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According to the University of Cologne’s Institute for Commercial Research (IFH Köln), 2018 saw the value of German e-commerce rise to EUR 53.3 billion. This represents an increase of more than EUR 4.4 billion, or 9.1%, on the previous year.   Around half of this growth was driven by Amazon Marketplace alone, which in 2018 succeeded in gaining over 100,000 new retailers and manufacturers in Germany, around 40% of whom were notably from from the People’s Republic of China.

The reasons behind this rapid development are not difficult to identify. On the one hand, consumers are increasingly using the Internet to do their shopping, and often begin their product search directly on Amazon. Until just a few years ago, this role of e-commerce gatekeeper was still reserved for the search engine Google. With Prime, Amazon has also succeeded in establishing an extremely attractive customer loyalty programme. In exchange for a fee, its approximately 100 million members worldwide enjoy free and fast delivery of their purchases, media products like Prime Video and Prime Music, exclusive discount offers (e.g. Prime Day), and special shops (e.g. Amazon Fresh). This has established the platform so firmly within the relevant set of customers that they order twice as often from Amazon on average as non-members.  What’s more, these customers are practically no longer attainable to other online shops as a target group for new customer acquisition.

In addition to their extensive reach and exceptionally loyal customer base, digital marketplaces like Amazon and OTTO & Co. offer a further, decisive advantage:    their technical and logistical infrastructure can be used by all suppliers without the need for financial outlay on their part. Platform maintenance, transaction processing, and marketing offers like Cyber Monday are all taken care of by the operator, with additional options available that extend the range of services provided to cover all logistics, including warehousing and returns handling, such as Amazon’s FBA fulfillment programme.

Figures published by IFH Köln show that suppliers who sold their products via Amazon in 2017 reported sales increases of more than 20% on the previous year – twice the total growth of e-commerce in the same period. Processing shipping, billing, and warranties via the marketplace is also making it easier for small retailers and manufacturers to gain a foothold in international markets. In this way, familiarity with the global brand promise of Amazon or eBay and the trust placed in them by customers is something that every supplier can use to their own advantage.

In addition to all of the incentives and advantages that the big platforms indubitably offer, however, it’s also important to take into consideration the risks and possible dangers that are posed by developing a marketplace strategy that is too reliant on them.

Manufacturers and retailers with interchangeable products who lack a strong brand identity of their own and do not offer a significant price advantage shouldn’t underestimate the level of competition that  marketplaces can have in store for them. Whereas having their own online shop allows retailers and manufacturers to make an exclusive presentation of their full range, on Amazon and similar platforms they’ll find themselves competing with numerous suppliers for customer attention and product visibility. Although a number of effective marketing tools enable them to purchase more desirable placement among the first pages of search results, achieving organic top-placement in the longer term will require significant investments in advertising together with the maintenance and optimisation of their product catalogue, which can quickly eat up a calculated margin.

An additional disadvantage – especially from a customer lifetime value point of view – is that they have little or no opportunity to make direct contact with their customers in order to let them know about special offers or new products and establish a sustainable CRM strategy.

Last but not least, there is the danger of them becoming too dependent on the marketplace and losing control over their own brand. Unforeseeable rises in fees, alterations to the general guidelines and terms and conditions, and the rise of numerous Amazon own-brands such as Basics, Essentials, and Find can render working with marketplaces unprofitable overnight. In the worst case scenario, bad business practices or negative black hat tactics on the part of the competition can lead to the immediate blocking of their own accounts.

For these reasons, retailers and manufacturers would be well advised to make an intensive exploration of additional sales channels in the interest of diversification. In addition to analysing niche marketplaces such as hood.de, yatego.com, avocadostore.de, or selekt.com, they should also consider creating their own online shop. This is especially likely to pay dividends if the shop offers customers something significantly different from the marketplaces in a way that they are readily able to appreciate. This can be achieved by offering a particularly attractive pricing structure, for example, or a distinctive product range or an outstanding user experience.  Making use of augmented reality or chatbots in the case of products or services that require a larger amount of explanation can achieve genuine added value, even making it possible to attract target groups away from the large marketplaces to new shopping channels.

Although there is no one-size-fits-all advice for developing and establishing a suitable e-commerce and marketplace strategy, which needs to be done on an individual basis, the following general conclusions can be drawn: Their extensive reach and potential mean that the big marketplaces are almost impossible for manufacturers and retailers to ignore. As their market power means that these platforms tend to dictate relationships on a one-sided basis, however, too much dependency and concentration on a single marketplace should be avoided, and alternative market footholds established.

