Google Changes the SERP

- Google changes the SERP
- Google Accelerated Mobile Pages
- Influencer influencing
- Digital and bad pizza
- Snap Vision
- B2B online


Special Bonus: Scott Galloway talks about the 4 horsemen

Google changes the SERP
The biggest news of this month actually happened last month but I wanted to see it in action a little bit before reporting on it so I could give you some good insight.

You may have noticed a pretty major change to Google's Search Engine Results Pages 9which search people call SERPs) Since February 18th. Paid search ads have disappeared from the right column They're just gone. And there are now up to 4 paid search ads at the top of the page above the organic results (There won't be 4 on every search, only on 'highly commercial queries' which are the most valuable search queries, including car insurance, mortgage rates, home equity line of credit. This is about 36% of searches) Finally, there will still be 3 more paid keyword ads at the bottom of the page. For a total of 7 ads.

Wow, huh?

I'm going to spend some time on this because 1. Any major changes to Google are important because they have the potential to change the face of digital marketing which will effect our business and 2. Because It also gives me an opportunity to spend some time on user experience and content quality, which as you know, are two subjects that are very close to my heart.

There's been a lot of wailing and gnashing of teeth about this because with 7 ads on the page instead of 12, lot's of experts predict that cost per click will inevitably increase, maybe drastically because of lower supply of space and the higher Clickthrough rates of the ads. But that hasn't seemed to happen yet. Why?

Well, according to Wordstream data, only 14 and a half % of all clicks go to ads on the side or bottom-of-the-page. And the change only applies to Desktop, which is less than half of all searches. So only about 7% of queries are effected. And really less than that since Paid Keyword results at the bottom of the page will still be there.

Google says the change improves the User Experience and makes the experience more consistent from Desktop to Mobile, where the majority of searches now happen. Their data showed less visitors were clicking on the side rail so it's been eliminated. The 4 ads above the organic results at the top will have access to all the ad extensions, like Ratings, types, sub pages, addresses, phone numbers. And each extension makes the ads bigger. So those top 4 ads should be richer and therefore get more clicks. The other effect of these larger ads will be to push the organic results down the page even further. In most cases, and especially on mobile, searchers will have to scroll to see ANY organic results at all.

In addition, the new layout makes the ads look much more like organic results, so even though they're carry that little yellow 'Ad' label, 45% of consumers still don't realize they're clicking on and ad when they click the top links.

The right column now hosts knowledge graph content. This is when Google provides its own deeper information about a query beyond the links. For instance, if you search the name of a movie, the knowledge graph in the right column will show you the movie poster, the year it was made, who directed and starred in it, and links to movie reviews. Or if you search for a restaurant, the graph will show you a map, pictures of the restaurant, the address and phone number, type of food, zagat review, etc.

The only other thing that the right column will be used for is Product Listing Ads. Yes, ads, which are delivered as a carousel of vendor choices with pictures and pricing on searches for specific products. These used to appear in the center, but now have moved to the right where they'll stand out more.

So there will be more competition for the fewer paid search spots on the SERP. One way to win in this more competitive environment will be to pay more, but another way will be to have higher quality content in your ads. If CPC goes up. some companies will be squeezed out of the paid search market for the highest value keywords. That will mean more concentration on SEO, which for me will be a good thing. SEO is also about quality, relevant, customer-oriented content. And we need to get more consistently good at this because more than half of our Web traffic, both from Desktop and Mobile, comes from organic searches. So failure is not an option for us.

The big lesson, as always, is: know what your customers are looking for and provide valuable content to answer that need. Whether in paid or organic, that's what's going to get you to the top of the SERP.

How do we know what our customers are looking for? Come talk to us about it. The North America Digital Team is working with many of our brands to do Deep Keyword research which we call Customer Intent Modeling or CIM as well as Social Listening. These tell us what our customers are thinking about and talking about. what their challenges and needs are, what ideas they have and the words they use to describe them and search for solutions. That tells us what content we need to create. It also tells us where customers are finding their solutions, where these conversations are taking place and who is leading them.

There's lots more to say about this and I'll be expanding on this thread over the months ahead.

Accelerated Mobile Pages

Has anyone heard of the AMP project? This was started last October as an open source project by Google and Twitter to make Web pages load much faster to improve the Mobile user experience. It's just starting to be rolled out now, mostly by news organizations. It's kind of an open source equivalent to Facebook Instant News pages. AMP is a stripped down form of HTML. No Forms, limited very structured CSS, only a few standardized Javascript components, etc And it's designed to be light and cacheable. In fact, when Google indexes these pages, it will cache them for quicker delivery and it's expected that others will create cashing archives as well. The practice is intended for Moble pages as the name suggests, but it also works on desktop pages and I think we should start considering using AMP as we work on redesigns of our site. It's an easy way to do responsive design and it brings an elegant simplicity to pages on the desktop as well as quicker load times, which, combined with good content can also mean higher authority and search ranking.

Influencing Influencers

Some of you may have seen a note from Blake Cahill asking us to be vigilant about paying for influencers or native content. Lord and Taylor just received a costly and precedent-setting smack for what the FTC decided was misleading content around their 'Design Lab' campaign which featured both paid influencers and native published advertising content that looked like independent editorial. The company tried to make the case that it was using #designlab to indicated that this was part of a campaign. But the FTC wasn't buying and slapped them with a hefty fine. The lesson is that whether you're talking about an influencer or a publication that you're paying to represent you. The FTC rules state that
They have to give a truthful opinion,
They have to clearly disclose their affiliation/compensation
The brand has an obligation to monitor the 3rd party's activities to make sure they're complying
And if they're not, the brand has to make them correct or take down the non-compliant content.
In addition, for native advertising, Advertising messages not identifiable as advertising (based on the net impression to a reasonable consumer) are deceptive.

