Google Kills the Cookie, Leaving Digital Media Companies Craving a New Way Forward
The industry is racing against a 2-year countdown.
Some are calling it the “cookie-pocalypse.” Others see it as a new dawn for the $565 billion global ad industry. What’s certain is that Google Chrome’s decision to phase out support for third-party cookies will affect everyone in the digital media industry.
While the move was not unexpected, at least among industry insiders, most will be preoccupied with it during the two-year window to overhaul and replace what has been one of the key tenets of digital media trading since its inception.
Marketers wary of the industry’s reliance on Google will have to figure out how they can adapt their first-party data strategy as some of the de rigueur marketing tools of recent years are rendered redundant in most internet browsers. These include third-party data and data management platforms, and multitouch attribution providers, all of whose days would appear to be numbered (at least in their current guise), as third-party data has been a critically important part of how marketers shape their communications strategies with consumers for close to 25 years. For instance, Procter & Gamble, one of the industry’s largest-spending advertisers, this week effused over its frequency capping efforts at the National Retail Federation’s annual conference.
However, identifying audiences online will be significantly more difficult (albeit not impossible) after 2022 within Google Chrome, which currently accounts for more than half of all installed web browsers, according to W3C.
Advertisers aren’t angry with Google, just disappointed
The tone some of the industry’s leading trade bodies took in their responses to the news reflected the scale of the challenge ahead. “It may choke off the economic oxygen from advertising that startups and emerging companies need to survive,” read a joint statement from the ANA and 4A’s.
The statement continued: “We are deeply disappointed that Google would unilaterally declare such a major change without prior careful consultation across the digital and advertising industries. In the interim, we strongly urge Google to publicly and quickly commit to not imposing this moratorium on third-party cookies until effective and meaningful alternatives are available.”
Meanwhile, Jordan Mitchell, online identity and digital privacy lead at IAB Tech Lab, made his preference for collaboration known as Google looks to develop ad targeting and measurement tools in its Privacy Sandbox.
Historic precedent
The rollback of cookie support by some of the industry’s major cookie providers is not without precedent. In April 2017, Apple began rolling out intelligent tracking prevention in its Safari web browser. Shortly thereafter, Mozilla implemented similar measures in Firefox.
Andrew Casale, CEO of Index Exchange, told Adweek this has affected publishers in Germany, one of the world’s biggest media markets, where Firefox use is much more prevalent than in the U.S.
“We haven’t seen a recovery in CPMs on either platform,” Casale said. “So, if the same events occur in Chrome with the same results, then there is a significant concern that there will be a reduction in budget toward publishers.”
Paul Gubbins, global programmatic strategy lead at Unruly, highlighted the potential impact Google’s decision could have given Chrome’s vastly superior footprint to the other two browsers.
“With the value of first-party data going up drastically following this announcement, I suspect many publishers today will be seriously reevaluating their authenticated data strategy rather than waiting for a multitude of device graph sales pitches in the coming months,” Gubbins said.
Both Casale and Gubbins separately told Adweek that many publishers have avoided asking users to register their data (effectively meaning sign in to their websites), but that may change as 2022 approaches. Casale predicted that publishers across the globe will look to emulate a countrywide sign-in initiative in Germany, where media owners have attempted to reduce their reliance on cookies for ad targeting.
‘The nail in the coffin for the cookie’
Peter Spande, CRO at Insider Inc., told Adweek that reductions in yield from Apple’s and Mozilla’s targeting restrictions have prompted some publishers to double down on their first-party data strategy.
“This is the nail in the coffin for the cookie,” Spande said, adding that it will make bidding on inventory in open marketplaces less appealing to advertisers.
Spande also predicted that advertisers may look to identify solutions provided by Google within its Privacy Sandbox, potentially providing publishers with scaled first-party data solutions an opportunity to capitalize over the next two years.
Wake-up call
For Mathieu Roche, CEO of ID5, the next two years will be characterized by “madness and transition” as the industry devises an entirely new infrastructure.
Roche believes that while the industry’s demand-side and supply-side platforms will continue to exist beyond 2022, the majority will have to work in harmony to foster an industrywide alternative to the cookie.
In the interim, however, advertisers will likely invest even more of their ad budgets in the walled gardens, which are much less reliant on third-party cookies for audience targeting.
“In the kingdom of the blind, the one-eyed man is king,” Roche said.
Meanwhile, Joe Root, CEO of Permutive, Google’s announcement is a wake-up call for ad tech’s buy-side, as such outfits will begin to feel the pain publishers have felt since the dawn of digital advertising.
“Privacy is causing a massive issue for them,” he said. “The big questions more generally [for the industry] is do we accept the truth that identity is disappearing because it’s privacy unsafe, or do we work to maintain identity?”
In Silicon Valley, some men say cosmetic procedures are essential to a career
Women have long felt the pressure of looking the part. Now men are feeling it, too.
Lounging at an outdoor cafe just outside downtown San Francisco, his athletic frame filling out a slim-fit button-up, a talkative tech worker named Daniel detailed the many ways he’s optimizing his existence.
Only the previous week, he says, he returned from a 10-day trip to Italy’s Amalfi Coast. Before that, he boasts, he journeyed to a yoga retreat and juice cleanse in Bali, the perfect setting to unload the stress he absorbs working at a well-known tech company in Silicon Valley. After ending a five-year marriage and shedding 10 pounds of subcutaneous fat several years back — his sun-kissed body now carb- and toxin-free — Daniel has reemerged a new, seemingly younger man.
The changes have enhanced his dating life, but more important, he says, they’ve bolstered his youthful professional image, giving colleagues the impression that he’s high-energy, hard-working and on-trend. There’s only one problem. Most of Daniel’s co-workers think he’s in his late 30s, but he’s 48 years old. As far as Silicon Valley is concerned, his birth date is the tech world’s equivalent of prehistory, years before Jobs and Wozniak set up what would become Apple in Jobs’s parents’ garage.
So like a growing number of male tech workers, Daniel is considering a new strategy to conceal his “advanced” age for years to come: plastic surgery, Botox, a facelift to counteract under-eye bags, and the kind of midsection sculpting that could offer the impression that washboard abs ripple beneath his tailored shirts.
Daniel, who spoke on the condition that only his first name be published for fear of being outed as old, has discussed those procedures with Larry Fan, a San Francisco-based plastic surgeon. Fan estimates that about 25 percent of his patients now are men like Daniel, the vast majority of whom work in tech. Increasingly, he says, they are struggling with beauty standards that have long tormented women.
“In Silicon Valley, it’s commonly believed that if you’re over the age of 35, you’re seen as over the hill,” said Fan, who touts himself as an expert in penile enhancement and Botox injections. “People here value the young for their passion and their ability to look at things in new ways.
