Vistar Hires Ex-GroundTruth Performance Strategist Matt Schuster As CRO

Vistar Media, seeking to deepen its cross-platform insights between out of home advertising and location technology, has named Matt Schuster, formerly of location ad marketplace GroundTruth, as its chief revenue officer.

he most recently was head of performance strategy, leading development and go-to-market strategy for all performance-based solutions. Before that Schuster was head of sales for GroundTruth, responsible for revenue growth from all major brand and holding companies in North America. Under his lead, the sales team achieved 100 percent growth in both revenue and headcount. Previously, Schuster was Sales Director at Undertone, a digital advertising company, where he oversaw a 300 percent increase in revenue over 18 months.

“Out-of-home is where the most innovation is happening in today’s media landscape, as mobile has largely become commoditized and centralized toward a few large industry players,” said Matt Schuster. “In out-of-home there is tremendous opportunity to bring targeting and concrete ROI measurement to advertisers that have never before been able to measure the impact of this channel.”

The company has called 2017 a “breakout year” for Vistar, and Schuster’s appointment follows a recent expansion into Canada.

“Matt joins Vistar at a time of rapid growth, and his experience scaling teams and revenue for innovative businesses will help our transition into additional international markets, as we bring in top talent to meet increasing global demand for our services,” said Michael Provenzano, CEO of Vistar Media.

We checked in with Provenzano about the evolution of OOH and the location tech connection amid the company’s growth plans.

GeoMarketing: What’s the state of “Digital Out of Home?” How has Vistar’s approach to DOOH evolved?

Michael Provenzano: The digital out-of-home industry is in an exciting spot today. At a basic inventory level, we’re seeing more and more media owners digitizing their networks, which is bringing opportunities for more dynamic content and creative executions to new contextual environments.

The biggest shift that we’re seeing in the OOH space is the push to tie OOH to measurable ROI (with programmatic being one of the mechanisms driving this shift). Digital buyers are increasingly looking to add OOH into their broader omnichannel media mix, and media owners are eager to tap into growing digital budgets. Transacting digital out-of-home programmatically requires systems that have been built to handle the complexities of OOH, such as measuring a 1-to-many medium, managing creative approvals (which have stricter regulations due to their public display), creative transcoding to fit the huge variety of screen displays, and much more. At the same time, programmatic systems that have been built from the ground up to handle these challenges are also offering new opportunities for buyers to reach their audiences in targeted, measurable ways across a very impactful medium.

Our approach to OOH has changed over time as we learned the ins-and-outs of the medium and got to see first hand the challenges that both media owners and advertisers were facing. The first challenge was simply building technology that would enable efficient transactions at scale. We focused on building those pipes and also aggregating supply by integrating and building partnerships with media owners across 90% of the available supply. As we ran more and more campaigns and learned more about the strategies of OOH buyers, we added in a focus on data and measurement, to demonstrate the ROI of OOH media. Today we have the ability to measure the impact of OOH advertising as never before and help marketers understand their consumers in amazing new ways, based on their movement patterns.

One thing we’ve been looking at is the rise of autonomous vehicles. What happens to billboards and radio when cars drive themselves?

There’s no question that the rise of automated vehicles will have a dramatic impact on the OOH industry, but ultimately we don’t see it as a damaging change. To start with, OOH is not really about billboards. It’s about using real estate assets – the physical locations that the OOH networks own – as opportunities to engage with consumers through compelling 1-to-many content. That opportunity doesn’t go away as people change how they move throughout the world, it just shifts the requirements for the content.

OOH media owners are also already starting to use their assets for multiple purposes – adding sensors to become a data collection point, working with telecom providers to support their networks, providing wifi, working with municipalities to become part of the citizen communication systems, etc. So there’s a lot of opportunity to diversify the use of the physical asset, which today might only be serving as a static billboard.

We also believe that mobile and OOH are perfect complements to each other, and the rise of autonomous vehicles will drive this connection further. Combining the impact of OOH media with the personal communication of mobile advertising is very powerful, and as consumer use of mobile devices increases during transportation moments, the interaction between OOH and mobile will be amplified.

How does geo-data and the use of location analytics factor into DOOH measurement for Vistar’s clients?

The biggest challenge of out-of-home historically has been that there was no real way to directly tie any impact results back to the actual campaign exposure. With location data, you can understand consumer movement enabling marketers to validate store visitation and household validation.

In-store visitation is a crucial KPI for retailers in a range of industries, from the big box retailers to telecom, QSR and casual dining. If they can invest in media and then see an increase in the number of people visiting their stores, and therefore increasing sales, that demonstrates the ROI of that ad spend and is a huge win for their business. Vistar measures foot traffic by using location data to identify audiences that have been exposed to a digital out-of-home campaign and then visited a physical store location. This provides a powerful view into the impact of OOH media exposure.

Visitation is great for retail marketers, but for some marketers in areas like automotive and CPG, sales are the final KPI that matters. In a similar way that location data tells us where someone went, it also can tell us where someone lives. Some of the largest transactional data sets for sales are stored at the household level. By combining location data with transactional data, we are able to understand what households are exposed to what ads and understand how sales were changed at a selection of households.

Are there any new programs or initiatives Vistar is planning to expand looking ahead to 2018?  

A major area of growth for us in 2018 will be expanding in international markets. We recently launched our business in Canada and are already seeing strong traction among leading brands, agencies and trading groups. We will be launching operations in the UK in January 2018 and expect to enter other European markets over the course of the year. The OOH industry in the EU is quite evolved, so we see tremendous opportunity to bring sophisticated targeting and measurement to this channel.

