Last week saw the annual Future of Digital Marketing conference in London, presented by Econsultancy. For me, a long day’s exposure to many stimulating speakers boiled down to a multifaceted take on the concept of value. How can marketing deliver value for advertisers in 2010? What value (and values) do consumers look for when they consider the options presented to them? What new behaviors made possible by digital media are attaining value? Below are a few points raised or prompted by the occasion.
Value comes in many forms these days.
At the most basic level, there is value in technology itself, including Internet access and mobile devices. These things make it easy to get information, find products and services, save time and save money. A milestone in this appreciation of technology as value, as keynote speaker Gerd Leonhard reminded us, is that from July 2010, access to broadband will be a legal right in Finland.
While some things are gaining value, others are losing it. A corollary of recent technological development, Leonhard observed, is that the intrinsic value of copies (such as songs, video and written content) has declined, turning many old business models on their heads. Now it is often the context of information or creativity that makes it valuable, and those who can create a compelling context will attract audiences.
One of the greatest sources of contextual value is online community. Facebook is the headline example—demonstrating that not only the site itself but advertisers who use it well can reap big rewards. But there are countless examples of smaller communities creating value through shared interests.
One speaker, Rowan Gormley of Naked Wines, has built his business on a blindingly simple win-win premise: Wine lovers get together to support independent winemakers with a proven pedigree, and commit to buying specific wines before they are made. Because the winemakers effectively pre-sell those wines, they don’t need to market them, and many upfront costs are also met. For their part, buyers save an average 33%—often more—on the wines themselves. The earlier they commit to buy, the lower the price.
Of the 80,000 members of Naked Wines, 20,000 also spend £20 per month to support winemakers who need modest investment to launch a new wine or begin a new project—perhaps buying an additional parcel of land to cultivate. In 2009, Gormley noted, Naked Wines was the largest single investor in new wine ventures in the world. Beyond this, the company works to harness the full value of users’ comments and to provide good customer service.
It’s not difficult to see the concrete value in Gormley’s business: for winemakers, for wine drinkers, and for Gormley himself, who clearly loves his job. Tom Savigar of the Future Lab discussed value in a broader sense. Savigar aimed to look “beyond retail” in his keynote speech, and ask questions that are fundamental in the multichannel age: “Why do I go to a store? Why do I go to a Website?” What are the differences, and how are these categories blurring as we all learn to shop in different ways? More importantly, how are retailers recognizing the value they provide, and using that knowledge to rethink their businesses?
Angela Maurer, senior marketing manager at Tesco.com, lifted the lid on the grocery giant’s API strategy to reveal another win-win situation. First, Tesco managers spent some hours together brainstorming ideas for online and mobile applications, and drew up a list of priorities in various areas. These were written on Post-It notes and stuck to the walls of their very large meeting room. That same evening, the firm threw open the doors to interested programmers recruited online.
Browsing among the posted ideas, programmers could choose the projects they wanted to tackle. Tesco managed the assignment process, and gave programmers all the information they needed about the store’s API and related infrastructure. Result: Tesco is taking advantage of some of the best brains in the field, programmers get payment and credit, and the customer gets better service. Moreover, said Ms. Maurer, the entire process of brainstorming, commissioning and delivery took a tiny fraction of the months that older processes would have required.
Marks & Spencer is also squeezing extra value from existing assets—in this case, its branded video content—according to Chris Gorell Barnes. Barnes is CEO of Adjust Your Set, which helped the retailer launch M&STV. The site is now populated with more than 1,000 pieces of intelligent content, and has generated over 4 million minutes of views.
Much of the content is also syndicated for broadcast on video sharing sites, social networks and other content and media portals. Crucially, these videos incorporate a click-to-buy facility, taking viewers straight to M&S for purchase. So far, data shows customers who viewed M&STV spending 23% more. And, said Gorell Barnes, video delivers value in other ways. His firm has seen e-mail response rates rise by up to 300% when outgoing messages contain video elements.
Inevitably, Facebook plays a growing role in any assessment of value on the Web. Beyond its importance to users and product advertisers, however, is its growing value as a broadcaster. As Gerd Leonhard noted, even content from major media owners is increasingly seen within this social environment, as a currency shared between friends or given new meanings by Facebook groups. Content owners are just beginning to think about how this may raise or lower the value of what they produce, and how their business models need to alter in response.
The emerging mobile arena was another key topic of the day. Douglas Orr of price comparison engine Sccope discussed the rapidly growing market for mobile commerce. His firm is the global m-commerce partner for BlackBerry, which aims to launch mobile buying facilities from this August. Orr and other speakers on mobile were joined on a panel by Jo Vertigan, Head of Digital at England 2018 (promoting England’s bid to host the FIFA World Cup eight years from now) and Patrick Mork, CMO of GetJar, a site offering “appsolutely everything” in the way of applications for mobile handsets.
M-commerce promises greater convenience for buyers and a new revenue stream for sellers. But what other values attach to mobile? Are apps better value for advertisers and consumers than mobile Websites? Advertisers often opt for a site strategy, which removes the need to cater for different handsets. But will the mobile Web win out in the long run?
Mork, not surprisingly, favored apps over sites. Apps offered deeper brand engagement, he said; users experienced no network delays, and payment was (at the moment) easier and more secure from within an app. But he acknowledged that advertisers interested in reach probably find better value in building mobile sites.
A final insight agreed by all the FODM speakers: The pace of change in the industry, though frightening, is also inherently valuable, keeping marketers on their toes and sparking innovation.