“In meetings, middle-aged guys will notice that everyone around them looks fresh-faced and youthful, and they’ll tell me they feel like they stick out, and not in a good way,” he added.
For men like Daniel, there is little doubt that the changes are, at least in part, motivated by vanity. But as Fan notes, male tech workers appear to be turning to plastic surgery because of more complicated pressures — both personal and professional — that have been gathering momentum in Silicon Valley’s male-dominated ecosphere for years.
Midcareer tech workers like Daniel have witnessed their industry transform from providing largely behind-the-scenes services to some of the most influential products on Earth. Tens of billions of dollars have flowed into the region as a result, skyrocketing incomes and property values and creating a new class of super-rich tech executives, hedge fund managers and venture capitalists.
Under pressure to keep up financially — and surrounded by an influx of creative young workers with new skills and talents — middle-aged tech workers can find themselves immersed in a future-obsessed culture that celebrates youthful brainpower with the same vigor that Los Angeles or Miami celebrates youthful bodies.
That’s why Daniel fears that what remains of his pleasing visage — and with it his upward career trajectory and robust social life — could disappear behind a mask of middle-aged wrinkles. His ultimate fear: being banished to the cultureless provinces, unemployed and alone, with the rest of the saggy-skinned suburbanites.
“Back in the early 2000s and late ’90s, people didn’t worry too much about how you looked,” Daniel said. “But there’s a whole new generation of workers here, and they have created different expectations, and that starts with appearance. You see more people in shape and looking fashionable now.
“And if people in the workplace know you’re older than everyone else, it can hurt you in terms of what roles you get,” he added.
It’s a common sentiment among older tech workers, a feeling reflected in lawsuits and investigations alleging that some of the valley’s biggest companies are steeped in age bias.
Last year, Google paid out $11 million to more than 230 job applicants older than 40 who accused the company of engaging in a “systematic pattern” of age discrimination during its hiring process, according to court documents.
The older workers alleged that the company used phrases like “Googleyness” and “cultural fit” as euphemisms for youth.
In 2018, ProPublica reported that over five years the cloud computing giant IBM — which reported more than $79 billion in revenue in 2018 — pushed out about 20,000 U.S. employees who were at least 40 in an effort to build a younger workforce.
At the same time, cosmetic procedures for men have tripled over about two decades, according to the American Society for Aesthetic Plastic Surgery. Though the vast majority of patients using injectables such as Botox and hyaluronic acid are women, the number of men undergoing the nonsurgical procedures more than doubled from 2010 to 2016.
Long gone is the era in which the tech wiz was synonymous with bulging bellies, thick glasses and pleated khakis, a time embodied by Bill Gates and Steve Ballmer’s cringeworthy dancing during the Windows 95 launch.
Today’s techie is all about striving for perfection, whether that’s redefining retail, altering traditional transportation networks, spearheading a crypto-banking revolution or flouting Father Time as long as possible.
That’s why, in certain parts of Silicon Valley these days, appearing old by its very nature carries more than a residue of failure.
“You’re surrounded by a lot of people who are just out of college and very ambitious, and you just feel pressure to fit in,” said a 40-something veteran of multiple Silicon Valley start-ups who spoke on the condition of anonymity because of the stigma attached to his age. “You don’t want people to assume that because you’re not in your twenties you won’t be able to work long hours and live the lifestyle necessary to be successful.”
His cosmetic procedure of choice: a collagen-stimulating skin rejuvenation technique called radio frequency microneedling that can cost about $1,500 per session.
Nick, another 40-year-old tech worker, says he spends about $500 on Botox every three to four months. He considers his regimen an “investment.”
“There’s a lot of studies that show being better-looking leads to people making more money,” he said. “From my perspective, a $2,000-a-year investment to make more money long-term is definitely worth it.
“Right now, I can definitely pass for 30, no problem,” he added.
Though quick to point out they’re not miracle workers, plastic surgeons say they can often shave five or 10 years off someone’s face. Tech workers are opting for treatments like Botox, injectable fillers, laser and skin-tightening treatments, all of which are wildly popular, plastic surgeons say. When it comes to cosmetic surgery, eye lifts and neck lifts are du jour.
Not to be forgotten are treatments like cool sculpting, a technique that freezes fat cells to death, giving someone the appearance of a slimmer, fitter physique. Many procedures require little recovery, allowing workers to return to the office within a day or two and often less.
To enhance the body, Fan first must probe the mind. His minimalist downtown office lacks a chaise longue, but Fan’s consultations give off more than a whiff of psychotherapeutic energy. The soft-spoken 47-year-old surgeon’s calming presence and attentive listening style seem perfectly calibrated to elicit deep-seated insecurities from vulnerable patients.
“Everyone is on social media and looking at pictures of themselves and feeling more self-conscious about their appearance,” Fan said. “Now these guys are coming in with apps like Face Morph that allow them to take a photo of their face and adjust the shape of their nose and cheekbones. They’ll show me the image and say, ‘I want to look like this.’ ”
Although many of her patients are in their 30s and 40s, Lavanya Krishnan, a San Francisco-based dermatologist, said she has witnessed a similar trend but with a twist.
“Men are definitely coming to us at much younger ages, so I sometimes see men in their twenties asking for injectables and laser work,” she said, noting that she’s often forced to turn them away because they’re “too young.”
“A lot of these guys come in with pictures of social media influencers they want to resemble.”
Krishnan and Fan say their patients work for major companies and popular start-ups, and Fan, in particular, says his clients include some of the most high-profile names in the valley. In Los Angeles, men might ask a plastic surgeon to re-create Brad Pitt’s jaw line, Ben Affleck’s nose or Jake Gyllenhaal’s eyes.
But in Silicon Valley, most patients are inspired less by classic looks and more by the act of striving for personal optimization. That means aspiring to re-create the seemingly impossible work-life balance embodied by titans like Elon Musk and Jeff Bezos — tenacious workers who are changing the world and looking good while doing it, whether that’s maintaining fresh-faced vigor (Musk) or looking buff in a fitted shirt in their mid-50s (Bezos). (Bezos owns The Washington Post.)
“People out here want to have it all,” Fan said. “They want to feel like they’re working hard and accomplishing great things and living a high-quality life that includes eating good food, being fit, making money and traveling.”
He added: “If you can change the world, why can’t you change your appearance?”
For many women, unrealistic beauty expectations begin in early childhood and continue unabated for decades. Traditionally, men have been immune from the brunt of those expectations, but in the Bay Area that may be changing.
Some tech workers attribute those changes to the profusion of gentrifying wealth that has transformed this city’s skyline, and character, over the last decade. Critics say the city is no longer a bohemian refuge but a condo-filled, millennial theme park — home to more billionaires per capita than anywhere on Earth.