We will also be expanding our vertical solutions through key partnerships, to be able to extend our targeting and sales lift measurement capabilities to more industries (similar to our current solutions for automotive, retail and CPG).

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Caffeine Spike: Foot Traffic To Coffee Shops Rises Almost 2 Percent

Visits to U.S. coffee shops this year grew 1.7 percent year-over-year, location intelligence company Foursquare has found, noting that despite the ubiquity of Starbucks, it was the smaller independents that are behind the gains.

Independent coffee shops saw traffic rise 5 percent year-over-year, compared to larger coffee chains, which saw a little less than 1 percent growth during the same period.

Naturally, when it comes to loyalty, having multiple locations is clear benefit. Foursquare looked at a number of factors related to chain loyalty, such as how often and regular a coffee shop was visited as well as its share of traffic within the cafe category.

As Foursquare put it, “chains with strong food and coffee pairings inspire the most consumer loyalty.”

The top 5 coffee chains that Americans are most loyal to:

  1. Starbucks
  2. Dunkin’ Donuts
  3. Tim Horton’s
  4. Scooter’s Coffee & Yogurt
  5. Dutch Bros Coffee
QSRs vs Coffee Shops … Source: Foursquare

While loyalty is key, when it comes to actual feet walking through the door,  Philz Coffee, a San Francisco based, third-wave coffee chain, is the winner in terms of growth, something that is indicative of a larger preference for smaller brands by caffeine addicts.

According to Foursquare, Philz, which has locations in Washington, DC and Los Angeles in addition to its SF hometown, saw visits rise 11 percent since May 2016.

For the most part, it appears that the increased amount of independent coffee shops popping up around the country while larger chains have tried to be smarter about their locations amid greater competition from quick serve restaurants like McDonald’s seeking to expand its breakfast offerings in order to generate more visits throughout the day.

At the same time, Starbucks shuttered all of its 379 Teavana outlets this summer, even as U.S. sales rose 5 percent at established locations.

Coffee Shops’ Prime Times

As for when is the “prime time” for coffee shops, while a 2015  “coffee report” by Square among its retail clients found that 8:30am during the week saw the most customer activity, Foursquare, which based its analysis on foot traffic patterns and lifestyle preferences of visitors to coffee chains from its apps, Foursquare City Guide, and Foursquare Swarm, found two particular times for drawing the coffee crowd.

With regard to highest traffic spikes for coffee, a Foursquare rep said that that Saturday at 10am is the most popular moment to get coffee, as that time 15 percent busier than the rest of the week. With regard to weekdays, coffee shop foot traffic initially spikes between 8-9am, and then again around noon.

As for the most popular month: yep, thanks to Starbuck’s cult of Pumpkin Spice, October is the busiest month for coffee shops, followed by the chill of December, while promotions for National Coffee Month in August makes that the third highest in terms of foot traffic, Foursquare said.

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How Discount Grocer Lidl Can Build Store Traffic Following US Launch

After experiencing a favorable introduction for its first 20 U.S. grocery stores in , German discount chain Lidl has been trying to establish its footing as it continues its East Coast expansion.

According to analysis by proximity platform inMarket, the dip in foot-traffic Lidl has seen at some of its stores in North Carolina and Virginia is afflicting others in the discount grocery space as Walmart ramped up its challenge against Amazon’s Whole Foods and Target.

Finding Traction

Lidl, which runs over 10,000 stores across 28 countries, “launched with a bang” this past June 15th, inMarket’s report notes. The company’s U.S. stores drew a decent 2.6 percent Share of Visits (SOV, as inMarket abbreviates it) on its introduction to the U.S. market.

The U.S. launch by Lidl appeared to take customers from another discount retailer BI-LO, which saw a decrease in visits from May to June, inMarket says. North Carolina- based Harris Teeter, which is a subsidiary of supermarket chain Kroger, also lost SOV in June, suggesting that consumers went to compare shopping at Lidl. (We’ve reached out to Lidl’s PR department and will update accordingly.)

Lidl saw an initial burst of store visits in the US this summer, but traffic has since declined.

But rather than cannibalizing the direct competition, inMarket points to Walmart’s gravitational pull as representing the biggest problem smaller supermarkets are facing, as the retail giant attracts about 30 percent of grocery visits.

“Many of those visits [to Walmart] are likely to involve grocery purchases,” inMarket says. “It’s interesting to note that Walmart dropped from 30 percent SOV in May to 29 percent SOV in June — perhaps as its cost-conscious shoppers went to check out Lidl. Fellow mass merch chain Target remained at from May to June at 9.3 percent SOV in these markets.”

Conquesting Reconsidered

Despite Lidl’s sudden rise, and its direct rivals’ dip in visits around the time of its debut, BI-LO, Walmart and Harris Teeter have all recovered SOV as of September, inMarket notes.

“It’s still very early for the retailer, so there’s definitely potential to turn things around,” inMarket Communications VP Dave Heinzinger tells GeoMarketing. “From our perspective, we know that location-based digital ad programs can help offline retailers drive foot traffic into stores.”

One area for Lidl US to explore is managing the digital presence of its growing network of American locations. Ensuring that consumers have the right discovery tools associated with digital presence management — nearest addresses for online searches, store hours, contact details, and reviews — could quickly expand its initial customer gains.

