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How to build brand loyalty in the age of ‘hyper personalisation’

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Consumers have more power over brands than ever before. Social media gives them the ability to openly scrutinise or share their great experiences directly with a mass audience, while online shopping means brands are in an ongoing battle to cut prices, hold user attention, deliver products quickly and ultimately stay relevant to keep consumers loyal.

Consumers also expect a lot more from brands. We’ve become accustomed to recommendations from companies like Amazon, who have changed consumer expectations by tailoring their offerings, based on previous purchases, to the extent that brands can no longer get away with ignoring online behaviours. However, often these recommendations are based on outdated algorithms and collaborative filtering.

It’s no longer enough for brands to address consumers by their first name in an email on their birthday and think that’s the personalisation box ticked. Hyper personalisation is about using data to react to consumer decisions in real-time, such as notifying them about a discount on shoes as they start their search in your app.

Businesses need to bring loyalty programmes into the digital age or risk losing the consumer base they’ve worked so hard to build.

Getting hyper personal

New data from research firm, YouGov, has found that 48% of loyalty programme subscribers are more loyal to those brands. They also found that 87% of consumers are looking for loyalty programmes that offer them discounts and offers. So why are so many brands failing at this at best – and ignoring it at worst?

The reason is simple: bad data. Traditionally, a brand would profile a consumer using a variety of factors such as age, gender, location and financial status. Take this for example: two men, both born in 1948, self-employed, wealthy, married, have dogs, own a house in London, have children and like fine wine. On paper, these two men are almost identical but in reality these two men are extremely different. This, in fact, is data pertaining to Prince Charles and Ozzy Osbourne. This highlights the main flaw with the data that brands are currently using to ‘get to know’ their audience.

So what other avenues can brands explore? Technology is evolving rapidly, so many brands may not be aware of the golden opportunity presented by advancements in AI (artificial intelligence) and computer vision analysis for mobile devices. The data on our smartphones says everything about who we are. From the places we visit to the photos we take, smartphone data provides more insight about our daily lives and habits than any other data imaginable. With consumer consent, brands can now take advantage of on-device AI, to quickly analyse that data – which includes GPS information, photo galleries, browser history and more – to build a persona for that user.

This first-party collected data is the key to the next generation of hyper-personalised consumer loyalty programmes. For one example among many, on-device AI can analyse a consumer’s entire photo gallery to produce insights about a consumer’s likes and dislikes, their desires and their intentions for the future. It also tells brands about a person’s socioeconomic status and indicates their spending power. This data is gold dust and, in the right hands, can be used to create personalised and relevant discounts and offers, benefiting both the consumer and the brand.

Imagine if you could offer a consumer what they want, need and care about, in real-time. This could be a specific discount at the moment that will be most useful, for example, discounts on home goods when they are about to relocate, or links to cheap train tickets when you know they are planning a trip. For forward-thinking brands that want their loyalty programme to stand out, this is clearly it – by showing your consumers that you really understand them.

Ultimately, this requires a shift in thinking. Brands are often rightly concerned about where the next consumer is coming from. Quarterly profit statements and shareholder scrutiny means brands need to be on the lookout for ways to improve market share. But this should not come at the expense of the existing consumer base. The potential ROI from just increasing sales to current consumers by 8% could be a significant increase in profits for many businesses. And all of this could happen overnight, by simply putting more emphasis on helping current consumers to purchase more of what they want, when they need it.

With the recent announcement that John Lewis’ profits have fallen by 99% in the first six months of 2018, the need for this shift in mindset has hit a critical juncture. Many analysts believed John Lewis to be the bastion of consumer loyalty, now they aren’t so sure. But John Lewis is already leading by example, working with Waitrose to trial combining their loyalty schemes in the hope that existing consumers don’t drift away from the brand. This is exactly the shift in mindset that is needed in today’s digital marketplace.

Metadata and understanding visual information are already the main weapons in the ongoing battle for customer attention. By leveraging offline data from smartphones and combining that with online consumer personas, on-device AI and computer vision analysis can provide brands with the ability to give consumers the experiences and recommendations that are personal, targeted and exactly what they need or desire.

It is this kind of revolutionary AI that will provide businesses with the cutting edge to differentiate themselves from the competition and offer the next generation of loyalty schemes. For anyone looking to knock John Lewis off the top of the retail tree, investing in this technology is paramount.