Suddenly, in this hypercompetitive environment, men may be finding that they have lost a privilege they’ve always taken for granted, according to Elizabeth McGrath, a Bay Area sex therapist who has coached men in “financially centric careers” on how to appear more charming.
“If women want to achieve things, it’s predetermined that they need to agree to particular standards of successful femininity in the workplace,” McGrath said. “Men have traditionally been able to opt out and say, ‘Those rules don’t apply to me.’ ”
McGrath added that while she doesn’t take pleasure in people’s suffering, there’s something “ironic” about men being forced to “play the game women have always had to play to get what they want.”
Celeste Hirschman — a sex therapist and relationship coach whose work with cerebral tech workers includes a form of playful grappling designed to reconnect men with the sensation of physical touch — cautioned that the pressure men are under to succeed in Silicon Valley is uniquely strenuous.
It’s not uncommon for her clients to work 16 hours a day, she said, and to have an isolating, stress-filled existence that makes many ill-equipped to cultivate relationships outside work. She’s not surprised, she said, that those same men would seek to bolster their self-image by using their sizable paychecks to alter their appearance.
“The people they’re comparing themselves to are billionaires, and so they often feel like absolute failures, which does not bode well for their self-confidence,” Hirschman said. “If you’re always comparing yourself to Steve Jobs and seeking the approval of your peers, you’re never going to feel adequate.
“The pressure is in the water at this point,” she added. “It’s so intense.”
The pressure can feel inescapable, even when tech workers leave the valley.
During his recent Italian getaway, Daniel slipped off his shirt for a swim and couldn’t help but notice that his pectoral muscles had lost a tinge of their youthful definition. It was a reminder, he said, that he can’t remain an undercover millennial for much longer — not without help.
“My biggest fear is what happens in the next decade?” he said. “Am I going to start looking like my father? Is it going to affect my job? I think plastic surgery might be a resource for me.”
3 reasons why SMEs should have a CRM system
A CRM system stores all the information such as customer details, new sales opportunities, service issues, marketing campaigns, etc, in a centralized hub and this data can be accessed by any employee who needs it.
Every small and medium business owner has a common goal- bringing new clients on-board and improving relationship with the existing ones. They want to scale up their small and medium enterprises (SMEs) by connecting to customers and providing exceptional services.
One of the key mantras to engage more customers begins in-house, i.e., by streamlining internal processes so that dedicated teams are aligned towards one goal and there is no gap or miscommunication. Here, digitization is the key.
Through digitization, SMEs can develop a system where all business contacts, potential customers, pre and post-sales leads, marketing initiatives, etc., can be listed in a centralized hub that can be accessed by employees of the organisation.
Here, a Customer Relationship Management (CRM) tool can help business owners. A CRM system stores all the information such as customer details, new sales opportunities, service issues, marketing campaigns, etc, in a centralized hub and this data can be accessed by any employee who needs it. This data is useful in sales and marketing initiatives, gives greater visibility of clients and latest interactions with them.
Here are 3 reasons why business owners should consider having a CRM system:
1. Streamline operations: A CRM system can help business owners streamline their operations, improve efficiency and productivity. Since it holds all the information on one dashboard, chances of gaps, losing data, details of meetings going missing, guesswork and missing leads minimizes. Employees can also get a clear picture of sales and marketing pipeline, actual sales data, and up-to-date information on the client progress. A CRM dashboard also gives an overview of customers with streamlined data.
2. Organise your data: One of the advantages of the CRM tool is it structures your data. It segments your contacts, customer details, and you can input any data and manage it. By listing the data, it helps business owners stay organised and effective selling.
3. Accuracy in sales forecasting: Since all the client details and data will be at one place, it will become easier for sales team to predict future growth of sales based on the pipeline of deals. Therefore, the team can prepare an effective strategy for annual sales and generate leads.
You can update and manage your data in real time on the Customer Management tool and thus, drive efficiency and productivity.
If CES 2020 didn’t inspire you, then you’re in the wrong business
The event proved to be electrifying with a focus on life-enhancing innovations over gimmicky tech for the sake of tech.
The world’s largest tech innovation show truly inspired. Anyone who leaves Las Vegas without even the slightest tinge of electricity just completely wasted a few days.
Those who threw themselves deep into the chewy chunks of CES’ 100,000sqft showrooms would have noticed one thing: Less gimmicks this year. I mean, yeah, of course aisles were lined with plenty of wtf gizmos designed to make us go “oooh” and “ahhh.” But it was obvious that the brands which matter spent the last 12 months squirrelling away on upgrading old models for perfection, not launching something flashy for the sake of tech.
A standout presence in The Venetian’s health and wellness section was Procter & Gamble. The CPG giant showcased Lumi by Pampers — a smart diaper created in partnership with Logitech and Google Verily Life Sciences. A P&G inventor’s eyes lit up when she described how the Nashville research family who tested the prototype not only experienced a transformation in the way they parent, but also a dramatic improvement in their marriage.
Elsewhere in the booth, Oral-B’s latest electric toothbrush took chomper fanatics by surprise with its sexy AI capabilities. Speaking of sexy, this is the first year that love-making tech got an official space in the showroom.
Sex tech has always been part of CES in some small form, but vendors were forced to camoflauge things that offend the squeamish, like dildos. The lead up to this year’s event has been thick with chatter about this move following organizers’ decision to revoke an innovation award for Osé, a robotic massager developed in partnership with Oregon State University. The backlash that ensued was great. Lora DiCarlo, the startup behind Osé, protested the decision along with other (mainly) female-led companies in the space. This year it sat proud on the CES Innovation Awards floor. However, the highly-anticipated arrival of sex tech booths did not come with a bang — more of a disappointing whimper. Visitors were made to work hard to find the ten to 15 stalls hidden deep in the showroom. It’s a start, I guess. Trouble is, this start should have happened 15 years ago.
In the main convention center, connected homes and electric cars were the big talk. Bosch’s smart living drive won major attention with a smart fridge that doesn’t just show you the contents of your fridge via an app; it detects expiration, allows you to order what’s needed, offers up recipes relevant to the food you have and even preheats a connected smart oven to the right temperature so you can literally get dinner started on your way home from work. Tell me you don’t want that in your life. You’d be lying. Away from the crowded exhibitions lived the usual meeting of minds and on stage knowledge spouting. Some of the most meaningful content came in the form of chief marketing officers getting candid about the future of their role, and what we can really expect from 5G this year. Agency folk were busy schmoozing their clients in hotel bars and clandestine corners of the strip. Most holding companies had some kind of presence, with WPP going big, prioritising this and Cannes in 2020. For an industry powered by tech, I don’t know why you wouldn’t go big at CES.