Heinzinger is interested to see if Lidl could make an impact by targeting competitive shoppers via smart, location-based retargeting programs. (For the record, Lidl does not employ inMarket, which relied on location data from the 50 million consumers who use the company’s partner apps).

“For example, our data shows that BI-LO and Walmart had dips in SOV during Lidl’s launch in June, while Whole Foods did not,” Heinzinger adds. “A top-line recommendation might be to focus on their strongest audience — the cost-conscious shopper — by conquesting BI-LO and Walmart shoppers through online-to-offline retargeting. They might also skip wasting dollars/impressions on uninterested Whole Foods shoppers.”

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Advertising Week Recap: Welcome To The Age Of Assistance — And Assistants

Advertising Week NY covered a great deal of ground last week, from Tencent’s expanded presence to the growth of Facebook Messenger as a marketing vehicle to the Weather Company’s heralding the Era of Cognition.

Retale Managing Director Nels Stromborg attended a number of events and meetings and here’s his takeaway.

Brands are taking action on transparency: Whether you’re a vendor, agency or seller, if you weren’t paying attention to the transparency debate, you are now. Brands are disappointed and upset; they’re running out of patience and taking action and it showed at the event. And to be honest, they have every right to be. The media supply chain has always been opaque. But in digital, it’s becoming more and more complicated, which has made the problem more pronounced. Spend has also exploded so advertisers want more accountability and a clearer view of ROI. The solution isn’t easy. Inventory sources need to address it by installing more third-party verification and opening up their data to partners. Agencies need to deliver on more transparent billing and measurement. While some progress is being made, there’s still a lot of work to be done.

 Alibaba versus Amazon: At Dmexco, Amazon was the belle of the ball. Their Amazon Services division had a big show. They used the event to tout their inventory, services and formats to advertisers (and retailers and CPG brands, in particular) – even if their current offerings are still very limited. I expect Amazon’s ad business to grow dramatically over the next year to support brand partners. But they were probably a bit jealous after seeing all of the attention Alibaba got at Advertising Week. GroupM announced a data partnership with them. Even Marc Pritchard spoke about their ability to disrupt the space. Their audience is almost entirely overseas, so their ad business doesn’t necessarily pose a threat to Amazon. But it’s fascinating to watch these massive e-commerce companies grow in influence among advertisers.

Google Americas’ President Allan Thygesen talks with Unilever USA CMO Keith Weed about Marketing in the Age of Assistants

The Age of Assistance: Get ready to see several hundred think pieces on “the age of assistance” over the next few weeks. Google’s Allan Thygesen used the phrase in a presentation with Unilever’s Keith Weed. It expertly captured a big technology shift in the market. It refers to the growing voice and chat bot movement in advertising. Consumers want more custom, personalized brand experiences. They like feeling like they’re the only one in the room – even if they’re online. For years, the best the industry could do was a well-targeted display ad. But bots have unlocked a more conversational and one-to-one campaign opportunity. That’s the potential brands see and love. They can deliver tailored, white glove service at scale through Facebook Messenger or your Amazon Echo. The AI needed to develop these tools has grown substantially better in the last three years, making it easier to meet the opportunity. The age of assistance is upon us and I think it’s here to stay.”

Leave content to the experts: The consensus on content during Advertising Week is that we are deep into a new golden age of “television.” This incredible programming is also increasingly being delivered free of advertising. What this dynamic does is make it almost irresistible for brands to stray from their core competency of product development and enter into the production business. During a panel hosted by FX, Joe Marchese, President of Fox’s Ad Products, relayed an interesting and recent exchange from a CPG. “They said, ‘We’re not in the paper towel business. We’re in the content business. We’re in the storytelling business.’ Which I look at and say, ‘Uh, I’m not sure you really want to do that, because you make paper towels!’ You hear (content) people talk about what it takes to break through, to make a story, make it timeless … [but] you need to sell paper towels tomorrow.” The point? Leave content to the experts – especially as the overall quality rises and the battle for attention becomes more competitive. Brands need to focus on what they do well.

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To Promote Soft Surroundings’ Store Expansion, Affiliate Marketing Helps Reach Influencers

Even as many major retailers pull back on the number of stores, women’s apparel chain Soft Surroundings is continuing its cross-country expansion.

The fashion retailer, which originated as a catalog company in 1998, has just opened its 54th location in New York last month. But a large part of its marketing has some tie to its publisher roots: Soft Surroundings has begun working with affiliate marketing platform Pepperjam to extend its reach to “marketing influencers” in the hopes of inspiring other consumers to walk through its locations.

“We have changed our affiliate philosophy in the last couple of years,” says Kim Hess, Soft Surroundings Affiliate Marketing Analyst. “We are not hugely promotional since we believe that the more coupons you offer, you train your customer to wait for a sale, thus avoiding paying full price. We do not want to steal the sales away from our other channels (specifically email and organic), so we limit our coupon publishers. We really appreciate the content publishers efforts for bringing in new customers and truly influencing sales. We will continue to grow the content publisher reach.

“We have recently signed on with ShopStyle, so hopefully we will see a nice increase of traffic, sales and brand awareness,” Hess adds. “I appreciate the update on new content publishers that appears in my inbox — and I always vet them.”

We checked in with Maura Smith, SVP Head of Affiliate Marketing for Pepperjam, to explain how the company’s publisher-marketing partners can connect online-to-offline sales for clients like Soft Surroundings.

GeoMarketing: How does affiliate show the overlap between engaging content and advertising?

