WEBVTT - Anindya Ghose Sees Life Getting Even Faster With Tech 0:00:00.200 --> 0:00:02.480 The future may not be clear, but our commitment is 0:00:02.640 --> 0:00:04.480 so when you sit with an advisor at Merrill Lynch, 0:00:04.559 --> 0:00:07.240 we'll put your interests first. Visit mL dot com and 0:00:07.320 --> 0:00:09.680 learn more about Merrill Lynch, an affiliative Bank of America. 0:00:09.800 --> 0:00:12.280 Mery Lynch makes available products and services offered by Merrill Lynch. 0:00:12.320 --> 0:00:14.680 Pierce Veteran Smith Incorporated or Register Broker Dealer remember s 0:00:14.680 --> 0:00:20.960 I PC. This is Masters in Business with Barry Ridholts 0:00:21.079 --> 0:00:25.639 on Boomberg Radio. This week on the podcast, I have 0:00:25.720 --> 0:00:28.920 professor a Nindia Ghosts of n y U Stern, where 0:00:28.960 --> 0:00:33.959 he focuses on mobile technology and information services. We spent 0:00:34.040 --> 0:00:36.800 a lot of time talking about his new book Tap 0:00:37.360 --> 0:00:42.920 Unlocking the Mobile Economy, and rather just repeat what we discussed, 0:00:42.960 --> 0:00:45.760 I want to give you a visual to think about. 0:00:46.840 --> 0:00:52.640 I'm a big fan of science fiction and um anything 0:00:52.680 --> 0:00:56.160 that Philip K. Dick wrote that is subsequently turned into 0:00:56.160 --> 0:01:02.000 a movie, including Minority Report, and everybody focuses on the 0:01:02.080 --> 0:01:06.800 precog aspect of that movie, the ability to anticipate who's 0:01:06.800 --> 0:01:10.920 gonna cause a crime. There's a lot of very forward 0:01:11.000 --> 0:01:14.640 technologies in the movie. But there's a scene in the 0:01:14.680 --> 0:01:18.399 film where Tom Cruise The main character is running through 0:01:18.680 --> 0:01:25.440 a shopping district and is bombarded with advertisement, not general ads, 0:01:25.480 --> 0:01:32.360 not billboards, but three D holographic ads specifically tailored to him. 0:01:32.480 --> 0:01:38.120 The retailer identifies him as a unique individual. They have 0:01:38.280 --> 0:01:43.440 access to his prior um shopping preferences, and they're showing 0:01:43.560 --> 0:01:49.640 him specifically tailored advertisements as he passes through in pursuit 0:01:49.680 --> 0:01:53.360 of whatever it was. I don't remember the fascinating aspect 0:01:53.400 --> 0:01:56.960 of this, uh in our My conversation with Professor ghost 0:01:57.720 --> 0:02:00.520 wasn't that, hey, this is the future. This is a 0:02:00.600 --> 0:02:04.720 hundred years or fifty years off in the distance. But 0:02:05.000 --> 0:02:10.440 rather mobile technology are uniquely identified phones, all the data 0:02:10.520 --> 0:02:14.200 we generate when we shop, when we use apps, when 0:02:14.240 --> 0:02:17.480 we just move about in the city, means that that 0:02:17.639 --> 0:02:22.080 sort of minority report technology is only two or three 0:02:22.160 --> 0:02:26.400 years away. And I found that to be absolutely astonishing. 0:02:26.440 --> 0:02:32.520 It's a fascinating conversation about technology and the future, and 0:02:32.560 --> 0:02:35.440 it turns out the future ain't that far off in 0:02:35.440 --> 0:02:38.880 the future. It's practically here now. So with no further ado, 0:02:39.560 --> 0:02:47.760 my conversation with professor A Nindia Ghosts. My special guest 0:02:47.800 --> 0:02:51.600 today is a Ninda Ghosts. He is a professor of 0:02:51.720 --> 0:02:56.519 Information Operations and Management Science and n y used Stern 0:02:56.560 --> 0:03:00.239 School of Business. He is the youngest ever recipd being 0:03:00.400 --> 0:03:05.080 of the prestigious Informs I S S Distinguished Fellow Award. 