We won’t harp on about the lack of diversity, because it was painfully obvious. There’s still an overwhelming amount of people who look like me at advertising’s biggest events, with exception to ADCOLOR — something all agency and brand reps should go to this year. It’s the most worthwhile conference Campaign US has attended. But important conversations surrounding inclusion and equality were found at Shelley Zalis’ The Female Quotient, as always.
Then there was the evening entertainment. Pandora, Spotify, Twitter and iHeart were among the brands with an overwhelming nighttime presence. Away from the clutter, VaynerMedia held a very low-key mixer that included tacos, llamas and Gary Vaynerchuk — a combination everyone should try at least once before they die. As for party gossip, well, you know what they say about Vegas. I will say though that I didn’t meet one person doing Dry January. Miracle Mile was extremely moist.
Why a football marketer ditched Adidas to build British eSports brand Excel
Robin McCammon, Adidas’ former director of global sports marketing, has made the move to esports firm Excel, taking up its chief commercial officer role to build the team and carve out new opportunities for sponsors.
This surprise coup for the burgeoning British esports brand reflects a shift in the make-up of contemporary sports fandom and has been further boosted by the additional appointment of Wouter Sleijffers as chief executive from rival firm Fnatic.
The esports group was founded in 2014 by brothers Joel Holmes-Darby and Kieran Holmes-Darb and operates professional teams in video game League of Legends. It participated in the League of Legends World Championships in 2019, which reportedly pulled in 100m viewers and peaked at a total of 44m during the final.
These tournaments are hosted in grand arenas like Madison Square Garden and the Beijing National Stadium. They offer large prize kitties and attract waves of global audiences, first via streaming platforms like Twitch, and increasingly, via linear broadcasters.
But it has bigger potential. Some 2.2bn people play video games globally, and the opportunity is in converting them into esports participants (there are around 454 million right now).
The prevailing theory is that this projected influx of players will need teams to support, which requires sports brand builders like McCammon. We’ve already seen marketing agencies, football clubs and former players including Ronaldo buy and manage teams within League of Legends.
It is a world both familiar and alien to McCammon, who has been at Adidas since 2001, operating much of the apparel giant’s football marketing. He chiefly activated sponsorships of the Uefa Champion’s League, the Fifa Women’s World Cup, Chelsea and Liverpool FC. But now he’s moved from world’s most beloved sports companies for one that is less visible but has the potential to reach football’s heights.
Esports has a lot to prove. As does McCammon, having never directly worked in esports before.
He will “position Excel as a challenger brand with a uniquely British feel” to help distinguish Excel from rivals, particularly in Asia where esports consumption is more established. There’s only one problem: new CEO Sleijffers’ former employer Fnatic is also based in the UK, and may fight for the British crown.
The intent is to build a household name and breach into the mainstream. McCammon was attracted to the job by how fast-acting teams are, particularly when compared with the sluggish football behemoth.
“Esports is ahead of the game when it comes to identifying new opportunities,” he said.
These could be in sponsorship, broadcast, partners streaming, and vitally, identifying what titles to compete in. There’s a whole slew of games to get involved with, be it in Call of Duty, Fifa, Rocket League, Fortnite, Overwatch and more.
There are many playing fields, which can each attract bespoke sponsors. In moving into new games, Excel can position to attract a growing list of non-endemic brands like Dell, Coca-Cola, Gillette, Intel, Audi and Red Bull that are now operating supporting the industry.
Few games have the longevity of League of Legends. New titles launch regularly to attract the attention of fans and build esports communities. Few succeed, and competition is rife. This environment has created a culture of “quick thinking and quick response” in esports said, McCammon. While brands are fast-acting, professionalism and organisation needs to improve.
“We need that structure that we see from the likes of the Premier League teams and Fifa – but even they find it extremely hard to act quickly,” he added.
And finally, there are inherent differences between sports and esports talent. McCammon notes how elite gamers often build audiences and personal brands before securing a team. Many are well practised in influencing before establishing success. Footballers operate in the reverse. As a result, Excel positions its athletes as influencers. Its channels are stocked with guides on how to operate League of Legends characters, strategies and more behind the scenes content.
“In marketing generally, there’s hesitancy from top organisations in using top-level influencers, but in terms of influencing a proven and core community in esports, it is clear they still have an important role to play,” he continued to tell The Drum.
The group’s new chief executive Sleijffers talked to the evolution of esports, noting that it took traditional sports around 60 years to hit current peaks of viewership. Professional gaming did it in around a third of that time. “It is probably the biggest sport you’ve never heard of. It’s not in its infancy anymore, but it is in puberty.”
Part of this “puberty” have been some teething problems, the sport has had its issues with match-fixing, over-hyped viewing figures.
But its storytelling potential is unrivaled he said: “It is not just about the games, but also about the lives of the pro gamers. The ups and downs and the drama. Like sports and music, there is a lot to see beyond the activity itself.”
Excel will face competition from an array of established and incoming rivals. In the coming decade, we’ll learn whether esports stars can become true household names with mass appeal, and it will take marketers like McCammon to catalyse this.
John Clarke, global brand and marcomms officer at Gfinity, previously wrote in The Drum:
“The winners and losers in this industry will be those who have their fingers on the pulse of the consumer and those that don’t. And while in marketing that is nothing new, the challenge is not to approach this industry by looking back at what has happened in the past, or through the rearview mirror. Foresight is needed.”
This article first appeared in TheDrum
More brands are leaving Amazon, but the strategy could backfire
Ikea said it would be moving away from Amazon, joining a growing list of brands who have ended business with the site.
The moves have sparked fears about who might leave Amazon next, and whether or not Amazon will suffer as a result. But even if brands stop working with Amazon, shoppers can still purchase their products from third-party sellers.
Earlier this week, Ikea became the latest brand to cut ties with Amazon when it said it would not to continue a pilot program that began in 2018. The Swedish retailer joined the likes of Nike, Birkenstock and PopSockets, which decided selling on Amazon wasn’t worth the hassle, and opted to pull out instead.
The moves have sparked fears that Amazon will soon see more big brands flee the site. Even if brands end their relationship with Amazon, shoppers can still purchase their products on the site via third-party sellers. And unless companies can develop an e-commerce strategy to compete with Amazon’s customer-obsessed mindset, experts say ditching Amazon has the potential to backfire.
Amazon continues to dominate online shopping. It controls 38% of the e-commerce market in the U.S., far ahead of rivals like eBay and Walmart, which only claim single-digit percentages, according to eMarketer.
Brands that attempt to replicate the services they lost by ditching Amazon may find it impossible. Amazon’s logistics and shipping operations, site traffic and mountains of shopper data are hard to match, even if you’re a well-known brand like Ikea.
And yet, that hasn’t stopped Ikea from venturing out on its own. Ikea told CNBC in a statement that it’s moving away from Amazon as the company is “keen on exploring new areas” to reach consumers.
