DECODING E-COMMERCE A WHITE PAPER BY OMG TRANSACT - Let's Make Lemonade
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DECODING E-COMMERCE A WHITE PAPER BY OMG TRANSACT
WHAT USED TO WORK OUT FOR MARKETERS HAS
BEEN CHALLENGED BY DIGITALIZATION, THE RISE
OF THE PLATFORM ECONOMY AND FINALLY BY
THE PANDEMIC.
In a post Pandemic era, we believe the EXPECTATION of the consumer will be TRANSFORMED.
In a digital world, EVERYTHING IS CONNECTED. What was considered good before, will
increasingly be expected as standard.
In the future, true competitive advantage will come from the ability to CONSISTENTLY CREATE
INTUITIVE & CONNECTED CONSUMER EXPERIENCES.
Experiences that not only SEAMLESSLY REMOVE FRICTION AND ANTICIPATE NEEDS, but also
reflect PERSONAL PASSIONS, VALUES AND ASPIRATIONS.
Future business success for beauty brands, will be reliant on the profound opportunity of
HUMAN and MACHINE COLLABORATION fuelled by DATA to design balanced, relevant,
timely and above all desired experiences.
We call this collaboration INTELLIGENT EMPATHY, systematically delivered via technological
expertise and the purposeful application of human intuition and creativity.
In this emerging ecosystem E-COMMERCE CONNECTS THE POLES of branding and sales.
It is not the embankment on the right or left side of the river. It is the river itself and it carries a
rich stream of data and insights.
The challenge is to use this stream to the benefit of your business and unveil its potential.
With this paper we want to stimulate THINKING, EXPLORATION AND DISCUSSION.
PAUL REMITZ
CEO | OMG Germany
2
E-COMMERCE IS THE BIGGEST SHELF
AT THE SAME TIME IT IS THE SMALLEST SHELF OF ALL
For decades, trade marketing followed The disruptive forces of digitalization
established concepts. The same applies to challenged the once clear approaches and
advertising communication. On the supply created a need for transformation within
side you had to secure distribution and your organizations. COVID has given this
shelf space in store. Demand was ensured by development a further acceleration.
brand communication via mass media with The following content gives guidance to
linear TV at the forefront. master the challenges.
E-COMMERCE AND MEDIA – MANAGED IN ISOLATION
BRAND MARKETING BUDGETS E-COM / SHOPPER BUDGETS TRADE BUDGETS
Brand / Awareness Performance CO-OP Shopper Marketing Trade Promotions
Display / Search /Social Display / Search /Social
Retailer Search Retail.Com Media / In-Store Display
RETAIL AND MEDIA MEDIA SHOP/ENGAGEMENT
ARE NOW TWO SIDES targeted and optimized Generating data that
towards interaction fuels media targeting
OF THE SAME COIN
3If we look on how companies are structured, because transaction can literally be just one
we usually see the marketing and the sales click away – and often is. On the one hand
department as different entities with media is targeted and optimized towards
separated staffing, budgets, reporting lines interaction/transaction. On the other hand
and goals. And often enough, they will also interactions/transactions provide data that
have different cultures and mind sets. fuels – via audience lists - Display-&Video
advertising, Social Media and Search. A
The connection between sales and marketing control loop is created, that only can be
has been studied plenty of times in the last effectively and efficiently managed with a
decades and interdependencies have been proper organization, where media and sales
proven. However, in an non-digital environ- have a common reporting line and a common
ment the connection was indirect and there- goal.
fore not subject to greater integration.
Digitalization has changed the game and Some companies have adapted quickly to the
continues to do so by increasingly chaining new reality by taking disruptive decisions and
the two together. In the digital ecosystem - are already showing success. However, in
from streaming entertainment to paid search - average, this development is still not reflected
media is now tightly linked to transaction, well enough within advertisers.
56%
your category buyers
go directly to Grocery.com
In the
past:
New
Retailer
Customer
Retailer
Media
Owner
Media
Owner
reality: Customer
to start their journey
4THE “PRIVACY FIRST The latest developments in the data economy,
made it obvious for manufacturers that they
REGIME” IS A GAME have to create their own consumer
relationships through TRANSACTIONS AND/
CHANGER OR ENGAGING experiences.
