It Is The Worst Of Times, It Is The Best of Times (Part 2 of 2)

It Is The Worst Of Times, It Is The Best of Times (Part 2 of 2)

By Giles Martin Oxford Road EVP, Strategy & Insights

4. The Collapse of the Funnel

2022 should see significant steps in the coming together of brand and eCommerce, in various guises. For brands that are not eCommerce natives, this is a major initiative and concern, with recent Gartner research indicating that optimization of digital commerce is the number one priority in terms of allocating marketing budget (12.3% of budgets, on average). Not surprising, perhaps, given the explosion in eCommerce and digital media use since the lockdowns.

Perhaps more immediately relevant for our clients, this trend can also be seen in systemic shifts in the way the media industry is coming to market, particularly retail media, which has traditionally focused squarely on performance. Now some retail platforms see an opportunity to close the loop between brand advertising and purchase, driving a new phase of growth.

Unsurprisingly, one of the key players here is Amazon, which will certainly be one to watch in this space. Consider the investments they’ve been making in content that would traditionally be considered much more brand-focused. These include its extensive video properties, acquisitions like MGM, and the licensing of rights to broadcast major sporting events including the NFL and EPL. Add this top-funnel, high-reach, high-engagement content to the depth and breadth of their first-party data, and you have a different kind of marketing tool (and one with enormous potential power.)

But wait, there’s more. The Amazon Marketing Cloud allows agencies and marketers to upload their 1P data in a safe-room environment to connect the dots, perhaps more clearly than ever, between upper-funnel content exposure on their platform, and subsequent lower-funnel action. This includes, through their new ‘Brand Metrics’ product, the ability to incorporate soft metrics (e.g. awareness, consideration) in the equation too. Do brand-aware or high-consideration prospects go on to buy? Is there a clear link between media exposure and these soft metrics? What has previously only been part of the realm of more speculative nested models is now part of the direct domain of Amazon, which is seemingly poised to provide much clearer data on this topic than we’ve seen before.

It is telling that Amazon has launched a B2B campaign to tell advertisers about its brand-building potential. What’s more, anecdotal reports suggest Amazon’s salespeople are all now incentivized on selling upper funnel. Amazon, seemingly, is going all-in on this initiative to connect top and bottom-funnel.

Other platforms are pushing in the same direction. Walmart doesn’t have video (yet) but it does have a deep partnership with the trade desk to monetize its media network ever more efficiently. Facebook and TikTok are aggressively pursuing the social/viral commerce space.

This can be seen as a movement towards the profile app space in Asia, where video content and commerce are more seamlessly connected (e.g. Shopee), and where the ‘Super App’ (Alipay, WeChat) dominates the landscape in a way we’re not familiar with yet in the Western market. That race, however, is very much on – and this alignment of entertainment and purchase is a key step forward in it. This is further evident in the delivery app space: Instacart now delivers for Dick’s, Best Buy, and Staples. Uber delivers flowers and cosmetics. DoorDash’s DashMart sells its own stock of convenience store items. By offering a suite of different products through a single platform, the evolution towards SuperApps, where entertainment, convenience, shopping, and purchase converge is well-underway.

5. Social Commerce & The Creator Economy

While influencers monetize their audiences via sponsored posts and ad revenue, creators are bypassing the major platforms to make an income through tools such as Patreon, Substack, Cameo, TipJar, selling NFTs, and creating their own brands and merchandise. This changes the relationship between brands, media platforms, and creators, and is driving innovative partnerships and collaborations.

Given the different financial structures of the relationship between brands and creators, brands will have to get increasingly used to having less control and letting go more. Offering creative freedom may be a scary prospect for some brands but there will be rewards for those that take the leap with authentic creator collaborations. Research by TikTok showed that 88% of users discover new content while on the app and one in two discover new products and brands in the process, with 91% of users taking some sort of action after seeing the content. There’s an enormous amount of potential here.

Social commerce adoption, like e-commerce, has been greatly accelerated by the pandemic. Social platforms are becoming shopping destinations as new technology has made shoppable media a seamless experience, transforming platforms into malls.

The lines between content and commerce blur as livestream commerce, as well as livestream content, will become more widespread outside of China and Southeast Asia.

While we won’t allow ourselves to add pointless fuel to the still-highly-speculative Metaverse fire, what is clear is that gaming will again be a trailblazer into this area, particularly as it merges with social media as games become places to socialize and spend time. In 2022, more brands will experiment with involvement in gaming, which is set to become a $300 billion industry by 2025 – there are limitless opportunities as anything in the physical world can be recreated in the virtual world.

6. AR & VR – The Realistic Version

While we’re not yet betting that the human race wants to abandon this reality in favor of a digitally-constructed one, we can expect AR & VR to continue to take significant steps in 2022. Part of this is an inevitable consequence of lockdown restrictions. Many brands, particularly in retail, have been unable to get their products into consumers’ hands. Prospects have not been able to try on clothes or test products. Market conditions then are forcing the acceleration and adoption of AR.

Think IKEA ‘Place’, which allows users to place virtual Ikea furniture into their own home (Home Depot have a similar product); L’Oréal’s ‘Modiface’ on Amazon, allowing customers to digitally try on make-up; Timberland’s Virtual Fitting Room (um, goes back to 2014); and Toyota’s vehicle demo, overlaying images of the inner workings of the Hybrid drivetrain onto physical vehicles.

5G is also going to be a significant factor in the deployment and adoption of AR. It will allow brands new ways to cut through in increasingly short customer journeys stimulated by ads and social experiences that are shoppable. And with 5G set to reach half of all mobile users globally by 2025, VR and AR won’t just be for big brands and the future – they’re for all and they’re now. Shopify has already launched its own AR toolkit for small commerce businesses, and reports that interactions with products having AR content showed a 94% higher conversion rate.

With faster networks and download speeds, more seamless, lower-latency VR and AR experiences will be accessible anywhere, at any time. There is nothing to stop AR and VR from becoming the new normal in shoppable media. According to a Nielsen global survey, consumers listed AR and VR as the top technologies they’re seeking to assist them in their daily lives, with 51% saying they would be willing to use AR technology to assess products.

Overall, 2022 should be a stimulating and challenging year for marketers. Even if, as we continue to hope, the world returns to a pre-2020 degree of normalcy and care-free life, many of the shifts that have occurred will remain, with ongoing challenges and opportunities for marketers.

* William Bruce Cameron