Digital and Bad pizza

In a disturbing development, pizza has become a harbinger of digital disruption in a bad way. The first ecommerce transaction happened in 1994 with an order for a pepperoni pizza from Pizza Hut. And now, according to L2, local pizzarias have lost 21% of their market share in the last 5 years to the well known purveyor of bad pizza, Dominos. Online ordering has grown 300% faster than dine-in. And DOminoes is the winner. I'm sad that if this trend continues a generation of kids will never know the wonder of watching a master toss a spinning pizza into the air and catch it on his fists to stretch it out the last few inches. As a New Yorker, I'm an avowed Pizza snob, like Jon Stewart, I don't recognize Chicago Pizza as actual pizza and I'm suspicious of anything that has pineapples on it, has a stuffed crust, or is made outside the safe borders of the NY Metropolitan area. But Dominos and Pizza Hut are the worst, like a virus which has crept into our world while we were sleeping. Their only resemblance to pizza is their overall shape. New York local pizza places need to step up their digital game

SnapChat's Vision

I mentioned on our last call that Snapchat recently caught up to Facebook in Video views. Which is a really impressive feat given that they did it in less than 2 years. One reason is that they've streamlined the process of capturing video in their mobile app. You tap the button to take a pic and just hold it to capture video. Nice, right? As a result, it's now the go-to app for capturing socialvideo which is moving it towards being the go to social media app period. So what else can they do to make their app easier to use? How about not having to take your phone out of your pocket?

SnapChat has never produced a physical product, except branded merchandise, but they launched SnapChat Research division in February of last year and they've been recruiting hardware experts, including about a dozen wearable tech vets, for a secret project. A hint? SnapChat bought Vergence labs at the end of 2014. Until they were acquired, Vergence manufactured and sold Epiphany Eyewear, a cooler-looking Google Glass clone that recorded video of what the Wearer sees, and 5 of their top people are still with Snapchat. They also have an eye-tracking expert, a glasses designer. So there are indications that we might see hands-free instant social video from snapchat soon.

B2B ONLINE

In the B2B space, we often hear that B2B ecommerce doesn't work either because of the long sales cycles or the high ticket items. So I was interested to see a new report from Accenture that finds 59% of B2B organizations see a third of customers transactions happening online. 86% allow customers to make purchases on their site. Only 14% offer no online purchasing options. And 92% say email marketing is the most prevalent B2B tactic. But we already knew that, right?

Super Bowl!

- Super Bowl
- Private messaging comes of age
- B2B online
- Niche Technology

Special Bonus: Walk off the Earth cover of Adele’s Hello

Super Bowl

- Since the last time we got together, the Super Bowl came and went and with it another display of profligate advertising spend. A :30 spot on the superbowl now commands $5Mn to reach the game's 112Mn viewers That was a 11% increase in cost over last year for the 3rd largest TV audience of all time. Of course, as with all TV ads, many of the audience aren't interested in the brand's that are advertising. But on the other hand, according to a study by the National Retail Federation and Statista, 1 in 4 viewers are there mainly just to watch the ads.

But in a digital world, that begs the question: 'wouldn't the money be better spent on digital platforms that not only offer precise targeting but trackable engagement as well?' That same $5Mn would buy 250Mn Facebook video views, 10 days of YouTube Mastheads, 750Mn paid search impressions or 15Mn paid search clicks. In fact,

Gatorade did a weeklong snapchat campaign sponsoring a filter that animated the traditional pouring the Gatorade cooler over the subject of the snap. That weeklong campaign cost them 350K per day or half the price of a Superbowl ad and completely engaging and trackable.

Companies should especially be evaluating this in light of the decrease in effectiveness of Social Media extensions of the super bowl ad content this year over last year. Trickle down views of extended content were just about non-existent. In fact, the 4 extra snickers ads, 5 additional TurboTax ads, and 14 additional Shock Top videos that were available online only accrued a total of about 85K views. And interestingly, social uplift from SuperBowl ads was almost 3x higher BEFORE halftime than after. OK, enough about the Super Bowl and congratulations to whichever team won. Just kidding, I know it was Denver.

Private Messaging

We've spent quite a bit of time discussing messaging in it various forms on this call. I think I even mentioned that it seems like advertisers are starting to try to use native messaging to reach out to their customers. Most of that is spam now, but advertisers are getting smart about making text a notification option for many routine business transactions. For instance many sellers now offer the options of delivery updates by text and once you've said yes to that, you may be in for other updates, like promotions and such. I let Delta give me flight status updates by text and now I also get notices when there's a discounted fare on a route that I've flown and when I pass frequent flier milestones. We've also talked about the prevalance and popularity of private messaging apps like WhatsApp, Viber, Line, and WeChat. These have become vibrant communities of their own, some of which offer rich communication options like video and livestreaming.

Up until now, most of them have had a hard time monetizing these apps, but that's about to change. Facebook is about to bring targeted texts to it Facebook messenger app. And that means that it'll be coming to their WhatsApp service as well. It'll be pretty restricted at first and again, dependent on the consumer initiating a chat with a business. businesses will be able to send ads as messages to people who previously initiated a chat thread with that company. To prepare, the document recommends that businesses get consumers to start message threads with them now so they'll be able to send them ads when the feature launches. So fair warning.

And hey, how many Facebook fans do we have? Let's see if we can get them to engage in a text conversation with us. According to TechCrunch, Facebook has also launched a short url link.fb.com/msg/ that instantly opens a chat window with that company, this is, reportedly, already operational, but I couldn't find a way to make it work.

Where Facebook goes, others will follow so look for this as the dawn of a new advertising medium. And with the young user-bases these apps have -- many hundreds of millions worldwide -- it's going to be a big important and powerful one, So let's get onboard and take advantage of the opportunity.

B2B ONLINE

In the B2B space, we often hear that B2B ecommerce doesn't work either because of the long sales cycles or the high ticket items. So I was interested to see a new report from Accenture that finds 59% of B2B organizations see a third of customers transactions happening online. 86% allow customers to make purchases on their site. Only 14% offer no online purchasing options. And 92% say email marketing is the most prevalent B2B tactic. But we already knew that, right?

Niche Technology Technology Head Fakes

- Earlier this month, Scott Galloway released a bit of a rant about what he called Technology Head Fakes, calling 'LOSER' on anyone who's bought into technologies which will never rise beyond a niche market. At first look these are surprising because they've all recently been touted as the next big thing. The technologies are Mass customization, Internet of Things, beacons, 3D printing, and virtual reality. Scott is a bit of an agent provocateur and he's also the first person to say he gets this stuff wrong all the time. So let's dig into these a little bit. I'll tell you what I think, and you guys should feel free to jump in and agree or disagree.

