As consumers, we are subjected to it every hour, every day and, in some ways, we have already accepted this as inevitable and positive part of our online experience. For instance, beauty and luxury car companies almost entirely withhold their ads from my laptop screen. Instead I’m the prey of food and beverage companies, and thanks to my girlfriend, female fashion. But I’m ok with this; it means I see adverts that are likely to be of interest. It wouldn’t be possible without brands being able to access data to enable programmatic advertising which in 20151 grew in the US and UK by $5.91 billion to $17.5 billion.

Targeted advertising is just the start. The evolution of brands involves using social data and online behavior to help them set prices based on the individual, otherwise known as price discrimination. The word “discrimination” carries a stigma, but in the world of digital media, it’s a good thing.

Price discrimination is not a new concept in the Financial Services industry. Banks charge interest rates based on how likely a customer is to be unable to repay – this seems fair, people with good credit ratings don’t pay for those without. Car insurance companies charge premiums based on a number of characteristics such as experience and claim history.

In November 2016, Admiral intended to launch their tool, firstcarquote, to use individuals’ Facebook activity to help determine a suitable premium. However, on the day of the planned launch, Facebook made the decision to prevent Admiral from using Facebook post data in order to protect the privacy of its users2.

Despite the setback for Admiral, other companies have had more success in using personal data to inform price. Vitality, a health and life insurance provider, enables members to factor in consumer activity levels into the price of an Apple Watch. People pay a small upfront cost ($57)3 and then 24 monthly payments between $0 and $13 depending on how active they have been. In other words, Vitality price discriminates based on the activity level of each customer.

So why did Admiral get shut down and Vitality pass muster? In both cases, the customer has to agree to their data being used. In the case of Vitality, however, the rules are transparent: the wearer gets points for different types of activity, and points mean prizes. For Admiral, the rules were less clear, in fact the principal data scientist, Yossi Borenstein said “Our algorithm for calculating what ‘safe’ looks like is constantly learning,”4 In other words, it will constantly change.

There are also concerns regarding how peoples’ behavior on social media will change if they are aware that it is being used by companies to set prices. How might you change your posts, what you like and the groups you join if it impacted the price you pay? One of the core concepts of social media is for people to have the freedom to share their lives and interests with the world.

Personal data is no longer limited to just targeted advertising (e.g. programmatic display and video) – it is now also used for price determination and perhaps in the future this may extend to product eligibility.

To quote the epitome of advanced technology (the Borg – Star Trek) “Resistance is futile,” and it may even result in harming the consumer through higher prices and less choice. Better instead to direct the flow of innovation by participating in the conversation. Digital discrimination can create win-win situations; Christmas shopping for my girlfriend was made easy this year by positive discrimination being applied to me by women’s fashion through retargeting. Rather than going hunting for gifts my girlfriend might like, gifts my girlfriend had already viewed came hunting me.

1 E-Marketer, 2016
2 BBC, 2016. http://www.bbc.co.uk/news/business-37847647. Accessed on 12 Dec 2016.
3 Vitality, 2016
4 Guardian, 2016. Admiral to price car insurance based on Facebook posts. Accessed on 12 Dec 2016.

Article originally published by MediaPost here.

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Digital marketing channels today are divergent – search, video, social, display, email, mobile – the list goes on. Marketers have a myriad of options to choose from to reach consumers to hit KPIs. But the biggest challenge is understanding which digital media work best…and how to optimize those.

The holy grail of many brands today is establishing which digital investment gets the credit for delivering a conversion event. Where should we spend our money? What can we cut from the budget? How? When?

As more media is bought digitally, more data is produced and with that comes an ability to measure effectiveness at a granular level.

The future is increasingly connected and for some big digital advertisers, requires the right measurement solution.

Digital Attribution can provide the right measurement and optimization solution. But you need the right tools and conditions to do so and what’s more – it’s not for everyone.

We have compiled an 8 Step Guide to Digital Attribution to help navigate marketers through the subject and understand whether it’s a journey they want to embark on.

The 8 steps are:

  1. Significant Digital Media Spend
  2. A Clear Online KPI
  3. A Skilled Team of Data Scientists
  4. The Right Purpose
  5. The Ability to Optimize Quickly
  6. The Right Data Set-Up
  7. Unified Digital Tracking
  8. The Right Methodology

You can read the in depth article published in AdMap, by downloading the article on the top right hand corner of this page.

Or

Visit our digital-attribution.com website to view the video.

 

AI and voice recognition promise to accelerate consumer adoption of smart devices, writes the global CEO of Gain Theory.

Last year, CES was most aptly described as more of an evolution than revolution. The reverse is true in 2017. This year’s event was a complete game-changer. Behind the high-profile, attention-grabbing gadgets is a very clear commentary on how voice recognition, artificial intelligence and smart technology have combined to irrevocably change the relationship between brand and consumer for the better.

