Mobile gaming is a vertical that’s being well monetized. That’s one of the reasons Zynga’s stock shot up today.
Why is this particular mobile vertical monetizing so well?
Firstly, there are billions of mobile gamers. And where there’s an audience of that magnitude, brands will follow. And where brands want to spend lots of money on digital media, tech startups will deliver the right advertising product to help them do it.
Now to recap, the right advertising product on mobile IS NOT banner ads.
As I’ve said before, banner ads on mobile suck. From a UI/UX perspective they are interruptive. Due to a lack of targeting data they are rarely relevant. And because of pitiful click-through-rates they fail to deliver any meaningful engagement with the brand.
Instead, the right advertising product on mobile is IS native ads.
A good native ad on mobile adds to the users’ experience. It delivers relevant branded content that users enjoy interacting with. And that leads to authentic engagement with the advertiser, which delivers the requisite ROI.
So it’s no surprise that mobile gaming’s massive audience has driven innovation in native advertising products, which are helping brands in very effective ways.
Forward-thinking ad tech companies like MediaBrix and Kiip have figured out how to “monetize the emotional moments” in games. For example, they’ll help position the brand as a hero to a gamer who might want to “level up” instantly or “save a life”, or needs a virtual “high five” for completing a new highest score – and can now do so by watching a well placed branded video at an appropriate point the game flow. Brands are lapping this up, meaning mobile gaming publishers who show these ads, like Zynga, are making hay.
But by definition, native ads have to be “native” to the underlying content. So an effective native ad in gaming can’t easily be applied to other verticals which might have completely different content types.
Said another way, different verticals with huge user numbers that brands want to engage with will need different native ad formats to be well monetized.
Photos will be the next mobile vertical that is well monetized.
Like the gaming vertical, mobile photos’ massive audience means brands want to engage that audience in effective ways. And innovative, vertical specific native advertising products are beginning to emerge.
— Instagram showed off some gorgeous looking native ads for photos today. Remember: a good native ad on mobile adds to the users’ experience. The predominant user experience on Instagram is to consume content in the stream. So Instagram’s native ad product pushes branded content into the stream that users will enjoy interacting with.
(It’s the visual equivalent of the Promoted Tweet. I’m not sure why Twitter haven’t already rolled out the same product via Cards, but hey).
— At Aviary, we have our own spin on gorgeous native ads for photos. The predominant user experience on Aviary is to create content (often to share on social networks like Instagram). So Aviary’s native ad product places brands right at the center of that content creation experience – by offering branded photo filters, frames and stickers that people can get creative with to make their photos look amazing. We soft-launched the program with Gap and Atlantic Records in April. Even in careful test mode since then, we’ve delivered over 50 million minutes of brand engagement. Full launch is imminent…
— Meanwhile, Snap Chat is developing their own spin on native ads for photos. The predominant user experience on Snap Chat is less about creation or consumption of gorgeous photos, and more about unfiltered visual communication between millions of people. Brands like Taco Bell are very effectively blasting that audience with ads – in a totally native way. The potential here is awesome.
So. Photos will be the next mobile vertical that is well monetized. There are literally billions of mobile photographers. Big brands need to engage that huge audience. And that has driven innovative tech startups like Instagram, Aviary and Snap Chat to deliver the right native advertising product to help them do it.
The obvious question from an investor’s or an entrepreneur’s perspective then is: what’s next?
Charts like this one from Flurry are helpful to show what mobile verticals are picking up massive audiences… which point to where brands need to be… which indicates where there will soon be demand for amazing native ad products that work in those verticals. If I wanted to take a big risk, I’d be betting or building right there right now. But if I wanted to back a sure thing, I’ll be looking at Instagram, Aviary and Snapchat for a while yet ;-)
Banner ads on mobile are a terrible experience. From a UI/UX perspective, they are interruptive. Due to a lack of targeting data, they are rarely relevant. And because of pitiful click-through-rates, they suck for advertisers. (Statistically speaking, you are more likely to die in a plane crash than deliberately click on a mobile ad.)
But there are billions of mobile users around the globe. And when there’s an audience that large, advertisers have to find a way to engage.
The way to do that effectively became a little clearer today. On mobile, it’s becoming native advertising or nothing.
— Off the back of Facebook reaching $100bn valuation, in part because of strong performance on in-stream mobile ads, FB-owned Instagram alerted agencies and users alike that native ads are coming soon. The ability to deliver a targeted image into a stream – either based on a user’s interest graph, or perhaps more explicitly triggered by a search query – will be very appealing to brands who are wise to the fact Generation SoMo communicates visually, and wants their ads that way too.
— Meanwhile Twitter bought MoPub for a rumored $350m. MoPub is a leader in programmatic mobile advertising. Twitter is a leader in native advertising, with products like Promoted Tweets. Combine the two and you get programmatic mobile native ads at real scale. That’s exciting. Add a location element to that, and you could deliver online-to-offline targeted mobile advertising (as I’ve written about here), which to many is the holy grail.
— On top of that, Snapchat announced they now see 350m snaps each day fly across their network (then disappear). They also announced that they want to figure out revenue before taking additional funding. Anyone who is friends with Taco Bell on Snapchat is getting a realtime view of a big budget advertiser figuring out the best way to deliver native ads on the service. Expect a lot more soon.
