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Why retail marketers should sideline AR and VR technology, at least for a while

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Marketers are always on the hunt for the latest in innovative tech in a quest to snare prospective customers with the wow-factor.

Augmented reality (AR) and virtual reality (VR) are two such technologies touted as the next to revolutionise the retail landscape, however, a new study by Censuswide and payments provider Klarna suggests customers don’t share the same enthusiasm.

Interviewing 2,000 shoppers, the study revealed that four in five had no interest in these technologies, suggesting that marketers are inclined to tick the shiny-new-tech box despite it not exactly chiming with customers’ wants and needs.

Asking 50 retail decision-makers themselves, the study found that while 38 percent listed the creation of online personas and avatars as a key priority, 28 percent of consumers just wanted to see a broader variety of clothes.

While 32 percent of retailers planned to create virtual stores which could be browsed online, meanwhile, just 10 percent of consumers said they would be interested in using this feature in the future.

The findings by Klarna are compounded by those of a recent eMarketer report which, focused on the new technologies that could improve m-commerce experience, found that just a third of millennials in both the UK and US favoured ‘try before you buy’ AR.

Instead, the majority (62 percent) cited visual search as a preference, while 58 percent said they’d benefit from ‘click to purchase’ content, through images, videos, articles, blogs and user-generated content on social.

It’s not to say, however, that there is no place for AR and VR-based tech in marketing. IKEA’s Place app, which allows shoppers to virtually place its furniture in their house, is a practical use case. Meanwhile, this summer Facebook tested AR ads which would allow users to ‘try on’ items from brands, such as cosmetics and clothing.

In a recent article on Marketing Tech entitled ‘Just how realistic a goal is augmented reality in marketing?’ Fifty Five and Five’s Sam Gowing envisaged the technology’s use in the B2B marketing space, where AR could be used for virtual conference meetings.

“When so much of communication is based on body language, and online meetings have a higher ratio of people not paying attention, the introduction of AR could be a boon and a great medium to providing more compelling sales pitches,” wrote Gowing.

While a measured and thoughtful approach to these technologies can see real utility that helps customers in the consideration phase, in a wider sense, AR and VR seem to serve as more of a PR piece. On how marketers should move forward with the technology, Gowing puts it well.

“While marketers would be commended for leading the way, and put themselves at a considerable advantage, the risk will remain high until the market is more mature. For now, though, marketers will do well to keep an eye on the evolution of augmented reality to see where it goes in the future.”

Interested in hearing leading global brands discuss subjects like this in person?

Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore. <

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The Drum’s Diane Young in conversation with Gary Vaynerchuk on predicting the industry

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There have been many times that chief executive officer of digital agency, VaynerMedia, Gary Vaynerchuk has got it right with regard to predicting the future of the industry. In another clip from a video interview conducted by The Drum’s CEO Diane Young – see previous videos here – he admits, “It’s very powerful when a video on LinkedIn, that dates back to six years ago, plays where I’m saying something that has turned out to be true. You can imagine how much weight that carries.”

Vaynerchuk explains that there is no debating that a lot of chief marketing officers, chief executive officers and board members are becoming increasingly aware and curious about what VaynerMedia do. But of course, a lot of that comes with its own cynicism about someone building their personal brand in 2018.

“There’s a lot of CMOs and CEOs who see me and think I’m a charlatan or a blow hard,” says Vaynerchuk, “which eliminates us from the sort of opportunities we deserve.”

He argues that GE and Pepsi – clients VaynerMedia has had for over half a decade and sourced through word of mouth recommendation – are far bigger drivers in propelling the success of the business.

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Focus on account optimisation and bid strategies to achieve success

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A key facet of a paid media analyst’s job is to optimise accounts to ensure they’re performing at their best while maximising efficiencies. As part of the fast-paced and everchanging landscape of the industry, we need to consider a larger number of variables when optimising bids, budgets, landing pages and ad copy towards a wide range of KPIs. At the same time keeping on top of all these tasks and KPIs across evolving and growing accounts is becoming increasingly challenging and time-consuming.

One of the key tools to help combat this is bidding. While it’s a basic point, this determines how much we pay for the traffic we drive. Historically, bidding has been one of the main tasks in an analyst’s day, however, there’s so much other work that needs to be done, so help was needed. The rise of artificial intelligence (AI) driven optimisation tools, such as bid strategies, offer the opportunity to automate some of the manual dayto- day bid changes beyond basic keyword level, giving analysts the time they need to focus on driving strategy and growth.

What are bid strategies?

Bid strategies automate processes involved in optimising accounts, such as adjusting keyword bids and location, device and audience bid modifiers. They take learnings from previous campaign and keyword data within the bid strategy and factor in many influences that we can’t always see or consider when making manual optimisations.

