Mediastreet
Tag

Amazon

Browsing
In News

How Google, Facebook, Microsoft, and Amazon became the most manipulative advertisers on TV

No Comments

The biggest ads from the biggest brands in big TV moments used to be dominated by cars, candy, and beer. Now—like everything else—it’s Big Tech.

For 32 years, USA Today’s Ad Meter has measured the popularity of Super Bowl ads, and this year’s list looked different than ever before.

Google nabbed the No. 3 spot, Amazon No. 7, and Microsoft No. 9. Even Facebook, which ranked much lower at No. 39, was airing its first-ever Super Bowl spot but still managed to beat out such TV ad stalwarts as GMC, Audi, Coke, and Pepsi.

Seemingly out of nowhere (although after years of building up to it), Big Tech has finally become the kind of major TV-advertiser class that used to be the sole domain of legacy brands—those TV ad staples in such popular categories as autos, beer, and candy. For most of their history, these companies scoffed at traditional media. Can’t measure it, can’t convert viewers into customers, not enough real-time data. Yet here are the 21st century’s most dominant brands behaving like their counterparts of the late 20th, using TV as a key tool to build image and consumer loyalty. Taking a half-step back, this development is a bit rich given that other than Microsoft, these are companies whose businesses are working, through digital advertising dominance and streaming content, essentially to destroy the modern TV industry.

The Super Bowl and most other high-profile TV opportunities like the Oscars and Grammys are now where the biggest tech companies go to forge the kind of emotional relationship with consumers that helps prevent us from becoming too critical, too nervous, and too creeped out by their actions.

It could not have been scripted better.

Big spenders

Microsoft was one of the biggest TV ad spenders in tech last year, shelling out half a billion dollars. On its Surface brand alone, the company boosted ad spending by almost 20%, to an estimated $219.1 million, according to measurement firm iSpot.

Amazon spent more than $1.25 billion overall in 2019, boosting TV ad spending for Prime, for example, by a massive 487% to hit about $210 million. Also notable for Amazon, it more than doubled TV ad spending on its home security system Ring, hitting about $79 million in 2019, compared with $32 million in 2018. Given that the company was recently accused of providing user data to Facebook and other companies without making Ring users aware that their data was being shared, adding to its other privacy scandals, it’s going to need all the brand loyalty it can muster.

Facebook is the smallest of the big tech companies, and it correspondingly spent just $300 million on TV marketing last year, with more than half of it, according to iSpot, going to burnish Facebook’s brand.

The ads, the strategies

After Google ran its Super Bowl ad on Sunday night, Twitter lit up with posts about its emotional effectiveness.

Microsoft received similar kudos for its ad profiling 49ers assistant coach Katie Sowers, which hit the perfect balance of product, brand, and a message of female empowerment that Secret and Olay, both of which have been marketing to women for as long as they’ve existed, couldn’t manage to find.

Amazon was back at its goofy celebrity best, this time teaming with Ellen DeGeneres to wonder what life was like before Alexa.

And then Facebook dropped in with an homage to eclectic Groups, with a side dish of Sly Stallone and Chris Rock.

All the game needed to have a Big Tech full house was Apple, but even Cupertino managed to launch a new spot yesterday for its Arcade video game subscription service.

Anyone wondering why the planet’s biggest and most successful tech and digital media companies are increasingly turning to good old-fashioned TV ads need look no further for a reason than what comedian and talk-show host Desus of Desus and Mero had to say:

As I wrote on Sunday, Facebook made its users the focus of its Super Bowl ad to draw as much attention as possible away from its myriad of corporate issues. Each of the companies chose the largest advertising stage and its most strategic products—Facebook Groups, Amazon’s Alexa, Microsoft Surface, Google Search—as the device with which to build a narrative and emotional connection with users.

Back in 2018, Google CMO Lorraine Twohill heralded the brand’s ads “Parisian Love” (which became Google’s first-ever Super Bowl ad) and “Dear Sophie” as the spark for what’s become the company’s strategy around humanizing its products and itself. When she joined the company in 2009, the marketing formula was more tech nerd than Mad Men and went something like this: We have to launch a new product, here’s a blog post, and here is a video of the product manager explaining its features. Please watch the video.

“In the early days, we had a Chrome digital-only campaign, which was about three things: safety, simplicity, and speed. Very rational,” said Twohill. “That did get us so far, but no one gets out of bed in the morning and says, ‘I need a new browser.’ What changed the game for us was to go out and create ‘The web is what you make of it,’ which is essentially a brand campaign about people using the web to make their lives better.”

Replace “web” with soap, cars, beer, insurance, or burgers and it becomes pretty clear that these companies we see as among the most innovative in the world still rely upon some of the most hardy advertising tropes in existence. Amazon’s humor is no different than VW in 2011’s “The Force” that charmed us all just before the company’s reputation imploded under the emissions scandal. Or how Snickers uses it to avoid us looking too closely at the sustainability and labor challenges of the chocolate industry. Facebook’s Groups spot is the direct descendant of any commercial gleefully celebrating human gathering, from McDonald’s “You Deserve A Break Today” back in the ’80s, to the longstanding idea of Miller Time.

Microsoft’s Super Bowl ad was fantastic, but let’s face it, the point was Sowers’s story and her accomplishment, not a tablet computer, and could’ve easily been a spot for paper towels. Kind of like P&G’s long-running “Thank You, Mom” Olympic campaign. And while Google’s “Loretta” expertly uses its own products to make those human connections, it hinges on tying human connection and emotion to the brand, a tactic perfected in spots like Coke’s classic “Hilltop” and Budweiser’s “Puppy Love.”

Back then, we were being charmed by companies that we knew—or had some sense—that they were connected to such serious problems as obesity, pollution, addiction, and more. Those, of course, still remain, but say what you want about beer or fast-food burgers, they don’t lead to issues of data privacy and misinformation, among others.

