Author Archives: Peter

LocalOnliner Bookshelf: The 2016 Innovation Mission Report Focuses on ‘Culture’

The local media companies have been shrinking and becoming increasingly irrelevant. Yet, they drive on as business entities, raising their circulation prices and reducing their days of operation to cover ad shortfalls. (I mostly stopped writing about traditional local media companies several years ago.)

Can they work towards becoming relevant again? Outside of companies that have major investments being poured into them (i.e. Jeff Bezos’ wonderfully regenerated Washington Post), it is hard to see that they’ll have a lot of money for re-dos.

But money hasn’t been everything. While the Ubers of the world raise billions of dollars to carve out and defend a niche, money wasn’t really much of a factor in the launch phase of many of the most “relevant” companies (Snapchat, Facebook, YouTube et al).

A ‘can do’ culture and clearly stated value proposition and mission is actually the biggest driver of initial success. A newspaper might, for instance, launch a video studio, new ad products, form partnerships in the new “distributed economy,” and even add a Virtual Reality component. But first, it must abandon the old mentalities. As one participant noted, it isn’t just about free food and ping pong anymore.

That’s the fairly obvious but worth repeating conclusion of this year’s Innovation Mission Report, which summarizes the Local Media Association’s seventh annual tour around New York and Silicon Valley. This year, the tour went to Facebook, YouTube, Instagram, Apple News, NYC Media Lab, xAd, E.W. Scripps Company, Cxense, Calkins Media, Newsy, Thumbtack, San Francisco Chronicle, Next¬door, and Tout.

The tour is a lot of fun and the report presents a lot of useful ideas for building an ideal culture, and refocusing on some cutting edge channels. “Local media companies need to act now,” notes the introduction. “They need to think bigger and bolder. They need to dramatically change their culture and continue to diversify their revenue.”

The Evolution of Content Farms (and New Ways to ‘Feed to Beast’)

“Content farms” like Demand Media, Associated Content, and Merchant Circle were once the big bet for filling out blogs. They’d “feed the beast.” Most of the content, however, turned out to be overly-generic and unenlightening. Sites that focused on verticals and required specialization were especially out of luck.

But there’s light at the end of the tunnel. In recent months, things have evolved quickly. Here’s what we are seeing:

1. Nozzl provides continuously streamed articles on specific subjects via a “player” on your website. Nozzl, launched by vets of Portland’s Oregonian, is inexpensively priced at $5.99 per month.

2. Quintype, a free alternative to WordPress, makes content available on given subjects from publishers seeking broader distribution.

3. Sociative curates sites from all over the Web and social media, and distributes them as custom feeds to blog owners. We’re especially intrigued by Sociative, a three-year-old San Francisco company that has determined that there is an “ocean of content” on many subjects. For instance, it provides a highly customized newsfeed of “foodie” content for The James Beard Foundation, which is dedicated to good cooking.

What Sociative is trying to avoid are the stories that are overly familiar –i.e. the Associated Press story that is reprinted on dozens of websites. It also seeks to avoid stories that are syndicated, via machine learning, from a small list of popular sites. (There’s more on this at NextWaveSMB)

SFSW16: Loyalty Must Emulate ‘Cheers,’ Not ‘Minority Report’

Loyalty products ride the crest of big data. They drive engagement and upsells based on customer behavior, and provide the analytics to steer future marketing efforts. But for SMBs, they are also an extra marketing expense and their value is still being established.

After five years or more in the market, we’d conservatively estimate there are fewer than 80,000 SMBs using electronic loyalty products today. Speaking at SFSW16 in San Francisco this week, FiveStars CEO Victor Ho, Belly CEO Logan LaHive and Empyr CEO Jon Carder weighed in on the value proposition and provided a progress report.

Ho noted that loyalty is just one components of a broader customer engagement suite that is being offered (including analytics, payment processing and marketing support.) But the digital punch card remains the most valuable component of the suite.

“In the past, you’d walk into a business, and they’d know who you are,” said Ho. “Now the only thing they compete on is service and personalization.”

