Interview with John Matthews (Group Head of Performance, APD)
CrescoData has interviewed John Matthews, Group Head of Performance at APD, about his view and recommendations on the TOP trends for 2018 in terms of marketplace development in Asia and Australia, Social commerce & the impact of voice search.
Q: Australia is shifting towards marketplaces – What are your views on the development and what are your takeaways from the recent launch of Amazon and/or Catch?
A: Marketplaces are not new to Australia. eBay launched in 1999, and its recent advertising campaigns talk to its heritage in the Australian market. Obviously, a lot of the talk in 2017 was around the impact that Amazon would have on Australian retailers, and from what we can tell from our retailer client base, adoption levels are varied. Many advertisers are waiting to see before jumping in, whilst others are going live and learning early. An interesting area to watch will be the adoption by Australian producer brands (as opposed to re-sellers of other consumer goods) and how much they are willing to cannibalise direct sales to potentially connect with a wider customer base.
From a personal perspective, I would always recommend testing new platforms and gaining learnings whilst volumes are potentially smaller. Also, consumers are likely to be more forgiving with the experience when a new marketplace goes live, as they understand it is a learning experience for all; marketplace, consumer and merchant alike. However, this does also depend on your brand and whether the marketplaces are a suitable fit for your product and also strategically for you as a business.
Catch’s recent advertising launch is interesting, as it underlines its core USP as value, something that Amazon will surely compete with heavily. With similar retailers like OzSale and MyDeal in the space, it’ll be interesting to see how the market settles and how much of the market is driven by lowest prices.
Q: SEA on the other hand is dominated by marketplaces – In which direction do you think it will go in Asia?
A: The existence of marketplaces in Asia has meant that brands have had the benefit of being able to launch online presences in new markets without the need to invest heavily in their own ecommerce infrastructure and online advertising. We speak to many multinational brands and they see it as a low-risk way of testing and tapping into huge markets they are unfamiliar with. Marketplaces drive significant volumes of sales and access to a huge consumer base. However, this comes at a risk, as brands are reliant on the marketplaces to deliver revenue and sales. This puts the power in the hands of the marketplace. Smart brands will use marketplaces while establishing their own ecommerce and online presence.
The Asian marketplaces will continue to target and launch multinational blue chip brands, however they will have to ensure they are dealing with grey market sellers so as to make these brands comfortable with having their products listed.
Q: Where do you see Social commerce in 2018?
A: Shopping is ultimately a social experience and now the big global social platforms are upping the ante with their social commerce offerings.
According to a recent study on Social Commerce by Technavio (https://www.technavio.com/report/global-social-commerce-market), the market is predicted to grow at 34% CAGR from 2017 to 2021, with the global market expected to be worth $167bn USD by the end of this period. Again this really is an area in which Asia is a trendsetter, with WeChat being the global leader in social commerce. Historically the large global social platforms—Facebook, Instagram, Pinterest etc.—have struggled to grow their commerce capability because they have forced users into certain types of behaviour. However this is changing over time.
Social commerce continues to grow exponentially as the social platforms continue to explore ways to monetise the audience they already have and brands look to “fish where the fish are.” Another area of real interest is the richness of data that a brand can understand on their consumers who are buying through social channels and how this can be used to feed into their broader marketing strategies.
In short any brand who does not have a well-defined social commerce strategy is missing out on a significant sales opportunity and also the opportunity to have a much deeper understanding of their consumers; there is still an untapped space in Australia for first mover advantage.
Q: Alexa, Google Home etc….. How does voice search effect Search Advertising?
A: Voice is predicted to cover more than 50% of all searches by 2020, so any advertiser not paying attention to voice and its impact is preparing to fail. Just like there was a change in content strategy and website structure during the shift towards mobile searches, we expect a similar change in approach for voice search. We will soon be getting access to real voice search data from Search Console, which will tell us more about the nuances in language use, particularly phrasing and the differences in searcher needs (or intent) that the average voice search interaction holds.
At the moment, the majority of voice searches are informational (e.g. “What’s the weather like in my city?” or “Is Starbucks open late?”), however as the technology advances consumers will move towards more transactional searches which will require brands investing in “skills” for Google Home or Alexa to capture searches like “Buy two large pizzas and deliver them to me,” or, “Book a rental car at Melbourne airport next Friday.” Early adopters have a chance to develop voice assistant skills and dominate their space (and relevant queries).
Another interesting point of note will be how Paid Search Advertising for Voice is handled. With results displayed on screen, the user has the choice of multiple options and has a degree of control over the listing he or she chooses. However with Voice, the consumer is expecting one result and for this result to be a perfect match. This puts a huge amount of power into the hands of the technology platform handling the result; if it’s not handled with care, it could cause conflicts of interest.
The true power of voice search will come to the fore with further advancements in both AI and ambient computing. More ways of capturing and displaying information combined with the ability to make sense of that data at scale will enable companies who embrace these technologies to enhance the customer experience far beyond what is possible now.
Our recommendation is to test and learn often and to understand exactly how users are using voice search within each industry to consider a website content optimisation vs skill investment.