As we close the books on 2017, it’s been a rough and wild ride for the advertising world.
Major marketers, particularly consumer packaged goods companies, are rethinking their marketing spend and questioning the effectiveness of digital advertising.
Activist investors are putting pressure on some of the biggest advertisers to cut spending.
Professional service firms such as Accenture have emerged as potential competitors.
Meanwhile, Facebook and Google now represent 60% of the global digital ad market and Amazon is the "elephant in the room".
But given this uncertain backdrop, the ad industry isn’t standing still.
We are innovating and transforming by putting the consumer at the heart of our strategy, as opposed to the communications platform.
Unlike consulting firms, the value that marketing agencies have always brought to the client lies in deep consumer insights.
Today’s consumers are faced with a paradox of brand choices both online, offline and in between.
In a mobile-first world, people are browsing, researching, shopping, receiving, rating and reviewing 24/7.
Not surprisingly, brand loyalty is elusive and at an all-time low.
Consider a recent McKinsey report that showed a mere 4% of cosmetic purchases were loyalty-driven.
That’s not encouraging if you’re L’Oreal, Coty or anyone in the cosmetics business.
Despite this new choosy consumer who has a plethora of options, brands have actually become more formulaic, producing too much low-quality content in an effort to cater to media fragmentation, or they have over-estimated the value of targeting.
All too familiar is the online experience where a pair of shoes follows you around the Internet. It’s annoying and can cannibalize a brand.
A friction-free experience
The new battleground is getting into consumers’ initial consideration set.
Research shows that it’s vital for a brand to be one of the first to come to a consumer’s mind when he or she is triggered to make a purchase decision.
Brands in the initial consideration set were more than two times as likely to be purchased than products considered later in the shopping journey.
This gives marketers huge opportunities for conversion – if you can be the brand that provides a seamless and friction-free user experience.
A frictionless consumer experience means much more than an app or an engineering tweak.
It’s a holistic concept of reimagining how interactions between people and brands can, and should, play a role in our lives.
The basic characteristics of experiential marketing have to be: personal, intuitive, omni-channel, responsive, easy and seamless. However, most importantly it has to be brand-led.
Take, for example, Uber. It launched in 2010 as a product solving a consumer pain point (hailing a cab) in a stagnant category. Its growth was a result of innovative disruption.
However, with growing consumer adoption, ride-sharing companies proliferated with Lyft, Sidecar, Gett, Didi, Curb and more.
These companies are battling over market share, exploring new models and markets, and often winning on price.
Though first to market, Uber has failed to build a brand experience around its service, which over time has become commoditized.
As we all know in the marketing world – becoming a commodity is a race to the bottom.
The long-term commercial value lies in developing a brand-led experience.
It should be a unique curated approach that brings a promise to life while addressing a category requirement and always surpassing consumer expectations.
A good example of a brand-led experience is a L’Oreal mobile application that allows consumers to virtually test beauty products.
For example, a young woman can see how a particular make-up would look on her using her smartphone.
She can visualize how it would look both in the home and when in the store.
Then, at the cosmetic counter, she can select "Evening Smokey" and scan in the bar code. And be on her way.
Virtual make-up, live streaming and augmented reality shopping are key features in a modern beauty journey that mixes online and offline.
These services delight consumers and increase conversion rates for L’Oreal brands.
It’s a frictionless experience from awareness to consideration to purchase and post-purchase, which is especially noteworthy when trying to build brand loyalty in the notoriously fickle cosmetics industry.
As you think about a frictionless consumer experience, here are five core concepts that will ring true whether we are talking about a technology or the toothpaste we have used since childhood:
1 Bring your brand to life for consumers.
2 Be enjoyable while addressing customer pain points.
3 Act in service of the consumer, not merely selling to or at the consumer.
4 Deploy partnerships to serve better. Technology and consumer products are meeting at an intersection.
5 Simplicity always wins. Remember that one.
My prediction is by 2020, branded customer experience will overtake price and product as the key brand differentiator.
We are already seeing companies allocating significant "customer experience" funds to the marketing budget.
If done right, it will drive market share and enhanced consumer loyalty, which is music to any CMO’s ears.
Asit Mehra is executive vice president of Omnicom Group