Mobile Fix: Amazon on the box
Simon Andrews, founder of Addictive! sheds light on how brands are evolving in a time where digital competition is fierce – with Amazon planning to launch its own set-top box and Waitrose and Morrisons embracing mobile opportunities to enrich the consumer experience.
While we have given lots of attention to Google and Facebook in recent weeks, we haven’t had too much from Amazon to think about.
But there is lots going on here. Amazon has hired quite a few smart sales people here in the UK recently – paying well above the competition seemingly. Their ambitions in advertising have been well discussed, with data being their main advantage. As Razorfish said:
“In today’s marketing world, data is gold and Amazon is Fort Knox.”
We remain convinced that a priority for Amazon will be to get brands to use the data Amazon has for targeting, with the intention to drive sales on Amazon. It is a digital equivalent to Tesco or Walmart, encouraging brands to invest in in-store promotions that drive sales. For Amazon, the whole web is their store.
Another tenet of Amazon’s vertical stack strategy has emerged with stories that it plans to launch a set top box that will allow the streaming of video. Given its investment in Lovefilm and the move into commissioning programming, controlling distribution on TV is just as crucial as controlling distribution on mobile devices.
So just as the Kindle is the Amazon response to the iPod, the iPhone and iPad, this could be their response to Apple TV.
GAFA need to be present throughout the value chain of digital content and services if they are to avoid being pushed out. As Amazon saw Apple develop into a major retailer of digital music with iTunes, it has to fight back and TV is the next arena.
Retail and Mobile
We chaired the afternoon sessions at the Mobile Retail Summit this week and learnt lots from presentations by super-smart retailers Schuh, Pizza Express and Morrisons Kiddicare.
QR codes are still alive and kicking; Kiddicare use them in store and a Waitrose client in the audience shared her experience that they were incredibly effective both in store and in advertising. I asked about the TV ads from a couple of years ago where they featured QR codes and was told they had worked well – the third most clicked code of the whole campaign was the TV ad.
The Pizza Express client was less convinced about QR though and found them to be ineffective. Maybe we’ll learn more when the 10,000 Adshels across the UK with both QR codes and NFC tags start to get traction with advertisers.
Pizza Express is a real pioneer with mobile. The app has had 500,000 downloads and has around 200,000 users every month. Yet 80% of mobile traffic is via the company’s mobile optimised site. And since free WiFi became available in all stores, Pizza Express has 600,000 users each month, spending an average of 38 minutes connected. So now it is running Instagram and Twitter promotions in store and getting really good engagement.
What is refreshing about this brand is that it has followed its gut based on a good understanding of customers, and it’s working really well.
Morrisons focused on how it uses mobile in its Kiddicare stores and again, we saw some great thinking driven by customer insight – and an approach built around testing and learning. As Morrisons get closer to launching online grocery shopping (with an Ocado partnership rumoured to be close) it is using Kiddicare as an R&D Lab. Morrisons describes itself as a tech company that happens to sell baby stuff.
The two key take outs for us were around testing and learning and that mobile is just one part of a multi-channel approach – something that Google’s Nikesh Arora is pushing as the company seeks to break down the silos around each device.
We increasingly see mobile as a key part of an overall digital strategy, but it’s clear that knowledge and expertise across both areas is rare.
So following the news last week of keyword targeting coming to Twitter and the launch of Twitter Music, we got some more news this week with the announcement of a major advertising partnership between media agency Starcom MediaVest and Twitter – a deal valued at hundreds of millions of dollars.
Will Twitter feature heavily in future media plans because it’s the right thing to do or because they need to meet the agency deal?
Given that the deal was announced through the FT, rather than AdAge or Campaign, and on the morning of the Publicis results (Publicis is the Starcom holding company) we suspect PR was an issue, especially as Publicis made a big thing about their focus on digital, inviting comparison with rivals WPP. Given Martin Sorrell stated he sees Twitter as a PR medium rather than an advertising one, it feels there is some point scoring going on.
So it’s not a huge surprise that Sorrell was talking up the WPP digital push this week too. He claims that shortly Google will surpass News Group to be the biggest media customer of WPP.
As we’ve pointed out before, this sounds quite impressive until you realise that the combined WPP spend with Google, Facebook and Twitter is just 3% of WPP’s overall media spend.
“We live in interesting times, but you have to wonder whether traditional agencies are well placed to advise their clients about these changes,” as said by Robert W. Lord, CEO of Razorfish.