In a recent article The Information argued that most of Yahoo users are not logged in and, therefore, it is hard to demonstrate value selling ads. By way of definition, logged in users have a profile in the platform, typically with an email address or username. In the case of Facebook they know a lot about you including your birthday, who your friends are, an what you like. In cases such as Github they have very little personal information but they know about your repositories. Newspapers such NY Times know your email address, reading activity, and comments (they will know more if you link it with your Facebook account). Slack knows your username, phone, and can track your posts. Logged in users are attracted not only to standard platform features but also for the additional benefit of exclusive content, secure access, and functions only available to logged in users.
On the other hand, logged out users are consumers of content available openly on the web and whose activity is not easily mapped to a single individual. Yahoo offers both logged in (Yahoo Mail) and logged out (Tumblr) experiences. Similarly Twitter offers both logged in (content filtered by follows) and logged out experiences (content based on hashtags). I argued last year that Yahoo should focus on mobile and video as growth opportunities. The key would be how to develop those businesses with logged in users.
Arguably Facebook is one of the greatest content platforms without spending any money on developing content.
Logged in users not only can be tracked within the platform but also across channels. Since Facebook, Twitter, Google Plus and others adopted the Oauth standard to enable login outside of their properties it has enabled tracking of user activity “beyond borders”. The omnichannel customer journey can now be tracked across internet properties creating value across the buying path. Facebook can learn about your activity outside of Facebook and retailers learn more about their customers and behaviors. Consumers benefit from better targeting to the risk of less privacy. One of the greatest advantages from Facebook is the combination of both great content (posts, news, videos, Instagram) with high logged in user engagement. Arguably Facebook is one of the greatest content platforms without spending any money on developing content. On the other hand, Yahoo invests on creating content (Yahoo News, Music, and Screen) without being able to fully capture omnichannel user behavior since not all users are logged in (some are but not clear on the % split). Yahoo’s logged in users come from Yahoo Mail which makes it vulnerable to competition from other email providers such as Gmail. Youtube straddles both where they offer great video content with both logged in (channels, subscriptions, playlists) and logged out experience. Twitter offers non-curated content for millions of logged in users (and also logged out users). Last, blogs offer a logged out experience with specialized non-mainstream content. The following two-by-two matrix illustrates my point.
Ad selling is about the ability to prove that your platform is better capable of provisioning the right ads to the right consumers. The key question is how accurate you can achieve that without logged in users. Search queries may help but they lack the additional demographics information from your profile and they don’t come with a friend recommendation.
Key questions to consider
- Social marketing where consumers will more likely respond to products recommended by their peer network. Probably works best for some content and not as much for others such as music. See Spotify offering you to connect with your friends playlists. Still inconclusive if that is productive but certainly worth exploring – do you choose your friends based on their music taste?
- Are you offering great digital content that keeps users engaged and coming back? Can you offer the content in the device of choice of consumers? Do you have “materially-better” premium content for logged in users?
- Are you able to offer consistent omnichannel experience across your properties? What about across Internet properties (i.e. Facebook login)? More and more you search for a product on Amazon and see an ad for this product on Yahoo Mail and Facebook.
- How much of user activity are you tracking and mapping to an individual consumer? There are several ways to track user activity via search queries, clicks, shares, and voting. However it is hard to connect the tracking to a specific consumer unless they are logged in to your platform. A deeper consumer engagement would include recommendation systems such as Amazon’s
- On mobile, this can be even harder since your product is often times purchased in an app store or in-app purchases which go through the mobile platform (i.e. iOS, Android) and not your app. This is a major competitive advantage of mobile operating systems which motivated mobile handset manufacturers, such as Samsung with Tizen and Xiaomi with MIUI, tried to develop their own operating systems despite the fact the market has tipped to iOS and Android
- Are you engineering ads for virality or persuasion? In other words, friends tend to share ads that are less coercive so there is a trade-off to be considered. Few can combine both virality and persuasion, such as Old Spice (see below video with 51m views)
It is important to note that the omnichannel concept has truly evolved to include brick-and-mortar stores, retail Internet properties, non-retail Internet properties such as Twitter, Facebook, and Youtube, mobile apps, micro-sites, and others.
Interesting cases
- Burberry, the British brand successfully integrated channels to become a digital leader in the fashion industry. First, they implemented the concept of “shoppable” videos where consumers can watch video campaigns, select a size and color and purchase a product. They also launched Burberry Twitter and Facebook accounts with specific accounts for key countries and regions. On YouTube, users can view special playlists for campaigns, events, and corporate events. They also created a micro social networking site The Art of the Trench with pictures of people wearing their trench coats. Even though their fashion shows have 1,500 attendees in person Burberry estimates around 93 million across digital platforms. As a consequence they launched the Runway to Reality program where consumers don’t have to wait six months to purchase new collections
- Starbucks app allows you to quickly link your credit card or paypal accounts, set favorite stores, and it sends you a notification when you are close to the store (via your phone GPS). The app also tracks your purchase and sends you rewards periodically (i.e. birthday). Reloading it is very easy and you can do it while waiting in line for your coffee. Since the unit economics are so good Startbucks can display a free coffee ad on Facebook if you download the app and sign-up which makes the adoption barrier really low – everyone who’s been buying Starbucks coffee for years enjoys a free coffee every now and then. Last, the app offers, via its Pick of the Week program, curated music and other apps so it also became a platform for others to advertise.
- Disney’s Experience app allows you to navigate through the park, purchase tickets, plan your trip, and it even shows you the wait time for specific shows so you can plan accordingly. This is a great way to real-time load balance demand inside the park (if there is a long wait time you may decide to do something else and come back later).
- Delta‘s app offers several features such as book online, check-in, view other flights around same time, check weather at destination. It also offers notifications based on where I am and the ability to share my arrival with friends on Facebook. My favorite is the same-day travel change. If it happens that I get to the airport earlier the app offers me the opportunity to take an earlier flight home, all within the app
- Bank of America was one of the first to integrate mobile app, camera, and check deposit. Now 63% of customers use the mobile check deposit feature (72% of millenials and 52% aged 50+). They have 17 million active mobile banking customers.
Ad selling is about the ability to prove that your platform is better capable of provisioning the right ads to the right consumers. The key question is how accurate you can achieve that without logged in users. Search queries may help but they lack the additional demographics information from your profile and they don’t come with a friend recommendation.