Friday, June 28, 2013 | Edited by Daniel Moores
||Best Buy’s Showrooming Strategy Resonating with Mobile Shoppers
Best Buy's initiatives to combat showrooming among its customers have been well-documented, and it appears that the big box's efforts to thwart Amazon.com may be paying off among mobile users.
According to Prosper Insights & Analytics' new Showrooming Ratio, Best Buy may be doing a more effective job of keeping wandering shopping carts away from Amazon, particularly compared to its discount peers.
The Showrooming Ratio indicates the likelihood that a mobile user will evaluate a product in a brick-and-mortar store and ultimately may purchase the product via that store's site or a competitor's digital channel. When compared to Amazon, Best Buy scored a Showrooming Ratio of 111.93 among mobile users in the market for electronics, meaning that these shoppers are roughly 11% more likely to purchase via Amazon than a Best Buy digital channel. Although the ratio tilts in Amazon's favor, when compared to Wal-Mart and Target, it's an improved margin.
Showrooming Ratios for Electronics Purchases
Mobile Users 18+
(Retailer site vs. Amazon.com)
Best Buy — 111.93
Target — 125.96
Wal-Mart — 135.04
To be read as: Mobile Users who shopped for Electronics within a Best Buy retail store are 11% more likely to purchase a product on Amazon vs. BestBuy.com after this in-store evaluation.
Prosper Insights & Analytics also looked at Showrooming Ratios by gender. It seems that men are more loyal to Best Buy channels than Target and Wal-Mart, whereas women tend to have an allegiance to Target.
Showrooming Ratios for Electronics Purchases
Male Mobile Users 18+
(Retailer site vs. Amazon.com)
Best Buy — 106.59
Target — 145.46
Wal-Mart — 152.88
Showrooming Ratios for Electronics Purchases
Female Mobile Users 18+
(Retailer site vs. Amazon.com)
Best Buy — 118.98
Target — 109.40
Wal-Mart — 121.46
"Men are more prone to looking for a variety of brands, in-store experience, and the latest technology when shopping for electronics, whereas women are generally more focused on a budget-friendly price point," said Pam Goodfellow, analyst for Prosper Insights & Analytics. "With Best Buy going to great efforts to improve its offerings and in-store customer experience, it's not surprising that male mobile shoppers are showing a higher affinity to this store compared to discounters. The challenge for Best Buy going forward will be to maintain a great experience and retain loyal shoppers because Amazon will continue to up the ante when it comes to winning over its competitors' customers."
For the complimentary report and access to the Prosper Mobile InsightCenter, visit www.ProsperMobile.com. Once you've logged in, the report is posted under the "Insights" tab.
(Source: Prosper Insights & Analytics, 06/26/13)
||Ad Viewability Causing Mess in the Digital Marketplace
Call them crazy, but advertisers want to make sure people can see their online ads. Yet the industry isn't quite ready to meet that requirement. And that's a big problem.
Indeed, as the industry wrestles with how to make sure its ads are actually viewable, the prolonged debate is wreaking havoc on the marketplace.
A few weeks ago, the Media Ratings Council announced that the technology for tracking viewability is not ready for prime time and explicitly advised publishers not to promise advertisers viewability The problem is, with comScore finding that about 50 percent of Web ads go unseen, clients are demanding that viewability guarantees be written into contracts.
That's happening even as more than a dozen vendors are vying to become the de facto viewability tracker. Often buyers and sellers work with different partners, leading to wild discrepancies, according to both buyers and sellers. "You tend to see a lot of disparity among vendors," said Curt Hecht, chief global revenue officer at The Weather Company.
The MRC expects that its technology, SafeFrame, will be ready by December, but even then the organization can't force a single solution on the industry.
Here's how seriously the demand side of the business is taking the issue, even as they wait for the MRC. GroupM has run extensive tests with 12 different vendors.
"There's no value to non-viewable ads. So this is huge," said Ari Bluman, GroupM's chief digital investment officer. But Bluman, who represents one of the biggest buyers out there, added, “We’re not panicking."
Bluman might not be worried, but publishers, particularly ad networks and mid-sized sites, are taking it on the chin.
"We're starting to see the buyers apply the pressure and the sellers respond in kind, but the different methodologies for viewability are preventing us from agreeing on a standard for guarantees," said Chris Paul, general manager of Audience On Demand. "Without the standard, even the most compliant publishers run the risk of unpredictable swings in ad revenue depending on whose methodology or methodologies the advertiser adopts."
