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Out of Home, Top of Mind

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Mobile Revolution Every serious conversation about advertising and marketing starts and ends with mobile. A recent article in The Telegraph reported that a half of a billion new users joined the Internet last year, driven mainly by mobile users in emerging markets.1 This means that approximately 42% of the world’s total population (3 billion people) is now online and global Internet penetration is widely expected to surpass 50% in 2016. Another noteworthy statistic is that global smartphone sales are estimated to grow by 15% in 2015 courtesy of the mobile revolution happening in emerging markets.

Considering these statistics and forecasts, it is clear that brands need to create attractive and interactive ways to engage their customers via their mobile devices. A “one size fits all” strategy will no longer work on younger demographics whose expectations include highly personalized and relevant interactions. While it is easy to recognize how important mobile is for brands, it is an entirely different matter to create and maintain engagements that drive KPIs.

                                                                                                               1 Here’s how the internet changed this year. The Telegraph, Lauren Davidson, January 21st, 2015 (http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/11360123/Heres-how-the-internet-changed-this-year.html)

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Attracting the Right Attention Since it is clear that we are living in a mobile world, the next challenge is to figure out how to properly engage the right target audiences. It all starts with understanding how to attract and maintain the attention of consumers. A study done by YuMe and IPG Media Lab shows that “consumers are 41% more receptive to advertising in public places than at home, and 16% more receptive at school/work than at home.”2 The study also shows that mobile devices are strong drivers of attention and that location is the most important indicator of advertising receptivity. Considering all of these factors, it becomes clear that people who are away from their homes with a mobile phone are the most likely ones to be receptive to personalized advertising.

Personalization, Microlocation, and OOH

In an earlier white paper entitled “Personalized User Journeys,” we discussed how Moments of Truth are significantly affected by delivering the right offer to the right person at the right place at the right time on the right device. This white paper, however, will focus on how user journeys can also travel across geographic locations, where each one has its own unique contextual data. In order to provide a seamless, yet highly relevant experience for users, Gravity R&D has created a solution that combines personalization, microlocation, and OOH.

Personalization

Imagine picking up a newspaper that was designed and printed exactly according to your interests. Now imagine walking into a store and seeing the entire layout specifically customized according to your tastes. While this is not happening offline, it is certainly happening online. Amazon is a pioneer in using customer data to generate highly relevant recommendations for upselling. This means that customers are encouraged to spend more than they had previously planned by receiving personalized offers for “add ons” and bundled products. Amazon famously reported back in 2006 that 35% of its sales came from their own product recommendations. 3 According to Forrester Research, an average of 10-30% of e-commerce site revenues are the result of product recommendations. While these are inviting numbers, let’s explore how microlocation and OOH can boost it even higher.

                                                                                                               2 YuMe’s Pursuit of Attention (http://www.yume.com/PursuitofAttention/) 3 How To Boost eCommerce Sales With Upselling, Tommy Walker, ConversionXL, April 11th, 2014 (http://conversionxl.com/upselling-techniques/)

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Microlocation

Now that we have established how important personalization is, the next step is to demonstrate how microlocation data can add a whole new dimension. While GPS and mobile triangulation are commonly used to locate mobile phones, they cannot be used to pinpoint the location of an individual. GPS can only provide an accuracy of about 8 meters, while triangulation is only good down to 50m.

If we want to target a person standing in front of an OOH advertisement, then an accurate, reliable, and affordable solution is needed. This is precisely why iBeacons, or BLEs (Bluetooth low energy devices), are now commonly used in retail stores, shopping malls, and airports, as well by outdoor venues such as zoos, walking streets, and busy public spaces. iBeacons transmit a Unique Identification Number (UID) by radio signal to capable phones with a specific app installed on them. This UID can then be combined with a particular user profile to deliver real time, personalized coupons, offers, and content. Microlocation data is particularly powerful when it connects a person to an offer that can be quickly and conveniently redeemed in the immediate vicinity. Even better, a brand can measure how many people interact with an OOH advertisement and then visit a nearby store.

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OOH and DOOH

According to PwC,4 global out-of-home (OOH) advertising will expand at a CAGR (Compounded Annual Growth Rate) of 4.7% and surpass the $40 billion mark by 2018. This growth will come from both infrastructure expansion and the adoption of Digital OOH or DOOH advertising. DOOH advertising itself is forecasted to see global growth at a CAGR of 16.2% and expected to grow at a CAGR of more than 30% in emerging markets.

One of the biggest impediments to the growth of OOH advertising has been its inability to determine the effectiveness of campaigns. The evolution of smartphones and DOOH advertising, however, are now transforming static experiences into interactive and measurable ones. Due to the rapid adoption of mobile payment systems and consequently the rise of m-commerce, digital billboards are now becoming a point of sale. According to a report by Javelin Strategy and Research, due to “the increase of Apple’s iBeacons and other proximity payment technology, consumers will increase the amount they spend on physical goods using their smartphones from $3 billion in 2013 to $53 billion in 2019.”5 OOH and DOOH advertising could very well find itself in the sweet spot again as interactions between brands and consumers are no longer limited to experiences in physical stores or sitting behind a PC.

