Category: Digital

2019 Consumer Insights – Google

light smartphone macbook mockup
Photo by Caio Resende on

As I have mentioned a couple of times already, it’s that time of the year when literally anyone and everyone is busy preparing and sharing their lists of insights and trends.

I came across Google’s view recently. And I found it distinctly underwhelming.

It’s very surprising to hear Google say that this is the year (2019) when ‘consumer journeys became increasingly complex‘. As someone who has been in the field of Digital Marketing for over 15 years now, this is something that was obvious to me for at least the last five years. The seeds for this were sown, I would say, in 2007, when Apple launched the iPhone and the smartphone revolution took off. Consumers no longer had fixed times (and places) when they accessed the Internet and could do it whenever and wherever they fancied.

The second insight is that ‘New Media Channels are Emerging‘. Really, this is big news in December 2019? I looked at the various research conducted by Google and discovered that most of these date from 2018. The only pieces of research that are later than January 2019 relate to YouTube – a channel that has been around for more than 14 years now – and Voice Search. Now I agree that Voice is going to be the next big thing. It might have been more accurate if Google had said that ‘Voice is Emerging as the Next Big Media Channel‘.

Moving on – the next insight is about ‘satisfying immediacy‘. Yes, this did have more recent research, but I distinctly remembered a similar insight that Google had shared last year. So I did a Google Search (:-)) for 2018 trends and voila! Read on for ‘The most interesting 2018 consumer insights you should carry into 2019‘.

Having said that, I do find it interesting that users are being more location conscious in their online searching and browsing behaviour. This is definitely something that brands should look at leveraging, wherever possible.

The next insight is that ‘Traditional industries are transforming with digital‘. Again, most of the research that supports this insight date to 2018. And given that ‘Digital Transformation‘ has been a buzzword for at least a couple of years now, is this truly insightful?

The final insight is ‘Standards are being raised in privacy and digital wellbeing‘. And this is the one that I think Google got right. Users are increasingly becoming aware of their digital footprint and digital addiction. As their October 2019 survey revealed, ‘1 in 3 Americans have taken steps to improve their digital wellbeing in the past year, and more than 80% of them said this had a positive impact on their overall sense of wellbeing.

It does look like Google has put together a largely rehashed set of insights to capitalise on this ‘End of Year’ season for insights. I would give them a rating of 2/5 for this effort, very disappointing for a leading digital business with the depth of resources that they have.

Customer Acquisition in the Travel Sector

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Photo by Element5 Digital on

So the big news in the (Online) Travel space over the past couple of days has been the resignations of the CEO and CFO of Expedia, one of the largest online travel companies (OTAs). The ostensible reason for their departure seems to be a disagreement with the Board over strategy. But did a little deeper, and it turns out that there could be another big reason – and that is the rapidly increasing cost of Customer Acquisition.

Now, this is definitely not a problem only for the Travel industry, but in this post, I want to talk about a few reasons why Travel seems to be one of the most significantly impacted sectors by this trend.

Travel was one of the first industries to embrace the ‘Internet’ in a big way. And that is no surprise for people old enough to remember what it was like to book a ticket pre-Internet. I still remember the time we had to write letters to the hotels, send them Bank Drafts and await confirmation of booking, again by post! Booking a train or plane ticket involved waiting hours in a hot and crowded queue, with no guarantee that you would even get a ticket! So when the first online travel companies provided customers the opportunity to book their flight and accommodation options from the comfort of their home or office, customers lapped it up.

Unfortunately, that seems to have been the biggest innovation in this sector in the past couple of decades, while the customer value proposition has drifted away from convenience to the dreaded ‘price’. Yes, we can now compare across multiple options, view high quality photos (and videos) and read hundreds of reviews across multiple platforms before deciding to book a hotel room. But why should I book the hotel room (or flight ticket) from one OTA (Online Travel Aggregator) compared to another? I don’t have any data, but I would argue that 80% of users would respond with ‘whichever provides me the cheaper option‘ if asked this question.

This lack of brand differentiation has led to the OTAs having to spend significant amounts of money on Customer Acquisition. And this biggest recipient of this money is the world’s largest search engine. Customers typically begin their travel booking process with a search, and OTAs have no choice but compete with each other to get as many of these potential customers on to their sites as possible. This has led to steeply increasing cost per clicks. Users also users typically make multiple visits before booking, as well as compare prices across multiple websites, which means that OTAs have to keep spending money to drive subsequent visits to their website, with low conversion rates. All of these add up to the Customer Acquisition Cost (CAC) going up all the while.

