3A's to save the advertising: Audience – Addressable – Advertainment (Webcast: The Conference Board Europe)

In a world in which the consumer suffers from advertising fatigue and advertising blindness, Hugues Rey, CEO Havas Media Group BeLux, joins us to discuss how data and dynamic creations enable us to reach the right person at the right moment on the right channel.

Advertising is still a massive budget for corporations and concerns remain on the effectiveness of channels in a fast changing media world. How can companies switch from perceived irrelevant spending to a tangible return on investement and better connect with their consumers in the process?

Key takeaways around the 3A’s

  • Audience – From reach to audience, what are the ways to connect better with the consumer to deliver the relevant content?
  • Addressability – What is the future of the mass media and how to use it in a more accurate targeted approach?
  • Advertainment – How to develop specific and dynamic content that engage, educate and entertain the consumer?

 

3A's to save the advertising: Audience – Addressable – Advertainment (Webcast: The Conference Board Europe)

 

In a world in which the consumer suffers from advertising fatigue and advertising blindness, Hugues Rey, CEO Havas Media Group BeLux, joins us to discuss how data and dynamic creations enable us to reach the right person at the right moment on the right channel.

Advertising is still a massive budget for corporations and concerns remain on the effectiveness of channels in a fast changing media world. How can companies switch from perceived irrelevant spending to a tangible return on investement and better connect with their consumers in the process?

Key takeaways around the 3A’s

  • Audience – From reach to audience, what are the ways to connect better with the consumer to deliver the relevant content?
  • Addressability – What is the future of the mass media and how to use it in a more accurate targeted approach?
  • Advertainment – How to develop specific and dynamic content that engage, educate and entertain the consumer?

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Is Voice The Next Advertising Frontier For Amazon ? (Author: Adam Blair)

 

 

Amazon has reportedly been talking with major CPG companies, including Procter & Gamble and Clorox, about introducing digital ads to its Alexa voice platform, according to CNBC. Early discussions have focused on whether companies would pay for higher placement when a consumer searches for a product on their Echo device — similar to the way paid searches put sponsored results higher up in Google search results.

Both voice and digital advertising are becoming major forces in the retail and CPG industries. Amazon claims that millions of Prime members used Amazon Alexa to shop by voice for gifts during the 2017 holiday season, and that the Echo Dot was the number-one selling Amazon Device during this period. Amazon Echo had 70.6% of voice assistant user share in May 2017, more than triple the 23.8% of Google Home, according to eMarketer. Overall, eMarketer forecasted that 35.6 million Americans would use a voice-activated assistant at least once a month in 2017, a 129% increase over the previous year.

Will Consumers Want To Silence Voice Ads?

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There are risks in selling advertising on voice platforms. While it’s easy for a shopper to scroll past a labeled ad on a desktop or mobile device, there’s much more “inertia” with voice platforms. Users would presumably need to verbally request another brand option if they don’t want to purchase Clorox bleach or Tide detergent.“I think [ads on voice platforms] would be a turn-off,” said Paula Rosenblum, Managing Partner at RSR Research. “It would likely be followed by the ‘Pay $9.99 per month for the ad-free version.’ You’d think Amazon would be happy with its captive ecosystem. I guess not.”

Other industry experts see greater potential for benefits. “I believe this is a good thing for advertising in general,” said Sam Cinquegrani, CEO of ObjectWave, a digital strategy and services firm. “We need more space not less, whether that be voice or click ads. It’s a good move as long as the consumer accepts it. And like most ad platforms, giving the consumer a chance to turn it off is a smart move. But not everyone is annoyed by ads.”

Consumer acceptance will be heavily influenced by the content and style of voice platform advertising. “I’d recommend that any ad material should give listeners a reason to not want to switch them off, particularly given the medium,” said Cinquegrani in an interview with Retail TouchPoints. “This is Alexa, not radio. So by focusing more on being informative and less on being promotional or a hard sell, CPGs are more likely to succeed. This works very much along the same lines as content marketing.”

Brands also will need to tread lightly in terms of how consumers perceive the way their personal data is being used, in order to avoid the “creep factor.”

“Consumers will likely be concerned that these ads may interfere with their anonymity as well as privacy,” said Marshal Cohen, Chief Industry Analyst, The NPD Group in an interview with Retail TouchPoints. “They are already fighting the privacy issue. But consumers are also used to ads invading their space. Cable TV, Sirius Radio and even apps they download on phones now all come with ads. All once promoted as ‘ad free’ now come with them. So over time I suspect the objections will fade.”