Technology can help, adds Ho. But hopefully, the experience will be more like the friendly “Hey Norm” experience of Cheers than the cyborg vision of Minority Report. “You want to build on the existing relationship,” said Ho. “It goes so much further than saving $2” on a coupon.

FiveStars doesn’t report on the number of SMBs it has, but its online map shows more than 1,000 SMBs in the Bay Area. Last year, the company said it was on target to sign up over 8,000 SMBs.

Coffee shops, retailers and salons are its top customers, says Ho. Marijuana shops have been among its fastest growing categories and now represent its second largest retail category.

Belly’s LaHive, meanwhile, said the company and industry have learned a lot over the past five years. At one point, there were 30 companies in the space but now there are just a few, he noted. The problem in the early days was that there was an assumption that it would be driven by new tech channels.

“We put a lot into (Apple’s) Passbook,” says LaHive. But those products are really only about early adopters. Payments and Beacons are the connecting points for retail marketing in those cases. “It doesn’t go through the loyalty programs,” he said.

Yet loyalty programs remain vital for scaling store-to-consumer relationships and targeting specific communications to consumers, he says. And there is a demand for it. The success of loyalty programs such as Starbucks point the way. Chick Fil-A’s new loyalty app is the number one category app in The Apple Store this week, he noted.

LaHive reports that Belly has about 10,000 SMB accounts, and also is beginning to target Enterprise accounts that have local stores as well. Going forward, it is all about physical retailers.

Empyr’s Carder, in a separate SFSW16 session, said the key to winning over SMBs was to bridge the gap in attribution. “There is no way to tell if any of the online advertising has resulted in a an instore sale, or created burn out and attrition, he said. Moreover, the data platforms are valuable for estimating traffic, but they don’t allow you to track 100% of the data.

“They are more of an estimate. They are designed for local advertisers,” he said.

Card- linked “Pay Per Sale” platforms that can track all the data, however, are closer to the mark. Carder notes that MasterCard, Visa and Amex have revolutionized this part of the industry by making their purchase data available “in less than one minute.”

SFSW16: Airbnb Posits Itself as Hyperlocal’s New Face

Airbnb is focusing on posting hyperlocal information as part of its mission to add value and interest in its far-flung listing network. Roughly 75% of its 2.4 million listings in 340,000 cities are located outside of traditional urban centers.

North American Regional Operations head Aaron Zifkin, speaking this week at StreetFight Summit West in San Francisco, said the company is focused on expanding its guidebooks. “We try to get all the information that is useful for everyone who is travelling,” said Zifkin.

Top topics for the guidebooks include restaurants, performances, parks and trails to appeal to everyone from foodies to joggers. Airbnb is culling the information in partnerships with local chambers of commerce and downtown business development districts, along with hosts and other sources.

One of its most ambitious efforts was with the local government in Brooklyn. Airbnb estimates it has added over $200 million to the local economy.

It is a persuasive argument, but there is, of course, also a political angle here. While the company has vowed to collect local taxes, it is facing real pressure from the hospitality industry and local politicians on its alleged tax drain and overall impact on the tourism infrastructure.

SFSW16: Location’s All About OmniChannel

After the Christmas shopping season, many people in the retail ecosystem began to write off Beacons and the entire premise of location targeting as a lot of tech hype.

That’s not the actual case at all, says Unacast CEO Thomas Walle (and he better think that: Unacast claims to be the world’s largest beacon/proximity network.) Speaking this week at Streetfight Summit West in San Francisco, Walle says the key is to understand that location targeting’s power comes from precisely-used omnichannel: beacons, geofencing/GPS, WiFi, NFC, Audio and QR all complement each other.

The combinations are powerful: In retail, there are more than 100+ uses. Beyond retail, hotels, airports, stadiums, cares and museums also have adopted dozens of uses.

Among retailers deploying location targeting, beacons are being used by 95% (and will have 8 million units in place by the end of 2016, per ABI research.) Walle says that beacon penetration will continue to rise as Google’s Eddystone standard continues to gain penetration, complementing Apple’s widely used, but ultimately limited iBeacon standard.

Eddystone is currently supported by 45% of the location targeting retailers, up from 38% in 2015. iBeacon, meanwhile, is supported by 90%, which represents a slight decrease.