Maura Smith: Affiliate marketing is one of the most effective revenue sources when it comes to merging content creation and advertising. Influencers and publishers can sustain their content by monetizing it to engage viewers and convert views into clicks. Influencers can incorporate affiliate links into their blog posts and social media campaigns ultimately blending content with advertising seamlessly- engaging their reader and creating a revenue stream. Affiliate marketing provides a unique content marketing approach, encapsulating all forms of digital–email, display, social, search, website–and enhancing opportunity for affiliates and brands alike.

How can affiliate sales drive online-to-offline store visits for brick-and-mortar brands?

The evolution of technology has derailed the myth that affiliate marketing is an online only marketing channel. Customer journeys are not single touchpoints, but rather a web of interactions across channels and mediums– not all of which necessarily result in a conversion. The same holds true for affiliate marketing. Online interactions with affiliate sites may encourage a conversion in a brick and mortar location making capturing the customer interactions a challenging task. Online to offline marketing tactics include the use of promotional codes tracking campaign effectiveness through brands’ POS systems. This strategy can also be leveraged in a reverse scenario for offline to online conversions. The use of codes in radio, podcasts or word-of-mouth can now be tracked to publishers through technology available to brands through Pepperjam.

How does it help close the gap between online and offline commerce?

Brands are adapting to changing commerce by enabling holistic tracking to ensure that purchases are attributed to the appropriate digital channel. Take, for instance, the use of codes in radio, podcasts or word of mouth that are used to complete online purchases. Transactions associated with these code redemptions can be attributed back to the true referrer of the sale with the use of the proper technology. Additionally, omnichannel purchases such as those that are influenced online but physically picked up in a store are now able to be tracked back to an affiliate referral source. Brands must realize that their network of affiliate marketing publishers is a distribution resource to marketing opportunities both online or in-store serving up new and innovative opportunities as the market changes.

Additionally, the rise of influencer marketing cannot go unnoticed when it comes to commerce, both online and offline. Influencers are naturally known for their digital marketing savviness; however, this reach extends offline as well. Sophisticated influencers leverage the power of their audience to engage in offline regional activities and special events. They can aid in closing the online to offline gap through targeted campaigns with a focus on consumer geography and demographics. The tactic of targeting a specific audience fuels brands to drive value in omnichannel engagement and conversions.

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Why Location Targeting is Key for Both Local and National Brands

If marketers ever doubted the value of location intelligence, that time has long since passed. According to a recent BIA/Kelsey Industry Watch report, location-targeted advertising is on the rise. Today, it represents 38 percent of all mobile ad revenue — and by the year 2021 that number will have jumped to 45 percent, amounting to more than $32 billion.

In part, we have tech giants like Facebook, Google, and Snap — all of which are investing heavily in location marketing — to thank for this upswing. New Facebook features launched last year are designed to “connect store sales to Facebook ad campaigns.” Snap is actively working to help retailers follow the path to purchase from Snapchat to their brick-and-mortar stores. The focus, however, is often on local targeting. That leaves many marketers wondering about the benefits to their national brands.

As companies continue to increase their location-based ad spend, it’s time to address the local-national link. Here’s a look at what national brands can expect to gain from location intelligence, and why it’s crucial to your future campaigns.

Why location targeting is more than just local

Most marketers are well aware that location data provides richer, more accurate insights into consumer shopping behavior. Brands know they can refine their local ads to be more relevant, timely, and personalized. What they may not realize is that location targeting can deliver similar results on a national level when it’s used to identify foot traffic patterns and incite in-store sales.

Recently, GroundTruth worked with a national restaurant chain to run a test campaign in a local market. The campaign, which utilized a new pay-per-visit model, was so successful that the brand expanded it to 81 top-tier markets. We found that the brand was able to generate the same results beyond the original region. To date, the effort has produced more than 100,000 in-store visits nationwide.

A strategy like this one has other advantages as well. For instance, an analysis of the consumers that visited the restaurant chain revealed an unexpected crossover with unlikely competitor brands. While the brand believed it had its finger on the pulse of both its audience and its competition, location data that provided deep insight into consumer intent allowed the advertiser to identify new areas of opportunity that would otherwise have been overlooked.

On a national level, location insights also enables marketers to make smarter decisions about issues like expanding to new markets, closing existing locations in light of reduced foot traffic, and establishing a brand presence near a thriving competitor. With the help of location intelligence, brands can fine-tune their strategies for specific regions. Many brands has invested heavily in a national campaign only to discover that foot traffic in the region they had high hopes for has fallen flat, but this scenario can be avoided if a brand leverages the data at hand.

For a public company with a national footprint, location data is an absolute must. Earlier this year, Walmart reported earnings results that were higher than expected, due in part to increased foot traffic to its stores. Using mobile data to assess foot traffic trends and predict sales can better prepare both retailers and market analysts for what’s to come.

Location as an indicator of intent

When it comes to gauging what their customers want, marketers look to search terms, social media activity, and buying history, but it’s becoming increasingly apparent that location data is a more reliable indicator of intent. As brands from Warby Parker to Amazon and Alibaba buck the trend and open brick-and-mortar stores, location data has become more vital than ever to creating a positive — and profitable — customer experience.

Imagine that an athletic apparel retailer is preparing to open multiple new locations nationwide. No amount of search or social media data can guarantee that customers will walk through the door. But location and shopping pattern data shows us which regions sports enthusiasts are most likely to live in, and which hotels and restaurants they’re most likely to visit. These indicators of intent paint a clear picture of where an athleisure company should open up shop.