0:03:05.440 --> 0:03:07.760 He has been named by Business Week as one of 0:03:07.800 --> 0:03:13.160 the top forty professors under forty worldwide. Analytics Week called 0:03:13.240 --> 0:03:16.200 him one of their top two hundred thought leaders in 0:03:16.320 --> 0:03:19.840 big data and business analytics. He's written more than a 0:03:19.919 --> 0:03:23.920 hundred peer reviewed papers and is the author of his 0:03:24.040 --> 0:03:30.960 first book, tap Unlocking the Mobile Economy and Ghosts. Welcome 0:03:30.960 --> 0:03:33.880 to Bloomberg. Thank you very much for having me. I'm 0:03:33.960 --> 0:03:37.440 very excited to be here. You cover some sections of 0:03:37.480 --> 0:03:41.000 the the economy and some sectors of technology that I 0:03:41.160 --> 0:03:45.800 find absolutely fascinating. In fact, you cover a broad range 0:03:45.840 --> 0:03:52.160 of topics consumer behavior, internet, digital marketing, big data, social media, 0:03:52.320 --> 0:03:56.400 and older related business analytics. How did that broad collection 0:03:56.440 --> 0:04:00.360 of topics come together for you as a as a searcher. 0:04:01.080 --> 0:04:03.800 So I first started working in this area in two 0:04:03.840 --> 0:04:06.800 thousand four, and you know, I was basically curious about 0:04:06.800 --> 0:04:09.800 all things Internet in two thousand four. You know, we 0:04:09.840 --> 0:04:12.280 were just about seeing the emergence of e commerce. You know, 0:04:12.360 --> 0:04:15.560 the likes of Amazon cropping up and people buying and 0:04:15.560 --> 0:04:18.680 selling books on the internet. Um, so that's how the 0:04:18.760 --> 0:04:21.839 journey started. Um, as the Internet evolved, you know, we 0:04:21.880 --> 0:04:24.800 saw the emergence of companies trying to use that as 0:04:24.800 --> 0:04:27.599 a platform to market their products. So that's why we 0:04:27.640 --> 0:04:30.720 saw the emergence of search engines like Google come in. 0:04:30.880 --> 0:04:33.440 We saw the emergence of you know, other kinds of 0:04:33.600 --> 0:04:37.159 digital marketing platforms on the Internet. And so I've always 0:04:37.160 --> 0:04:39.480 had this, you know, interest in figuring out what is 0:04:39.520 --> 0:04:42.440 it that consumers are doing on the Internet and how 0:04:42.520 --> 0:04:46.160 can companies leverage those differences in behavior, you know, to 0:04:46.279 --> 0:04:49.400 better accurate products and market products and so on. And 0:04:49.440 --> 0:04:52.640 as the Internet eventually moved into mobile, by two thousand 0:04:52.680 --> 0:04:55.560 and eight, the first smartphone was already out there, that 0:04:55.720 --> 0:04:58.000 really sort of got me thinking more and more deeply 0:04:58.040 --> 0:05:01.400 about consumer behavior and mobile And on the mobile phone, 0:05:01.440 --> 0:05:04.320 you're doing social media. You know, you're responding to ads. 0:05:04.320 --> 0:05:06.640 If you're responding, you're creating a lot of data. And 0:05:06.720 --> 0:05:08.640 that's how all these things come together. So so let's 0:05:08.680 --> 0:05:13.640 talk about the smartphone essentially the intersection of all those 0:05:13.680 --> 0:05:18.120 different technology sectors we just mentioned. Is this the single 0:05:18.200 --> 0:05:23.400 most transformative consumer device ever to be created. I would 0:05:23.400 --> 0:05:25.680 say so. In fact, in my book I actually mentioned 0:05:25.720 --> 0:05:28.080 this that you know, by two thousand and eight, when 0:05:28.120 --> 0:05:31.960 I first started thinking about this topic, it was pretty 0:05:31.960 --> 0:05:34.880 clear to me that the smartphone would be, in fact 0:05:34.920 --> 0:05:37.680 the most transformative thing that we've ever seen. And you know, 0:05:37.760 --> 0:05:40.320 in ten years after that, now we do see, in fact, 0:05:40.400 --> 0:05:43.960 there's plenty of evidence it is, because it's almost embedded 0:05:43.960 --> 0:05:46.880 on us. And you know, there's people often ask me, 0:05:46.920 --> 0:05:49.320 is there's a tipping point. I don't necessarily see that 0:05:49.440 --> 0:05:51.880 the smartphone is going to become a more remote control button, 0:05:52.200 --> 0:05:54.800 smart home, smart cars, everything is going to be controlled 0:05:54.800 --> 0:05:58.480 by the smartphone. I have to tell you when you 0:05:58.600 --> 0:06:01.800 look at the amount of tech analogy today that exists. 0:06:02.200 --> 0:06:04.920 So you can control your nest, you can control your car, 0:06:05.040 --> 0:06:08.240 you can start your car remotely, you can control the 0:06:08.240 --> 0:06:12.839 temperature of your pool remotely, your security system, your video camera. 