the enemies of agencies – new market entrants that need to be stopped.  Many of them have already won, as Forbes illuminated in a recent article. “According to Ad Age, all the top 3, and 8 of the top-10 ad agencies are not those legacy names that might visit your home nightly with their TV commercials. Instead, they are consultancies like Deloitte, Accenture, KPMG and PwC.” Agencies seems to be responding in-kind, building up their consulting expertise.

This trend is driven by many factors, with two of the key drivers being:

  • Brands are increasingly spending more on MadTech, and technology has always been a core capability of management consultants;
  • Digital transformation is now often driven by customer engagement points (MadTech), and agencies have a long history of driving and managing customer engagement points for brands.  

The old three-martini lunch may have passed, but the agencies’ “trust me” attitude often remained, at least until recently. The ANA’s report on agency transparency, the P&G bombshell at the IAB Leadership conference, and recent cries from some YouTube advertisers speaks to the increasing volume of calls for change. The press points fingers at ‘AdTech’ companies, the programmatic nature of buying, fake news, fraud…

I think it’s something different.

Given all the background noise about transparency, agencies, AdTech companies and others have a vested interest in the ‘media’ pricing model, which hides all the dirty little secrets: fees and recharges with agency trading companies, the hidden costs of SSP’s and Exchanges, and the ‘price included’ fees of data targeting. These (and many other) MadTech fees are structured to be imbedded in the holy ‘media-based’ model.

This model is seriously broken. With many claiming the ‘AdTech tax’ is at least 45%—and some declaring it to be as high as 75%—everything is suspect. Brands are spending more on MadTech than ever before. They know they’re getting screwed, they’re just not sure how.

In march the consultants, with their decades of expertise in supply chain management, and a depth of expertise in getting technologies to work together, that few agencies can challenge.

Large consulting firms have spent decades, if not generations, tearing down supply chains to remove waste and friction, reassembling them for higher efficiency. The typical MadTech supply chain to deliver an impression is primed for the consulting axe:

  1. Data and Targeting
  2. Ad Serving
  3. SSP/Exchange fee
  4. Dynamic Creative
  5. Fraud/Verification/Viewability

    …Et cetera.

Each of these technologies, many of which are invaluable, are bundled by agencies into the ‘price of the media’ and distributed behind closed doors. Management consultants know how to play in this game. They are going to continue to gain market share, particularly against major agency holding companies, until the pricing model changes. And, by the way, it’s not that consulting firms come at a bargain, but they don’t hold the same vested interests that agencies do. They expose problems, are more transparent about their own pricing, and are ruthless in attacking the supply chain.

Management consultants will drive transparency in agency pricing models. However, while they are experts in supply chain management, they are not as good at recognizing how MadTech innovation can improve a brand’s performance, and are likely to pick only the largest tech suppliers as they strive for supply chain efficiency.

Let management consultants drive agencies toward embracing transparency. But technology companies, take note: To maintain an innovation-driven ecosystem, rather than to see a culling of the herd with only the largest companies surviving, will require new pricing models. The onus is on MadTech to create them, and to lead the way.

 

660 Minutes

GET YOUR PIECE OF THE CMO’S LIMITED ATTENTION WITH RELEVANT RESEARCH. 

We recently published a study, Research + Content = MadTech Sales. The takeaway:  “Research based content trumps all other forms of marketing.”

We’re not saying the industry isn’t already generating thought provoking, innovative, fresh and informative research. But competition amongst industry experts in the attention economy is growing fierce. Every marketer of MadTech has to… well, bring their A-game. So what does an A-game look like?  

First, audience: Marketers have to strategize and focus on who the research needs to reach and impress. According to new research from Gartner, “Marketing tech budgets are on track to exceed the amount of money CIOs spend on technology in the coming year.” So, let’s connect the dots… the most sought after potential customer for MadTech vendors is the CMO — one of the hardest people to connect with, and even harder to keep their interest.

Second, budget: MadTech vendors have to cease misallocating budgets by accurately accounting for how much money marketing companies are generating towards technology. From the research Gartner depicted, Forbes broke down the numbers: “The average marketing expense budget is now equivalent to 12% of company revenue, and 27% of that is allocated to marketing tech… This 27% is 5 percentage points higher than what CMOs allocate to paid media… Further this 27% means that 3.2% of a company’s revenue is now set aside for marketing technology.” These numbers shine a true light on the importance of tech and who is going to control the budget in coming years.

We hear you saying, “Challenge accepted.” But before you go charging into the CMOs office…

According to Digiday, “the average person spends more than 11 hours each week reading emails, and competition is fierce for every one of those 660 minutes.” This. Is. Just. The. Average. Person. An OMD executive was painfully honest with us, stating, “I actually don’t answer my phone.” Gulp.

What does a vendor have to do in order to stand out and hold a CMOs attention?

With a strategic email marketing plan, research-driven content and the realization of where efforts have to be focused in the coming year — MadTech vendors will be able to offer something more to CMOs. Recalling again our recently published study, “Research-based content trumps all other forms of marketing and can make other communication initiatives more effective.” In order for this research to be effective, it needs to be contextually relevant. According to our Index Insights, 93% of surveyed panelists say that relevant research will positively impact a company as a potential partner. But then only 14% said they’ve received thought-leadership content that was relevant.

Marketers of MadTech, you have your work cut out for you. But if you have information the CMO needs, she might have something you want: Her attention.