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Frictionless Business, There’s the Rub

by ~ June 14th, 2013

This article was written by Chris Copeland, Chief Executive Officer of GroupM Next, and originally published on ClickZ June 7, 2013. Follow Chris on Twitter: @C2Next

It was Shakespeare’s Hamlet who once opined that the barrier to his own suicide was tied to death delivering him into sleep where his own dreams might be his salvation; thus, creating “the rub” whereby his easy out became a difficult destination.

In the media business, many an idea or opportunity has died the death of barriers and limits. Great creative, the most strategic of media plans, and even brilliant products themselves have all met their maker because the resistance (or friction) was simply too much to endure.

In this business and also in life, in general, friction is the enemy. It slows us down as marketers and consumers. It gives us a reason to stop forward progress and/or look for an alternate path. In a marketing sense, the friction we must avoid comes in many forms, including the three described below.

Consumer Friction

Show me a man with time on his hands and I’ll show you a man who just hit the Powerball lottery. Short of that it seems no one, regardless of walk of life, ever has enough time. Consumers in the current age of digital want value and access, but above all else they want solutions that give them what they lack most – time. For brands to truly become trusted solutions and resources, the equation has changed. Low, low prices will only go so far. Now, brands have to think about their marketing as utility delivering value to consumers. Social media as customer service extension/replacement and apps/in-store technological support as information support are good starts. With the rise of “content newsrooms,” brands are suddenly finding themselves in a position where what they choose to say must be rooted in the value it can provide to their current and would-be customers. To do this, the mindset shift requires that brands think in terms of providing solutions to problems, removing the friction of education, and purchasing to create new evangelists who see the brand as solution provider rather than just a product producer.

Procedural Friction

There are more than 47,000 miles of interstate highways in the U.S. The construction of this paved network has been called the largest public works project known to man since the pyramids were constructed, and it was done for the low, low price of $425 billion. For anyone who will take to one of these roads for vacation this summer, you will gain the firsthand understanding that the network is always under repair. But “Construction Ahead” signs are not just reserved for the highway. In fact, there are probably more of them inside agencies and media companies than one could count. The fact is, as devices evolve and emerge, consumer usage changes and new platforms are created to target these shifts. As such, an entirely new infrastructure is required. Tech stack strategies (buy, build, partner) have become a key consideration that will only grow in importance. Ultimately, the reduction in manpower spent collecting and processing data to inform more intelligent buying and give order to the chaos will create a network that more closely resembles the yellow brick road than the broken cobblestones it does at present.

Organizational Friction

Ask 10 marketers the biggest challenge to their business and, while you are likely to get 10 answers, in each of the responses will be some form of a desire to become more agile as a brand. The next big idea is tantalizingly close for many, and what is stopping them is not the idea itself, but the execution. Organizations built sturdy internal groups, derided now as silos, to execute specific tasks such as marketing, IT, and finance, and while they work well in isolation, they have been measured and recognized for that very behavior over the collective impact. Now, both brands and agencies are shifting the thinking to structures that utilize words like holistic and integrated. The thinking being that with alignment comes cohesion and productivity. The approach also removes friction of conflicting agendas and reporting lines into a singularly-focused organization. Apple, for example, has one P&L for the entire organization.

Friction is force resisting the relative motion of solid surfaces, fluid layers, and material elements sliding against each other. It is not, even by definition, a negative. But, in the business context, when opposing sides weight against each other with great effort it can be a barrier. And therein lies the rub. Friction can be incredibly productive to create energy and advance causes, and yet it is often the limitation of progress. Identifying the right places for friction and removing it elsewhere is the difference between sparking a fire and slowing all progress to a halt.

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The Coming Audio Revolution

by ~ June 12th, 2013

Last night was a rare night in the Sherfy household:  my kids and wife were out of the house, giving me sole possession of the remote control – heaven!  Able to channel surf to my heart’s content, over the span of one hour I came across five different car commercials from five different manufacturers, all touting a digital music service as part of their standard package.

Imagine that – all of the major auto manufacturers including the same element in their commercials that has nothing to do with performance and everything to do with the shift in music access.

