This week: Apple’s privacy push cuts out marketers, marketing to the algorithm and robot furniture. Sandra Peter (Sydney Business Insights) and Kai Riemer (Digital Disruption Research Group) meet once a week to put their own spin on news that is impacting the future of business in The Future, This Week.
Our guest: Andrew Baxter
The stories this week
00:45 – “Sign in with Apple” blocks marketers’ access to email addresses
18:16 – North Face gaming algorithms leaves Wikipedia unhappy
Robot of the week
32:46 – IKEA introduces robotic furniture
Other stories we bring up
Tim Cook’s speech at the 40th International Conference of Data Protection and Privacy Commissioners in Europe
Our previous discussion of Apple selling privacy here and here
Sign In With Apple vs Google and Facebook
Instagram has no organic reach
Wired explains ‘Amazon’s choice’
Wikipedia says North Face manipulated its site
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Our theme music was composed and played by Linsey Pollak.
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This transcript is the product of an artificial intelligence - human collaboration. Any mistakes are the human's fault. (Just saying. Accurately yours, AI)
Disclaimer We'd like to advise that the following program may contain real news, occasional philosophy and ideas that may offend some listeners.
Intro This is The Future, This Week on Sydney Business Insights. I'm Sandra Peter, and I'm Kai Riemer. And every week we get together and look at the news of the week. We discuss technology, the future of business, the weird and the wonderful, and things that change the world. Okay, let's start. Let's start!
Sandra Today on The Future, This Week: Apple's privacy push cuts out marketers, marketing to the algorithm and robot furniture. I'm Sandra Peter. I'm the Director of Sydney Business Insights.
Kai I'm Kai Riemer, professor at the Business School and leader of the Digital Disruption Research Group. So Sandra, what happened in the future this week?
Sandra Andrew Baxter happened in the future this week. We have a guest on the show. Welcome Andrew.
Andrew Thank you very much. Nice to be here.
Sandra And I'm going to let Andrew introduce himself because he's got so many things to his name that it's just too long to go into it. So, why don't you tell us a little bit about yourself?
Andrew Yes, well I'm currently doing a what they call a portfolio career, which means I've got three advisory roles and three board roles. And one of those advisory roles is here at the University of Sydney as the Adjunct Professor of Marketing. Before that I, for 11 years, was the CEO of a couple of the largest advertising agencies in the country, originally Ogilvy and more recently Publicis, so that's my background.
Kai So Andrew you brought a story for us today.
Andrew Well I was reading an interesting one on AdAge, it was titled "Apple will block marketers' access to email addresses". And effectively what Apple's suggesting, they had their large conference on Monday, and they're talking about a new sign on service that will give people an option to use an email address to sign in or not when they add an app. And obviously, from a consumer point of view, around privacy that's terrific as they push towards a stronger privacy positioning. But I think from a marketers point of view, sometimes a lack of data or not enough data can cause consumer expectation issues. So there's this counter-balance that I find fascinating.
Kai So at WWDC Apple announced 'Sign in with Apple'. I think that's what the service is going to be called, and it basically follows off the back of the well-known options that Google and Facebook provide, which allows customers who have an account with either of those to use that to sign in to any app on the iPhone or websites on the Internet to sign in, and make it just very easy to go into these services without having to enter all your data in a new account and everything else. But it comes at the price of letting these companies collect your behaviour inside that app, and also to know which other apps you're signing in, and so they can build up that profile. And what Apple effectively is doing is they want to provide the same convenience, but they're going to use custom-made, sort of throwaway email addresses which will protect customers privacy, and Apple says that they're not going to track or build a profile off the back of this. So you get the convenience without giving up the data. And the interesting bit here is we always discuss these topics on the podcast from the customer point of view, but we never really have the marketers perspective, so we're quite excited to have you here.
Sandra And to see this as more than, you know, 'I'm protecting my data from everyone else'. As Kai just said, what Apple will do is generate the new email address for every service you log onto, and further give you the option of even deleting that specific e-mail address from the apps that you've signed on to so that is protecting my privacy. But what does that mean to marketers, and what does that mean to the competition, to companies like Google and Facebook that actually relied on this to get data on their customers?
Kai And do I as the consumer lose something as well, if I behave like that?