The emotional connections forged by these ads seek to paper over all of that, at least for 30 seconds at a time.

Oh, and add in a CEO tweet for good measure.

What’s next

These challenges—and Big Tech’s need to cultivate as much goodwill as possible—aren’t going anywhere, so expect this type of TV ad spending to continue to grow, at least until they actually do kill broadcast TV. This will be most acute during major events like the Super Bowl, Oscars, World Series, and anywhere else our fragmented media culture manages to come together in anything even remotely resembling a collective cultural experience. The more we love their ads, the more likely we’ll be to buy and use their products, and therefore less likely to address potential concerns, vote to have monopolies broken up, or otherwise question their motives.

On the bright side, though, at least Big Tech didn’t try to sell us a baby peanut.

Read More
By
In News

Why marketers must look beyond cookies and rethink data in the 2020s

No Comments

By Thomas Hobbs

Marketers must stop prioritising strategies built around cookie data if they’re to succeed in the 2020s. Speaking on a panel at The Drum’s Predictions 2020 event at Sea Containers this week, Andy Chandler, Adjust’s VP for UK and Ireland, called for brands to evolve in the post-cookie world and start to work out whether they’re truly adding value to their customers’ lives.

“With Google Chrome getting rid of third party cookies, brands need to start looking at data differently or they’re going to very quickly get left behind,” he explained. “We are moving into a cookie-less world, where consumers are interacting more with apps than browsers, so the way we measure data needs to truly reflect that. We need to keep evolving and keep up with where people are, ensuring we add real value to their lives.”

A recent feature by The Drum explored the impact of Google’s plans to “render third-party cookies obsolete” and how brands must now respond. According to Ed Preedy, chief revenue office at Cavai, one solution could be for brands to use online messenger apps to speak directly to their consumers. He says messenger apps can ensure more tailored advertising and better conversion rates when it comes to making a purchase.

He added: “In 2019, there were 73 trillion posts across all messaging apps. And in markets like APAC and Latin America, something like 63% of consumers purchased over a messaging app or spoke directly to a business. These are becoming hotbeds for commercial opportunity and it will only grow in the decade ahead in the UK too.

“Messaging apps allow for a genuine two-way interaction. They qualify what users want and who they are almost instantly, so therefore the advertising that runs is contextually relevant. They will become so much more important as cookies start to dissipate. I think there will be a wider move to more personalised platforms, where advertising is less random.”

It was a frank assessment that Tanzil Bukhari, managing director for EMEA at DoubleVerify, very much agreed with. He insisted consumers now want to see more relevant advertising and that getting rid of cookies will ensure this happens more consistently. “The Google Chrome announcement will mean publishers have to offer much richer and directional content, and that’s only a good thing.”

Using data in the right way

But there was also a message of caution in the air, with Vodafone’s brand director Maria Koutsoudakis warning that brands and agencies who prioritise data too heavily risk becoming irrelevant, on a panel earlier that morning alongside Ogilvy CEO UK, Michael Frolich. Koutsoudakis asked the audience: “When was the last time you spoke to a customer? If you stood back from click attributions and A/V testing then what do you really know about your customers now?

“By only really focusing on data, there’s a risk we create a generation of marketers who don’t understand brand, consumers or behavioural change and aren’t agile enough to cope with it. There needs to be more of a blend of people being on the ground, really speaking to their customers, as well as having a good data strategy. If marketers only care about digital metrics then there’s a risk they become irrelevant in marketing in the 2020s.”

With consumer data obviously so important to the UK mobile network’s business, she admitted it has taken a back step to ensure it’s precious about protecting it. “We don’t sell this data as we can’t afford to lose our consumers’ trust,” she admitted. “Being so cautious might mean we get left behind, but I think it’s worth it as we can’t take any chances.”

Frolich agreed with Koutsoudakis’ sentiment. In the 2020s, he said ad agencies shouldn’t be using client and third party data unless they can absolutely prove it has a positive impact on creativity and this in turn enriches the lives of their customers.

“We aren’t a data company, we are a creative agency,” he insisted. “We use client data and third party data to feed our creativity and build better work that consumers then enjoy. If you’re using this data and it isn’t creating better human insights then you’re using it incorrectly.

“Agencies have bought big data companies and it isn’t working because they’re not using the information to create better marketing. If we can work with a client like Vodafone and use their data to feed better creativity then we’re winning.”

The sentiments around trust were picked on another panel, where Courtney Wylie, VP of product & marketing, Mention Me had a word of caution: “We’re going to continue to see this evolving trend of lack of trust. A declining trust in influencers, brands, marketing channels.”

However, the way the relationship between agencies and brands works will become a lot more adaptable over the coming years, with a one-size-fits-all approach now completely redundant. John Readman, CEO & Founder, Modo25, explained: “In past there were only two options: work with an agency or do something in-house, but we will see these lines blurring more and more. There’s no reason why a combination of both won’t be the best way forward.”

Talking about the way forward, Andrew Challier, chief client officer, Ebiquity predicted that the industry will finally see “the rebirth of creativity and the importance of creativity in engaging people and reaching people in a meaningful way.”

A more ethical way of thinking could impact Facebook and Amazon

As we move further into the 2020s, some of the event’s panellists warned that established retailers and social media brands could start to fall short, as consumers switch to a more ethical way of thinking.

“Yes, lot’s of people still buy off Amazon, but the fact Brits also want to become more engaged with their local community means independent retailers should be confident heading into this new decade,” predicted Hero Brown, founder of Muddy Stilettos.

She explained further: “We’ve noticed a real shift in our readers wanting to support the high street more and more, and there’s this ethical thinking coming through, which could be detrimental to an Amazon. Shoppers want real-life experiences, even from online brands. They’re starting to get tired of faceless fast transactions and want to see brands brought to life in a more physical way. This trend will only intensify in 2020.”