Digital data enables an unprecedented TRANSACTION is still dominated by
understanding of the consumer. It provides e-retailer currently, with Amazon heading
valuable insights into which products are the pack by far.
bought as well as when, how, for how much,
how often, in what combination and how they But how do you go about it? How can
are paid for. What used to be aggregated relationships with retail, especially e-retail, be
panel data available weeks after the actuals balanced, if one is ultimately dependent on
purchases, has become instantly available their support in the present? In the chapter
granular factual data, processed in real time “Winning strategies in e-commerce – Direct to
and interpreted by artificial intelligence. Consumer (D2C)” we provide some further
guidance. D2C is not only about shops and
With this data, trends can be recognized early owning the transaction. Engaging content is
on and as described above, this data is a also an important element to create data-
flywheel to precision marketing. generating relationships with consumers.
As long as manufacturers have not built their But there are many examples of ascending
own last mile to the customer, they are D2C-Shops from Manufacturers as well.
dependent on the data flywheel of the
e-retailers with whom they partner. D2C Shops in Germany ranked by turn over
Data exchange has become problematic due Ranking Domain
e-commerce turn over 2019
in Mill. Euro
to the legal regulations and tracking
1 apple.com 588,0
prevention of browser and mobile operating
2 hm.de 498,8
systems. Although, it has always been the case
3 ikea.de 494,0
because e-retailers naturally do not like to 4 bett1.de 278,9
share their treasured data and if done, it 5 esprit.de 251,5
would be in an unhelpful aggregated form. 6 soliver.de 164,8
7 medion.de 127,8
As a consequence, they walled their data 8 adidas.de 116,4
gardens. 9 zara.com 100,2
10 nike.com 100,2
5VALUE CREATION WITH ENGAGING
EXPERIENCES THROUGH D2C
• Community building • Tutorial
for like minded shopper • Virtual Services
• Tailormade content • Live Help/Customer Service
• Outstanding customer/ • How-To Guides
brand experience
VALUE FOR
• Competitive pricing for CUSTOMER • Exclusive Configuration/Sizes
multi-channel items • Product Pre-Launches
• Reward programs to • Exclusive Limited Editions
trigger reoccurring sales
• Customizable Products
• Special Deals & exclusive
Bundles
• Next day delivery
• Easy return process
• Subscription models
• Gifting options
Direct-to-Consumer is without a doubt an of sales online are still made via e-retailers on
important strategic topic, and more relevant the digital shelf of Amazon and the leading
since the COVID-19 pandemic showed every retailers in each product category. Therefore, it
manufacturer how much power and potential is important to win ground on those shelfs in
e-commerce has. Nonetheless, the majority order to secure revenues in the present.
6WINNING THE DIGITAL SHELF
As platforms and e-retailer become marke- With over 50% share of online revenues
ting ecosystems in their own right, brands Amazon is the uncontested top player in
struggle to decode the winning formula for German e-commerce and sets benchmarks for
budget allocation and integrating retail with consumer expectation in all dimensions.
media.
AMAZON IS
53%
AMAZON
LEADING WITH MORE 19%
THAN 50% MS Other
Market-
places 13%
Retailer 10%
Market Share: Distribution of online shopping 5% Brands
expenditure from January – February 2019 Other
Unsurprisingly, competition on the platform is How can we integrate our retail media into our
fierce and the challenges are manifold: How wider media ecosystem? These and further
do we deal with margin erosion? How can we challenges are addressed by the OMG
distil actionable insights for our retail and Transact Framework that provides a structure
media operations from Amazon data? from general strategy to holistic media.
OMG TRANSACT
COMMERCE & MEDIA FRAMEWORK
BEFORE BEHIND AT TO BEYOND
The Shelf The Shelf The Shelf The Shelf The Shelf
INVESTMENT JBP TERMS CREATIVE SOLUTIONS Advanced Targeting HEADLESS
PLANNING Advances Retail Brand Stores Media Metrics COMMERCE
Top Down Modelling A+, Vine, Image Prpensity Model Halo Attribution Leadership
Bottom Up API Integrations Investment Planning
WIRING RETAIL STRATEGY RETAIL DATA BID FLIGHTING OMNI CHANNEL
RACI Advances Retail Shopper Behaviour Management Integration
P&L Modelleing Promo Budget / Demand Sensing Cementing
Budget Process API Integrations Effectiveness Forecasting Halo Planning best practice
CONNECTING RETAIL OPS CAT MANAGEMENT RETAIL BIDDABLE RETAIL MEDIA
PLANNING Account Mangement E-Com DEO PERFORMANCE STRATEGY
Retail + Media Shipping Inventory Content DEV ACTIVATION Strategy /
PIM / TAB Feedback Loop Execution Foundation
71
E-commerce Pure Players may lack the
STRATEGIC prominence and resources of large brands but
PLANNING make use of the platform environment to
leverage their biggest advantage: speed and
flexibility. In some categories these early
The foundations for success are laid long adopters have consequently carved out their
before the first product is sold. The first pillar niche, facing major brand with the challenge
of success is to form an internal structure that to reconquer their fair share of market.