The benefits to leveraging location targeting don’t end with your local campaign. As investments rise, it’s time to make the most of location data for your national brand.

**Dan Silver is the senior director of local marketing at GroundTruth.

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Consumers Exchange Over 2 Billion Messages With Businesses Each Month Via Facebook Messenger

Facebook Messenger’s 1.3 billion monthly users exchange more than 2 billion messages with businesses each month — and that volume is set to increase as nearly half of Millennials now say that messaging apps are their preferred means of customer service interaction.

In a panel at Advertising Week, execs from Facebook, LiveNation, and more focused on how businesses — from global brands to local SMBs — can take advantage of this increased reliance on messaging platforms.

“Businesses are already using [messenger] to engage with their consumers in a personalized, powerful way,” said Stefanos Loukakos, Head of Messenger, Facebook. “This can be the new paradigm of how businesses communicate with their customers. Twenty years ago, they… started building a web presence; now is the time for businesses to build a presence on messenger.” But how?

Below, three takeaways from the session on how businesses can look to make personalized, one-to-one communication a reality through messenger — and subsequently drive sales.

85 percent of consumer time is spent in the top 5 apps: This includes Facebook Messenger and Whatsapp. The key, Loukakos said, is to ask the question, “how can we embrace users in an environment that they’re already comfortable in?

In other words, if a brand’s native app or website sees high engagement, it could be advantageous to enable messaging or a chatbot feature there — but most of the time, consumers are more open to interacting via the platforms they use every day. For a significant majority, that’s established messaging apps.

KLM, for example, has seen success using Facebook Messenger to let people change their flight, access boarding passes, and more in one thread — just like how they’d chat with their friends.

It helps to create KPIs specific to messenger: Driving conversation through messaging apps “can be great for lead generation, great for closing sales, and great for customer service/support,” said Christian Brucculeri, CEO at Snaps. But businesses need to ask what they want to drive: Engagement? Website visits? Store visits? It doesn’t have to be all about sales, but businesses can identify which aspects of customer service can be improved through this type of communication.

Embrace chatbots — with care: Chatbots/conversational agents can make it much easier to facilitate these kind of messenger conversation that consumers increasingly want — but transparency about the fact that a bot is answering their questions or referring them to a store associate is key. As Loukakos puts it, “don’t try to do everything with a bot. Find a business objective that you want to tackle, and work towards that.”

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Marketing In The ‘Now’ And ‘Next’

One clear thing coming out of dmexco last week is that the nature of the customer journey has evolved, crisscrossing the physical and digital worlds. As marketers, so must we. We no longer need to ask whether they’re “connected” or not: All people are already part of this morphing “always-on” world. It’s great news for brands and agencies alike, striving to create more timely and dynamic conversations between businesses and customers.

What’s even better? We’re now able to precisely understand in which offline contexts these audiences digitally engage with brands. Think of mobile engagements triggered in-store: While it’s made in the moment, it’s also paving the way for retargeting. So this should not only help us understand the “now,” but also be many steps ahead of the game. Here are five trends showing how offline-to-online advertising is ushering in the era of now-to-next marketing.

Generation Z is always moving

Generation Z is the top contending demographic of the day. Like their Gen Y brethren, they are mobile first. With over 96% of them owning smart phones, they are tech savvy. As a result, their world is one that constantly keeps them moving. So, how do we best engage with them to harnesses both the power of their constant movement and their connection to mobile phones?

Studies show that over 53% of all Gen Z consumers select brands that understand them as individuals. The personal user data that smartphones collect for us provides incredible opportunity to best contextualize and interact with the individual. After all, they have lived an entire lifetime with a smartphone, so the data we collect about them today will serve them for years to come. With the strong marriage of Out-of-Home advertising and mobile marketing today, we are able to target these audiences in the context of their environments.

Environments are growing interactive

The physical landscape is ripe for groundbreaking marketing opportunities; environments are becoming increasingly interactive. What we can begin to anticipate next is how these interactions will help us target and retarget to better reach our audiences.

As consumers grow more mobile, they become less attached to time and place. Instead, environments are both physical and virtual. So what does this mean next for marketers? Everything needs to happen away-from-home, making room for direct interactions.  Out-of-Home advertising is the missing link — and most fundamental part, when it comes to moving from mass communication to personalization. Coupled with mobile, the dynamic “power duo” makes for vastly more transactional campaigns.

You see, the digitalization of Out-of-Home real estate is rapidly helping consumers interact within spaces, generating and increasing transactions in both real and virtual worlds. By transforming everyday spaces into an opportunistic “playing field”, we are able to effectively share the experience of our brand with them while simultaneously receiving invaluable information and data about the passerby. Visually or virtually stimulating is not enough; there must be interaction.

Dynamic content delivers greater engagement through programmatic

If utilizing programmatic buying to capture audiences is the now, leveraging what worked well to further anticipate and dynamically understand their physical journey is what comes next.

The combination of programmatic inventory and dynamic content delivery drives contextual engagement. While programmatic buying optimizes both budgets and placements, dynamic creative delivers and updates the content in context.

This trend is also closely connected with real-time advertising, fully automated and data-driven media shopping, and the optimal distribution of marketing messages. The rise of AI will significantly impact dynamic and digital Out-of-Home, automating the creation of custom content based on the target audience and context they’re engaging with.

