Don’t Spam, Don’t Spy; Ask Permission and Satisfy - Musings on media, advertising and big data

I was struck by data just out by the US Magazine Publisher’s Association just out on 7 January, 2016. We’re not surprised that the total cumulative audience of print is down, perhaps surprised that its down by so little - only 6% from last year. Then we are not surprised that there is a shift to digital which is bigger than the loss from legacy print. So these are the same titles, say Sports Illustrated, which can be bought as a magazine or consumed on the internet or consumed on mobile. Yes, digital is up. But here’s the stunner. Web consumption of print titles is.. down ! Down more than print, even! Down by 8%. These are branded titles like Time and People Magazine and Vogue etc. Web is down? More than print itself? Thats pretty amazing news. And where is the growth.. well, obviously its mobile. How much is mobile up from 2014 to 2015 by branded print titles in the USA? Try 39%. Yes, mobile audience of US print titles now accounts for 30% of the total audience. Web has fallen to 16% and print itself only is used by 54% of the total audience that reads say Car and Driver magazine or Field and Stream. Its time for me to do my occasional total update to the 'mass media, mobile and advertising' story. This comprehensive blog article runs 10,000 words or the length of one full chapter in my hardcover books. Get yourself a cup of coffee before you start.

FOR SOME THIS IS NEWS

Mobile wins, obviously. But that distinction - that the internet is NOT the future, it IS mobile, that is the stunning part for many, in all sorts of industries from banking to healthcare to travel. And who told you first, yes yes, me obviously in my lectures and books at the turn of the millenium but lets stay with print media. Its what the Associated Press newspaper guild told their members five years ago. That the future of newsmedia is not the internet, its mobile. So who is it, who told the PRINT media that their future was mobile, not the PC based internet? I spoke to the Periodical Publisher’s Association in 2002, yes 14 years ago, about how mobile was their future. Since then I’ve done workshops and seminars for all sorts of media houses all over the world.

(BTW have a guess what I talked about back then in 2002? I told the PPA about ... SMS alerts for breaking news. Yes, of course! And about mobile payments! Yes. Of course. I talked about flirting and chatting services (aka ‘social media’ before we had that term). Duh. This is 14 years ago! Who else was teaching PRINT MEDIA about how powerful mobile was, and pointing out the massive opportunities that really nobody else was noticing back then. I talked about mobile ads, how ads on mobile should not be spam, they should be individually TARGETED). (yes. None of this is new, if you’ve been on this blog for the past 11 years or read my books for the past 14 years. But nobody ELSE in media was saying this in 2002).

By the way, I also prediced for that audience that mobile phone penetration rates will exceed 100% (a controversial view at that time), and that voice would decline (not controversial), SMS would become biggest data service (nobody said this), MMS would reach second largest status (few said this) and - that video calling would not be significant in mobile (another controversial view, many thought we’d be doing videocalls on the 3G networks). There were no other forecasts I gave, so I didn’t do 100 silly forecasts and now pick the 5 that happened to be correct. If anyone was in that audience in 2002, and didn’t act on my slides, only kept them, and monitored the evolution of the industry for the next few years, that slide set would still be the BEST guide for the mobile future for the second half of that decade !!!! (not unlike my books; the forecasts I made in my book M-Profits came true at a rate of 97%)

ADVERTISING IS IN DISTRESS

So where were we? Oh, about print and mobile. Yeah I’ve been down that road leading that merry band that has now grown to an army, mobile-mobile-mobile, mobile-first etc... Now, what about the big changes in ADVERTISING? I chaired the world’s first mobile advertising event 15 years ago, and I keep doing advertising industry events all around the world from Ireland to India, from Croatia to Guatemala and from South Africa to Singapore and from the USA to New Zealand. The old world, the new world, the emerging world and everything in between. I’ve literally done advertising industry events on all six inhabited continents. And what do we see? The ‘experts’ and ‘gurus’ in advertising keep saying that their industry is in turmoil and the old ways are gone, but yet, they keep doing more of the same. I just saw a statistic by Medialets about some supposedly fantastic mobile ad click-through-rates. They measured that in the first half of 2015, in-app advertising on smartphones achieved a CTR of 0.56%. Zero point five-six percent. Just over one HALF of one percent. This is according to Medialets better than what they measure for mobile web banners ads at 0.23%.

Zero point five-six percent. Just over one half of one percent? And this they think is good news? To borrow the phrase from Monty Python and the Holy Grail - "I fart in your general direction!" If you are doing under 1% reactions for your advertising on mobile, you are FAILING. Get out of the business. You are a waste. You are polluting the gene pool. Its exactly what I have preached forever in mobile: Don’t spam !!! Its spam !!! Don’t spam !! (Recently I’ve evolved that even further so now I say: Don’t spam, don’t spy; ask permission and satisfy!)

Yes its better than mobile banner ads. Gosh, Windows Phone OS does better than Blackberry OS. Its still a total catastrophic failure! If you do 0.56% click-through rates, you are a disgrace! Its still a total comprehensive utter failure. We HATE spam !!! We hate it even more on mobile !! Don’t spam. Ask permission and deliver content the consumers want !! What does mobile marketing done correctly achieve? It achieves 20% RESPONSE rates. Not Click-Through-Rates (which includes accidental clicks and unintended clicks, a response is conscious decision by a consumer to not just go look at what was offered - but to RESPOND to it). Well designed mobile marketing campaigns yes, get 20% response rates or FAR BETTER. And doing what? It ALWAYS starts with mobile messaging !!! Duh, mobile first equals SMS. It always has, it always will (at least till year 2028, then Whatsapp or some such service may have caught up to SMS by audience, the only relevant metric for an advertiser, not the total volume of messages that Whatsapp likes to brag about, with their puny user base. And yes, Whatsapp reached 1 Billion users last week. That in any other industry would be massive. In mobile only one Billion is.. puny. SMS has FIVE point EIGHT BILLION active users! 5.8B vs 1B, yes Whatsapp would be big in any other industry; in mobile its still just puny - but its growing nicely. Wake me when they've passed 5 in Billions, around year 2025, I might have retired by then, though).