Andrew I think at the end of the day marketers should be acting in the best interests of the customers, because businesses are built around customers. So I think that marketers that are doing the right thing should be using data in a positive way to create a much better customer experience and a much more relevant experience. So the counter is that, some of the studies differ, but for example in the banking industry 73 percent of people are quite happy to give their data up as long as they're served back relevant products and relevant ads. A bit like in politics, you're going to have people who are very much willing to have that trade-off of giving data for relevant information back, and is going to be other people that really want to hold onto their privacy completely and don't want to have anything to do with that. And I think what Apple's doing is providing that option, which is terrific. But I think we've all had examples of, as a consumer, where we might have bought something the week before, but for the next week we're still being served up an ad.
Kai Yeah, that's the Bosch hedge trimmer for me, which I bought at a hardware store, online actually, and I searched for it. But weeks and months after, Google Ads still tries to convince me to buy the product which, you know, I've long used at home.
Andrew So there's an example of where a piece of data wasn't captured, and therefore created a customer frustration, as opposed to a positive experience.
Kai Oh amusement, more.
Andrew Yeah, but it's true, you know and I think you're right. In those search terms in particular, I mean one of those board roles I'm doing is with a tourism attraction, and I'm constantly searching up the website to look for things and as board member learn about them, and of course now being sent ads for me to go and travel and visit that attraction constantly. So those small pieces of missing data are creating frustration. I think with what we're talking about here with Apple, the potential is for a whole lot of additional data to be lost, and potentially create even further customer frustration. And clearly from a marketing angle, the right thing to do is to be using that data in a positive way to create a better customer experience, and a more relevant customer experience.
Sandra So what's the alternative for marketers, if they do lose access to things like email addresses?
Kai And why are email address is so important for marketers?
Andrew Well I think most databases that are being built are usually anchored around, I mean the common things you tend to have an email address, a mobile phone number, or one of our social channels. You know if you go back a long while, it probably used to be a home address was the anchor. That's no longer the case, it really is that e-mail address, and most of us have got one in particular that we tend to use more often for certain things. And that's what we'll use to log in for many of the apps or devices that we've got. So if someone doesn't have access to that as part of that data feed, it's going to be harder for them to build up that profile, as you mentioned before, around that person. So I think the email address has been a pretty critical part of direct marketing for a long long time.
Kai Yeah, if I think about myself, it's probably the one thing that has stayed with me the longest. I've moved continents and I still have that one email address from back in Germany, while phone number has changed. I've had that for a while since I got here, but postal address certainly changes much more often than any of those items.
Sandra And that's why probably some of the websites like Yahoo are still in the top most used websites in the world, mostly because a lot of people still have their email on Yahoo from back in the day.
Andrew Yeah, I do believe that consumers should have choice, and at least if this provides that choice. My brother had a significant birthday recently, and my other brother and I were joking that he's still not on social media. But maybe that's a good thing for some people, they don't like doing that, and they prefer their privacy.
Sandra So Apple has taken this to really try to cement it's position as the company that offers you privacy, and that seems to be the direction it's taking. And let's not forget that a large reason for these moves into providing more privacy and thinking more about the services that it's offering, is that their share of iPhone sales has been declining for the past few years. Whilst for recent history it has always been around 70 percent of the money that Apple made was out of products like the iPhone, it's now down to about 60 percent. So they have to supplement that with income from other places, so selling privacy is now the next thing.
Andrew I do think though, Apple has had a history, that part of their DNA of their brand has been around being quite a secure platform. So I don't think what they're doing is outside their brand remit. So it does make sense, but I think you're right. The cynical side is that it's another revenue driver. They've obviously put their prices up for mobile devices over the last few years, to counter that shift in people that are owning iPhones. So the business model they're still trying to work on over time.
Sandra And indeed, Tim Cook actually put this at the heart of what Apple is doing, and he gave a pretty remarkable speech at the 40th International Conference of Data Protection and Privacy Commissioners in Europe. And here's what he had to say:
Audio There, and everywhere it should be rooted in four essential rights: First, the right to have personal data minimised. Companies should challenge themselves to de-identify customer data, or not to collect it in the first place. Second, the right to knowledge. Users should always know what data is being collected and what it is being collected for. This is the only way to empower users to decide what collection is legitimate and what isn't. Anything less is a sham. Third, the right to access. Companies should recognise that data belongs to users, and we should all make it easy for users to get a copy of, correct and delete their personal data. And fourth, the right to security. Security is foundational to trust, and all other privacy rights.