— Meanwhile, at Aviary HQ, we delivered the latest post-campaign report to another happy client of Aviary’s native ad model for mobile photos. We work collaboratively with clever brands to deliver branded content (like photo filters, and stickers) to our 64 Million MAUs, who engage with the content in creative ways as a natural part of their photo editing experience. We soft-launched the program with Gap and Atlantic Records in April. Even in careful test mode since then, we’ve delivered over 50 million minutes of brand engagement. Full launch is imminent…
Mobile advertising is dead. Long live mobile advertising. The native kind.
I’ve never met John Battelle, though I owe a lot of my career to him.
Let’s rewind… I was at Cardiff University, finishing my PhD in the school of Civil Engineering, as the consumer web started taking off in the mid-90s. I fell in love immediately, and co-founded a “portal” (remember those?!) with some college mates. We didn’t know what we were doing, and neither did anyone else around us. The Welsh Valleys weren’t exactly Silicon Valley. There were no VCs. Instead, we got a GBP 7,000 grant from The Prince’s Trust, which bought exactly two desktop computers. There were no “meet ups” or “open coffees” to learn from others. In fact, apart from the bloke who set up a cyber cafe in the city center, I don’t think anyone else knew what the internet was. And there we’re no developers to hire. Luckily my flat mates (Physics PhDs) knew how to program, as did I. My PhD involved applying Machine Learning techniques to solve Civil Engineering problems, and I taught myself to code to get there. So between us we learnt html by copying sites we liked (thank you View->Source on Netscape browsers!) and got busy creating static web pages. Needless to say, we didn’t get very far.
So I moved to London, and eventually joined a company called Net Decisions in 1999. ND was a boutique consulting firm, specializing in e-commerce. There I finally learnt how to succeed with Internet 1.0 businesses. But when that first consumer web bubble burst, Net Decisions switched focus to Enterprise IT – and so did I. Cutting a long story short (via a detour to run an offshore software development center in India), I ended up in NYC selling speech recognition software to call centers. Bored out of my brains mid-way through 2005, a friend recommended I read John Battelle’s “Search” … which I did… and a whole new world opened up for me.
Suddenly I saw the potential of big-thinking technology ideas, and how they could impact millions of consumers across the globe. Suddenly I saw that my Machine Learning knowledge could be applied to “big data” problems at internet scale (though those terms weren’t in common parlance then). And suddenly I realized I could not only read The Anatomy of a Large-Scale Hypertextual Web Search Engine and “get” it, but I could also re-write the search algos if I wanted to.
As it happens, I over estimated that last bit. As a self-taught programmer who’d hadn’t programmed for 5 years, I wasn’t going to cut it as a professional developer. But I knew how to sell, and parlayed that into a BD role at a company called Me.dium in Boulder, Colorado. Me.dium (awkward period intentional - it was all the rage back then ;-) provided a realtime social overlay to the internet. Essentially, you could hang out with your friends online. Which presented another problem for me. Since my switch to Enterprise IT, I hadn’t paid much attention the consumer web, and was intellectually miles behind the thought leaders of what was by then known as “web 2.0”. This is where John helped me again…
I turned up to his now sadly defunct Web 2.0 Conference. It was the year that Twitter “broke” at SxSw, but still very early days. MySpace was hot, Facebook still required a .edu email address to register. And at the conference I listened intently as folks like David Hornick delivered master-classes on new topics like “going viral”. Personally, it was a transformative event. It got my brain in gear. We ended up pivoting Me.dium into OneRiot – a search engine that re-ranked search results based on current trends across the social web. I still couldn’t code the algo, but I cheekily wrote our version of “The Anatomy of…” titled “The Inner Workings Of A Realtime Search Engine”.
Next, we had to figure out how to monetize. So I started reading more of John’s work. He was now preaching how brands had to become publishers to stay relevant in the era of the realtime social web. I figured that if we were about to witness an explosion of branded content, as brands sought to stay relevant in realtime, then there should be an “ad-sense” which promoted that branded content to users querying realtime-relevant search engines like OneRiot. By now, I was CEO, and we ended up focusing the whole company on this model. Cutting, another (very) long story short, we ended up being bought by Walmart. So John, a guy who I’ve never met (though who I now email with occasionally), helped me with an exit too ;-)
Fast forwarding to today… I’m back in NYC, running Aviary. And I saw John Tweet about his new conference, OpenCo. He says it’s “a festival of innovation” where “attendees will meet [innovative companies] in their native habitat”. In other words, sessions are held in startup offices around town, and attendees get to hear founders and execs talk about how their big-thinking technology ideas are impacting millions of consumers across the globe. It sounds fantastic – and I’m proud to say that Aviary will be hosting an OpenCo session at 2pm this coming Thursday on May 23.
I probably won’t get to meet John this week either, and that’s fine (I expect he’ll be pretty busy!). But I feel like I owe him a couple of big ones at this point. So let’s hope, as a starter, we can deliver a great session on Thursday. Please come!
This year over 500 billion photos will be taken worldwide, and nearly half of them will be taken on smart phones. Considering that all those mobile photos can be shared widely across text messages, group messages, social networks, blogs and more, it’s clear that mobile photography is massive.
So what opportunities do brands have to tap into all this mobile activity?