“Ikea worked on a pilot project with Amazon in the U.S. for Smart Lighting in 2018. The project was a trial and after it ended, it did not go live,” the company said. “We will continue to dialogue with different partners to test new ways to meet our customers now and in the future, whenever and wherever they want.”
An Ikea spokesperson has since shared a new statement with CNBC, noting that the company continues to work with Amazon on smart home projects:
“We are curious and keen on exploring new areas to get insights on how to reach and serve more of the many people,” the new statement said. “Ikea explored the possibilities to launch a pilot with Amazon in the U.S. but cancelled the project before the launch. Approximately 30 products were in the scope of the project and the plan was to run the pilot for a limited time. The project was cancelled as Ikea was not ready for [third-party] retail testing at that time. Amazon and IKEA are collaborating in the area of the smart home and will continue to work closely together on assuring compatibility within our product range.”
Among the strategies it has considered are developing its own marketplace that would function similar to Amazon’s, according to the Financial Times. Ikea declined to comment on its plans to launch an online platform.
Amazon’s marketplace is the company’s not-so-secret weapon that prevents it from relying on brands to fill the site with products. Even if a first-party vendor decides to leave the site, their product is probably still available on Amazon, by way of a third-party merchant, said James Thomson, a former Amazon manager and now partner at brand consultancy Buy Box Experts.
For example, a quick scan of Ikea products available on Amazon shows that there are often several third-party sellers for a single listing that offer the item at a similar price to the brand and with Prime shipping. For many Amazon shoppers, that’s likely a good enough reason not to look elsewhere.
“To say the brand has won by walking away, they haven’t won at all,” Thomson said. “Amazon has a massive security blanket called the third-party marketplace. Those products sell at huge volumes, they’re Prime eligible and most customers don’t know any better.”
To be sure, Amazon’s marketplace is not without its problems. The marketplace, which now accounts for more than half of Amazon’s overall sales, has also been proven to host counterfeit, unsafe and even expired goods. Amazon’s marketplace features items from millions of third-party sellers, many of which are sold at prices that undercut industry standards and end up squeezing brands’ profit margins.
An Amazon spokesperson told CNBC in a statement that the company has a zero tolerance policy for counterfeits and “invests heavily” to make sure its policies around counterfeits are followed.
That aggressive pricing atmosphere was part of PopSockets’ decision to stop selling directly to Amazon in 2018, along with Amazon’s move to exert greater control over how brands sell their goods on the platform, according to Recode. PopSockets, which sells grips that attach to the back of cellphones, still has some products available on the site, the Amazon spokesperson said.
The marketplace was also the primary reason why Birkenstock left Amazon in 2016, followed by Nike last November. Birkenstock said at the time that Amazon had become overrun by counterfeits and unauthorized sellers, which it felt had the potential to “jeopardize” the brand. Nike initially agreed to sell on the site under the premise that Amazon would crack down on counterfeits and third-party distributors. When that didn’t happen, Nike decided to cut ties.
As a result of how the marketplace works, brands are no longer just Amazon’s selling partners. They’re often competing against third parties and even Amazon itself. Amazon has greatly expanded its private-label business, which includes products developed by Amazon or by third parties who exclusively sell the items on the site. It’s also widely believed that Amazon uses data from its marketplace to develop private-label brands.
Amazon’s aggressive private-label strategy was thrust front and center last year, when Allbirds called out Amazon for selling a nearly identical version of its $95 wool sneakers for half the price. While Allbirds never sold its shoes on Amazon, the move was viewed by the company as a clear attempt to “siphon off demand” from its product.
The Amazon spokesperson told CNBC its wool sneakers don’t infringe on Allbirds’ design. “This aesthetic isn’t limited to Allbirds, and similar products are also offered by several other brands,” the spokesperson said.
Justin Leigh, CEO of e-commerce advisory firm Ideoclick, said his company has worked with brands that have left Amazon. For some brands, the “frustration built to the point that they walked away without a strategy beyond just not doing business with [Amazon] anymore.”
Leigh said a brand like Ikea might find some success off of Amazon because there are “still things Amazon doesn’t do well and big, bulky items are one of them.” The site doesn’t lend itself particularly well to furniture shopping, since it’s hard to manage shipping, damages and returns on furniture, he added.
There are other retail areas that aren’t fulfilled by Amazon or the marketplace. Some luxury fashion companies, such as LVMH, which has brands like Louis Vuitton and Givenchy, don’t sell on the site. Amazon has realized it has to court high-fashion brands if it wants to feature those products on the platform, Thomson said, since there are few opportunities for third-party sellers to buy those items at a deep discount and resell them on the site.
Ultimately, if Amazon continues to clash with brands, more of them are likely to leave. But the exodus is also likely to be a slow drip rather than a flood. Bigger brands may take advantage of their consumer loyalty to move away from Amazon, but smaller businesses, as well as legacy brands that can’t compete with Amazon’s aggressive promotions and logistics network, are likely to remain for the time being.
Artificial Intelligence Identifies Previously Unknown Features Associated with Cancer Recurrence (ITN)
The AI also identified features relevant to cancer prognosis that were not previously noted by pathologists, leading to a higher accuracy of prostate cancer recurrence compared to pathologist-based diagnosis.
Artificial intelligence technology developed by the RIKEN Center for Advanced Intelligence Project in Japan has successfully found features in pathology images from human cancer patients, without annotation, that could be understood by human doctors. Further, the AI identified features relevant to cancer prognosis that were not previously noted by pathologists, leading to a higher accuracy of prostate cancer recurrence compared to pathologist-based diagnosis. Combining the predictions made by the AI with predictions by human pathologists led to an even greater accuracy.
“This technology could contribute to personalized medicine by making highly accurate prediction of cancer recurrence possible by acquiring new knowledge from images. It could also contribute to understanding how AI can be used safely in medicine by helping to resolve the issue of AI being seen as a ‘black box,'” Yoichiro Yamamoto, M.D., Ph.D., the first author of the study published in Nature Communications.
The research group led by Yamamoto and Go Kimura, in collaboration with a number of university hospitals in Japan, adopted an approach called “unsupervised learning.” As long as humans teach the AI, it is not possible to acquire knowledge beyond what is currently known. Rather than being “taught” medical knowledge, the AI was asked to learn using unsupervised deep neural networks, known as autoencoders, without being given any medical knowledge. The researchers developed a method for translating the features found by the AI — only numbers initially — into high-resolution images that can be understood by humans.
To perform this feat the group acquired 13,188 whole-mount pathology slide images of the prostate from Nippon Medical School Hospital (NMSH), The amount of data was enormous, equivalent to approximately 86 billion image patches (sub-images divided for deep neural networks), and the computation was performed on AIP’s powerful RAIDEN supercomputer.
