Media evolves. Print, from paper to digital; radio from on air to on line; out of home from static to dynamic; television from broadcast to addressable. While the importance of linear television and its increasingly addressable nature will remain highly significant for at least five more years and possibly more, the next phase of message distribution represents fundamental change and a significant opportunity, or threat, to all advertisers.
The digital revolution and the mobile shift are well-trodden concepts. Less well-trodden is the path of the app ecosystem to becoming the dominant gateway to media consumption, commerce and the delivery of customer service. Even more broadly, apps act as the remote control of the digital home and the quantified self.
Apps are everywhere: phones, tablets, smart TVs, automobiles, watches and even the desktop with the arrival of Windows 10. Apps are simple to use, optimized at the device level and bandwidth efficient.
The App ecosystem and the presence of apps on limited screen real estate may be the battleground to dominate in the second half of this decade and beyond.
In aggregate, for any given user, there are likely to be 50 apps (and their functional and local analogs) that will account for perhaps 90% of aggregate screen time on connected devices. The mobile web is of decreasing significance. Money follows time, user attachment and utility. Dollars invested by advertisers will migrate even faster to the app ecosystem with the increased penetration of the smart TV, other devices and the flight of the media to OTT delivery.
Some apps are close to universal. Facebook, Instagram, YouTube, Google Maps, LinkedIn, Messenger, Twitter and Amazon. Others are in massive distribution: Walmart and Target in retail, Netflix and Hulu in streaming video, others like SnapChat will ebb and flow. A rash of media apps from the Mail Online to those of TV origin along with service apps from banks, retailers, hotels and transport, will round out the list of apps that everyone will know and use.
In the same way no one really used a 500-channel TV but instead used no more than 20 channels almost all of the time, the idea of 1.5 million apps to choose from is broadly irrelevant.
The consequence – the end of fragmentation?
If this assessment is correct we are about to witness a complete reversal of 30 years of multi-channel fragmentation and 15 years of web-driven atomization.
Further, the extensive re-engineering of marketing for the cookie-driven desktop age may become redundant in less time than it took to create.
There will be a new power structure in advertising. Some pillars like Facebook and Google are in place, but the rise of retailer as media owner, and service players (like Uber and Airbnb) have yet to play out to anything like its full extent.
Some old power players will remain and some will continue to prosper. Our challenge is navigating the shift from web and broadcast delivery of popular content to this new world and ensuring that our partnerships with legacy media vendor's focus on the future without sacrificing value or performance today. A key component of success will be to follow the content creators into their new channels of distribution. Being the 'best' advertiser in sports television needs to evolve into being the best advertiser in sports in every channel the rights holder deploys.
Actions for every advertiser
Advertisers can find a home in almost all these new (and currently walled) environments in video and beyond. 'Beyond' in this context means the development of services as well as ads, of commerce as well as communication. Which hotel and restaurants brands will win the race to integrate their locations and offers with Uber; which energy drink will integrate with fitness apps? Further, it demands a new engagement with program creation and product integration as the most likely point of advertiser and brand access to Netflix, Amazon Prime and others as we see an increase in the total advertising-free viewing hours.
Digital marketing, long dominated in terms of ad spending by lower funnel, adaptive layer activity has to deal with every part of the customer journey.
Doing this will require:
· Matching the brand portfolio with the purpose and functionality of the dominant apps.
· Devising solutions for all and then leveraging the 'mandoline' targeting potential of each to create an effective, efficient and durable presence that acts as the new foundation layer of marketing and customer service that will drive awareness and preference.
· An understanding of the user app portfolio at the segment or the individual level to understand how different app portfolios fulfill different consumer needs.
· Creating ads that are native to each app in terms of format, content and duration.
· Creating an adaptive approach for tactical deployment in the same environments to ensure that every opportunity for growth is captured.
· The application of advertiser data enhanced by third-party data sets to focus on the most valuable opportunities.
These environments will provide the data feedback look that will in turn drive allocation, creative and data strategies for the portfolio, but there will be many persistent acts of 'data gatekeeping' by the owners of these apps. They will be anxious to avoid the commoditizing effects of 'audience buying,' which ceded some control to advertisers. This will require an evolution of data practices of agencies and advertisers and a return to modelling, albeit faster than its forebears, as a proxy for reality.
Goodbye search, hello discovery?
The app ecosystem, and its category vertical characteristic, also has profound implications for search. As desktop usage declines so do brand web sites; as trust and familiarity increase the desire to compare falls. With this the PPC imperative, beyond local informational queries, 'how to' and complex queries such as those related to healthcare, declines also, but even here the Mayo Clinic and WebMD may for many be a perfectly acceptable first and second opinion. The key now is asset creation:
· Assets that are discoverable organically alongside channel-specific creative development.
· Assets, paid and organically distributed, that populate native e-commerce, e-tail and owned-and-operated commerce environments – these assets will be a significant determinant of the winners and losers in the next generation of trade marketing.
· Brand owner-operated e-commerce will increase in importance if for no other reason than its ability to provide fast, customer-level data, the supply of which may be severely restricted by other platforms.
The role of the media agency
Media selection and optimization will help frame distribution strategies by an increasing focus on profitability, margin and data by channel.
Beyond the inter- and intra-channel function the media agency's additional role in this future is as the advertiser's partner in developing an app by app, brand by brand, segment by segment, market by market game plan to achieve presence, relevance and, data-informed and validated business outcomes and to offer channel expertise to marketing, sales and creative constituencies within our client organizations. This, ultimately, represents an advisory role on how brands could and should respond to escalating consumer expectations of access, personalization, immediacy, transparency and service.
All this implies a return to scale. For example the future transaction with Facebook: Its unduplicated reach of close to 2 billion individuals across multiple apps, infinite segments and more than 100 markets, will be among the most complex, and costly, ever made. Successful execution will require a perspective that is broad and deep and the ability to establish value at the brand and market level in the context of competing channels and competing demand for budget.
Global infrastructures cross channel and cross market data sets and real experience in media transactions differentiate media agencies from other marketing services companies, data companies and critically media sellers.
Winning the battle for attention in the app ecosystem will allow the most aggressive players to reclaim the durable competitive advantage that accrued to those advertisers that secured franchise positions in commercial television and print two generations ago.
The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com / MyersBizNet, Inc. management or associated bloggers.