It has become evident that we are positioning Mxit as a tech platform and not as one of the most powerful media channels in the country and on the African continent.
So, after the Mxit acquisition, we spun off the internal advertising team into a new unit called Shinka. Our focus is firstly to direct sales of Mxit’s premium inventory, and secondly to invest in and research future trends in digital marketing and buy technology that allows massive networks like Mxit (with more than 1.5 billion impressions a month) to scale. We’ve now extended our network to pull more selected properties into our private market.
A Breakfast Cereal
Martin Lindstrom used neural studies to prove that we don’t make buying decision with the continuous portion of our brains rather we use the subconscious. It’s a brilliant book and really worth the reading, there’s one chapter in the book that discusses Somatic markers. A very simple example is when you’re young and you burn your hand on something, your brain remembers it. It never has to repeat the same process again. Advertising leaves the same markers in our brains, allowing us to make purchase decisions in a blink of an eye.
In the old days, it was easy for a cereal to engage with its audience, since in the 90’s there were only a few cereals on the market. They could cut through the clutter and reach people like my mother and convince her that it was a good brand to buy – although David Ogilvy famously said that you should never sell to women through logic, but rather, emotion.
These days there’s something called the bandwidth economy. Consumer limited amount of daily bandwidth to engage with brands have been depleted, through services like Mxit, TV, Facebook, Twitter, etc. Therefore a cereal only has one opportunity to engage with me, in the morning… that’s it. I don’t have time to go to their Facebook page during the day and tell them if I like hot or cold milk on my cereal they have to engage with me during my thought process and in the moment and the only way they can do this is on mobile. And I happen to love Pronutro (don’t judge me).
Imagine two almost identical advertisements, roughly the same size, and they cost about the same but one reaches a 100 times as many prospects than the other. What would you think of the media buyer who can buy 100 times as many prospects with the same amount of dollars?
That’s precisely the conundrum display advertising on mobile is facing compared to traditional advertising channels. Of greater concern is that there’s more and more data being quoted, showing that ad dollars are just not being spent where the consumers are.
So why’s that? Why are major brands not moving on to mobile and digital?
Keeping the Romans happy – One of the most topical issues is the fact that mobile and digital is still being measured in CPM. The fact that we’re still using Roman numerals might just be a bit of a warning sign. We lack a measurement within the industry that shows users engagement. There’s encouraging signs with the likes of Google and Comscore testing new industry standards. For now, CPM seems to be mobile and digital’s only universal currency available.
Transparency is the name of the game – Mobile and digital have only themselves to blame. During the early days of display networks, the swear word ‘blind-network’ became popular. Blind networks came into existence so not to alienate publisher’s internal direct sales force. The sales pitch would usually go something like: “Since we’re blind, advertisers won’t be aware that they’re buying from your network and therefore you would still be able to charge them a premium with your direct sales force.”
Both the publisher and the advertiser would receive quite a raw deal from this. The advertiser would have no idea where your advertising would be running (or if it did indeed run) and on the other side of the pond the publisher would have next to no control over what advertising would be running on their properties. (Except for a few vanilla controls, like no porn, no guns etc). By being more transparent mobile and digital will pull in more brand related advertising, since brands will know where their ads are being placed.
Information is key – Radio, TV and print has had eons to build accurate information pools about their customer basis. More than that, they are mediums that media buyers interact with every day in their personal capacity. Picture a TV channel and notice how you can immediately visualise its audience. Doing the same with any mobile or digital channel is a bit more difficult, especially if they haven’t originated from the traditional channels. It’s even trickier when it’s not a content provider, but rather a communication or social network. By providing more detailed (trend) information about your customers, big brands can become more comfortable with how & where they spend their money.
Performance Based Advertising? Since big brands couldn’t really spend on digital, due to the issues mentioned above, performance based advertisers (content, insurance etc) took advantage of the gap. Bidding at low prices and only paying per click – just imagine TV stations had to run advertising and only when consumer interacted with advertisement they got paid! The catch 22 is that publishers are stuck with these advertisers, since they depend on blind-networks to provide them with advertising. The lack of transparency and oversupply of contextual-less media, by blind networks has caused mobile to be devalued.
Top brands want to move to mobile, but they need to know more about the consumers they are reaching and where their advertising will be running.
The Solution: Private Markets or Private Exchanges
A space in which only select publishers are allowed, allowing companies like Shinka to conduct research into our network and really understand who we’re talking to. Case in point being that of the 10 million users on our network, the segment 17-28, LSM 7-10, represents our largest reach in the South African population (just over 33%). If we further distill through the brands that are being consumed by this segment, we start getting a picture that, for brand and media buyers, should be a no brainer to move into digital marketing.
There’s a massive shift to infusing more data into display networks, so the right advert is present at the right time. During the days of consumer decision fatigue, somatic markers represent one of the few proven methods to influence consumer purchase behavior. To create these markers you need to be where your consumer is, and these days wherever they are, they’re mobile in hand. You need to create a story for your brand or at least a story or content that your brand can own.
Paul Stemmet is CEO & founder of Shinka, a mobile media company.