Brand engagement on mobile has been a difficult case to crack. Because of the intimate place mobile has in peoples’ lives, it’s important that any kind of mobile advertising feels “harmonious”. As I blogged about previously, this means native and additive to the users’ experience, not interruptive and out-of-context like a banner ad would be.
For the past few months, we have been quietly testing and iterating our own version of “harmonious” mobile advertising at Aviary.
To Aviary – as the world’s favorite mobile photo editing platform – a great native advertising offering has to:
We’ve been fortunate to work with some of the biggest brand names during our testing phase, including Red Bull, H&M and Atlantic Records. For these brands, we’ve created harmonious, native, branded experiences that users appear to love.
You can see the results of a recent campaign for Atlantic Records by searching Twitter or Instagram for “#EvilFriends”.
Branded Sticker Pack in Aviary’s Photo Editing app, and a search page for “#EvilFriends” in Instagram
To support Atlantic Records’s goal to build excitement around the upcoming launch of Portugal The Man’s new album, Aviary collaborated with the band to design a sticker pack that put their distinct creative aesthetic in the hands of their fans. Millions of music-loving mobile photographers created their own “evil friends” – then shared their work on social networks. The results are highly creative, and the engagement very obvious.
Equally important during this exploratory phase is that we’ve been collaborating with a select set of Aviary partners, who have integrated our SDK into their apps and offer their users photo editing capability through our standard UI. We now have over 4,000 partners - and a number have been working closely with us, testing to ensure that these new native advertising experiences work well for different types of users – from PicStich’s creative collagers to Tango’s social IMers. The conclusion is: they do.
This is critically important, because it give Aviary the scale that advertisers want (and we can generate revenue for our partners).
Native ads by their very definition are native to a particular service. If you’re Twitter, you can show your native ads (promoted Tweets) to your 200MM users and give advertisers the scale they need. But if you’re, for example, Path, recently on a rocket ride but still “only” at 10MM users, a native ad play would be hard because of that relative lack of scale. With the Aviary SDK providing a standard UX/UI across thousands of apps and reaching 45MM MAUs today (and growing at a ridiculous rate), we can deliver a native ad experience at scale – in a distributed fashion, across many apps. Essentially, we’ve now got a huge “visual mobile native ad network” (with apologies for the buzz-words!). That means big brands like Gap can come in and reach tens of millions of consumers – as they did recently with a triple play of branded Filters, Stickers and Frames to support their collaboration with Diane Von Furstenberg on a new line of children’s clothes.
Gap/DvF Sticker Pack in Aviary, and across Aviary Partner apps, enabling Gap to reach millions of mobile photographers.
Exciting times – but definitely still early days. We’ll have a lot more to share in the coming weeks and months.
To me, it’s paid-for content that looks and feels like organic content, and can be engaged with (commented on, shared, etc) in exactly the same way. A Promoted Tweet is the best example – it looks and feels like a Tweet, can be retweeted, @replied, fave’d, but it’s been paid for.
Said more succinctly, a good Native Ad should add to the users’ experience. It should deliver additional content that users enjoy interacting with - leading to authentic engagement with the brand advertiser, which delivers the ROI required.
On the conference panel, David Shing of AOL described this as “Harmonious advertising”. It’s a neat term – you have believe that an ad which is “harmonious” with the underlying consumer service has to be better received by end-users, and it follows that it should deliver better performance.
I bumped into an opposite experience last night, while catching up on the footy scores on The Guardian.
This take-over ad for Billionaire.com is far from harmonious - it’s just plain obnoxious. It completely covers the content I’m looking for, there is no “X” to close it, and every pixel on the ad unit clicks through to the advertiser’s website, which is full of content about what luxury yacht I might want to buy next summer – i.e. it’s completely mis-targeted to boot. (Though at least it’s not as offensive as the Equinox ad in the bottom right. #FFS)
No wonder users “hate ads”. More specifically, they hate traditional, interruptive, banner and take-over advertising. And that shows - with industry-standard click through rates hovering around 0.something percent. (Compare that to 3-5% engagement on Twitter ads).
But it’s not just users who “hate ads”. Entrepreneurs do to. This morning over coffee, I read a good piece by Kim Mai Cutler in Techcrunch about MessageMe, the super hot messaging app from former-LOLapps CEO Arjun Sethi.
Kim-Mai has a great sense of the monetization momentum that successful social / messaging apps are now beginning to enjoy – driven by “native” business models, not just from Twitter but also from Asian powerhouses like Line App (by NHN).
When talking about monetization for MessageMe, Arjun says: “We really don’t want to focus on advertising. We don’t want to be focused on moving users out of the experience”. Said another way, we don’t want interruptive, obnoxious ads - otherwise users get annoyed and quickly move on to a new app. Monetization, especially in mobile, has to be native and additive to the experience.
At Aviary we’ve been thinking a lot about native ads in the context of mobile visual communication. Can you bring brand dollars into the equation in a way that enhances the user experience and delivers authentic, impactful brand engagement? In other words, can you do this “harmoniously”? The answer is: yes. And I’m looking forward to talking more about some of our initial findings in the weeks and months to come, as we continue to experiment in our own apps and those of close partners like Tango.
How will the mobile devs of today translate their services to these new platforms? Or will consumer demand mean they have to develop entirely new ones - leveraging native capabilities that enable new and unique user experiences. And can devs do this while keeping their “legacy” products (e.g. iPhone apps) alive?
