Appetite for Disruption: Mobile Marketing Matures but Faces New Challenges with Bots, Ad Blocking & “App-athetic” Users

Mobile marketing is entering yet another exciting era. Email, apps, notifications, and chat have produced unique opportunities, while the rise of the bots, improved machine learning, virtual reality, and other innovations are creating new ways to gain consumers’ interest and importantly, their trust in the age of ad blocking and “app-athetic” users.

But as Robert Gray reports in this first of two installments, keeping both remains a challenge.
 
The ever-shifting landscape has already caused a lot of upheaval in the brief smartphone and mobile app era. After all, it’s been less than a decade since the iPhone burst onto the scene and changed mobile marketing forever. The disruptive pace has been brutal to many sectors and a number of industry insiders say they don’t see it abating anytime soon.
 
The media industry has been stood on its head, consumers can now literally order modern conveniences such as dinner, drivers, or dry cleaning at the touch of a button. Texting has surpassed talking on the phonefor many, particularly for millennials, and continues to present engagement opportunities.
 
But while texts, snaps, and notifications are instantaneous they can also lead to uninstalls if consumers are bombarded with spam or feel their privacy is threatened.
 
And in a time when app adoption is slowing and greater growth is coming from existing users than new ones for many mobile businesses, and more ad blockers are being deployed on the mobile web, what does it take to create a winning mobile product and marketing strategy in light of the current, and future, challenges?
 
A number of executives from different disciplines shared their insight, experiences and outlook for this whitepaper in advance of the Open Mobile Summit on November 29-30 in San Francisco.
 
We greatly appreciate their time and contributions without which this project wouldn’t have been possible.
 
They are as follows:
Paul Gaffney, Senior Vice President of Software Development, The Home Depot.
He is responsible for leading the IT technology development for more than 2,000 stores across the U.S. and Canada. Paul drives the design and development of our long-term strategy and vision for the technology roadmap that supports our stores, online, merchandising, supply chain and other developmental platforms.
Paul brings more than 20 years of technology expertise that spans multi-channel retail, financial services, e-commerce, physical distribution and direct fulfillment operations. Before joining The Home Depot in 2014, Paul served as president and CEO of American Automobile Association of Northern California, Nevada and Utah. He has held executive leadership positions at Desktone, Staples, Office Depot and Charles Schwab.
 
Scott Havens, Head of Global Digital for Bloomberg Media.
He is responsible for Bloomberg’s global consumer digital initiatives, overseeing digital product, user experience, partnerships, and overall digital strategy for Bloomberg’s websites, mobile apps, over-the-top platforms, and distributed content partnerships.
Previously Havens was Senior Vice President of Digital at Time Inc., where he managed operations and drove the strategic development and rebuilding of digital products within the news, business, sports, and entertainment verticals.
Before that he was President of The Atlantic, playing a key role in the successful digital transformation of the 157-year-old magazine into a profitable, global, multi-platform media company.
Prior to that, Havens managed the business development team at Yahoo! Finance.
 
Kate Harris, director of product for The New York Times.
She oversees product development across its core digital platforms (Android, iOS and Web) and manages third party experiences, such as Google AMP and Apple News. Harris joined The Times as a mobile product manager in February 2012, before she moved into her current role in June of 2014.
Prior to joining The Times, Kate did stints in mobile product strategy at HUGE Inc., strategic partnerships and new product incubation at Google and emerging media at Conde Nast. Before that, she worked in strategic development at a startup and statistical modeling at a consulting firm.
 
Laura Newton, Product Manager, Bot Platform, Kik
She works closely with one of Kik’s development teams.
Newton gathers feedback from partners and external developers, deciding which features to build into Kik’s platform, when to do that and how the user experience will work.
She works with the development team and designers and the business team to get them built and launched successfully to the developer and brand community and pushed through Kik’s launch process.
 
Ben Smith, Senior Vice President. Head of Experience, Hulu
Smith is responsible for the end-to-end viewer experience and customer journey on Hulu – everything from product design to customer service.
Prior to joining Hulu, Smith headed Product Management at Sonos where he led the global expansion of music services. As a Partner at Microsoft, Ben led product design for Xbox for nearly a decade, broadening the gaming experience with Kinect, pioneering streaming video and living room UI on Xbox 360, and designing the TV and video experience for Xbox One. In 2014 Smith and the teams he led at Xbox won an Emmy for Innovation in Entertainment Devices.
 
Angela Wise, Head of Product at Sprig
Wise oversees product management, design, research, brand and culinary R&D for the meals on-demand company. She is responsible for the Sprig customer experience via Sprig’s mobile apps, menu strategy, food quality, and customer insights.
Prior to joining Sprig, Wise worked in product management at Uber on surge pricing, and dispatch. Before Uber, she led several R&D efforts as a PM at Microsoft.
 