Let's start with Virtual Reality. The hype around this has been deafening of late, with Samsung even opening a purpose built Virtual Reality studio in lower manhattan last month. Nonetheless, I agree with Scott on this, at least in it's current incarnation, because it requires a crazy looking headset and the 3D aspect of it literally gives many people a headache. I'm one of those people. So those seems like pretty significantbarriers to widespread adoption.

Internet of Things, we hope isn't limited to a niche becasue it's a significant part of our healthcare and lighting businesses. While there has been some overhype - connected blender? -- I think there's a lot of potential for wide adoption for many IoT applications.

Mass Customization. I strongly agree that this was a concept doomed to failure. A great example of this is Nike allowing people to pay a premium price to design their own sneakers. Now, remember, I'm not saying no one is going to do this. But I do think it will remain a niche because most people buy products from top brands becasue they like the edgy designs that the brands come up with. Very few people can out-design Nike.

Beacons - In case anyone doesn't know, Beacons are bluetooth devices that are being placed in stores around the country -- actually around the world. In a store, beacons use Bluetooth to detect nearby smartphones and try to bridge the physical and digital experiences, sending media such as ads, coupons or supplementary product information. I agree that nobody has figured out a way to make beacons really benefit their bottom line yet, certainly not in a directly trackable way. But I have seen some uses that positively impact the Customer Experience and that can only be a good thing. And remember, nobody made money with a Web site for many years after the Web started to happen. Beacon technology is still developing. So I think there's a good chance that we'll see them play an important role in the omni-channel environment.

3D printing - again, there are customers who will benefit from this tech. College engineering departments, manufacturers, etc. It IS exciting technology, but I've never been able to see how it's going to go mass market. Just print anything you need right in your own house. You'd have to keep a huge inventory of materials around to be ready to print whatever you needed on demand, The cost of the various materials is just too high. And it seems that there would be too much wasted material and energy. I think we're all waiting for a star trek type replicator anyway. Now THAT I'll be ready to adopt.

RANDOM ACTS OF STATASTICS

Couple random interesting stats...

Google made 74.5 Bn in 2015, and the new holding company, Alphabet reported earnings of 21.3 Billion just for the last quarter.

61% of retailers have a transactional moble app and half of retailers say 21-50% of their Web sales come from an app.

I've mentioned this before, but it bears repeating: 74% of all Web traffic will be video by 2017. This needs to be part of all our marketing strategies. And to be efficient, we need to look at how we can produce more video in-house. I'm not talking about fully produced ads on YouTube, but short, engaging videos on Vine, FB, Insta, etc. I'm very interested in your ideas about how to produce and use video in our marketing. Can you guys post some of your video-related successes in the comments?

Mobile Genius

- Mobile = Genius
- Brick and mortar non-stores!
- Snapchat takes on Facebook
- 2016 eCommerce eMail benchmarks
- Video holds eyeballs
- Niche Tech

Special Bonus: Internet Statstics Compendium (Caution: Addictive)

Mobile = Genius

More than 50% of Web searches now happen on a mobile device. That's why L2 Research has awarded Genius status to any brand that meets three criteria: They have a mobile first strategy, ranks number 1 on Google Mobile search for their brand term and uses the mobile technology for more than just an optimized site, for instance, they use location data to benefit either their visitor or their company. Clearly, WE'RE not there yet, but Home depot was a big winner in this space, which will be no surprise to anyone who has used their app. It lets you search for items and availability in a particular store, helps you find stuff when you're in the store itself and even let's you search for an item by taking a picture of it!! That's pretty cool cutting edge stuff but with slope of the current customer expectation curve, I predict these features will be table stakes for any brick and mortar retailer in the very near future. Maybe even this year.

Brick and mortar non-stores

Speaking of physical stores, here's an interesting trend that bears watching: we've talked over and over again about the death of pure play retail and how even giant etailers like Amazon will eventually need brick and mortar presence to fully succeed. Stores have been undervalued for years through the e-commerce era but as it turns out, they add tremendous value as local warehouses as well as distribution or pick-up points. They're also showrooms where customers can see and touch products before they buy them. Well, now a number of ecommerce companies are trying a different take on brick and mortar. They're building stores that aren't stores. For instance, the men's grooming brand Harry's has expanded from online only into a chain called Cornershop, a retro barbershop offering haircuts, shaves, beard trims and Harry's shaving products. Customers can book appointments online and use the 'cut archive' app to record their favorite haircuts and beards for future visits. The positioning of a neighborhood shop where customers can build long lasting relationships complements their messagoe of old-fashioned quality. Is there a lesson here for Philips? definitely. Though we probably missed the barbershop opportunity. What about pop up snack bars that sell food made with our Kitchen Appliances? Or sleep bars that offer people with respritory disorders the chance to try our SRC products while they grab a nap in a comfy bed in the middle of the day?

Another creative application of a real-world presence comes from the previously online only Trunk Club, This is a Style site where you input information about yourself and a personal stylist puts together a 'trunk' of clothes tailored to your needs. The unique trunks are shipped to each customer who only pay for what they decide to keep and returns the rest. The company just opened several 'Clubhouses' in a number of cities where customers can meet with a stylist in person, see, touch and try on the merch and even have a complementary beverage before they meet with their stylist. It's a whole new take on clothes shopping.

While we're on the subject. American Eagle, an established brick and mortar has gone well beyond just adding a Web presence. Since 2010 they've invested heavily in becoming a true omnichannel business. They persevered even as their stock price took a hit in 2013. They hired a Chief Digital Officer, Opened a Tech Center in Silicon Valley, introduced ship from store, built a state of the art fulfillment center and perhaps most important, rolling up ecommerce and retailer reporting so everyone was working from the same information. Their long game was rewarded last year as their stock price climbed 11% in just 6 months. Kudos to them for having a clear strategy, hanging in and doing it right.

Snap vs Facebook

A couple of calls ago, we mentioned that Snapchat was starting to position itself as a marketing platform as they made sponsored 'Lenses' available to Brands. These are branded filters or frames that users can put around their pictures garner up to 16Mn impressions. At 750K for special days, the pricing for a sponsored Lens rivals the cost of a super bowl ad. Snapchat also allows Brand accounts. But now the popular channel is reportedly building a sophisticated ad targeting platform to compete with Facebook. This may explain why they turned down an acquisition offer of 3 Billion from Facebook two years ago. Smart, because their current funding round just valued them at 16Bn. While Snapchats 100Mn users pale in comparison to Facebook's 1.2 Bn, the demographics of Snapchats 18-24 dominated user base, and it's younger group of users with a potential for exponential growth are clearly compelling to brands. A study shows that marketers who are active on Snapchat and post daily, maintain an average of 9 posts/day. Much higher than averages of 1.8 on FB, 2.3 on Insta and 3.3 on Twitter. Then again, Snapchat could fade away in a couple of years and never be though of again. FB's not going anywhere.