SMS and MMS is how mobile marketing starts. Its mobile first. It what I told the Periodicals Publishers Association in 2002 and its what big gurus and experts of media and advertising teach now. And why is mobile messaging (and other smart mobile marketing) achieving 20% and above response rates? Duh, don’t spam, don’t spy; ask permission and satisfy! Did I say, ask permission? It HAS TO BE on an opt-in basis. If its not opt-in, it is by definition spam. Don’t spam. I mean it literally. Ask permission. I mean that literally.

MUST ASK PERMISSION

But Tomi, ooooh, asking permission is so hard, it takes so long, my audience might say they don’t want to. If your audience says I don’t want to get ads from Coca Cola, is it perhaps likely that customer hates your drink and will not buy it? Would you not rather KNOW who likes you and who doesn’t? Why not read the case study of Big Data, why the Obama campaign manager said he doesn’t want to talk to all voters once, he wants to talk to the undecided voters ten times ! For any advertising manager or brand manager to say, I don’t want to ask permission - means that ‘professional’ is a coward (and deserves to be fired).

Here some cold facts about opt-in and mobile. Mobile started in Japan. McDonalds is an American restaurant brand who has a big presense in Japan. A foreign food brand. Japan is a fish-eating nation (like sushi..), not culturally a hamburger-eating nation. McDonalds is a youth and family restaurant, Japan is the nation with the most inverted age pyramid of any nation, its population is so badly imbalanced of old people not young, its population is declining. Japan is the ‘oldest’ nation by age of its population. The total absolute opposite of what is McDonald’s target audience. And yet. Have a guess how many Japanese consumers have opted in to receive mobile ads from McDonalds? Opted in. So they have asked to receive McDonalds’s mobile ads? Think of a number as percent of total Japanese population. Good. Now lets get the envelope, please. ‘The number?’

20 million Japanese people or one in SIX people! 16% of the total Japanese population has OPTED IN to receive ads from Mayor McCheeze and the Hamburglar about Big Macs and Happy Meals.. One in six. If McDonalds can achieve that, as a foreign restaurant chain, in a fish-eating nation, where the age pyramid is literally the worst for McDonalds target audience of any nation, then you can too. It just takes time. McDonalds has worked at that mission for years, literally more than 7 years to get to that level of opt-in. It doesn’t happen overnight. I takes time and it just takes concentrated effort and management focus. And honestly, seriously, the actual consumer base, out of Japan, who might like to go eat in a McDonalds restaurant, is probably that amount, 16% of the population. Its not going to be much more than that.

So the advertising industry gurus and guides talk about how the industry must transform itself. It must abandon the abusive practises of spamming and locking audiences to punitive media formats. It has to learn to use ‘engagement marketing’ methods, and have a dialogue with consumers. That they have to migrate from a shotgun approach of marketing to mass audience, to microtargeting, precision, a ‘segment of one’. Again. This was all theory, until it could be proven. The first ‘contest’ of two national massive marketing campaigns, one of the old model of demographics and mass marketing shotgun approach, versus the other using microtargeting and precision, has been done. We have a case study of the new ‘big data’ powered segment-of-one precision marketing on ‘engagement marketing’ methods went against the old model, in the same big race. Yes readers, the world's first MEASUREMENT of the difference in 'throughput' of the old way against the new way. If you don't know this case study comparing old demographics targeting vs Big Data and mobile, you are a dinosaur in the digital age. That case study has several articles on this blog, but the conclusion is devastating. The new way, of precision targeting driven by big data, outperforms sampled demographic audiences and mass marketing by a factor of 4.5 times better. Not 4.5% better. Not 45% better. But the new way is literally 4.5 TIMES better. If your traditional campaign achieves 200 million dollar of sales, my way achieves 900 million dollars of sales. Four and a half times better. The future is very clear, the old way of advertising is dying and will eventually be gone as a weird early phenomenon of mass media. As quaint and obsolete as going to the movies to ‘watch the news’ as people used to do in the 1930s. The mobile world is different. And advertising on mobile is different. The whole process is different, and has to be learned. Like I preach, don’t spam, don’t spy; ask permission and satisfy.

REACH EVERY POCKET

So what does McDonalds do with this. Its night-and-day for inventory management and customer satisfaction. Rather than advertise in mass media driving traffic to random McDonalds simultaneously, now each McDonalds restaurant knows ITS OWN customers, very intimately. This guy always orders a Big Mac. This woman orders three happy meals and a salad. This student buys a Diet Coke or diet 7up. But this guy switches and buys different things. This one is highly driven by the bargain of the day, etc. With this ‘Big Data’ type information, blasts of mass marketing become a pointless waste.

We can take one restaurant, one, and see its current inventory of Happy Meal toys are low so lets send targeted offers only to those customers who VISIT this restaurant. Not by ‘location’ bullshit. Not who happen to be registered to supposedly live near that place, no. But by ACTUAL CUSTOMERS. Some visit that restaurant because its near their work, or their gym or their girlfriend or its at the train station where they change trains, etc etc etc. Yes, some are near the restaurant, others are not. But if we KNOW our customers, and know who visits which store (on which days of the week, at what times) - McDonalds has essentially every one of their regular customers now in their mobile database - similar to how Obama had all voters in that database - they can do microtargeting. So take that one store with Happy Meal toys inventory is low. Lets drive familes (only family customers, the lady who buys three Happy Meals and one salad) to take a basic cheeseburger meal package in an offer, instead. Not all who buy Happy Meals will take that offer, but some will. This can be tested to find the exact discount level needed, to get a specific level of business that is shifted. And not harm ANY OTHER restaurant business, because the offer is targeted to those who eat at that McDonalds one restaurant only. And now the lesser-than-normal inventory of Happy Meal toys will last until tomorrow when the next truck from the warehouse arrives.