Mobile Moments of Truth Moments of Truth refer to those brief windows of time when the purchasing decisions of consumers are significantly affected by a personalized offer.

                                                                                                               4 PWC Global entertainment and media outlook 2014-2018: Out of home advertising (http://www.pwc.com/gx/en/global-entertainment-media-outlook/segment-insights/out-of-home.jhtml) 5 Powa Raises $80 Million to Launch Its Mobile, E-Commerce Payments in U.S., WSJ Blog, Lizette Chapman, November 7th, 2014 (http://blogs.wsj.com/venturecapital/2014/11/07/powa-raises-80-million-to-launch-its-mobile-e-commerce-payments-in-u-s/)

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Ninth Decimal, a mobile audience intelligence company, has conducted their own study that also proves that personalized offers are strongly correlated to higher conversion rates.6

The "Live in Levi's" Campaign Levi’s has been making jeans since 1873 and its brand is iconic. Levi’s revenues, nonetheless, have plummeted in recent years as the brand’s perception has deteriorated from cool to old school. In an effort to turn things around, Levi’s has called for a retail revolution that will be led by personalization across their omnichannel.7 Using iBeacons is a big part of their strategy to attract and motivate people to visit nearby stores. Levi’s CMO, Jennifer Sey, sees iBeacons as a fix for OOH advertising8 since they create opportunities to leverage contextual data.

Attracting the customer’s attention is just the start, as Levi’s plans on gathering data about the behavior of their customers to help them fine-tune and plan their in-store and future campaigns. Their new campaign called “Living in Levi’s” is all about reconnecting with their customers in a personal way and big data, microlocation, and DOOH are at the heart of their strategy.

Dafiti Goes Micro Dafiti is a Brazilian fashion e-tailer that uses iBeacons to personalize and localize offers to its customers. The unique part, however, is that Dafiti does                                                                                                                6 How Proximity Marketing Is Driving Retail Sales, Forbes, Greg Petro, October 8th, 2014 7 NRF 2015: Levi’s Brand President Calls for a Retail Revolution, Brand Channel, Sheila Shayon, January 15th, 2015, (http://www.brandchannel.com/home/post/2015/01/15/150115-Levis-Innovation.aspx) 8 Levi’s iBeacon Case Study, Fosbury, http://www.fosbury.co/case-study/levis

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not have any physical stores, but rather uses iBeacons to customize offers based on specific locations. For example, trendy neighborhoods that are home to people with higher disposable incomes receive different offers than those living in less affluent ones. Similarly, the areas around sports stadiums receive sports related offers and the ones around schools receive offers tailored for younger demographics. Their goal is to become a relevant part of their customers’ lives, which is highly correlated to loyalty.

According to Dafiti, personalized and contextualized offers significantly boost both click through rates and sales conversions. Their results speak for themselves as “Dafiti has grown rapidly since launching in 2011, from an Internet Retailer-estimated $70.8 million in web sales in 2011 to $177.0 million in 2013, an increase of 150%.”9

Top of Mind Successful advertising in today’s world must involve real time, personalized engagements designed for consumers who are mobile and not stuck to their chairs. This is critical for brands that want to achieve and maintain “Top of Mind” awareness amongst its target audiences.

Gravity R&D is one of the world’s leaders in machine learning and recommendation engines. We work with clients from all over the world in a wide variety of industries to personalize the communication between themselves and their target audiences. At the same time, Gravity also creates analytics to help its clients understand in real time what is happening with all active campaigns. The addition of microlocation data now enables us to personalize the dialogue for both individuals and specific geographic areas. Finally, Gravity is partnering with top OOH advertising partners from around the world to allow us to deliver the right offer to the right person in the right place at the right time on the right device.

                                                                                                               9 How a fashion e-retailer uses Apple’s iBeacon technology to reach shoppers in Brazil, Internet Retailer, Matt Linder, December 8th, 2014 (https://www.internetretailer.com/2014/12/08/how-dafiti-uses-apples-ibeacon-technology-reach-shoppers)

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About Gravity R&D

Gravity R&D was founded by a team of data scientists who entered the Netflix open competition in 2006 for the development of the best collaborative filtering algorithm for predicting user ratings for films. In 2009, Gravity was a part of the group that tied for first place. This was quite an achievement given that there were more than 44,000 submissions from more than 5,000 groups.

Gravity has gone on to become one of the world’s leaders in machine learning and recommendation engines and currently provides services to clients like Dailymotion, P&G, RCI (part of the Wyndham Group), Schibsted and Naspers.

About the Author

Kevin Jackson is the Global Sales and Marketing Director for Gravity R&D and can be reached at kevin.jackson@gravityrd.com.

Contact Us

To learn more about how Gravity R&D can help your organization harness the power of personalized user journeys, please go to www.gravityrd.com.