This shouldn’t be surprising, as eMarketer recently reported a 200% increase in the amount of hours Pandora listeners access through mobile/auto/CE devices, and Pandora is now available in more than 85 car models.  Or perhaps all of the auto manufacturers have stumbled upon a simple fact: adding digital music moves the cars from the dealer lot to the driveway.

In research we’ve just published by our Consumer Insights team, we found that the inclusion of in-dash digital audio increased consumers’ auto purchase intent by 14%.  There are very few, if any, non-performance features that have similar sway over a potential buyer’s checkbook.  This works so well, in fact, that eMarketer estimates shipments of connected-car systems to increase from 8.2MM in 2012 to 39.5MM by 2016.

Our research also revealed that the internet radio audience, especially those that spend at least 1/5 of their radio listening time with internet services, are a desirable audience by any brands’ standards.  The audience is younger, with an income and education level that equals their older counterparts.  Beyond that, these avid internet radio listeners are less likely to avoid advertisements, twice as likely to make a purchase after exposure to a radio ad and the vast majority of them (over 86%) opted for the ad-based, free versions of the internet radio platforms.

The very definition of low-hanging fruit.

And the expanse is not stopping at cars.  CES 2013 revealed that connected electronics will be the next major platform for digital audio penetration as several manufacturers revealed app-enabled refrigerators, washers/dryers, dishwashers and more.  As a brand marketer, imagine for a moment, being able to target a consumer in their car, their living room, their kitchen and their laundry room with a tailored message cocooned around their favorite music.

Now open your eyes and stop imagining it – because that moment has now arrived.

The Internet Radio Marketplace: Who Listens,Where,and Why

You Should Care-GroupM Next-Research by GroupM_Next

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Is Radio Apple’s Seventh Billion-Dollar Business Unit?

by ~ June 11th, 2013

This article was written by Jesse Wolfersberger , Director, Consumer Insights, at GroupM Next, and published on MediaBizBloggers June 11, 2013.

Apple’s iTunes Radio service could have an audience of more than 70 million people ready to listen based on its brand name alone. In fact, a recent survey of 1,000 Internet radio listeners reveals one-third would switch to Apple’s radio from their current favorite service. If these early insights are a glimpse of reality, Apple’s entry into this market could completely shift the landscape and cut deeply into the audiences of Pandora, Spotify and the rest of the Internet radio market.

After months of speculation that an Apple radio service was on its way (including a report from CNET that hard evidence was discovered in the code of iOS 6.1 on a jailbroken iPad), the company announced a streaming radio service yesterday at its WWDC 2013. Set to launch this fall, iTunes Radio is a free Internet radio service delivering features familiar to iTunes users and a sophisticated personalization of song lists and stations based on user preferences and listening behavior.

Recently, GroupM Next conducted a broader study and analysis on Internet radio usage, and from it, compelling consumer data about Apple emerged, signaling the company would immediately gain an incredibly strong radio audience – if launched.

Knowing nothing about the service other than it would be made by Apple, 49% of respondents said they would be interested in the service, and 34% said they would switch from their current favorite service. What’s fascinating is the staggering power of Apple’s brand reputation. Consumers express faith in a product experience that steps outside of Apple’s mainstream product offering, based on brand name alone. And for that, Apple has the competition to thank – Pandora, iHeartRadio, Spotify and others – for delivering a marketplace and services that have gained adoption the world over. The challenge now, which Apple would undoubtedly match, would be developing an experience for expectant consumers who, based on the study, are confident the execution of “iRadio” would be of the same level of style and quality of Apple’s devices and operating systems.

The results are even more encouraging for Apple among heavy Internet radio users. For consumers who spend at least 20% of their radio listening time digitally, 70% said they would be interested in Apple radio, and 49% said they would switch from their current favorite product.

These results might seem too large to be an accurate estimation, however, consider that Apple’s iTunes Radio would likely have exclusive features to separate itself from the current leaders in digital radio, and that Apple will likely launch the product with a large Apple-style marketing campaign. The initial adoption, particularly on iOS devices, could be enormous.

Is digital radio Apple’s next billion-dollar business? Not yet, but time will tell.