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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Ad-fraud shift from desktop to mobile sparks partnership

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As consumers shift more and more of their online time to mobile, ad fraud is following suit. DoubleVerify’s Fraud Lab has noted an 800% jump in in-app mobile ad fraud over the past year. In response, the marketing analytics software provider has partnered with InMobi, a mobile engagement platform for marketers.

As part of the partnership, “DoubleVerify will provide always-on fraud filtering and measurement for mobile in-app advertising campaigns across the InMobi Exchange globally,” DoubleVerify chief operations officer Matt McLaughlin said in an announcement.

Third-party verification has helped to reduced digital ad fraud on desktops to low single digits, according to DoubleVerify. At the same time, mobile apps have grown to command more than 50% of a consumer’s time online. In response, advertiser’s demand for quality mobile inventory has ballooned. That demand has fraudsters finding creative ways to corrupt the mobile ad experience.

DoubleVerifyFraud Lab has spotted three key trends related to mobile ad fraud that are on the rise:

App spoofing is increasingly sophisticated. Non-premium apps are spoofing as other non-premium apps or as premium apps to draw higher revenue by appearing to be more valuable than they actually are.

Hidden embedded browsers visit fraudulent sites where they generate non-human impressions while trying to avoid detection.

Apps that hijack mobile devices use hidden or background ads to generate high volumes of fraudulent traffic.

DoubleVerify’s integration with InMobi aims to help address these issues. The integration will cover pre-bid targeting for all InMobi Exchange impressions within its mobile in-app platform. Additionally, the integration will enable monitoring of post-bid fraud activity, such as spoofing. These also will allow InMobi to continuously refine its mobile ad inventory quality.

“With ad spend increasingly concentrated in mobile, it’s imperative that brands have transparency into the quality of mobile app inventory,” McLaughlin. “We are proud of our partnership with InMobi, which expands the footprint of our fraud prevention capabilities.”

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Who should take advantage of IGTV first?

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YouTube has had a near monopoly on the long-form video space — until recently. Instagram’s IGTV is here and it looks like it could be a formidable competitor. IGTV is the popular social media platform’s very own vertical video app, which is designed to allow brands, influencers, and creators to post longer segments; allowing for videos up to one hour in length, compared to the previous length of only one minute.

IGTV will almost certainly develop as a bona fide YouTube competitor, at a time when YouTube may be in its most vulnerable state. Here are the most likely reasons why:

IGTV could be a brand safety oasis

YouTube is especially sensitive to IGTV at the moment due to brand safety concerns. For the past year, YouTube’s biggest challenge has been assuring advertisers that their buys will be safe. At one point, 250 brands stopped advertising on the platform altogether. And, while almost all brands have returned, and YouTube has invested heavily in being a better partner, half of advertisers say YouTube has done a poor job with brand safety and managing inventory quality.

For IGTV, this is a gift. Though it has been careful not to say so explicitly, Instagram will likely be positioning IGTV as a more curated and brand-safe environment than YouTube. Brands want an alternative in light of safety concerns, so they’re looking at options from Snapchat and other premium publishers. We see this in our own spend data, with YouTube ad growth almost completely flat; increasing by just 0.2% from January to May.

So, what can brands do in the interim, whose main concern is brand safety? The instinct is to be cautious. But that may not be the right answer. Instead brands should be clear and firm with expectations. Brands first to market will be able to push Instagram to be brand safe – to demand it – and IGTV has the opportunity to challenge Google Preferred by providing brands with a transparent, brand-safe solution to YouTube’s shortcomings. However, the platform has to prove it by example first.

YouTube has made significant strides in showing advertisers that they are taking brand safety concerns seriously (e.g. the implementation of whitelist and blacklist technologies, partnering with DoubleVerify). IGTV has to be brand-safe out of the gate — or at the very least, safer than its competitor — to draw those advertisers away from YouTube.

Advertisers will like IGTV for performance

Beyond brand safety, IGTV could beat YouTube on performance. Over the past two years, the demand for performance by digital media has exploded. Last year, brand frustrations culminated when P&G and Unilever, two of the world’s biggest advertisers, dramatically cut ad spend due to concerns around transparency and ROI. Ad budgets are being scrutinized more than ever and a growing number of operations are being taken in-house.

This ties back to IGTV and YouTube in a few ways. First, according to ANA data, influencer marketing has surged. Seventy-five percent of brands are spending on influencers and nearly half will increase spending in the next year. Why? Sixty percent say they’re happy with the performance they’ve seen, with Instagram being the second-most popular channel for influencer programs, just behind Facebook.