The brick is getting smarter

The interconnectivity between smart cities and smart cars will reshape the way we stay connected at all times. The data that we obtain through these constant connections will power us to understand and target where personal journeys lead next. Digital interactions with individuals will give great power to tools like Wi-Fi, geo-fencing, beacons, proximity networks, and more – opening new realms of interaction and engagement.

Rarely in life do we ever get from point A to point B in one single step, and we may not even know what point C or D will be yet. It is this truth that opens the doors for incredible opportunities within smart cities and cars. If journeys are long, we must be there for every step; not just physically, but contextually. Moreover, the data captured or interacted upon must best serve future interactions. We can take this information in real-time to further influence the customer’s journey to points C and D. Relevance is key in the “smart” space.

The value exchange as the purchasing power

Peer-to-peer payment became so popular over the past years because it’s a simple value exchange. We all make quick payments and transactions amongst ourselves using our smartphones. In China, mobile payments have already accounted for over 100MM transactions.  This behavior is already established in the every day life of most people on the globe, but how do we build upwards from this foundation? What comes next?

The rise of crypto-currencies and blockchain models suggests that the value exchange between a brand and an audience might fuel purchasing power. For instance, Kik’s KIN has created a new transactional model for brands, by which users earn a social currency and buy products through brand interactions. This is opening up an entirely new realm of generating in-channel, or “in-brand” commerce.

**Liliana Caro is the Global CMO of Kinetic Worldwide, a global agency dedicated to connecting with and activating audiences on the move. In this role, she elevates client performance through the digitalization of Kinetic’s product offerings and a unique methodology that delivers communications in context. As Kinetic evolves to keep pace with consumers that move faster than ever, Liliana brings new platforms and processes to ensure clients can effectively leverage the ubiquity of interactivity of Out-of-Home advertising across the globe.

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How Will The Connected Car Change The Dynamic Between Automakers And Consumers?

Connected cars are expected to make up 75 percent of total car shipments worldwide in 2020, compared with just 13 percent in 2015, according to Gartner.

But unlike features added to cars like FM radio and air conditioning, the features and services associated with the Internet of Things will also pave the way for new ways carmakers and drivers will interact, notes Brendan O’Brien, chief innovation officer and co-founder of Aria Systems, a software company that provides cloud-based billing services for companies such as digital mapping platform HERE, ride-sharing provider Zipcar, Suburu.

In O’Brien’s view, much of the new opportunity for automakers in the age of the connected car will be “recurring revenue” because of the very nature of how these IoT features are consumed, measured and paid for. Some examples of those services and features include subscriptions to consumption-based recurring payment schemes for such things as ride sharing, location services, apps (from connected devices), telematics, wi-fi access, internet radio, among others.

GeoMarketing: Considering all the potential disruption of the auto industry from the connected car, how will the car companies derive revenue from these new IoT related services?

Brendan O’Brien: For the industry to fully capitalize on connected car services, they are going to have to do more than monetize in-car connected services. Connected services will be part of the deal, but cashing in is going to take a fundamental shift in how automakers think about selling cars. What is thought of as “loyalty” now—building and selling a car and hope that it’s good enough that the customer will probably buy another one from you in 5-7 years—has to evolve into building strong and lasting brand affinity.

Instead of building the car, they need to build the brand and the relationship with the customer. It can no longer be a point-of-sale relationship, it has to be constantly nurtured to develop a permanence. That is going to take a direct line of sight to the customer that cannot be maintained with the current dealer-driven sales structure.

Achieving this all-important brand affinity is going to be relatively easy for makers of luxury vehicles and work vehicles, where such affinity tends to already exist, but is going to be much harder for low-to-mid-market makers of passenger vehicles where they risk being commoditized – in these cases the consumer’s affinity and relationship are far more likely to reside with the provider of the service that puts them behind the wheel (think Zipcar, Enterprise CarShare, even Uber and Lyft) rather than the manufacturer of the vehicle itself.

Connected cars are hot, but it looks like industrial applications for connected vehicles could be just as—if not more—lucrative. Why are heavy vehicles and mobile telematics as much in the IoT fray as their passenger-wheel counterparts?  

Usage-based monetization models and IoT integrations are already popping up in the heavy equipment industry with leaders like Caterpillar and John Deere using the technology in many different ways. There is currently a lot of unanswered demand for data that can be used to create efficiencies and increase profit margins with connected industrial vehicles. This will be a fast-growing sector, and we have yet to see its breadth. Industrial applications also tend to contribute to bottom line in a more immediate and direct way than consumer. And for industrial customers, the machines are already a sunk cost and the connected features just become a huge value-add that has an almost instantaneous positive impact to their bottom line, solely based on the productivity gains and loss prevention these connected services provide.

Explain how new services offered from companies like Trimble, Arsenault/Dossier, and others are fixing problems that have plagued heavy construction for years?

These companies are providing usage-based pricing models to get people to use the vehicle, as well as “add-on” services that dramatically increase productivity (e.g. automated fleet management and predictive maintenance alerts) and decrease loss (e.g. geo-fencing that eliminates overnight equipment theft). The add-on services are instantly attractive for their immediate bottom line impact per my response to the prior question, and the pay-per-use model is finding traction because it more naturally aligns with how these businesses measure their own success, which is the same reason so many enterprises have moved toward the use of cloud-based IT infrastructure (like Amazon Web Services) rather than building and hosting their own IT infrastructure. It can also reduce extremely high costs of entry and gives industrial users a whole lot more flexibility as they are never stuck with machinery sitting idle that they bought for project X that won’t be used for project Y and Z.