0:06:13.560 --> 0:06:17.520 At what point does the phone just simply stop being 0:06:17.520 --> 0:06:21.120 a phone and just becomes a mobile computer? Yeah, I 0:06:21.120 --> 0:06:23.320 mean I think it's already kind of getting there, right. 0:06:23.320 --> 0:06:26.040 I mean, by now, the phone is much more than 0:06:26.080 --> 0:06:28.440 a phone. You know, it's a camera, it's a flashlight, 0:06:28.600 --> 0:06:31.839 you know, it's my television, it's my book as well, 0:06:32.000 --> 0:06:36.039 it's everything, right, So I think the convergence of various 0:06:36.200 --> 0:06:40.039 digital phenomena on the smartphone has already happened. In my 0:06:40.120 --> 0:06:42.560 prediction I mentioned this in my book, is that a 0:06:42.600 --> 0:06:45.600 lot more is going to happen. And and by by 0:06:45.880 --> 0:06:47.760 what I mean by that is exactly what you said, 0:06:47.800 --> 0:06:51.159 which is people are going to start controlling their appliances, 0:06:51.200 --> 0:06:54.279 their homes, their cars, other sorts of things. Let's let's 0:06:54.320 --> 0:06:57.120 put let's put a number on some of the venture 0:06:57.200 --> 0:07:01.760 capital investing in the space. In two thousand and ten, 0:07:02.720 --> 0:07:06.680 less than four percent of all venture capital funding was 0:07:06.760 --> 0:07:11.200 going to mobile startups as of fourteen, which is already 0:07:11.240 --> 0:07:14.120 a good couple of years ago. It's now about eight percent, 0:07:14.200 --> 0:07:19.200 So we're up a hundred percent or so from Is 0:07:19.600 --> 0:07:22.640 mobile just going to consume the lion share of all 0:07:22.680 --> 0:07:25.840 these new tech startups? I think that number is going 0:07:25.880 --> 0:07:28.240 to only keep increasing, right, And and there's a couple 0:07:28.320 --> 0:07:31.000 of reasons for that. One is, over the last five years, 0:07:31.120 --> 0:07:34.000 we have consumers have been spending more and more time 0:07:34.120 --> 0:07:37.720 on mobile devices. You know, from from two thousand twelve 0:07:37.760 --> 0:07:41.600 to two sixteen, the last five years We've come from roughly, 0:07:41.880 --> 0:07:44.320 you know, about ten percent of our time to about 0:07:45.880 --> 0:07:49.280 time on these devices. And what's as telling companies that 0:07:49.320 --> 0:07:53.160 there's a lot of opportunity for monetization because right now 0:07:53.200 --> 0:07:55.560 advertisers are only putting in twelve percent of the ad 0:07:55.600 --> 0:07:58.160 dollars and mobile phones. So there's a disconnect. You know, 0:07:58.280 --> 0:08:01.840 consumers sure spending twice that time, companies are spending half 0:08:01.880 --> 0:08:04.400 the money. So does a disconnect. Let's let's look at 0:08:04.440 --> 0:08:07.720 the jobs a little bit. The Boston Consulting Group came 0:08:07.760 --> 0:08:11.480 out and said that mobile technologies are going to be 0:08:11.760 --> 0:08:15.080 or or just about at a three point three trillion 0:08:15.120 --> 0:08:19.160 dollar investable sector over the next few years, and they 0:08:19.200 --> 0:08:23.560 expected to create eleven million new jobs. Is this the 0:08:23.600 --> 0:08:27.640 next boom sector or or currently the biggest sector that 0:08:27.680 --> 0:08:30.520 we should expect new jobs from. I think certainly at 0:08:30.560 --> 0:08:33.000 least one of the top two or top three biggest sectors. 0:08:33.000 --> 0:08:35.600 You know, those eleven three point three trillion dollars is 0:08:35.640 --> 0:08:38.839 only four point two percent of the world's GDP and 0:08:38.920 --> 0:08:41.320 so you can only imagine it has to grow from here. 0:08:41.840 --> 0:08:44.280 The other thing that's going to propel jobs is, you know, 0:08:44.360 --> 0:08:46.640 one thing is that the mobile app economy is growing 0:08:46.679 --> 0:08:48.719 by leaps and bounds, and so every time you've got 0:08:48.720 --> 0:08:50.800 a new app, you know you need an entire army 0:08:50.800 --> 0:08:54.000 of employees. But also aside from the fact is the data. 0:08:54.120 --> 0:08:56.320 So I talk a lot about how you know, consumer 0:08:56.360 --> 0:08:58.800 tapping on the phone to create stata. So they need 0:08:58.880 --> 0:09:02.280 data