Amazon’s primary competitor in the voice realm — Google — has focused on product partnerships with retailers rather than advertising. Walmart announced in August 2017 that it would make thousands of items available for voice shopping via Google Assistant. The retailer integrated its Easy Reorder feature into the platform, enabling existing customers to link their Walmart accounts to Google and receive personalized shopping results based on previous online and in-store Walmart purchases.

Amazon Moves Aggressively Into Digital Advertising In 2018

The Alexa news followed a Dec. 26, 2017 CNBC report that Amazon will be making a major push into digital advertising this year, challenging industry leaders Google and Facebook. Most of the conversations are focusing on e-Commerce search and video products. Amazon also plans to partner with third-party tech companies to sell partnered TV and mobile ads.

Digital and mobile advertising is projected to grow 13% in 2018 to reach $237 billion, or 44% of global ad revenues, according to Magna Global. The media buying research firm forecasts that by 2020, this type of advertising will comprise 50% of the total global ad spend.

Is Voice The Next Advertising Frontier For Amazon ? (Author: Adam Blair)

Source: https://www.retailtouchpoints.com/features/trend-watch/is-voice-the-next-advertising-frontier-for-amazon

Is Voice The Next Advertising Frontier For Amazon?

Amazon has reportedly been talking with major CPG companies, including Procter & Gamble and Clorox, about introducing digital ads to its Alexa voice platform, according to CNBC. Early discussions have focused on whether companies would pay for higher placement when a consumer searches for a product on their Echo device — similar to the way paid searches put sponsored results higher up in Google search results.

Both voice and digital advertising are becoming major forces in the retail and CPG industries. Amazon claims that millions of Prime members used Amazon Alexa to shop by voice for gifts during the 2017 holiday season, and that the Echo Dot was the number-one selling Amazon Device during this period. Amazon Echo had 70.6% of voice assistant user share in May 2017, more than triple the 23.8% of Google Home, according to eMarketer. Overall, eMarketer forecasted that 35.6 million Americans would use a voice-activated assistant at least once a month in 2017, a 129% increase over the previous year.

Will Consumers Want To Silence Voice Ads?

ADVERTISEMENT

There are risks in selling advertising on voice platforms. While it’s easy for a shopper to scroll past a labeled ad on a desktop or mobile device, there’s much more “inertia” with voice platforms. Users would presumably need to verbally request another brand option if they don’t want to purchase Clorox bleach or Tide detergent.“I think [ads on voice platforms] would be a turn-off,” said Paula Rosenblum, Managing Partner at RSR Research. “It would likely be followed by the ‘Pay $9.99 per month for the ad-free version.’ You’d think Amazon would be happy with its captive ecosystem. I guess not.”

Other industry experts see greater potential for benefits. “I believe this is a good thing for advertising in general,” said Sam Cinquegrani, CEO of ObjectWave, a digital strategy and services firm. “We need more space not less, whether that be voice or click ads. It’s a good move as long as the consumer accepts it. And like most ad platforms, giving the consumer a chance to turn it off is a smart move. But not everyone is annoyed by ads.”

Consumer acceptance will be heavily influenced by the content and style of voice platform advertising. “I’d recommend that any ad material should give listeners a reason to not want to switch them off, particularly given the medium,” said Cinquegrani in an interview with Retail TouchPoints. “This is Alexa, not radio. So by focusing more on being informative and less on being promotional or a hard sell, CPGs are more likely to succeed. This works very much along the same lines as content marketing.”

Brands also will need to tread lightly in terms of how consumers perceive the way their personal data is being used, in order to avoid the “creep factor.”

“Consumers will likely be concerned that these ads may interfere with their anonymity as well as privacy,” said Marshal Cohen, Chief Industry Analyst, The NPD Group in an interview with Retail TouchPoints. “They are already fighting the privacy issue. But consumers are also used to ads invading their space. Cable TV, Sirius Radio and even apps they download on phones now all come with ads. All once promoted as ‘ad free’ now come with them. So over time I suspect the objections will fade.”

Amazon’s primary competitor in the voice realm — Google — has focused on product partnerships with retailers rather than advertising. Walmart announced in August 2017 that it would make thousands of items available for voice shopping via Google Assistant. The retailer integrated its Easy Reorder feature into the platform, enabling existing customers to link their Walmart accounts to Google and receive personalized shopping results based on previous online and in-store Walmart purchases.

