Amidst the shifts by companies like Apple and Facebook toward preserving consumer privacy online, Amazon has made a move that has captivated e-commerce companies and marketers alike. In our previous blog, How Will Apple iOS 14 Change Digital Advertising, we discussed Apple’s shift away from default internet cookie monitoring toward engaging online users in giving consent for web-tracking. This major shift has forced big online players like Facebook to rethink how consumers can be identified, analyzed, and marketed. Similarly, these shifts have made marketers have to reconsider how they can reach specific audiences with targeted messaging.
On April 24th, 2021, days before Apple launched the notoriously awaited iOS 14.5 update regulating data tracking consent across its interface, CNBC first reported Amazon’s latest move to grant its third-party sellers the capability of marketing directly to the inboxes of their customers. Welcome Amazon’s “Manage Your Customer Engagement” tool. In this article, we’ll dive into what Amazon’s new tool is, why it’s significant, and how this affects both marketers and brands engaged in the ever-changing e-commerce space.
Amazon’s “Manage Your Customer Engagement” Tool
For quite some time, Amazon has been resolute in its efforts to prohibit third-party merchants from excessive contact with their consumers for solicitation. Aside from matters such as communicating order status and reviews, communication has remained fairly minimal from third-party Amazon sellers. All of that seems to be changing with Amazon’s new “Manage Your Customer Engagement” feature.
In short, this new feature allows third-party sellers that are members of Amazon’s Brand Registry to establish a social-media-like following of consenting customers who will receive email promotions directly from the business. These promotions include anything from new product announcements to the latest deals and offers. Think of it as email marketing via Amazon. This new feature allows a seller to market directly to Amazon customers who “follow” their brand, similar to the consented following of accounts on social media.
Why This Matters
This move by Amazon is said to aim at increasing retention, building relationships, and driving engagement. Key benefits of the “Manage Your Customer Engagement” tool include:
- Allowing direct relationship communication between sellers and customers
- Granting greater ability to announce new promotions and products
- Allowing consumers the ability to follow their favorite stores and establish brand loyalty
As previously mentioned, the post-cookie digital shift has made understanding consumer behavior more transparent for the user but harder to track for the business. In a move away from cookies, companies and marketers are needing to find new ways to gain insights into their audiences. Fostering direct, first-party relationships between consumers and brands lays the foundation for transparent, information-rich, and long-term potential as brands seek new ways to build authentic customer loyalty. Amazon’s latest tool appears to be a move toward facilitating this shift.
According to CNBC’s article, an Amazon spokesperson told CNBC that it is “committed to serving our shoppers by helping them engage with their favorite brands. With Manage Your Customer Engagement, brands will be able to initiate email campaigns about new product announcements and offers that Amazon will send to shoppers who choose to follow the brand.”
What About Consumer Privacy?
We must not forget that consumer trends show a more negative view of data collection by companies. Despite the new ways of contacting customers, Amazon’s new feature will continue to keep shoppers’ contact information private from the seller. According to the CNBC article, “Shoppers’ contact information will continue to remain private. Amazon will give companies aggregate data when they use the tool that shows them how many emails will go out when they decide to share marketing campaigns with their followers.”
For eCommerce Companies
Understanding the changes to the digital landscape is paramount for sellers looking to find the balance between where their audience is and where their brand is best able to communicate effectively and authentically. As the industry moves away from reliance on aggregated detailed data banks, companies will need to internally establish, utilize, and nurture their customer databases since that is where they will find the valuable, rich, and accurate understanding of their buyer. All of this better informs a company of the ways in which it can reach and interact with customers to grow long-term success.
Amazon’s move toward providing CRM tools like “Manage Your Customer Engagement” is beneficial in allowing their sellers greater ability to foster long-term consumer relationships. While companies must not forget to maintain transparency in collecting data of their customers, this moment offers companies a creative opportunity to expand their unique in-house customer knowledge. As we are embarking on the newly implemented cookie-consent era on platforms like iOS and Facebook, it will be interesting to see how tools like this will alter the business-consumer relationship.
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The internet has redefined how we as a society interact, operate, and connect to one another. If last year has taught us anything, it is that the internet and online platforms have become integral in how we operate everyday life and have changed the way we use the internet. While technologies like Google and Amazon have made online actions easier than ever, everything comes at a cost. In a previous blog, we explored how Apple’s new iOS 14 changes will be affecting the experience for both users and businesses. This month, we are diving into the larger conversation about how major digital giants are redefining the future digital landscape amidst a “cookie-less” internet. Read more on what cookies are, why they matter, how they will affect businesses and advertisers, and more.
What Are Cookies and Why They Matter
According to the Federal Trade Commission, internet cookies are the information that is saved by your web browsers and used to recognize your device in the future. In Layman’s terms, cookies are tools that help websites track activity to better understand you as a user. While there are many benefits to internet cookies, there are also some drawbacks that have sparked concerns, policy changes, and legislation.
For Consumers – more customized user experience and increased convenience
With the added knowledge collected from cookies about the consumer’s buying habits, search history, and user activity, websites are better able to identify and suggest content and products that similar users found relevant. Additionally, cookies allow websites to save information such as passwords and usernames to streamline user convenience.