scientists and need business analytics, not not just tapping 0:09:02.280 --> 0:09:04.760 on the phone, but where they physically are, what else 0:09:04.800 --> 0:09:08.040 they're running, what else they had previously been doing. There's 0:09:08.040 --> 0:09:10.560 an enormous stream of data that we will create just 0:09:10.640 --> 0:09:13.480 carrying the phones around exactly. Let's talk a little bit 0:09:13.520 --> 0:09:18.240 about mobile you referenced earlier, the ad spends. Some of 0:09:18.240 --> 0:09:23.199 the numbers are just astonishing. One estimate claims mobile ad 0:09:23.200 --> 0:09:27.160 spending will top a hundred billion dollars by next year. 0:09:28.800 --> 0:09:33.920 How effective is this advertising? And what alternatives do marketers 0:09:33.960 --> 0:09:38.240 have other than mobile? So my studies and projects over 0:09:38.240 --> 0:09:41.600 the last ten years, in across three different continents, across 0:09:41.679 --> 0:09:46.439 multiple countries have actually demonstrated very rigorously than mobile advertising 0:09:46.559 --> 0:09:50.440 is very effective if you do it right, How do 0:09:50.480 --> 0:09:52.480 you do it right? And what do people who do 0:09:52.559 --> 0:09:54.520 it wrong? What are they doing wrong right? So one 0:09:54.520 --> 0:09:57.640 of the things I talked about my book is companies 0:09:57.679 --> 0:09:59.439 who are doing it right are the ones who are 0:09:59.480 --> 0:10:03.280 creating in a concierge or a butler in your smartphone. 0:10:03.559 --> 0:10:05.480 And the companies who do it wrong are the ones 0:10:05.520 --> 0:10:08.880 who are creating this creepy stalker. Okay, so if it's 0:10:08.880 --> 0:10:12.160 some like Uber managed to do both, yeah, it's a 0:10:12.200 --> 0:10:15.160 full concierge. And then we've just found out they were 0:10:15.200 --> 0:10:18.959 stalking people even after they deleted, uh deleted the app. Yeah, 0:10:19.000 --> 0:10:21.240 I mean they're going to get into trouble. And you know, 0:10:21.280 --> 0:10:23.240 but I mean for a number of reasons. They've been 0:10:23.240 --> 0:10:25.920 in trouble for a long time. No one episode of another. 0:10:26.080 --> 0:10:29.440 But you know, just from a brand advertiser's perspective, um, 0:10:29.480 --> 0:10:32.760 there's a thin line dividing the coolness and the creepiness. 0:10:33.320 --> 0:10:34.920 And you know, in my book, I talked about a 0:10:34.920 --> 0:10:37.079 lot of the case studies where have you've been actually 0:10:37.120 --> 0:10:41.080 been very successful in remaining cool and not digressing into 0:10:41.080 --> 0:10:43.840 the creepy stuff. And the book is tap unlocking the 0:10:43.880 --> 0:10:49.360 mobile economy. So what can a app provider do to 0:10:49.480 --> 0:10:53.439 stay on the right side of the cool creepy divide? Right? 0:10:53.640 --> 0:10:56.120 So two things. One is you want to reduce the 0:10:56.280 --> 0:11:00.000 frequency of how often your message your consumer through an 0:11:00.040 --> 0:11:03.400 offer our ad, and you want to increase the relevancy 0:11:03.440 --> 0:11:06.240 of that messaging. Okay, right now, if you have the opposite, 0:11:06.520 --> 0:11:09.680 we are getting inundated by ads which are not necessarily 0:11:09.760 --> 0:11:13.520 very relevant and redundant. Absolutely, So how does the company 0:11:13.559 --> 0:11:17.160 do that? How do you focus in on what is relevant? 0:11:17.480 --> 0:11:22.400 And how do you avoid haranguing um? Because you know, 0:11:22.440 --> 0:11:26.920 I use an a service called limail because I'm loath 0:11:27.080 --> 0:11:31.760 to give anybody my real email address because you know, 0:11:31.880 --> 0:11:34.520 if I buy something, it's not an invitation to send 0:11:34.520 --> 0:11:37.520 me a daily update. In fact, you know what once 0:11:37.520 --> 0:11:41.200 a month is plenty for most of the retailers or 0:11:41.240 --> 0:11:44.360 what have you I'm interested in. But it seems to 0:11:44.440 --> 0:11:47.280 be all right, we have this person's email address, let's 0:11:47.440 --> 0:11:51.400 let's bang on their head daily and hopefully they'll buy something. 