Kai And so to be fair, Apple has actually done a fair few things to implement those principles. So, we now have what's called the iPhone Secure Enclave on the phone, so Face ID for example, and fingerprint information of the user never leaves the iPhone and is encrypted on the phone, so this information doesn't go back to Apple. iMessages are end-to-end encrypted, so Apple cannot actually read what we text each other when we use iMessage between two Apple devices. They've implemented far-ranging protections against tracking across websites in their Safari browsers, where cookies can no longer be used by marketers to actually track users when they're outside of their website. So, they actually do a fair bit to make the usage of iPhones more secure, and also more private in a way that they actually don't harvest that data in the first place.
Sandra Let's remember they were the first browser to block third party cookies by default, and that was a move to protect user privacy, but it also was kind of a strategic move against its competitors, against companies like Facebook and Google. And with 'Sign in with Apple', it's a much more aggressive move in the same direction.
Kai And of course Tim Cook, in the speech that we just heard, he goes on to have a dig at the competitors:
Audio Some oppose any form of privacy legislation. Others will endorse reform in public and then resist and undermine it behind closed doors. They may say to you, "Our companies can never achieve technology's true potential if they're constrained with privacy regulation". But this notion isn't just wrong. It is destructive.
Kai So it's a fairly direct move against Facebook and Google when it comes to privacy.
Andrew I mean Google, it was only a month ago they did make a very different pitch in that sense when they spoke, and they talked about that trade-off. And they felt that the trade-off is worth making, that trade-off about how much data they're collecting and how they're using that in a relevant way. So, it's two very different business models that are opening up, and Facebook's even different again in how they're doing things.
Kai Yeah, and let's not forget that every Android phone, whether it's from Google or not, has a Google operating system which collects location and usage information at a very deep operating system level, and gives that back to Google. And they then use this, for example, to improve the experience on Google Maps, and the search experience. So they do some good things with it, but they also harvest and amass quite elaborate profiles about its users. And you can actually go and download these profiles and have a look, and some journalists have done this, it's sometimes massive files in the gigabyte size, and also quite private information that can show where you've been on any given day within a couple of metres radius.
Sandra So where does this leave a company like Facebook. Because whilst Apple markets itself as the company that sells privacy, Google quite openly will say 'there is a trade-off and this trade-off is worth making, give us your data and we'll give you the best products and services'. But then, Mark Zuckerberg famously said that "the future is private", but then did not go on to implement any of the things he discussed there. Is privacy not important to Facebook at all from a marketing perspective?
Andrew Well I think he said that it is, I think we're still waiting to see exactly how that plays out in terms of what they're doing. I think what they are saying is that, you know and obviously they had the issues around Cambridge Analytics a couple of years ago that arose, where people were using more data than they realised to do things that weren't part of why they'd given them, access to that data to start with. So I think that became a slightly different issue around privacy of the Facebook data.
Kai And interestingly one feature at the heart of the collection of data that became Cambridge Analytica was the sign in with Facebook and the tracking across different apps, which is now what we're talking about. But I think what Facebook is now saying is 'we're going to protect your privacy because we're not going to share as much information with third parties'. But of course, Facebook will still know everything about users, what they do in Facebook Messenger and Instagram and so on, so forth. So when Mark Zuckerberg says things need to be more private, it still implies that Facebook will know everything, because fundamentally, and we've discussed this just last week, is that both Facebook and Google are in the business of selling user privacy to marketers because that's their business model, that's what they make their money from. The better they can know their users, the better they can target ads. So when they talk about privacy, they have a slightly different understanding than Apple employs here.
Andrew I think the other interesting one is that there are some other alternatives from a database point of view. And clearly building your own database as a business is one of those. And there are now platforms, whether it be on a Microsoft platform, or Salesforce platform, or Adobe platform, they're the most popular at the moment. They are safe places to house your data. And I think you're finding that they're also starting to push the privacy ability of housing databases, but they're not going to actually see the data, they are just platforms to house them. And then the other model is, once you've built out your database, and Quantium, well 50 percent of their business was bought by Woolworths a few years back and they're collecting a huge amount of information through the Woolworths rewards card, as well as the information Quantium is able to get through some of your credit card details, to again build a profile of each individual customer. And they're now commercialising that data, and enabling access for people who are selling goods in their supermarkets to better understand their customers. So there's sort of three or four layers here that are quite interesting, particularly around this data privacy piece. And are consumers completely understanding that that's what's going on?