What are the likes of Ford, Audi and GM doing that they have never dreamed of before?  

Just take a look at recent actions by OEMS like Audi, General Motors and Ford. Audi is currently offering two different types of “lifestyle access” programs including on-demand cars, and pooled usage. Ford just picked up San Francisco crowd-sourced-commuting company Chariot (which uses Ford vehicles), and they have also promised fully-autonomous vehicles by 2021.

The autonomous cars from Ford will only be offered (at least initially) as a commercial mobility service, and not for traditional purchase, pointing to a shift to usage-based, recurring revenue models. General Motors is also getting into the autonomous ridesharing fray, and they say they will be launching a fully autonomous vehicle with its partner Lyft in about five years. GM has also started its own car sharing service called Maven, in addition to its partnership with Lyft. Previously, automakers were content with a very hands-off fleet sales model where rental companies and then ridesharing and car sharing companies like Uber and Zipcar were sold vehicles at volume discounts or provided with special offers for exclusivity.

But it seems they see the writing on the wall when it comes to the changing tastes of millennial consumers—they are less likely to participate in traditional purchases and more likely to buy “experiences”. Automakers are not about to be left out. Though it is a massive culture-shocking change from measuring success to margin-at-sale to long-term annuity and recurring revenue from services, the opportunity is too large to take a pass.

What can businesses do now to develop their connected vehicle go-to-market strategies?

Mainly, they have to prepare for that massive culture change. Automakers, their dealer networks, the wholesale model—it is built on and relies on long-standing traditions and agreements. Today’s customers are used to self-service, to doing their own research and making purchases on their own terms. To these consumers, the dealership model is archaic, painful, and unnecessary.

While upscale and boutique, Tesla is proving that the current dealership model could virtually be a thing of the past if the industry can break down its own bureaucracy. Tesla is the model, and ignoring this model will be done at the peril of mainstream OEMs.

Although it won’t disappear entirely, the current dealer-centric model is a dead man walking. It will and should be more like, say, an Apple Store, where the purchase is made online, the transaction handoff, value-adds, and continuing service happens in the store, and tech upgrades happen over the air.

The dealership becomes part of the relationship, not the entire relationship. There is also a major technical infrastructure aspect of this for OEMS—they have relied entirely on a one-time sales revenue model for the last 110 years. They just don’t have the back-office capability to handle selling, billing, and provisioning products and services outside the dealer network and with a recurring revenue and customer lifetime value model. If this is to scale, they need to prepare their billing and accounting systems and practices today, not after the next launch or acquisition. Internal evangelism for this shift needs to start in the finance office. Recognizing growth and revenue is going to change—margin models cannot be counted on for much longer.

The CFO has to be on board. The best path to getting this new thinking socialized for many OEMs is more likely to be their in-house financing divisions (if they have them), as concepts like “annuity-based returns” (where profit is realized over time rather than at initial point of sale) is far less likely to feel “foreign”. Many of the explorations at OEMs of non-traditional “transportation as a service” ideas are originating from these finance divisions for that very reason.

You cite four main business offerings for what you call “IoT on Wheels” which includes cars and other vehicles. Can you give us some examples of companies that have successfully adopted these models and what they are doing right?

Let me break it down by offering:

  1. For transportation as a service – Audi and BMW are doing a great job building and capitalizing on brand loyalty and the exclusivity of their brands with their white-glove on-demand car services. They took the functionality of Zipcar and turned it into a luxury service that perfectly matches their luxury brands by leveraging the pre-existing brand affinity that is typical of many luxury buyers. Ford is also on board with FordPass, which is the first automaker-produced app that can provide services even to drivers who don’t own a vehicle from that brand. The app can help find parking, lock and unlock the car—all great—but what it really does is help build brand affinity without the customer even having to get into one of their cars.
  2. For post-sale/lease secondary services – While OEMs are all making several forays into services like roadside assistance (e.g. GM’s OnStar), on-board entertainment and navigation, etc., the companies with the most traction and in better market position tend to be after-market providers. Verizon HUM is a great example that leverages the sophistication of the comprehensive data streams provided by modern, ubiquitous OBD ports, and like the many services provided natively by smartphones from Apple and Google, these services go where the consumer goes and are vehicle-agnostic.
  3. For Usage Based Insurance and Taxation – Metromile is a great example of millennial-focused UBI, and Progressive has provided an attractive way for telematics data to directly reduce premiums for safe drivers. Oregon’s OreGo pilot program is determining how effective usage-based-taxation, again derived from telematics data, can more equitably distribute the road-use taxation load in an era of electric and hybrid vehicles. Oregon is finding a way to replace income can no longer be counted on coming from taxes applied at the gas pump.
  4. For secondary data stream monetization – We’re still in the “wild west” to some degree here, where OEMs who are suddenly the beneficiaries of “direct line of sight” data about the users of the vehicles are figuring out how those streams can be analysed and utilized for secondary direct and indirect monetization. But, we’re getting there. Whether used for influencing broad-market decisions like determining which vehicle features should be developed and highlighted in upcoming models, or for targeted individualized offers to consumers for new vehicles that better serve their personal driving habits, or for downstream sale to third parties like insurance companies, there is a sense that there is great value here, even if the exact application of that value isn’t predetermined by the OEMs up front.

You’ve said the challenges currently facing connected vehicles have little to do with the technology itself. What are the main hurdles standing before companies seeking to capitalize on a connected vehicle business?