They reprocess and modify keyword bids and demographic bid modifiers up to four times a day to ensure performance is maximised and efficiencies are met. Considering the number of keywords which can be processed, the number of data points considered and the frequency of the bid changes, it’s nearly impossible for an analyst to do this manually every day.

When the algorithm has gone through its learning phase (approximately 10 days), it will learn which times of day or week are more likely to drive conversions and will adjust bids during these times to maximise performance.

When the learning phase is complete, the strategies can be left to run and manage the daily optimisations of the account with minimal changes required by analysts. Changes shouldn’t be made more than once a week though, as the algorithm will need to relearn following changes to ensure it can work towards the new goal.

The more data within a bid strategy, the quicker the algorithm can learn and optimisations can be made with more efficiency and accuracy. Likewise, the more conversions which come through the bid strategy, the more accurately the algorithm can predict when a conversion will happen and bids can be adjusted accordingly.

With bid strategies automating optimisations, analysts have more time to grow their accounts by developing the overall strategy and researching and implementing new features.

Different types

There are several different targeting options available through bid strategies; the option you use depends on the overall KPI of an account or the set of campaigns and keywords.

  • Ad position: This strategy will adjust bids on your keyword sets so that ads appear in the specific position you wish to target. This is a good goal to have for brand campaigns where top position and high visibility are a priority.
  • Number of clicks: This strategy will find the optimum bids for driving the most traffic to site. It doesn’t take into account what actions are taken once a user has clicked on the ad, and instead only focuses on driving traffic through to site.
  • ROI bid strategies :These strategies find the optimal bids for maximising the number of conversions or revenue generated on-site while maintaining a target cost per ad (CPA), effective revenue share (ERS) or return on ad spend (ROAS).
  • Monthly spend strategies :These will spend a specified amount within a month; the algorithm adjusts to spend your budget evenly and exactly throughout the month while maximising conversions or revenue. This works best when monthly budgets are fixed and don’t vary considerably month-to-month.

The capabilities of bid strategies are constantly growing and evolving, with the learnings becoming increasingly accurate. Once you have bid strategies working correctly and are happy with their performance, you can then look to expand them to consider different attribution models as part of the optimisations.

What’s important to note is that you can’t just ‘set and forget’. We all use the automations at our disposal to improve performance and speed in our accounts, however it’s important to intervene when needed. Ensure you keep a close eye on your campaigns and manually adjust when necessary, rather than completely relying on the algorithms.

While bid strategies are key to optimising accounts, they’re not the only tool at our disposal. There are plenty of other tools available to ensure the success of our accounts, including:

  • Search Query Reports (SQRs), which allow us to identify search terms which are wasting spend and exclude them from the account, as well as picking up new, relevant search terms to add as keywords.
  • Budget management, which allows us to control where and when we focus our investment; this can be done on an individual campaign level, or shared across multiple campaigns as you see fit for your activity.
  • Breaking out highperforming keywords into their own campaign can help focus budgets.
  • Adjusting and optimising various campaign settings and rotations.
  • Using modifiers to adjust bids based on device, audience, demographic, and geolocation.

With all this in mind, it’s clear that optimising on a daily basis is vital for campaign health, efficiency, and efficacy. From bid strategies to SQRs, we have the tools and techniques to not only meet our business objectives, but also exceed them, and what’s key is to strike that balance between technology and human intervention, ensuring that you’re always maximising the potential of your account. Now if you’ll excuse me, I have some optimising to do…

Natasha Hole, paid media analyst, Greenlight Digital

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Watch this space: When will brand integration finally take off?

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Back in 1982, Reese’s Pieces and ET changed the game when it came to product placement. But with streaming services offering advertisers ever more opportunities and Netflix’s Stranger Things carving out its own place in the product pantheon, but when are we really likely to see brand integration become the norm rather than the exception?

In the history of brand integration, there are a few ‘gold standards’ that come to mind when talking to industry professionals. The first, which always seems to be on lists, is the Reese’s Pieces integration in Stephen Spielberg’s classic ET. As the story goes, M&M’s maker Mars passed on the opportunity and Hershey’s snapped it up, agreeing to spend $1m promoting the film in exchange for using ET in its ads. Hershey’s tripled sales of the new product and the investment was estimated to have resulted in $15-$20m worth of brand promotion.

There are other iconic integrations. Aston Martin and Heineken with James Bond (though many other automotive brands have been part of the franchise); Mini in The Italian Job; FedEx and Wilson in Cast Away; Ray-Ban in Risky Business; Nike in What Women Want. The list is long and distinguished and, today, brand integration is arguably more critical than ever as behaviors and consumption habits change – especially in television as streaming continues to gain momentum.

According to research by Morning Consult, as of October 2017 in the US 32% of respondents were using streaming services more than traditional TV, and 14% were watching traditional TV and streaming about the same amount. Amazon Video has seen an uptick in subscribers to 64 million in the US (up from 48 million in 2016) and is expected to reach 94 million by 2022, according to Digital TV Research. Netflix has seen substantial growth, with more than 109 million worldwide subscribers – up from around 23 million at the end of 2011.

