In only about five years, the arsenal of advertising has moved from a blunderbuss to a precision sniper rifle, a Google executive told Charlotte ad agency leaders Thursday.
Sam Nana-Sinkam, the New York-based mobile strategy lead at Google, told a luncheon of the American Advertising Federation/Charlotte that smartphones are revolutionizing the way retailers connect with customers – and how the devices are driving sales in unexpected ways.
“We now have supercomputers in our pockets at all times,” Nana-Sinkam said, asking those without mobile phones to raise their hands. None rose in the crowd of about 60.
“If you want to win in retail, you have to win in digital,” he said. “And if you want to win in digital, you have to win on mobile.”
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Time spent with – and ad budgets aimed at – traditional media such as print and TV is falling, he said, while both are rising sharply with mobile.
Fragmentation of media platforms has driven a crisis in the advertising business as it became more difficult to effectively reach a desirable audience through traditional means. But smartphone technology offers an alternative channel to reach consumers, and can target their individual interests by recording their Web activity.
Even lingerie giant Victoria’s Secret is cutting back on its iconic catalog in favor of developing digital advertising approaches, he said.
While traffic to stores has fallen since 2010, he said, sales are up at retailers that were early adopters to digital mobile marketing such as Home Depot, Target, JCPenney and Abercrombie & Fitch.
One recent study showed that 85 percent of customers liked to come to stores to examine products before they bought. But of that audience, 73 percent had been influenced by a connection on mobile, either by looking at advertising or finding the address of a nearby specialty retailer.
Data from customer Google searches are driving inventory decisions at some retailers, Nana-Sinkam said.
Advertisers who used to depend on mass media in print or broadcast are now using mobile devices – and the geolocation functions they provide – to target customers in a relatively compact radius of their stores.
Customers who are within 5 miles of an outlet are vastly better prospects than those who are distant, he said, and mobile technology can identify them.
“You need to own your home court,” he said. “If someone is within 5 miles, you need to own that user.”
Other observations from Nana-Sinkam included:
▪ Phone apps haven’t been a big player in retail marketing, partly because they use up too much memory space and partly because they don’t offer anything unique from the retailer’s website.
▪ Target has begun putting free Wi-Fi in stores and directs mobile customers by beacon technology to items they’ve searched for and bargains only a few steps away.
▪ About 15 percent of all mobile ads clicked on resulted in a customer going to a retail store.