is ready to deal with the fast moving e- Naturally, these players have gained insights
commerce world. This requires from and adopted practices that can be learned
companies to break up the silos between from and built up on top.
brand marketing, e-commerce and trade
2
marketing to form a commerce unit that
exploit the crosslinks between all areas of RETAIL
commerce. Especially for large and B2B
oriented companies this poses a significant MANAGEMENT
challenge that requires a digital
transformation project with sufficient top level Successful retail management is the backbone
management back up to succeed. of Amazon business and relies on detailed
insights on customer behavior, portfolio
As the e-commerce playing field is governed performance and stock planning. Key
by its own rules, not only the company needs accounter regularly face the challenge that the
to adapt, but the product portfolio as well. required data is widely segmented, a single
Shipping costs set up a financial threshold for source of truth does not exist. This impedes
low priced products below which business is the managers capability to quickly make
not feasible for e-retail partners such as informed decisions. In the ever fluid Amazon
Amazon. Exclusion-listing on advertising environment fast adaption is key and
options and delisting are consequential. A spending too much time collating information
portfolio strategy that utilizes ship in own is an unaffordable luxury.
container packaging (SIOCs), virtual- and
hard-bundles and optimal minimum order Brands that can field custom tailored
quantities (OMOQs) can counter these e-com technology and steering dashboards make
tradeoffs. Nevertheless, not all products are better decisions faster and can allocate more
made for e-commerce and investing in an e- time to strategize and secure profits beyond
commerce exclusive product line may be todays business. Even more, data aggregation
feasible. This comes with the added benefit of and processing helps not only in daily
evading the clash potential of platform price business but also provides the basis for a solid
erosion with pricing demands of brick-and- argumentation during the annual negotiations
mortar retail chains. with retail partners.
On Amazon, a thorough competitor analysis As these challenges are not Amazon specific,
and go to market strategy is more important proven technology will serve as a blueprint for
than ever. When it comes to e-commerce every mature e-commerce undertaking and
competition you should expect to face prepare manufacturers for the developing e-
previously unknown players. commerce Landscape.
83
Thus, excellent content always caters to the
CONTENT shopper audience not only by utilizing the
EXCELLENCE correct search for keywords, but by speaking
in the language of the customer. Start with
the customer and work backwards is a
Winning the digital shelf depends on two credo that has not only made Amazon
factors: be seen and converting the shopper successful as a company. Putting yourself into
to get sold. Both are largely dependent on the the shoes of your customers is also
product content, especially on Amazon. indispensable for brands to win over shoppers
and make the sale. Every product hero
On average, 90% of Amazon browsers across therefore has to be polished to the maximum
categories find their way to the product detail to convey the products selling proposition and
page (PDP) by means of search. Therefore, be the brands magic.
seen to get sold equals ranking high in
4
product search results on both paid and
organic placements. The Amazon A9 search RETAIL
algorithm considers content from the product
detail page and in the vendor central backend
MEDIA
such as bullet points and images. To win the
battle for organic placements, brands need to Data and advertising are more important
create content highly optimized for the for platforms than retail business. As the
Amazon search engine utilizing keyword most developed e-commerce ecosystem in
mining strategies and specialized tools. the western hemisphere, Amazon has created
Content matching with entered search queries a playing field where brands are pitted against
is deemed relevant for the shopper by the each other, vying for the consumers attention
algorithm and improves the products ranking and in doing so have to spend media euros in
for this search term. Other marketplaces such no small amount. To make it worse, the
as eBay use search for shopper guidance as alternative product from the competition is
well and operate along similar principles. only one click away as providing selection to
the shopper is a strategic cornerstone of
Although Amazon has become the number online marketplaces.
one for product related searches, the
technology has not reached the same level of Non-platform e-retailers are lagging behind
maturity as Google search yet. This is and only slowly seem to be able to detach
especially true for the search functionality on themselves from an “old fashioned” insertion
German retailer sites, where only a limited order process.
number of information fields are taken into
account to rank a product which severely [details please see info-graphic on page 10]
impedes brands options to implement search
optimized content. This is bound to change as After the initial hype, enterprises have become
the Covid-19 crisis has propelled the German more cautious in properly allocating their
e-commerce landscape years ahead, leading media budgets on marketplaces. But which is
e-retailers to prioritize the development of the right path to follow and how to deal with
their e-commerce channels. the increasing pressure? Let’s take a closer
look. Amazon offers two major instruments for
However, creating relevancy for the search media activation, Sponsored Advertising and
algorithm is only one aspect of content the Amazon DSP. As with all tools their
excellence. Converting shoppers is as efficiency and effectivity is largely depending
important as being seen. on the user.