Maybe an entirely different community of devs will emerge to take advantage of the new new thing, just as the iphone left old-skool web devs eating dust (initially) and breathed new life into previously marginalized (by market size opportunity) Mac OS devs.
I haven’t felt this excited about a paradigm shift since i built my first m-commerce site in the year 2000. It was a cheap flights finder, built for Nokia WAP browsers. It was clunky as fuck, but you could tell this was going to be “da future”.
A lot of devs who jumped to mobile around that time got stuck in the mud of J2ME and all that jazz. That initial wave of “mobile” took 10 years to hit mass market, and a lot of those early devs hit the rocks of changing technologies before you could make much money. However, this next wave is coming at us much, much faster. If i was a dev, i’d be jumping with confidence right about now…
Mobile is dead. Long live mobile.
I joined Aviary today as the company’s CEO, and I couldn’t be more excited. Here’s why:
Aviary has built the best SDK for photo editing, sharing and monetization. More than 2,500 developers already use that SDK in apps across mobile, tablet and web. In November, Aviary saw 25m unique end users across that developer network. On Thanksgiving Day alone, Aviary’s technology helped edit and share more than 15m photos. Meanwhile the company has just topped 2bn total photos edited (up from 1bn as reported in September).
Those are big numbers, showing significant growth, and indicating real traction. Partners like Flickr, MailChimp and Walgreens agree, having integrated Aviary into their offerings. Last week, Twitter joined that roll call. Likewise, Aviary is the go-to photo platform partner for many and varied indie devs, including Muzy, Palringo and Recipe Search.
When you get to know the company, it’s easy to see how they got to this position. A) the team that’s been put together to date is awesome and B) the core product rocks. If you’re a developer, and you’re thinking “photos”, you’re likely thinking “Aviary”.
For about a year, I’ve been talking with Aviary’s co-founders Avi and Iz about the B2B direction they’ve been taking their company. We’ve always clicked as people, and I love their big vision of democratizing creativity. Likewise we’ve talked for days about the business potential, especially in the context of a mobile photo space that already seems huge but is really only just getting started.
Last month, they asked me to join the company. Through our conversations, it became apparent that some of the experiences I’ve been through and the lessons I’ve learned in my career – especially when CEO of OneRiot – would complement Avi and Iz’s strengths as they sought to scale their business and better serve their developer community.
One of the hardest decisions startup founders can ever make is to bring in an outside CEO. The fact that Avi and Iz were so clear on why they wanted to do that now was very impressive and compelling. In addition, having Mo Koyfman from Spark Capital as Aviary’s lead investor was also a plus. Spark was the lead in OneRiot. They, like me, see the benefit in getting the band back together.
So here we are: Avi, Iz, me, a very talented flock at Aviary’s NYC HQ, and a board full of brain power, ready to help our developer community create and monetize the best photo apps possible for their users, while taking this company to the next level and beyond.
The Aviary team celebrates the Twitter Photos launch
I’d encourage you now to install Aviary’s showcase apps on iOS and Android to see the core product in action, and to start using the service through one or many of Aviary’s partners. Also, keep an eye on the Aviary blog and follow Aviary on Twitter for more product, partner and feature announcements – there’s a lot of very cool stuff just around the corner. Meanwhile, we’re hiring!
As I said, I couldn’t be more excited. I feel very fortunate to be joining such a top team who’ve created a great product that is loved by so many developers and photo takers around the world. Now… it’s time to get to work.
I just left Walmart.
I arrived in September 2011 as part of the transaction that saw OneRiot acquired by the world’s largest retailer.
We had some clever technology for targeting relevant content at mobile consumers based on their social signals, not to mention a super-smart team of Big Data devs and Machine Learning PhDs. Meanwhile, Walmart was beginning to realize that social and mobile would change not just e-commerce but commerce period. So they got busy buying up a number of startups in the space (OneRiot, Kosmix, Set Direction, Small Society, and more) to help them figure it out. Together, we would be referred to as “@WalmartLabs”.
It was Walmart’s way of dealing with Innovators Dilemma - and it’s working. In the last 12 months @WalmartLabs, often working in conjunction with more established teams across the wider Walmart world, have built search engines incorporating social signals that improve sales conversion by 15%; m-commerce experiences that account for 40% of online holiday traffic; and truly innovative apps to help shoppers while they’re in the store – not just embracing show-rooming (the very thing most physical retailers are scared of) but positively encouraging it, based on the confident belief that Walmart will have “everyday low price”.
There’s a whole book to be written on what Walmart is pulling off here – innovating on the edge while building upon 50 year-old beliefs. (This Fast Company article is a good start). Whatever you think of Walmart, it’s mighty impressive to see this done at real scale. However, that’s for another time. This post is focused much more on the individual. Specifically the individual from a startup who gets acquired by a Big Co. Hopefully it will be useful if that ever happens to you.
I’ve met a lot of startup people this year who were acquired, and talked with them about their experiences while trying to execute in their new Big Co. There’s a lot of overlap in lessons learned – whether they were bought by a Walmart (millions of employees), a Google (tens of thousands) or a Facebook (thousands). Guess what? It’s different than a startup. Here are some tips to survive – and hopefully thrive.
(A big hat-tip to Dion Almaer who helped me think though this list.)
