Mobile eCommerce: How It’s Changing the World

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Q: What trends has 2016 seen for eCommerce in the mobile space, and what do you expect for the remainder of the year?

A: We’re seeing big brands invest in apps because apps are playing a critical role in eCommerce. It finally gives brands a platform where they can engage with their users, and when done right – push the right message at the right time – increase sales significantly. Urban Outfitters and The Gap are two good examples, but there are many more. These brands have invested in apps offering a better user interface, which is essential for maintaining and growing the customer relationship. At the same time, apps also make it easier for brands to reengage shoppers and learn about their likes and dislikes.

One of the key things about mobile is it bridges the divide between online and offline (eCommerce and the store). Home Depot is using mobile to navigate their stores, and when that data is combined with loyalty program data and push notifications, it yields a very clear picture of consumer behavior. Brands are also deploying beacons to increase the targeted use of push notifications, delighting the user in the right time. And increasingly, as eCommerce brands are relying more on apps, the UI around it has also gotten more sophisticated. Using data in a smart way to acquire engaged users, for example layering data, into Facebook creating smart look alike audiences reaching like -minded users. Platforms such as Facebook are spending a lot of efforts to improve their offering, including carousel ads and dynamic product ads.

Q: You indicate that there is a new alignment around industry standards for mobile. Can you share what changes you have seen and why you think the industry is aligning?

A: A year ago, it was common for brands to run a paid mobile campaign before they had setup an integrated tracking system. That isn’t true anymore, and I think it’s because brands and developers are becoming more sophisticated and turning that knowledge into industry standards for mobile. Already, those standards are paying dividends. Tracking allows brands to be more careful with how they are buying inventory, for example. When you combine a tracking system with a DMP, it opens up new possibilities for advertisers to work off of engagement payment models like cost per engagement (CPE), cost per sale (CPS) or cost per registration (CPR). This alignment of standards is also improving the quality in mobile. Advertisers are thinking intelligently about the right metrics—quality is measured against long term KPIs. Even a metric like daily active users (DAU), which was once reserved for the developers, is becoming standard to the point that DAU was a plot point on the HBO show Silicon Valley. Of course, the consequences of standardization aren’t just about jokes on a cable comedy. Right now, we’re seeing a new question emerge around the attribution “claim” window because that one-week standard will have to evolve due to improvements around reengagement.

Q: You believe that agencies are more at risk for becoming obsolete than ever, can you give some background on what you feel is causing this increase?

A: Agencies aren’t going away, but their challenges are real. The biggest issue is that brands want to be closer to their data; they want to understand it better and they want to do a better job of feeding those insights back into product and strategy. Naturally, brands are also taking a more hands on role in their campaigns, and the self-serve technology that we saw enter the marketplace years ago doesn’t answer the need, since the mobile ecosystem is so sophisticated using self-serve tools doesn’t cut it. Meanwhile, agencies have had a tough time in the mobile space because mobile-first companies that pioneered the innovations of the previous decade are becoming increasingly strict about keeping their data and expertise in-house. So in a lot of ways, the agencies are losing ground to tech companies but mainly they’re losing ground to their clients, even if their clients still want them to take the lead. That’s a real challenge for the agency business and agencies that aren’t open to a new way of communicating (often with the third party involved) will find it hard to keep their heads above water, especially if they’re built entirely on selling media at marked up prices. But some of the smartest people are in the agency business and the agencies that can look into this change and innovation will evolve and figure out a way to provide value to their clients, either because it’s not cost effective for the brand to do all advertising on their own, or because an agency, just like a tech company, offers something unique and inherently valuable in the marketplace.

Q: Is 2016 the year for mobile first? What have you seen to indicate this?

A: Citing stats about mobile is silly at this point. Mobile is here. It’s the norm. If a company or service doesn’t have an app, users go elsewhere. Users are always on their mobile devices, or those devices are literally on their hips or the bedside tables. So the question isn’t whether this is the year for mobile first, I think we passed that moment a while back. The question is when will it be the year of cross channel? What I mean is that when we talk about cross channel we see mobile not as a stand-alone channel, but as an extension of everything, from outdoor and in-store to television and online. Mobile is how we tie those channels together; it’s how we contact users and how we collect relevant data to better understand consumer behavior.

Q: What challenges remain to be overcome in the mobile space?

A: The biggest challenge is cross channel attribution. We’re able to connect the dots, to a point. But true cross channel attribution means being able to connect the dots in a systematic way.

Another big challenge is quality control and standardization. We see this around viewability, for example. But there are other issues that are just as important. Window of attribution is one challenge for brands and vendors. Another challenge brands need to be looking out for is influencer marketing attribution because there’s a lot of emphasis being placed on influencers, but not a lot of data on effectiveness. Marrying social and mobile in order to layer data from different platforms to better target lookalike audiences is a challenge I expect we’ll see a lot of movement on in the coming months. Likewise, there are opportunities for improvement around programmatic when it is used for performance based campaigns.

As always, the self-serve vs. managed debate continues. Brands are still pushing to a self-served model for better control, but the mobile stack is a lot more intricate than the desktop stack, and so for the time being, fully managed services for mobile are better fitted for brands because the need for experts is stronger on the mobile side.

Naturally, new platforms like Snapchat also present a challenge. It’s hugely popular, but we don’t know how it will be monetized yet. But of course, this is a constant in mobile technology—there’s always a new innovation that you have to evolve to meet.

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