Out: Chasing Eyeballs, In: Delivering Outcomes

Mobile 1.0: Serving Up Ads to Eyeballs

Nearly 20 years after Web 1.0 and AOL, we are returning to an era of captive user attention and walled gardens, manifested most acutely on mobile devices. The mobile platforms of today are meant to control the services, content and marketing messages that are directed at a user — from messaging apps like WeChat, which act as wrappers around other services, to the smartphone OS itself, which is pre-loaded with system level apps for nearly every utility and core service. The services where people spend time on mobile devices are increasingly hungry and extending their tentacles to capture even more of it.

As a result, the vast majority of mobile publisher revenue is generated by ads that are measured and sold based on impressions, views and engagement — metrics tied to attention rather than outcomes. Publishers and the advertisers they serve aggressively push messages via autoplay video ads, pop-up banners, takeovers, pop-unders, scroll throughs and any manner of ad surprises that separate and distract the user from the underlying content, intruding on a reader’s experience with often-irrelevant information.

Only Google and Facebook have the sophistication to target accurately based on interest or intent. This has ensured that these two companies are capturing ALL of the digital ad industry’s dollar growth, while the rest of the publishing industry declines in aggregate. But even Google and Facebook have begun to overload the user — Google returns ads rather than organic results for two-three pages on commercial mobile searches, while Facebook loads a carousel of ads at the top of each user timeline and one ad for every four Instagram photos — and will be forced to reduce ad load in 2017. As a result, users have thrown up their arms in frustration and disgust, hoping for a better publishing model that aligns interests with information.

The Turning Point: Mobile Commerce Everywhere

In this cluttered mobile environment, it was refreshing to learn of the New York Times’ acquisition of The Wirecutter on Oct. 24 for $30M. The purpose of The Wirecutter is quite straightforward:

Wirecutter’s purpose: to help people find great things, quickly and easily. Through rigorous testing, research, and reporting, they create straightforward recommendations that save readers from unnecessary stress, time, and effort.

The Wirecutter’s purpose reminds one of Google’s philosophy, as spelled out in “Ten things we know to be true”:

We know your time is valuable, so when you’re seeking an answer on the web you want it right away–and we aim to please. We may be the only people in the world who can say our goal is to have people leave our website as quickly as possible.

The acquisition of a recommendation & discovery site by one of the world’s most venerable news publishing organizations highlights a turning point in content and media. This turning point is echoed across a host of verticals whose participants are racing to modify their business models to keep pace with their customers’ mobile usage, which now far outpaces desktop, and exhibits different behavior. Entire industries are moving away from the cheap, impression-based world of abundance to a Google like-world in which money is aligned with user intent, in an effort to make up for the massive mobile revenue gap.

The new and improved mobile revenue strategy is tied not to the user’s identity or behavior but rather to the reader’s actions and intentions — linking the moment of discovery to the moment of purchase. In fact, it is no surprise that the first organic search result for “Best Wireless Mouse” on Google links to The Wirecutter’s review — they have taken great care to curate fantastic content and provide unbiased recommendations that user’s trust; the content is aligned with the user’s intent. Furthermore, this is evergreen content that has long term value for the publisher and the reader rather than content meant to capture short term attention for mobile ad scraps.

The mobile commerce turning point has been accelerated by greatly improved buying experiences on mobile devices. Apple Pay, Android Pay, Braintree, Stripe, PayPal and others have simplified payments for every developer while ensuring trusted, secure checkout flows that are safer than swiping a card at a retail store. Retailers and service providers have created highly-focused flows such that “The Everything Store” (Amazon) allows you to search and buy at the spur of a moment, Uber allows you to beckon a ride, DoorDash allows you to order your favorite lunch with just a few taps and iTunes lets you download any song, show or movie instantaneously. These services take advantage of the limited screen size, simple interface and short attention span exhibited on mobile devices to get a user exactly what they want at the touch of a Button. And these mobile commerce actions tie nicely to the content people are consuming about products, things to do locally or where & what song or movie to purchase. As a result, publishers, are moving en masse to connect the places people spend time with the places they spend money — and mobile commerce everywhere has been born.

Mobile Business Models Will Be Transformed

As mobile commerce continues to rapidly grow — ComScore cited a YOY 40% increase in mobile web commerce and a 70% increase in mobile app commerce in Q1 2016 — it will transform nearly every industry’s business model. In addition to The NY Times, the largest new-age publishers such as Buzzfeed and Business Insider have introduced and expanded their mobile affiliate efforts, introducing gift guides, affiliate links and other specialized sections to connect content to commerce. Local and travel review services such as TripAdvisor, Foursquare and Yelp, who previously monetized 100% through ads are rapidly shifting to commerce models, generating revenue from food delivery, rides, activities, hotel bookings and more. It is one of the largest areas of investment for each of these platforms. Google Maps and Apple Maps have introduced Uber and OpenTable connections. Google and Bing return transactional results in an increasing number of searches. Even Facebook, the master of mobile attention, is itself moving to replicate the WeChat model, adding ticketing, rides and reservations to its Places and Messenger services. In fact, Instagram announced just this month that they will be enabling the purchase of products in 20+ leading retailers’ sites and apps after discovery on a mobile Instagram page! They’re bridging the gap between inspiration and commerce in a consumer-friendly way.

Mobile publishers and marketers are still in the early days of shifting from measuring success solely on delivering attention to measuring success on delivering outcomes. These outcomes will lead to delighted users, publishers with a more loyal audience and valuable content and marketers with more efficient spend and measurable mobile outcomes. Mobile commerce everywhere, enabled by the linking of evergreen content with relevant commerce actions, will lead to a friendlier mobile experience for users, a new source of publisher revenue and a powerful new acquisition and transaction channel for marketers. The foundation is in place — it’s time to help people get what they want, when they want it — at the touch of a Button!

img_conde-hotels

Advertisements