According to eMarketer, digital radio in the U.S. will have 147.3 million monthly listeners in 2013, and advertisers will spend about $970 million in this market. If Apple were to capture about half of the market share with the release of its Internet radio service, it would translate to more than 70 million monthly listeners and roughly $500 million in potential ad revenue in the U.S. alone – assuming the service is ad supported. This also opens a new revenue stream into iTunes which, as expected, Apple has closely integrated with its radio service – listeners can access a free, ad-supported service or subscribe to an ad-free service, iTunes Match, for an annual fee of $24.99. Digital radio is probably not Apple’s seventh billion-dollar industry right now, but it could be within the next five years.

Apple’s radio product is potentially disastrous for other Internet radio services. In the study, respondents were asked to identify which services they currently listen to. Of those who said they currently use Pandora, 46% said they would switch to Apple’s product. Of those who use Spotify, 47% would switch. The story is even bleaker for less popular digital radio products. For example, 66% of AOL Radio users said they would switch to Apple.

When Apple decides to flip the switch iTunes Radio later this year, it will be an absolute game-changer in the digital audio market, and likely another big win for Apple.

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Sales Tax Reform: Offline Retailers Should Be Careful What They Wish for

by ~ June 4th, 2013

This article was written by Steve Sherfy, Manager, Insights, at GroupM Next, and published on ClickZ June 4, 2013.

Consumers have become accustomed to “tax-free” online shopping, but the game is about to change. There is a sales tax reform bill on the floor of Congress, and whether it passes or not, increased taxes for online-only retailers are inevitable – there is too much tax revenue being missed by states under the current self-reporting system.

To investigate the potential effect of an online sales tax bill, my company surveyed 500 online shoppers. The respondents were instructed to think about their last online purchase, then asked what they would have done if state and local sales tax were charged at the time of purchase. Most consumers (63 percent) said they would have still made the purchase online, 18 percent said they would have made the purchase offline instead, and 19 percent said they would not have made the purchase at all.

This is good news for brick-and-mortar retailers in the short term, as one in five online purchasers will purchase in-store if sales tax is applied – but the story does not end there. The tax reform is the first domino leading to major changes in the retail landscape in the near future.

Naturally, the bill has wide support among major brick-and-mortar retailers, such as Walmart, Best Buy, and Target, which have long been fighting against the lower prices of the “tax-free” online-only retailers. What may be surprising is that Amazon also supports the bill. Why would the biggest online-only retailer back legislation that could curtail online buying by as much as one-third? Amazon is already a step ahead.

Without having to worry about state lines due to taxes, Amazon is able to expand its operations into all 50 states, opening up a myriad of possibilities to better serve its customers. If lack of sales tax has been an advantage of online retailers, convenience and immediacy have been the biggest advantages of brick-and-mortar stores. Amazon’s recent moves and investments have driven the company closer to reaching the immediate gratification parity that customers get with physical stores. With added infrastructure across the country, Amazon will be the champion of immediacy.

The same way the standard of free shipping was once a fringe benefit, next-day and same-day delivery, as well as pick-up, will be the new normal in the near future. Amazon has already been testing same-day delivery in 10 major markets and has over 10 million people subscribing to Amazon Prime for two-day delivery.

EBay, although opposed to the tax reform, is also positioned to expand its services once state lines are no longer barriers. EBay has recently launched the eBay Now app geared toward instant delivery in New York, San Francisco, and San Jose. Through partnerships with over a dozen major retailers including Best Buy, Target, and Macy’s, an eBay “valet” will find what you need at a nearby store and deliver it to you for a small delivery charge. EBay plans to expand service to Chicago or Dallas next and, if all goes well with the pilot, across U.S. cities this summer.

Moves like those taken by Amazon and eBay deliver a greater threat to brick-and-mortar stores than lopsided taxation. Once online-only retailers build out and perfect these same-day services, the brick-and-mortar stores will have to innovate to stay relevant. The next five years could see a retailer arms race, where the stores giving customers the most convenience win.

Once same-day shipping becomes the norm, one of the only advantages physical stores will have left is the in-store shopping experience. Customers still like to shop, and touching and feeling a product will always be a draw for brick-and-mortar stores. Retailers will have to capitalize on this advantage and put more effort and innovation into the in-store experience.

