Undreamed of advertising opportunities are emerging from the plethora of new technologies. Alan Mitchell reports on the revolution
There's no doubt about it. Technology is turning the world of advertising upside down. This week, for example, Saverfone is being launched, a national service that lets mobile phone users look up messages about special offers from participating retailers (such as Dixons) within 500 metres from where they are shopping.
Over the coming year, Sainsbury and Boots are to launch interactive TV services (via joint ventures with Carlton and Granada) which, among other things, will let consumers point and click at a programme they're watching say, a celebrity chef conjuring up a recipe to order the ingredients.
Meanwhile, a new TV revolution has begun with the launch of devices such as TiVo, Replay TV and Ultimate TV which allow consumers to programme automatic ad-zapping into their viewing and recording: TiVo can simply skip the ads when it records a programme. At the same time, however, their set top box hard drives also record every detail of consumers' viewing behaviour including which adverts they do watch and which ones they zap and can pass this information back to the service provider, daily.
On a more modest scale, experiments such as Argos' Christmas game on the NTL platform are continuing. With this game, Argos embedded its own brand into an interactive game (catch the Argos Christmas present) while collecting data from consumers (from those signing up for a prize draw), and directing them to its site on NTL. This is just one of a whole raft of advertising formats, including "click to find out more" ads, embedded in the electronic programme guides which the cable provider downloads to customers, and different adverts directed to different households depending on their viewing habits and demographics (no more sanpro ads for young men), that NTL interactive advertising manager Ian Johnson is working on.
Meanwhile, on the internet, the same quest for ever more precise targeting and effectiveness continues apace. Experiments in "viral" and permission-based e-mail advertising abound, while major advertisers sign up with the likes of DoubleClick, which uses real time systems that track the way consumers move through web sites, to "dynamically target" ads to the right people. Targeting criteria include the content of the pages surfers are looking at, how they use the web (how often, at what times, and how often they respond to advertising messages), or personal characteristics such as their geographic location.
Software experts such as Broadvision meanwhile are helping companies to tailor what each individual customer sees on their web sites, depending on who that customer is, his transaction history with the company and so on. Among the promises made by Broadvision's "retail suite" are that it will allow retailers to discover their most profitable customer groups, treat them specially "even if your site is experiencing 25 times its expected peak demand", and to learn "which campaigns are most effective and fine tune product mixes and promotions".
In fact, the list of possible new technology driven advertising concepts is almost endless. But they're all driven by one, compelling dream: the win-win of relevance. Yesterday, dumb broadcast technologies could only send the same message to everyone. They wasted advertisers' money and consumers' time and attention by sending messages to people who weren't interested in them. Now the search for the holy grail of the truly relevant ad that speaks to my needs and desires at times that suit me is on. It's the quest to transform advertising from an interruption and a nuisance into a welcomed service.
Today's proliferating new technologies seem to offer advertisers the chance to reach this holy grail. But we're not there yet. Take ZagMe, an experiment similar to Saverfone, which lets retailers in shopping centres such as Lakeside alert shoppers close-by to special offers. It has 50,000 registered users so far. But at any one time, only a couple of hundred are active. That's not enough (yet) to provide statistically significant results, admits Russell Buckley marketing director at ZagMe provider Spotflash. And the "big leap forward" of real time positioning where the phone locates users within a radius as small as 10 metres is "still a few years away." So too are those perfectly targeted and interactive TV ads. Boots and Sainsbury's interactive services still have to launch and gain critical mass and while there's been a few interactive advertising test with brands such as Unilever's Chicken Tonight and P&G's Pantene, it's still extremely early days. NTL has a long list of exciting experiments, but it has to "phase in new technologies and functionalities," cautions Johnson.
The fact is, says Nigel Sheldon, managing director of m digital, the interactive arm of WPP-owned media buying giant Mindshare, service providers still have their work cut out to get their core offers right and clear technical hurdles such as the ability to follow people seamlessly between traditional broadcast programming to interactive services and back.
Advertising is still, basically, on the "to do" list, he says. "It's all going to take time."
But technology is only half the equation. By changing the economics and dynamics of information and transactions, it is blurring once-clearly defined roles for buyer and seller alike, and reinventing the way markets and marketing work. And marketers and consumers alike are still trying to grope their way to an understanding of what these shifts mean.
Traditionally, for example, mainstream advertising has been separated in time and place from actually closing the transaction. You watch TV at home at night and go to the shops the next day. But with the internet and interactive TV point-and-click shopping this now-familiar separation is blurring. The new approaches create "a golden triangle that allows everything (editorial content, advertising and commerce) to be connected", enthuses Carlton Interactive CEO Rupert Miles. Likewise with mobile phone messaging. As Saverfone CEO Steve Wunker points out, "you don't take your TV or your newspaper with you when you go shopping".