1 - Develop patience. It’s a virtue. (And pushing multiple initiatives is the only way to maintain sanity.)
In a startup, you can have an idea while brushing your teeth in the morning and it’s in market that afternoon. If it doesn’t work, you just roll it back – easy. It’s not like that in a Big Co, for a bunch of reasons – many very valid. In Walmart IT circles, there’s a saying that goes something like: “the ‘one in a million’ happens 15 times a day at Walmart scale”. In other words, if there’s the smallest chance that something you push is not 100% perfect, your customers are going to have issues multiple times everyday. And if they’re biggies, that could cost you millions of dollars in lost revenue – which is unacceptable. You have to take the time to get it right. So it follows that things you think should be banged out in a week can often take a month, and initiatives you think could be in market this quarter can often take a year to fully realize – especially if they touch multiple parts of various other business systems and processes. Understanding that reality, and working with it, is the key to avoid frustration. So rather than kicking off one single initiative, and possibly waiting around for a year to see it finally being used by customers, you can kick off several things and pace them in parallel. Individually, they might all be going “slower” than you’re used to in startup land, but in aggregate they’ll keep you busy and deliver a big impact when they finally pop.
2 - Learn to love “Alignment”. Achieving it will become a big part of your job.
In the physical retail world, it’s often said that the three most important things are location, location and location. When trying to get something done in a Big Co, the three most important things are alignment, alignment and alignment. No matter how small or isolated you think your particular initiative is, there’s a good chance that it’s going to impact someone else’s – possibly in a part of the business you’ve never even contemplated before. And it might also be true that someone else is already working on something related (or worse, working on something conflicting). Getting alignment upfront is the key to avoiding frustration with other folks downstream, and reducing the risk of someone somewhere executing expensive, redundant work. But getting that alignment in a Big Co takes patience, time, and a whole lot of repetitive, consistent communication. At OneRiot, we use to do a whole-company standup meeting every Friday morning to make sure we were all on the same page. But we only had 20 people. That doesn’t scale when you have 2 million employees like Walmart. But you still need the same level of alignment to avoid tripping yourselves up. Just prepare for that to take time, and commit to making it happen. (One technique I used was actually borrowed from my startup days: a monthly “board meeting" for my products.)
3 - Understand the Mission Statement.
Mission Statements are often derided for being vacuous or disconnected with what the company is actually doing for its customers in the real world. But when you’ve got a good one, it can act as THE reference point for every decision that’s made. Think about “organize the world’s information and make it universally accessible and useful”. If you are working at Google, whether you’re setting top-level strategy or committing a single line of code, if you’re doing something that helps “organize the world’s information…” then you know you’re probably doing the right thing. You can proceed quickly and with confidence. A good Mission Statement can be very powerful in a Big Co – as a means to speed up decision making while keeping everyone on the same page. At Walmart, the mission is to “save people money so they can live better”. If a new search engine could better surface the best deals for customers, let’s do it. If a new mobile app meant parents could get home-delivery of weekly groceries, saving them a couple of hours dragging two toddlers around a supermarket, then let’s do it. The mission statement wasn’t “let’s build some cool shit and throw it at the wall to see what sticks”. It was very much focused on price-conscious customer retention and loyalty, which in turn set the tone for new customer acquisition and additional growth. Understanding that – and making sure that your new ideas, initiatives and projects line up with that mission – can be key to quickly getting all the support you need to deliver something that will be met with success in the market.
4 - Seek out the brilliant people in other departments, and learn from them.
It’s probably true that Big Co got big because they know what they’re doing. (Maybe not in every department, but certainly in their core business.) And they know what they’re doing because the people there know their shit. Working in a Big Co is a fantastic opportunity to seek out these folks, and to learn from them. Often they will come from different worlds to the one you inhabit (e.g. Walmart is brimming with brilliant operators and merchandisers – something I wouldn’t come across while deciphering social signals all day long at OneRiot). And while it’s often interesting to talk about specific details of their job, it’s always really fascinating to hear these people’s bigger picture insights on topics like “how do you execute at massive scale?” or “what triggered the fastest growth spurt you’ve ever seen at this company?” It’s great to spot patterns and parallels in their answers that can help back in “your world”. To get the most out of this, a friend who got acquired by Cisco gave me the idea of doing “200 breakfasts” in a year. That’s practically a breakfast every workday with someone from around the organization who you could learn from. I don’t think I quite hit 200, but I definitely absorbed lessons from a great many people who’ve had fabulous and successful careers in complete different fields to mine. I feel much richer for that experience.
5 - Understand, and revel in, the scale.
The scale of Big Co might be a reason why things can go slow (you need lots of alignment, the one-in-million is always around the corner, etc, etc). But if you wrap your head around it, you can also leverage that scale to achieve some crazy things. Consider my tiny slice of the Walmart world… I was working on mobile initiatives for non-US markets. With a small scrappy team, we launched 5 mobile apps in 9 months for the UK, and took that market from a standing start to 50% of typical weekly global mobile revenue. We achieved that not only by building quality products, but by leveraging the organization’s massive scale to distribute our products to acquire highly active customers at staggering rates. Likewise, my colleagues in the mobile team focused on the US delivered some incredible stuff this year – including innovations like smart phone-based self-checkout and amazing user experiences to help crush Black Friday. The scale of what we achieved this year might be “normal” to many folks in Big Cos, but it was eye-poppingly enjoyable for me.