9Web-URL advertising. ottoretail.media rewe-group- douglas-marketing- ebayads.de zms.zalando.com kairion.de
amazon.com retailmedia.de solutions.com
Owned and amazon.com OTTO, ABOUT YOU, rewe.de, penny.de, douglas.de ebay.de zalando.de real.de
operated limango, myToys, toom.de
baur, Ackermann,
nonprix, Quelle,
FRANKONIA, heine
Mandates
Display Ads
Video Ads
Audio Ads
Sponsored Ads
Shop-in-Shop Brand Stores Creative Concepts Brand Stores ShopNow
Targeting • Keywords • Audience • Audience • Keywords • Audience • Audience • Audience
• Audience • Audience
• Location
• Products
Managed • Per insertion Order • Sponsored- • Display Ads • IO- & • ZMS Creative • Campaigns
• Amazon DSP Product-Ads • Brand Store Programmatic: • Processes
(Creative In-House Productions)
Service • ZMS Insights
• InStore-Promotion • Standard Ads
• Collabary by ZMS
• Audience Extension • High-Impact
• ZMS Media
• Dynamic Creative Takeover
Optimization • Top of Search
• DSP Active Agent Display
• Native Display
Self-Service • Sponsored Ads • Display & • Sponsored • Display • ZMS Insights Self-
• Amazon DSP Sponsored Ads Product Ads Service-Tool
• Otto Display • Audience Ads
Network
Services/ • Plus, connected • Dynamic Creative • Brand cockpit • Product test • Target group finder • Custom-build • Support
Solutions devices Optimization • App couponing campaigns dashboards • Campaign
• Audience Insights Pre-Launch-Tests optimization
(Fire TV Ads)
•
Report • Shopping cart- • Reporting
analysis • A/B/N-Testing
• Smart search &
ranking
• Online only price
promotion
The focus of Sponsored Advertising lies in The Amazon DSP is the retail giants own
the consideration and conversion stages of walled garden programmatic bidding solution.
the customer journey. Sponsored Products It stands apart from other DSPs firstly through
and Sponsored brands are the mainstay of its targeting that leverages the enormous data
CPC advertising, regularly showing the highest pool Amazon has aggregated from its
return on invest and consistently receiving customers shopping behavior. Secondly, it is
between 80%-90% of brands budget the only way to program-matically activate ad
allocation for Sponsored Ads. The ads inventory on Amazon owned operated sites
themselves are at least partially generated such as amazon.de or imdb.com. The Amazon
from product data and are displayed on DSP is a multipurpose tool that can address
search results pages and product detail upper funnel awareness goals but also mid-
pages. funnel consideration through live shopper
targeting and lower funnel conversion targets
Structuring the account along branded, by means of retargeting. As such, the DSP has
category and competitor targeting it’s place in every larger Amazon media
has become best practice for optimal strategy.
campaign steering and strategic evaluation.
105
But where are the low hanging fruits?
One opportunity often neglected is to fully CONNECTING
leverage the potential Content Excellence
offers for Retail Media. THE DOTS:
AMAZON IN THE WIDER
A high CPC is not the only relevant element in
winning the ad placement. Similar to Google, MEDIA LANDSCAPE
Amazon factors a quality score into then
decision which sponsored ad to show the user.
This quality score takes into account booked Amazon and other e-retailers do not stand
keywords in the ad campaign and matches isolated in the media landscape but must be
them with the keywords found on the product imbedded in the overall media strategy.
detail page. A second advantage of
connecting content and Media is that product On a strategic level the importance between
titles and hero images are an essential the different e-retailers and especially an
element of every Sponsored Ad and Amazon owned D2C presence must weighted and
DSP Ad. Excellent content thus has a direct aligned.
impact on media click through rates and ROAS
and an indirect impact on ROAS through Should your programmatic and social
better conversion rates. campaigns link to brand.com, to e-retailers or
both? On which e-retailers should onsite retail
When looking at the future of Amazon media be activated? Does activating offsite
advertising, three relevant trends for brands retail media like the Amazon DSP fit into your
stand out: strategy or create clash? How do you deal with
keyword overlap clashes on Google, where
• technology integration you suddenly face yourself bidding against
• video and your own retail distributors?
