Tech Mix: Solving Wanamaker’s Riddle

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: tech mix. Tech mix can be described as a force that enables businesses to pursue omni-channel marketing. It has two dimensions. First, consumers today spend time on multiple devices (or multiple screens) and this sort of multihoming creates an interdependency between devices that firms can tap into. Second, consumers are exposed to multiple ad messages in different ad formats for the same brand across different channels at different points in time in their path to purchase. This creates potential omni-channel synergies. These two dimensions of tech mix influence consumers' behavior in non-trivial ways and have made digital attribution the holy grail of advertising.

Trajectory: Watch Where You’re Walking

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: trajectory. An individual's trajectory is the physical, behavioral trace of his or her offline movements. Firms can measure when we walk past their physical stores, when we come through the front door, when we walked up to the second floor, and so on. Trajectory has three dimensions: time, route, and velocity. Time includes the starting and ending point of the trajectory and the day of the week. Route is not location itself, but rather a way to determine how similar someone's spatial trajectory is to others. Velocity contains information about how fast the individuals are moving. Underlying these three dimensions is a fourth and far more granular dimension called semantics. Semantics takes a number of factors into account, such as the likelihood that someone may visit a certain store, how much time they spend there, how much time they spend moving to another location, and how related or unrelated those two stores are.

Saliency: Can You See Me Now?

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: saliency. Today's consumers may find advertising annoying, but they fear missing out and would prefer not to waste time in the trial-and-error process of searching for what they need. They want choice and freedom, but they also get easily overwhelmed. Imagine an ideal world where we don't need to scroll down and squint to find what we want. We don't need to refine and repeat our search or make a tough call. We always get the “best right answer” with the least possible effort. This is referred as saliency or the position effect. Consumers want to see the best right answer stand out on their screens. Advertisers, retailers, and other marketers want their message to be that “best right answer.”

Location: Why Geography Matters

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: location. For many decades, location-based marketing usually meant being able to target users at the level of ZIP codes. Every consumer in the same ZIP code received the same offer, presumably because they had homogeneous preferences stemming from similar socioeconomic and demographic backgrounds. However, in today's mobile economy, firms can know in real time which store someone is visiting, which aisle in the store someone is standing in, and in some cases estimate shelf location of the product someone is staring at. Consumers' location histories are very predictive of their product preferences. This means their locations will influence their responses to marketing offers.

Striking a Balance

This chapter discusses the importance of businesses striking the right balance in consumer lives while leveraging technologies. On the surface, it is very easy for businesses to get discouraged by consumers' seeming resistance or inhibition to advertising. However, what lies beneath the surface is different. On the inside, consumers do have appreciation for advertising, albeit at varying levels. This is reflected in four behavioral contradictions, which are particularly striking as business becomes more aware of the immense and untapped power of the mobile economy: (i) people seek spontaneity, but they are predictable and they value certainty; (ii) people find advertising annoying, but they fear missing out; (iii) people want choice and freedom, but they easily get overwhelmed; and (iv) people protect their privacy, but they increasingly use their personal data as their currency.

Introduction

This introductory chapter begins with an explanation of the motivation behind the present volume. The author goes back to sometime in late 2009 or early 2010, when he first heard the phrase “we live in an era of smart phones and stupid people.” He recalls being both very amused and intellectually intrigued by this statement, not so much about what smartphones would eventually do to human intelligence, but more by how it could become an exceptional source of intelligence for businesses. The chapter then sets out the book's purpose, which is to demystify the mobile economy and take the uncertainty out of the process of harnessing the power of mobile data and delivering value to consumers. It concludes with an overview of the three parts of the book.

Epilogue

This epilogue presents a few closing thoughts about the impact of mobile technology on society at large. It argues that the future of mobile advertising depends on a bargain that consumers and firms need to strike with each other. Both sides will have to make some investments and offer some trust for this give-and-take relationship to prosper. Consumers will need to find better ways to strike a personal balance between their lives and mobile technology. They will need to make the choice about how much they let technology intrude and inform their lives. They will hold the key to how open or private they want to be with their data. But this does not relieve businesses of their responsibilities. They need to pay attention and take their roles very seriously in this ecosystem. They should surprise and impress consumers while helping them with their needs the way a butler or a concierge would. More importantly, they need to take data security and privacy issues seriously.

The Next-Generation Technologies

This chapter discusses emerging technologies, including wearable technologies, artificial intelligence, instant messaging and apps, smart homes and connected cars, smart wallets, and virtual reality/augmented reality. It concludes that there is a lot to explore with the technology and capabilities at hand today in the mobile world. At the same time, there is a lot in the future to be excited about as well. Within a few years, the mobile ecosystem and related technologies will transform our lives beyond recognition and usher in a new age. It will without doubt be recognized as one of the hallmark advancements that society has seen in the 21st century.

What the Smartphone Has Changed

This chapter discusses the impact of smartphones on consumer behavior. The proliferation of smartphones has changed the way people create and consume any kind of content. Whether streaming music on Apple Music or Spotify, uploading pictures and videos on a social networking site such as Snapchat or Instagram, or writing a review on Amazon, we now have the ability to create or consume content in a frictionless manner. During the early days of internet shopping, consumers used to browse online but make the actual purchase offline. Today, thanks to mobile devices, many consumers often browse in a brick-and-mortar shop and then complete the transaction online on their devices. Perhaps one of the biggest changes has been in mobile how businesses interact with their audiences. For instance, location-based services have enabled advertisers to alter content depending on what part of a city or even which block of a city the consumer is in.

Social Dynamics: You Are Who You’re With

This chapter examines one of nine critical forces behind purchase decisions that make mobile advertising so powerful: social dynamics. Recent studies have shown that the social company we keep changes our behavior. This is our social context. Beyond our individual location at any given time, our social context influences how we interact in real life as part of a group of friends, as a couple, or with family members. And these behaviors are fundamentally different than how we behave when we are on our own. The chapter discusses the impact of social dynamics on mobile purchases, the importance of group composition, and digging deeper into consumers' personalities.