Amazon Moves Aggressively Into Digital Advertising In 2018

The Alexa news followed a Dec. 26, 2017 CNBC report that Amazon will be making a major push into digital advertising this year, challenging industry leaders Google and Facebook. Most of the conversations are focusing on e-Commerce search and video products. Amazon also plans to partner with third-party tech companies to sell partnered TV and mobile ads.

Digital and mobile advertising is projected to grow 13% in 2018 to reach $237 billion, or 44% of global ad revenues, according to Magna Global. The media buying research firm forecasts that by 2020, this type of advertising will comprise 50% of the total global ad spend.

 Here’s How 5 Tech Giants Make Their Billions – Alphabet & Facebook: Advertising

Source: Chart: Here’s How 5 Tech Giants Make Their Billions

on May 12, 2017 at 1:03 pm

Chart: How 5 Tech Giants Make Their Billions

The Revenue Streams of the Five Largest Tech Companies

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Last year, we published a chart showing that tech companies have displaced traditional blue chip companies like Exxon Mobil and Walmart as the most valuable companies in the world.

Here are the latest market valuations for those same five companies:

Rank Company Market Cap (Billions, as of May 11, 2017) Primary Revenue Driver
#1 Apple $804 Hardware
#2 Alphabet $651 Advertising
#3 Microsoft $536 Software
#4 Amazon $455 Online Retail
#5 Facebook $434 Advertising
TOTAL $2,880

Together, they are worth $2.9 trillion in market capitalization – and they combined in FY2016 for revenues of $555 billion with a $94 billion bottom line.

BRINGING HOME THE BACON?

Despite all being at the top of the stock market food chain, the companies are at very different stages.

In 2016, Apple experienced its first annual revenue decline since 2001, but the company brought home a profit equal to that of all other four companies combined.

On the other hand, Amazon is becoming a revenue machine with very little margin, while Facebook generates 5x more profit despite far smaller top line numbers.

Company 2016 Revenue (Billions) 2016 Net Income (Billions) Margin
Apple $216 $46 21%
Alphabet $90 $19 21%
Microsoft $85 $17 20%
Amazon $136 $2 2%
Facebook $28 $10 36%

HOW THEY MAKE THEIR BILLIONS

Each of these companies is pretty unique in how they generate revenue, though there is some overlap:

  • Facebook and Alphabet each make the vast majority of their revenues from advertising (97% and 88%, respectively)
  • Apple makes 63% of their revenue from the iPhone, and another 21% coming from the iPad and Mac lines
  • Amazon makes 90% from its “Product” and “Media” categories, and 9% from AWS
  • Microsoft is diverse: Office (28%), servers (22%), Xbox (11%), Windows (9%), ads (7%), Surface (5%), and other (18%)

Lastly, for fun, what if we added all these companies’ revenues together, and categorized them by source?

Category 2016 Revenue (Millions) % Total Description
Hardware $197,020 36% iPhone, iPad, Mac, Xbox, Surface
Online Retail $122,205 22% Amazon (Product and Media Categories)
Advertising $112,366 20% Google, Facebook, YouTube, Bing ads
Software $31,692 6% Office, Windows
Cloud/Server $31,396 6% AWS, Microsoft Server, Azure
Other $60,177 11% Consulting, other services (iTunes, Google Play), etc.
$554,856 100%

Note: this isn’t perfect. As an example, Amazon’s fast-growing advertising business gets lumped into their “Other” category.

Hardware, e-commerce, and and advertising make up 76% of all revenues.

Meanwhile, software isn’t the cash cow it used to be, but it does help serve as a means to an end for some companies. For example, Android doesn’t generate any revenue directly, but it does allow more users to buy apps in the Play Store and to search Google via their mobile devices. Likewise, Apple bundles in operating systems with each hardware purchase.

Advertising generates €7 for the economy for every €1 spent

But the industry still needs to do a better job of communicating its economic benefits across Europe as policy makers look to limit online advertising.

Source: Advertising generates €7 for the economy for every €1 spent

Advertising economy EU

Every euro spent on advertising boosts EU GDP by €7, contributing €643bn to the 28 countries in the bloc and creating millions of jobs, promoting competition and boosting innovation.

That is the conclusion of a new report by the World Federation of Advertisers (WFA), which is using the findings as a stepping stone to promote the positive impact advertising has on economies.

The study, conducted by Deloitte using econometric modelling, found advertising contributes 4.6% to EU GDP and accounts for 6 million jobs. That includes people directly involved in producing advertising, as well as businesses such as publishers reliant on advertising for their revenues and people employed across the wider economy due to the consequences of ad activity such as sales people and those in hospitality.

