It’s time to start defining the digital world.
This story first appeared in the November 11, 2013 issue of WWD. Subscribe Today.
The finance executives are gleefully raking in the e-commerce dollars and the marketers love stirring up buzz on the social networks. But what do the two sides of the digital coin have in common?
Is there a Grand Unified Theory of Everything Online? (And if there is one that’s true at the moment, how long will the moment last?)
A good place to start is information—a powerful thread that ties together Google, Facebook, Twitter, eBay, Amazon and all the rest.
“The true battleground for digital is not channel related—meaning search versus social—but rather data and one’s ability to make decisions, shape distribution and offer relationships with data in a way that builds utility,” says Martin McNulty, founder and chief executive officer of performance digital agency Forward 3D.
The data an organization collects allows it to make informed decisions about how to invest in various distribution channels, he says.
Currently, marketers can find out if a user has searched for something—and on the basis of their search history, can change the online ads the user sees even before they visit a Web page.
“It’s more about behavioral retargeting. I don’t care what Web site you’re on, but I care who you are and what you’ve done. It’s data-driven,” McNulty says. “People think Google is free, but it’s not. Your data is being mined, exploited and sold. With Facebook, the product isn’t free—you and your behavior are the product.”
The targeting is only getting more sophisticated.
McNulty offers an example including transactional, behavioral and external data.
If a marketer were to cull together this type of information in a database and see that a consumer had visited three travel Web sites in one week, purchased a brand from Net-a-porter.com repeatedly, and see the weather report where that user is based, the marketer could make much more informed decisions about targeting this consumer.
Data, though, is a shadow of a larger force.
Gustavo Waizbrot, cofounder and president of digital agency One Rockwell, describes data as the imprint of people in the online world.
“The unifying element is us, the consumer—but data is the translation of people online. It’s a technical representation of us in a way, and it’s a common factor in all of these different channels,” Waizbrot says.
While any understanding of the digital world that places data at the nucleus of the online ether might hold true right now, the danger is that as consumers become more concerned with privacy, they might become less comfortable allowing brands to see what they’re up to online. It’s a fix: Just as companies are learning what data is valuable and what isn’t, the consumer is getting more options to opt out and not share their digital pasts.
“When consumers are surfing, they’re also giving up a lot of their privacy,” explains Shelly Socol, One Rockwell cofounder and executive vice president. “It becomes a conflict, but if they stop sharing this information, then we go back to the Internet of yesterday—one where users never got what they were actually looking for.”
For Socol, data is how her team understands customers and what actions they want to take online. Clients are pushing for more personalization and to be more relevant.
“Google and Bing are trying to address this, but the answer depends on what the user is able to give you,” she says. “It’s a relationship with an exchange of information—and users have to provide that information.”
In e-commerce, consumers want to see e-mails about things that are interesting to them, specificity is paramount and organizations are using data to be as targeted as possible. Consumers are leading increasingly complex, data-rich lives online that brands want to tap into. But the whole model runs the risk of crumbling if the data aspect is taken away.
Experts fear people will start to pull away if channels like Facebook fail to deliver ads that are relevant to the user. If concerned Internet users stop supplying data about themselves or even command that Google no longer track them or their activity, the platform falls apart—along with much of the fashion game plan online.
Google conducted a study to try and understand the linkage around the types of resources 3,000 consumers used to make buying decisions, and the one thing consistent across the board was that everyone used the Web in some shape or form, according to Brian Zeug, Google’s industry director of branded apparel.
“There were 3,000 people and 3,000 paths to purchase. There is no such thing as a linear path to purchase anymore,” Zeug says, noting that 98 percent of luxury consumers use the Internet daily.
Zeug says people spend 5 percent of their online time in the search box, 10 percent buying, 50 percent on entertainment and 35 percent communicating or being part of a community.
“Those are all interrelated,” Zeug observes. “You don’t do one linearly, per say. You do a lot of these behaviors.”
Devices and platforms work in conjunction online—as people spend their time searching, buying, being entertained and communicating simultaneously.
This hyper-connectivity offers another way to understand the Web.
“Intensely socialized, personalized, ubiquitous and always-on experiences are what unifies all Internet things,” says Tony King, founder of digital agency King & Partners.
For King, once people arrived at the point where they were creating and consuming content simultaneously—meaning browsing, shopping, searching, discovering, sharing, listening, watching, discussing, gossiping, informing, posting, Googling, Facebooking, Tweeting, Tumbling—without being conscious of it, then a certain unity or symbiosis was achieved.
And it’s never ending—the Internet never shuts off.
Beyond all of this though, paid search, e-mail, display advertising and social media are all vastly different businesses.
E-commerce evolved from modern retail and social media came from branding and marketing—both heavily ingratiated into the everyday lives of more than a billion people, especially in the case of Facebook.
“Scale, reach and commercial benefit are the core things that make a channel successful,” McNulty says. “What social media has is scale and reach—because everyone uses social. That’s confused a lot of people, though.”
Social media is driven by communities and relationships, but it still lacks the inherently commercial aspects that have been intrinsic to search, e-mail and e-commerce since the get-go. Social channels still remain immature as advertising outlets because the commercial medium is still unclear, McNulty cautions.
So social media and e-commerce are connected—by their always-on, always-connected users, the digital trails they leave online and their still-untapped potential.