ECommerce email Benchmarks

I touch on this every couple of months, but it bears repeating because marketers tend to think of email marketing as old or passe. The fact is email marketing is the gift that keeps on giving. I think I mentioned last month that a quarter of all black friday weekend traffic was driven by email. But how many emails did it take to drive that traffic? How do you define email success? Great question and one that a recent study by Remarketry is helping to answer as they provide some email benchmarks for 2016.
If you send out a regular email newsletter, you can expect an open rate of 23.4%. 17% of those will click on something in your newsletter and 1% of THOSE will likely convert. If you beat that, you're doing something very right.
But once people have bought something from you, the story changes pretty dramatically. Order follow up emails get a 46% open rate. CLick rate is 16% and 5% of those people will convert, though probably not to another sale right away. People ARE willing to give feedback though, they'll RATE SOMETHING or sign up for a loyalty program once they bought something so let's capitalize on that. Could be a way to increase our ratings and reviews
When someone hasn't seen anything from you for a while, they're more likely to pay attention, this includes inactive customers. 38% of them will open an email from a brand that they haven't done business with in a while, 19% will click and 2.5% will convert
Maybe the best opportunity is email follow ups to cart abandons. 46.6% of people who've abandoned a shopping cart will open an email about it. 28% of them will click and fully 5% will convert to a sale. So let's make sure we're following up on cart abandons. Otherwize, we're leaving a lot of money on the table.

Fun video stats

I want us to do more video in 2016. Lot's more. And I don't mean fully produced 2 or 10 minute videos that only live on YouTube. I mean Vines and Snapchats and Instagrams and even animated gifs and jpgs. They're just more involving and people look at them longer than static images And as long as they're looking at them, they're thinking about our brand. Here are a couple interesting stats...
Snapchat now delivers 7Bn video views per day. That's up 1Bn views year over year. And only a Bn short of Facebook but with only .1% of the users. Wow!
Periscope has delivered 100Mn live broadcasts in the last 10 months and it just became autoplay on twitter which could geometrically impact it's growth.
People watched 12Bn hours of Netflix in the last quarter of 2015. That was a 70% increase Year over Year, in case you were wondering why the bars are all empty.

Niche Technology

Earlier this month, Scott Galloway released a bit of a rant about what he called Technology Head Fakes, calling 'LOSER' on anyone who's bought into technologies which will never rise beyond a niche market. At first look these are surprising because they've all recently been touted as the next big thing. The technologies are Mass customization, Internet of Things, beacons, 3D printing, and virtual reality. Scott is a bit of an agent provocateur and he's also the first person to say he gets this stuff wrong all the time. So let's dig into these a little bit. I'll tell you what I think, and you guys should feel free to jump in and agree or disagree.
Let's start with Virtual Reality. The hype around this has been deafening of late, with Samsung even opening a purpose built Virtual Reality studio in lower manhattan last month. Nonetheless, I agree with Scott on this, at least in it's current incarnation, because it requires a crazy looking headset and the 3D aspect of it literally gives many people a headache. I'm one of those people. So those seems like pretty significant barriers to widespread adoption.
Internet of Things, we hope isn't limited to a niche becasue it's a significant part of our healthcare and lighting businesses. While there has been some overhype - connected blender? -- I think there's a lot of potential for wide adoption for many IoT applications.
Mass Customization. I strongly agree that this was a concept doomed to failure. A great example of this is Nike allowing people to pay a premium price to design their own sneakers. Now, remember, I'm not saying no one is going to do this. But I do think it will remain a niche because most people buy products from top brands becasue they like the edgy designs that the brands come up with. Very few people can out-design Nike.
Beacons - In case anyone doesn't know, Beacons are bluetooth devices that are being placed in stores around the country -- actually around the world. In a store, beacons use Bluetooth to detect nearby smartphones and try to bridge the physical and digital experiences, sending media such as ads, coupons or supplementary product information. I agree that nobody has figured out a way to make beacons really benefit their bottom line yet, certainly not in a directly trackable way. But I have seen some uses that positively impact the Customer Experience and that can only be a good thing. And remember, nobody made money with a Web site for many years after the Web started to happen. Beacon technology is still developing. So I think there's a good chance that we'll see them play an important role in the omni-channel environment.
3D printing - again, there are customers who will benefit from this tech. College engineering departments, manufacturers, etc. It IS exciting technology, but I've never been able to see how it's going to go mass market. Just print anything you need right in your own house. You'd have to keep a huge inventory of materials around to be ready to print whatever you needed on demand, The cost of the various materials is just too high. And it seems that there would be too much wasted material and energy. I think we're all waiting for a star trek type replicator anyway. Now THAT I'll be ready to adopt.

Personalization Personalization Personalization

- Personalization is important
- Instagram CTR outperforms
- 3 in 5 companies NOT there!
- Baby Names
- Google Quality Rater guidelines
- L2 Predicts, Yahoo Acts
- Black Friday and Cyber Monday recap
- Amazon drops mic

Special Bonus: The extended Trailer


Let's spend some time today talking about personalization. Almost all companies agree that it's important and most are working towards it in some way. When asked to name one marketing capability that will be the most important in the future, 1/3 of businesses say Personalization is their top priority. Customers want personalization and are beginning to demand it. Nonetheless, Many companies find themselves hamstrung by privacy concerns. Very few are doing personalization well. In fact, according to Greenlight research, even though personalization capabilities are most advanced on Web sites and in email, with 54% of companies doing it on both these channels, Mobile, which is perhaps the most personal experience, lags behind with less than a quarter of businesses personalizing on mobile sites or in-apps. In fact, 9 out of 10 brands are failing to personalize effectively. They don't recognize customers across channels, which is a shame because, according to L2, customers are twice as likely to buy from a brand who knows them wherever they are.