Publishers often don't have visibility into what data buyers have and thus are forced to overdeliver on campaigns to satisfy viewability demands. "It's basically a new currency with no standards," said Andrew Casale, vp of strategy of Casale Media.
"That means big potential losses for sellers," added Eric Franchi, co-founder of Undertone.
Tom O'Regan, president and CRO of Martini Media, noted that advertisers have long bought ad inventory by negotiating based on a blend of expensive and cheaper inventory. But when viewability is brought into the mix, it reduces the supply for many publishers, causing CPM spikes. "Agencies are like, 'What, you've been ripping me off all these years?'" he said. "Publishers are freaking out."
No one in the ad industry is advocating for non-viewable impressions, but O'Regan said even the IAB's oversized Rising Stars ads are a problem since they don't load quickly on various Web pages and can be counted as non-viewable.
"I've heard it," said Sherrill Mane, IAB's svp, research, analytics and measurement. "I can't go anywhere without someone asking me about viewability. Publishers are bearing much of the burden. We have a lot of work to do and a lot of challenges to overcome, but we're working quite diligently to solve them by 2014."
The MRC's SafeFrame product, which provides publishers with visibility into what ads third parties run on their site, is ready, according to CEO George Ivie. The organization just needs more time to work out the implementation logistics, while also working to audit more third-party companies that claim to track viewability. "The bottom line is this is a disruptive challenge. But a shift is coming."
Until then, some publishers, including Time.com, are revamping their sites so that every single impression is viewable, no matter what. Said Moritz Loew, Time's vp, sales: "Just take the discussion off the table."
Or publishers could just say "no" to buyers' viewability demands and see how that goes. One large Web brand said they tried that tactic, only to lose business. "I don't know many publishers strong-arming clients these days," said Loew.
Still, not every publisher is seeing such a battle over viewability. Mark Howard, svp, digital advertising strategy at Forbes Media, said his company has pushed to get out in front of the viewability challenge by testing multiple vendors. He's not feeling the heat from buyers. "Everything is going according to plan," he said.
There are some that believe that all this planning may be for naught because of a simple move by a familiar player. Google is planning to build viewability tools into its DoubleClick ad server, for free, which could obviate the need for multiple vendors specializing in viewability. "For the publishers that use Google, it will become a Google metric," said Jonah Goodhart, CEO of Moat. An interesting and telling admission, considering that Moat is one of the players tracking viewability in this space.
(Source: Mike Shields, Adweek, 06/24/13)
||The World According to Borrell
A 2013 Delphi Panel of experienced management in the media industry, anticipating media's future in a study by Borrell, contributes to a future knowledge base that will have value in planning for what's coming for media in the next decade and beyond.
In short, and expanded some in the continuing text, an overview of the results according to the year the panel says they will take place, is summarized as follows:
According to Borrell, these initial predictions become the first plot points of a map of the future that is to be built during 2013 to create a future knowledge base that will have real value in planning for what's coming for media. The "Probability Map" will show respondents' media expectations ranging from highly probable to unlikely within this decade and beyond.
- In 2018 it is 52% likely that real-time bidding will be responsible for half of all digital ad placements, and 61% likely that consumers will spend more on apps than they do on PC software.
- In six years, 2019, it is 48% likely that the first broadcast network will convert to a cable or cable-like entity, says the report.
- Seven years from today 2020, the panelists predict that it is 50% likely that major electronics retailers no longer stock desktop PCs.
- In 2021, the Panel anticipates that it is 49% likely that 50 million U.S. households will drop cable in favor of online TV services; 49% likely that newspapers in the top 20 U.S. metros will publish four days or less, and 49% likely that the U.S. Postal Service will declare bankruptcy.
- In nine years 2022, the panelists say that it is 45% likely that online political ad spending exceeds that spent for television.
- Ten years from today, in 2023, it is thought that it is 42% likely that mobile video ad spending exceeds that spent for broadcast TV.
Analysis of the answers to each of the postulates is provided by the Borrell staff, describing conditions precipitating the attitudes expressed.
Postulate: Real-time bidding accounts for half of all digital ads placed in the U.S.