The Internet sales tax legislation is inevitable, and whenever it passes, about one-third of online shoppers will change their purchase behavior. However, the real implication for brands is the long-term effect of the online-only retailers expanding their operations and competing with the old guard on their own turf.

For brick-and-mortar retailers relying on an Internet sales tax to level the playing field, they may find that consumers have taken the game to a whole new stadium. When the competition for consumer dollars moves beyond price, convenience and experience will reign supreme.

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Attention Marketers: Six Distinct Consumer Journeys Identified

by ~ May 29th, 2013

The purchase pathway, once as simple as moving from awareness to consideration to purchase, has evolved within the emerging digital space.  The expansion of the online world has provided today’s consumers with digital tools and technology as points of research before purchasing a product.

A comprehensive research initiative we’ve recently completed uncovers six distinct segments of consumers using these tools to inform their purchase decisions. Our white paper, “The Digital Consumer Journey,” outlines our analysis of the digital purchase pathways of more than 168,000 consumer electronics purchases, both online and off, to see where consumers go online to inform their purchase decisions – and why. The infographic to the right details each segment’s pathway, the tools they use along the way and the number of steps each takes to get to the point of purchase.

Additionally, the study found that the difference in purchase pathways has more to do with behavioral factors as opposed to demographics, as outlined in the segment facts.

As you can see, no individual segment dominates the market – the largest segment size of digitally engaged shoppers is 29% – however, our segment forecast predicts that some will grow in the future.

One of the most intriguing insights emerging out of this research is the increasing influence of Amazon in purchase pathways. Our findings show that, in pathways leading to a digital purchase, when a consumer goes to a retailer site, one out of every three goes to Amazon.

Click here to download the infographic.

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Optimizing for the Future: Connecting Consumers with Brand Content

by ~ May 23rd, 2013

There’s been a lot of talk about Google Glass as of late; simply visit any major news outlet’s website to view some sort of related headline. Big-picture thinkers know that Glass is part of a larger trend, one that signifies a major shift in digital advertising – a trend of increased connectivity between brand and consumer.

Tarina Roberts on our Insights team penned a piece that’s a fresh reminder of what’s ahead for connected devices and getting brands and marketers thinking about optimizing for the future. In it, she details the multitude of ways that brands can take advantage of emerging technologies to “give consumers the right offers on the right products at the right time,” whether that right time happens in the car, the kitchen or in a retail store. To target consumers efficiently, these new technologies do everything from monitor background noise to track in-store behaviors.

Brands like LG, Volkswagen, Nike and yes, Google, are already preparing for a future in which they have constant contact with consumers. Read our POV below to see how your brand can follow suit.

Optimizing for the Future – GroupM Next POV by GroupM_Next

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Defining the Words That Define Us

by ~ May 20th, 2013

This article was written by Chris Copeland, Chief Executive Officer of GroupM Next, and originally published on ClickZ May 13, 2013. Follow Chris on Twitter: @C2Next 

I’ve had the good fortune to write thousands and thousands of words for ClickZ and other publications about digital advertising. I’ve been doing it so long that I’ve seen the entire space move from media fad to force. Now I am fortunate enough to have the opportunity to write a monthly strategy column for ClickZ. In agreeing to do this I had a very specific objective in mind. My goal for this column is to discuss and debate the meanings behind some of the words used to define the space we inhabit in advertising.

So, here’s how this will work. Every month I’ll give you my take on defining a single word that has significant impact. If you have read some of my previous work, you already know I rely heavily on pop culture and sports references to make my point and this will be no different.

We occupy a fascinating space where “pictures are worth a thousand words” (or a billion dollars if you are Instagram) and “actions speak louder than words,” yet words are our tool of the trade more often than not. Words inspire and motivate, they can harm and hurt, and they can take on different meanings depending on context. Take the word, “word,” for example.

Merriam-Webster lists no less than eight different uses where the application in sequence changes the meaning of “word” from its root meaning to information or confrontational and other things in between. Brands have built iconic status on words. In some cases taking ordinary words and transforming them into something extraordinary.

“Just Do It.”

“Breakfast of Champions.”

“M’m! M’m! Good!”