Meanwhile, Darren Savage, chief strategy officer at Tribal, would like to see Facebook’s dominancy recede in the social media space. “I think major firms who consistently lie will come unstuck in the 2020s as people won’t put up with it anymore,” he said. “An immoral toxic cess-pit like Facebook will come tumbling down.

“The blatant lies they tell around consumer data will mean people will leave the platform in much bigger numbers. Truth is more important than ever before and just being a big business isn’t going to protect you if you mislead consumers.”

Proving you’re making a difference

This ethical way of thinking also extends to a brand’s commitment to sustainability, and Misha Sokolov, co-founder of MNFST, believes this will only rise in importance over the coming years.

“I spoke recently to someone at the Volkswagen Group and he was telling me how they calculated they were responsible for 1% of all global emissions, and that’s why they now want to be carbon neutral within 10 years,” he said. “The smartest brands won’t just put a nice message on their packaging, but do something that has a provable positive impact on the environment and helping reduce climate change. It must happen automatically as brands will lose market share if consumers don’t think their being ethical enough. There’s no excuse in the 2020s.”

And businesses shouldn’t just think of sustainability in environmental terms either, with it also being just as wrapped up in how a brand and business treats its employees. Stéphanie Genin, global VP of enterprise marketing at Hootsuite, says employee advocacy will be a huge trend moving forward, as consumer want to ensure their favourite brands treat their staff good before supporting them with a purchase.

She added: “Employee advocacy and employee generated content will become so so important. When you empower employees to be the communicator of what your business stands for it really adds to brand value and boosts sales. I think marketers are missing a trick by not prioritising this more heavily.”

However, Readman, added none of this will work unless it’s part of a global governance policy. “It’s all good being sustainable and doing good things for employees in one market, but if it’s not something you’re doing consistently across the board then consumers will work it out and there will be a backlash.”

Meanwhile, for John Young, executive creative director and co-founder, M-is, as brands start to really understand the consumers through personal engagagement, “the advertising budgets will transfer into experiential budgets.”

Be as safe as possible

Another topic of conversation that came up throughout the day was brands ensuring the data they keep on consumers remains safe, especially as more and more of their ads are traded programmatically.

Francesco Petruzzelli, chief technology officer at Bidstack, said that 13% of global ads are currently fraudulent and that while major brands know it’s a “big issue”, they’re not necessarily doing enough to prevent it. “We acquired a publishing guard to protect publishers, but I find a lot of people aren’t thinking seriously enough about this issue. It won’t go away!”

Dan Lowden, chief strategy officer at Whiteops, added how he recently worked with a major brand who believed bots were accounting for up to 5% of fake views of its £10m campaign, but says his team worked out they were actually accounting for 36% of traffic.

Looking ahead, he concluded: “The bad guys aren’t going to let up and will keep on persisting with cyber crime in the 2020s. We all need to be serious about tackling this problem and do more to collaborate as an industry to ensure that marketing dollars are genuinely being spent on human engagement and not just robots.”

By Thomas Hobbs

Sourced from The Drum

Read More
By
In News

Amazon Is a Brand Disaster Waiting to Happen

No Comments

By Geoffrey James.

The company is playing fast and loose in some markets where it’s crucial to maintain the customers’ trust.

Brand disasters aren’t the same as business disasters.

Business disasters are transitory problems from which companies can easily recover. For example, a series of bad quarterly results is a business disaster, but the disaster becomes moot after you clock a couple good quarters.

Brand disasters are events that cause customers to no longer trust you. For example, if your product becomes responsible for numerous highly-publicized deaths, your existing customers will jump ship, and potential customers will be all “I don’t think so…”

Last month, I identified Boeing’s 737 MAX crashing-on-takeoff scandal as a brand mega-disaster because it’s created a general impression that something is fundamentally wrong at Boeing and that therefore their products can’t be trusted. That’s an albatross they might never shed.

Similarly, the Wells Fargo fake account scandal fundamentally changed how the public perceives the brand. Where the brand originally said “solid, American, and trustworthy,” it now says “Gee, do I really want to trust my money with these shady characters?” Again, this is likely to prove a very difficult brand image to change or improve.

Unlike business disasters (which can result from bad luck) brand disasters emerge from the corporate culture. At Boeing, for instance, the culture changed from “safety first” to “cost-savings first.” At Wells Fargo, it changed from “serve the customer” to “sell, Sell, SELL!”

While brand disasters can happen in any industry, they’re more serious and long-lasting inside industries where there’s a big downside risk to working with an untrustworthy partner, like aircraft manufacturing, banking, accounting, and pharmaceuticals.

And that’s why the Amazon brand may be headed for disaster.

The Amazon brand established itself by selling a product–books in print–where the manufacturers (the book publishers) do their own quality control. Customers knew that when they bought from Amazon, they’d get what they paid for.

In addition, buying a book has virtually no downside risk to the customer, other than perhaps discovering, post-purchase, that it was written by Danielle Steel.

All kidding aside, Amazon developed an enviable brand reputation as a trustworthy source for a quality product, a reputation that it built upon as the company branched out into additional product categories.

However, Amazon has recently been sacrificing its brand reputation by allowing third-party sellers to offer poor-quality products. According to the public interest group Pro Publica:

“[Our] investigation found 4,152 items for sale on Amazon.com’s site that have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators — items that big-box retailers’ policies would bar from their shelves [including] at least 2,000 listings for toys and medications lacked warnings about health risks to children.”

Amazon justifies substandard products on its site in a manner similar to how social media sites justify distasteful content–that they’re just a platform and therefore not responsible, as long as they remove anything that violates their terms of service.

The problem is that Amazon.com has always positioned itself as a store rather than, say, a flea market. As such, customers may feel that Amazon should guarantees the goods it sells in the same way that brick and mortar stores guarantee the goods they sell.