Now how about the neighboring restaurant. They are just training a new cook on doing the quarter pounder cooking. So QP sandwitches will be ‘slower than usual’ in that restaurant today. Fine, lets do an offer for Big Macs in that restaurant, instead. But again, only that restaurant. We don’t STOP selling Quarter Pounders, but now we can ‘counter-program’ our advertising ‘against’ something we don’t want to sell a lot of today, but don’t want to stop selling. Most days, most restaurants, its going to be ‘normal’ promotions but these drive actual sales. How much? HALF of McDonalds customers in Japan redeem mobile coupons REGULARLY.... When you know your customers and make them relevant offers that are seen as valuable, they will be appreciated. Don’t spam, don’t spy; ask permission and satisfy. Give them a reason to love your mobile marketing. When half of your opt-in audience REGULARLY redeems your coupons and offers, you are indeed doing mobile ‘well’. I’d say extremely well. Who mentioned less than one percent click-through rates, gosh, thats ridiculous. 50% redemption vs 0.56% click-through rate. My way is 100x better than stupid in-app advertising banner-ad spam! (Ok, for math nerds, only 89 times better. Not 89% better. 89 TIMES better, 8,800% better)

I CAN’T AFFORD BIG DATA: ITS BIG

But Big Data is expensive! Ok, it can be. If you want to have a database that includes all 195 million American voters in it, like the Obama 2012 campaign did, with their voter history through past five elections, plus then add the relevant data from the summaries from individual telephone conversations by campaign volunteers, carried out over many months and talking to the same voter many times, yes thats gonna be enormous. The Obama 2012 campaign database was one of the 20 largest databases ever created in the IT industry history anywhere on the globe. At 10 Terabytes of capacity it was run on a platform of computers as a ‘Massively Parallel Processing’ computer system that ran as an SQL relational database run on a slew of super-power HP computers connected via the Amazon cloud. Just the tech cost $100 Million dollars and took 100 data analysts to build and manage. Yeah, Big Data can be expensive. If you want 195 million people to be in it.

Do you have 195 million customers? I don’t mean ‘audience’ I mean paying customers? I mean, even McDonalds in Japan only has 20 million customers who opted in to their mobile advertising. So yeah. If you’re a little chain of 10 hair dressing salons, you might have what, 20,000 loyal customers who visit your salons roughly once every two months, some more often (ladies?) some less often (men?).

Big Data isn’t called that because the database is huge - although early systems are or were. Big Data means a customer relationship management PROCESS that is radically different and prone to expand enormously because suddenly we want each of our customers to be in it, and then to collect for each customer more than just their billing address and a record of their monthly bill. You cannot do marketing to a ‘segment of one’ without first identifying all customers and then to track what kind of engagement you’ve had with that customer. We’ve all been through that situation where the telephone company tries to sell us a service that we already have. That kind of mistakes. Only if the system KNOWS what Tomi said and did last month and last year, and what we promised him two years ago, only then can the marketing communications START to seem like targeted to me, personally, that I feel like I truly am treated uniquely. Like Obama’s voters in 2012, compared to Romney’s voters who just got robocalls (often the recorded voice of Donald Trump).

The reason so many are loyal to their barber or hairdresser is, that they remember us, and how we wanted our hair. But now imagine if that same principle went beyond the one unique hairdresser-person, and was across the whole chain of 10 salons and its 25 barbers. Then a hairdresser who never has touched my hair and has never seen me, knows how I like it and can give me the same cut as my ‘regular’? And if the salon could guarantee this across its 10 shops? That would be a great boost to their profitability, because they could optimize their available time slots and hairdressers more efficiently.

Then you add customer satisfaction. The client would get the right haircut irrespective of which of the hairdressers cut the hair this time. So imagine for example the hairdressing salon always snapping a picture of your haircut for their file - never to be used in PR (stealing your image without permission: don’t spy!) but only so you have a record of how it was before - and they have that record too. And of course, the customer can go see that history at any time, via online, to see the different cuts over the years etc. Now, even if you HATE this idea (some will), at least consider it when your barber or hairdresser is on vacation and you NEED a haircut. Wouldn’t it be a better peace of mind, if you KNEW that the hairdresser has seen the pics of how your hair usually is when you leave the shop and can do ‘that haircut’ exactly like your usual hairdresser?

So its 20,000 customers? Thats a trivial database in size. A standard PC can handle that easily. You don’t need to hire a ‘data scientist’ for that. The customer business data (not the pictures) fits inside an excel sheet. The picture-storage and sharing? Do it via Facebook (or whatever social media) and have the unique client page id embedded into the Excel sheet. So the hairdresser can take a quick look at the next customer’s hair history pics, before starting on that customer’s job. Then of course build the picture library so that your client privacy is safeguarded. Would this be valuable? Would your little chain with 25 hairdressers working for you, be more easy to manage with this?

Now, add the mobile phone numbers of your clients. Why? Send them appointment reminders the day before their appointment. They will love that, it will seem like real personal service (and missed appointments probably costs a hairdresser what, 5% of total profits). This has been tested and proven. Kaiser healthcare centers send SMS reminders which give them annual savings of half a million dollars in the USA, because they have less missed doctor’s appointments. Now, what about offers? Ask permission, never spam. But the next time the customer is sitting in a chair, have the hairdresser ask if the customer would like to receive two notices and offers per month from the salon, to their mobile phones. NOW you have power to boost your profits by 10%. Why? Because people will notice when they need a haircut but only AFTER they notice it, will they act to go to a salon. Some do it the same day or next day, other will wait weeks before getting around to it. You can see from the system, what is the choronological pattern of their visits. Oh, this guy averages 6 weeks between visits. Send him a reminder FIVE weeks into the cycle (1 week early). This way you can SHRINK the cycle of when your loyal customers come to get haircuts !!!! This is the power of mobile ! As I teach, Mobile is the Magical Money-Making Machine.

We’ve tested this, its been reported. Omo laundry detergent has been collecting opt-in mobile marketing audience in South Africa, out of its detergent purchases. Then they launched repurchase reminders, via SMS. Repurchase rate shot up by 60% !!!! Of course it works, because we are now marketing to OUR LOYAL CUSTOMERS, via opt-in and mobile. Of course it works. Don’t spam, don’t spy; ask permission and satisfy!