Instagram has established itself more strongly as a performance channel than YouTube and it offers an unmatched ability to drive purchases. That’s an advertiser’s dream, of course. A recent study, reported by RetailDive, and conducted by Dana Rebecca Designs, revealed that 72% of users have made a purchase decision as a direct result of something they saw on Instagram. YouTube, by contrast, has helped with purchase decisions already planned. If Instagram can deliver similar performance through IGTV, advertisers will come calling.

Retail brands, specifically those that are significantly reliant on online shopping, should realign their budgets to make IGTV a priority, as IGTV will be a great resource for driving the right type of customers toward a purchase.

Instagram is growing, while YouTube is not

Unfortunately for YouTube, brand safety isn’t the only major challenge it has grappled with recently. In addition to ad growth, viewership numbers have begun to slow down. A few months ago, major channels and influencers on YouTube saw their monthly views stall. An analysis by eMarketer echoed this pattern, noting that YouTube’s audience growth was 13% in 2016 but only 9% in 2017. According to the report, “YouTube viewership is nearing saturation in many markets.” Those numbers are likely to continue to erode.

IGTV, by contrast, is only just getting started. Its growth prospects are bright. Instagram’s user base is growing by 5% each quarter. The company recently announced 1 billion monthly active users. YouTube has more at 1.8 billion, but Instagram hasn’t shown any signs of plateauing. Also, consider that consumer tastes have shifted towards vertical video as mobile viewing has exploded. IGTV is a vertical video-first platform, while YouTube only added vertical video compatibility in January. The viewership trends are in Instagram’s favor, whereas YouTube is playing catch up.

YouTube could wonder about its ability to maintain audience numbers if top stars and influencers desert it. At its core, Instagram is a social network. YouTube, by comparison, is not. Most come to YouTube for personalities like Smosh and Jenna Marbles. But if the personalities go away, so do the viewers.

In recent months, some influencers haveeither left the platform or chosen to diversify their content across challenger services such as Twitch. As YouTube tightens brand safety and copyright controls in an effort to calm advertisers, creators are concerned that the cleanup is leading to “viewer suppression” and demonetization. IGTV has already partnered with popular influencers such as King Bach and LeLe Pons for its launch, and any blowback among YouTube’s community of stars will only help it attract more creators.

Tread cautiously

IGTV’s opportunity to become a brand-safe, performance-driven, vertical video alternative to YouTube isn’t just hype. That being said, brands should remain vigilant during this time, and not act on impulse once IGTV decides to monetize. Some may be tempted to dive right in, due to the influencer-heavy list of content creators on the platform, but IGTV will have to prove it has learned from the woes of its competitor, before it can truly outshine YouTube.

Todd Krizelman is chief executive officer of MediaRadar

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Group Nine centralizes branded content team with launch of an in-house studio

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Group Nine Media is bringing its branded content strategy under one roof with the launch of in-house studio Brandshop.

The digital publisher announced today (11 December) that Brandshop will bring together the creative services teams across its four brands — NowThis, Thrillist, Seeker, and The Dodo — and the branded entertainment piece of its production studio Jash.

Group Nine president Christa Carone said centralizing everything will better inform the outlet's editorial strategy.

"The campaigns, the videos, and all of the programs we're developing are entirely informed on the insights that we're seeing from the audiences that engage with our editorial content. So, when an advertiser asks what young are people interested in, [we have a] robust set of data to be able to answer that question in an informed way," Carone told The Drum.

According to Nielsen, Group Nine reaches over 80% of US adults in their 20s. Group Nine brands earn more than 140 social engagements each month, per Listen First Media.

Yosef Johnson, senior vice president and head of Brandshop, will lead the new studio. He called it a "holistic new shop" across Group Nine's four brands.

Group Nine is the latest media company to push a brand content strategy. Condé Nast recently set up its own agency and brand consultancy in the UK.

Carone said Group Nine is seeing "very healthy, double-digit growth" in the area, and that as a social-first publisher it has a unique position in offering branded content.

"We lean very heavily into the social platform. It's one of the reasons we know advertisers want to work with us, because we are known in the marketplace as being one of the most robust social-first publishers, so our learnings from that are helping advertisers better understand how they can engage with younger audiences on social," Carone said.

Digital media currently stands on some shaky grounds as it competes for advertising dollars with giants such as Facebook and Google. BuzzFeed's chief executive suggested a merger among media companies could help publishers better compete.

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