0:11:51.760 --> 0:11:56.400 Usually I unsubscribe, I delete the app, and limail allows 0:11:56.440 --> 0:12:01.320 me to whether they actually unsubscribe him or not. It 0:12:01.360 --> 0:12:04.559 allows me to turn that email off so they can 0:12:04.600 --> 0:12:06.440 market to me all they want. I never see a 0:12:06.440 --> 0:12:09.480 single a single thing from them. So so where is 0:12:09.520 --> 0:12:11.520 that line and how do you stay on the right 0:12:11.559 --> 0:12:14.120 side of it? So basically, right now, what's happening is, 0:12:14.160 --> 0:12:17.800 you know, companies are sending like hitting dots in the 0:12:17.840 --> 0:12:20.199 air and hoping one will stick. Right. And the reason 0:12:20.240 --> 0:12:23.000 it's happening is even though this might seem very surprising, 0:12:23.040 --> 0:12:27.120 they actually don't have enough information on consumers on a 0:12:27.160 --> 0:12:30.600 given consumer. And this might seem astonishing given this world 0:12:30.679 --> 0:12:33.480 of data, right. The reason is because and I talked 0:12:33.480 --> 0:12:35.200 about this in the book a Lot, is the data 0:12:35.280 --> 0:12:38.319 is actually fragmented. It's all in silos, so somebody has 0:12:38.360 --> 0:12:41.400 to come and stitch it together. And absent that, what's 0:12:41.400 --> 0:12:44.080 going to keep happening is companies will keep in undating 0:12:44.160 --> 0:12:48.560 us with these offers. So you would think that Apple 0:12:49.160 --> 0:12:54.840 in iOS and Google with Android are the ones who 0:12:54.880 --> 0:12:57.760 can stitch all that data together. They have access to 0:12:58.840 --> 0:13:02.040 all the data that every app generates. Are they moving 0:13:02.080 --> 0:13:05.360 in that direction? And are we creating a monopoly or 0:13:05.400 --> 0:13:08.200 all a goopoly amongst the big players who have access 0:13:08.520 --> 0:13:11.959 to all our data? Right? So what's really fascinating is that, 0:13:12.040 --> 0:13:14.840 you know, Google and Facebook are sort of the two 0:13:15.000 --> 0:13:19.400 lead players who are essentially putting this infrastructors together. Meaning 0:13:19.440 --> 0:13:22.560 what meaning that between the publisher and advertiser, they have 0:13:22.679 --> 0:13:27.360 created these intermediaries called add exchanges and dsp s and 0:13:27.520 --> 0:13:29.920 SSPs and a lot of the technical jargon, but the 0:13:29.920 --> 0:13:33.760 basic job for these companies stitched the data together. And 0:13:33.840 --> 0:13:36.920 what's also fascinating is the next big challenge to these 0:13:36.960 --> 0:13:40.400 companies is going to come from telecom providers. So WIDD 0:13:40.520 --> 0:13:43.640 Verizon buy out, a O L wided Verizon buy out Yahoo. 0:13:44.080 --> 0:13:47.400 Verizon does not see itself as a telecom provider anymore, 0:13:47.640 --> 0:13:50.920 if they're not just the pipe there just say actually, 0:13:50.960 --> 0:13:53.400 if you ask their top management, they will say, well, 0:13:53.600 --> 0:13:56.520 you know, we are actually the next big media tech company. 0:13:56.600 --> 0:13:58.640 We want to take on Google and Facebook and they 0:13:58.640 --> 0:14:02.360 can like us. They have so much data right that 0:14:02.360 --> 0:14:04.840 that's that's quite fascinating, you know, when we look at 0:14:04.920 --> 0:14:08.880 some of the data points that mobile is generated, I'm 0:14:08.920 --> 0:14:13.160 fascinated by this. After the launch of the iPhone, voice 0:14:13.200 --> 0:14:17.160 minutes amongst eighteen to thirty four year olds fell from 0:14:17.160 --> 0:14:21.200 twelve hundred to nine hundred minutes per month within two years, 0:14:21.240 --> 0:14:24.800 so that's a twenty drop over the same time period. 