Put another way, if a product being sold on Amazon.com starts killing people, they public is likely to blame Amazon rather than the supplier.

To make matters more potentially difficult for Amazon, the company has gained a reputation as an employer that doesn’t value its workers. For example, Amazon has been plagued by stories of mistreatment of warehouse workers and was recently accused of giving insufficient safety training to its delivery drivers.

All of these brand image problem apparently stem from Amazon’s focus on growth at any cost, even if that cost might the erosion of public trust. But that’s just the start.

Amazon is also a major player in cloud computing (which accounts for 50 percent of the company’s profits) and an increasingly important player in the grocery industry–both of which are especially dependent upon maintaining the trust of their customer base.

Any widely-publicized scandal in those areas, piled atop Amazon’s already increasingly sketchy brand image, risks permanent brand damage. It may be only a matter of time before I end up including Amazon in my yearly brand disaster list.

Feature Image Credit: Getty Images

By Geoffrey James

Sourced from Inc.

Read More
By
In News

Adobe and Amazon launch Alexa skill aimed at creatives, the Inspiration Engine

No Comments

By Jenny Brewer.

Adobe and Amazon have collaborated on a new Alexa skill aimed at creatives, titled the Inspiration Engine. Ask your Alexa-controlled device to “open the Inspiration Engine” and you can unlock a host of features intended to aid creative block and inspire work. This ranges from “quick sparks” – inspirational quotes and one-sentence “meditations” from creatives such as Jessica Walsh, Pascal Campion or Weitong Mai – to creative-thinking exercises that can, for example, guide the viewer through one’s senses or environment in order to explore a project from a new perspective.

With an Alexa-compatible screen device, users can ask for inspirational imagery, displayed on Behance, Adobe’s online portfolio site. Users can also take the Creative Types quiz, created for Adobe by Anyways, which asks a series of multiple choice questions to define an individual creative personality – for example an Adventurer (seen above), a Visionary or a Dreamer. Previously an in-browser experience, for the Inspiration Engine, Alexa will take users through the quiz and reveal their type.

The launch comes off the back of a recent study by Adobe, finding that 89% of respondents often struggle to find inspiration. This new Alexa skill targets those designers and artists “staring at an empty page, canvas or dartboard for too long,” says Adobe on its blog, and hopes, with the new tool, to be involved in the earliest stage of the creative process – whereas its other products are used once ideas have already sprouted.

The Inspiration Engine is available in the US, UK, Canada, Australia and New Zealand.

Feature Image Credit: Anyways: Adobe Creative Types, the Adventurer

By Jenny Brewer.

Sourced from It’s Nice That

Read More
By
In News

Amazon Just Announced an Incredible New Feature That Most People Are Going to Love. There’s Only 1 (Pretty Big) Problem

No Comments

By Justin Bariso.

A major development in bill payments is sure to excite. But does it continue a dangerous trend?

When Amazon originally introduced Alexa back in 2014, I was highly skeptical. I can still remember watching that first commercial, where a family purchases an Amazon Echo and then use the device for everything, from answering their most (and least) important questions, to creating shopping lists, to helping the children with their homework.

“With everything Echo can do, it’s really become part of the family,” the little girl says at the end of the commercial.

“Spooky,” I thought. “No way this is going to catch on.”

Of course, I was wrong. Fast forward to today: Amazon said at the beginning of the year that it had already sold over 100 million Alexa devices. Which means if you don’t personally own one, you probably know someone who does.

And now, Amazon made an announcement that signals the next step in Alexa’s evolution:

You can soon use Amazon Alexa to pay bills with your voice.

Amazon Pay Vice President Patrick Gauthier revealed the new feature in his keynote at yesterday’s Money 20/20 conference. The new bill pay feature will begin by authorizing users to pay utility bills with their voice, and the company expects the feature to roll out to 95% of zip codes in the U.S. by the end of the year.

Gauthier further explained all the advantages Amazon expects users to love. Initial examples were simply, such as asking Alexa when a bill is due, or setting Alexa to provide a reminder that they need to pay a bill.

But what came next was more interesting.

“The customer may also ask information,” Gauthier explained. “How does this compare to last month? How does this compare to last year?”

“The next stage of that would be proactively notifying the consumer when something is out of control,” Gauthier continues. “As in, ‘Your water bill doubled this month. You may have a leak.’ Anticipating the need of the customer and enabling them to act upon it in the moment is a very powerful way of servicing those customers.”

Of course, Gauthier, went on, part of that enabling is giving customers the ability to pay the bill right away–using Alexa if they like.

While Amazon Alexa payments will only work with utility providers for now, there’s no reason it’ll stop there. In fact, Amazon recently announced that Amazon Pay users in India can already use Alexa to pay for utility, internet, mobile and satellite or cable TV bills.

I know this is a powerful development that plenty of Alexa enthusiasts are going to get excited about. And I love the potential insights it could all provide…

But there’s also a pretty large elephant in this room, and we’ve got to address it.

How secure is it?

As technology continues to make information more accessible, and make routine tasks like bill paying easier and more insightful, it also poses major security risks.

“Like every other newer technology, voice payments are highly susceptible to fraud,” says FinTech analyst and researcher Diwakar Mandal. Mandal cites a “series of critical Bluetooth flaws” in 2017 “that  exposed security loopholes in millions of AI-based, voice assistants including Google home and Amazon Echo.”

In addition to more common hacks via malware, Mandal highlights the fact that “voice-controlled smart hubs are prone to accidental triggering leading to unauthorized access to the payment capabilities.”

According to Mandal, Amazon currently addresses this problem by requiring customers to provide a four-digit PIN code in order to authorize payment. And no doubt Amazon (and competitors) will continue exploring tech-enhanced fixes that make it more difficult to gain access to your finances.

