Gartner

“Same old, same old”: Retailers are sending the same e-mails to the same people.

Phillip Nones Advertising, Branding, Direct Marketing, Marketing, Marketing Communications, Sales , , , ,

As with so many aspects of marketing these days, data segmentation is key to the success of retailers’ sales efforts.

E-marketing may well be the most cost-effective method for reaching customers and driving business, but a recent analysis by Gartner of retail e-marketing activities shows that many retailers are employing tactics that are neither well-targeted … nor particularly compelling.

The Gartner analysis was performed earlier this year and published in a report titled Discount Emails — The New Playbook.  The analysis covered more than 98,000 e-mail campaigns conducted by 100 national retail brands.

Trumpeting discounts is one of the oldest tactics in marketing, of course, so it comes as little surprise that those sales messages are pervasive in e-marketing as well.

In fact, Gartner finds that more than half of all e-mail campaigns by retailers feature discounts in their subject lines.  Those discount messages are typically sent to nearly 40% of the retailers’ e-mail list — meaning that discount messaging targets broad segments of customers.

Gartner finds that those discount offers generate a ~16% open rate, on average.

Contrast this with retargeting and remarketing e-mails. They make up a much smaller fraction of the e-mail volume, but pull much higher open rates (around 31%).  Abandoned shopping cart e-mails generate an even higher average open rate of 32%.

“Welcome” e-mails tend to do well, too — in the 25% to 30% open rate range.

Gartner’s conclusion is as follows:

“Brands that employ less frequent, but timely, relevant e-mails triggered by customer site engagement or transaction outperform their peers.”

Gartner also found that the average national retail brand has more than 25% of its e-mail database overlapping with other national retailer e-lists, making it even more important for brands to differentiate the language of their e-mail subject lines and to engage in more data-driven e-mail targeting in order for their marketing to stand out from the pack.

Let’s see if the national retail brands get better at this over the coming year.

Blockchain Technology: Hype … or Hope?

Phillip Nones Business, Security , , , , , , ,

Recently I read a column in MediaPost by contributing writer Ted McConnell (The Block Chain [sic] Gang, 3/8/18) that seemed pretty wide of the mark in terms of some of its (negative) pronouncements about blockchain technology.

Not being an expert on the subject, I shared the column with my brother, Nelson Nones, who is a blockchain technology specialist, to get his “read” on the article’s POV.

Nelson cited four key areas where he disagreed with the positions of the column’s author – particularly in the fallacy of conflating blockchain technology – the system of keeping records which are impossible to falsify – with cryptocurrencies (systems for trading assets).

But the bigger aspect, Nelson pointed out, is that the MediaPost column reflects a general degree of negativity that has crept into the press recently about blockchain technology and its potential for solving business security challenges.  He noted that blockchain technology is in the midst of going through the various stages of Gartner’s well-known “hype cycle” – a model that charts the maturity, adoption and social application of emerging technologies.

Interested in learning more about this larger issue, I asked Nelson to expand on this aspect. Presented below is what he reported back to me.  His perspectives are interesting enough, I think, to share with others in the world of business.

Hyperbole All Over Again?

Most folks in the technology world – and many business professionals outside of it – are familiar with the “hype cycle.” It’s a branded, graphic representation of the maturity, adoption and social application of technologies from Gartner, Inc., a leading IT research outfit.

According to Gartner, the hype cycle progresses through five phases, starting with the Technology Trigger:

“A potential technology breakthrough kicks things off. Early proof-of-concept stories and media interest trigger significant publicity. Often no usable products exist and commercial viability is unproven.”

Next comes the Peak of Inflated Expectations, which implies that everyone is jumping on the bandwagon. But Gartner is a bit less sanguine:

“Early publicity produces a number of success stories — often accompanied by scores of failures. Some companies take action; most don’t.”

There follows a precipitous plunge into the Trough of Disillusionment.  Gartner says:

“Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investment continues only if the surviving providers improve their products to the satisfaction of early adopters.”

If the hype cycle is to be believed, the Trough of Disillusionment cannot be avoided; but from a technology provider’s perspective it seems a dreadful place to be.

With nowhere to go but up, emerging technologies begin to climb the Slope of Enlightenment. Gartner explains:

“More instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.”

Finally, we ascend to the Plateau of Productivity. Gartner portrays a state of “nirvana” in which:

“Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off. If the technology has more than a niche market, then it will continue to grow.”

