Its name has become a verb meaning “to search,” but as users shift to mobile devices, Google Inc. GOOG -0.40% is suddenly faced with the threat that its search engine—and its advertising business—are becoming less relevant.
The company was built with the help of an army of “spiders” deployed to crawl the Web, and sophisticated algorithms to rank the value of pages. But in the mobile age, those spiders can’t easily navigate the apps where users are spending most of their time, threatening Google’s roughly $50-billion advertising business.
In response, Google in the fall launched an initiative to better see—and direct—what smartphone and tablet users do on their devices. The effort seeks to mimic what Google built on the Web, with an index of the content inside mobile apps and links pointing to that content featured in Google’s search results on smartphones.
Other big Web companies, including Facebook Inc. FB -1.47% and Twitter Inc., TWTR -2.37% are pursuing similar strategies. Facebook is having early success with ads that prompt users to install apps.
Google’s initiative has won several prominent backers, including online encyclopedia Wikipedia, travel site Expedia, EXPE +0.64% restaurant guide Open Table and the IMDb movie database, all of which are incorporating links into their apps. A search for movie information using the Google search app on an Android phone, for example, may show a link to the movie’s page within the IMDb app, provided the smartphone user has the app installed.
Before there was Don Draper, there was David Ogilvy. “The father of advertising,” as he is sometimes referred to, was all about valuing the consumer’s intelligence, testing and “the big idea.” He helped forge a new, creative path for advertising in the ’60s that we now all look back on as the Golden Age of the advertising industry.
Unsurprisingly, a lot of what Ogilvy had to say back then still applies to the industry today — and it is perhaps even more important to remember some of his soundbites now with technology and the pace of the digital world forcing advertisers to be faster, more agile and more creative in real time.
Here are five David Ogilvyisms — shown as Don Draper macros, because why not? — that are still relevant today.
When Scratch polled 3,500 millennials to find out which industry was most prime for disruption, the results were clear: Not only did banks make up four of their top 10 most hated brands, but millennials increasingly viewed these financial institutions as irrelevant.
The three-year study from Scratch, an in-house unit of Viacom that consults with brands, found that a third of millennials believed they’ll be able to live a bank-free existence in the future. In the age of Simple, Square, and Bitcoin, these millennials, defined as those born between 1981 and 2000, overwhelmingly believed that the way they access money and pay for things will be completely different in five years.
For Nina Brown, moving into her second home in an Atlanta suburb a decade ago was an act full of symbolism.¶Homeownership was a way for Brown to prove she could strike out on her own after a divorce. It showed she had the finances — a good job and good credit — to provide a stable environment for her son, Jaylen. Moreover, with housing prices soaring, her purchase of a new townhouse in a gated community was a big step toward building a real estate investment portfolio and nest egg.¶That was before tenants in two of the other three properties she owned lost their jobs and the grand plans she had for her life unraveled. ¶ At the age of 26, Brown found herself among the more than 5 million Americans who have lost their houses to foreclosure in the era of the Great Recession. And like many of them, Brown says she is not in a rush to jump back into the housing market.
“I don’t have any intention of buying anytime soon. The economy is still unstable, and it could end up being a financial burden,” said Brown, now 33. She rents a three-bedroom townhouse in another Atlanta suburb, where she lives with Jaylen on weekends, and a small apartment in the District near Howard University, where she works during the week as an executive producer at WHUR-FM radio.
Using smartphones at the movies may be a no-no. But other than that, mobiles are an integral part of the experience, from ticket sales to theater directions, a fact that movie and entertainment marketers would do well to heed.
Consumers increasing use smartphones for their purchases—in the case of movie tickets, 30 percent are bought on mobile phones, according to a new report from the Interactive Advertising Bureau and InMobi. And 87 percent of moviegoers researched a movie on smartphones after seeing an ad for that movie in another medium.
The report, which just looked at smartphone use and did not include tablets, highlights just how much people rely on smartphones for their moviegoing decisions.
Notes and slides from a recent mobile strategy talk:
Good morning, ladies & gentlemen. Today, I want to talk with you about opportunities.