But as with any type of payment platform, security measures are only as good as the way users implement them. And that fact points to what turns out to be the biggest problem of all:

As technology makes things easier, it also tends to make us lazier. So, as more and more users seek experiences that are seamless and convenient, the less likely we’ll be to take the needed steps to keep things secure.

Maybe Alexa can teach us to do that, too. After all, it’s basically part of the family.

Isn’t it?

By Justin Bariso

Sourced from Inc.

Read More
By
In News

Is Alibaba Really The Amazon Of China?

No Comments

By Trefis Team

Alibaba is often referred to as the ‘Amazon of China’ because of its growth trajectory being nearly identical to that of Amazon. Both companies started off as e-commerce platforms, but over the years evolved into much more diversified companies with a significant focus on technology. But are their business models really similar to each other?

Trefis attempts to answer this question by comparing the various revenue streams for Alibaba vs Amazon in an interactive dashboard. While Amazon is the larger of the two companies by a significant margin, both companies have quite similar revenue streams.

  • When comparing Commerce as well as Cloud revenues, Amazon’s revenues are nearly 15x that of Alibaba’s.
  • However, Alibaba’s advertising revenues are quite comparable to that of Amazon’s.
  • The gap between Subscription Revenues for both companies is likely to continue expanding on the back of Amazon’s wider and more local focused reach.
  • Despite the law of large numbers being against Amazon, the U.S. company’s reach is likely to remain an order of magnitude higher than that for the Chinese giant.
  • That said, a side-by-side comparison of the two companies shows that Alibaba’s title of ‘Amazon of China’ really does fit.
Today In: Money

You can see more Trefis technology company data here.

A Detailed Comparison Of Historical & Expected Trends In Revenues For Both Companies

Total Revenues

Amazon revenues:

  • 2016 revenue $136 bn; 2018 revenue $232.9 bn; 2016-18 growth of 71.3%.
  • 2020E revenue of $350.2 bn; 2018-20E growth of 50.4%.

Alibaba revenues:

  • 2016 revenue $9.4 bn; 2018 revenue $23.2 bn; 2016-18 growth of 146.1%.
  • 2020E revenue of $41.7 bn; 2018-20E growth of 79.9%.

Ratio of Amazon’s to Alibaba’s total revenues had reached from 14.5x in 2016 to 10.1x in 2018. Considering 2018-20E growth of 50.4% in Amazon’s total revenues versus expectations of 79.9% for Alibaba’s total revenues, we expect the ratio of revenues to narrow further to 8.4x by 2020.

Below, we summarize key trends from our detailed interactive dashboard comparing revenue streams for Alibaba vs Amazon

Commerce revenue

Ratio of Amazon’s to Alibaba’s commerce revenues have fallen from 33.6x in 2016 to 17.3x in 2018. Considering 2018-20E growth of 39.8% in Amazon’s commerce revenues versus expectations of 97.2% for Alibaba’scommerce revenues, we expect the ratio of revenues to shrink further to 12.2x by 2020.

Cloud revenue

Ratio of Amazon’s to Alibaba’s cloud revenues had reached from 32.6x in 2016 to 17.5x in 2018. Considering 2018-20E growth of 75.5% in Amazon’s cloud revenues versus expectations of 145.8% for Alibaba’s cloud revenues, we expect the ratio of revenues to reach 12.5x.

Advertising revenue

Notably, Alibaba’s advertising revenues have been larger than Amazon’s over 2016-17. But the ratio of Amazon’s to Alibaba’s advertising revenues flipped from 0.6x in 2016 to 1.1x in 2018. Given Amazon’s push into advertising over recent years, we expect the ratio of revenues to reach 1.7x by 2020 in Amazon’s favor.

Subscription revenue

Ratio of Amazon’s to Alibaba’s subscription revenues had reached from 6.6x in 2016 to 7.7x in 2018. Considering 2018-20E growth of 80.3% in Amazon’s subscription revenues (driven by the geographical expansion in Amazon Prime video offerings) versus expectations of 60.4% for Alibaba’s subscription revenues, we expect the ratio of revenues to reach 8.7x.

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs

Feature Image Credit: The Alibaba Group Holdings Ltd. logo is displayed outside the company’s offices in Beijing, China

By Trefis Team

Led by MIT engineers and Wall Street analysts, Trefis (through its dashboards platform dashboards.trefis.com) helps you understand how a company’s products, that you touch, read, or hear about everyday, impact its stock price. Surprisingly, the founders of Trefis discovered that along with most other people they just did not understand even the seemingly familiar companies around them: Apple, Google, Coca Cola, Walmart, GE, Ford, Gap, and others. This might include you though you may have invested money in these companies, or may have been working with one of them for years as an employee, or have consulted with them as an expert for a long time. You can play with assumptions, or try scenarios, as-well-as ask questions to other users and experts. The platform uses extensive data to show in a single snapshot what drives the value of a company’s business. Trefis is currently used by hundreds of thousands of investors, company employees, and business professionals.

Sourced from Forbes

Read More
By
In News

Why Does Amazon Want to Hire Blockchain Experts for Its Ads Division?

No Comments
By Matthew Hrushka

Earlier this month, Amazon announced plans to hire blockchain experts for its advertising division. But how can the use of blockchain technology possibly resolve the pain points in the advertising industry?

For the digital advertising industry, with its revenues reaching over $28.4 billion in the first quarter of 2019 in the United States alone, you’d think standard business tools like a shared database would be required — but you’d be wrong. In reality, the advertising industry uses very outdated, manual, time-consuming processes when it comes to selling, payment, verification and other critical functions.

New tools for digital advertisers

It is time to introduce a better framework for digital advertisers, a platform without bias and with a common set of rules. Fortunately, blockchain technology is ideally suited to address issues of transparency, trust, verification, efficiency and complexity, all of which currently plague the digital advertising industry.