“Great stories can come from anywhere and they can travel everywhere, as long as we use technology to get the right story for the right person and make that a great experience”. Greg Peters, Chief Product Officer of Netflix, used this sentence a few weeks ago to close his lecture at the Web Summit in Lisbon. The vision: to make Netflix the place in the media landscape with the world’s best formats, the best user experience and the best opportunities for producers to tell their stories.

At the moment, however, Netflix is just one provider among many and the likelihood of a single medium ever fulfilling the function of ‘main medium’ again, i.e. becoming the symbolic campfire around which the nation – or even the whole world, in the era of globalisation – sits, seems unrealistic. Nonetheless, Netflix, Amazon Prime Video and YouTube represent a fundamental shift in media use that has taken place over the past ten years: the age of mass media is coming to an end.

My grandma is never going to get up to speed with Netflix. But what about my parents?

My grandma likes to watch television. However, she turns 100 in February and, before the internet even came along in the 90s, she wasn’t that interested in the entertainment innovation that was the video cassette – there was always television.

It’s a different story with my parents who, both in their mid-60s, are regular users of Amazon Prime Video, even if conventional television still accounts for the majority of both their media usage. There are still lots of regular viewers of traditional TV in all age groups, but the number decreases with age and consumption becomes less frequent.

However, television is still just one medium among many and the big winner is the consumer, as the choice of fantastic formats available on all kinds of media is wider than ever before. Alongside the major media brands, the internet has also given thousands of micromedia and content producers tools and platforms to tell their stories. Whether it’s on YouTube, Twitch, Instagram TV or as a podcast on Soundcloud, however niche the topic – practically all of them can be used any time and anywhere.

Mastering the complexity: fragmentation as an opportunity for agencies

From a marketing perspective, fragmented consumer use of media means that there are now an unmanageable number of touchpoints in the consumer journey. This development has been exacerbated by the long-standing trend towards maximum personalisation of consumers’ life plans, with high demand for products and services that are personally relevant. “One size fits all” has long been a thing of the past.

The complexity of marketing has now reached levels that are no longer manageable without experts at every interface – from strategy to technical implementation – with pressure to be efficient at every stage. On the other hand, the modern marketer has an enormous toolbox of touchpoints and technical solutions to reach every target group with exactly the right message at the right time. AI-assisted differentiation of budgets and channels and programmatic modulation across all media channels enable this. Nonetheless, there are still potential hiccups along the way – a lack of comparable metrics across channels and platforms, greater regulation of the data collection required for precisely tailored delivery and the rules set by major platforms for their ‘walled gardens’ are all issues that agencies will need to wrestle with for a long time to come.

Marketers navigating the touchpoint jungle: stay calm, try out ideas, learn.

Even if it isn’t easy to be an agency in the highly fragmented and complex world of marketing, in all honesty you wouldn’t want to be in the shoes of the customers who account for the marketing. The Board supports flagship projects for the brand image, Sales wants to sell, the CRM team needs leads and Product Management services the trend towards consumer customisation with a stream of new line extensions to be offered to the public. And all these requirements have to be met, ideally at the same time and for less money. Then, the long-standing, tried-and-tested measures start to lose their efficiency; whether it’s target audience penetration, short-term available reach or advertising impact – nowadays it’s difficult to work with one medium alone.

Nonetheless, we can only recommend not letting it drive you crazy. You don’t need to start exploiting every new touchpoint straight away and stop using the tried-and-tested methods overnight. Instead, you should plan and optimise across multiple channels, seek to maximise impact and make best use of the strongest channels. Quantify success with the handful of KPIs that are truly important rather than getting lost in thousands of metrics. ROI and contribution instead of last click and cost per order. Start from the beginning of the customer’s journey and invest in awareness and image, instead of skimming the surface. And, last but not least, view the user’s interest as a rare commodity. In future, major brands will emerge as the sum of several small, tailored measures.

When it comes to programmatic advertising or marketing automation in general, media or technology experts usually lead the discussion, while creation often remains sidelined. However, in a world of advertising where computers are increasingly performing control-based processes, creation is an important criterion of differentiation for brands and businesses and should not be considered as separate to the technical implementation.

In the key discussion regarding programmatic advertising and marketing automation, the market is driven exclusively by technology and media experts. So far it simply hasn’t been necessary in creation to speak about technological solutions.

However, avoiding the modern opportunities for advertising certainly isn’t a solution with a future. Creative minds should know and use the possibilities for involving new technologies such as programmatic advertising – even if it isn’t their main task to promote the standardisation of advertising media or the measurement methodology of online videos on Facebook or to discuss interface problems between DSPs and SSPs. But they do need to develop an idea at the beginning of the process that will surprise the market and that isn’t expected. Only once this umbrella idea for a brand or product has been developed is it possible to meaningfully engage automation in marketing.