 
Where the Bots Are:
 
Mobile marketers are now deploying bots and artificial intelligence to enrich and extend engagement with consumers. It’s early days still but these companies are learning the best ways to engage and hold the attention of users.  
 
Gaffney: Unlike many “ecommerce-y” type questions, it’s a business model question. Home Depot is all about creating fantastic experiences for customers, but also about reliably creating investment leverage for our investors. AI and the bot space is one of the few spaces where an emerging class of technology has great potential to affect both of those. As we figure out how to better improve our customers’ experience, we get a double win without a lot of expense on a marginal transaction.
We have the capability to essentially resolve product search into where exactly is that product in a specific store and which aisle and bay it is in and serve that up in a map. We have delivered that historically in a non-bot way with a guided app experience but we’ve opened that up as an API and you do SMS into that. People find that really cool.
 
Wise:We’re planning to integrate with bots.  From my perspective if a chat bot is used correctly it could be a much better way of creating user-benefiting ways of introducing your functionality into something they’re already doing. Creating a chat bot with Sprig is user enhancing, it’s not pushing users to order sprig.
I think the iMessage integration is so compelling because people are already using it. It’s finding places people already are and integrating into Slack, iMessage…if you’re talking to your significant other in iMessage and planning dinner, we want to be there.
 
Newton:The biggest challenge we’re facing, because we’re in such a new space, is that everybody is figuring out what makes a good chat bot. We’re exploring what the interface will look like and what features the platforms need to be successful.
We were trying to figure out how we can make bots more viral and shareable. No one really knows if bots are supposed to be consumed by an individual or if it’s a group experience, but we had a hunch that it will be better with friends because most things are. With Kik being a messaging app and social in nature, we decided to give that feature a try and to keep it super simple it’s just a button that lets you pick a friend from your contact list and the bot will reach out to the friend.
All of our bots are opt-in only…Our Sephora bot has makeup tutorials instead of being pushed straight to purchase, it’s a lot more interactive.
Smith: We have done a lot of work over the last two-and-a-half years on improving our machine learning and recommendations with the goal of surfacing the right content to the right users at the right time.
We’re really excited about chat bots because they are another way to surface those recommendations to the viewer to help them find more shows they want to watch quickly. AI, machine learning and chat bots create a better experience for the customer. They spend less time searching for their favorite content and navigating the UI and more time watching shows they love.
 
 
Pardon the Disruption: finding, retaining and reengaging an audience
Billions of apps have been created and downloaded but overall fewer are being added to smart devices and there’s now greater growth among existing app users than from new ones.
Wise:App fatigue is real but right now all of the other solutions are worse from a customer experience perspective, for the developer, and in a lot of ways worse for the customer.
The solution is going to look like some other platform that is not the app stores. I don’t think anyone has developed that platform. I’m skeptical that the platform is going to be Facebook Messenger. I’m skeptical because it’s not integrated enough to my day-to-day that it seems like the natural place to get what I need.
Newton: Users aren’t downloading as many apps; I think three’s a great spot where bots can take over those interactions where you’re not willing to download an app—that can provide real value.
We can look to WeChat—we see that as the operating system for mobile. (The Chinese) are ordering their Ubers, pizza, getting drinks out of vending machines all out of their messaging app. We think that kind of change will happen in North America as well, hopefully on Kik.
 
Harris: We continue to re-market to users who have already downloaded our app. This audience tends to more likely to subscribe than our mobile web audience; they already have brand affinity.
We try to target via in-app pushes based on how many articles they have read that month since users who read more are more likely to subscribe. We’ve also expanded our news alerts and push notifications strategy to highlight our best enterprise coverage and move beyond just breaking news.
Gaffney: The app experience is so much more elegant but human beings like that text experience. We’re going to learn from that and find out what it means to expose that interface. If there are some consumers that are not going to download our app, how do we use some of that underlying technology? So instead of displaying our map, let Facebook Messenger display it.
There are very few people running a brand’s app that will be ubiquitous in their life. How do you get into that flow instead of your own private flow?
The important pivot is to recognize you want to live inside an experience, inside of something else that someone created that’s not an experience you have control over. That’s different from destination brands. In the physical world, we’re not in malls because we want to be a destination, but in the digital world, it’s upended. You want to be where the customers are.
Havens:I don’t think the mobile web will become anything more than a necessity—the plumbing, the must-have destination for new users to discover a brand.
We believe that apps across all connected devices are the future of media as they allow publishers to control the relationship, the data, the experience, and create unique marketing solutions.