Amazon and Apple's 'Tough Slog' on Madison Avenue
Feb 21, 2014 5:00 AM PT
Amazon and Apple just can't seem to catch a break with the advertising elite on Madison Avenue. In fact, advertising sales are a "tough slog" for both companies, mourns a feature in the latest Advertising Age. The problem? Apple and Amazon won't reveal enough information about their customers.
This is the best news I've heard all year. In fact, it just reinforces my loyalty to both Amazon and Apple.
Meanwhile, it also shows how other industries utterly fail to understand the core of two powerhouse organizations. They seem to be looking at what they want Apple and Amazon to provide -- wanting these companies to change to fit their needs, rather than embracing what Amazon and Apple can offer, which, let's face it, is millions of loyal, active consumers who repeatedly spend money on a quality experience.
"The lack of data both companies deliver is frustrating for marketers because these notoriously opaque giants sit atop incredible troves of information about what consumers actually buy and like, as well as who they are and where they live," wrote Kate Kaye.
Pretty Is as Pretty Does
One person familiar with the situation -- thankfully not directly named or quoted -- said that "Apple's refusal to share data makes it the best-looking girl at the party, forced to wear a bag over her head."
There are so many things wrong with this statement, I don't know where to start.
How about this? If Apple were a girl, she wouldn't stand around a with a bag on her head, much less ever let anyone force said bag upon her. Meanwhile, the person behind the statement doesn't even realize that if Apple showed up at the party at all, it would be to invite people over to a different party on the beach -- a place where customers wouldn't feel as if their secret desires and private lives had been bartered and sold all the while they were being groped in an attempt to find their wallets.
As for Amazon, he's the ruggedly handsome guy on the beach, building up the fire and setting up the coolers full of beer.
Let me put this another way: I don't believe that Amazon or Apple actually want a piece of today's advertising world. More to the point, I think they are willing to be part of it only to guide others to a place where everyone has a good time and no one is a bag-wearing object of misguided lust.
Back in 2010, when Steve Jobs introduced Apple's iAds offering, he pointed out that most mobile advertising "sucked." iAds clearly was an attempt to make it better.
For its part, Amazon was worried that advertising would be disruptive to the consumer experience, its advertising lead, Lisa Utzschneider, reportedly noted. What's to love about this statement? That the challenge to integrate ads started from the customer experience, and not a treasure chest map with a path that trampled all over Amazon's loyal customers.
Amazon and Apple Aren't Ad Needy
Fortunately, Apple and Amazon can remain negligible digital advertising players because they don't need to feed at Madison Ave's party trough: Apple's US$258 million in ad revenue in 2013 is a tiny fraction of 1 percent of Apple's $171 billion in revenue for the year. Even if Apple quadruples that in 2014, it's negligible to Apple's bottom line. Bag indeed.
Advertising for Amazon is marginally more lucrative, bringing in $614 million to add to Amazon's nearly $75 billion take for the year -- still less than 1 percent.
During the same year, Google reportedly picked up $17 billion in advertising spend on nearly $60 billion of revenue, while Facebook grabbed $3.2 billion as part of its nearly $8 billion take. If I read these numbers, they tell me one thing: Google and Facebook rely heavily on advertising spend -- so who is their real customer? You? The end user? No way. Their key customers are advertisers.
For good or evil, this introduces a layer between you and your relationship with Google or Facebook and how they manage their relationship with you and the data they create to describe, predict and influence your behavior.
Lusting After Apple and Amazon Data
Data is at the heart of the misunderstanding with Madison Avenue, which must not be able to look in the mirror and recognize the pattern of "suckiness" that Jobs saw back in 2010.
Because Apple doesn't track its users and ads with cookies, ad agencies can't do "automated buys via their cookie-centric trading desks, which allow them to mesh lots of data from different sources," Kaye observed.
Perfect! This is exactly what I want from Apple -- and more importantly, this is exactly what Apple likely doesn't want: the lowest common denominator ad that is seen everywhere else. It's why Apple doesn't appreciate apps created specifically to look and run exactly the same on any mobile OS -- because so often developers build to the lowest common denominator. Apple seems to abhor a sameness that lacks quality, thought and maybe even pride.
I also appreciate Amazon's rigor over revealing too much customer data. In some ways, Amazon might know more about me than Apple. Why? Apple doesn't know which coffee maker I bought, which lotion, which toys for kids, types of dog food, research over which bicycle tire to buy. Add that to which Kindle books I read or television series I watched on Amazon Prime -- and who knows what Amazon knows about me?
If I feel for an instant that Amazon is breaching trust, selling my secrets, thoughts or desires -- whether I know them or not myself -- I'm gone. Same goes for Apple.
So when I read an article like Kaye's, it's just one more proof point of how Apple and Amazon distance themselves from selling things that get between them and their real customers -- you and me.
May the "tough slog" continue!