How do I, a broker, seize the opportunities in front of me. In this case “mobile”; today and tomorrow?
I submit that job one is to consider if the new new thing, or the shiny object, supports our larger strategy (Chart 1)? Or does it add complexity and simply increase the size of our mess?
I have a real blessing. That is the opportunity to travel and talk with real estate firms. I often compare websites and if they have them, apps. In this example (Chart 2), I compare the number of choices a customer faces when visiting the broker’s home page. I’ve run this on the Real Trends 500 a few times. The winner, or I suppose, loser has 664 links or actions on their home page. 664. Let’s pause to consider just how this happens. The website, in this case, is created for machines, not humans. SEO. Yesterday’s game (I can’t resist: those of you still playing that game might want to see what is happening to google’s per click revenue and a 2nd data point: The App Store, is now about half the size of google, and it grew 34% last year. It alone would rank at number 130 in the Fortune 500). How does 664 happen? We keep adding to the pile.
The thin bar on the far right, well, that’s our 5th generation native iPhone, iPad and Google Play app. Think about your agents and clients. How much complexity do they face, compared to the apps they use every day? And those apps people use everyday, do they require web style menus first? No.
How many systems must your agents login to to do their job? I’ve observed a number of firms over the past year, this chart (Chart 3) includes 6. What are the odds of adoption, efficiency? How can you possibly train and support so many systems? 22, 16, 13, 11. It’s easy to write a check if you have the money. Strategy, training and implementation are hard. But that is the only way to build long term value. I’m reminded of a large franchise that offered certain agents a new iPad last year as a recruiting chotchke. Of course, this firm has no software that runs on the iPad.
Over my 18 years working with real estate technology, I’ve seen brokers fall into two camps: those who check the box and add to the pile and those who view technology as an essential part of their business strategy.
The last two charts illustrated the choices we face when considering mobile opportunities. Let’s turn to the upside.
This chart (Chart 4) reveals a mid size client’s public app monthly usage over the past four years. Usage. Real data.
Why might app usage grow so quickly?
Let’s think about the most popular apps. First, they are real. Second, they provide immediate information, not a bunch of menus. Facebook tried to wrap a website into an app and it failed. They have now written all of their apps natively for speed and user experience reasons. Yet, several real estate firms have adopted that strategy, wrapping websites into apps. What does that mean?
It means that you end with with a slow and unusual user experience.
Three real estate apps. One makes you visit a web page, another, makes the user wait every time it starts and a third provides immediate information. These examples (Chart 5) illustrate the choice: optimize the past or create for the new.
Why cling to the past?
It’s because so much software was written during the PC era, which has come to a close. This chart (Chart 6) tells the story. ‘
We like to skate to where the puck is going. A few data points to consider:
- Microsoft’s share of connected computers, 2009 to 2013. Most software, including a number of mobile real estate schemes, are written for the old era. The era of mice, clicks and big, power hungry computers.
- Americans used smartphones more than PC’s in December, 2013
iPhone and iPad outsold Windows in 2012. Google Play did the same. User expectations and behavior are changing fast. Weight Watchers stock dropped 25% two weeks ago. Why? Competition from diet apps. Health related apps are the next big frontier. Successful apps just work through a combination of speed and smart clouds services.
- Apple’s Cloud revenues are what % of google’s annual income? 50%; 34% y/y growth. That business would rank 130 in the Fortune 500. That’s called an eco system.
Why are the giants battling over app ecosystems? Nielsen reported last week that smartphone owners spend 86% of their time using apps vs 14% on the mobile web.
In closing, I would like to share a few broker eco-system opportunities. I remember working with a client in the late 1990’s. We had just implemented our cloud based advertising automation tools. Ad office admin suddenly had 8.5 hours of time to do other things. The old, complex way required 9 hours per week. The new, cloud automation needed only 30 minutes. More time was available for agent training, marketing plans, help agents with their clients, create contact plans & campaigns, work on the newsletter or write a blog post.