The answer depends if we are talking about OEMs or aftermarket providers. OEMs face myriad challenges, stemming from their lack of infrastructure to deal with recurring revenue and usage-based models that need to be employed to monetize connected car services.

They have always operated on one-time sales models and they just don’t have the back-office capability to handle selling, billing, and provisioning products and services outside the dealer network. Not to mention that the structure and culture of the dealer networks just does not jibe with how connected services and vehicles are provisioned.

Not to mention the inherent complexity of manufacturing a car—development cycles are long and the lifecycle is even longer. Tech becomes outdated before a car even hits the sales floor. This is where margin accounting comes into play and becomes a problem—though recurring revenue can be derived from services and sales-alternative models like car sharing and shared leasing—automakers still focus on margin at point of sale. Continuing to do this will hinder innovation.

Non-OEMs, the aftermarket, does not face any of these hurdles, and their barriers to entry are typically pretty low. They can still leverage vehicle systems (using OBDII) to provide connected services, and they are not tethered to margin-based accounting. Not to mention that they are far less burdened by regulation, that while beneficial to consumers, constrains OEMs in ways that don’t apply to the aftermarket.

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Why McDonald’s Keeps Winning The QSR Foot-Traffic Game

From Taco Bell to Burger King, a plethora of QSRs have expanded into the morning space — but McDonald’s remains the winner, with 52 percent share of foot traffic among the QSR breakfast leaders, according to the latest QSR Foot Traffic Trends report from GroundTruth (recently rebranded from xAd).

Part of this success is no doubt due to simple factors, like the chain’s size and number of locations, but that can’t entirely account for the loyalty the brand sees compared to its competitors of a similar scale: While Fast Casual customers as a whole are reportedly the “least loyal,” with only 24 percent returning to the same fast casual brand from month to month, 48 percent of McDonald’s customers came back over the same time period.

In light of these insights, GroundTruth’s Sarah Ohle talked to GeoMarketing about how McDonald’s keeps driving customers to its locations, and what physical businesses — from SMBs to enterprise — can learn from it.

GeoMarketing: From your perspective, why does McDonald’s remain the breakfast winner with 52 percent share among the QSR breakfast leaders?

Sarah Ohle, VP of Marketing Insights at GroundTruth: From our very first Q1 2016 QSR Foot Traffic Trends report, McDonald’s has held the lead in overall share of foot traffic, due at least in part to size and number of locations. However, another big aspect of their success is that they are constantly innovating and responding to market needs. One very clear example of this is their push for breakfast. McDonald’s was the first to offer an all day breakfast menu in October of 2015, and since then they’ve expanded the breadth of their breakfast options, with a focus on more sophisticated McCafe beverages.

Proving the success of these initiatives, our 1H foot traffic data shows McDonald’s experienced a 3 percent increase in breakfast share of foot traffic YoY when compared to a sample of brands.

What’s especially interesting, though, is looking at how much competition has increased over the past year. For instance, while there used to be only a few brands focused on breakfast, now we’re seeing increased foot traffic at breakfast for most of the major QSR brands. The biggest increase is coming from Burger King, who saw significant growth in their breakfast share of foot traffic after rolling out their egg-normous burrito last May. Clearly McDonald’s was onto something with their breakfast focus.

As far as their marketing tactics, what might other brands be able to learn from this?

Other brands can learn from McDonald’s by embracing innovation to respond to changing consumer needs. In addition to breakfast, perhaps two facets of McDonald’s success is through the updated brick-and-mortar location and continued expanded menu options. This in turn is essentially upgrading the fast food experience — and blurring the lines between traditional fast food restaurants like McDonald’s and fast casual restaurants like Panera Bread.

McDonald’s, and a handful of other fast food chains, are adopting more “fast casual” elements by investing more in interior design and offering upscale and healthier food options.

Examples aside from McDonalds include Wendy’s, which has been experimenting for some time with replacing their old carpets with tile and adding cocktail-style tables to encourage people to sit and stay. Taco Bell also launched redesigned concepts that include plush chairs, exposed rafter beams, and modern art. On the cuisine front, fast food chains are now focusing on healthy, fancier, and quick-style homemade food options. Consumers are increasingly being provided more upscale options, like lobster rolls at McDonald’s and truffled burgers and fries at Wendy’s.

What lessons are there in this for other brands — QSRs, retailers in other verticals, or even SMBs? How can they compete and drive more foot traffic to their physical locations?

As we’ve learned from Warby Parker, having a brick-and-mortar presence can prove extremely valuable for a brand. However, in the age of Amazon, some retailers struggle to drive foot traffic to their physical storefronts.

While the convenience of online shopping is a huge draw, the in-store experience still plays an integral part in purchase decisions. And from a marketer’s point of view, once a consumer walks through the door, especially in the case of QSRs, they are very close to purchase. Reimagining the retail experience to draw consumers in-store and providing as seamless of a shopping experience to online is essential in keeping customers returning through your doors. This is exactly what brands like McDonald’s, Wendy’s, and Taco Bell are doing with their modernized interiors and tech enhancements like mobile ordering.

On the retail front, one creative reimagining of the retail experience that builds on this idea is the showroom model, which allows customers to browse products in a physical location — upon purchasing, products are then shipped directly to their home. Examples of brands leveraging this model are Bonobos and Modcloth. A showroom model also provides retailers with the opportunity to save space on inventory — given the need to have only a few products in different styles and colors on display.

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