DIGITAL MEDIA DIGEST: SEP‘18
A monthly look at the world of digital from NORTH’s point of view
This month we’re posting a synopsis of our annual media landscape presentation covering topics we think will lead the media conversation in the coming year.
Life at the Speed of 5G
By Caroline Desmond, Director of Media Strategy
Wider Pipeline, Faster Lanes
There are many reasons to get excited about the launch of 5G connectivity. Besides being ten times faster than current 4G LTE networks, 5G promises to support more concurrent users (both sensors and smart devices) as well as lower latency — faster response times for connected devices with a goal of 1ms latency.
As a Verizon spokesperson noted in an interview with Wired last year, “5G will provide a wider pipeline and faster lanes.”
Public & Private Sector Applications
5G’s ability to enable faster data processing, downloads, and decision-making will impact consumer technology as well as infrastructure in the public sector.
In the private sector, enhanced connectivity stands to deliver richer consumer media experiences in mobile video, online gaming, and augmented reality. And since 5G can support more concurrent devices, this means consumers can enjoy interacting with these experiences without depleting bandwidth from smart home connected devices.
Faster decision-making means things like self-driving cars become safer and more viable technologies considering the myriad split-second decisions involved in driving.
In the public sector, 5G paves the way for “smart cities” — connected municipalities that leverage connected sensors and data analysis to inform decisions like “lighting, waste management, digital citizen-centric kiosks, smart irrigation, smart parking and city-wide access to public Wi-Fi.” The data collection and decision-making will likely become even more real-time and accurate with the rollout of 5G.
The Extra “G” is for Greener
Among the other benefits of 5G, the infrastructure required to power a 5G network also comes with environmental benefits. 5G networks would use what is referred to as “Cloud architecture RAN (C-RAN)”. Basically, C-RAN moves a significant portion of the transmission functions involved in powering the network into the cloud. This cuts down substantially on the amount of transmission equipment needed on the ground.
According to a 2017 study by China’s National Science Foundation reposted by ZDNet “the act of cooling 4G LTE equipment alone may contribute as much as 2 percent to the entire global warming problem.”
By moving more of the transmission systems into the cloud, it is expected that 5G C-RAN will eliminate the main source of heat and what equipment remains might be able to be cooled just through exposure to open-air environments.
RIP Cable
Cable networks are already feeling the pinch as consumers increasingly cut the cord in favor of streaming TV options. 5G could be the final nail in the coffin.
Consumers may begin turning to the telcos for their home internet service instead of purchasing home broadband packages through cable companies. Verizon and AT&T have already announced they plan to offer “fixed 5G” to replace home broadband packages as early as this year.
Additionally, Verizon CFO Matthew Ellis announced last month in an interview with VentureBeat that Verizon is working on a new streaming video offering for 5G consumers.
Availability
From Clicks To Commands: An Update On Voice Search
By Caroline Desmond, Director of Media Strategy
Current Adoption
Consumers are becoming increasingly comfortable with voice search. In fact, Comscore estimates that over 50% of searches will be voice-based by 2020.
As it stands right now:
- ~1/4 U.S. consumers have ordered product via voice search (Mintel, Online Shopping — May 2018)
- ~1/3 are open to brand recommendations via voice search (Mintel, Online Shopping — May 2018)
- ~3/4 U.S. owners of voice-activated speakers use them daily (Think With Google)
- 3/4 consumers say they spend too much time looking at a screen (Mediapost), which makes voice search all the more attractive
It’s About Research > Buying
Despite consumer receptivity to voice search and the projected growth, it’s not yet become a popular method of transacting. According to an August 2018 study published by Mintel, “[o]nly 4% of US consumers primarily use voice command assistants to order an item.”
This is not to say that consumers don’t find voice search useful. In the same study referenced above, Mintel found that nearly half of surveyed consumers (47%) get utility out of voice search platforms. Moreover, in a study conducted in February 2018 among 7,400 U.S. consumers — including over 1,500 who currently use a voice assistant such as Siri, Alexa, Google Home and Cortana — it was revealed that consumers are more likely to use voice search as a research tool (DigitalCommerce360).
Google corroborates this in a January 2018 Think With Google post breaking down voice search behaviors. Essentially, Google found that consumers are primarily looking for brand promotions and deals, as well as life hacks.
Brands should follow the lead of companies like Target and Google who are experimenting with voice-activated coupons to increase consumer comfort and engagement with voice search as a way to drive purchases for impulse buys. Last spring, Target and Google partnered to offer Google Express subscribers $15 off a Target order by saying “spring into Target” to Google Assistant on Google Home or the Google Assistant app on Android or iOS.
Think Local, Keep It Conversational
In addition to why consumers use voice search, data also reveals how consumers are using it.
For one thing, voice search queries are more likely to be related to local businesses or attractions. This makes sense when you consider that consumers are more likely to be accessing voice search either from a mobile device on the go (where they would likely be looking for nearby options), or from a smart speaker device (more likely to be located in their home base).