The AI learned using pathology images without diagnostic annotation from 11 million image patches. Features found by AI included cancer diagnostic criteria that have been used worldwide, on the Gleason score, but also features involving the stroma — connective tissues supporting an organ — in non-cancer areas that experts were not aware of. In order to evaluate these AI-found features, the research group verified the performance of recurrence prediction using the remaining cases from NMSH (internal validation). The group found that the features discovered by the AI were more accurate (AUC=0.820) than predictions made based on the human-established cancer criteria developed by pathologists, the Gleason score (AUC=0.744). Furthermore, combining both AI-found features and the human-established criteria predicted the recurrence more accurately than using either method alone (AUC=0.842). The group confirmed the results using another dataset including 2,276 whole-mount pathology images (10 billion image patches) from St. Marianna University Hospital and Aichi Medical University Hospital (external validation).
“I was very happy,” said Yamamoto, “to discover that the AI was able to identify cancer on its own from unannotated pathology images. I was extremely surprised to see that AI found features that can be used to predict recurrence that pathologists had not identified.”
He continued, “We have shown that AI can automatically acquire human-understandable knowledge from diagnostic annotation-free histopathology images. This ‘newborn’ knowledge could be useful for patients by allowing highly-accurate predictions of cancer recurrence. What is very nice is that we found that combining the AI’s predictions with those of a pathologist increased the accuracy even further, showing that AI can be used hand-in-hand with doctors to improve medical care. In addition, the AI can be used as a tool to discover characteristics of diseases that have not been noted so far, and since it does not require human knowledge, it could be used in other fields outside medicine.”
Forget Tanks, The Army’s Most Powerful Weapon Will Be AI
There is an ongoing co-evolution between indispensable human cognition and decision-making and AI-enabled autonomy.
Envision a scenario wherein dismounted infantry soldiers are taking heavy enemy fire while clearing buildings amid intense urban combat — when an overhead drone detects small groups of enemy fighters hidden nearby, between walls, preparing to ambush. As the armed soldier’s clear rooms and transition from house to house in a firefight, how quickly would they need to know that groups of enemies awaited them around the next corner?
Getting this information to soldiers in seconds can not only decide victory or defeat in a given battle but save lives. What if AI-enabled computer programs were able to instantly discern specifics regarding the threat such as location, weapons and affiliation by performing real-time analytics on drone feeds and other fast-moving sources of information, instantly sending crucial data to soldiers in combat?
While current technology can today perform some of these functions, what if this data was provided to individual dismounted soldiers in a matter of seconds? And instantly networked? Operating in a matter of milliseconds, AI-empowered computer algorithms could bounce new information off vast databases of previously compiled data to make these distinctions–instantly informing soldiers caught in the crossfire.
“The use of autonomy will assist in assimilating data from these various systems and quickly provide useful options to command decision-makers including individual Soldiers. Over time, more and more new intelligent technologies will be introduced,” Dr. J. Corde Lane, Director of the Human Research and Engineering Directorate, CCDC-Army Research Laboratory, told Warrior in a written statement.
Much of this work centered upon near and far-term applications of AI is being done by the ARL’s Cognition and Neuroergonomics Collaborative Technology Alliance. Army scientists and many of its industry partners rest the entirely of this conceptual approach upon a key premise — that AI and autonomy are intended to massively improve the soldier decision-making process and not displace the crucial and much need faculties unique to human cognition. The idea is to have AI-enabled technical systems perform instant procedural functions able to instantly inform humans operating in a role of command and control.
The Army calls this overall process “Soldier as a System”…the concept of using computer networking and the latest algorithms to seamlessly integrate otherwise disconnected nodes operated by soldiers. Specifically, this means a single electronic architecture will connect night vision goggles, individual weapon sites, wearable computers, and handheld devices showing moving digital maps and time-critical intelligence data. Information from all of these otherwise separate soldier technologies, which can also include acoustic and optical sensors or mobile power sources, such as batteries, is naturally interdependent and interwoven in crucial battlefield circumstances. Therefore, an ability to use various applications of autonomy and AI to create instant information-sharing in war changes the tactical and strategic circumstances confronted by individual soldiers, massively improving prospects for survival.
The Army is now discussing various technologies and innovations with a handful of industry partners. One such example is Booz Allen Hamilton, a vendor who has been working on a related program called “Digital Soldier.” The system, as described by Booz Allen Hamilton developers, is similarly based upon the concept of creating an overall system or technical apparatus through which to better connect soldier technologies in war.
“We have created some algorithms that can recognize a human in a video feed and recognize the action they are taking. We can see someone who has raised a weapon and immediately cue a heads-up display or drone flying in the area,” Joel Dillon, Vice President of Soldier Solutions, Booz Allen Hamilton, told Warrior.
BAH, the Army and other industry innovators are working to “co-evolve” autonomy and human decisions, recognizing that there many fast-changing emerging problems in war which contain a mix of interwoven and complex variables less calculable by machines and computer algorithms.; the best AI systems, for instance, cannot replicate a lot of subjective phenomena such as certain kinds of “judgement” decisions, feelings or other dynamics associated with human perception.
“The use of autonomy will assist in assimilating data from these various systems and quickly provide useful options to command decision-makers including individual soldiers. Over time, more and more new intelligent technologies will be introduced and will continually change the nature of the battlefield and the very nature of the tasks the Soldiers perform,” Lane explained.
Some future-oriented research and AI-work is now analyzing methods of successfully performing analytics on more subjective nuances associated with human perception and behavior – such as speech patterns or cataloged information regarding previous behaviors, tendencies or decisions. Nonetheless, not only is this work early on, but it does not promise to mitigate some of the known limitations of AI. This question is, interestingly, taken up in a Switzerland-based academic journal known as “Information.”
The 2018 essay, called “Artificial Intelligence and the Limitations of Information,” entertains some of the challenges associated with AI to include complexities related to “meanings” and “inferences.” The journal article, written by Paul Walton, says certain nuances “we are prone to ignore, is at the heart of many fundamental questions about the information. Truth, meaning, and inference are expressed using information, so it is important to understand how the limitations (of AI) apply,” the essay states. (Information is a peer-reviewed scientific journal published monthly by MDPI.)
Walton also cites a difficulty for AI to fully synthesize or compare some different “ecosystems” of information. For example, certain kinds of information collection systems might be unique to individual data sets; the essay, for instance, says financial data compilation may differ from processes used by mathematicians. Therefore, resolving potential differences between what the essay calls “multiple interactions” might prove difficult.
Future AI will, the article explains, need to “analyze the integration challenges of different AI approaches—the requirements for delivering reliable outcomes from a range of disparate components reflecting the conventions of different information ecosystems.”