Kai So these are much more targeted mechanisms of course that also rely on already having transactions with customers and knowledge of customers. So Facebook and Google in that respect is a much more blunt instrument to target ads to a more amorphous mass of new potential customers, right. So would a company like Woolworths use the whole gamut and do advertising on Facebook, use its own database, how does that compare?
Andrew Well when you boil it all down to the fundamentals of what you're trying to do from a direct marketing point of view, one is either to retain customers and get them to spend more with you, which I think is what the Woolworths model is. Because once you've got them as a customer, it's how can you help them buy more things, and more relevant things. I think where Facebook and Google help you is if you don't actually have that customer yet, you can be advertising to them based on some of the profile and information you're gathering, that they are shopping a certain amount of time, because you do know that they're at a certain location, maybe the competitors location, three times a week. And again the combination of both of those things, particularly the location data, even for a current customer with somebody who is then walking into Woolworths becomes quite a powerful marketing tool as well.
Kai Which is incidentally something that Apple uses quite extensively, right? If you're near, or in an Apple store, and you open the Apple Store app on your iPhone, it actually shows you the information of the local store, right, so they know where you are in that respect.
Kai Even though they might not share this with others, they do provide you with relevant location services.
Andrew I think this all comes back to ethical and relevant use of data, to me. I've often talked about the nosy neighbour versus the helpful neighbour. And if you take that analogy of, if you know that the next door neighbour’s kids are sick, and the mum and dad are really struggling to do everything that week, and you take them over a bowl of soup. Well, that's using the information at hand to do something relevant and nice and helpful and trust building, whereas sort of peering over the back fence that somebody, isn't quite the same use of the information you've got at hand. And I think from a data point of view, we have to come back to some of those fundamentals, and say what is right here? What is in the customer's best interests? How can we help them?
Sandra Do we think that's what Apple is trying to do? Trying to help customers regain some of that control, or is it more of a strategic move to try to distract companies like Google and Facebook, whose business models are built around gathering that information?
Andrew I think it's both. It is a very competitive world, and I think they are trying to set themselves up as the ones that are privacy-driven. However, at the end of the day customer choice is really, really important and I think that's what they're providing. They're saying we're very happy for you to give us that data and we will try and use it in the best possible way for you. But if you don't want to.
Kai Yeah. Or do you stay within the metaphor. Like at the moment Apple seems to be saying we're building a bigger fence so we can't actually look. So the challenge for Facebook will be to go from the creepy neighbour who, you know, basically peeks at everything you do and you don't quite know what they do with it, to become a good helpful neighbour, right. Which is the challenge that Google and Facebook are facing, where they try to balance things out.
Sandra So, if we forward this another five years or another seven years, is this a real threat to the types of business models that we have, and do you see any of those changing in the future the types of information that Facebook and Google collect? Or is that something that's with us to stay, and these sort of forays, yes will make a difference to the iPhone users, but not to the business models at large?
Andrew I think at the end of the day customers vote with their feet, or in this case fingers on their devices, and the customer is always right. Marketers need to understand what the customers need and want, and the longer you go in not delivering that, then the more likely that that business model is going to break down. I mean that is the essence of business.
Sandra Speaking of voting with one's feet, I'll be buying Patagonia. I think the second article we have for this week comes from the New York Times, and it's titled "North Face edited Wikipedia's photos. Wikipedia wasn't happy". What happened here was that in a video ad, North Face described...
Kai Bragged about more like it.
Sandra Yes, bragged about how it took photos of its clothing in very famous outdoor destinations, and then uploaded those pictures to Wikipedia, hence getting on top of the search results by really hacking into Wikipedia's images.
Kai So anyone searching on Google, holiday kind of search, for any of those destinations would then be presented with photographs, which not only show the destination, but feature a jacket or a tent, or a North Face branded backpack as the first image on Google.
Sandra So the idea was that Wikipedia as one of the top websites, would then always put North Face's images at the top of the Google image results, according to the algorithm that would rank those as the highest results.
