The Full Monty: This Time, It's Personal – May 7, 2018
Brands need to think about customers over channels; how human and machine relationships will affect designers and ethics alike; the leading digital personal assistant; the generations adopting technology; the battle for e-tail in India; all the F8 announcements; cord-cutting and paywalls mean subscription hell; Spotify and Pandora earnings; change your password on this platform; new analytics features from Facebook; what Teddy Roosevelt knew about creating; plus the podcast of the week and more in the This Time, It's Personal edition of The Full Monty from Brain+Trust Partners for the week of May 7, 2018.
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Last week's commentary began with a focus on Big Tech – how Facebook and Google hold a duopoly in digital advertising – and ended with a call for brands to own their data. Given that the piece mostly focused on the former, we'd like to explore the latter a bit more.The IAB report The Rise of the 21st Century Brand Economy contains a few nuggets worth considering. Namely:
- As the retail apocalypse continues, there are permanent changes in industry supply chains that are shifting the center of growth in the U.S. consumer economy from brick-and-mortar locations to digital outlets.
- Economic benefits are accruing to firms that create value by tapping into low-barrier-to-entry, capital-flexible, leased or rented supply chains. These include thousands of small firms in all major consumer-facing categories that sell their own branded goods entirely or primarily through their owned-and-operated digital channels.
- The single-point retail fulfillment experience has permanently changed to a variable experience, which in turn transforms all value-creation and extraction activities before, during, and after the sale.
- All retail sales growth is shifting from brick-and-mortar stores to digital, data-enriched channels.
- First-party data relationships are important not for their marketing value independent of other functions, but because they fuel all significant functions of the enterprise, including product development, customer value analysis, and pricing.
- An arms race for first-party data is influencing strategy, investment, and marketing strategies among major incumbent brands across all categories.
That's quite a bit to digest. Let's dwell on it for a bit.
On one end of the spectrum, we've got Amazon and Walmart fighting for supremacy as the One Distributor to Rule Them all. And as we've previously seen, all it takes is a head fake by Amazon and an entire industry's market is in upheaval.
But on the other end, we've got hundreds or thousands of brands that are competing in the DTC market, effectively cutting out distributors and retailers and handling the relationships themselves. Brands have been conditioned to serve the channel, not the customer, so it's not surprising that they're woefully underprepared to compete with the likes of Warby Parker, Quip, Casper, Allbirds, Dollar Shave Club, and more.
All of those companies have made it frictionless for customers to use their products, with deliveries and returns being handled directly by the brand. Some have even gone as far as to build in a subscription model to make it even easier to acquire the products. It's really not that different from what we're seeing in the media world, with cord-cutters getting what they want from a variety of networks and subscription services that have made an end-run around the traditional cable and satellite companies.
All of the above means that traditional an upstart brands need to be serious about personalized experiences. Knowing your customer and giving them what they need (even if they don't know they want it) is the new expectation. And rather than having 10 audience personas to develop and market to, there will be thousands or more, each different from the next.
But here's a fear amid heading down this path: personalization may eventually lead to a decline in shared consciousness. Think about it: with a nearly infinite number of choices, it means that we'll have less in common with each other than when there were limited choices. Johnny Carson was universally known and seen by tens of millions of viewers because that was the show to watch at 11:30 pm (back when there were few channels); now every late-night show host gets a couple of million. Saturday morning cartoons were a thing of our childhood; now our kids are watching the thousands of YouTube channels and influencers available to them.
In 1987, E.D. Hirsch wrote Cultural Literacy: What Every American Needs to Know in which he wrote:
And here we stand, on the edge of a society that is placing more emphasis on catering to the individual. That's the kind of cultural literacy that brands could do with right about now.
Industry developments and trends, including advertising & marketing, journalism, customer experience, content, and influencer relations.
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On one end of the spectrum, we've got Amazon and Walmart fighting for supremacy as the One Distributor to Rule Them all. And as we've previously seen, all it takes is a head fake by Amazon and an entire industry's market is in upheaval.