All this being said, the current and anticipated impact of fast-progressing AI continues to be revolutionary in many ways; it goes without saying that it is massively changing the combat landscape, bringing unprecedented and previously unknown advantages. AI is progressing quickly when it comes to consolidating and organizing data from otherwise separate sensors on larger platforms, such as an F-35 or future armored vehicle…. yet integrating some of these same technical elements has not reached dismounted infantry to the same extent.
For example, Dillon further elaborated that these kinds of emerging algorithms can quickly distinguish the difference between someone extending a weapon or merely digging a hole — or recognize enemy armored vehicles. The AI-empowered system could also quickly cue a combat analyst so, as he put it…”they don’t spend time pouring over massive amounts of data.”
The concept here is not so much the specific systems as it is a need to engineer and adaptable technical infrastructure sufficient to evolve as technology changes. Lane described this as a co-evolution between indispensable human cognition and decision-making and AI-enabled autonomy. The ARL works closely with Army Futures Command’s Soldier Lethality Cross-Functional Team which, among other things, is focused on this concept of extending Soldier as a System architecture across an Army Squad unit. (Adaptive Squad Architecture)
“In some cases, the better chance of victory will be due to faster adaptability. Creating intelligent systems that are able to self-adapt to Soldiers’ needs and seamlessly adjust as Soldiers adapt to the changing situation promotes rapid co-evolution between Soldiers and autonomy,” Lane added.
The Army and its industry partners are now working on advancing the algorithms, writing the code, upgrading hardware and software and engineering the standards through which to create interfaces between nodes on a soldier or between groups of soldiers. For instance, Dillon explained that some of these nodes could include laser designators, input from radio waves or data coming in from satellite imagery overhead. “Computers are so much faster,” as Dillon put it, explaining that algorithms are now being advanced to “train at scale” to analyze a series of images and pinpoint vital moments of relevance.
“We build out algorithms we could run on some kind of soldier-worn system such as a small form factor computer, thermal imaging, daytime cameras or other data coming in quickly through satellites. When you network all of this together and bring in all the sensor data, machine learning can help give soldiers the accurate prompts,” Dillon added. “The more we do this, the smarter the algorithms get.”
Author Kris Osborn previously served at the Pentagon as a Highly Qualified Expert with the Office of the Assistant Secretary of the Army – Acquisition, Logistics& Technology. Osborn has also worked as an anchor and on-air military specialist at national TV networks.
How technology is leading millennials away from brick and mortar stores
As retailers in Asean continue to evolve their operations to support a more joined-up commerce strategy and capture millennial sales, they must provide a modern, engaging customer experience for the uncompromising modern shopper. Lionel BONAVENTURE / AFP
THE retail industry in the Asean (Association of Southeast Asian Nations) region has undergone massive disruption over the last few years. The way the industry operates today is vastly different from the past. The unprecedented growth of e-commerce has truly changed our shopping habits. Retailers in Singapore clocked record sales during the recent Black Friday and Cyber Monday sales, with Amazon Singapore seeing an 84 per cent year-on-year increase. Customers today are spoilt for choice while shopper expectations continue to rise rapidly. In Asia-Pacific, shopper satisfaction in store (78 per cent) and online experience (76 per cent) are on the rise but retailers still have room to improve, according to Zebra’s Shopper Vision Study 2020.
In Asean, Singaporeans, followed by Thais and then Malaysians, are the most active users in the region, where nearly every second person purchases goods online. While the evolution of this online shopping culture is affecting many demographics, one group is particularly affected: the millennials, who are now making 60 per cent of their purchases online. At the heart of the millennials’ modus operandi is the consumption of technology. This obsession with technology among millennials is in turn influencing how retail sales are made all over the world. The Zebra’s Shopper Vision Study 2020 also found that 86 per cent of millennial shoppers in Asia-Pacific indicated they shopped in a store and abandoned purchases only to end up buying the item online.
In order to grow and succeed, retailers in Asean must understand the incredible spending power that this new generation of e-shoppers have. We know that millennials hold great sway when it comes to retail sales, but what services do retailers need to deliver to capture millennial sales? What is the technology driving the millennial market?
Millennials expect enhanced service
In order to target millennials successfully, retailers in this region must go down the omnichannel route. This is important as it will support marketing strategies across all channels – including online and offline. A seamless omnichannel approach is vital to capture the millennial sale, as it can deliver personalised content and services to customers at the right place at the right time. The data that this approach generates can also be used to analyse key metrics such as store visit frequency, repeat visitors, basket size as well as customer retention and cross-channel visits.
The rise of omnichannel is most typified by the growing popularity of click-and-collect. Put simply, the typical millennial mindset is one of instant gratification – an “I must have it now” mindset. Click-and-collect allows consumers to place their orders online and then collect in-store, a local shop or lockers. In the case of in-store pick-up, the store itself makes the ideal picking location and with location analytics, a notification can even be sent to the enterprise’s picking systems when a click-and-collect consumer comes within a certain radius. This notification prompts staff to get the order ready. Not only does this enable stores to deliver better customer service – it enables retailers to deliver seamless retailing.
Another area of growth driven by millennials is free returns. In fact, increasing numbers of e-commerce sales are accompanied with the offer of free returns to avoid unsure customers leaving with incomplete sales. E-commerce has created a new retail reality in which where consumers expect unlimited returns, which has generated a substantial cost for retailers – estimated to be over $600 billion annually by the IHL Group.
Returns have long been a pain point for retailers. And with e-commerce returns running over three times that of store purchase returns, retailers are actively looking for solutions. Linking this back to the click-and-collect aspect of omnichannel, one best practice methodology is to encourage customers to try out their goods on the spot, minimising the risk of damage or loss and bringing forward any returns, thus minimising time stock is out of the inventory cycle. Some progressive retailers are using their stores as extra warehouses, creating a single view of stock across the business wherever it sits, and often enabling shipping and receiving returns directly to the local outlet.
After the items are ordered, packaged and ready for collection, it’s time for payment. For millennials, the preferred method is mobile payments. This is due to the demographic disinterest in carrying cash. Retailers in ASEAN need to ensure mobile payments are at the forefront of their offering to engage with this specific audience.
Let IoT take the wheel
Identifying the services that millennials desire is an easy enough task, but what technology is needed to deliver these? Managing the operation behind the shop front is a vital factor in retail strategy.
Central to the conversation here is the Internet of Things (IoT). And while much of the conversation surrounding IoT may seem like hyperbole, connected devices are not only the future, they are the now. Indeed, Zebra Technologies’ Intelligent Enterprise Index 2019 found nearly 86 per cent of retail decision makers are expecting an increase in their IoT spend over the next two years.
The study also revealed that retailers are investing in IoT technologies — from beacons that beam shoppers customized coupons to radio frequency identification (RIFD) tags that track inventory — to simplify, enliven and customize the shopping experience, generate revenue, and reduce costs. They’re embracing IoT platforms to transform real-time, visibility-driven data throughout the supply chain into actionable insights.