0:14:25.280 --> 0:14:29.160 Texting more than doubled from six hundred to four hundred 0:14:29.240 --> 0:14:33.600 messages per month over that same period. The impact of 0:14:33.680 --> 0:14:36.280 this is really quite enormous it is. I mean, look, 0:14:36.520 --> 0:14:39.000 first of all, there is a very you know, non 0:14:39.000 --> 0:14:42.000 trivial consumer behavioral chain. Right, if you're not talking on 0:14:42.040 --> 0:14:45.320 the phone anymore, you're tapping and texting, right, every tapping, 0:14:45.360 --> 0:14:49.320 every texting is creating data about our behavior. But more importantly, 0:14:49.360 --> 0:14:51.560 you know, coming back to the study comp providers, because 0:14:51.600 --> 0:14:54.520 that's how they get the services. They are not making 0:14:54.640 --> 0:14:57.440 that much money anymore on those products that they used 0:14:57.440 --> 0:15:00.240 to make money on, which is Internet advice and and 0:15:00.360 --> 0:15:03.760 text messaging. That's why, you know, whether it's Verizon or 0:15:04.760 --> 0:15:09.120 Telephonic and Germany or China Mobile Estelecom, they realize the 0:15:09.200 --> 0:15:12.840 next big bed is monetizing the user data, the user 0:15:12.880 --> 0:15:16.400 location data, our behavioral data, you know, all of the 0:15:16.400 --> 0:15:19.880 contextual data. And that's what they're moving into. Here's another 0:15:19.880 --> 0:15:24.000 fascinating data point from the book of text messages are 0:15:24.000 --> 0:15:28.840 read within ninety seconds of delivery. Are we at risk 0:15:28.920 --> 0:15:34.000 of never being disconnected? And what are the ramifications of that? UM? So, 0:15:34.120 --> 0:15:36.040 you know, I, I guess I belong to the group 0:15:36.080 --> 0:15:39.760 who does not think there's a problem in that. UM. 0:15:39.800 --> 0:15:42.480 I do not mind the fact that we are immersing 0:15:42.560 --> 0:15:45.680 our devices. UM And the reason is because you know, 0:15:45.720 --> 0:15:49.280 everything that I've seen is that there's actually a positive 0:15:49.320 --> 0:15:51.600 site of this as well, which is which is going 0:15:51.640 --> 0:15:54.320 back to my argument before that the reason company is 0:15:54.400 --> 0:15:57.120 sending us all these offers is they don't have enough information. 0:15:57.160 --> 0:15:59.560 But the more of immersals from the device, the more 0:15:59.680 --> 0:16:02.960 data generates, and the more information not companies will have, 0:16:03.440 --> 0:16:06.440 which will then let them reduce a frequency of the 0:16:06.480 --> 0:16:09.400 messaging increase the relevancy. Let's let's talk a little bit 0:16:09.400 --> 0:16:14.000 about mobile retail and what the impact is. A recent 0:16:14.280 --> 0:16:20.080 report from Credit Swiss estimated that there could be undred 0:16:20.200 --> 0:16:22.920 store closings this year, which would be higher than the 0:16:22.960 --> 0:16:27.160 peak in two thousand and eight and significantly higher than 0:16:27.280 --> 0:16:33.200 last year. What is the state of retailing in America? Okay, 0:16:33.280 --> 0:16:35.720 So this is a great question and one of my favorites, 0:16:35.760 --> 0:16:39.640 because mobile as a studio over the years is a 0:16:39.720 --> 0:16:43.040 double a sword for retailing. Okay, And here's why. On 0:16:43.040 --> 0:16:46.400 one side, you know, offline retailers have been petrified by 0:16:46.400 --> 0:16:49.960 the fact that consumers have been mobile showrooming, meaning that 0:16:50.000 --> 0:16:52.760 while they're inside a physical brick and model store and 0:16:52.800 --> 0:16:55.160 they found something they like, and yet they're actually looking 0:16:55.160 --> 0:16:58.200 for the same product online on their phone looking for 0:16:58.240 --> 0:17:00.840 a cheaper price. Let me interrupt you and ask you 0:17:00.840 --> 0:17:02.800 a question about that. I used to have an app 0:17:02.840 --> 0:17:06.800 on my phone called Amazon price Guard. I'm gonna actually 0:17:06.840 --> 0:17:09.160 have to take a quick look at it, and yet 0:17:09.280 --> 0:17:12.680 Amazon ended up. I don't want to say price check 0:17:12.760 --> 0:17:15.199 is the name of it. Amazon doesn't seem to be 0:17:15.240 --> 0:17:19.919 supporting that app anymore. Um, is showrooming still the problem 0:17:19.920 --> 0:17:22.440 that was a few years ago? Okay, so yes or 0:17:22.480 --> 0:17:24.719 no in the following sense. So showrooming was a massive 0:17:24.760 --> 0:17:28.120 problem up until recently. The likes of these physical brick 0:17:28.160 --> 0:17:31.560 and motor retailers were losing fifty of the traffic the 0:17:31.680 --> 0:17:35.160 likes of Amazon, and someone would go into Best Buy, 0:17:35.240 --> 0:17:39.119 look at the television or whatever, find it was fifty 0:17:39.119 --> 0:17:41.600 bucks treeper on Amazon, and walk out, it's right and 0:17:41.680 --> 0:17:44.360 buy it on Amazon. So you just lost one customer there, 0:17:44.359 --> 0:17:47.480 So one in two people were doing that. Now. The 0:17:47.520 --> 0:17:49.560 reason I say it's a double that sort is today 0:17:49.680 --> 0:17:52.800 the offline retailers have a tremendous resource in the same 0:17:52.840 --> 0:17:55.720 phone which was once a threat to them, because now, 0:17:56.119 --> 0:18:00.080 using these location based tagging technologies, they can send you 0:18:00.119 --> 0:18:03.000 a coupon in real time when you're invest buy to 0:18:03.119 --> 0:18:06.320 prevent you from walking out without buying the TV. And 0:18:06.400 --> 0:18:08.480 in my book, actually I talk a lot about these 0:18:08.520 --> 0:18:11.240 case studies where based on you know, whether it's the 0:18:11.280 --> 0:18:13.840 WiFi in the store or the beacon in the store 0:18:13.960 --> 0:18:17.120 or the GPS, these retailers are able to sense where 0:18:17.119 --> 0:18:19.679 you are and send you an offer and delight you 0:18:19.720 --> 0:18:24.439 and impression surprise you. So couldn't they simply have just 0:18:24.640 --> 0:18:28.359 matched the Amazon's price to begin with. And and you know, 0:18:28.760 --> 0:18:31.800 if Amazon is providing a lower price, or any online 0:18:31.800 --> 0:18:37.040 retailer is providing a lower price, Uh, what is the 0:18:37.080 --> 0:18:40.119 advantage of the coupon? Or is it that some people 0:18:40.200 --> 0:18:42.359 come in and pay the full price anyway and the 0:18:42.400 --> 0:18:44.399 price insor of people get the coupon and they go 0:18:44.520 --> 0:18:46.840 that way. That's exactly what it is. Basically. You know, 0:18:46.920 --> 0:18:50.439 any sort of location based mobile coupon strategy has to 0:18:50.520 --> 0:18:53.359 be intrementally useful to the company. You don't want to 0:18:53.400 --> 0:18:57.160 send a blanket price matching policy for everybody, right, because 0:18:57.200 --> 0:18:59.120 many people will just be happy to paying the higher 0:18:59.119 --> 0:19:00.959 price when they buy, they're out with they don't want 0:19:00.960 --> 0:19:03.120 to be bothered, right, It's the stragglers that really price 0:19:03.200 --> 0:19:06.040 as they folks the bargain hunters whom you don't want 0:19:06.040 --> 0:19:08.960 to lose. That's where the location based technology is, folks. 0:19:09.040 --> 0:19:13.200 So I'm gonna I'm gonna move to advertising because it 0:19:13.560 --> 0:19:17.400 relates back to this. In the old days, we used 0:19:17.440 --> 0:19:21.399 to take ink and spray it on mashed up trees 0:19:21.520 --> 0:19:24.680 and and it was called the newspaper or magazine. Back 0:19:24.680 --> 0:19:27.479 in the nineteen fifties, there was something like fifty there 0:19:27.560 --> 0:19:32.080 was something like fifty four million paid subscriptions to newspapers. 0:19:32.920 --> 0:19:36.720 That number is under forty three million as of two 0:19:36.720 --> 0:19:42.440 thousand ten, but relative to population, it's a seventy decrease. 0:19:42.840 --> 0:19:45.960 So when I think of all these retailers, I remember 0:19:46.240 --> 0:19:48.760 it was always the best bicircular in the Sunday paper. 0:19:48.800 --> 0:19:52.200 There was always a target circular. I assume that still 0:19:52.280 --> 0:19:56.159 goes on. I just hardly read a print paper the 0:19:56.200 --> 0:20:01.000 way I used to. What does the the diminishing of 0:20:01.760 --> 0:20:08.320 print as a communication channel, how how does that impact 0:20:08.359 --> 0:20:11.960 retailers and what are they doing to overcome the loss 0:20:11.960 --> 0:20:14.399 of that channel? Right? So it means two things. One is, 0:20:14.440 --> 0:20:16.919 and if you're a retailer, you're still spending money on 0:20:17.119 --> 0:20:20.800 physical newspapers for advertising, You're wasting it. Now, people only 0:20:20.840 --> 0:20:23.679 spend six percent of the entire time reading a physical 0:20:23.720 --> 0:20:27.199 newspaper or magazine, right, Unfortunately, that's what it