• wider media landscape integration.
Facing the fact that e-commerce is still the
The integration of technology means a smaller part of commerce; those online
continuous opening of Amazon towards third marketing activities must be considered
party technology ecosystem, signaled by the carefully as clashes with offline retail chains
development of APIs for retail and media. The are to be avoided.
emergence of Sponsored Brand Video and live
shopping in the US is a clear indicator that As you aim to make your wider media setup
Amazon will focus more on visual content in shoppable, agency driven technology such as
the future. And finally, Amazon Attribution is retailer selectors on ads and tracking from
Amazons first step to integrate itself into the offsite media to cart is of paramount
brands wider media landscape. importance. Making every ad shoppable does
not mean the end of awareness: branding and
Beyond Amazon it is a safe bet to assume gaining customers is still important.
that most e-retailers will follow with their own
onsite product advertising solutions such as But it will become increasingly difficult clearly
REWE and eBay have done already. separating both, and those brands and
agencies that rise to the challenges will win
It is also plausible to assume that these will the digital shelf of tomorrow.
operate along similar principles allowing to
transfer some of the learning gained.
1110 RULES
FOR WINNING THE SHELVES!
1 Break down your silos - brand
marketing, e-commerce and trade
marketing are going to be highly
6 Visibility matters - Speak the
language of your customers to
maximize visibility in search
interconnected and interdepend- queries on search engines, on e
dent; your organization needs to commerce platforms & your D2C.
reflect that!
2 E-Commerce has its own
requirements on product margin
& prices – make smart
7 E-retailer becoming media
houses – just listing your
products won’t do it anymore.
adjustments to your portfolio! You need to make sure to
manage sponsored advertising
properly.
3 Be aware of e-commerce pure
player – marketplaces and digital
communication are their native
8 Everything will be in motion -
Prepare for visual content in
e-commerce – especially video
playgrounds. Learn & adapt their content!
best practices!
4 Data is the key to success - install
proper information tracking
systems to take informed
9 One strategy to rule them all -
Find your balanced approach
between your D2C shop,
decisions in e-commerce & to marketplaces, e-retailer and
learn about your customers’ brick-and-mortar.
needs!
5 Content wins the digital shelf -
Make sure you provide the right
content for e-commerce shelves
10 Brand building remains
mandatory - Besides all new E-
Retail marketing possibilities, your
to stand out from the crowd. brand is still the most valuable
asset and therefore classic brand
building is still mandatory to keep
the flame alive.
12WINNING STRATEGIES
IN E-COMMERCE
DIRECT TO CONSUMER (D2C)
IN A COOKIELESS WORLD D2C IS THE BEST POSSIBLE WAY FOR BRANDS
TO STAY CONNECTED WITH THEIR CUSTOMER.
Leading industry companies like Nike or Apple 2. OWNING THE CUSTOMER
already have a very strong focus on their RELATIONSHIP
Direct to Consumer (D2C) business. Nike just In a cookieless future having access to a
recently proclaimed that it aims to do 50% of large amount of first party data will make
their worldwide sales through their D2C, all the difference. Every item or service that
coming from 33% in 2020. Why are those you sell through your D2C store comes with a
companies so obsessed with this special part customer interaction and with it you receive
of their businesses? Within the next first party data that you can add to your data
paragraphs we will shed a light on why retailer warehouse. So, whenever you have something
should consider creating a D2C offer and what interesting for your customers coming up, you
it takes to be successful in this area. can reach out to them directly. In addition to
that you will learn very quickly which features
of your website customers embrace and which
WHAT ADVANTAGES parts need to be reworked.
DOES D2C DELIVER 3. SAFE TEST & LEARN ENVIRONMENT
On your own website you can easily test new
FOR RETAILER? products and find out if they resonate with
your target groups. You can ask your
customer base about feedback and even
1. OWNING THE CUSTOMER EXPERIENCE create pre-market product testing groups
Within your own website environment, you that provide valuable insights. Customer
have the full control to deliver an that are involved in the creation process of a
outstanding shopping experience for your product show a higher commitment of buying
customer. While marketplaces like amazon are it afterwards.
somewhat limited when it comes to brand
experience and are not always the best place 4. DATA COLLECTION
for creating emotions, your website isn’t. You Through the direct interaction with your
can offer customers additional services like customer you will be able to collect a large
personalization or offer help and guidance set of data reaching from Sales KPIs over
via virtual services. In short you can present Advertising KPIs to Customer Behavior
your brand & products to your customer as KPIs. The more interactions you have the
you imagine them to be. more possibilities to learn about your
customer arise. This knowledge is extremely
valuable not only for your research &
development department but also for your
marketing department that is now able to
create tailormade strategies based on data &
insights.