Personalisation is key
Aside from IoT, machine learning is playing a vital role in targeting millennials. This technology utilises analytics and predictive models to help retailers personalise customer experiences and enhance inventory demand, forecasting and visibility. The outcome is increased, repeat sales as well as great customer satisfaction. This latter point is vital in today’s digital age where millennials can post negative reviews if they feel they are getting short-changed on the high street.
The final powerful tech available to retailer is automation. This often involves the identification of areas where mundane tasks can be automated, freeing up staff to focus on customer service and sales tasks to improve conversions. This technology is vital for ensuring orders are shipped efficiently, inventories are tracked meticulously, in-store inventory levels can be monitored, and customers can find their items. Automation could be described as the unsung hero in the retail mix.
What’s next for retail?
Being the 20th century’s first truly digital generation, millennials make up the most influential key demographic in the growing retail industry. As retailers in Asean continue to evolve their operations to support a more joined-up commerce strategy and capture millennial sales, they must provide a modern, engaging customer experience for the uncompromising modern shopper. To do so, these retailers must employ the right technology both in-store and in the back office. Failure to do this could see millennials shopping elsewhere, and any forward-looking retailer would not want that.
The Year Of First Party Data
Sir Martin Sorrell lays out 4 lessons for marketers to succeed in a new era of advertising.
After three decades of unprecedented success at WPP, Sir Martin Sorrell knows a thing or two about driving businesses toward long-term growth. At Think Platforms India 2019 — a two-part event in Delhi and Mumbai focused on successful data-driven marketing in a privacy-focused world — Google India’s managing director of sales Vikas Agnihotri sat down for a chat with the inspiring advertising leader.
Sir Martin Sorrell needs no introduction. The founder of WPP plc, Sorrell notes that while he was with the advertising and PR firm, India was its “crown jewel.” After 30 years at WPP, Sorrell established a new digital advertising and marketing services company, S4 Capital, where he’s still captivated by the people, culture, and tremendous opportunity for growth in India.
He laid out four key principles guiding S4’s path forward that every marketer and business leader can learn from:
1. Go Where the Growth Is
“Among the fastest-growing areas [at WPP], three were by far the most interesting: digital content, programmatic, and first-party data.” — Sorrell
While still at WPP in 2018, Sorrell saw that agencies like AKQA and Essence and data-driven companies like Kantar were growing faster than other areas of the business. The difference was their heightened focus on three facets: digital content, programmatic, and first-party data.
In those facets, Sorrell recognized a foundation for S4’s success. He saw where the growth was — in digital content and technology — and started “pushing on an open door.”
When marketers take a step back to survey what’s working (and what’s not), both behind their own business’s doors and around the industry, they can get a better idea of where they should be investing their time and resources. It just takes a willingness to learn, evolve, and adapt to areas where growth is strong.
2. Embrace first-party data while giving users choice and control
“One of my clients building up their business in India described 2020 as being the ‘year of first party data.’” — Sorrell
Research will tell you that specific, tailored marketing is much more effective than trying to achieve mass appeal. That’s where first-party data becomes critical. It’s the key to creating and delivering highly personalized content to the right audiences at scale.
Sorrell expressed that he and his team firmly believe that creative needs to be fit for both format and purpose. For instance, when they get an insight about consumers, “like women spending an average of 1.7 seconds on a Facebook post,” their first response is “to develop two-second digital ads — not a 15- or 30-second TVC.” The creative execution is inspired by an insight from first-party data.
However, Sorrell also shared that businesses may want to action first-party data but either lack integrated systems or clear policies to respect user privacy — or both. Using Boston Consulting Group’s definition of digital marketing maturity, ideally 100% of Indian companies will be using first-party data in the most effective way in a few years. India currently leads the region in that regard, but the number of companies that have reached their full potential is just 6% of those that BCG surveyed. This raises a pressing question: What can the rest of India’s businesses do to catch up?
In this environment, it’s up to business leaders to build more transparent, meaningful relationships with consumers to deliver tailored, timely messages while ensuring users’ right to privacy.
3. Focus on agility, quality, and efficiency
“One of the biggest problems CEOs of legacy companies face is the failure of their organizations to adapt quickly to digital transformation.” — Sorrell
Sorrell believes in three simple yet powerful tenets: faster, better, and cheaper executions. This trio has helped S4 grow from a “peanut”-size company to a “coconut or maybe even a pumpkin,” in just two years.
Faster is about being agile. If you’re not evolving as an organization, you’re falling behind. Being open to change and experimentation is paramount.
Better comes down to being well-versed on the advertising ecosystem. Sorrell advised that every marketer should understand 15 leading platforms and software companies, including Google, Snapchat, ByteDance, IBM, Adobe, and Salesforce, among others. Knowing how each company’s tools and platforms work, what unique benefits they offer, and why they’re hot (or not) in the industry is essential to advise clients on the best tools and route to take.
Cheaper is about becoming more efficient — not just with time, but with dollars and cents. That doesn’t mean resorting to zero-based budgeting (ZBB). While Sorrell described the approach as having a “dose of efficiency,” ultimately, long-term growth — not short-term gains — should always be the goal.
These three tenets come down to finding the most efficient strategy for your clients while still delivering the quality they expect and deserve. That requires being up to speed on new tools and technology that make it possible for marketers to work faster, smarter, and more efficiently than ever.
4. Get all teams within the organization to communicate
“The biggest issue for any CEO is getting everybody to face in the same direction at the same time.” — Sorrell
It’s up to business leaders to establish a single definition of profits and losses across their organizations. That’s impossible when long-standing, opaque walls separate each department.
Sorrell called out three areas in particular that need to work more closely for today’s businesses to succeed: marketing, sales, and IT. He elaborated with an example we can all relate to. Think about the last time you visited a bank. That interaction wasn’t facilitated solely by the marketing department; IT also played a huge role. And if you sat down to speak with a bank associate, there’s a good chance sales played a part, too.
Getting your teams to work together seamlessly is an organization-wide effort. It takes time and focus, but the result is being able to measure your campaigns more accurately, surface relevant insights from data, and get a better understanding of your audiences — all of which lead to deeper, more meaningful relationships with your consumers.
A new business model for long-term growth
Much of Sorrell’s success at WPP and his vision for S4 can be chalked up to an intense focus on being in business for the long term. Every business leader can borrow a page from that book and think about what they can do today to prepare their organization for the next five, 10, or 20 years. Keeping up with the pace of today’s consumers is an ongoing process, and setting up teams to adapt and evolve takes time. But the right time to start is always today.
“It’s clear to me that understanding the role of data and programmatic, and how that fashions highly personalized content at scale, is going to determine the future of marketing.” — Sorrell