• Personalized emails deliver 6x higher transaction rates but only 30% of brands use them.
• Only 39% of retailers send personalized product recommendations via email
• 3/4 of online consumers get frustrated when content has nothing to do with their interests. I know I do.
• Customers want personalization, but they also want control: 2/3 want the option for privacy controls and just having privacy controls available makes customers 30% more likely to trust a company with their data.
• 58% want personalization based only on information that they proactively provide and 38% are willing to specify their individual interests so that the company can deliver content tailored to their needs.

Based on all this, I would like to see Philips offering our customers a subscription to a customized newsletter which allows them to specify what Philips-related topics they're interested in and how often they want to receive it. An offer like this would help build our opt-in database, it would keep us in regular touch with these customers with content that interests them, giving us the opportunity to market to them in a personalized way.

In addition, we should be building a sophisticated back end into our Web presence which allows us to track customer behavior on the site so we know what their interests are and where they are in the buying cycle.

These technologies aren't just possible. They're widely available and absolutely necessary for us to succeed in a world where personalized marketing is increasingly expected by our customers. And the fact that most companies aren't getting this right yet gives us a window of opportunity to gain a competitive advantage. Let's make 2016 the year Philips moves into this important space to make our mark with best in class personalization.


Instagram advertising has been available for a couple of months now and the first reports are making people jump up and down. Not only does the new ad platform have the reach to connect with 400 Mn people, but the clickthrough rate is 17x higher than standard ad clickthrough and 1.5x higher than Facebook ads. It's possible this will wane as more ads show up. but take opportunities when you can get them. The platform offers full-funnel marketing capabilities to raise brand awareness, attract prospects, retarget site abandoners and retain current customers.

The bar has been set high for creative imagery. Stock and studio photography won't work on Instagram. But when good creative is combined with all of the targeting and optimization capabilities available on Facebook, Instagram advertisements provide a powerful and visual way to reach target audiences. If you're not on Instagram already, you should at least be considering it.

Couple other cool comments about Insta, while we're on the subject...
3 in 5 marketers are not targeting Instagram users. but half are planning to, mostly to boost brand awareness
The platform is so influential that parents have started naming their children after it's filters.
The boy's names Lux and Ludwig are up 75 and 42% respectively since last year. And for girls Valencia and Juno are up 26 and 30% Amaro, Willow and Reyes are also up, though not quite as much. Yikes! This is the first time ever that a technology has inspired baby names.


Followers of SearchEngineLand and SearchMOS know that Since at least 2005, Google has been using a large, worldwide focus group to help refine the algorithm. These highly trained people review search results from Google's current algorithm side by side with results from a proposed new algorithms to determine which delivers the best results. The people in this program are called Quality Raters and, as you can imagine, the work they do is important to search marketers everywhere. So it's big news that Google just published their updated Quality Rater guidelines. The document gives us a look inside Google’s decision-making processes and what the search engine wants to see from a site. Reputation is a big factor. Google expects big brands to generate positive and trustworthy mentions (not just links) and it will be problematic to a brand’s SEO if that’s not happening. This will force SEO and PR people to work together.
Google also added several other exciting new capabilities in 2016. Offline measurement, which is when a search concludes with a searcher arriving at a new physical location rather than a Web page. And app search, which delivers content from apps in search results and in some cases, through app streaming, allows users to engage with an app they don't have on their device through the Search Engine Results page interface. In fact, the results page, especially on a mobile device has become a much more transactional engagement space where searchers can click to do something concrete rather than just to choose a Web page to visit.
I'm an android user and I definitely crossed the chasm this year to treating my phone as a personal assistant, especially when I'm driving, telling it, through the Google Voice interface to do things like send a text or call someone, get directions, set an alarm or play a song or artist. It's really a different way of interacting. You don't even need to look at your phone to get what you want.


On November 19th, L2 Research offered a recap of Yahoo's management under Melissa Meyer, suggesting that this company should be sold. Ms 'lean in' has one of the best known brand names in the world, among the world's oldest and top trafficked sites with a solidly respectable reputation for news, finance and sports yet after all this time, they haven't been able to monatize their considerable assets. Right now if you subtract their stakes in Alibaba and Yahoo Japan, their core business is worth negative $5 Bn. Scott Galloway is the first to say he get's this stuff wrong all the time, but that's apparently not the case here as on December 1st, The Wall Street Journal reported that Yahoo's board is planning a series of meetings this week to discuss spinning off the Alibaba investment and finding a buyer for the core business. We with them the best of luck.


I've never liked the term Black Friday, it's incredibly cynical and unfestive for the name of the beginning of the happy holiday shopping season and it seems a lot of people agree. 82% of tweets about Black Friday in November were negative. That may be because past Black Friday incidents have left a lot of people cold. In store sales over this THanksgiving weekend dropped over a $Bn -- almost 10% -- since last year to 10.4Bn while Cyber Monday was the largest US online sales day in history, up 16% year over year, topping $3 Bn. and that's after $4 Bn in online shopping on Thursday and Friday. By the way, a quarter of consumers began their Christmas shopping before Halloween this year so a LOT of spending has already happened.
The online shopping was so robust that a number a retailers, most notably Target experienced Website overload on Monday. They were putting visitors into virtual lines where they had to wait before they could even browse Target's sweet deals which included at least 15% off on everything on the site as well as doorbusters on many larger items.
More than half of Online transactions over the weekend happened on mobile -- 3/4 of those on Apple devices, a quarter on Android -- and for the first time, Average Order Value was higher on Tablets than on Desktops.
Finally, we may think of email as an out of date technology, but it drove almost a quarter of all sales over the weekend, outperforming organic, paid, direct traffic, affiliates, social and display. So email is still very much alive and well.


I'm sure no one will be surprised to hear that Amazon crushed it this weekend. Largely through their unprecedented presence in paid search. You should think of search as the biggest store window in the world. And in that all-important shelf space, Amazon scored the highest in paid search visibility in almost every holiday product category. Electronics, sporting goods, toys, you name it. As L2's Scott Galloway says, you CAN buy your way to happiness on Google. Unlike organic, paid search isn't a skill set. It's just a function of deep pockets. And with $115 Bn market cap and a stock price up 105%, no company has ever had access to such cheap capital for so long. As a result, they have more chips to put down on more numbers, they are going underwater with the world's biggest oxygen tank and forcing other retailers to join them. But the other retailers are beginning to drown.

It's all BACK to the Future Now!