135. CONNECTION POINT FOR SOCIAL 6. IMPROVED P&L STRUCTURE
COMMERCE & SHOPPABLE MEDIA By selling direct to your customer you are
As soon as your D2C capacities are up and cutting out the man in the middle.
running you can add variable traffic sources to Manufactures and brands are able to gain
push your D2C business. With social back control on pricing. With the correct
commerce on the rise and shoppable media portfolio setup, you will see a margin
all around us your D2C operation is the improvement with every sell that you
heart for a multitude of traffic and sales make.
channels.
WHAT DOES IT TAKE TO
BE SUCCESSFUL IN D2C?
YOUR ULTIMATE GOAL IS TO HAVE A CONSTANTLY GROWING CUSTOMER BASE THAT
LOVES TO INTERACT YOUR PRODUCT OR SERVICE OFFERING AND RETURNS AS OFTEN AS
POSSIBLE. IN ORDER TO REACH THIS YOUR CUSTOMER NEEDS TO PERCEIVE VALUE OUT
OF THE INTERACTION WITH YOUR OFFERING.
1. DIFFERENTIATION 3. PLATFORM SETUP
For multi-channel brands differentiation is There are a multiple solution provider in the
the best way to avoid conflicts between market to bring your platform live. It is
your existing channels. Differentiation can worthwhile to spent time to conclude what the
come in many ways like different size, different aim of your D2C offer is and how many traffic
products configurations, new bundles and you want to put through it. After you’ve
services that provide added value. By offering chosen the right platform, it is essential to
something different in your D2C store than in build it in a SEO optimized way. This will
the other channels your customer has a reason increase your organic visibility and save media
to constantly return. This strategy also avoids money that is better at use in attracting new
price wars on your valued products. customer. The solution you choose has to be
scalable and capable of handling peak
2. D2C-READY SUPPLY CHAIN season traffic & events like Black Friday.
Your customer will bench you against the Imagine you have a great offer for this event
best in the industry. Therefore, you need to and your website goes down and your clients
make sure that your fulfilment center is can`t see it.
able to live up to this expectations. You may
also consider to offer some additional services 4. TRAFFIC GENERATION
like a personalization of the package or a After you’ve ticked all the value creation boxes
gifting opportunity to enhance the customer for your customer it is now time to drive traffic
experience. to your page. Here you need a clear SEA
strategy to reach the right audience and
stand out from your competitors. In addition
to that you can use Social Media as a traffic
generation source for your D2C site.
14MEDIA – IN THE MIDST
OF TRANSFORMATION
THE FOLLOWING TRENDS SUMMARISE THE FACTORS MOST LIKELY TO IMPACT
MEDIA IN THE MONTHS AND YEARS AHEAD.
SHIFTING CONSUMER BEHAVIOURS: In particular, it places greater emphasis on the
ADAPTING TO THE “GREAT DISPERSION” need to demonstrate tangible and practical
Accelerated by the pandemic, the key pillars of value both in terms of brand experience and
society are being decentralised and dispersed. messaging. Whilst the importance of a clear
With numerous audiences happy to adapt, we and socially conscious Brand Purpose has
expect to see education, entertainment, work, come to the fore as a result of the seismic
retail and even healthcare to continue to be events of 2021, any associated activity or
played out in homes across the globe; allegiance must be authentic, credible and
untethered from the traditional restraints of useful.
geography.