Apps are changing everything, from Fortune 500 companies to individuals. This means that your agents, buyers, sellers and managers expectations are changing and, likely already have.
Consider the jobs to be done within your organization, from lead management, to staying in touch with contacts, creating, sharing and signing documents, managing showings, the CMA, buyer presentations to core service marketing.
How simple is it for agents to incorporate your mortgage, title and insurance partners into their documents, cma, leads, closing and customer for life programs?
Before adding to your technology pile, consider the importance, cost and relevance of current practices and tools.
One of the mysteries of the housing boom and bust is how speculation in Las Vegas and Phoenix, with their wide open spaces, got so heated. With so much land on supply, you’d think it would be hard for a bubble to get started.
A partial answer is provided by Massachusetts Institute of Technology economist Albert Saiz’s research on land constraints pointed to in Thursday’s Heard on the Street column on home builders: The wide open spaces of Las Vegas and Phoenix aren’t as wide open as popularly thought. But only a partial answer. Economists are busy trying to figure out the other part.
Using satellite-based data, Mr. Saiz determined the amount of land available for development in 269 U.S. metropolitan areas. The more hills and other impediments an area has, the less land can be developed. Each metro area got an “elasticity score” — the lower the score, the more difficult it is to put up a home. The range of scores for the top 100 metro areas by population ranged from 0.6 to 5.5. Las Vegas, with a 1.39, and Phoenix, with a 1.61, are in the lower scoring half.
Yet home prices ramped up far more in Las Vegas and Phoenix during the bubble than in many more land-constrained areas, and then saw some of the steepest declines in the country. What made them so special? A couple of economics Ph.D candidates at Harvard University, and another one at Princeton University, have hit on some possible answers.
Classical theories assume the firm has access to reliable signals to measure the causal impact of choice variables on profit. For advertising expenditure we show, using twenty-five online field experiments with major U.S. retailers and brokerages ($2.8 million expenditure), that this assumption typically does not hold. Evidence from the randomized trials is very weak because individual-level sales are incredibly volatile relative to the per capita cost of a campaign — a “small” impact on a noisy dependent variable can generate positive returns. A calibrated statistical argument shows that the required sample size for an experiment to generate informative confidence intervals is typically in excess of ten million person-weeks. This also implies that selection bias unaccounted for by observational methods only needs to explain a tiny fraction of sales variation to severely bias observational estimates. We discuss how weak informational feedback has shaped the current marketplace and the impact of technological advances moving forward.
In possibly the first survey of its kind, in 1983, polling firm Louis Harris & Associates asked U.S. adults if they had a personal computer at home and, if so, if they used it to transmit information over telephone lines.2 Just 10% of adults said they had a home computer and, of those, 14% said they used a modem to send and receive information. The resulting estimate was that 1.4% of U.S. adults used the internet.
Personal computer owners were then asked, “Would your being able to send and receive messages from other people…on your own home computer be very useful to you personally?” Some 23% of the computer owners said it would be very useful, 31% said it would be somewhat useful, and 45% of those early computer users said it would not be very useful. And 74% of computer owners agreed with the statement, “The trouble with purchasing and bill-paying by computer is that it will be too easy to buy too many things that aren’t in the family budget.”
Looking back, this should come as no surprise. A blinking cursor on a blank screen was not exactly an invitation to dream, at least by most people’s estimates. The internet would remain a clunky, text-based resource for another six years.
Americans’ attitudes toward an ideal marriage have changed dramatically over the past several decades. The share of the public that favors a marriage in which husband and wife both work and take care of the house and children is up from 48% in 1977 to 62% in 2010. During the same period, the share that prefers the model of the breadwinner husband and homemaker wife is down from 43% to 30%.
Young adults are often at the forefront of changing social norms. Adults younger than 30 are most likely to favor a dual-income marriage model (72%), over the breadwinner husband-homemaker wife model (22%). This is even more true for young women, who are more likely than young men to prefer dual-income marriage (78% vs. 67%). Young adults are also more positive about the impact on families of increasing numbers of women entering the workforce.