I’d guess almost everyone recognizes those slogans from Nike, Wheaties, and Campbell’s. Consider for a second the power of words. Campbell’s defined its brand by building an association off an emotional and positive visceral reaction to interaction with its brand. In fact, the company uses sounds married to a single word, “good,” to define itself.

So, while we all get seduced by 30-second commercials, rely heavily on display ads, and now embrace native advertising as well as social, let us not forget that our ability to select the right words at the right time will have as much impact as anything else we do. This is true not only in the work put into market but the interactions with employees and everyone else. In an increasingly limited bandwidth world where social media and mobile communication encourages fewer and fewer characters, our judicious use of words becomes all the more critical.

As Socrates once said, “The beginning of wisdom is the definition of terms.”

Or put into the modern day poet Christopher Wallace’s words, “Biggie, Biggie, Biggie, can’t you see. Sometimes your words just hypnotize me.”

My hope is this becomes interactive. What words do you think we should discuss and define? Post your comments on the ClickZ site or send a tweet to @C2Next.

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These Are the Biggest Hurdles Facing Social TV – 2013 Could be the Breakthrough Year

by ~ May 14th, 2013

This article was written by Chris Copeland, Chief Executive Officer of GroupM Next, and originally published on AdWeek May 13, 2013. Follow Chris on Twitter: @C2Next  

TV has a new love—that little blue Twitter bird. And like any new infatuation, the promise of what’s to come is almost too good to be true.

Most recently, the Grammys became #Grammys. Host LL Cool J (@llcoolj), when not busy doing bicep curls off stage, spent most of the evening hyping the “Hashtaggrammys.” At one point, Beverly Jackson (@bevjack), senior director of marketing/social media for the Grammys, tweeted that they were averaging more than 200,000 tweets per minute. The only thing CBS didn’t do in promoting its Twitter social connection was put a hashtag on Carrie Underwood’s dress. She’s @carrieunderwood, by the way.

On the heels of Nielsen and Twitter announcing a Twitter TV rating system and the social giant’s acquisition of TV social monitor Bluefin Labs, it is clear that 2013 will be the year social TV makes its first full-on run at becoming mainstream.

Exactly what that thing will be is still unclear. For social TV to be meaningful to advertisers and TV viewers alike, a few pieces of the puzzle have to be put into place. For one, we need to find a way to make tweeting work for live episodic TV as well as it does for event TV.

Massive watercooler moments like the Super Bowl, the Oscars or even the presidential elections are ideal for social TV. Recent Trendrr Social TV data found that eight of the 10 most popular cable shows were reality/sports content. For the Grammys, the E! Network’s pre-event red carpet show drew as many social TV mentions as The Simpsons, the longest running scripted show on network TV. Scale is a must for marketers, but it’s not there yet for social TV during the average drama or sitcom (with the exception maybe of The Walking Dead; the AMC show’s season premiere did 10 times the social media traffic of The Simpsons on Fox).

We also need to find a way to get hashtag TV out of its own echo chamber and apply some filtering to Twitter. During the Grammys telecast, LL Cool J joked about being backstage trying to keep up with all the tweets being posted. Since the volume of tweets (at 200,000 per minute) would be the equivalent of a full-length novel every hour, I’m guessing no one read every single comment made about the show. This challenge is not only for celebrity award show hosts but also all Twitter users.

This is a big, long-term problem for the social site. If you can’t keep up with the chatter, you have a skewed noise-to-sound ratio. Your network may or may not be made of valuable communicators on a given topic, but without real-time curation by Twitter or another source, you are left with a less than stellar experience. Twitter is reportedly working on this, but it remains to be seen how Twitter’s determination of relevancy impacts individual users. For the time being, it’s too easy to miss entire conversations or be exposed to tweets that fail to paint a complete picture.

The other big hurdle facing social TV is the “where does it happen” factor. The single biggest variable in determining just how real social TV will be in 2013 is the technology experience. GetGlue, Viggle and IntoNow, among others, want to be the de facto destinations for TV viewers who are using a second screen to enhance the first.

At the same time, Twitter is searching for ways to keep people on its own platform to own its combined experience. Other players, from TV manufacturers to console systems, will want in on this as well. The ad dollars flow through this end of the pipe, so there will be a battle to see who can put metrics and scale against the destination. Today, everyone is willing to go to multiple sources and buy inventory, and Twitter continues to increase price based on its clubhouse lead at the moment.

