Richard Dennys, Chief Marketing Officer at Qype will be among the speakers at the Figaro Digital Marketing Conference in July where he’ll be discussing brand survival strategies in the ‘war for local’. In an in-depth interview, he talks to us about some of the challenges and opportunities thrown up by the mobile web
Back in the 1990s we were fond of the phrase ‘think global, act local.’ Here in the 21st century, digital technology has gone some way to eroding that distinction. Advances in communication have made the world a smaller place and deepened the sorts of relationships we have with our immediate environment. As Chief Marketing Officer at user review site Qype, Richard Dennys is well placed to observe the convergence of local, social and mobile and, he says, there’s a battle going on for users’ hearts, minds and custom. So what’s at stake in the ‘war for local’, and what are some of the challenges facing brands seeking to forge closer relationships with users?
“At Qype we’re seeing a big migration in how users are accessing our content,” says Dennys. “They’re moving from a traditional web interface to the mobile web and apps. That represents a big opportunity for everybody. But mobile also presents a threat. Google’s success has been based on a fairly complicated search algorithm. But mobile search is about proximity on top of algorithmic results. Brands know that the mobile web and local spaces are something they urgently need to make sure they own.”
Putting local on the map
The conflict, he explains, is over how to do that, and one clash involves the ownership of mapping services. In October last year, Google announced a cap of 25,000 free views for sites using Google Maps. That cap came into effect at the start of 2012. In March this year Foursquare responded by announcing that they’d be switching to OpenStreetMap, and Apple have now confirmed they’ll be launching a mapping service of their own, using Tom Tom mapping overlaid with GeoData for use across their devices.
This skirmish is emblematic, Dennys explains, of the explosion of activity in the local sphere. “Everybody’s jostling for position. Do you do Pinterest, Twitter, Facebook? How much effort should you put into local activity? If you’re a restaurant for example, you want to know the kind of people who are wandering past your door and what kind of offers might attract them in. That’s always been a problem for retailers, but these days you’ve got two challenges. You can try and use your shopfront as an advert to get customers to buy online. Or you can use some kind of proximity technique to get them into the shop itself.”
One way of doing that is to use local, offer-based services like Groupon, or Groupon Now or Qype’s own coupon brand QypeDeals. But, says Dennys, not all retailers favour discounts or the hit they can inflict on brands. “You’ve got all these big things going on and people are trying to work out what’s happening next. It’s fantastically interesting and the challenge for brands is where to put their stick in the ground.”
Scanning the aisles
SoLoMo (social-local-mobile) may not be the most elegant acronym in the digital marketing lexicon, but it does highlight the necessity for channel convergence. How can brands ensure they succeed in this context?
“The first thing to say about SoLoMo is it’s only applicable – at the moment – within a certain demographic. That used to be higher-earning 25 to 35 year-olds, but it’s becoming much more open as smartphones become more affordable. If you’re a brand you need to be sure you match the demographic to what you’re selling. If that fits – fine. But if not, just leave it. If you’re an outsize suit manufacturer, let’s say, SoLoMo may not be for you. But if you’re a mobile phone shop then sure, it’s bang on.
“The second thing is to understand the kind of offers people are going for. Do you want to offer discounted goods? Are you trying to reach existing customers or new customers – what is your proposition? Why would someone benefit from the offer being local rather than something they could download, or an offer they can just pick up from walking past the shop? Make sure you’re not cannibalising your customers – you want new, attractive customers and you want more sales from your existing customers.
“What’s really going to push things here, I think, are food retailers. At the moment they’re lagging behind in terms of mobile. But there’s a lot of work being done in the background and Google are looking at in-store wi-fi and locator services. I can see a day – within two years – when your mobile will tell you where there’s an offer. Your phone can do a scan-and-shop and guide you to something on offer locally.” Success in this context, then, may mean thinking about small-scale campaigns which recognise the issue at SoLoMo’s heart: localism.
Another skirmish in the war for local is being fought over the devices themselves. Despite the much vaunted expectation that by 2014 mobile access to the internet will exceed desktop, mobile remains a fragmented sector with different devices and operating systems. Does Dennys think marketers are getting to grips with this?
“No, but there are all sorts of things to consider here. You’ve got the handset manufacturers, you’ve got the networks and you have the operating systems. Now, the operating system war is between Google and Apple. It looks like Microsoft are trying really hard but they’re not getting anywhere, even though they’ve taken Nokia on as a partner. So it’s going to be the Android against iOS and I think Android will overtake Apple this year.
“Then you have the networks. At the moment we have 3G but 4G is coming very soon. Germany and Sweden are pretty much on 4G now. And that will then make way for LTE (long term evolution) which is a really superfast mobile broadband network. There was a recent report from Ericsson saying that within five years 85 per cent of the entire planet will be able to access a superfast broadband connection on their mobile. So pretty soon we could all be accessing things almost instantaneously on our mobiles.
“From there things like Real Time Buying and open auctioning can really take off. At the moment you can’t really set up a business like that because you don’t have enough people in your bidding arena. You have it in advertising, but not in product. But it will come.”
“Another issue,” says Dennys, “is peer-to-peer purchasing which is about to go really big. This is where, by touching phones, you can pay somebody something. And again, there’s a massive war there because the banks and credit card companies want to ensure that they remain the medium of exchange. Meanwhile, there are the Vodafones of this world who are already enabling us to pay for things on mobile via your phone bill. But in reality there’s probably a big market out there for bartering systems now. With the banks losing trust, there’s an opportunity for people to have some kind of virtual currency. So I touch your phone and give you four credits that I earned somewhere else by offering to build a wall for somebody. The idea that we’ll have virtual bartering through mobiles is something which I think will come roaring through in the next few years. There are systems in Africa that are already running along those lines. You can earn credits by physical work. It’s an exchange of labour for reward – the disintermediation of hard currency.”
And whoever ends up owning that space, points out Dennys, can expect massive rewards of their own.
“It’s a utopian vision of course, and no doubt it’ll spark another series of wars! But this is why it’s important that people like Google have their devices nailed down. That’s the physical aspect of the human-machine interface and it’s the most important part to own. Whether you’re Apple, Google – whoever – the relationship between humans and the machine is what’s most important.”
Article by Jon Fortgang