Can you do this with a radio ad? No. Can you do this with a newspaper ad? No. Can you do this with a TV ad (which small barber shop chain can afford TV ads?) No. You can ONLY do this if you first, collect the customer behavior data; then second, you have their MOBILE numbers (email etc aren’t activating enough, not immediate enough). Do like Finnair who sell upgrades ot their frequent flier. Not giving away random empty seats in Business Class. Rather, offer them to best customers on a first-come, first-served basis per flight, on a discounted upgrade rate. Do this only after ticket-sales are closed and this flight total ticket sales has ended. The total amount of money the traditional travel industry is capable of generating, has now ended for this one flight. Except for mobile! Mobile is the Magical Money-Making Machine! How many Finnair frequent fliers who have been offered these upgrades, have paid more for a flight to move their seat to Business Class? 23% !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

(let me emphasize that point for you:  !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! )

(You do understand, this is PURE profit now. Pure profit. That flight ticket sales are closed. There are 89 passengers booked onto that 9 AM Finnair flight from London to Helsinki, but suddenly the three empty seats in Business Class are sold to upgrading - and very happy - frequent fliers. Those tickets were sold in economy class (often at big discounts). Those passengers have their luggage already checked in, onboard this flight. There is no way to sell anything else to this flight this Airbus 320 will fly to Helsinki in 25 minutes without anything else onboard. But can we sell ‘more’ to a passenger who has already paid for this flight? 23% of frequent fliers? YES WE CAN. This is pure profit! And no other tech will reach us while we are rushing past security control and grabbing a bottle of single malt whisky at duty-free. Only mobile can reach those customers and only through messaging. Even Facebook or Twitter will not reach them in time, an airline app never will, before we’ve landed at the other end and are disappointed, why did this stupid offer come this delayed.. Only SMS or MMS can reach the passengers as they rush through the airport. Once again. 23% of Finnair frequent fliers have OPTED to PAY MORE to upgrade themselves. But Finnair didn’t start this yesterday. They started the opt-in mobile services to their frequent fliers in... 2001 yes 15 years ago.)

And third, you only can do this if you measured their pattern and started to manage it. That.. means you need ‘Big Data’. Oh, obviously your Top Mobilista here at the Communities Dominate blog says - don’t spam, don’t spy, ask permission and satisfy. So fourth, please please ask permission before doing this.

If a barber shop chain can cut 6 days off the repeat cycle of loyal customers who usually take 2 months to come for a haircut, you are 10% faster at your business velocity. Assuming you currently have at least 10% slack in your schedule (almost all hairdressers who are not managing inventory this smartly will have, probably closer to 30%) and you can use mobile to not just accurately target the ads, but to hit specific TIMING with the ads, you can reasonably accurately fill those empty slots in your schedule. That means 10% more profit for you. Not revenue. That barber was sitting idle at the shop, reading a magazine. This is pure profit for you. (Yes, you’re welcome). Mobile is the Magical Money-Making Machine. I have these inventory management solutions via mobile to massively boost profits from all around the world from movie cinemas to dentist offices.

Now will this ‘Big Data’ project bankrupt you? No. You need a PC and someone who knows Excel to set it up. You may have that person in your organization or might hire a company to set it up for you, and then any hairdresser would do their own client ‘paperwork’ after each cut (and take the picture/s). But this won’t cost you 100 million dollars. They key is not the SIZE of a ‘Big Data’ database. they key is the PERSONALIZED nature of customer relationship management, that you will be able to do. This throws away all the previous ‘demographics’ based marketing targeting. That person is a retired person, give him this kind of haircut. That person lives in this part of town, she must want this color for her hair. Listen to how ridiculous that sounds. But if its truly personal, the ‘Big Data’ system can massively boost your business success (like Obama in 2012, a 4.5 times better performance than by using the old demographics and shotgun approach to mass advertising).

WHAT COMES AFTER MOBILE FIRST?

Then lets talk a bit about mobile and the current fad of ‘Mobile First’. So, some still are that clueless that they think that by creating a smartphone app, they have a mobile strategy. Our industry guru Martin Wilson coined the term iSyndrome for that. iSyndrome is the mistaken belief that a smartphone app is tantamount to a mobile strategy. No. Mobile first starts with the only tech that reaches every pocket, and every single human being in any country, that is economically viable. That is SMS text messaging. Smartphone apps only are used on smartphones. There are only 2 Billion smartphones in use worldwide and not all of those even are used to download ANY apps, far less your app. But SMS has an active user base of 5.8 Billion people. Yes. Nearly three times larger than the installed base of all smartphones. SMS is the largest data platform on the planet, meaning yes, its almost twice as big as the total internet by users. SMS is four times as big as Facebook and almost six times as big as Whatsapp (again, all this is measuring users, not how many times they use that given tech). Essentially all the gurus of the industry now say, what I told the Periodicals Publishers Association back in 2002, that the mobile strategy starts (always) with SMS. Not apps. Not NFC. Not the mobile web. Not email. Not Facebook or Whatsapp or Twitter. Mobile First equals SMS Text messaging. That is what all the big successes of mobile are, or do, or did, or yes, in the case of tech darling Uber right now. Yes, Uber too have discovered SMS and are adding it to their portfolio.

So Mobile first starts with SMS but doesn’t end there. Mobile first immediately evolves to encompass also ‘picture SMS’ ie Multimedia Messaging ie MMS. Don’t sweat this detail, you’ll see silly people saying nobody uses MMS. MMS is the second most used data platform on the planet, so they are simply clueless people who do not understand mobile. MMS is not a person-to-person messaging platform or a picture-sharing platform, its a MULTIMEDIA platform and the vast majority of MMS messages and almost all of the money made in MMS is from media and other content. Like did you already receive an airline ticket boarding pass sent to your phone? Juniper reported that 745 million mobile boarding passes were processed in 2015, thats 1 in 6 total airline tickets! In more than 90% of the cases, that was sent via MMS. Did you receive a QR code sent to your phone? That was sent by MMS. We just don’t even notice it. MMS alone is 50% bigger than all apps on all platforms, combined, by revenue. Yes. MMS alone is twice as big as the global music industry. Yes. MMS... but don’t sweat this detail. Ignore it for now. Your team, the moment they notice the success they are getting with SMS (20% or better response rates) they will rush to read the right people and books, like say Gary Schwarts’s excellent book Fast Shopper, Slow Store where he teaches that MMS will get even better response rates than SMS !!!