Following a potential uplift in spending by
This means not only adapting media consumers “revenge buying” following
strategies to reflect different patterns of lockdown restrictions, we expect a prolonged
geographical movement, but also carefully period of frugal spending globally.
considering the impact this will have on media Additionally, we anticipate the revival of
behaviour, generally as well as its influence on trusted global brands that characterised 2020,
context. Moments and mindsets will be to be eroded as younger consumers in
impacted as will cultural norms and long-held particular begin to buy into new DTC entrants
habits. As we emerge from the Pandemic at buoyed by an accelerated e-commerce
different rates, the ability to predict and environment.
respond to shifting norms, anticipating those
areas that are transitory and those which are For media, this will require a review of where
more likely to endure, will represent a growth will most likely come from, with
significant competitive advantage. opportunities and risks from consumers
trading up or down. In addition, accelerating
SHIFTING CONSUMER NEEDS: your own e-commerce and DTC initiatives as
UNDERSTANDING WHAT’S MOST an on-going priority. Moving forwards, we see
IMPORTANT two macro trends impacting the world of
Alongside changing consumer behaviors, commerce from a media perspective:
we’ve seen a collective shift in consumer fragmentation and convergence.
needs that look set to continue throughout
2021 and beyond. The global crisis has seen Firstly, marketplace innovation is driving
an increase in the importance of basic needs. fragmentation, meaning lines of distribution
The relative importance of health, safety and become challenging to manage. It will require
financial security have started to eclipse needs greater emphasis on the stewardship and
more associated with self-fulfilment such as management of your brand voice along all
personal accomplishment and job satisfaction. POE touchpoints and funnel steps.
15Secondly, we are seeing the convergence of Highly relevant, and connected, intuitively
experience and buying going mainstream. The understanding and responding to individuals’
digital shelf has become so much more than a needs. At times removing friction, at times
transaction, increasingly it’s a shopping enhancing and enrichening experiences in
experience and a moment of discovery. surprising and unexpected ways.
With Asia providing an industry bellwether of This will require a far more nuanced approach
future commerce trends, increasingly to media strategies and activations generally.
successful brands are humanising e-commerce The need to reach multiple audiences with
touchpoints, ensuring brand ambitions can be nuanced and connected messaging across the
elevated whilst also providing the opportunity entire customer journey at speed, will require
for frictionless transaction. more sophisticated planning and activation
approaches able to leverage relevant AI and
This means, the consumer journey has Machine learning capabilities, whilst also
become more connected with any historical applying human interpretation and expert
siloes needing to be broken down for good. analysis.
The continued merging of the sales and
marketing functions will provide a shift in The need to match and exceed consumer
mentality from media optimization, to expectations will continue apace. Requiring a
product/retail-based optimization of media, as more thoughtful, real-life and fluid approach
well as a level of accountability for every to audience definition and targeting based on
marketing dollar spent at a level previously the identification of the differences that
unheard of. matter. The accelerated decline of 3rdparty
data solutions will see a renewed focus on the
importance of contextual targeting to ensure
the end user experience is a relevant and
valued as required
REFLECTING ON THE CHALLENGE OF BALANCING THE
THESE TRENDS WE BLURRING LINES BETWEEN BRAND (LONG)
SEE RESULTING & SALES (SHORT)
As a more connected advertising and retail
KEY CHALLENGES: ecosystem becomes reality, there will be
increased pressure and opportunity to
accurately balance investment and emphasis
across the entire consumer journey, as well as
the balance between brand and performance.
THE CHALLENGE OF CONSUMER
EXPERIENCES:
Whilst this is the perennial challenge, the
As we emerge into a Post-Pandemic
ability to facilitate the flow of information
landscape, we will see a continued but
across historical siloes will finally facilitate a
accelerated increase in the importance of
more considered and data driven approach to
consumer-centricity and as a result the
this most enduring of marketing conundrums.
consumer experience. It is the ability to deliver
superior consumer experiences that will
become the pre-eminent force across “More effectively managing this balance will
categories. ultimately ensure investments are more
effective and efficient. It will reduce media
Multi-sensory, immersive, digital, augmented wastage at a time when the competitive
and real-life, incorporating every interaction landscape is increasingly challenging, and
between consumer and brand. scale is no longer a guarantee of success.”
16It will also allow to more effectively manage
price and promotional budgets in line with “The sheer scale and diversity of influencers,
your communication efforts. Finally, it will also operating across an even greater proliferation
allow you as a business to extract immediate of social platforms requires an increasingly
short-term returns, whilst also building more considered approach.”
sustained brand and business success in the
longer term. Within the beauty category specifically,
THE CHALLENGE OF MEDIA Influencers are also emerging as genuine
FRAGMENTATION: competitors-increasingly diversifying their
revenue streams developing and launching
their own products. This is a threat and an
“An increasingly fragmented media landscape
opportunity for deeper levels of partnerships
will make it challenging to deliver and
for example potentially launching new ranges
measure coherent and connected Consumer
together or using influencers as retailers.
Experiences.”
