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Marketing singularities

Reading Time: 3 minutes

This post was prompted by a couple of conversations over the past few days.

Conversation number one

A friend pointed out that they’ve got a new job, just received a document on what we’re doing from my global social agency ‘X’. What’s your opinion of them and where do you think client and agency responsibilities should lie? Question number two didn’t really get answered as ‘X’ is a social agency? was a much more interesting talking point. Would they be any good, when did they become a social agency? What just happened? The upshot of it is that social is a thing that everyone is now an expert in.

surveillance sticker art

Conversation number two

I was in conversation with a potential technology vendor for a specific project and I outlined the point solution that I liked about their product, which was something that made them a particularly good fit for said project. They then explained to me why they were so much more than the point solution I required and were in fact a complete CRM-type solution.

Other peers (let’s not call them competitors, as they have a slightly different world view and do slightly different things) have been acquired by CRM or software vendors. Those that were too big to buy have done deals to integrate their offering as a kind VAR-like partnership.

Structure

What these two conversations are indicative of are a pair of distinct singularities in the marketing sector.

Think of marketing as a broadly horizontal industry sector rather than the vertically integrated leviathans that are often brought to mind by the words Martin + Sorrell or the letters W, P +P respectively.

I would consider the marketing groups to be more analogous to conglomerates than integrated marketing creatures. Competing clients and bespoke client needs create the need for different marketing brands and single purpose agencies but for many parts of the business they tend to operate independently from a day-to-day operation. Collaboration and genuinely integrated working are journeys to be yet taken rather than destinations that they will be soon arriving at.

WPP are an interesting organisation in that as a conglomerate they have tried to build a vertical stack of agencies and technology vendors. They own a variety of technology companies particularly involved in the purchasing of online advertising (programmatic advertising or real-time bidding as it has been called in the past).

There has been concerns amongst amongst the ad worlds largest clients that groups may use their privileged position as vendor and agency to play against their clients. Major brands seem to have developed a distrust of both agency trading desks and the lack of transparency into market data. Instead of giving agencies an unfair advantage and allowing them to play both sides of the trade, they are bring the trading desk in-house.

So there is both client pressure and expertise factors that come into play which suggest the horizontal model is likely to be dominant for some time to come – now matter how many spreadsheets using a Monte Carlo method are developed by investment banks predicting a sure-fire success.

However within this  horizontal model there some consolidation happening. On the one hand tools are rushing towards total customer information awareness. The key problem is one of structure, tools are used to selling into one kind of person (someone like me), not re-engineering a business from the ground up. Secondly relationships with agencies are not going to provide the kind of trust and access that would be required to fulfil the full potential of this vision.

You could imagine the conversation in the board room

Hi Mr CEO, Sterling Cooper Draper Price, the marketing agency the last CMO appointed want to re-engineer our business with their social software.

Wait a minute Mr CTO, when did we have Sterling Cooper on board? What happened to McMann and Tate?

They were fired two years ago by the last CMO, who left six months ago

Our current CMO handed in her resignation yesterday, to start her own yoga retreat franchise. No doubt the new one will want their own agency…

Ok, so a bit of poetic license is used in this thought experiment, but the point is suppliers like marketing agencies tend to be changed more frequently than the vendors of key business systems. Something has to change radically for this work.

Whilst on the agency side of things everyone has tried to ‘own’ the social space as there is client fatigue over what that now means. And while social is now something everyone does at a marketing agency level, there are less individuals who are willing to admit that they have a specialism in it; as it seems to have about as much long term career growth in it as being a CB radio operator.

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Tim Cook at The White House Cybersecurity Summit

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Whilst on the surface this is a puff piece for Apple, but Cook uses the Obama administration’s call to cooperate making life easier for the intelligence industrial complex get access to consumer data and lays out an opposing vision.

He basically kicked Washington DC in the teeth, other significant companies just decided to turn up with a significantly less senior representative to send the same message.

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O2O (online to offline) or what we can learn from the Chinese

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My friend Sam Sun used to flag up O2O as the most important trend he saw when we worked together on mainland Chinese campaigns. O2O means online-to-offline. An integration of digital marketing tactics with marketing to drive retail footfall.

O2O in China

In China, there is real consumer demand for this type of marketing. Tencent surveyed WeChat users and found out that 13 per cent of them would prefer to have O2O adverts in their moments (think a stream of friends Tumblr accounts or Facebook’s news feed).
wechat_moments_advertising_consumer_preference

There is a whole eco-system that the Chinese can tap into.

QRcodes have greater customer acceptance in Asia than in Europe, where despite the efforts of Pepsi and other brands to encourage consumer adoption, it has been tepid at best. QRcodes are often confused for barcodes and take-up is a fraction of that in other countries like Japan. By comparison here is the picture of a real estate advert on the table of a Chinese fast food restaurant in Shenzhen.
Ridiculiously small QRcode on these property ambient ads

In-store wi-fi in the UK is often clunky, poorly run by a major carrier like EE or a specialist provider like The Cloud. By comparison, in China, Tencent’s WeChat provides a turnkey solution for retailers, restaurants and bars to provide wi-fi and build their social following in a relatively painless manner for the consumer. (Though the software used by the retailer needs regular updating to keep up with Tencent’s ambitious development of the platform).

On the face of it however China isn’t the most promising market for O2O. It is a vast, diverse country, which makes it hard to build a truly national network of retail outlets. It has a dominant e-commerce platform this is more like eBay than an Amazon in that it doesn’t compete directly with its merchants. Secondly, the cost of labour and the huge funds available to internet companies mean that building a logistics network is more likely to succeed than it would do in a more expensive country like the UK or US.

O2O in the west

Contrast this with the west, where Scott Galloway predicts Amazon’s demise because of the unsustainable cost of its product delivery system. Galloway hypothesises that ad-hoc logistics networks based on the sharing economy a la Uber and clicks and mortar businesses like Tesco offer a better alternative. Apparently doing the warehousing towards the edge is more cost beneficial than the Amazon model.

In the west, we seem to be on the cusp of a range of technologies that could make indoor location, identity and marketing a whole lot easier.

Hong Kong developers Green Tomato, have used ultrasonic signals and low power Bluetooth to allow applications to interact with their surroundings from sports check-ins to shopping mall navigation.

Low power Bluetooth beacons have been experimented with by retailers for encourage mobile augmented shopping and by organisations including Japanese Railways to aid indoor navigation. CSR and other companies have talked about using wi-fi as an indoor navigation aid. Further out quantum technology offers highly accurate GPS type location finding within buildings. All of this technology has the potential to further move O2O further forwards, if the user experience is made sufficiently simple and seamless. In the meantime the humble QRcode soldiers on connecting consumers and retailers in Asia.

More information

WeChat Adds Wi-Fi Solution to Public Accounts | Technode
China consumers voice their preferences for WeChat Moments ads | Resonance China
Proposes new indoor requirements and revisions to existing E911 rules | FCC
New indoor positioning system lets you do Batman-like echolocation on your phone | ExtremeTech
CSR claims it will be able to fix your indoor location accurately | VentureBeat
UK military creates quantum compass that could be the successor to GPS | ExtremeTech
JR Rolls Beacon Navi for Tokyo Station | Wireless Watch Japan – interesting internal navigation application of beacon (low power Bluetooth technology)
WiFi Chip Tracks Indoor Location | EE Times
Five examples of how marketers are using iBeacons | Econsultancy
Mapping Our Interiors – NYTimes.com – interesting business model by IndoorAtlas
Grindr – Lisa Page – HyperIsland – really interesting insights on LBS design
Green Tomato Limited