The report follows a previous study by the Advertising Association (AA) in the UK in 2013, which used the same methodology to conclude that for every £1 spent on advertising there is a £6 boost to the economy. According to the AA, the ‘Advertising Pays’ drive in the UK helped change policy makers minds about the role of advertising and the WFA is hoping for a similar impact across Europe.

READ MORE: Advertising generates £100bn for UK economy

“[This research] enables us to argue more forcefully and convincingly about the positives of advertising,” WFA CEO Stephan Loerke tells Marketing Week.

“There are a lot of headlines about advertising but they usually put the industry on the defensive. They are usually in the context of trying to address perceived challenges such as obesity among children or data privacy. But advertising actually plays an important role for the economy and society and this is totally left aside.

“This is all the more contradictory as most EU governments have a clear focus on generating growth through innovation. We need a positive proactive public agenda that explains why advertising is a good thing. It needs to be much more proactively promoted and championed.”

We need a positive public agenda that explains why advertising is a good thing. It needs to be much more proactively promoted and championed.

Stephan Loerke, WFA

While the WFA report focuses on the EU number, advertising’s contribution to the economy has been calculated across a number of different countries including Japan and Australia. And this found that advertising has a similar contribution across countries, tending to vary between €6 and €8.

Those variations tend to come down to a number of things. While the metholodology cannot be definitive, countries with lower ad spend per capita tend to contribute more to GDP, as do countries with a higher proportion of their economy given over to services.

But the major difference appears to be in the size of the online ad market. The research suggests that ad markets with a proportionally bigger share in digital are likely to be more effective at creating GDP.

That is why the WFA is particularly worried about proposed EU legislation that would limit digital advertising. Announced this week, the ePrivacy directive has the aim of boosting users’ privacy online but to do this it recommends giving internet browsers the choice of whether they opt-in to third-party cookies that can track people across the web when they install the browser, rather than on individual websites.

Yet at the same time the proposals will allow publishers to track if people are using ad blockers and ask them to turn them off if they want to see ad-supported content.

“It looks like a significant percentage of people would reject cookies but could then be constantly bothered by websites requesting them to accept cookies,” explains Loerke.

He then cites separate research that suggests 89% of internet users would reject tracking cookies as a reason for his concern that the new rules will have “major implications” for the digital industry.

“We are concerned that what has been put forward will have unintended consequences and impact the digital ecosystem as we know it,” he says. “The EU has a growth agenda focused on digital… but to put forward a regulation like the one we see would, we think, very significantly hurt those ambitions. This is yet another case where we feel there is not enough understanding by policy makers of the benefits of advertising.”

The Value of Advertising report shows economic benefits of advertising: Mutiplier effect x 7  – Media Marketing

According to the EU-wide report from Delloite, every euro spent on advertising generates a seven-fold boost to GDP

Source: The Value of Advertising report shows economic benefits of advertising – Media Marketing

Report: http://www.mm.be/userfiles/media/Economic_Contribution_of%20Advertising_EU.pdf

The Value of Advertising report was funded by the World Federation of Advertisers and claims to be the first EU-wide report to isolate the economic and social contribution of advertising, aiming to express the impact of advertising at a time when the World Federation of Advertisers is concerned the economic benefits of advertising could be diminished.

The European ad industry is calling for a moratorium on further restrictions on advertising to ensure the impact of any new rules any unintended consequences is fully assessed.

Deloitte’s econometric modelling found advertising contributed to nearly six million jobs across the EU and 4.6% of total GDP.

Research stated the €92bn (£80.4bn) spent on advertising in 2014 within the EU would have contributed €643bn to GDP, which equates to 4.6% of overall EU GDP.

The 5.8 million jobs supported by advertising is equivalent to 2.6% of all EU employment, according to the report.

Some 16% of the 5.8 million figure are those directly employed in the production of advertising, a further 10% include jobs created in media and online businesses that are funded by advertising.

The remaining 74% are the jobs created in the wider economy as a consequence of advertising activity.

Deloitte defines this as “sales jobs to roles supporting the ad business in industries such as hospitality” and roles created by “advertising-stimulated demand for products and services”.

Deloitte’s research also highlighted the social benefits of advertising such as its ability to support news, entertainment and communication tools for a reduced cost or for free.

It also argued that “outdoor advertising provides additional civic benefits in the form of an improved urban environment while search engines help people to reduce both the time and financial cost of seeking new information”.