Then there is a third necessary component to Mobile First. It is a mobile website. A mobile-optimized website. An absolute must. If your website is not mobile optimized, your customers will hate you, won’t come back - and half of them will go... to your competitor’s mobile website !! (Do I know the mobile internet? I chaired the world’s first mobile internet conference 16 years ago in Amsterdam and then joined the event when it was repeated in the USA late in year 2000.) And don’t worry about your budgets. The cost to develop a comparable website to a smartphone app is one tenth the cost and takes one quarter of the time. Many app developers will throw the mobile website as a bonus into the same package if you buy their app development work haha. Mobile web was there well before the iPhone, and I was one of the rare mobile web experts who said when the hype started about the App Store, that gosh, that is not the way. Its good for gaming but for mass media, don’t abandon the mobile web. Today there is a big migration back to the mobile web because it has more users, there is no need for discovery of an app, nothing to downoad, and most customers prefer a mobile website to downloading an app. Duh. Did I mention there are more users on mobile web and it costs less to make? This won’t kill your budget.

There is an optional fourth element to Mobile First. Its voice. In many markets and types of businesses, we can build services on voice calls, recordings, IVR etc around voice. This is far more relevant if there is still illiteracy in the country where you operate. In India for example they have innovated with the idea of ‘missed call’ services and then people receive voice call based entertainmet, content, and advertising. But voice is not a necessary part of Mobile First. Mobile First starts with SMS, then adds MMS and mobile web. That is Mobile First, in that order. Then in some markets you can add voice calls, still into the Mobile First part. Smartphone apps are never mobile first, not even here in Hong Kong where 95% of all phones in use are smartphones.

YOU CANNOT STAND STILL

QR codes, NFC payments, Augmented Reality, LBS (Location-Based Services), mobile wallets, smartphone apps, camera and video, etc are not ‘Mobile First’. They are later strategies for evolution past the Mobile First stage. As mass market reach, none of them are globally yet relevant but in individual countries and markets, some of them can be, yes.

So this is the NEXT stage for you. Mobile is the most dynamic giant industry and has been the fastest-growing giant industry ever seen by the economic history of humankind (still growing at record-speed). Thats why we just learned that while print audience is down, web audience is down, mobile audience is up so much, it more than covered for both of those declines. Now you cannot sit still. So you DO have to evolve. You have to monitor your industry and its opportunities and what is relevant to the industry from this mobile revolution. Once your customers fall in love with your initial mobile services on SMS, MMS and mobile web, you need to think ahead. Do you want to go to mobile wallets (like Walmart) and/or to NFC (like Hilton Hotels) and/or to AR (like Audi) and/or maybe launch your own phones (like Pepsi), etc etc etc. Very likely if you are a national organization or company, you will deploy apps too, at least on Android and in many countries also iOS (but nobody does Windows anymore on mobile). Nothing wrong with doing apps, as long as its part of a mobile strategy that went Mobile First ie did SMS, MMS and mobile web already.

Then be VERY clever and use the full powers of the technology. Like Guinness beer for example, it built a loyalty program and game, around the sensors on the phone, to look for people who can ‘pour’ a perfect pint of beer. You have to keep a steady pouring motion and slowly enough to create the perfect ‘head of foam’ to win in the game. This kind of stuff is obviously done by an app. Will everybody download and play that, with one Billion downloads like Angry Birds. Never. But some of your loyal fans will love it and use it and share it and get friends involved. Its like Ikea with its AR catalog or its like Home Depot who has a very clever ‘bolt measurement’ took for the smartphone screen. It lets you place the bolt on the screen and measure accurately exactly what size screw fits that bolt.. Is this an app for 7 Billion humans, absolutely not. Is it an app for all Home Depot customers, no. But for those who like to build, its a very compelling tool that really has no equal. And its perfect for the pocket. So maybe 10% of Home Depot regular customers might use it, maybe only 5%. But every one of Home Depot customers can be reached via SMS and MMS for the next campaign (don’t spam! get permission).

COMING NEXT? THE REWARD

Now what about the future? Where will this go? Its again something you read in the signature book to this blog, 11 years ago. Communities Dominate Brands told you that you should make marketing experiences rewarding to the audience. Make it fun, make it useful, make it solve some problem. Or.. why not.. reward your audience for interacting with you. I don’t mean to pay them money to see ads, although that too is possible. But the rewards can be loyalty points or frequent flier miles or upgrade benefits or whatever. But isn’t it about time this idea finally matured. I didn’t invent this idea, its been around for ages. There have been many such attempts on the internet and some tried on mobile that all essentially died or vanished. A few are trying to live in this space on app store smartphone apps. But shouldn’t this just become a standard feature for ‘all advertising’ everywhere. Everywhere that is digital and interactive, so online and mobile (including Social Media obviously), at least. But yes, lets also start to reward audiences for actually interacting with our ads!

Now, nobody is going to get rich by watching ads. As any economist will instantly tell you, its a commercially ludicrous idea. The economics are utterly unsustainable (to have anyone get rich by watching ads). The advertiser wants to sell us something. But its our TIME. Its our ATTENTION. All the current methods are abusive or ignored. We fast-forward past TV ads (who watches TV anymore, only the retired people) and skip print ads. We ignore banner ads. If an annoying pre-roll ad is forced onto our screen on YouTube, we skip to whatever else we have also open, and watch that or read that for a while, until the annoying pre-roll ad is gone.

Search ads were an early smart way to do the opposite direction. We know its an ad. We know its paid search. But while we are searching for a hotel in Hawaii, and the search result offers a nice link to what seems like a good resource we didn’t know of that lets us compare Hawaii hotels, yeah, we click on that link. Search is one of the ways the advertising is learning to think ‘the other way’ and its a huge growth area. Most of Google’s profits come from search ads (both on mobile and old web)

What about Amazon’s recommendation engine? Thats brilliance. When you look for my book say M-Profits, you will see on the bottom of the page books that others bought who also bought M-Profits. So you see Mobile as 7th of the Mass Media, and you see Communities Dominate Brands, etc, but you also see other books by other authors, like Chetan Sharma’s Mobile Advertising or Ajit Jaokar’s Mobile Web 2.0 etc. What are those little ‘thumbprint’ pictures of book covers on Amazon’s recommendation engine? They are ADVERTISING. Amazon is advertising to us, not based on what a book publisher paid them to push but rather - far more relevant - based on what Amazon’s (Big Data) engine tells them I am most likely to buy next. This is so good advertising, we don’t even think of it as advertising. We think of it.. as content!