To fully leverage their potential, there is a
significant need to build infrastructures and
At a time when individuals’ expectations of
processes that allow for analysis, selection and
brands continue to soar, the ability to match
management integrated in a more
those expectations will be technically
comprehensive business outcome-based
problematic as interactions play out across a
measurement framework, that social
multitude of platforms and distribution
commerce and connected retail are making a
outlets. Mass market brands will continue to
reality.
require reach and salience as key objectives.
THE CHALLENGE OF INNOVATION:
The continued fragmentation of the AV
Periods that follow major historical trauma are
landscape, meteoric growth in streaming
often characterised by high levels of
services and corresponding shift in
transformative innovation. Previous crises have
Hollywood’s business model means it will
demonstrated that those businesses able to
become increasingly difficult to do this across
successfully innovate, have seen significant
screens, particularly amongst younger
commercial success in the years following the
audiences.
crises. Conversely, at times of crises,
innovation budgets are some of the first to be
The lack of a single source of measurement
curtailed. In 2021 it will be critical to take a
continues to provide barriers as AV campaigns
structured and deliberate approach to
play out across a wider array of outlets.
innovation.
Against this backdrop, it will be required to
continually develop more sophisticated cross-
Defines a brand’s Innovation aspirations and
platform approaches to planning, fuelled by
recommends tailored innovation solutions.
more holistic and sophisticated data capture
Calibrates bravery by providing a hierarchy of
and application.
innovation goals that scales to level of
ambition. Builds capability over time to ensure
THE CHALLENGE OF INFLUENCER
brands don’t get left behind.
MARKETING:
By taking deliberate steps to set out an
Whilst influencers as well as peer reviews
agenda that is accountable and connected to
continue to play a hugely significant role for
required business outcomes will be key to be
consideration, conversion and loyalty within
able to capitalise on Post-Pandemic
the category, a growing cynicism is
opportunities that can provide incremental
challenging their credibility.
and transformative growth opportunities.
17CRITICAL BUILDING BLOCKS,
BASED ON KEY CHALLENGES, TO
BUILD AN OVERARCHING MEDIA
TRANSFORMATION PLAN
1
UNIFIED CONSUMER UNDERSTANDING
Driving a deeper, empathetic and unified consumer under-standing using data sets
and tools, connected across all your business teams.
DATA-DRIVEN, AUTOMATED MEDIA DECISIONING
Automating the media decision process, making every decision data-driven, better
2
and faster creating more time for strategic and creative innovation of the consumer
experience along the funnel, providing decisions against the blurring lines between
brand and sales. Future business success for brands, will be reliant on the profound
opportunity of human and machine collaboration fuelled by data to design
balanced, relevant, timely and above all desired experiences. This approach is
called “Intelligent Empathy”, systematically delivered via technological expertise
and the purposeful application of human intuition and creativity.
3
PERSONALIZATION AND PREDICTIVE ANALYTICS
Rolling out market-leading personalisation and predictive analytics services –
enabling every market to optimise each individual brand interaction using dynamic
creative and propensity scoring.
CONNECTED E-COMMERCE OPTIMIZATION
4
connecting and integrating an e-commerce optimization process; all the way from
consideration through to conversion to loyalty. Provide advanced interactivity –
Shoppability - Items on screen will be purchasable, with all products on-screen
rendered clickable.
5
TOTAL PERFORMANCE EVALUATION AND OPTIMIZATION
Taking an always-on approach to performance evaluation and attribution, so we
are always evolving and improving what we do based on performance data
insights and POE-Modelling.
18LIST OF ABBREVIATIONS:
A9 The Amazon search algorithm
B2B Business to Business
D2C Direct to Consumer
Hard-bundles Physically bundled products
OMOQ Optimal minimum order quantities
PDP Product detail page
SIOC Ship in own container
Virtual bundles Physically separated products that are bundled on the shelf
THE AUTHORS:
PAUL REMITZ STEVE FLEMMING PETRA SLOMKE PAUL NIEMEYER
CEO Managing Partner Head of E-Commerce Director Digital Media
OMG Germany E-Commerce OMG Germany Amazon & E-Commerce
OMG Germany Resolution Media
SASCHA JANSEN KLAUS STINNERTZ THORSTEN DECKER DANIEL SCHETTER
CDO Managing Director Managing Director Executive Director
OMG Germany OMD Germany Strategy & Innovation Client Lead & Paid Traffic
OMD Germany Resolution Media
If you have any questions or are interested in further information,
please contact Sascha Jansen.
19If you have any questions or are interested in further information,
please contact Sascha Jansen.You can also read