For Businesses – more accurate understanding of consumer habits
Brands have long used cookies to track their website’s visitors to better understand their audience and fulfill their needs. Whether it be what content your favorite websites release to the most popular pieces of merchandise on an online store, this information collected by cookies gives businesses and advertisers greater insight into knowing the consensus of their audience.
For Consumers – an infringement on user privacy
Many concerns about cookies surround data collection and whether or not the user knows their data is being collected. Additionally, consumers have mixed emotions around how their data is being managed, commoditized, and sold.
For Businesses – increased risk of losing customer trust
With this change in consumer sentiment, companies must align themselves with consumer shifts to avoid losing their audience’s trust. According to ClickZ’s article analyzing a study conducted by Publicis Sapient, they found that while consumers had a positive view of technology, they had a negative view on data collection.
What is Changing and How This Affects Businesses and Advertisers
Many of the new national and international policies and legislation combatting excessive data collection center around gaining users’ consent to be tracked and promote an “opt-in” choice. In order for businesses, especially large online platforms, to continue building consumer trust, it is in their best interest to comply with these shifts toward more transparent online interactions.
With the implementation of this newly added “opt-in” choice on platforms such as Google and Facebook, it is likely that there will be a decline in raw information gained from consenting cookie tracking. As user information will become less available from third-party browser cookies, companies and marketing professionals will need to adapt and pivot their efforts in collecting, understanding, and reaching out to their audiences.
What Steps You Can Take
So where does this leave businesses and advertisers? Don’t fret. Sure there are concerns about how this will changing the industry, but businesses and marketers are no stranger to having to pivot and adapt.
Firstly, companies and marketers should both optimize themselves for when major platforms shift their sites. For example, with Apple’s iOS changes, here are 4 steps to prepare your Facebook advertising account for what’s to come. (Note these precautionary measures may not apply to everyone and vary between sites and businesses.) In addition to getting their interfaces ready for the shift, it is key that companies utilize the current cookie information they have access to before it disappears.
Here are 5 points to keep in mind when adjusting to the cookies-less future according to Advertising Week 360:
- Audit your existing data
- Prepare a plan for first-party data
- Strengthen marketplace partnerships
- Understand your audience contextually
- Leverage cookieless signals such as probabilistic data
Of this list, it is important to emphasize the increasing importance of first-party and CRM data. In this new age of data collection, the strongest data a company can use to understand their audience is the rich data they are able to collect themselves from their consenting users. Businesses and marketers will be tasked with creating new offerings and strategies to get the enthusiastic consent of their audiences. With a growing hub of first-party data, businesses and marketers will be able to explore more authentic and tailored targeting and retargeting strategies.
While this transition will be a major shift in how users, brands, and marketers operate online, keep in mind that this will become a worthwhile investment into a greater online experience overall. Though this does mean brands and marketers will have to strategize new ways to identify, target, and reach audiences, this change holds many opportunities to innovate along this unpaved road. All in all, the post-cookie digital landscape is wide open to new tools and strategies that engage in the user-business data exchange while improving trust and transparency along the way.
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Apple’s upcoming iOS 14 privacy update has many advertisers and app developers scrambling. In summer of 2020, Apple announced the rollout of their new operating system, iOS 14, which included new privacy features. As part of the new operating system, mobile users will be empowered to decide whether or not they want their data tracked as they peruse different apps and the internet. These new changes, scheduled to take place sometime in Spring 2021, will have a noticeable impact on the marketing landscape for platforms such as Facebook, Instagram, Google, and many more. In preparation for these changes, platforms and advertisers alike have to rethink how they do business, including implementing new strategies and tactics designed to minimize impact.
One major change involves Identifiers for Advertisers (IDFA) – Apple’s mobile ID that allows advertisers to target and track users within apps on iOS devices and shares user information with ad platforms, app developers, and mobile measurement providers. With the release of iOS14, users will be required to opt in in order to be tracked across apps and websites. As fewer users are expected to opt in, advertisers will have much less data to work with, thereby reducing the accuracy of their marketing abilities and the personalization of their ads.
As one of the most prominent social media platforms, Facebook has been challenged with the adoption of the new iOS 14 policy, as Facebook utilizes their user’s web data to monitor off-platform user traffic via Facebook Pixel and use this information to calibrate targeted advertising demographics, build retargeting audiences, and match users with programmed content. It is important to note that while Apple iOS 14 mobile users will be required opt in/opt out of data tracking, Android and other mobile users will continue reporting third-party data to sites, such as Facebook and Google. Nonetheless, Facebook has been forced to pivot by making changes to their advertising platform in order to mitigate the potential changes that can adversely affect ad campaigns.
Facebook has been quite vocal about the coming changes to their platform, and they urge advertisers to understand these updates which will undoubtedly impact their marketing practices. The big changes for Facebook’s advertising model include strict limiting of Facebook Pixel reporting capabilities from several reportable events down to just one, as well as capping the number of supported events for each domain down to only 8 prioritized events. Facebook will also require that advertisers on the platform verify their website domain and will reduce the accuracy and timeliness of conversion reporting as 28-day attribution windows are scaled down to default 7-day windows.