- It’s all BACK to the future now
- Bing makes money!!
- Transformation Perception Gap
- Instagram – the ‘it’ social network
- Prepared for Wearables?
- Snapchat sponsored filters
- Twitter stats
- Twitter polling
- Mondelez vous?
- Google Shopper Insights
- The BIg Box shrinks

Special Bonus: The preferred Social Networks of The Breakfast Club


We entered a new era last week in which all of Back to the Future now takes place in the past. I confess to a little ambivalence because it makes me a little sad, but it's also exciting because we're now in uncharted territory. The movie correctly predicted wearables, smart phones, video conferencing (though only on a wide screen, not a small one), googleglass and maybe hoverboards?. We're still waiting for coats that automatically resize and dry themselves, self-tying shoes and Mr. Fusion. But the Cubs definitely didn't win the World Series, thanks to the Amazin' Mets. #letsgomets

Interestingly, the flood of references to Back to the Future day last week benefitted the brands that were associated with it. Especially Pepsi and DeLorean, althought it's too late to do DeLorean any good.


Enough with the fun and games...

Bing makes money!

It's been a long wait, but Microsoft's Bing search business has finally become profitable, generating $1bn in revenues during the company's first quarter of this fiscal year. Here are some key stats related to the surprise announcement:

•Search revenue grew 29%, driven by higher revenue per search and search volume.

But here's the kicker!!

•Nearly 20% of search revenue in September was driven by Windows 10 devices.

Why is this interesting? Anybody? Anybody? Beuler... Because Windows 10 devices, their Tablets, their Phones and now almost every existing Windows 7 and 8 laptop and desktop, which are all eligible for free upgrades to Win 10, all have Bing as their default search and are notoriously difficult to change. So all these miriad devices are now functioning for Microsoft the way the Kindle works for Amazon. That is -- Amazon takes a loss on it's Kindles because it's essentially putting a really streamlined amazon store in every owner's hand. Microsoft has this growing media sales business, they're putting a Bing search engine in every owners hand, lap and office. But the Windows 10 upgrade offer has only just begun and there 1 and a quarter BILLION Windows 7 PCs out there in the world. So this is likely just the beginning of a rapidly expanding period of good news for Microsoft's and Bing. I predict it'll be worth the wait for the Big M.

Perception Gap

There's a perception gap in digital organizations. According to a recent study by L2, 9 in 10 organizations are undergoing a digital transformation, only 1 in 7 think they're doing it fast enough. 55% of CEOs think they're doing this very fast, fast or about right. 64% of Line Managers think the transformation is happening slow or very slow.

How is Philips doing? I'd love to know what you guys think. Can you respond either in this thread or on the SocialCast group at bit.ly/DigitalNAConnect? But I can show you some results of the Digital @ Scale Change adoption survey and other stats that Blake just reported to the Exco last week. The survey tracks what respondents think about the progress we've made in Digital since the inception of D@S:

The strongest improvements have been made in analytics
Half the respondent's now think Digital Strategy is extremely important
North America is above average in Digital Capabilities
North America is the leading market at collecting new marketing contacts
The Level 2 training onboarding level for Personal Health in August is leading the world at 89%


Instagram

If you're a regular reader, You know Instagram is the growingest presence in Social. We talk about it almost every
month. According to research by eMarketer, 32% of US companies with 100 or more employees currently use Instagram as a marketing tool. This figure is set to increase to 49% by next year, and will reach an incredible 71% by the following year. According to the research, the photo-sharing app could be more popular with marketers than Twitter within two years.

Twitter stats

And as much as we all love Twitter, it's hemmoraging users and over 44% of its Bn members have never sent a single tweet! 391 Mn of them have no followers. Interestingly, I couldn't find a stat about the % of Twitterers who only post but never read Twitter. I'm sure there are a lot of them. Anyway, Something needs to be done to jumpstart the venerable channel and there's increasing scepticism that Jack Dorsey will be able to do it as a part time CEO while he's also getting ready for an IPO at Square, the other company he's CEO of. But here's a bright spot...

Twitter polling

Twitter just launched a new polling feature. Tweeters can now create a 2-button poll that will remain live for 24 hours. Voting is anonymous and there's no limit to to how many polls you can create or participate in. Seems to me this is a great new way to engage on Twitter. Although it may get overused for a while before it settles down. Of course, you could always ask questions and get answers on twitter, but I think the anonymity and ease of just choosing a button rather than composing a tweet may get more response. Like any other tweet, the cleverness of the

question and choice of answers will likely be determinative. It's also rudimentary social listening. And it can even help you shape your approach to your twitter account...

What do you think of tweets without links? 1. They're useless. 2. Tweets can be fun and infomative without links.

How about this one...

Is two buttons enough to be useful? Yes No ?

Two choices is pretty rudimentary, but I think Twitter chose this simple version to test the waters. So we may see them roll out multiple choice pretty quickly as this catches on.

Prepared for Wearables?

With the popularity of Wearables growing so rapidly, you'd think that Health Organizations would be dedicating recources to being able to leverage this treasure trove of data. But eConsultancy and Ogilvy conducted an interesting survey in Sept on how ready the Healthcare industry is to jump on the opportunity presented by the consumer adoption of wearables. Only 5% of respondents said their organizations were very prepared, while 66% said their orgs were either unprepared or very unprepared. Only 25% of HealthCare organizations even use data from medical devices, and only 11% are collecting data from wearables. This validates the tremendous opportunity for Philips Healthcare Informatics, solutions and services to leverage our deep expertise in this type of integration, especially with our HealthSuite Digital Platform (HSDP) to help the industry take advantage of this rich trove of data and insight.

Snapchat

SnapChat just completed a new round of funding that pushed it's valuation over $16Bn. Does anyone use Snapchat’s Lenses? Apparently a LOT of people are. The social network launched Lenses a month ago. These are little decorative filters that you can pull over your selfies on The Snap to make your pictures more fun. And they're about to make these available as a media buy. Companies can create branded ones and pay to make them available for a limited time to Snappers. Snapchat expects its new sponsored selfie filters to reach a staggering 16m viewers a day, according to a report by Buzzfeed. The catch? Snapchat is asking advertisers to cough up $450,000 per day for sponsorship running Sunday through Thursday, $500,000 per day for Friday or Saturday, and up to a staggering $700,000 for holidays.

Mondelez vous?