Meanwhile, geofencing/GPS is being used by 54%; Wi-Fi is being used by 28%; NFC by 16%; Audio by 16%; and QR by 10%. QR has been prematurely written off, says Halle. It’s a great lead tool.

Location targeting also benefits from the very broad definition of “location.” This has led to companies diversifying their platform offerings. Generally, people see it as a push medium, says Walle (i.e. receive a coupon on your mobile device.) Mobile accounts for 73% of usage. But other uses are also very high. Indoor navigation, for instance, is 51%; proximity ad nets is 34%; online retargeting is 20%; digital signage is 11%; and data monetization is 5%.

Some Favorite Posts From NextWaveSMB

We’ve been thinking hard about the next wave of technology for SMBs, and blogging about it on NextWaveSMB, a new blog brought to you by our innovative friends at Booker.

1. SMBs Reinvent the Digital ‘Experience’ to Surprise and Delight Customers

The idea of a personalized experience is especially important online, which by its nature, can be a “me too” lookalike. As Bonobos CEO Andy Dunn says, “We need to show we care about our customers as people.”

2. Delivery Becomes Strategic for SMB Retailers

How important is it for small business retailers to offer delivery? How timely does it need to be to move the needle on sales and loyalty? And can it be done economically?

3. 7 Cutting Edge Lessons For SMB Retailers From ShopTalk

ShopTalk, a new mega-event with 3,000 attendees, focused on the next wave of retail for both national and local merchants in the face of challenges from online giants such as Amazon. Here are 7 key takeaways.

4. SMB Loans Go Digital: Easier Access, Better Services, More Loans

A new breed of loan providers use a number of data sources to efficiently assess and approve SMB loans. These largely use automation and other online capabilities to process and manage loans. Some also integrate loans with marketing support.

5. Mastering Your ‘Digital Brandformation’

You can buy a lot of advertising, create a new logo and leave a trail of Tweets and “likes.” But what’s really important for building an SMB brand? For marketing strategist MJ Thornburg, it’s all about creating a bigger and better experience – or what she calls a “digital brandformation.”

6. ‘A-Comm’ : Turning Your Schedule Into a Strategic Marketing Tool

Thanks to advances in marketing automation, electronic schedules an be used most effectively to anchor Appointment Commerce and target customers with special promotions to fill last minute openings and slow days; send reminders to book again; upsell and cross-sell them on relevant products; and solicit reviews.

Are Loyalty Programs Getting Lost in the Shuffle?

Image from Technology Advice

A wide range of innovative loyalty programs are in the marketplace, and they report impressive ROI and user engagement. But are they a high priority for retailers? Many retailers (and their agencies) have been slow to commit to loyalty programs.

At ShopTalk in Las Vegas May 16-18, loyalty programs seemed to have gotten lost in the shuffle of digital solutions (i.e. omni-channel, email, artificial intelligence, email). As eMarketer Yory Wurmser noted, “loyalty programs are of mixed importance…loyalty rates are going down.” He added that programs delivering direct gains in “transactions” or “emotional” allegiance to brands and retailers will have a leg up over pure-play loyalty solutions.

Quidsi CEI Emile Arel Scott also noted the limited appeal of pure-play loyalty programs. “We have gone through so many loyalty programs,” said Arel Scott, whose company is owned by Amazon. “They are a lot of work. Better service and customer feedback are much more important than points,” he said.

“The real struggle is for brands to find a message outside of ‘25% off’ or a sale,” Arel Scott added. “The key is to continue to get more specific in messaging,” he said, noting that chats seem to hold a lot of promise in this direction.

For Index CEO Marc Freed Finnegan, it all comes down to getting customers to build an account with a retailer, where all the data can be kept. An account “remembers everything I buy. Loyalty is a leading way to get there,” he said. But so are mobile accounts and other channels that stimulate incremental revenues.

Does this mean that loyalty programs aren’t poised for success? Not really. Many of them, especially card linked offer programs, have already evolved into broader programs that provide the useful analytics, feedback and targeting capabilities that the ShopTalk panelists alluded to. But it is an ongoing battle to gain a retailer’s attention, given all the industry solutions out there.