Continued growth in this space presents a unique challenge, as well as opportunities, for brands. One Netflix show in particular, the highly popular Stranger Things, seems to be next in line to carve out its place in the brand integration pantheon.

“We did more than 5,000 [integrations] last year, [which is] about 14 a day, and one that stands out is Stranger Things,” says Greg Isaacs, chief product and marketing officer at Branded Entertainment Network (BEN).

Indeed, when discussing the show, a conversation around Kellogg’s Eggo brand is sure to be among the first mentioned.

“I just thought that was such a pivotal part of [Stranger Things character] Eleven’s storyline, with her finding something of comfort,” says prop master Scott Bauer, a 20-year Hollywood veteran. “It was a brilliant piece of storytelling and product integration.”

Eggos aside, the show is proving that brands offer a savvy way in which to make an impact – Stranger Things has done impressive hookups with legacy brands that tap into its1980s vibe, such as Oreo, KFC and Reebok.

“There was a scene at a dinner table where four of the characters were talking,” says Isaacs, “and the KFC bucket, it was just sitting in the middle of the table for over two-and-a-half minutes. And not only was it sitting there, at the end the characters, and I’m paraphrasing, but they essentially said, ‘Wow, this is finger-licking good.’ That is extremely hard to do, and so authentic.”

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Being authentic matters more than ever

Authenticity is a critical component of brand integration and one that relies on a great deal of trust between brands and creators. To the brands, there is an expectation that the product will have prominence. To creators, including producers, showrunners, prop masters and transportation on productions, having brands involved helps create a more effective and authentic story.

“One of the toughest things for brands to understand when integrating their products into stories is that their brand actually can’t be front and center. If it is, the audience trusts the story less. If it’s integrated seamlessly, then the audience doesn’t care, because they’re being entertained,” says Lesley Chilcott, producer, and director of films like An Inconvenient Truth and It Might Get Loud.

“Forcing an integration where it feels and looks unnatural can seriously backfire,” adds Pattie Falch, brand director, Heineken sponsorships and events. “Content integration is not an opportunity to create a commercial — it’s about finding authentic moments that enhance the story, and the brand plays a big role in bringing those moments to life.”

The danger of? Making a viewer hop out of their comfort zone to feel as though they have to pay attention to a brand, versus the story itself, is borne out in how audiences think about advertising in general.

“One of the things we’ve seen consistently, in the research we do, is that audiences prefer integration over interruption, by massive percentages,” says Aaron Frank, vice-president of strategy and insights at BEN. “When it’s done in an authentic manner, where it’s aligned with the characters and advancing the storyline, audiences say they don’t mind that it’s there. When it feels like a commercial in the show, it turns [audiences] off. The best marketers want to create an emotional connection between the product and the audience, their customers.”

“That’s where the art comes into this whole business,” adds Isaacs.

No longer a ‘nice to have’

With the continued momentum of content creation (there was $17bn disclosed in new content creation across Amazon, Hulu, Netflix, Apple and Facebook), especially among platforms that don’t necessarily deal in traditional advertising, there are ample opportunities for brands to get on the bandwagon relatively early.

“With a 30-minute episode, whether it’s on streaming or broadcast, if you think about just how many different scenes there are, and characters, and opportunities for brands, it’s a tremendous amount. You can watch a 30-minute episode, and there might be 20 brands in there,” says Isaacs. “We did an analysis where only about 1.5%-2% of arguable impressions are being utilized today for integration. That leaves 98% available.”

Marketers continue to look for places to make an impact and, according to Isaacs, streaming audiences will be larger than broadcast. Additionally, the fact that, for the most part, brands can’t advertise in traditional ways illustrates the opportunity afforded in brand integration. Also, increasingly sophisticated measurement signals a potentially safe place for brands to dig in.

Taking a test-and-learn approach, like traditional advertising, is becoming more frequent in the integration space and improved measurement is critical for its prospects.

“We now understand the impact of these integrations on some base-marketing KPIs,” says Frank. “Whether that’s awareness of the brand, consideration or purchase intent, we’re able to do studies that give a real sense of the impact and effectiveness of integrations on audiences. That’s what marketers want — to be able to understand if they are making the right investment, and if it’s turning into ROI for them.”

With an ever-expanding playing field and content progressing at a staggering rate, in Isaac’s mind this could very well become another ‘golden moment’ for the combined power of brands and entertainment.

“Brands used to think about integration as a ‘nice to have’ or a one-off,” he says. “Today, they’re viewing them as campaigns, which means they’re in for the longer haul. I think 2018 is the year that brand integration will become a necessity.”\

This feature was first published in The Drum's February issue, the Future of TV.

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