Andrew It's interesting, because it's not illegal to do, but it blurs the ethical lines is I think what the backlash was all about. You're trying to take what has been a reasonably trusted website that hasn't allowed advertising, and gaming the algorithm to put, effectively, advertising in there.
Kai That's quite interesting because this is done across two websites, right? So you do something on Wikipedia, knowing that this will translate into the Google search results, because Google obviously nowadays, for many search terms, presents a box at the top with information straight from Wikipedia as a trusted source. Off the back of the last couple of years of being caught out, you know, spreading fake news, they've now prominently featured Wikipedia. And now this company comes along and puts their advertising material into Wikipedia, to actually game this algorithm. Which Wikipedia didn't take at all well, obviously.
Sandra So the campaign was done with the advertising agency Leo Burnett Tailor Made. And interestingly the North Face Brazil CEO, defending the campaign, said in a statement to AdAge. "Our mission is to expand our frontiers so that our customers can overcome their limits. With the 'Top of Images' project, we achieved our positioning and placed our products in a fully contextualised manner as items that go hand-in-hand with these destinations". Is this saying that any press is good press?
Andrew I think what consumers are looking for is authenticity, and it's interesting, even Google themselves now have defaulted to, you know, if you go to your local restaurant most of the pictures that come up are user-generated pictures now rather than the perfectly manicured food shots that have been taken by that restaurant, or the beautifully lit version of that restaurant as a wider shot. So consumers, they want these authentic visuals, rather than manufactured ones.
Kai Well they do get manufactured ones in this case right? Because they are all perfectly lit photos of North Face products in those locations that people have been looking for. And the company was actually quite proud of what they've achieved, and in a way you could make the argument that this is in the spirit of what the North Face, as a brand, wants to stand for, pushing frontiers. So here they try to push the boundaries of what is good digital marketing, going into an ethical grey space, but still coming up with a creative solution that no one had thought about before. And the company said "We hacked the results to reach one of the most difficult places: the top of the world's largest search engine, paying absolutely nothing, just by collaborating with Wikipedia". Now, the word collaborating is a bit strong here because Wikipedia took a very different stance. They came out and said this amounts to defacing public property, because obviously Wikipedia wants to be a trusted source of peer-generated content that upholds quite a objective version of reality that is not undermined by commercial interests, right. So clearly that was against the rules and the terms and conditions of Wikipedia, and those photos have been taken down or the logo has been edited out, because some of the photos were actually quite nice photos of those locations, but they just shouldn't show any commercial products.
Sandra So this has clearly worked for North Face. They've got free advertising in the New York Times where we got our article from, and across all the media platforms. Will this ever work again?
Andrew I'm not sure in this exact example, but I think what agencies will always do is, and it's why the creative teams within agencies is such a tough job, because they spend their entire day on these incredible brands trying to come up with unique creative ideas or things that have been done first. Using technology a certain way for the first time, because that's what ideation is. It's fresh new unique differentiated ideas. So I don't know that anyone will come up with exactly this, but I think creatives, agencies, marketers will always be pushing to do these first, because obviously if you do something first there's a PR value to it. Now the blurred ethical lines is where they got in trouble in this one.
Kai But also the marketing to the algorithms, right, to understand what does it take to get on top of the search result. What does it take to get that precious piece of attention from customers? And there's recently been another couple of stories on exactly that topic. One was that Instagram came out to market their influencer program saying that if you post something on Instagram it will just be swallowed by the noise, so you better make sure that you have influencers who can actually bring it to the attention of customers. And the biggest story in Wired magazine on the importance of being the preferred choice in Amazon, because Amazon now is a massive marketplace with millions of products across all product categories, so as a small vendor you have to actually make sure that you get in front of the customers. And there was an interesting story around that.
Sandra So, in both cases that you mentioned, really what was at the heart of it was the fact that we now have to market to algorithms. In the Instagram story they actually showcased the quote from the VP of brand communications at Old Navy that said that "organic reach on content has become increasingly limited, so we're consistently looking" at ways to serve partner content to the right shoppers and basically going to marketing to the algorithm. And in the case of the Amazon story that you mention, it revolved around a small company making Trump socks, with orange hair and all, that in a very short time after a public picture of the Trump socks made the rounds on the news channels, lost its first place on Amazon to copycat companies from China, and it could no longer regain that even though it had done everything right. As in protecting the image trademarks, all that, it could not regain its top spot on Amazon. Only after Wired magazine had intervened on their behalf. So does this mean that we now have to market to algorithms, rather than to people?