Gartner publishes dozens of these “hype cycles,” refreshing them every July or August. They mark the progression of specific technologies along the curve – as well as predicting the number of years to mainstream adoption.

Below is an infographic I’ve created which plots Gartner’s view for cloud computing overlaid by a plot of global public cloud computing revenues during that time, as reported by Forrester Research, another prominent industry observer.

Cloud Computing Hype Cycle

This infographic provides several interesting insights. For starters, cloud computing first appeared on Gartner’s radar in 2008. In hindsight that seems a little late — especially considering that Salesforce.com launched its first product all the way back in 2000. Amazon Web Services (AWS) first launched in 2002 and re-launched in 2006.

Perhaps Gartner was paying more attention to Microsoft, which announced Azure in 2008 but didn’t release it until 2010. Microsoft, Amazon, IBM and Salesforce are the top four providers today, holding ~57% of the public cloud computing market between them.

Cloud computing hit the peak of Gartner’s hype cycle just one year later, in 2009, but it lingered at or near the Peak of Inflated Expectations for three full years. All the while, Gartner was predicting mainstream adoption within 2 to 5 years. Indeed, they have made the same prediction for ten years in a row (although I would argue that cloud computing has already gained mainstream market adoption).

It also turns out that the Trough of Disillusionment isn’t quite the valley of despair that Gartner would have us believe. In fact, global public cloud revenues grew from $26 billion during 2011 to $114 billion during 2016 — roughly half the 64% compound annual growth rate (CAGR) during the Peak of Inflated Expectations, but a respectable 35% CAGR nonetheless.

Indeed, there’s no evidence here of waning market interest – nor did an industry shakeout occur. With the exception of IBM, the leading producers in 2008 remain the leading producers today.

All in all, it seems the hype curve significantly lagged the revenue curve during the plunge into the Trough of Disillusionment.

… Which brings us to blockchain technology. Just last month (February 2018), Gartner Analyst John Lovelock stated, “We are in the first phase of blockchain use, what I call the ‘irrational exuberance’ phase.”  The chart below illustrates shows how Gartner sees the “lay of the land” currently:

Blockchain Hype Cycle

This suggests that blockchain is at the Peak of Inflated Expectations, though it appeared ready to jump off a cliff into the Trough of Disillusionment in Gartner’s 2017 report for emerging technologies. (It wasn’t anywhere on Gartner’s radar before 2016.)

Notably, cryptocurrencies first appeared in 2014, just past the peak of the cycle, even though the first Bitcoin network was established in 2009. Blockchain is the distributed ledger which underpins cryptocurrencies and was invented at the same time.

It’s also interesting that Gartner doesn’t foresee mainstream adoption of blockchain for another 5 to 10 years. Lovelock reiterated that point in February, reporting that “Gartner does not expect large returns on blockchain until 2025.”

All the same, blockchain seems to be progressing through the curve at three times the pace of cloud computing. If cloud computing’s history is any guide, blockchain provider revenues are poised to outperform the hype curve and multiply into some truly serious money during the next five years.

It’s reasonable to think that blockchain has been passing through a phase of “irrational exuberance” lately, but it’s equally reasonable to believe that industry experts are overly cautious and a bit late to the table.

________________________

So that’s one specialist’s view.  What are your thoughts on where we are with blockchain technology? Please share your perspectives with other readers here.

Thanks to IOT, search is morphing into “just-in-time knowledge.”

Phillip Nones Advertising, Business, Content Creation and Content Management, Education, Marketing, Marketing Communications, Social Commentary , , , , , , , , , ,

aeIn today’s world of marketing, it’s been obvious for some time that the pace of technological change is dramatically shortening the life cycle of marketing techniques.

Consider online search. Twenty-five years ago it was hardly a blip on the radar screen.  Picking up momentum, paid search soon began to rival traditional forms of advertising, as companies took advantage of promo programs offered by Google and others that aligned neatly with consumers when they were on the hunt for products, services and solutions..

Google has attracted billions upon billions of dollars in search advertising revenue, becoming one of the biggest corporations in the world, even as entire industries have grown up around optimizing companies’ website presence and relevance so as to rank highly in search query results.

And now, thanks to continuing technology evolution and the emergence of the Internet of Things, the next generation of search is now upon us – and it’s looking likely to make keyboards and touchscreens increasingly irrelevant within a few short years.

afhSearches without screens are possible thanks to technology like Google Assistant, Amazon Echo/Alexa, and software development kits from providers like Soundhound and Microsoft.