But on the other end, we've got hundreds or thousands of brands that are competing in the DTC market, effectively cutting out distributors and retailers and handling the relationships themselves. Brands have been conditioned to serve the channel, not the customer, so it's not surprising that they're woefully underprepared to compete with the likes of Warby Parker, Quip, Casper, Allbirds, Dollar Shave Club, and more.
All of those companies have made it frictionless for customers to use their products, with deliveries and returns being handled directly by the brand. Some have even gone as far as to build in a subscription model to make it even easier to acquire the products. It's really not that different from what we're seeing in the media world, with cord-cutters getting what they want from a variety of networks and subscription services that have made an end-run around the traditional cable and satellite companies.
All of the above means that traditional an upstart brands need to be serious about personalized experiences. Knowing your customer and giving them what they need (even if they don't know they want it) is the new expectation. And rather than having 10 audience personas to develop and market to, there will be thousands or more, each different from the next.
But here's a fear amid heading down this path: personalization may eventually lead to a decline in shared consciousness. Think about it: with a nearly infinite number of choices, it means that we'll have less in common with each other than when there were limited choices. Johnny Carson was universally known and seen by tens of millions of viewers because that was the show to watch at 11:30 pm (back when there were few channels); now every late-night show host gets a couple of million. Saturday morning cartoons were a thing of our childhood; now our kids are watching the thousands of YouTube channels and influencers available to them.
In 1987, E.D. Hirsch wrote Cultural Literacy: What Every American Needs to Know in which he wrote:
"[C]ultural literacy—the grasp of background information that writers and speakers assume their readers and listeners already have—is the hidden key to effective education in America."
And here we stand, on the edge of a society that is placing more emphasis on catering to the individual. That's the kind of cultural literacy that brands could do with right about now.
Artificial Intelligence / Autonomous
The latest in AI, machine learning, bots, and blockchain, mobility, and autonomous everything.Aʀᴛɪꜰɪᴄɪᴀʟ Iɴᴛᴇʟʟɪɢᴇɴᴄᴇ / Mᴀᴄʜɪɴᴇ Lᴇᴀʀɴɪɴɢ
- A three part series looks at the mindset, methods and skills designers will need as we move into the era of creating human and machine relationships.
- From the New Yorker: "The Rise of the Ethical Machines" – does Westworld make the case for robot ethics?
- New AI is fascinating, but it's mostly being put to use to solve old problems. When we will humans learn to fix the basics before moving on to the next shiny object?
- In a test that pitted the digital personal assistants against each other, who wins: Alexa, Google Home, Google Assistant, Cortana, or Siri?
- Related: while Amazon Echo dominates the voice-enabled speaker market, its user share is slowly shrinking, as those of Google Home and smaller rivals begin to grow.
- And... devices supporting Google Assistant have more than tripled in the last four months.
Communications / Marketing / Business Strategy
Sᴛʀᴀᴛᴇɢʏ / Mᴀʀᴋᴇᴛɪɴɢ / Cᴏɴᴛᴇɴᴛ
- If you run a small business, then you may find value in this one-person marketing plan for startups.
- Pew Research found that while Millennials have often led older Americans in their adoption and use of technology, there has been significant growth in tech adoption in recent years among older generations – particularly Gen Xers and Baby Boomers.
- If you're having trouble marketing to a generation, no problem. Just invent a new generation. That's what Miller Coors did with the 21 to 24 year-old cohort. They should name it bleen.
- GDPR and the Marketer's Dilemma: Seth Godin takes a look at two ways to interpret the new regulations.
Jᴏᴜʀɴᴀʟɪsᴍ / Cᴏᴍᴍᴜɴɪᴄᴀᴛɪᴏɴs / Rᴇᴘᴜᴛᴀᴛɪᴏɴ
- Apple is paying some Apple News publishers for early exclusive access to their video content. Apple clearly wants to win the video battle happening across platforms.
- As any journalist can tell you, the best answer to the question “what happened?” is not: ask a bunch of your friends what they think, organize their views along a spectrum, and then decide where to plant yourself. But that's precisely what Mark Zuckerberg wants to do.