6 - Realize that you’re sometimes at war with other departments, not just your competitors.
In startup land, everyone is in it together. You’re busting your collective guts to make sure your company wins – end of story. In a Big Co, that might not be true all the time. A friend who was acquired by Microsoft put it well: “in a startup, you’re at war with your competitors. At Microsoft, I was often at war with other departments”. Microsoft’s woes here are well documented, but I found a flavor of that sentiment in talking to everyone who’d been acquired by a Big Co this year, whatever company they landed at. You might be at war for budget, for resource, for senior management mindshare, or because your boss wants to annex other parts of the business and build an empire. There will be politics, perhaps hostility, and certainly lots of posturing and positioning. For many startup folks, that’s completely alien. But those are the rules of the game. If you think you’re going to build a long career at Big Co, then it’s best to jump in, learn the rules and start playing. If you’re happy staying on the sidelines (“I’m keeping my head down, just doing my job”) then that’s fine – but accept that you will likely be always on the sidelines. Thankfully, I saw a few folks learn to use their political powers for good – it was heartwarming, like watching the Rebel Alliance strike back.
7 - Get the highest-ranking job title you can. It impacts the speed with which you can execute.
Startups tend to be mercifully free of much hierarchy. The first tech company I worked for had few role titles internally. But the founder knew that titles were important “signals” to the outside world we were doing business with. So we were given license to call ourselves whatever we needed to get the next sales meeting. I can remember being told: “if you need to be the VP of Intergalactic Importance to get the meeting, then you are now VP of Intergalactic Importance. Just get the bloody meeting!” I’ve always adopted that approach in startups - but it seems a different approach is required in Big Cos. In a Big Co, where many initiatives can be cross-department, or even cross-continent, you’ll often need to connect and communicate with folks you don’t know and who don’t know you. In that case, it helps speed up the process if you really are VP of Intergalactic Importance. That signal – your title – tends to inform other people’s speed (or even willingness) to respond. And, unlike in startup land, you can’t make it up. You and your title are “in the system” – easy to look up, and easy to be bumped down someone’s priority list if the signal isn’t strong enough. This can result in some infuriating, time-wasting behavior – for example, bringing more senior folks into a meeting, simply to ensure that the meeting takes place. But if you get the right title, you can navigate the organization fluently, and easily exert influence in all the right places to get your initiatives out the door. That title also helps information flow to you as well. For example, email distros for “VPs and above” might contain info that helps you understand what’s going on in other parts of the organisation, giving you a broader appreciation of business dynamics and where you can contribute most. If you’re not on that list, you’ll struggle to get that insight. In summary: if you are about to be acquired by a Big Co, fight for the highest title you can – walk in the door with the strongest signal that you’re here to execute and have the authority to do so.
8 - Accept that certain things in your workday are going to suck, or else everything will suck.
Assuming you have a decent role, on a decent project, and are generally happy with what you have to deliver day-to-day, there’s still a lot of stuff around the edges of your workday that is going to suck. You’re on a Mac using Chrome, but the timesheet system will only work on a PC with IE. Security systems make working remotely difficult. Impenetrable Travel and Expenses policies mean you just let receipts pile up on your desk unclaimed. Etc, etc, etc. The easy flow of working at your Google Apps-oriented startup could well be replaced by a bureaucratic grind supported by ancient, creaking systems. But none of that matters. At least it shouldn’t. More to the point, you’re unlikely to change it – so don’t fight it. I’ve seen many people lose much energy rallying against the system and process, to the point where they lose sight of why they’re there in the first place. It’s better to simply focus on what you’re there to deliver, and make that fun. Ignore the sideshows.
9 - Don’t forget who you are. At the end of the day, that’s why you were bought.
On my first day at Walmart, I was pulled aside by a very senior executive who told me: “We’re going to teach you a lot of new things while you’re here. But we’re also going to learn from you. So don’t lose your startup spirit. Just figure out how to apply it at Walmart scale.” I will always remember that. And every time I felt beaten up, or boxed in, or not listened to, or just frustrated, I went back to that day-one conversation and started charging again. Above all else, that’s really what Walmart wanted me to do.
10 - Don’t drag it out to the point of diminishing returns.
There will come a point when you’ve done what you set out to achieve at Big Co. That might be seeing your original startup product rolled out to market at massive scale, or it might be the delivery and acceptance of a new initiative you were driving. At that point, you’ve probably also delivered ROI on your acquisition - so everyone should be happy with what you’ve done, including you. And when you’re at that point, take a good hard look at yourself and ask: am I going to make a bigger impact next year? If the answer is no, and you’re at the point of diminishing returns, then it’s probably time to walk and find the next startup. You’re not helping anyone by moping around making half the impact you were last year. Especially yourself. Certain startup skills (that you don’t use in Big Co) might go stale – making your entrance back into startup land difficult. Or you might get “comfortable” – making your entrance back into startup life almost impossible. Of course, in many situations, deciding to stay at Big Co might have a bigger impact on your wider world (maybe you’re on a retention plan that could set your family up for life). It’s never that black and white. But it’s always worth considering…
So, working for a Big Co is very different than working for a startup. It’s a different world, with different rules, but it’s a chance to learn new skills, absorb lessons from talented people, and execute at a whole new scale. I’m glad I did it. But I’m equally glad that I’m moving on to the next thing now…
I got retargeted on Facebook today – and it was magical.