The greatest hurdles for programmatic creation lie in everyday work. This is because advertisers’ briefings for media and creation are unfortunately rarely coordinated with each other. Completely different objectives are frequently formulated for the two areas – depending on whether the aim is to achieve something for the brand or for sales. Furthermore, media and creation are usually different departments (both for the customer and the agency) that don’t always communicate with each other. How exactly the creative process works in an agency and in cooperation with the advertisers strongly depends on how the campaign planning is organised. The areas of strategy, media and creation are usually involved. If one of these areas starts the work on its own or dominates the planning process (which is usually the case) then at least one department is often dissatisfied.

Anyone wanting to advertise successfully in the programmatic age should try to engage all those involved at an early stage and incorporate all their perspectives. Creative minds need to understand how algorithms work and how media people tick. While media needs to realise that creative individuals have an emotional connection with “their” motif and that it isn’t just any old piece of cargo. Only in the symbiosis, in the understanding that the other group also has a very important contribution to make, do we get an end result with added value and a meaningful strategy. The foundation for this approach in the future should be for creation and media to have a shared budget. If, for example, creation addresses users with more target-group-specific advertising and varying motifs (and requires more time and money to do so), this money can then be saved from the advertising effect and the media budget can be lower.

As a first step towards finding a common solution, advertisers should precisely define what they expect from their communication or campaign. Ideally, marketing, media, sales and other stakeholders should get together for this and formulate clear targets for creation, strategy and media. After all, only once a good strategy has been decided upon and a compelling creation developed can programmatic advertising and automation demonstrate their strengths.

This article was published at Arabian Marketer.

With the world views divided on the latest BBC Nirbhaya documentary issue and the Women’s day just gone by we thought of talking about the changing face of women in Indian advertising. If we carefully look at the current portrayal of women then there are many interesting examples where brands not only empower women but have made their branding around creating a strong identity for them. For example: In the latest ad of Airtel film “Boss” the lady is shown as independent with complete professional attitude.  This is quite a big change from what was shown in the past. Even second marriage is shown in a very positive light by the jewellery brand Tanishq. Here re-marriage is set as the backdrop for its contemporary range of wedding jewellery. The new sea change is marked with the fact that more and more women are joining the work force and are independent enough to take their own decision. Earlier women of the 80s were portrayed just doing household chores or just adding glamour to ad. The role of women in India has seen the change over the years with more and more women joining the workforce and becoming independent decision makers which is quite a contrast to her role even in the society. From the sacrificing homemaker who would have done it all for the betterment of her family is now the guilt free happy mom doing multiple roles. Now, her forte includes more independence and decision making.

Even in the latest ad of Prestige where we have celebrity couple Abhishek and Aishwarya are shown enjoying cooking. The best portrayal of women has been by brand Havells which started the ‘Respect for women’ series.’  Also, the detergent ad of Nirma shows three women pushing a vehicle an ambulance stuck in a ditch. All these ads are creating a different space in the advertising space where a non-traditional role of women has gained a momentum. Most importantly, even society is welcoming the positive imagery of women where they are relating more to the real women of substance rather than just the glitter doll role. The latest Horlicks campaign titled ‘Love you ma’ shows mothers in traditional avatars but being a source of constant support to their independent daughters in various professions like police officer, sports star etc and a little daughter holding hands of her mother in supporting her in return. It is a beautifully shot film which shows the new era woman in altogether a different light.

The same Indian woman who was once upon a time shown as submissive housewife is now shown as confident, independent and makes her own choice. No longer will you see the stereotypical roles of women in the ads. Now a new momentum has gained precedence in the last few years, which breaks the old imagery of women being in the backdrop or shown as an eye candy. While big brands are doing their bit, smaller brands are also creating milestones: Fiberfitness shows the most beautiful gift given by a son to his mother and father, of being healthy for life by joining health club. Here, again, the mother is given most importance. While women employees add up to 30% of work force in the software industry, there are instances where still few brands showcase women mostly as homemaker or just glamed up. But the percentage to which the role of women has changed over the recent years is quite an eye opener. Usually portrayal of women are in essentially in three categories –traditional, neutral and nontraditional. 

The traditional category comprises of the following roles: mother, daughter, homemaker and decorative.

The neutral category comprises of: others

While non-traditional comprises of: professional, girlfriend, women superior to men or to equal to men

Non-traditional roles are on the rise were you see the Indian women no longer a part of the kitchen, but have taken centre stage to be the protagonists of many leading brand stories.

Reference: Marketing white book 2015