Retail Apocalypse
Humans are a transactional species, and the practice — if not the very notion of what retail is — is undergoing a historical metamorphosis.- Walmart appears to have beaten out Amazon for a majority stake in Indian e-commerce giant Flipkart in a $15 billion deal that reportedly includes a $3 billion co-investment from Alphabet. This is a blow to Amazon, which has been investing heavily in India.
- Many Indian trade unions and seller associations are concerned that the proposed deal between Walmart and Flipkart could be a violation of foreign direct investment norms and have approached the Competition Commission of India to block the deal on anti-trust grounds.
- Macy's has purchased Story, the commerce-and-experience store that changes its design, products and marketing message every four to eight weeks. This is as much about talent as it is creating experiences that bring feet to the store.
- Birchbox sold a majority ownership stake to one of its investors at a hedge fund after a deal with QVC fell through.
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Platforms
News to know about relevant social, virtual, and augmented reality platforms that may affect your business.Fᴀᴄᴇʙᴏᴏᴋ / Iɴsᴛᴀɢʀᴀᴍ / WʜᴀᴛsAᴘᴘ
- Facebook held its F8 developers conference last week. Here are all of the announcements from F8. Some highlights:
- You'll be able to clear your Facebook browsing history. They keep track of that?
- Messenger has more than 300,000 bots. Don't worry - these are the good kind that assist customer conversations.
- Augmented reality effects for Messenger and Instagram, the launch of Oculus Go, the ability to find blood donation areas
- A dating feature to compete with Tinder.
- Facebook is extending its push into the corporate technology market, adding business software integrations to Workplace, its enterprise collaboration tool. Integrations include SurveyMonkey, SharePoint, and Adobe.
- Spotted in New Zealand and Australia: downvote buttons on Facebook.
- Instagram is preparing to let you add music to your Stories.
- Also in Instagram: a native payment feature that will allow users to send money to each other. An expected development, as WhatsApp and Messenger both feature this. Facebook is protecting itself, ensuring that if users leave any one of its platforms, they'll still have essential functionality in its others.
- At the same time, Facebook is simplifying Messenger.
- British Parliament has requested that Mark Zuckerberg testify before its Digital, Culture, Media and Sport Committee before May 24. If he fails to comply, they'll issue a summons for him.
Tᴡɪᴛᴛᴇʀ
- During the NewFronts, Twitter announced 30 new or renewed video deals, including with ESPN, NBCUniversal, Viacom, Vice Media, and more. The partnerships span entertainment, news, lifestyle, music, gaming and sports, including expansions of existing deals with Live Nation Entertainment, Major League Baseball and Major League Soccer.
Aʟᴘʜᴀʙᴇᴛ / Gᴏᴏɢʟᴇ / YᴏᴜTᴜʙᴇ
- At its Brandcast event from the newfronts, YouTube unveiled the latest content trends and new ways for advertisers to connect with their most attentive audience.
- If you use Google Chrome, the news you've been waiting for is here: the browser will start blocking those annoying autoplay videos.
Sɴᴀᴘ / Sɴᴀᴘᴄʜᴀᴛ
- Why Snapchat's big redesign isn't working. Advertisers and users alike are skittish.
Media
The latest in the world of streaming video, audio, and the advertising, pricing and bundling models related to them.Vɪᴅᴇᴏ
- So you've cut the cord from your cable company. But subscription creep is happening as you add service after service for programming. Add to that your newspaper, magazine, and music subscriptions, and soon you're in Subscription Hell. When is enough enough? Or worse, when is enough too much?
- Comcast is increasing Internet speeds for some customers. Some. As in, only those who have elected to purchase the Internet-TV bundle. Sorry, cord-cutters. It looks like Comcast has cut you out of the deal. As if Comcast needed another reason to be despised.
- Realizing that it needs a solution for today's viewer, ESPN has rebooted SportCenter for mobile.
- Publishers are creating video programs as a new way of distributing serial content, in conjunction with linear TV streaming networks.