is. So 0:20:27.240 --> 0:20:29.679 what they should be doing is actually putting that money 0:20:30.000 --> 0:20:33.640 on that magic device, which is the smartphone. Right, So 0:20:33.720 --> 0:20:36.840 instead of spending money in print newspapers, you should actually 0:20:36.880 --> 0:20:40.520 spend money investing in these location based advertisement and locations 0:20:40.560 --> 0:20:44.600 cool pons, all of these technologies that enable companies to 0:20:44.680 --> 0:20:46.800 do so in real time. Let's talk a little bit 0:20:46.840 --> 0:20:50.600 about travel and what we see uh here in the 0:20:50.680 --> 0:20:57.040 United States there are about a hundred and fifty million smartphones. 0:20:57.440 --> 0:21:01.240 Of these are use location services. Is how is this 0:21:01.359 --> 0:21:07.120 data being shared and who has access to that data? So? Um, 0:21:07.160 --> 0:21:10.199 A lot depends on how the app is actually owned. Right. 0:21:10.240 --> 0:21:12.800 So if the company, the travel company or the travel 0:21:12.880 --> 0:21:15.160 site owns the app, then clearly you know the app 0:21:15.200 --> 0:21:17.119 Delapa belongs to the company and they own it. If 0:21:17.160 --> 0:21:20.200 it's a third body, a developper, then the abdulopper will 0:21:20.240 --> 0:21:22.760 have it and highly likely they will be sharing it 0:21:22.840 --> 0:21:26.400 with the company because that's how the arrangement is. Um. 0:21:26.520 --> 0:21:30.280 So those that happens for sure, and we were talking 0:21:30.680 --> 0:21:34.880 uh off air before, but let's let's bring this up. 0:21:36.640 --> 0:21:40.359 There seems to be a sort of ambiguous nous about 0:21:40.400 --> 0:21:45.479 what people say their concerns with privacy actually are and 0:21:45.480 --> 0:21:51.280 then what they actually do. So I'm pretty concerned about privacy. 0:21:51.320 --> 0:21:54.800 I don't like sharing my email address, or my location 0:21:54.920 --> 0:21:57.800 or a whole bunch of other data points with companies. 0:21:58.359 --> 0:22:01.720 But yet the generation that's younger than me, they seem 0:22:01.800 --> 0:22:06.040 to they could not possibly care less about these privacy issues. 0:22:06.119 --> 0:22:10.520 They share the data free, freely. What is the standard? 0:22:10.640 --> 0:22:14.080 What's going on with that? What should an app company 0:22:14.119 --> 0:22:17.680 reasonably expect from their users? So, you know, various studies 0:22:18.240 --> 0:22:21.679 we have done and others have shown that millennials are 0:22:21.800 --> 0:22:24.240 very willing to share their data as a currency to 0:22:24.320 --> 0:22:29.359 get something in value, right, Um of Generation Z and 0:22:29.400 --> 0:22:32.399 Generation Y a willing to do the same less so 0:22:32.520 --> 0:22:36.560 it baby boomers. Um. But you know, if you are 0:22:36.680 --> 0:22:39.359 a marketer today and you're thinking about your target segment, 0:22:39.400 --> 0:22:42.720 target population, right for the lot for the most part, 0:22:42.760 --> 0:22:46.600 it's actually Gen ZS, gen X, gener wise and millennials, right, 0:22:46.640 --> 0:22:49.280 So you want to stay with the trend and keep 0:22:49.320 --> 0:22:52.320 targeting them, and if they are actually responding to this 0:22:52.480 --> 0:22:55.760 data exchange data boutter economy. So what you really want 0:22:55.800 --> 0:22:59.840 to do is be their butler and concierge by sending 0:23:00.000 --> 0:23:03.320 a curated, relevant message. That's what you want to be doing. 0:23:04.320 --> 0:23:07.960 So supposedly this was just reported the Times not too 0:23:08.000 --> 0:23:12.600 long ago when Tim Cook discovered that Uber was capturing 0:23:12.640 --> 0:23:15.879 the unique identify er the fingerprints of each phone and 0:23:15.960 --> 0:23:20.520 using it to track Uber users, even those who have 0:23:20.880 --> 0:23:25.960 removed the app. Um, he threatened them with taking kicking 0:23:26.000 --> 0:23:29.200 them out of the app store. So raises a couple 0:23:29.200 --> 0:23:33.160 of questions. First, how bad is the behavior of Uber? 0:23:33.200 --> 0:23:36.880 And second, it seems like Apple has an awful lot 0:23:36.920 --> 0:23:40.359