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I am sitting at a Starbucks in London writing this post. It is a Starbucks that I found on my smartphone through Google Maps. In front of me are arguably the two most important things I need in my life at this very moment: My tablet and my coffee. I am saving my ramblings to the cloud-based Hubba Google Docs repository, researching mobile stats on my tablet’s browser and streaming music from Spotify (to drown out a rather lively Chelsea/Manchester United debate beside me). The Starbucks app on my phone answered a question I had about the caffeine content of my drink and it gives customers the opportunity to purchase coffee through my phone. There is no doubt that mobile is changing our world and embedding itself deeper and deeper into our everyday behavior.
The blanket term of “mobile” has always bothered me though. In addition to running a mobile software company, I am a heavy user of mobile technologies. I pluralize the term technology because there are many different components to this world. The term mobile just isn’t specific enough when trying to understand the market and consumer behaviour. At the highest level, I break ‘mobile’ up into two different worlds…independent and contextual.
The Independent World
I love reading articles. They could be on technology, on cars or on current events, it really doesn’t matter to me. The beauty of mobile is that I can now read this content anywhere. I can be sitting on my couch at home, on a hammock by the lake or in an airport. I am in no way dependant on my location or surrounding environment. I was able to get emails on my honeymoon in Mozambique and I am able to pull up documents on my way to a meeting in Dubai.
The Contextual World
There is another world though. It is a world that is hyper-dependant on my location and surrounding environment. It is a world of context. It happens when I am standing in a shoe store I am interested in a hiking boot. It happens when I am at my friend’s house for dinner and want to know more about this amazing wine we are drinking. These types of situations happen dozens of times a day.
It is human nature to cling to something that is familiar
Do you remember early e-commerce sites? Many were virtual stores where you browsed through virtual aisles. Or maybe you remember the early Southwest Airlines website that was a virtual travel agent desk? Eventually, our behaviors changed to accommodate and exploit the best traits of this new medium. This is similar to what is happening with mobile. In its nascent stage, much of what we have done is simply take the web and shrink it down to a smaller screen. Although this can work for the Independent world, it is a flawed model for the Contextual world. One area where this is clearly evident is in the effectiveness of advertising.
Admob, Millenial Media, JumpTap and many other great companies are aggressively going after the mobile ad world. These ads are primarily focused on the Independent world and won’t necessarily work for the Contextual world. The Contextual world is different because consumer behavior is different. It is about targeted, immediate and validated information. As such, it is difficult to create effective ads. To be successful in this world, advertising needs to be targeted, valuable and invisible.
You may ask why I would even bother to address this. It seems to be an obvious topic when talking about ads, right? Well there is targeted and then there is TARGETED. The Contextual mobile world provides advertisers with more key factors that enable them to further tailor advertisements. This is very different than serving up an ad for an oil change on a car website. With a mobile phone different things come into play. For example, your location and your proximity to other products are easily known. Also, in contrast to a home computer that can be used by many people, most mobiles have one user so advertisers know exactly who they are targeting. The architecture is also different. A growing number of product searches are done via apps vs generic browsers. These apps allow for demographic capture and history (if the user chooses). Once again, this gives advertisers more information to tailor their message. Finally, it provides context to the actions of the user. They are not sitting at home in front of a computer; they are in the process of doing something out in the world. Understanding this behaviour is a major benefit to advertisers.
The experience would be akin to being at a friend’s house enjoying a nice bottle of wine. The user would scan the bottle which would return pertinent, accurate information about the wine and the vineyard to help you come to the conclusion that this is worth purchasing. This would include things like price, locations close to you where you can purchase it, types of dishes it goes well with, as well as other details that are important to the user. An advertiser would know that the user is in a high income area, they are close to a luxury shopping area and they have a history of searching for and purchasing high end gifts. As such, the advertiser would serve up an ad for a crystal decanter at the shop only a few minutes away. The ad, however, will not be for 20% off the decanter but for 10% the purchase of a second item over $50. Advertisers would know that based on historical behaviour the user is more prone to action when they feel that they can get more items for a discount vs. getting a larger discount on a single item.
It all sounds great but this is not enough. Advertisers need to go further. The ad needs to provide some real value.
Probably the most important aspect of a Contextual world advertisement is value. By value, I do not mean how much of a discount is being provided. I mean that advertisers provide consumers with something that will enhance their experience. In my last organisation, we focused on the consultative ‘sale’. We would help clients solve a problem. We would partner with them to ensure their success. This gave us the most important tool a salesperson could ever possess: credibility. The best part is that it was completely sincere. We wanted our clients to succeed.
This is how I see advertising in the Contextual mobile world. Users are taking action to solve a problem (I need more information on this product, where can I find this product, how can I best enjoy this product). As such, if we use our wine example, a simple banner ad declaring a 10% discount on a second item above $50 at a local store would not necessarily provide the value a user is seeking. However, more explicit information on how a decanter works and how it enhances the flavour of this wine, would be a significant value add for the user. Then being able to direct them to a local store to find this decanter is another value add. Now instead of selling to the user, you are helping them enrich their experience and helping them solve a problem. If you are interested in a hiking boot, maybe this will be a listing of local trails. If this a car, maybe it will be tips on maintaining your automobile. Instead of being on the other team selling into consumers, companies will be on the same team helping consumers. It is time to stop selling and start solving. It will be a far more effective approach in this type of world.
I am sure that I am going to get some comments on this but my personal belief (not necessarily the official stance of Hubba) is that advertising in this world should be invisible; not hidden but deeply embedded. People seem to get in an uproar whenever a company links user information to advertising. Facebook always seems to have this challenge. I generally have a different reaction: “Wow, you are going to use my behaviour and preferences to make sure that I get ads about cars and not manicures…that is awesome!” Twitter has a similar issue with their sponsored or promoted tweets. If they had a great algorithm and provided tweets that I found value in, I couldn’t care less if the source was somebody I was following or an ad. Indicating that it is a sponsored tweet is almost like putting a stamp on it that says “hey, I know that this doesn’t really do anything for you but we need to stick it in here anyway”. They could actually give me 10 tweets in a row from advertisers. If I get something out of it I would be thankful. That is how the best advertising works in the Contextual world. If I scan that bottle of wine, there are some important things I want to know to make my purchase decision. Those details can come from multiple sources. For example:
- Type of Wine (source: Wine Maker)
- Description (source: Wine Maker)
- Friends Who LIKE This (source: Facebook)
- Review (source (source: wine.com)
- Ways to Enhance Flavour (source: Advertisement: Decanter, Local Shop)
- Calorie Content (source: USDA)
- Where to Buy Online (source: Google)
This profile paints a small but powerful picture to help consumers make some key decisions. The advertisement in this profile educates on how a decanter helps enhance the flavour of this purchase. Being embedded as part of the value proposition creates a better experience for the user and a more effective strategy for the advertiser.
The digital ad world is constantly evolving. No piece of that is changing faster than mobile ads. As the market matures, data will clearly indicate which approaches are the most useful to consumers and return the highest ROI for advertisers. In the meantime, splitting the mobile world into the Independent and the Contextual worlds is the first step in this evolution.
About Ben Zifkin
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