This past October, market forecasting firm Gartner came out with an interesting prediction: Within four years, it forecasts that ~30% of all searches will be carried out without a screen.

It’s happening already, actually. In web search, Amazon Echo answers voice queries, while the Bing knowledge and action graph allows Microsoft to provide answers to queries rather than a set of answer possibilities in the form of links as has been the case up to now.

Gartner envisions voice interactions overtaking typing in search queries because it is so much easier, faster and more intuitive for consumers. By eliminating the need for people to use eyes and hands for search and browsing, voice interactions improve the utility of web sessions even while multitasking takes on ever-increasing degrees of shared activity (walking, driving, socializing, exercising and the like).

Related to this, Gartner also predicts that one in five brands will have abandoned offering mobile apps by 2019. Already, many companies have found disappointing levels of adoption, engagement and ROI pertaining to the mobile apps they’ve introduced, and the prognosis is no better going forward; the online consumer is already moving on.

Gartner’s predictions go even further. It envisions ever-higher levels of what it calls “just-in-time knowledge” – essentially trading out searching for knowledge by simply getting answers to voice queries.

Speaking personally, this prediction concerns me a little. I think that some people may not fully grasp the implications of what Gartner is forecasting.

To me, “just-in-time knowledge” sounds uncomfortably close to being “ill-educated” (as opposed to “uneducated”).  Sometimes, knowing a little bit about something is more dangerous than knowing nothing at all. Bad decisions often come from possessing a bit of knowledge — but with precious little “context” surrounding it.

With “just-in-time knowledge,” think of how many people could now fall into that kind of trap.

Apps come of age. (Translation: Average app revenues are cratering.)

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Smartphone app developmentWell, it was nice while it lasted.

App developers have had a pretty lucrative playing field over the past several years. But like so much else in cyberspace where there’s a “drive to the bottom,” paid apps are no longer the path to guaranteed revenue riches they might have been once.

According to mobile market research firm Research-2-Guidance, total paid app revenues continued to grow in 2012 – and by a healthy rate of 27% — to reach $8 billion.

But at the same time, the average revenue generated per paid app fell at the very same 27% rate.

As a result, the average revenue generated per paid app declined from ~$26,700 in 2011 to just ~$19,500 in 2012.

Research-2-Guidance posits that the decline in average sales per paid app could ultimately lead to a situation where developing paid apps is no longer a profitable endeavor.

“There are now so many applications available that supply even exceeds demand,” company spokesperson Vincenzo Serricchio noted in a summary statement.

In line with the notion that “everything in cyberspace wants to be free,” information technology research and advisory firm Gartner projects that by 2016, nearly 95% of app storefront downloads will be free rather than paid apps.

And even among the paid apps, the Gartner analysis estimates that nine out of ten of these app downloads will be priced at $3 or lower.

Yet another forecast – this one by Strategy Analytics – predicts that the average price for all phone apps (free and paid combined) will drop to just 8 cents per app by 2017.

Most major brands don’t really care about pushing paid versus free apps, as they typically use them for boosting branding exposure and engagement rather than for revenue generation per se. However, with so many quality free app options being offered, the question is how many app developers – particularly those in the gaming field – ultimately will find the new landscape unprofitable or otherwise unpalatable.

Stay tuned.

Growth hits the skids in two key industry segments.

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economic doldrumsAs further proof that the worldwide economy is sputtering in a pretty major way, here come two reports on stalling growth in two key industry segments: hospitality and mobile communications.

Technology research and advisory firm Gartner, Inc. has announced that it is revising its 2012 mobile growth projections downwards.

In fact, Gartner is reporting that worldwide sales of mobile phones actually declined nearly 3% during the second quarter of the year.  That’s a rude awakening for a market segment that’s been nearly impervious to downward economic pressures up to this time.

And on the hospitality front, industry research firm Hospitality Resource Group (HRG) is reporting that worldwide hotel rates during the first half of 2012 are essentially flat, following a significant rise charted throughout all of 2011.

While a smattering markets scattered around the world (Moscow, Mexico City, Dubai, San Francisco) have charted hotel rate increases in the 10%+ range, there were far more urban areas that experienced rate declines, led that dramatic drops in the following markets:

  • Bangalore, India: -30%
  • Barcelona, Spain: -26%
  • Munich, Germany: -20%
  • Bombay (Mumbai), India: -18%
  • Istanbul, Turkey: -16%

It may be comforting to hear the reassuring words of select politicians in Europe, Asia and North America as they reiterate that recovery is just around the corner.