Smart contracts, in their simplest form, are vending machines — two parties agreeing to a set of terms and each party paid with either goods or services. Buying and selling digital advertising is more complicated but isn’t any different.

Marketers today use a paper or digital insertion order for contracted terms of their ad buys, but they aren’t trackable or enforceable. Blockchain-based smart contracts can resolve these issues with a programmatic approach. These smart contracts enforce what an advertiser is buying and allows the verification to take place during the reconciliation process at the end of the campaign. These efficiencies alone are monumental in allowing advertisers to actually get what they pay for on top of payouts to the supplier within the agreed upon time.

An ideal system provides the opportunity to tokenize the framework to treat digital advertising as a true asset class, standardizing the valuation of ads. This, in tandem with the structure of blockchain, keeps decentralization as a top priority.

This provides incentives for running a full node and validating transactions within an ecosystem instead of trusting an inherently biased third party (e.g., Facebook and Google). These third parties have a huge influence on market pricing due to their pervasiveness and can cause immediate shockwaves throughout the entire industry.

In 2018, both tech behemoths took a strong stance against the crypto sphere when Google announced a ban on all cryptocurrency-related advertising while Facebook made a similar move months prior before later renouncing it.

Citing user protection, censoring advertisers with the intention of protecting against scammers following the initial coin offering craze, these companies could greatly benefit from integrating blockchain solutions to safeguard their advertising spend.

Blockchain for advertisement

While it appears Amazon recognizes the value of blockchain at the foundation level of its advertising model — for billing and reconciliation — it is only a matter of time before it is enlightened of the numerous other ways it can be used to increase efficiency and protect ad spend through tokenization.

At this early stage of blockchain, it’s unlikely that major brands — along with their large budgets — will want to pay in some unconventional way like a token. Integrations within the platform are needed to ensure adoption and to facilitate the movement of traditional currencies through these smart contract insertion orders.

The digital advertising ecosystem is ripe for a revolution, and blockchain holds the most promising keys.

What makes Amazon different from other tech behemoths?

Amazon needs to do something to differentiate itself from Facebook and Google, which currently dwarf its advertising platform. If Amazon were able to provide efficiencies around Facebook’s and Google’s shortcomings, it would be able to siphon off some of the market share from the other ad platform giants.

Smart contracts with logical insertion orders can contain any logic that the blockchain would support. Targetability within that logic can be a game changer in regard to what’s actually being delivered. This cures a lot of questionable tactics many advertising networks use to secure the delivery of a campaign. With 100% transparency on the smart contract insertion order and terms placed within it, there is no tampering or delivering something the client didn’t order. Verification of purchase is needed within this industry, and blockchain (along with layered logic through smart contracts) solves these issues.

In addition to pairing smart contracts and payment reconciliation efforts, integrations within a blockchain can be endless, and provide additional insight and value. Adding a measurement provider into a smart contract allows additional transparency to all parties. In this measurement provider example, a demand-side client wants to only be billed for a very specific downstream event, like signups. If everyone is on the same page in terms of what is being delivered, it rules out discrepancies, allows for a more successful campaign to be delivered and payment to be expedited.

Fraud can’t totally be solved by implementing blockchain alone, but it can track publisher identity along with governance. Identity at scale is something that this industry won’t see until this new technology is implemented.

The digital advertising vertical has grown very quickly and essentially created an overlap in regard to bidding or, to some extent, competing with yourself by purchasing media on multiple platforms. Governance within a blockchain is something that can improve what we’re dealing with today.

As an industry, we can all agree on certain aspects or actions that would be considered fraud. A click from an Android user that installs an application only meant for an iOS device shouldn’t ever be billed or valid. In this example, that logic — along with others — could be built into a smart contract to enforce only true iOS installs vs. mismatched installs. Also, by tracking identity, blockchain networks could include or exclude publishers or users that create issues or are fraudulent within the ecosystem.

Amazon is trying to make its mark in the digital advertising ecosystem, and to get there, it needs to innovate and outpace the major platforms of today — i.e., Facebook and Google. It seems clear that Amazon has refined its internal chain supply, but how it implements it in the advertising ecosystem will be the key to its success.

By Matthew Hrushka

Matthew Hrushka is product marketing manager at Xchng. Matt has been involved in the cryptocurrency space since 2015 and has a deep knowledge about distributed ledger technologies including blockchain. Additionally, Matt’s professional experience in the digital advertising space makes him uniquely qualified to understand the application of blockchain to this particular industry. Matt previously served as the mobile marketing manager at Rosetta Stone and before that, was the ad operations manager at Verve Mobile. Matt is the primary contact for the OnXchng Partner Program and is passionate about bringing new partners into the Xchng project.

Sourced from COINTELEGRAPH

Read More
By
In News

Amazon, Apple and Nike Just Got Some Truly Amazing Good News. (Millennials Especially Will Be Very Happy)

No Comments

By Bill Murphy Jr.

Good news all around.

Imagine you run a company, and I say I have some good news. Which would you be happier to hear?

  • Learning that customers think you have a valuable brand.
  • Learning that Millennial customers particuarly love your brand.

If you’re Amazon, Apple or Nike, it’s actually a trick question. Because recently, all three brands got some fantastic news on both fronts. Here’s the background.

Earlier this year, WPP research agency Kanta revealed the latest update to its annual “BrandZ Global Top 100” list of the world’s brands, ranked by monetary value.

I find this fascinating — the idea you could break out the brand value, and assign it a value as if it were any other asset. This year, Amazon got the best news, as the agency thinks has a brand worth $315.5 billion.

That was enough for it to leapfrog over Apple and Google, whose brands were valued at $309.5 billion and $309 billion respectively.