The new technologies also blur the age-old divide between active message senders and passive receivers or audiences. Whether it's the web, interactive TV, or opt-in mobile phone or e-mail messaging services, the common factor is increased consumer control either by proliferating choice, or because it's down to the consumer to search out the information he wants.
The emerging world also upsets a long established and comfortable split of shopping data "ownership". When a customer pays cash, the retailer knows what is being sold, but not who has purchased it.
Electronic transactions, however, create a sort of transaction slug trail which follows the consumer wherever he goes: what items are purchased, which web pages are viewed, which ads are clicked on or responded to, and so on. The old modus vivendi is fading, forever.
The key to the win-win of relevance may depend on advertisers having access to personal information, but as Forrester Research points out, the cleverer the new tracking and monitoring capabilities become, the greater consumers' concern. Two-thirds of web users are now "extremely" or "very" concerned about their privacy, with nearly one third admitting to giving false information on-line. Result: "Marketing efforts are backfiring as nervous consumers stop buying, start lying and send for help," warns Forrester analyst Paul Hagen in his report, Personalisation and Privacy.
It would be a mistake, however, to see the privacy debate solely in terms of consumer concerns about security (such as credit fraud) or Big Brother.
Blurring roles point to something much deeper. Here's a suggestion: try seeing it in terms of a battle over property rights. Consumer information is an asset which marketers are prepared to pay good money for. So is data generated by me and about me that slug trail my private property; an asset whose value I have a right to protect and enhance? If so, I also have a right to put down fences to stop people trespassing on my land. Or is this slug trail' public property, free to anyone to profit from if they have the tools, technologies (and relationships) to follow it?
Forrester recommends three principles for companies wishing to build fences in the right place. First, accept that "users own their data". This means empowering consumers to control how their data is collected and shared (including making all data collection opt-in rather than opt-out). Second, "pay for users' information with value" in the form of demonstrably better service. And third, ensure privacy protection across the network (because, warns Hagen, the next "explosive" privacy scare will revolve around "derived data" the pictures that companies build of consumers by collating many apparently innocent pieces of information from many different sources.)
Some companies are already embracing the idea of consumer control. Saverfone, for example, lets users specify which messages they get, by category (electronics but not groceries) and even by retailer (Tesco but not Sainsbury). With mobile phones, says Steve Wunker, "advertising has to be very relevant if it's to be tolerated. By letting the consumer specify which messages he gets, we don't have to guess."
But this solution isn't so easy to apply on interactive TV and the internet where, already, a growing army of software entrepreneurs is addressing privacy concerns via an expanding range of "anonymising" and "cloaking" services. ZeroKnowledge's Freedom package, for example, lets users create a range of different online identities, control who uses what cookies for what, surf the Web anonymously, and "remove the clutter of unwanted ads".
So far such services' impact has been small. But now big blue chip brands are entering the fray. Within the next few months, for example, Securicor will launch Safedoor, a service that lets consumers shop anonymously on the web via Securicor, which effectively buys the goods from participating retailers on their behalf, guaranteeing the value of transaction.
The retailer never gets the consumers' credit card or other details. Instead, consumers disappear behind the reassuring but unpenetrable wall of the Securicor/ Safedoor brand. The theory: for many e-tailers it's much better to forgo data capture than it is to have people not shop with you at all.
"Marketers are in danger of becoming very excited over the power of data in the online environment while forgetting that they have to earn the right to collect such data," declares Stephen Taylor chief executive of Securicor's new e-solutions unit. But the critical question now, he insists, is not how to gather and use consumer data to make marketing initiatives more efficient and effective, but "how do you give power back to consumers to use their data as they see fit?"
Securicor, for instance, is investigating a whole slew of next-generation privacy services, some of which could help consumers turn their information and attention into a positive revenue stream. One possible example: consumers deposit information with Securicor on subjects such as "I'm thinking of a buying a new four door saloon car". Securicor then aggregates, packages and "sells" this data to the likes of Ford and Vauxhall (while protecting the identity of the individuals concerned).
It may say, for example, that "we have 200 customers intending to purchase a car with these specifications. For a set fee, we will pass on relevant messages and offers to these hot prospects' for you". Retailers especially those with loyalty card and home shopping relationships are well-placed to take on a similar role vis-a-vis their consumers and their suppliers.
It's commonplace nowadays among marketers that "trust" is the key. If the consumer trusts a brand, that brand will win the right to collect personal data. If it uses that data wisely it can, in turn, reach for the win-win of relevant advertising. But trust cannot rest solely on a promise not to abuse or misuse consumer data, because this begs the question: where should the fence between advertisers' access to consumer data and "privacy" lie?
Winning brands are likely to go one step further: earning additional consumer trust by maximising the benefits of ownership and access to data for them; acting as their "shopping partner" as Saverfone's Wunker puts it.
And today's blue chip retail brands are in prime position to seize this opportunity.
{{COVER FEATURE }}
No comments yet