Here’s what happened. I wanted to buy a Ted Baker gingham check sports shirt. So first I went to Google and searched for “Ted Baker gingham check sports shirt”. That’s a pretty explicit signal indicating that I’m looking to buy a pretty specific item. The top result was for a matching product page on Nordstrom.com, which I clicked. On that page, I then looked at different colors, scrolled down to read the reviews, but didn’t buy. Said another way, I signaled that I was engaging with the content but for some reason didn’t complete the purchase. From Google to Nordstrom to engaging with content… Close, but no sale. Yet.
Then I went to Facebook to see what my friends were doing.
Typically, the ads on Facebook are targeted based on my demographic info (age, gender, location, etc), and things I’ve liked (aka my “interest graph”).
However, this time, I got an ad on Facebook featuring the specific Ted Baker gingham checked shirt I’d searched for, that I could buy Nordstrom.com. In other words, I got retargeted. From Google to Nordstrom to engaging with content… to Facebook, to clicking on the Ted Baker ad, back to Nordstrom.com, and finally this time to purchase. This time they got me.
As a former ad-tech guy, I love re-targeting for a number of reasons:
However, as a social technologist, this type of retargeting on Facebook is interesting for other reasons. Primarily because it indicates that Facebook can’t effectively monetize with “just” the mountain of the demographic and interest-based data it has about you.
The Interest Graph vs Intent Data
Demographic and interest-based targeting is good for top of funnel brand awareness. For example, an advertiser like Nordstrom could target males, 30-40, who have “liked” various fashion brands – and make them aware that Nordstrom.com offers a good selection of fashionable clothes. It’s like advertising in GQ Magazine – you know the audience is broadly in your target, and you hope that some of them end up buying something at your store. But it’s a bit hit-and-hope, which is why – as an advertiser – you wont pay top dollar for it. Or, from the other angle, Facebook can’t charge a lot for that type of advertising space.
The real money is made on bottom of funnel conversion. If Nordstrom know that I am this close to buying a Ted Baker shirt, and now have a chance to advertise that very same shirt to me, they will pay a lot of money to do so. i.e. Facebook can charge a lot of money for that type of advertising space.
But in order to offer that premium opportunity, Facebook needs to understand – and share with the advertiser – my recent intent to buy. And it’s never going to derive this from my Facebook activity or my interest graph. I go to Facebook to catch up with friends and family, not to signal that I’m market for a new shirt.
This is why Google, in comparison, is such a money making machine. Every time I search for a product on Google, I’m showing my intent to buy – and lots of advertisers will pay lots of money to show their ads intermingled with those search results. In fact, it’s this very need to understand intent – to command higher advertising dollars – that has so many commentators harping on about Facebook needing to build a search engine.
However, as clearly demonstrated in the Nordstrom example above, Facebook doesn’t necessarily need to do that. Thanks to the underlying ad-tech that traces a user from site from site, Facebook can instead exploit the fact that I’ve searched on Google, then landed on a product page on Nordstrom.com before going to the social network. From those clicks, before I got to Facebook, it can understand my recent intent and sell high priced advertising against that information.
So is the interest graph – from a monetization perspective – useless? Is making serious money all about understanding intent?
I’d like to think that re-targeting can be refined with a blend of interest graph data and intent data, and a big dollop of data science. Which is where the technology could get really cool…
Let’s say Nordstrom retarget as above, showing ads on Facebook to users who’ve previously been to their product pages but didn’t make a purchase. And let’s say Nordstrom could also access the interest graph of the users that subsequently converted to purchase as well as those who didn’t. A data scientist would have a field day trying to decipher a pattern between intent and interest data that resulted in the highest number of sales. Who knows, maybe 35 year olds in New York who like Joy Division and Manchester United are more likely to buy Ted Baker shirts than 40 year olds in San Francisco who like REM and like eating at good restaurants. Those two characters might show the same intent (e.g. both searched for the same thing on Google, and both checked out the same product page), but the data might show that one has a higher propensity to ultimately buy. And if you were Nordstrom, armed with that information… you might now spend more money to retarget to the very specific niche – based on intent and interest – that you knew converted at the highest rate.
Twitter, Retargeting, and… mobile magic
I’ve talked mostly about Facebook here, but what about Twitter? Well, of course, they can do exactly the same. At OneRiot, we discovered that Twitter has an implicit interest graph every bit as strong as Facebook’s. But, as Facebook are finding out, to make real money, they need to sell against retargeted intent. Likewise, Twitter needs to enable retargeting.
Now, the ad in a retargeting campaign can take the form of any creative – be that a sponsored post on Facebook, a traditional banner ad, or a Promoted Tweet. So, let’s say in the above example… I went from Google, to Nordstrom and then not to Facebook but to Twitter. Just as on Facebook I saw an ad that had been dynamically created to show me the exact product I had just been looking at, I could now see a Promoted Tweet talking about the same Ted Baker shirts at Nordstrom.com. It could even be hyper-personalized and structured as an @reply. That would be awesome.