Its totally normal for regular visitors to Amazon to click on the link to suggest 'more books like this' - customers are now ASKING TO RECEIVE MORE ADVERTISING !!!! The riddle has been solved. Amazon solved it already. It can be done. Advertising can transcend from being annoying, to being so beloved, WE ASK FOR MORE. Amazon Recommendation Engine is the case study I use in my mobile marketing workshops, to show how the future of advertising will work. And obviously also its a case study in Big Data. Is it useful to Amazon? Amazon reports that 30% of its TOTAL sales come out of the Recommendation Engine !!! (Big Data rules!)

The advertising industry is waking up to this new world, and trying to make sense out of it. They have to learn to get consumers to opt-in, indeed ask for ads. Sometimes the ads can be so ‘useful’ that consumers don’t even ‘notice’ they are consuming more ads - the Amazon recommendation engine has the button ‘more recommendations’ and when you click on that link - you are actually yes, requesting to see more ads served to you by Amazon. We love Amazon recommendations so much, we do not think of them as advertising at all. While they totally are.

What about the idea of paying customers to see ads. Ah, yes, that idea. Its been tried in many ways, both online and in mobile, and mostly to bad results. Here is why. The target audience who clicks on ads to receive the payments are not the ideal target and those who are ideal target, don’t waste time clicking on such frivolous ideas. The concept is so bad economics, it attracts utterly the wrong types of consumers and attracts the wrong type of advertisers, that it collapses, almost always. But not always.

A GLIMPSE INTO THE FUTURE

Those who have seen me doing my workshops in the past few years have often heard me talk about a Spanish company called Qustodian or you may know it from its service the 'iadbox'. It was set up by my dear friends Agustin Calvo and John Roberts. They’re both real veterans of the mobile industry that I’ve known for more than a decade (Gus is considered the father of mobile advertising of Spain). And they approached the mobile advertising audience from the audience’s point of view. And they built their idea on the princples of ‘Engagement Marketing’ as outlined in Communities Dominate Brands. Their company is now many years old and has millions of users in a dozen countries and growing fast.

First off, its opt in. You will never be spammed and you, the consumer gets to pick what if any advertising you ever receive. On their model, there is literally no spam, ever. Thats a good start. The consumer is in total control and will never be spammed. The ads will always be relevant to you by the topic areas and brands, but then.. the system learns and the ads become ever more relevant. And every time you view an ad, you also get a small reward. A couple of frequent flier miles, or Nectar points or whatever is the loyalty program that is involved, airtime, cash-back, etc... The amounts paid by one ad are so tiny, you can’t get free flights by watching ads. BUT you DO get miles (or whatever) meaning you see constantly a little growth in your balance, and combined by your OTHER miles, from flights and hotels and car-rentals, yes, you get to your free flight a bit faster. And its not just obvious ‘currencies’ like loyalty points or FF miles. It can be more ‘digital’ value like say access behind a paywall to paid content. Earn such access by acruing enough value into your advertising-viewing balance.

Or take another variation with gamification. Have games with prize draws, plenty of low-cost but nice give-aways, T-shirts, hats, mugs, whatever, but then a few superduper awesome prizes. You sponsor the big sports league in your country? Give away a pair of tickets to the championship contest, that kind of super prize. Gamify the ad experience. Its a variation of how the consumer is rewarded (and these can be used of course also together, they are not mutually exclusive).  But note again, the more a consumer views ads, the more chances they earn of winning a prize. Again, this is nothing new in mobile, New Zealand did this with ‘power points’ on TV audiences via mobile, a decade ago. The concept is there, mobile can do this. Now its time to take that big plunge. Lets reward audiences for sharing their time with our brands. Don’t spam, don’t spy; ask permission and satisfy!

This is RADICAL. You get ads as relevant and useful as Amazon Recommendation Engine or Google’s Search Words. You pick and choose when you receive your advertising, not only ‘contextual offer’ to distract you, like Google ad words. No, you pick whenever, if ever, you want some targeted ads - but what Amazon won’t do, these guys also PAY you every time you view another ad that was targeted to you. You will not get 50 ads per day, you only get a few. And the system learns, and you teach it, and the ads get ever more relevant and ever more useful - exactly how Amazon recommendation engine becomes more accurate after you’ve bought more books... I was talking with John a few weeks ago and he said they now have a lot of their users who have started to look forward to the next ads, setting up a bit of time to review them, because they are so useful. Imagine the power of Amazon Recommendation Engine, only even better, across not just books or DVDs but across our whole life. Only stuff thats really interesting to me personally - I’d love to know what Omega has around its James Bond SPECTRE promotion or what special new custom single malt whisky is launched by Tomintoul, or about Kaspersky’s Ferrari Formula One related special edition anti-virus software package with Kimi and Seb, etc. Even though I hate ads, I would love to see THOSE ads. And now, imagine if in addition to getting ads you like, from brands you like, that learn about your tastes so the ads are also RELEVANT, they also... REWARD you? Not by massive amounts, no. But you get a few miles? Isn’t that the sweetest deal you ever heard? No wonder the Qustodian customers are falling in love with the idea and becoming highly loyal and regular users. Its in some ways like the next evolution of Amazon recommendation engine or Google search ads.

REMEMBER RESEARCH BEFORE THE INTERNET (BEFORE GOOGLE)?

Are you old enough to remember research before the internet and search engines. Now think how totally search changed not just the internet, but changed the digital and media worlds, plus so much of our lives. Probably the single most useful service I use every single day is (Google) search. Much as I love Twitter, if I had to pick which was broken today, I would very reluctantly turn off Twitter and keep Google. But the early internet and the worldwide web was content that could not be searched. Early search engines changed all that and today you’re literally a nobody until Google discovers your website for the first time. Now think about the future of advertising. We know the current interruptive way is a dying beast. What I just described is the first road to the promised land. Its like the first search engine was to research and the vast content on the internet. This is the way the future of advertising will be, it is inherently better.