Andrew I think definitely, and particularly with the advent of voice, in terms of algorithms. Because in the future talking about, you know I want to order chips, or washing powder, or bread, or milk or beer. What is the algorithm going to pick up and order for you, if you haven't specified what brand or what size you're going to buy? So I think there is a piece right now, which these examples are clearly showing, where we have to start understanding algorithms as best we can, and I think a lot of marketers have small little heart palpitations when these algorithms occasionally change, which they have done over time.
Kai And Wired had another article off the back of this first article, explaining that Amazon's choice that category was actually invented by Amazon when it brought out its Echo devices with the Alexa voice, right. Because you need to have a way to establishing which product to order, in a context where the customer just tells you, you know, buy a pair of Trump socks. So there's no display, you can't actually browse through the lists, so they'll pick one, right. The problem here now is that in this particular case, Amazon's choice became one of the knockoff products, and then a cheaper Chinese version, rather than the original US-made socks that this small company proudly patented. Which raises questions as to how can you actually, you know, argue with an algorithm? So you have to go back to the humans behind it. But from the point of view of Amazon of course it's a massive ecosystem. These are small cases that happen at the fringes of what is a massive undertaking. And so to then jump up and down, get the attention of Amazon to have the problem resolved, is near to impossible for a small 'mom and pop' shop.
Sandra So where does that leave marketers? You know, besides heart palpitations.
Andrew The first one is there's a lot of very smart consultants out there advising people on how these algorithms work, and how you can best do that. I think that the second part of this, which is even more worrying, is the latest OECD figures showed that there's about three point three percent of world trade is now in fake goods. Exactly to your examples.
Sandra Enabled directly by such algorithms.
Kai Yeah, Wired says it's a trillion dollar industry, right?
Sandra So if you're a large company like North Face, or Old Navy, you can afford to both hire these consultants and start fighting against the knockoffs. But if you're a small company, what options do you have then?
Andrew Well I think in this case that you're talking about with the Trump socks it's very difficult, because these are sort of a one-off product, you know it's almost a fashion item, and there's other fashion items out there. If that gets the head of steam, even if you do get it reversed, the moment's gone. And they possibly can't afford the lawyers deal with this. But some of the bigger companies down the track may do, so that's quite a tough area.
Kai And it's also quite staggering because, let's not forget the other side, right. So what happens is this product goes viral, it's in the media, it starts taking off. Within days the Chinese supply chain is able to flood the Amazon channel with knockoff products. One side of the coin is that this is obviously illegal, and unethical and immoral. But you also have to admire the agility with which companies are actually able to pull this off, right. And feed off those algorithms, because it's only possible because all of this happens at scale. All of this happens online, And all of this is accessible worldwide. So we're talking about a uniquely digital phenomenon, obviously backed by a very agile production supply chain that is at the heart of all of this.
Andrew And of course we've always optimised search from day one of Google and classic search engine optimisation, right now through to what we're talking about here. How do we optimise search within a retail environment, in the future is going to be how do we optimise search within a voice-driven environment. And we're thinking about countries like India and China and Indonesia, that over 50 percent of search now already is in voice. These are the things that marketers need to be constantly thinking about, to understand how to best do that.
Kai So it's always been an arms race of course, Google has always tried to curtail people gaming their system, by setting up fake websites that link to each other, and creating these link farms, and making sure that you end up in the first page of search, because Google wants to control what the algorithm shows of course. Because they can control, you know, what stays on top, and they can sell these places, and they do advertising and all the rest of it. So is marketing to algorithms basically trying to reverse engineer how the damn thing works, and then do whatever shit gets us to the first spot, as we've seen now with this creative solution with Wikipedia? Is that what it's all about, or?
Andrew Well it is, and particularly in voice. Because there's only going to be one spot, right, in voice. You're not going to see a screen come up in front of you with 10 options. And so it's always been, up until now, to get on the first page of a retail environment, on Google, or whatever. With voice it's going to be number one.
Andrew Because when you say 'Google or Siri add bread to my shopping basket'...