But the facts on the ground are delivering an unmistakable message that’s far different – the commercial equivalent of a skunk at the garden party:  The economic doldrums aren’t going away anytime soon.

Does Gartner’s “Hype Cycle” Chart Apply to Social Media?

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Hype Cycle Chart (Gartner, Inc.)That’s what author and digital marketing specialist Jeff Molander seems to think. In fact, it’s the topic of an article he wrote recently in Target Marketing magazine titled “What Game Changer? Moving past the Social Media Revolution that Never Was.”

As can be seen in the diagram at right, the Gartner “Hype Cycle” model begins with a technology trigger that generates a groundswell of interest and expectations, which is then followed by a crash when the early expectations fail to pan out.

Things do move forward again – much more slowly – as the sober reflection on early disappointments helps temper expectations to more realistic levels, characterized by Gartner as a “plateau of productivity.”

It is Mr. Molander’s contention that the characterization of social media as a “game-changing” phenomenon has been so overstated and sensationalized, most companies today are probably working against their own best interests in how they’re dealing with it.  Which is to say, not using it properly as a selling tool.

Here’s how Mr. Molander puts it: “The difference between fooling around with social media and selling with it relies on the use of time-tested direct response practices – not new tools and techniques.”

Those basic practices include:

  • Solving customers’ problems
  • Provoke customer responses that connect to the sales funnel
  • Discovering customers’ needs as they evolve … then using this knowledge to improve the response rate

The companies that are successful in selling goods and services via social media are promoting interactions in ways that answer questions and solve problems.

Of course, there is absolutely nothing new or novel about this: “Solving customer challenges” has always been an effective way to cultivate AIDA (awareness, interest, desire and action).

It also continues to be the best way to move customers toward making a purchase.

What social media can do is make the process easier to accomplish, due to social’s interactive nature. Approached in the proper way – and done with regularity – facilitating digital Q&A interactions will help leverage and drive sales.

I think Mr. Molander’s point of view is correct. Using social media as a platform for sales isn’t about some kind of “secret formula” for content creation or figuring out the ideal time to publish a Twitter tweet or blog post. It’s about using the “new” platforms to facilitate “old” sales concepts.

You know – the ones that work.

The Mobile Web: Great Promise + Growth Pains

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It’s clear that the mobile web is a big growth segment these days. Proof of that is found in recent Nielsen statistics, which have charted ~34% annual growth of the U.S. mobile web audience, now numbering some 57 million visitors using a mobile device to visit web sites (as of late summer 2009).

And now, a new forecast by the Gartner research firm projects that mobile phones will overtake PCs as the most common web access devices worldwide … as early as 2013. It estimates that the total number of smartphones and/or browser-enhanced phones will be ~1.82 billion, compared to ~1.78 billion PCs by then.

Gartner is even more aggressive than Morgan Stanley’s prediction that the mobile web will outstrip the desktop web by 2015.

So, what’s the problem?

Well … consumer studies also show that web surfing using mobile phones continues to be a frustrating experience for many users. In a recent survey of ~1,000 mobile web users, web application firm Compuware/Gomez found that two out of every three mobile web users reports having problems when accessing web sites on their phones.

Because people are so used to fast broadband connections – both at home and at work – it’s only natural that their expectations for the mobile web are similarly high. To illustrate this, Gomez found that more than half of mobile phone users are willing to wait just 6 to 10 seconds for a site to load before moving on.

And what happens after they give up? Sixty percent say they’d be less likely to visit the site again. More importantly, ~40% report that they’d head over to a competing site. As for what would happen if the mobile web experience was as fast and reliable as on a PC, more than 80% of the respondents in the Gomez study claim they would access web sites more often from their phones.

For marketers, this means that to maximize their success in the mobile world, they should reformat web sites to conform to the small-form factor of handheld devices. And Gartner also notes that “context” will be the king of the hill in mobile – more than just “search” – in that it will deliver a personalized user experience. New functionalities such as Google’s “Near Me Now” are providing information on businesses, dining and other services that are in the proximity of a mobile user’s location. These and other innovations are opening up whole new dimensions to “seeking and finding” in the mobile web world.