So how does this work? The ads accumulate into your ‘advertising inbox’ for you to consume when you want. So if I suddenly have a cancelled project and a few days of extra time, and could go on a short holiday, suddenly I AM interested if any of my regular airlines have offers say Cathay Pacific to fly me to Bali, or Malaysian Airlines fly me to Lankawi, that kind of thing. Suddenly, today, I AM interested in seeing travel ads. But not 15 minutes ago and definitely not yesterday while I was in a hurry to catch my plane and only had a moment at the airport to do some urgent emails. Then, next week, my sister reminds me about my nephew’s birthday coming up. He has somewhat similar tastes in expensive Italian designer brands as me, now I WOULD be interested to see ads by Armani, Brioni and Canali, perhaps to buy him a necktie or a shirt or something... See ads that only are relevant, and see them only when we want with literally no spam, and no silly deal that ‘you have to watch this ad to see the content’. This is starting to sound ‘sensible’. And what? Then they also reward you with some loyalty points or miles or cash-back dollars or whatever little reward per ad seen.

So its like Amazon’s recommendations but you also get paid to view those ads? Whats not to like. Wait. It works on mobile. Duh. Its mobile messaging. Duh. It also works on the internet. Yes, cross-platform (DUH... has to be!). No silly spam of showing me the same ads again. And serving me on both platforms. This is most definitely another spin on how advertising will totally be transformed into the years and decades to come. Don’t spam, don’t spy; ask permission and SATISFY.

This idea was a prototype by the boys, they tinkered with it and then found ways it works really well. So what can I tell you now? The response rates are not 0.56%. They are not 1%. They’re not even peaking at that 20% level we see on SMS. For most campaigns run on their platform, 20% is the floor of the average range, and 60% is the typical ceiling. Yes, advertising that gets response rates between 20% and 60%. Why are you still sitting there? Why didn’t you talk to these guys already and get onboard this, haha.

So who has used it? Oh, nothing major really. How about the Olympics! London Olympics ran a series of surveys together with Olympics sponsor BT on Qustodian in 2012. They invited British citizens to join in the survey telling them it will run through the 20 day period of the Olympics, with 5 questions every day. You know most will not complete such a journey no matter how much they would love to. How many did with Qustodian’s method? 76% !!!! They had a huge daily response every day with fully tabulated results delivered via Nielsen the next morning. Or take Marca, the largest print and online newspaper of Spain. They achieve 10% engagement rates on their ads using this method.

IS NEXT STEP ON JOURNEY TO MOBILE

So I am not talking now about SMS or MMS. This is not run on SMS or MMS. That was your entry into mobile. That was ‘mobile first’ and that was the beginning. This what I just showed is the future. This solution called the iadbox is part of your second stage. This works with mobile internet. This works with games. This works with smartphone apps. This works with the PC based legacy internet pages. So you have a iadbox ‘inbox’ on your screen. Its like a notification if you have a message via any messaging platform. And it shows how many ads are there waiting for you. The consumer opts in, sets up the iadbox, then sets preferences of what kind of ads are of interst. Travel, cars, movies, football, rock concerts, you know, and after that profile is set, the system start to send you ads, based on your preferences, and then you are always in control of how to configure the inbox and as you teach brands about you - assuming they run Big Data type analytics and monitor the discussion (this still requires a lot of un-learning and new learning by brands and advertisers) the contacts will become ever more relevant and personalized. Exactly like Obama in 2012 compared to Romney.

So who is this for? As a business, its for media houses, banks, game publishers, etc, who want to talk to their customers. Its a direct marketing channel but one that will be prioritized by the consumer. They don’t want to meet brands who spam them in Facebook or are pretending to be a human on Twitter. Those are again lying concepts of spam pretending to be social media. They are not opt-in. This box works only as opt-in. This is one of the first companies to discover the path to the promised land, what all ad industry and media industry gurus say is the inevitable future. And now its no longer a ‘project’ with some thousands of users. They have over 4 million users in Spain alone, growing fast. Its in 12 countries and counting on four continents (Europe, Latin America, Asia and North America). In total their reach is now past 10 million across their whole footprint. And for you, in those countries, it might arrive to you, via say the local football magazine, on their app or website, as a suggested communication channel. Or say the radio station or the credit card company offers it to you, as a communciation channel. But its not only that magazine’s or radio’s or bank’s private messaging system.

Its a ‘generic’ marketing communication system covering all brands, but one that is totally controlled by the individual consumers and has no spam! So any brand can use it but the consumer totally controls it. This is why they have solved that riddle of how to do the loyalty rewards in a sustainable way. I am a loyal Pepsi buyer, I will not want ads from Coca Cola, no matter how many for free they offer me if I buy one of their cans. I don’t want Cocacola’s buy one get 100 free offer. I don’t buy Coke... haha. (ok, one plus one hundred, I think I could take that but only because I’d give the 101 cans to the one of my nephews who is the black sheep of the family who prefers Coke, not Pepsi).

Note how hopeless this is a project to launch. Its a chicken-and-egg problem but to a much more hopeless degree than most. The first consumers won’t see any worthwhile ads because the advertisers aren’t there. The advertisers won’t care because there isn’t an audience. Thats true of all ad projects from the dawn of advertising with the first published newspapers almost two hundred years ago. But its far worse. These are an ‘exclusively opt-in audience’ meaning if you have 1,000 ‘audience members’ in total, only maybe 10% are interested in say food or makeup or cars, its FAR worse, initially, to the whole prospect. Then it gets worse yet. These audience members need to be compensated for viewing the ads. So someone’s gotta put up money to get the ball rolling. And a Spanish user is no good for the advertiser in France or Britain or Brazil. So the whole process has to start from scratch again. But now imagine the power, once its in place. Imagine the power of Obama’s machine in 2012, by the time it knew who were the 7% who were truly undecided, and could focus on only those, and ignore 93% of voters who already had decided which way they will vote. Now consider this system. When millions are in the system, it gets ‘into gear’. Now we have case studies on iadbox like KLM the Dutch Airline which got a response rate of ... 90% on its promotion. Because only those customers who were interested in travel, watched the ads, and watched them only when they were in the mood for travel purchases... 90%. How great is that?