Kai And to be clear, Amazon's algorithm will put on number one whatever makes the most profit for Amazon in that, in that situation, right. It doesn't have an ethical component which will say oh but there's this small 'mom and pop' shop, you know, who own the brand so we'll have to feature them. Algorithms don't think they automate.
Sandra So where does that leave us with authenticity. You mentioned previously how important increasingly authenticity is, but marketing to the algorithm seems to take us as far as technically possible from authenticity. So what we see will never be what organically rose to the top, will never be the next new thing. It will be whoever managed the game the algorithm.
Kai So from a marketing point of view then, is social media marketing and marketing to algorithms, are these, like two distinct forms of marketing, almost?
Andrew What I love about a lot of these conversations, is that a lot of it comes back to the fundamentals of marketing, and I've talked a lot of the university students here about this. In a tech-driven world, we have to really understand how we execute today and tomorrow, the fundamentals of marketing and what we're talking about here is classic pull and push strategies. You know, how do we convince customers to want to buy something? And how do we drive demand for a well-branded product, that in the end, the customers are asking for, rather than them being served up something that the algorithms telling them? So how do we create that emotional connection to the brand? How do we create that momentum? Those socks are a good example, right, I mean, there was a momentum for people to buy those socks. It just so happened that someone illegally ripped them off. There was a moment where that went viral, and they couldn't quite catch who was doing that. So, I think the end of the day, the fundamentals of marketing have to come back in, then that will help drive the decision making.
Kai So create 'pull' on social media for the authenticity that people crave. But at the same time you've got to 'push' things through the algorithm, because the only way you can stay ahead is sort of putting it number one the algorithm.
Andrew Correct. And business has always been competitive, whether it's on-shelf and you've got five options to look at in the supermarket or whether it's online.
Sandra Technically there's no chance for anything to move up organically, is there?
Andrew If they know the brand.
Sandra But how are they going to know it?
Andrew Well. TV, I suppose. In the classic earned, owned, paid media. Well, there is earned. How do you get that product out through PR to get people to know about it? You know there's obviously paid, for those that can afford it. Kellogg's Cornflakes, you want people to be typing that straight in to the retail store or Google, rather than saying 'I want cereal'. So I think that so brand's going to become even more important invoice.
Kai In voice, yeah absolutely. Because the channel is so narrow.
Sandra Mm hmm. So the future of marketing looks like it's going to be absolutely fascinating. The fundamentals staying the same, yet so many ways in which we deliver on those are changing. Andrew, thank you so much for spending time with us today.
Andrew It's great to be here. Really enjoyed it.
Kai And we're going to end on our favourite...
Kai So our Robot of the Week is also a retail example, because our robot comes from Ikea, of all places. The Verge reports that Ikea's introducing robotic furniture for people who live in small spaces. coming to Hong Kong and Japan in 2020.
Sandra What will these do?
Kai It's a collaboration between an American furniture startup called Ori Living, and it's basically a furniture that you install in a small room which can move across the room, and depending on your time of day either reveal a wardrobe, a bed or a sofa. And the article issued a hope that this would be less expensive than the original ten thousand dollars that this startup advertised. But if Ikea brings something like this at scale it should bring a interesting new robotic solution which, with the push of a button can transform your room from bedroom into a living room.
Sandra And I hope they introduce voice with that, akin to the little Roomba we had two weeks ago which was cursing every time it bumped into furniture.
Kai So for people who get trapped behind the wardrobe because they pressed the wrong button. And that's all we have time for today. See you soon.
Sandra On The Future...
Kai Next week.
Sandra This week?
Kai Yes, but next week.
Sandra On The Future, This Week, next week. Thanks for listening.
Kai Thanks for listening.
Outro This was The Future, This Week, made possible by the Sydney Business Insights Team and members of the Digital Disruption Research Group. And every week, right here with us, our sound editor Megan Wedge who makes us sound good and keeps us honest. Our theme music was composed and played live on a set of garden hoses by Linsey Pollak. You can subscribe to this podcast on iTunes, Stitcher, Spotify, YouTube, Soundcloud or wherever you got your podcasts. You can follow us online on Flipboard, Twitter, or sbi.sydney.edu.au. If you have any news that you want us to discuss, please send them to firstname.lastname@example.org.