Do you Mondelez? You may not have heard of Mondelez food, but you've definitely eaten them. Nobody could get through life without trying an Oreo, a Cadbury chocolate or a Ritz Cracker. As it turns out, Mondelez is the world's second largest packaged food company, just behind Nestle and just ahead of Pepsi. According to the Wall Street Journal, as part of a massive cost cutting program, this giant has reduced it's TV advertising more than 50% in the last 5 years and almost 20% since last year. Where has the spending gone? Why to digital of course which is less expensive and twice as effective! And to some cost cutting. BUt this company is overcoming challenges from learning new capabilities at a very fast pace, to executive education to tracking. Digital was 32% of their North America media spend last year and will be 45% this year. They've made big deals with Google and Facebook to create new communications paradigms for them beyond simple ads and promotions ad they're starting to get into impulse oriented e-commerce, which, though commonplace in a store setting is entirely new to the snack food market. How will this work? Don't know yet. We'll have to wait and see. But it sure sounds like these folks are finding new ways to market very traditional products.

Google Shopper Insights

Shoppers have used Google for a long time to help them find products and retailers. But this week Google announced Shopper Insights - a new tool that combines search and maps to help retailersfind shoppers. Or more specifically when and where shoppers search for stuff. For instance: In NYC, Gamers are shopping for Playstation 4 twice as often as XBoX One, but on the West Coast, shoppers were 10x more likely to be looking for the Microsoft console. Or on Black Friday, people tend to shop with their phones, while on Cyber Monday, they're more likely to use Desktops. For the first time, retailers can tap into insights yielded by search queries to understand shopping trends in individual markets.

The Big Box shrinks

Here's a surprise: WalMart is getting smaller! Most of their supercenters have around 2500 less products than they had last year and they're looking to further reduce to make inventory easier tomanage as they streamline their systems to boost online sales. Spending on these initiatives, along with it's determination to increase wages for the average worker have the company on track to lose about 12% in profit next year. That news caused the stock to drop 10% in a single day, allowing Amazon to surpass Walmart in value for the first time and wiping out about $11Bn of the Walton kids' fortune. But don't worry, they'll be OK.

Wikipedia leaks, Asos wins SEO.

- Wikipedia leaks page views
- Infinitely scrolling content feeds
- ASOS wins with the basics
- A trillion streams
- Periscope looking over the top
- Look out email, Slack impresses
- Google’s New Logo

Special Bonus: Americans in Space

Wikipedia has lost a quarter of a billion visits/month from Google over the last 3 months. Though they haven't commented on it, Google has clearly made a quiet change to it's algorithm to favor brand sites over Wikipedia for the first time. This is a big big change. For years, Wikipedia's search authority has been unchallenged for almost any term they had a page for, including pages about a brand, but most importantly, up until now, brands could not effectively compete for the right to win many generic search terms that Wikipedia expounded on. Google has apparently decided that allowing brands to win terms like this will also increase their bids for these terms and that logical business decision has trumped their previous leaning toward impartial purveyors of information.

I wanted to point out a relatively new trend in Web site content presentation. A number of sites that I spend time on have started to load one article after another in an infinite scrolldown. Similar to a Facebook or Twitter feed and very mobile friendly. Most often there's some intelligence built in so the next article you see is related. This is because for many sites, the article page has become the new home page because that's the search bait where people enter the site. I think this is a very cool development because until this, if you're on a content site you have to keep clicking back to the home page to find the next thing to read. As we get more into the content marketing business, we should follow this model. Digiday has added a new wrinkle, a TLDR button. in Internet Slang, TL;DR means Too Long, Didn't read. But this button is a way of switching to summaries of each article, of course you can always switch back. This is even better for mobile and a really good user experience. Wish I'd thought of it. But I'm not too proud to implement best practices when I see them.

Speaking of Search, L2's recently released Digital IQ Index of department stores surfaced an unexpected leader. It's ASOS, Britain's big online only retailer. How has it beaten global Digital Omnichannel success stories like Burburry and Macy's? First page search visibility is their secret sauce. And they're beating their competitors across the world for 650 incredibly high value keywords like Shoes, Shirts, Socks and the like. How are they pulling this off? They're doing it by blocking and tackling and getting the SEO basics right. Tagging photos, consistent use of Keywords in Title Tags, H1 Headers and intro paragraphs as well as correct keyword density. They're careful not to allow their pages compete against each other for the same keywords and they have relevant content that answers searchers' needs precisely. It's really not a secret at all. They behave less like a retailer and more like an SEO company that sells clothes.

Music streaming has had it's best year ever, over a Trillion. That's Trillion with a T, songs were streamed in the first 6 months of this year. That's already twice the number streamed in all of 2014. Last year 41Mn people payed for streaming services and streaming revenue increased almost 40%. Can't wait to see the stats for this year.

And staying with the subject of streaming, I can give you an update on the Periscope/Meerkat battle of live-video streaming apps, Periscope appears to be winning due to its native access to 300Mn twitter users and incrementally better design. The result is that over 40 years of footage are watched on Periscope every day and it appears to be the favorite of brands just recently streaming one of Ralph Lauren's runway shows.

Anybody sick of email? I know I am as I receive over 300 emails a day, many of them cold solicitations from vendors. But what's the alternative? Well it could be Slack. An app trying to replace email for internal business communications. This small company has grown from nothing in Jan of 2014 to 1.1Mn daily active users in March of this year. But the most amazing thing is that its most recent round of funding in June valued the company at $2.8Bn. This works out to $2500 per user which is completely unprecedented. The nearest competitor is LinkedIn at $282 per user. Seems like some people are expecting big things from this company and they're putting their money where their mouth is. The generation coming up behind us is managing to do just fine without email, preferring Instant Messaging and Social Media. So as they enter the workforce, it's very possible that there's hope for the end of this time sucking scourge of business.

Learning your Alphabet

- Do you know your Alphabet?
- Amazon going postal
- Lucky or good? UnderArmour and Jordan Speith
- Christian Louboutin World campaign
- Is Social Marketing Dead??!!

BONUS! : Tiny Dancer

You may have heard that Google is getting a new CEO, Sundar Pichai, but did you know that Larry Paige is restructuring Google into a holding company called Alphabet? The current leaders of Google will be the new leaders of Alphabet. Larry will be the CEO, Sergey Brin the President and Eric Schmidt will continue his role as executive chairman and at some point later this year, every share of Google will become an equal share of Alphabet.