Also there are plenty of other really cool ways the system has been used, such as having the rewards go to a charity or youth program instead. So one individual would not earn much in one year of say airline miles, but if a bunch of friends join together and support the Red Cross, in one year of their combined ads, donated to the charity, a Red Cross doctor can be flown to a disaster zone for free... that kind of collaboration is also totally at the core of this system’s design. One for the enlightented and caring consumer of tomorrow..  Or in other words, young people.

FUTURE IS HERE

So some of you have read or heard me saying that in the future advertising-funded media like TV, radio, internet etc will remove the linear connection between ads and the content. I mean that on TV and radio, we have ‘linear content’ and then we cut into an advertising break. A variation of this is the pre-roll video ads, to watch before we are shown something on YouTube etc. The advertising is placed with the consumption of the media, because there was no practical way to deliver ads to the audience and still ensure they get viewed. This model of iadbox is a break from that pattern. I can foresee a totally free periodical, which ‘shows no ads’ and has no subscrption, but is profitable, and has its ads all delivered via something like iadbox. The audience is offered a channel to self-select and opt-in, into ads of only their areas of interest - and never be ‘forced’ to see ANYTHING, before watching (reading/listening to/consuming) any content. And also, I can foresee a media consumption ‘account’ run by something like iadbox, where you can subscribe and pay, or you have say a ‘silver level’ iadbox ‘status’ and that entitles you to select five magazines from these 2,000 magazine titles, which normally are by subscription. If you consume more ads (and/or your profile is more targeted to higher consumption levels, like say you buy airline tickets powered by iadbox rather than two sticks of deodorant and a sixpack of beer) you are upgraded to the ‘gold’ level and now you can pick 10 titles from the 2,000 basic titles, and 5 titles from the 10,000 premium specialist titles, etc etc etc... Same for radio, same for premium TV etc etc etc. We are now approaching that moment when this type holy grail of digital advertising becomes reality. Like take me. How can the advertiser reach me, if I stopped watching linear TV 9 years ago, stopped buying the last paid magazine (The Economist) six years ago and refuse even free newspapers on airlines (who reads yesterday’s news today?). I don’t even read the freebie travel magazine of my airlines. I deliberately avoid even the ads that airlines show before they give me my movie. I know the ads are coming, I turn the TV screen away, continue on my PC for 5 minutes, then rewind to the start of the movie. How are you going to reach me? The old system is broken and lives on ever less valuable customers left to target to.

Advertising is necessary and will live on, but advertising has to change to adjust to the new world. First TV ads were literally radio ads played to a magazine still picture shown on TV. Early advertisers didn’t know how to use the power of TV. Early internet ads were magazine or Yellow Pages ads reformated for the PC screen. Again early advertisers didn’t know the full power of the internet. Mobile is the most powerful media by almost every metric - it is the one with the largest reach, its the one growing fastest, its the one that is most personal, and its the fastest. Mobile is the most measurable mass media that ever existed, so much so, that mobile is used to measure OTHER media audiences. In terms of revenues and profits, mobile obliterates all legacy media. But mobile is also a NEW media, as I have been teaching for a decade, mobile is the 7th mass media where the internet was only the 6th and TV was the 5th. Mobile is different, it has 9 unique abilities you can’t do on the internet or TV or radio or cinema or print etc. But most ads on mobile are still repurposed internet banner ads !!! (again, that same mistake, ignoring the power of the new mass medium). Mobile is more powerful than that. Lets use that power and deliver ads worthy of this mass media channel.

We are now approaching the point in time, where the physical connection between digital content, and advertising that funds it, can be severed. The appropriate ad viewing and related purchases can be accurately measured back to the audience member and his or her media consumption so the ad dollars can also fund the appropriate titles and their content. Without interrupting the audience or spamming them. Don’t spam, don’t spy; ask permission and satisfy! Then if you pay a bit in rewards to the audience, suddenly this system is taking off and we have a new way to do advertising. All opt-in, no spam. And with smart audience interaction, any business can then build a ‘Big Data’ personalization to their messaging. The timing is now more significant than ever, as we saw from the statistics just out last month that even PC web audiences for print media titles are in decline, but mobile is far bigger and keeps growing. Which brings me back to what I told the Periodical Publishers Association in 2002: I summarized my mobile keynote with four thoughts (from my original conclusion slide):

1) the mobile internet will be huge, larger than the fixed PC internet (became true);
2) your best content and most passionate audiences will migrate to mobile (right now becoming true for print industry);
3) your competitors will be there (true); and
4) educate your customers now with SMS (haha, how perfectly true back in 2002, and how totally still true today).

Comments

[rgb]

Tomi how come there were no political posts this week? You made so many after Donald Trump's loss last week I was hoping you could do an in depth analysis explaining Hillary Clinton's loss this week.

[Tomi T Ahonen]

rgb

hold on, its coming. but the quick version for you - Trump's loss in Iowa was AGAINST the polling lead he had. Hillary's loss in NH was consistent with the polls she had. Hence Trump was news, Hillary was not. But I will be doing a more indepth discussion on the blog shortly

Tomi Ahonen :-)

[NH voter]

The biggest news out of NH(my state), was the exit polls that overwhelmingly showed that Hillary is thought to be an untrustworthy, lying scumbag and a shill for the corrupt establishment.

The other news, what does it say about our election process when the party bosses, from both parties, pledge to spend whatever money/resources necessary to oust the candidates the voters want to replace them with their own filthy agenda driven shills.

[Henry Sinn]

Hey Tomi.

Great to see a media based post after SO long. It's been a very long time coming and, as always, an insightful read...

Starting to sound more and more YELLOW in context:
Give people a match to what they WANT at the time they WANT it / Don’t spam, don’t spy; ask permission and satisfy!

Looking forward to more....

[العاب برق]

im so thankfull buit iom not agre with u