Google will also be adversely impacted by the changes in Apple user privacy settings, however their approach to the reduction of IDFA access seems to flow better among advertisers and developers. According to Adexchanger, although Facebook has indicated that it will stop entirely collecting IDFA information from its Apple users, Google will implement an AppTrackingTransparency (ATT) Framework, which will allow continued tracking information from Apple users who decide to opt in with minor changes to reporting tools such as Google Analytics.
As we progress into the era of enhanced security, user privacy and transparency, first-party data will be especially important. Actively capturing user information (email, phone, address), will be even more valuable, since their utility will likely increase over time as IDFA privacy protocols become stricter in the advertising space. More than ever, it is essential to develop a viable strategy for maximizing advertising spend and optimizing a results-driven multichannel approach. Perhaps the most viable way to stay ahead of the curve is to stay informed of privacy changes and policy updates for platforms that you advertise on and to be proactive instead of reactive.
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Traditional television advertising continues to dominate, and in fact, has been shown to substantially improve the performance of digital advertisements by forming lasting impressions among viewers and building trust with your target audience. According to a report from Mediascience, television ads running concurrently with digital ads increases the average viewership time by 300% compared to running digital alone and leads to an increased brand recall from audiences by over 200%. The combination of TV and digital advertising also boosts purchase intent by an average of 15% among viewers.
The main reason television advertisements pair so well with digital is because TV ads produce a halo effect which validates and solidifies a brand’s reputation. This phenomenon causes digital ads to also be perceived as more desirable compared to without a TV presence, which makes digital seem more exciting and less intrusive than TV ads alone. From a strategic perspective, incorporating both digital and traditional TV advertising into your business is likely to increase performance by a larger percentage than either medium alone.
TV ads also bring a higher level of attention to branding, as a recent study from EffecTv shows that 94% of audiences watch the full length of TV ads, compared to only 78% of viewers watching full length digital ads. We also know that lesser known brands benefit more from TV ads than established ones, as well-known brands such as Target or Coca-Cola experience a diminishing return from a saturated market of television brand awareness, making it the perfect opportunity for smaller businesses to start casting a wider net with their marketing budgets.
According to a study conducted by TVSquared, television advertisements drive an additional 23% average weekly increase in website traffic while TV ads air. Conversely, when a TV advertiser goes off-air, they see a weekly reduction of website traffic by an average of 20%. Pausing TV airings can also reduce a brand’s visibility and awareness, which leads to lost opportunities of converting leads into potential sales.
Consumer’s trust in television as a credible source of new information makes it an essential factor in your direct marketing plan, as a solely digital strategy does not create the same level of brand reputation as combining the two. Mediascience also reports that TV ads are viewed on average more than twice as often as digital ads, so it makes sense that seeing an ad on both TV and digital will yield a higher level of audience interest and engagement.
It is essential for brands to develop a consistent TV schedule to reach their target audiences and attract new customers by running a wide range of different airings and channels. Building trust with customers has never been more important at a time such as this, utilizing the halo effect of TV paired with digital advertising will position your business to take full advantage of an omni-channel marketing strategy.
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At the beginning of September 2020, retail space vacancy rates hit a historic high of 9.8%, which is largely fueled by Covid-19 shutdowns and safety concerns across the nation. The demand for commercial retail space has been slowly decreasing over the past few years as retail transitions to digital, but now with Covid-19, there is a surplus of availability without enough customers to lease out this vacant space.
In response to this change in demand, mall operators are forced to roll up their sleeves and focus on actively finding new tenants, and developers are beginning to repurpose mall space for a number of businesses, including schools, doctor’s offices, long term storage facilities, and even residential housing. While some businesses are feeling the impact of reduced physical retail space, large direct to consumer sellers such as Amazon are racing to secure vacant mall spaces in proximity to urban areas and adjacent neighborhoods to meet the increasing demand of online order deliveries.
Currently, Amazon is aiming to convert several former JC Penny and Sears department store locations in micro-fulfillment warehouses, strategically located close to urban communities which will allow orders to be delivered quicker and at lower shipping costs. Some retail business owners speculate that the introduction of micro-fulfillment centers in conventional mall spaces will increase the rent for struggling businesses, yet many property managers are even negotiating discounted rates to find long-term tenants that can reliably cover overhead costs.
Amazon recently reported that it doubled its net profit to $5.2 billion in its 2020 Q2 earnings statement, which indicates that the ecommerce giant is not going anywhere. The future of vacant mall space may seem uncertain as many businesses and consumers alike are cautious about the upcoming holiday shopping season, however the bigger picture of retail is much brighter than it may appear. Overall, Amazon retail sales still only account for roughly 5% of all retail spend across the country, which goes to show that no single force is dominating the entire retail marketplace.
With the new changes in physical retail and online ecommerce, it’s more important than ever to establish a sound marketing plan and take advantage of an omni-channel advertising strategy to reach new customers. At River Direct, we offer a number of performance driven marketing solutions to help your retail business grow through linear television, Amazon listings, over-the-top/connected-tv, and social media marketing.
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