Where this could get super exciting for Facebook and Twitter is if they supported retargeting cross-platform (web and mobile), and combined that with geo-location… to enable localized, multichannel, bottom of the funnel advertising. Lots of buzz words there – let’s break it down into plain English:
Let’s say I’ve searched for Ted Baker shirts on Google again, landed on the product page on Nordstrom.com, not bought… and then stepped away from my computer to head down town. While I’m walking the streets, coincidently in the near vicinity to a Nordstrom, I open my Twitter mobile app… and at the top of my stream is that retargeted, personalized, Promoted Tweet from the retailer. But now that Tweet also includes a link to Google maps giving me directions to the store. Using intent data gathered from my online activity, Twitter can deliver a bottom-of-the-funnel Promoted Tweet to my phone that’s informed by my current physical geo-location.
If you really push the boat out and get aggressive, Twitter could even send me a push notification, based on my current geo location, saying “Nordstrom just tweeted you about Ted Baker shirts”. Opening the app, I’d then find a Tweet that linked to not only to store directions but also included a 10% discount voucher redeemable for the next 30 minutes. That would definitely reel me in!
However, for the above examples to work – for that type of cross-platform, geo-located, personalized ad targeting to work – my intent (the information that kicks this whole cycle off, the information that says “this guys wants a shirt!”) needs to be explicitly tied to my personal profile. Today it’s buried in some cookie linked to an abstract understanding of an anonymous user tied to a desktop web browser. That’s just not useable in a cross-platform, multichannel world. Said another way, “@tobiaspeggs” on the desktop needs to be identified as the same “@tobiaspeggs” that opens his mobile device downtown 1 hour later.
I can hear privacy wonks screaming already – and that’s another discussion altogether. But if we can get over that hurdle, cross-platform retargeting becomes a reality. i.e. Bottom of the funnel mobile ads can be targeted based on your earlier, desktop web browsing behavior. And the ad-supported properties with massive numbers of logged-in users who engage with them in pervasive, cross-platform ways (i.e. switching from desktop to mobile and back) become the big winners. Which is why I’m so hot about Twitter and Facebook. They are with us all the time, whether I’m tied to a desktop or walking the streets. And they can show me retargeted ads – focused on conversion, and driving me to purchase online or in a physical store if I’m near one – at any time.
Broadening the target on mobile
Of course, one of the paradoxes of targeted advertising is: the better you target, the smaller the audience you can hit. If you are Nordstrom, and you want to send a promoted Tweet with a discount code to Twitter users who open their app within half a mile of a store, who have recently displayed intent to buy a shirt, who like Joy Division and Manchester United because they tend to convert at a higher rate… then you are looking at a very small audience. Broadening the audience, without losing site of the target, is key.
This is where Facebook have got the technology lead right now – and I’m thinking here specifically about Facebook’s new mobile ad network. Launched in September, it means an advertiser can now run ads “Powered by Facebook” across thousands of other 3rd party mobile apps. Which surely means, one day soon, advertisers will have the ability to retarget, from web to mobile, not just to users who open the Facebook app (relatively small number)…. but potentially any app (relatively huge number!)
Think about this example. Let’s assume Rovio becomes a publisher in the Facebook mobile ad network. Now I could search on Google for a Ted Baker Shirt; poke around on Nordstrom.com but not purchase; go to Facebook and see a retargeted ad… but still not bite; head down town… stand in line at Starbucks, open my phone to play 2 minutes of Angry Birds… and see a Facebook-powered ad telling me to buy that Ted Baker shirt at the Nordstrom two blocks away. Now that’s powerful!
So where’s this all going?
Dave Morin has a great line about the disintegrating distinction between “online” and “offline”. He argues that there’s now just awake and asleep. When I’m awake, I’m connected – at my desktop or via my phone. This is really interesting from a retail perspective. It means it’s time to bring all the techniques we’ve developed to increase conversion and basket size online and bring them into the “awake state” – i.e. to bring them to the phone and to make them work seamlessly cross-platform.
Of course, we’re already seeing a lot of this beginning to happen. Mobile apps that show online reviews of a product I’m looking at in the store; QR codes that link to mobile web pages show more product information; realtime mobile chat that connects you to an expert in the very product you’re standing next to right now. Etc, etc, etc. But now, by tying intent and interest information to a user profile – a user profile that’s consistent cross-platforms – we could start to bring over all manner of ad-based conversion techniques to his “awake state” as well. Such as retargeting; Such as personalized ads (dynamic creative); Such as recommendations (“people who looked at your shirt also bought these jeans”); And even context-sensitive calls-to-action (e.g. directions to a store two blocks away that’s selling those jeans that would look great with your new shirt).
Nerds will rule the world
A lot of nerds love Minority Report for the cool UIs. I always loved Minority Report for the ads. In the movie, Tom Cruise walks past a billboard downtown which scans his retinas to trigger a personalized ad based on past purchase history and inferred intent. Something like: “You bought Kakhis last week, now you need a vest. The nearest GAP store is two blocks away”.
What I’ve outlined in this blog post is a small step away from what was envisioned in Minority Report… and you could pretty much piece it together today (replacing retina scanning and billboards for a Twitter ID and a mobile phone ;). Sure, there are plenty of holes and inaccuracies in what I’ve outlined – but that’s why it’s a blog post not a business plan. What i do know for certain is that there are smarter folks than me who are thinking more diligently about this space, and building out the required technology platforms that will turn into humungous business.
The first time I was retargeted on Facebook, I thought that was magical. But we ain’t seen nothing yet…