So how can OTAs tackle this problem? Unfortunately, I do not have a magic bullet that can solve this problem. The core of the issue is really lack of brand differentiation and a value proposition that is largely predicated on providing the cheapest price. Brands will constantly have to ask themselves if they can provide value to their customers that can engender brand loyalty. Brands like Amazon have managed to do this but a big part of the reason for this is that they operate in a sector where customers typically make frequent and regular purchases. The problem is more severe in Travel because users typically make only one or two transactions a year, but the ticket sizes are high enough that they will spend sufficient time and effort in doing research to get the best value.

One option that I am sure all the large travel companies are exploring would be to leverage ‘Big Data’ and ‘Machine Learning’ to provide a more personalised solution to users. Booking flights, and especially hotels, has, I would argue, actually become more difficult these days due to the plethora of choices. If an OTA is able to understand my requirements (based on my digital and other signals) and narrow down the options they present me while I am doing my research, I might be more inclined to book with them and do it faster, thereby improving their Conversion Rates and lower CACs. If they are then able to offer ancillary products and services that are also tailored to my specific requirements as well as send smart reminders for me to plan my next holiday, then Customer Lifetime Value can also be driven up.

Yes, I know this is easy to state from the outside and there are, I am sure, numerous reasons why true 1:1 personalisation might be difficult to achieve, but I would really like to see some companies try.

Links to further reading on the Expedia Leadership Change:

  1. Expedia Leadership Shakeup Shows Power Of Travel Industry Disruption
  2. Why Expedia Blamed Google for Its Earnings Debacle

Monday Reads – 25/11

Some interesting articles to kick off the last week of the penultimate month of the year!

  • Elastic: Flexible Thinking in a Constantly Changing World – If there is one article you read this week, make it this one. A succinct, but fascinating view into the type of thinking that can lead to meaningful breakthroughs in this rapidly changing world.
  • TV the ‘least risky’ form of advertising – Right at the outset, I must add the caveat that this research was commissioned by a TV advertising body. Having said that, I agree with the findings and suggested strategy. I do not think TV advertising is going to go away anytime soon, but it might not be the right or relevant strategy for everyone.
  • Building a better data-first strategy – I think by now, most marketers and businesses know the importance of being data-driven. This is a good article in case you are still unsure on what your data-driven marketing strategy should be. However, as the article so rightly states, keep in mind that “people are not machines, and as such, they’re not always rational, efficient bidding and buying engines. They don’t necessarily respond in the way you’d think they might. As a marketer, you have to plan for that by gaining a better understanding of the human story behind your data — because it’s those behaviors that may drive your business forward.

The role of judgment in an increasingly automated world of Digital Marketing

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One of the key developments in the field of Digital Marketing in recent times has been the rise of Machine Learning led automated tools and processes to simplify the increasingly complex world of Digital Marketing. These automated processes enable marketers to simplify the process of creating, targeting, publishing and optimising their digital ads.

I have been working in this field for over 15 years now and have seen the evolution of this marketing channel at fairly close quarters. This is how I have seen the skills required to be successful evolve:

  • Technical skills – In the early days when the tools were not so sophisticated, it was a great advantage to have some understanding of the technology. Which is why, in my experience, some of the earliest digital marketers came from a technical background.
  • Analytical skills – As the tools become simpler to use, and digital marketing became more widespread, people who had a talent (and interest) in working with numbers started dominating this field. The ability to analyse and interpret data became a source of competitive advantage.
  • Creative skills – It’s safe to say that, for a long time, digital marketers weren’t necessarily the most creative. Creativity was seen as the domain of the ‘brand’ marketer, while ‘digital’ marketers were more analytical. However, with the rise of social media which is typically more visually oriented, we are seeing a change. Digital marketers increasingly need to have good creative skills as well. I am not saying that they need to be good at creating ads, but they need to have an eye for what is likely to be a good ad.

Skills for the Future?

The machine- learning led ‘automated’ tools and processes even today means that users with little technical, analytical or even creative skills can create and run digital marketing campaigns in a matter of hours (if not minutes). So what are the skills that are likely to matter most for the digital marketer of today (and the future)?

This is a topic that I have been ruminating about for a while. And a recent article I came about provided a strong perspective.The article is called “The Simple Economics of Machine Intelligence” and is written by Ajay Agrawal, Avi Goldfarb and Joshua Gans. The article basically postulates that as machine intelligence improves, the value of human prediction will decrease, but the value of human judgment would increase. And I agree with this.