Not every TV show is appointment viewing, and it’s safe to assume that not every show will be hashtag TV. But, as deal flow and content production better align with the social opportunity, social TV is going to explode. Whether that happens in 2013 or beyond is difficult to forecast.

The resolutions to make social work for live TV, balancing noise and sound on Twitter, and owning the platform from which social TV originates will determine if this becomes “The Year of…” or if it simply lacks the clarity to make a breakthrough.

Filed under: Digital Advertising, Social Media | No Comments >>

Fitbit Flex versus Nike Fuelband

by ~ May 6th, 2013

Today, San Francisco-based company Fitbit began shipping its Flex bands, a product our team got a firsthand look at during CES 2013. Check out our initial thoughts in the video below, as GroupM Next Director of Technology Mike Dowd compares the Fitbit Flex to Nike’s FuelBand.

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In the Social Search Jungle with Google and Facebook

by ~ April 30th, 2013

This article was written by Chris Copeland, Chief Executive Officer of GroupM Next, and published on MediaPost  April 30, 2013. Follow Chris on Twitter: @C2Next

“I wanna be like you, I wanna talk like you” – King Louie, “The Jungle Book” (Disney version, of course)

Social search. It’s become the buzziest of buzz words in the search space over the past 12-18 months. Google+, Facebook’s Graph Search, and a host of other companies and signals of consumer data utilized for rankings have made this the hottest topic for discussion of where search is going.

That said, social search is still a bit of a mystery — not for what it seemingly is in the minds of the search industry, but for what consumers want from it and whether those perceived benefits will ever be realized. Facebook obviously believes that associating you with friends that have common engagements is of great benefit. Google seemingly agrees through the advent of Google+, but is refining that approach to suit a very Google-like approach that suggests it is less about friends and more about select experts in given topics as defined by usage of circles.

But what about consumers? We surveyed 1,000 US Internet users and asked which they would prefer: Google to have more Facebook-like characteristics or Facebook to be more like Google? The answer? 72% of survey participants want Facebook to be more Google-like.

In trying to assess why this is the mood of the people, three observations jump out:

The importance & quality of search. Search as refined and now defined by Google has an explicit promise to consumers. Search gives you a myriad of choices that help you take action against your expressed intent. These choices may not be the sole influencer in the conversion of an action, yet they have a meaningful role, often (though not exclusively) late in the process. You know that’s what you are getting on Google. On Facebook, even with Graph Search, the ability to deliver on this promise is far from guaranteed. The quality of the network is the single greatest influencer; and for many, the personal network cannot sustain the model.

Connections are central to consumers. My single biggest takeaway is that consumers want more value and utility from Facebook. A Facebook that better marries my network and algorithmic content is a lucrative endeavor for all. But it’s not there and consumers know it. It also speaks to the challenge underlying Google+. Regardless of the hundreds of millions Google touts on the network, its primary value is to provide a social layer of data back to the mother ship search engine. The implied contract users signed with Google, not to be confused with the single login agreement pushed down, reads that Google will serve you organized information in an easily accessible fashion. To rewrite that contract to nclude being your social network is well beyond how most would ever see Google, and continues to challenge Google+ to be more than what it seems to be today.

Solution or Signal? Is social search the answer? I guess it depends on the question being asked. It would seem from the responses given that people would actually prefer “search social,” where the better parts of search make their way into social, providing a deeper layer of validation. I’ve said it before but it bears repeating, the reason you associate on Facebook often has little to do with personal passions, at least at scale. High school, college, professional and familial connections are the top reasons for friending someone. How that helps you when you want to buy a car or talk sports is limited. That’s not true in an emerging class of vertical social networks, and it is definitely not true on search engines. For now, social search is more signal to me than solution. As for a better Facebook via search, Bing has an enormous opportunity here, but Facebook has to look deep inside and determine if they want to be more like Google to be the Facebook people want them to be.

Because, as Louie said, “You’ll see, it’s true. Someone like me can learn to be someone like you.”

Filed under: Paid Search, Social Media | No Comments >>