Aᴜᴅɪᴏ
- In its first earnings report, Spotify missed revenue projections by about $40 million. The streaming music provider saw a 30 percent increase in Premium subscribers to 75 million, with about 170 million subscribers in total.
- Record labels that have invested in Spotify have netted about $1 billion. Sony, which held the largest stake, sold about half its shares for close to $750 million. Then, Warner Music Group followed suit – selling off 75% of their shares, and netting close to $400 million.
- Pandora fared a little better, with an increase in revenue of 63 percent, at $104.6 million. It increased its paid listenership by 5.63 percent.
- Program of the Week: Our pick this week is a set of recommendations from Jeremy Bednarski: the best 20 marketing podcasts you need to check out now. Do you have a program to recommend? Add yours to our Google Sheet: smonty.co/yourpodcasts.
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Privacy / Security / Regulatory
Business disruptions in the legal, regulatory, and computer security fields, from hacking to the on-demand economy and more.Pʀɪᴠᴀᴄʏ / Sᴇᴄᴜʀɪᴛʏ / Hᴀᴄᴋɪɴɢ
- Twitter advised all 330 million users to change their passwords after a glitch exposed them in plain text. There's no evidence of a breach or misuse, but Twitter is playing it safe. Change your password now. And implement two-factor authentication if you haven't already.
- GDPR is a principle-based, legal framework to drive change, as opposed to a check-box exercise.
- With Facebook's privacy changes, developers have been left feeling as if they've been thrown under the bus.
- After the Facebook data scandal, Cambridge Analytica is closing its doors. They'd be hard-pressed to continue business with that kind of a reputation hit. But watch to see whether they reopen under a new name.
- Russia is trying to block VPNs in an effort to stop Telegram from being used.
- A criminal gang used a swarm of drones to obstruct an FBI hostage raid.
Rᴇɢᴜʟᴀᴛᴏʀʏ / Oɴ-Dᴇᴍᴀɴᴅ Eᴄᴏɴᴏᴍʏ
- An investigation found that 103 Uber drivers have been accused of sexual abuse or assault. No word on how this compares to the criminal records of traditional taxi drivers.
- Lyft is launching a fleet of 30 autonomous vehicles in Las Vegas.
Measurement / Analytics / Data
The future is not in plastics, but in data. Those who know how to measure and analyze it will rule the world.- One of Facebook's F8 announcements included new analytics features, including the ability to track the omnichannel journey.
- Marketers are still struggling with data management. One of the primary reasons is that marketing technology and data management are difficult to execute because marketers don’t always have the proper resources available in-house.
- Are you tired of seeing "growth hacker" in resumes? It's probably because you don't need a growth hacker; you need data-driven marketers.
- More than three-quarters (77%) of marketers are personalizing their email marketing – but mostly at the audience level and not at the individual level. The reason they give for the lag? Fifty-five percent of them say they don't have enough data. More likely than not, they haven't cleaned up their data – a requirement for machine learning to work effectively.
Mental Nourishment
Other links to help you reflect, improve, or simply learn something new.- It's time to start listening to the true experts, and not defaulting to the lazy shortcuts your brain makes.
- "The poorest way to face life is through as sneer." So said Theodore Roosevelt as he addressed the cowardice of cynicism and the courage to create rather than criticize.
- Fifty pulp cover treatments to classic literature. The easiest way to sell something is to make it look salacious (whether it actually is or not).
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Scott -Thank you for sharing your... You.
ReplyDeleteEverybody we truly love is because we know them.
Thank you for encouraging the virtues of "Diversity" ... where it takes a village of diverse capabilities with common Values. We don't appreciate how many Values we share until we are in a Diverse group.
If your Values include respect and curiosity (beyond defending your status quo turf) then you can realize the personal and professional brilliance of Diversity. It's a global economy right here and everywhere. It is not us and them.
You are a beautiful ear-ringing beacon of hope and helpfulness.
With Love and Appreciation,
David (legally-blind-bottle-bottom-wearing) Cutler
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