Some quick stats:
- “Mobile voice-related searches are 3X more likely to be local-based than text.” (Search Engine Watch)
- “75 percent of smart speaker owners perform searches for local businesses on a weekly basis, and an astonishing 53 percent say they perform these searches every day.” (Search Engine Land)
Beyond being local in nature, voice search queries tend to be worded in a more conversational manner than text searches.
- Three-to-five words in length
- Asking questions led by who, what, when, where, how
- Smart speaker owners “perceive the devices as more than just an electronic toy, they’re more akin to another person or a friend.” (Think With Google)
Brands have an opportunity to develop content on their sites to answer questions commonly asked by consumers in relation to their product category so that the brand’s answer is what voice search assistants select when responding to user queries. The more directly the brand’s content answers the question, the more likely that content will be ranked as the top result. This matters, because voice search assistants like Alexa, Google Home, and Siri “answer queries with only the contents of the top [result], ‘Position Zero’ search results.”
Black Dollars Matter
By Devon Brown, Performance Marketing Manager
Black American consumers have an unprecedented amount of spending power and influence in today’s markets but are still largely overlooked by brands and advertisers. See, for example, a recent editorial piece published by Outside Online on the outdoor category from the perspective of a black woman.
This section of our media landscape roundup dives into exactly how powerful this audience is, as well as how marketers and advertisers can better communicate with them to give them equal representation in all corners of the ad industry.
Affluent and educated:
- They make up 14% of the population (46MM people) with a spending power of $1.2 trillion as of 2018 and 1.5 trillion by 2021
- They’ve experienced 138% growth in HHI’s of $200K or more (2005–2013)
- 53% have some college, or a college degree (a sharp increase compared to previous generations) (U.S. Census)
- Of the $75 billion spent on advertising, only $2.24 billion of it was spent with media focused on Black audiences (about 3%)
- The number of businesses majority-owned by Black women grew by 67% in the last decade. Trendsetters, brand loyalists and early adopters who care about projecting a positive self-image [have enjoyed] steady growth in population, incomes and educational attainment. — Nielsen, 2017
- U.S. Census Bureau projects that minorities will become the majority at 54% of the U.S. population
“With 43% of the 75 million Millennials in the U.S. identifying as African American, Hispanic or Asian, if a brand doesn’t have a multicultural strategy, it doesn’t have a growth strategy” — Andrew McCaskill, Nielsen’s Senior Vice President, Global Communications and Multicultural Marketing
Engaged with brands on social media:
- 44% more likely to show support for their favorite companies or brands
- 29% more likely to find out about products and services
- 44% more likely to meet or network with professional contacts
- 14% more likely to learn about news and current events
Black Twitter is where culture starts:
Hashtags including: #onfleek, #yolo, #bae, #trapqueen, #ratchet, #trash etc. all started on Black Twitter. 73% of White and 67% of Hispanic consumers believe Black Culture influences mainstream American culture.
- Black Women over-index by 29% for spending 3–4 hours each day on social networking sites and by 86% for spending 5 or more hours each day on social networking sites. They are living their lives online.
- Conversations are raw and unedited, out in the open, and happen in real time. All topics are covered: brands, social activism, media messaging, representation, etc.
- Black women place greater trust in recommendations from friends and their online communities as it relates to purchasing decisions, so social media plays a particularly key role.
Black Girl Magic: Black women are influential and trendsetting
Additionally, black consumers over-index for multiple product categories relative to their proportion of the U.S. population (14%) demonstrated by a recent Nielsen study.
- Ethnic Beauty (85% of all spending)
- Women’s fragrances (22%)
- Feminine Hygiene (21%)
- Men’s toiletries (20%)
- Personal soap and bath needs (19%)
- Frozen unprepared meat & seafood (18%)
Moreover, black consumers are trendsetters. As Cheryl Grace, Senior V.P. of U.S. Strategic Community Alliances and Consumer Engagement says:
“Black consumer choices have a ‘cool factor’ that has created a halo effect, influencing not just consumers of color but the mainstream as well.”
Reaching Black Communities
- Use relatable influencers.
- Influencer opinions are highly valued in the black community–this is a culture that hasn’t been able to trust or depend on advertising because it’s rarely relevant to them, so they value the opinions of people who look like them and have had similar struggles and life experiences than them.
- Consider partnerships and acquisitions. For example, Sprint partnered with Tidal in order to gain a stronger footing in black communities, and Apple purchased Beats headphones.
- Reach them in digital ads and on mobile.
- Represent them in front of and behind the camera.
- Don’t treat black culture as a trend or try to appropriate black culture.
- Hire Black Freelance. Give them a seat at the table. Put them in writing rooms and concepting rooms, in front of the camera, behind it, and everything in between. #HireBlackFreelance
The “Straight To You” Trend
By Izzy Kramer, Media Planner
We are living in a time of speed and instant gratification. Consumers expect products and services to be brought directly to them, whenever and wherever they are. The on-demand economy motivates the next generation of delivery and personalization with speed and quality becoming differentiators between brands.
