While virtual experiences have become critical to our industry this year, absorbing the valuable information shared during these events is increasingly challenging given the distractions and digital event fatigue we are all experiencing.
That’s why IBM Watson Advertising is sharing some key takeaways from the recent IAB Disruption Summit. These highlights will help you learn how companies have innovated to address disruption and what brands of all sizes need to consider to help ensure success in our new normal.
Agility is paramount
Many of the brands that experienced the greatest growth during the pandemic were those that listened and quickly capitalized on consumer trends, often releasing new products and forming new partnerships that addressed evolving consumer needs in exactly the right moment.
During the “250 Brands to Watch” session, IAB highlighted Winky Lux, an online cosmetic company that partnered with Target to feature their products in-store last spring (deemed an essential business, Target remained open during US lockdowns). Cosmetics saw an increase in consumer interest during this pandemic, likely driven by people spending more time staring at themselves on camera as virtual meetings became the norm. By delivering an offering that aligned with changing consumer needs and quickly identifying the right partner to help them scale, Winky Lux achieved profitability for the first time.
Another example was Hims telehealth startup, which began rapidly providing COVID-19 tests as well as primary care and mental health services when demand for online medical care surged. By rapidly building an inviting healthcare delivery system (through high quality, well designed imagery in ads and on their website) and making in-demand products easily available, Hims was able to double their business growth in one year.
In an uncertain world, disruptions will be our new normal. Smart brands should invest in the systems and tech that enable them to understand consumer needs and pivot quickly so they will be prepared for volatility.
The direct brand-to-consumer economy is here to stay and first-party data will be your competitive edge
The COVID-19 pandemic massively accelerated the growth of digital shopping and, in turn, the direct brand-to-consumer economy. In fact, the transition from physical shopping to digital shopping was 5x faster in 2020 than the year prior and there were 3x as many brick-and-mortar store closings. All signs indicate that this behavior is likely to endure after the pandemic; a survey from McKinsey revealed that there will be a 15 – 45% growth in online shopping across all categories in the year ahead.
This new reality has created conditions that favor digital disruptors – brands that have agile outsourcing and scaled individual relationships. It’s also placed an increased importance on leveraging first-party data. For example, Stitch Fix, an online retailer whose subscriber revenue fell during the early days of COVID-19, was able to use its first-party data to model nonsubscribers and offer them one-off purchases without committing to a subscription. As a result, Stitch Fix increased revenue by 3x and grew its stock price by 50%.
Increasingly, brands will become data companies that make things. In a world where the ad, the content and the store converge to take a consumer from the top to the bottom of the funnel, successful brands will use technology to extract new value from their data. A key element of this success, however, will be using this data in safe and privacy-forward ways to avoid compromising consumer trust.
To prepare for a cookieless world, we should look beyond one-off solutions
The elimination of traditional identifiers – like third-party cookies and their impact on our industry – was a common theme addressed across many sessions. In “Jumping Over the Wall with AI,” Lindsey Van Kirk, VP of Product Management at Xandr, discussed how her clients are most concerned with their ability to safely and effectively reach consumers as well as quantify the impact of a company’s media investment once identifiers go away.
While identifier changes will likely give way to an increased dependency on consent, first-party data, contextual solutions and walled gardens, many industry leaders have acknowledged the need to look beyond one-off approaches and instead champion solutions that support a healthy, sustainable, diverse and equitable open internet.
Artificial intelligence (AI) is one of those solutions. Given its potential for cookieless data processing and machine learning, AI can drive more confidence in targeting, measurement, and personalization in an open and privacy-forward way. For example, through advanced data modeling, marketers can look at the environment in which an ad is presented and make predictions about how and to whom that ad should be served. AI can also be used to analyze the impacts of those campaigns and create insights for efforts moving forward.
Furthermore, interactive, AI-powered advertising solutions can enable brands to have intelligent 1:1 conversations with consumers that not only enable greater personalization (without identifiers) but also yield valuable and privacy-friendly consumer insights.
The future is bright, but the tech industry will be remembered for how we react during this time. It’s on us to adapt to new normals and set strong standards for how we move forward.