Under that big new umbrella will be a subsidiary called Google, run by Pichai, who's been Larry's right hand man for a while now, The new Google company will include the core businesses, Search, ads, maps, apps, youtube, android and the related technical infrastructure.

But also under the Alphabet umbrella, will be a group of other businesses like Calico, Nest, Fiber as well as google Ventures, Google Capital and incubator projects like Google x which will all be managed as separate businesses. This is pretty big news. The market sure liked it as the stock jumped from 633 to 660 on August 10th when the change was announced. Although it got Crushed with the rest of the market last week going from 660 on Aug 19th to 580 on Aug 25th and today it's back at 637. Whoa!

Why do this? There are a number of theories,
They want to Slim down and simplify the Google company to focus on it's core competency, which is of course printing money.
or maybe Larry and Sergey want to focus more on the big picture and not need to run day to day google stuff
or it was a way to make room for lots more CEOs and executives?
Maybe they wanted to give more visibility to the smaller companies, bringing them out from under Google's giant shadow, probably all or some combination of these.
Though we probably won't be hearing much about Alphabet, expect to see news stories about ... Life Sciences - our competitor, Calico - longevity, Nest - Home automation, Fiber - Home video and communications services and so on. They'll be free to promote themselves and, who knows, maybe be sold or taken to IPO... the possibilities are endless.

When you go to check out Alphabet on the Web though, you won't be typing alphabet.com cause BMW already owns that. Instead, try abc.xyz. No really. That's the new url. I encourage you to go read Larry's excellent and aspirational statement there which ends with...
We are excited about
Getting more ambitious things done.
Taking the long-term view.
Empowering great entrepreneurs and companies to flourish.
Investing at the scale of the opportunities and resources we see.
Improving the transparency and oversight of what we’re doing.
Making Google even better through greater focus.
And hopefully… as a result of all this, improving the lives of as many people as we can.

Now let's talk about an UNPROFITABLE organization, the US Postal Service, which has lost more than 46Bn over the last 10 years. They seem to have found a sugar daddy in amazon and are now delivering about 40% of Amazon's packages or about 150Mn items a year, including on Sundays. Amazon pays them an average of $2 per package, which is half of what they pay FedEx and UPS. Amazon gets that deal by presorting everything for the post office using machines and automation rather than workers who move in an almost comically practiced slow motion. That 300Mn should help the old USPS stay afloat a while longer but it's really just a drop in the bucket for an organization that's losing almost 5Bn a year. Amazon may need to buy them yet.

The post office may be neither lucky or good but UnderArmour is both. Back in May, we highlighted UnderArmour on this call, and talked about how they had effectively used social and some uncommon 'athletes' like Misty Copeland and Giselle Bundchen to broaden their all masculine brand so successfully into the female market that they are already threatening Nike and Lululemon. Misty just became the first African American woman to be named principal dancer at a major ballet company. which has boosted her UnderArmour video over 9Mn views. Well they haven't forgotten about the guys as we saw watching the young Jordan Speith write his way into the record books winning both the Masters and US Open in the same year with the UnderArmour logo adorning his gear. Before his Masters win, when he only had one big win under his belt but was already under a 3-yr contract with them, the brand had preciently rippped up the old one and given the golfer a new, 10-year contract. It'll be great to see another classy and talented young role model staring in the company's breakthrough social media.

Fashion and beauty brands have expanded their social media efforts on Instagram by about 40% in the last year, but Christian Louboutin has taken it a step further, realizing that not many are getting their customers involved in the fun. To do that, the brand launched Louboutinworld, a User Generated Content site gallery that gives visitors who post great pix with the # louboutinworld a chance to have their art featured on the LouBoutin site. Effective? Since the beginning of this past July, They've grown their community by 80% and increased organic brand mentions to 5.1Mn!
Maybe we could use a campaign like this to fill our Philips Asset Library!

In light of all the talk of successful social media campaigns, today and in the past on this call, I thought it might be good to discuss the post from Steve McGrew of Philips Design that many of you may have seen on SocialCast this Tuesday. It recommends a post by Josh Bernoff on his Without Bullshit blog that seems to claim that Social Marketing is Dead. For those of you who may not be familiar with him, Josh Bernoff is the author (with Charlene Li) of GroundSwell, perhaps the seminal treatise on Social Marketing and he was also the editor of Outside in - the power of putting the customer at the center of your business. I've found both quite influential. He's a great speaker and a really good writer and thinker. I suggest you read the post but more important, read the comment discussion below it, because that's where the real value is and I think that was his motive in stirring the pot like this.
Josh is agreeing with a post from another digital pundit, Augie Ray who quotes a lot of stats that say that Social doesn't work.

To that I say Social media doesn't work as pure advertising, it doesn't work as a broadcast medium. Wholeheartedly agree. As I said in my reply to Steve's post, What social has always been primarily about, for me, is listening. It's an almost bottomless mine of customer insight for companies willing to invest in developing it. Understanding what the market is thinking. Learning about your customers' needs. Then using this insight and these channels to RESPOND to those needs and thoughts in a meaningful way that connects you to the people who are looking for your help. Not talking about yourself, but doing things that cause customers to talk to each other about you in an upbeat and positive way. That 'asymmetrical' communication is the holy grail of Social.

There's more to it then that. Facebook has sqeezed the life out of social marketing on their platform so that you have to pay for impressions rather than get them organically because that's their business. As we've discussed here before, they did it nefariously, getting brands to pay to build communities, then walling off those communities and charging them for access.
1. That's not social's fault, nor is it marketings fault, it's Facebook's fault. 2. Advertising on Facebook is perhaps the most surefire way to reach a very specific, even a niche audience. It's the most targeted ad buy available. But it's an ad buy. It's not social media.

Last thing I want to say about this is Social is too often used as a broadcast medium by people who don't understand it. Marketers are just as guilty of this as anyone, but it's not a marketing problem. To be effective, Social marketing requires a very refined degree of a specific kind of creativity. Personality that resonates with the reader, quality, value to the reader, honesty, wit and charm, craftsmanship and art are the keys. Quantity is counterproductive. The idea is to find a way to engage that makes your audience feel something. The point is to create situations that make customers talk about your brand to each other. When that happens, earned media will talk about you too.