“Smart” was the prevailing theme at this year’s event—and I saw (and heard) it everywhere. From lightbulbs to toasters and TVs to vacuum cleaners, the devices on display didn’t just “do”—they thought. Smart devices themselves are not the real game changers here. It is AI and, in particular, voice recognition, which promise to accelerate consumer adoption.

Relevance, ease-of-use and trust have all been barriers to consumer adoption and, until recently, many smart devices were controlled by a smart phone. The ability to turn lights on and off via a smartphone has been around for some time but not necessarily widely adopted. Frankly, why get off the sofa to grab your smart phone to turn off the lights when there’s minimal additional effort to simply walk over to the light switch? Voice recognition was the crucial missing component—and it was all over CES.

So it wasn’t surprising that Amazon’s Alexa stole the show.

Next generation smarter devices
With seven microphones embedded into the Echo device and machine learning at scale with automated speech recognition, Alexa’s response is almost instantaneous in helping to control lights, thermostats, door locks, sprinkler systems and even order an Uber at the command of voice. Amazon has opened up Alexa for integration using a free API and, according to GeekWire, Alexa now has over 7,000 “skills” (Amazon’s word for integrations) from just a 1,000 in June 2016. With reportedly 5 million units of Echo sold to date and fast growing integration of Alexa with other devices, the ease of use and relevance of smart devices is likely to accelerate consumer adoption with some predicting that 2017 will be the year smart home goes mainstream.

On another front, traditionally non-tech brands are moving into the smart device market, partnering with tech creators to fashion an array of new products. For example, Hair Coach, the world’s first smart hairbrush, is a collaboration between Kérastase (part of the L’Oréal Group) and Withings, who bring sensor technology and app connectivity to everyday products. The brush has microphones that pick up on various audible cues on the state of your hair and shares its data via a mobile app.

There were also a multitude of toys and educational devices for children. Fisher Price announced its intent to launch a high-tech exercise bike for toddlers and Lego announced a robot-making toolkit for kids. Lego’s “Boost” toolkit enables children ages seven and up learn to code and build robots, bringing their creations to life by adding movement, sound and personality.

Manufacturers as maintenance managers
Until recently, retailers held the keys to unlocking direct conversations with consumers. Having a detailed understanding of customers purchasing habits and demographics have helped them to communicate one-on-one with consumers, build strong relationships and increase future sales.

Manufacturers, on the other hand, have remained relatively in the dark beyond the number of units distributed, relying on third parties to help inform them of the end sales volumes, pricing and demographics of customers. The advent of smart technology has the potential to change that by enabling the manufacturer to gain a deep understanding of customer behaviour after the product has been purchased (assuming the customer grants permission). Smart fridges will automatically reorder items when they run out. Automotive manufacturers will know when your journey cannot be completed with your current fuel levels and alert you when driving to your nearest/most convenient/cheapest gas station.

Implications to marketers
Smart devices with voice recognition and AI will not just dramatically change the way in which consumers interact with computers, but also the way in which brands market to and build relationships with consumers due to the vast increase in data and resulting insights.

Retailers of consumer electronics, manufacturers, energy providers, telco operators and others will have a real opportunity to build even stronger relationships with customers by helping them to navigate the smart home. Joining up all the devices, ensuring strong security, diagnosing and solving problems for consumers as they integrate new technology as well as providing on-going subscription based support will strengthen brand relationships if done at a level that results in surprise and delight.

Machine learning, the ability to process data at scale and make intelligent decisions and recommendations in real-time will require a different approach to marketing in the future.

On its 50th anniversary, CES has indeed (re)found its voice and it’s clear that there’s a major step change in the technology we interact with every day, with voice recognition likely to be the biggest revolution in our lives since the smart phone.

Manjiry Tamhane is the global CEO of Gain Theory.

Article originally published by Campaign US  here

 

 

The latest IAB digital ad spend results have been released. In it is revealed the fact that in the UK paid search is now the largest advertising sector, above TV and even programmatic display.

It appears as though the constant Google algorithm changes have managed to drive even more money into the pockets of Alphabet and their investors.

But is paid search really advertising at all?

In the old days, before the internet, if you wanted a pair of shoes you’d go to town, find a shop which sells shoes, and buy them. You might know you wanted a pair of Clarks shoes, or you might spend a bit of time to peruse a number of shops. Shops would spend money on rent, staff, store frontage, and a number of other tangibles to ensure they got your business. But this would never be included in a marketing budget.

Now, you go online, go to clarks.com or search for clarks, or you search for shoes (you might specify a colour, or a size, or a type… whatever). The point is, none of this is new, it’s just a way of doing online what we’ve previously done in the past. You either know what you want and go straight to it, or you shop around a bit and eventually get what you want.

The best advertising is about creating a demand for a product or a brand. Paid search does not create demand, it converts it. And whilst this is important, I would argue it’s not advertising.

With budgets about to be squeezed again in the UK due to Brexit bringing with it price pressure this could be an important argument for brands to have.

What do you think? Agree, disagree, or simply don’t believe this is important? I’d love to hear your thoughts – email me at matthew.chappell@gaintheory.com 

© Gain Theory 2016. All rights reserved.