Home shopping and affordable home delivery are the norm. However, business to home delivery services no longer cut it with consumers; they now demand greater control over the specific location and timing of their delivery. And they are willing to pay for it. According to a study by McKinsey & Company, “almost 25% of consumers are willing to pay significant premiums for the privilege of same-day or instant delivery. This share is likely to increase, given that younger consumers are more inclined (just over 30%) to choose same-day and instant delivery over regular delivery.” Due to this, developments in automated technology have flourished to meet the demand, with the food industry leading the charge.
For example, Domino’s Hot Spots now delivers to a geo-location, not just a specific address. Want to order a pizza while at the beach? Look for a Domino’s Hot Spot near your sunny spot and the pizza will come straight there.
Or take the Robomart, a self-driving grocery delivery service. Mentioned in July’s Digital Digest, Robomart delivers fresh produce straight to your door at the touch of a button.
And finally, this trend is even going as far as in-fridge delivery. Through Walmart, you can pay to have someone bring groceries to your home and put them away in your fridge. Like magic!
We are also seeing this trend have a major impact on personalization. As previously established, consumers want what they want, and they want it now, but they also want it tailored to them. Delivery is a natural fit for personalization and it has become an expectation for brands.
We see this fit incredibly well in subscription-based services (the Trunk Clubs and Birchboxes of the world) but now companies are beginning to offer subscribers customized experiences. For example, Jet Black by Walmart allows “customers to text computer-powered personalized shoppers a variety of topics or even a picture of what they are trying to find and the personalized shopper will send back a list of products that could be of interest. If a product fits the bill it can be ordered on the spot with same- or next-day delivery straight to your home.”
Jet Black is incredibly exclusive (requiring an invite to use the service), is in beta, and is specifically targeted to parents. But having your own personalized shopper available for all of your personal requests may soon be a service various companies begin offering.
With that, we are also seeing a trend in ultra-personalization with subscriptions that require a DNA sample to provide their products. Prime examples are services such as 23andMe or Baze, a vitamins provider that sends vitamins directly to your door based off a blood test. This is as personalized as it can get, all the way down to your DNA. Personalization is reaching an ultimate height thanks to online shopping and home delivery.
Overall, in order for brands to understand and flourish from this trend, they must minimize consumer effort while delivering a premium product and/or service to stay relevant. They also need to understand the future of delivery lies in pre-empting the realization that something needs to be bought in conjunction with using advanced automated technology to more effectively meet customers’ on-demand needs.
But the straight to you trend doesn’t stop there. We are seeing a translation in this trend from physical consumer products to the evolution of bringing media straight to your fingertips. Rising smartphone ownership, usage, and improved internet connectivity have encouraged brands to develop mobile-exclusive viewing options. Moreover, those that exist on social platforms have an edge by not requiring a subscription to stream.
A prime and timely example, is IGTV, Instagram’s new content platform. Instagram is built off of short-form content in the form of photos or videos less than a minute. First came Instagram Stories—allowing for even shorter content at less than 10-seconds and lasting for 24-hours. Now with IGTV, Instagram is dabbling in long-form content. This will become incredibly important for younger generations with 48% of iGens saying “social media is their main form of entertainment. According to an article by The Fader, “Instagram and YouTube are core channels for reaching iGens with 70% of iGens using YouTube daily and 62% using Instagram daily.”
Instagram has stepped into the ring with big-name streaming platforms, but do not require a subscription to use their services…yet. They are playing the same category as YouTube, however, so we will see if Instagram follows suit in developing a subscription-based streaming platform such as YouTube Red. However, it’s likely Instagram won’t ever charge based on its parent company’s behavior. (Facebook Watch has consistently remained subscription-free)
The competition between streaming services is nothing as drastic as the fight major media moguls such as Discovery and Disney are facing to stay relevant. The threat streaming services pose requires these companies to reorganize internally and to think more seriously about building their own subscription streaming services. In order to compete, they have begun creating new positions and responsibilities focused on “direct to consumer products”. For example, Discovery has hired Peter Faricy, a former Amazon executive, as its first CEO of global direct to consumer products. Disney has created an entirely new division of direct to consumer products led by Kevin Mayer, Disney’s former chief strategy officer.
However, it is going to take a lot more than reorganizing or adding new departments to make this problem go away. Media companies will need to learn how to build relationships directly with subscribers after decades of focusing on relationships with cable and satellite TV providers. They will also need to utilize the dedicated fandom of their programming to capture new and existing viewers while also turning the tables on streaming services to keep up a variety of premium programming to stay relevant.
To conclude, the straight to you trend is encompassing of both product and service delivery, as well as delivery of your favorite shows, music, and media. It is rapidly growing and evolving to include new technologies to meet the great demand while maintaining speed and quality.