Real-time bidding continues to grow in popularity and volume. It has proven the critics who warned it would drive down the price of online advertising wrong. Borrell's current forecast calls for RTB to make up 18% of all digital ad placements by 2017, a somewhat more conservative forecast than that given by the panel. The panel's central forecast indicates that members are slightly more certain than Borrell or others that no legislation will block the rapid growth of RTB.
Postulate: Major electronics retailers no longer stock desktop PCs.
PC sales have dropped more than 30% this year, though IDC expects the decline to moderate as the year progresses. Other computing devices, more mobile and easy to use, have consistently outsold desktop PCs for more than a year. Borrell's current forecast points to a more rapid decline in sales than IDC has published, indicated by the flow of digital ad spending away from desktops to mobile devices. By 2018, the report predicts that the majority of all digital ads will be directed to mobile devices.
Postulate: Consumers spend more on mobile apps than they do on PC software.
The certainty of the panel concerning this statement is obvious from its naysayers, says the summary; only 5% don't think it will occur. A strong majority thinks it will happen within the next five years. A growing corps of developers keeps the app population fresh and growing, just like the software industry of the '80's, when the PC and PC-DOS first hit the streets. Previous statements have defined the flow of device purchase, away from desktop computers toward mobile devices like tablets and smart phones. As this flow continues, demand for more prosaic, work-related apps will grow.
Postulate: Mobile video ad spending exceeds that spent for broadcast TV.
According to the panel, there's less than average probability that upfronts will be largely digital affairs by the next decade. However, younger people have shifted some of their attention away from TV toward their mobile devices. Proctor and Gamble and Budweiser have begun shifting their marketing away from TV toward mobile and social venues. Detroit looks to be following suit, cutting offline new car ad budgets in favor of those same arenas.
Now, potential car buyers come to the showroom already certain of the car and accessories they want as well as the price they need. More often than not, the salesperson has little to do but fill out forms and hand over the keys. Similar trends are changing purchase patterns in real estate, home goods, apparel, and travel.
Postulate: 50 million U.S. households drop cable in favor of AppleTV, Hulu, and other online TV services, up from the current level of five million.
Only 4% separates those panelists who think the statement is impossible from those who believe it is certain to occur. If it were to happen, by the beginning of the next decade the broadcast TV network structure, and the cable network structure as well, would become history. The viewing trends of younger people is important here, says the report. Will binge viewing behavior patterns persist, or will these viewers settle down to more scheduled routines as they age? The panel's view is that they will.
Postulate: All metro newspapers in the 20 largest markets reduce public distribution to four days a week or less.
The number of panelists who think the statement is likely to occur is almost exactly matched by those who do not. Next to people, says the analysis, a newspaper's biggest expense is paper. The big dailies have already cut staff drastically during the last decade, and reducing paper consumption produces big savings almost immediately. In an age where daily readership continues to dwindle and younger people look to the Web or their smart phones instead of news stands for their information, stopping the presses on historically low readership days seems like a reasonable concept.
Postulate: The U.S. Postal Service declares bankruptcy.
Panelists are almost evenly split on the future fate of the Postal Service. However, the panel's majority thinks it will take at least five more years before the postman stops coming by, if it happens. Part of the Postal Service problem is simply disruptive technology. Email and the social sites have long since replaced "snail mail" as the nation's preferred means of communication.
The only increase in mail during the past decade has come from advertisers, and yet the USPS continues to give the direct mailers deep discounts. This insures their business but does nothing to contain a hemorrhaging cash flow. The future for U.S. mail looks cloudy at best, says the report.
Postulate: Online political ad spending exceeds that spent on television.
Digital ad spending during the 2012 U.S. elections comprised less than one dollar out of every 25 spent in all 13,000 contests. In both election cycles, as in every cycle since 1960, says the report, the bulk of ad spending has gone to broadcast TV. According to the panel, the 2020 presidential race as well as the 2022 congressional runs will remain much like they are today in terms of media use.
(Source: The Center for Media Research, 06/24/13)
Daily Sales Tip: My Chinese Fortune Cookie
After dinner, I cracked open my fortune cookie to read: "If we do not change our direction, we are likely to end up where we are headed."
Advertising is moving in the direction of integrated media solutions. Traditional advertising must support digital. Digital must support traditional.
Develop recommendations for your advertisers that include broadcast creative that supports their digital advertising, and help them with digital creative that supports the messages in your broadcast commercials.
Source: John Potter, SVP/Professional Development, RAB