But now, these companies have some encouraging news about a subset of their customers from another source: a marketing firm that asks Millennials about their favorite brands each year.

And while the brand value might provide a snapshot in time, I think the affinity younger customers have for a brand might be better news — a promise of greater value in the future.

Here are the top 10 brands for millennials according to Moosylvania, and what they might mean for the companies involved:

1.    Amazon

Amazon is just the big winner across the board. It was at the top of the BrandZ list, and now it’s jumped form number 3 on last year’s Moosylvania list to the top slot. In fact, its grocery brand, Whole Foods, separately tied for 82nd on the list as far as Millennial affinity is concerned.

2.    Apple

Apple was number 2 on both the brand value survey and the Moosylvania list. The difference was slight, relatively speaking, on the overall brand survey — $6 billion, but that’s less than 2 percent below Amazon given that the brands are are so valuable to begin with.

3.    Nike

Interesting and promising jump for Nike, which was the 21st most-valuable brand on WPP’s list (with an estimated brand value of $47.360 billion). It corresponds with Nike’s all-in backing of controversial ex-NFL quarterback Colin Kaepernick.

4.    Walmart

Another positive sign for the future for Walmart, which ranked #32 on the overall brand value list earlier this year. It would seem any brand that ranks higher on preference lists for younger consumers than overall should take that as a good thing.

5.    Target

Target doesn’t even seem to listed in the BrandZ Global Top 100, which might be explainable by the fact that it’s a worldwide ranking, while Target at this point is basically an American brand. But good news for the future: it’s number 5 on this Millennials list.

6.    Samsung

Samsung was only ranked 38 in terms of value on the BrandZ Global list and 10th among technology companies. But it comes in at number-6 here. The big difference, one would think, is higher Millennial adoption of Samsung’s phones.

7.    Google

If I were a brand, and I were to worry, I would be Google. It’s still a gargantuan company, of course, and it has some interesting plans to take over more parts of the world. But setting aside Target, it has the biggest negative difference between overall brand value according to Brand Z, and ranking on this list of younger customers.

8.    Adidas

Another brand with an amazing sign for the future if these rankings have value: Adidas ranked the 100th most-valuable brand according to Brand Z, but here it is at number eight among younger customers’ favorites.

9 and 10.    Coke and Pepsi

Rather than write the same observations about similar brands Coke and Pepsi twice, we’ll combine them here. These brands ranked 9th and 10th as Millennial favorites from this survey. (Coca-Cola was also number 14 on the Brand Z survey.)

It’s even that even as younger consumers eschew sugar water and sodas, the brands behind those products retain affinity from this cohort.

You can see the entire list here. (opens as .pdf). Let us know in the comments what brands surprised you on the list.

Feature Image Credit: Getty Images

By Bill Murphy Jr.

Sourced from Inc.

Read More
By
In News

As marketplaces compete with Amazon on shipping, sellers are shouldering the burden

No Comments

By Anna Hensel

As Amazon continues to set shipping expectations, competing marketplaces and platforms are racing to ensure their sellers don’t fall behind.

This week, Etsy became the latest marketplace to go all-in on free shipping, with an announcement that at the end of July, it will start ranking higher in search results U.S. sellers who offer free shipping and international sellers who offer free shipping on U.S. orders of $25 or more. In a video sent to sellers explaining the changes, Etsy said that it would feature items that ship free in its ads, through email marketing, social media and TV ads, and would provide educational tools that would help shops figure out a pricing strategy that helps them offer free shipping.

Etsy is a different type of marketplace than eBay or Amazon — it’s a place where customers go to buy one-off, handmade goods, usually from small businesses. But it’s not immune to the pressures that every marketplace is feeling to offer free and fast shipping, thanks to Amazon’s precedent. Etsy CEO Josh Silverman summed up the decision to Business Insider: “I don’t know that we ever win on shipping. We’ve just got to stop losing.” Etsy does not share how long it typically takes products from sellers on average to ship, but said during its third-quarter earnings call last November that about a third of products available on its site offered free shipping.

The most common way that marketplaces — ranging from ones that serve both big and small businesses like Amazon to second-hand markets like Poshmark — have historically tried to help their sellers offer cheaper shipping has been to try to negotiate discounted shipping rates for their sellers with the major carriers. But like Etsy, they’re now also prioritizing items that ship free in their search results.

Taking a cue from Amazon’s Fulfilled by Amazon network, companies like eBay and Shopify are also experimenting with adding fulfillment capabilities. Shopify announced at its annual Shopify Unite conference in June that it’s building its own fulfillment network, which for a fee will hold Shopify merchants’ inventory and handle shipping and delivery to customers within two days. Meanwhile, in January, eBay started inviting select sellers to participate in a pilot fulfillment program. An eBay spokesman said that in an email that around 70% of the products bought on eBay ship for free. Like Etsy will soon do, eBay said it does prioritize items that ship for free in its search results and offers sellers pricing tools to help them better figure out how to factor in shipping costs.

“Platforms and marketplaces are starting to take greater ownership over shipping,” Laura Behrens Wu, CEO and founder of Shippo, a multi-carrier software provider, said.

Free shipping is increasingly becoming table stakes. A 2018 survey of 1,400 shoppers from e-commerce fulfillment firm Dotcom Distribution found that 91% of those surveyed said that they were more likely to become repeat customers of a business that offered free shipping. Still, Andrew Lipsman, an e-commerce analyst with eMarketer, said that marketplaces have to be careful in taking “a carrot-and-stick approach” to encourage vendors to offer free shipping. They can’t take steps like prioritizing products with free shipping in search results without first giving sellers sufficient tools to help them get there, or sellers will feel like they’re being unfairly penalized.

