Instagram Enter AdvertisingAdvertisers running campaigns on the Internet and through mobile apps have to wonder just how effective these platforms can be.  Faced with rising concerns of sophisticated ad-blocking technologies, extremely low advertising click-through rates, and click fraud attributable to automated software, the decision to invest big advertising money in these platforms is not an easy one.

But there is another problem that also concerns advertisers – the value of the online and mobile properties on which ads appear. It is logical to assume ad placement on websites and apps is only effective if users are receptive to the advertisements. If users don’t pay attention or interact with an ad, then advertisers have to wonder what is the point of spending money placing the ad. This concern is especially an issue with social media.

If there is one question that has dogged social media since its inception, it is how these properties will make money through advertising. Social media users have historically not been receptive to advertising, at least not receptive given the number of interaction users have with Twitter, Facebook, Snapchat, and others on a daily basis. Maybe the ineffectiveness of advertising on social media can be blamed on the small screen size most people use to access social media (i.e. smartphone). Or maybe people using social media just want to communicate with others and are not necessarily looking to satisfy a specific need, which is what advertisers want and why they advertise.

Social media sites understand the challenges facing advertisers and are addressing how ads can be delivered in order to yield better response. For example, according to this Fortune story, Instagram (owned by Facebook) has big plans for generating advertising revenue by allowing almost anyone to advertise. For advertisers, they are offering special options, including video, for targeting customers.  It seems, that in some ways, their advertising options may be much more advanced than what other social media outlets offer.

The story indicates click-through rates for the early “test” advertisers were quite high. However, this is likely not going to be the case as thousands more advertisers try out Instagram and users become flooded with ads. Consequently, whether Instagram’s methods are a breakthrough for social media advertising remains to be seen.

As we have noted many times in this blog, the Internet and mobile technologies are dramatically altering how nearly all business is done. While it is certainly debatable as to which industries have been affected the most, certainly retailing is at the top of the list. Whether this is because technology allows customers to choose from a virtually unlimited number of items or offers the convenience of rapid delivery or makes it easy for customers to gain information and compare products, online shopping is transforming retailing.

Yet, the benefits customers obtain by shopping online is just one of many changes retailers must face. For example, changes include such things has millennials moving from suburban to urban areas which impacts the location of physical stores. Also, there is greater emphasis on health and fitness, which is changing the types of products customers seek. And, of course, the increased sharing of information among fellow shoppers, such as through social media and rating sites, is making it necessary for retailers to communicate in more detail and with a greater sense of urgency.

A good example of how retailing is changing can be seen in this state of the grocery industry story from Fortune. It looks at key issues affecting a retail model that has been in existence for nearly 100 years. The story suggests remaining competitive requires grocery stores to innovate or face a very uncertain future. For instance, grocery stores need to not only address issues of location, food choice and customer communication, but they also will need to become more tech-savvy, such as offering automated ordering options, and create a more comfortable and attractive shopping environment, such as offering in-store bars and restaurants.

And in the future even more innovation will be needed, such as home delivery using driverless vehicles, real-time information on the origin products and even robot-assisted stocking of shelves (see included YouTube video).

Last week we talked about how creativity is often an invaluable trait for those wanting to be successful in marketing. This quality is a requirement due to intense competition, changing customer needs and other factors, which force marketers to be continually on the lookout for new opportunities. How much time and effort a marketer should invest in finding new opportunities will certainly depend on the business. For well-funded companies, with large marketing budgets and employees whose main job is to research potential new markets, looking for new ideas is a full-time effort. Smaller marketers, who may not have the luxury of a staff dedicated to research, may not be able to afford to spend time each week looking for something new. However, they still need to be watchful of new developments by keeping in close contact with their current customers to see what seems to be capturing their interest, or use other methods, such as watching news sites and social media, to see what they can learn.

The true test of being innovative is to have a product that is at the forefront of an emerging market or at least not too far behind. Unfortunately, this is very easy to say, but often difficult to do. As we noted in a previous post, it is often tricky to determine whether a developing market holds viable long-term potential or is just a fad. Jumping in too late may mean a marketer has missed the market while jumping in too early for a market that never takes off can prove to be an expensive mistake. So making the decision to enter or hold off is one of the more difficult marketing decisions organizations face.

Another example of a market that may or may not have long-term potential is discussed in this story from Advertising Age. It reports on the growing market for cooking products targeted to children. Sensing that a new market is evolving, marketers are addressing this with a number of new products including kid-size stainless steel cookware, television programs, magazines, as well as pretend kitchens. The story suggests demand in this market can, in some ways, be attributed to the efforts of the Food Network cable channel. Their shows, featuring children in cooking situations, may be helping to frame cooking as an activity for girls and boys of any age.

If it turns out kids are accepting cooking as a fun activity, then marketers should expect this market to be much more than a fad and getting in too late may be costly.