My experience with the automated strategies in Digital Marketing is that while they can definitely save time and effort, they are not yet at the stage where it can be guaranteed that they will deliver better performance that human judgment led campaigns. One of the reasons for this is that all of the machine learning models rely on data. The more relevant data points, the better. And even though the volume of data points is going up exponentially, most businesses still struggle with quality of data. The data might not be sufficient for the specific use case that the marketer is targeting leading to the models extrapolating from the existing data or relying on ‘similar’ data, neither of which might accurately predict what is likely to happen next.

This is where human judgment comes in. An experienced digital marketer might be able to spot trends, or come up with hypotheses for testing that the machine learning models of today might struggle to do. A good marketer should have an innate understanding of their customer’s behaviour which can be translated into campaigns and ads. They would definitely have more information of their overall objectives which would enable them to take certain calls around campaign optimisation that automated models of today are not equipped to do.

The value of judgment also extends to hiring. While the process of hiring is also getting digitised and partly automated, I would argue that, at the end of the day, the hiring team would be able to judge the softer skills far better than any machine. What is the attitude of the candidate? Would the candidate and the hiring manager get along? Would he or she fit in with their immediate (and extended) team members? These are factors that are increasingly going to lead to stronger performances, than the typical ‘skills’ that people have been hiring for. As I am sure you would agree by now, a majority of these ‘traditional skills’ can be better performed by machines, if not today, then in the very near future.

So what are the skills that I would recommend digital marketers to develop?

  • Customer empathy – An ability to really understand your customers, how they behave, how they consume media, etc.
  • Curiousity – Always be asking questions. Why does the customer exhibit a particular type of behaviour? How does this latest machine learning model work?
  • Insights – What is the data really telling me about my customers and how they behave?
  • Ability to unlearn and relearn – The world is changing so rapidly that we need to regularly question whether what we believe to be facts still holds true. Do not let ego blind you.

What are the other skills you would recommend? Please do send in your comments!


AI for Human Happiness

As I posted last week, I came across an interesting article that prompted multiple thoughts in my head. I wrote about one of them (Greed and Development) last week. Here is the second.

An interesting section of the New Yorker article spoke about Artificial Intelligence (AI). This is a topic I am ambivalent and frankly, confused about. We hear about this all the time. While the majority of views are positive, there are a few dissenting views around. I believe this is a significant issue that demands us to pay a lot more attention and engage constructively around.

Most of the discussion around AI is driven from a technology point of view. It is no doubt creditable that technology has developed so rapidly that AI / ML is now increasingly impacting our daily lives. And yes, I have no doubt that it’s making and will increasingly make our lives easier and possibly more comfortable.

What concerns me, though, as the article implies, is that I am not sure that stakeholders in this (and that includes all of us) have given much thought to what is the end goal that we would like AI to solve for? Private players, for the most part, have vested interests that would impact the direction they would like to AI to move towards. And, at the moment, that seems to be towards maximising corporate profits. While I have no qualms about that, I do worry that we are not thinking enough of how we could leverage AI to make people happier.

I am not sure that making lives easier automatically equates to making us happier. I am not a pyschologist nor a sociologist and therefore, do not have a good answer to exactly what would make us happier. But here are some points that, I believe, are relevant:

  • Sense of connection / belonging: We humans are inherently social animals. The more we feel a sense of connection to the community at large, the more I believe it would make us happier.
  • Sense of purpose: We are increasingly, in a digital world, trying to find out what our purpose in life is. I believe a lack of purpose leads to unhappiness.
  • Feeling connected with nature: This might probably not resonate with everyone, but I believe spending time with nature can make us happier.
  • Health: No explanations required here, I would imagine.

The good news is that there are qualified people grappling with, and expressing their opinion about, this topic. An article on Pew Internet called Artificial Intelligence and the Future of Humans includes the views of many experts in this field. I particularly liked the views expressed by Baratunde Thurston, futurist, former director of digital at The Onion. A few of his comments below:

  • “The problems to which we are applying machine learning and AI are generally not ones that will lead to a ‘better’ life for most people. That’s why I say in 2030, most people won’t be better due to AI.
  • By 2030, we may cram more activities and interactions into our days, but I don’t think that will make our lives ‘better.’ A better life, by my definition, is one in which we feel more valued and happy.
  • To create a different future, I believe we must unleash these technologies toward goals beyond profit maximization.
  • We need to ask that they ask us, ‘What is important to you? How would you like to spend your time?’ But that’s not the system we’re building. All those decisions have been hoarded by the unimaginative pursuit of profit.”

Let’s hope that we see some more public discussions around this topic in the near future.

Image of Nature