Following Etsy’s announcement, the company hosted a Q&A for sellers that was flooded with complaints. International sellers, in particular, were upset that Etsy had made the change before rolling out a tool that would show them how many of their customers come from the U.S. — though Etsy said that it was working to make that data more readily available. And sellers of bulkier items felt that the decision unfairly penalized them, because shipping costs can vary more greatly for heavy items.

“I think the initial reaction from a lot of sellers is they feel like that burden is going to fall solely on them,” said Lipsman.

Behrens Wu said that it’s critical for marketplaces who want to push their vendors to offer free shipping to try to educate them on how to build it into their margin structures — particularly small-business owners, who might never have been taught how to do so and don’t have the resources.

Building out fulfillment centers that merchants can store their products in, like Shopify is now doing, is the most straightforward way to ensure that products can be shipped in the same number of days almost every time, and if not for free, that customers can at least expect to pay the same for shipping every time. But it comes at a huge logistical cost for the company — Shopify said it would spend $1 billion building out its fulfillment network. Still, it may be a bitter pill that other marketplaces will have to swallow.

“Free shipping is the most important driver of conversion,” Lipsman said.

By Anna Hensel

Sourced from DIGIDAY

Read More
By
In News

2 Quick Steps to Getting Started as an Amazon Seller

No Comments

By Timothy P. Seward

The following excerpt is from Timothy P. Seward’s book Ultimate Guide to Amazon Advertising. Buy it now from Amazon | Barnes & Noble | IndieBound

There are many reasons to begin selling your brand’s products on Amazon, from the millions of active customers on the Amazon worldwide marketplace to the extremely high conversion rates many businesses experience. If you have a new brand, you can start selling on Ama­zon quickly without the need for a stand-alone website.

Amazon offers two Selling Plans to get you started. The Individual Selling Plan carries a fee of $0.99 per item sold (plus other fees, which vary by category), and the Professional Selling Plan has a subscription fee of $39.99 per month plus other selling fees.

Those other fees include referral fees (usually taken as a percentage of revenue from products sold, which varies based on the product category and may carry a minimum fee of $1), and for sellers who let Amazon handle product warehousing and shipping for them, Fulfillment by Amazon (FBA) fees. These include such fees as order picking and packing, shipping cost, packing boxes or envelopes, inner “cushion” packaging, and monthly storage fees.

Not all selling categories are open to Individual Sellers (e.g., fine jewelry, personal computers, and professional services). In addition, the use of feeds, spreadsheets, and other tools to load inventory are only available to Professional Sellers.

If you plan on selling more than 40 items a month, want to sell your products in the U.S., Canada, and Mexico (rather than simply one of the three), or offer special promotions and a gift wrap option for your products, then go with the Professional Selling Plan.

Once you’ve decided on a Selling Plan, it’s time to open your Amazon selling account. To open an Amazon selling account (of either type), simply register for the account of your choice by clicking on the “Sell as a Professional” or “Sell as an Individual” button on the Amazon Services site (https://services.amazon.com/selling/benefits.htm).

After you sign up, you’ll be asked to complete a two-step login verification process. Once that concludes, you’ll officially have an Amazon Seller Central account. Now let’s walk through the basics of what you can expect with that account.

Amazon seller central

Amazon Seller Central is where you’ll spend much of your time as a seller; it’s also where you’ll find the tools you need to manage your inventory on the Amazon marketplace. This is where you’ll create listings, manage orders, correspond with buyers, get feedback from Amazon about your performance, run reports, set up Sponsored Products campaigns, and more.

Once you’re in Seller Central, you might want to use the Settings menu/User Permissions to add more users from your company if you have other employees who will be working on your Amazon account. By adding users, you can give them access to Seller Central and customize their permissions so they’ll have the appropriate system rights for their role at your company.

If you’d like to learn more about Seller Central and selling on Amazon in general, and you prefer a more formal learning process, open an additional tab in your browser and go to the Amazon Seller University: https://sellercentral.amazon.com/learn. Seller University (a curriculum of instructional videos designed to help you master the Amazon marketplace), available to users within Seller Central, will help teach you the details of selling on Amazon, tools and policies for sellers, and the products and services that can help you grow. These instructional videos and PDF learning documents are very thorough. I highly recommend you and the other members of your team dive in and explore!

Amazon brand registry

There’s one final step that’s key to controlling your brand’s content on Amazon, and I strongly recommend any brand owner with a registered trademark enable it in the “getting started” section of Seller Central: signing up for the Amazon Brand Registry program.

According to Amazon, Brand Registry helps protect your brand’s intellectual property and create an accurate and trusted experience for customers on Amazon. With Amazon Brand Registry, you can have your trademarked brand’s Amazon product detail page content locked down so only one marketplace seller (i.e., you or someone who works for you) can alter it.

If you don’t register your brand, you can still submit updated or enhanced product content (including images); you’ll just have to contact Seller Support for each individual product and have Amazon make the changes for you.

In addition, Amazon says your enrollment in the program gives you access to text and image search tools, predictive automation from your reports of possible intellectual property rights violations, and increased authority (and therefore control) over product listings with your brand name. Finally, Amazon Brand Registry can give you access to Enhanced Brand Content, Amazon Stores, and Sponsored Brands, which all allow you to share your brand’s unique story and educate consumers about your products.

If you don’t take control, resellers (authorized, unauthorized, or both) will set up product listings for your products, and they, not you, will determine how your brand promises are communicated to Amazon customers. A reseller will never represent your brand exactly as you would. And because Amazon product page listings often get highly ranked on Google, it’s common for many of those listings to show up higher on the Google search results page than a brand’s own organic listings.

Once you’ve locked down your trademarked brands through the Brand Registry program, you can remain responsible for content maintenance or align with a reseller to create and maintain thorough and accurate product listings for your brand.

Feature Image Credit: Yu Chun Christopher Wong | S3studio | Getty Images

By Timothy P. Seward

Sourced from Entrepreneur Europe

Read More
By
Load More