The Value Of Loyalty
Retailers are all-in on loyalty programs – which means earmarking serious growth marketing budgets to acquire new subscribers or members. These campaigns typically target regular or high-spending customers who aren’t already part of the loyalty program. That makes intuitive sense for consumers and marketers alike … right? That’s the question at the heart of a new marketing study written up at the Harvard Business Review. Get this: Loyal customers tend not to change their shopping habits after they enroll, but the retailer still has to sacrifice some profit margin to serve up deals. With that in mind, rather than targeting by historical spend, the most effective targeting tactic, as per the report, comes from using location data. Specifically, loyalty program marketers should think of “vulnerability” as a location-based metric. Shoppers who live near a competitor’s store will consolidate more of their budget after joining a loyalty program than will people who live near a store but not in proximity of a competitor. Customers who drive by a competitor en route to a retailer’s store are also more vulnerable – and thus more valuable to sign up to a program. A loyalty scheme, in other words, is less effective as a rewards program for already-loyal customers and most effective as a way to consolidate shopping budgets that would otherwise be split between two or more chains.
Started, The Streaming Wars Have
Roku’s deal with Amazon to carry the free ad-supported CTV service IMDb TV is up for renewal in early 2022 – and you can expect a fight. Streaming rivals with their own apps are scrambling for market share and distribution. Amazon packaged IMDb TV with the popular Prime Video service when the two companies negotiated their initial distribution deal in 2019, The Information reports – and Amazon was able to extract major concessions. Aside from piggybacking IMDb TV with Prime, Roku doesn’t get a cut of the AVOD net inventory. Typically, Roku would get up to 30% of third-party CTV app inventory, while Amazon would get a 20% share of Roku impressions on Fire TV, which carries Roku’s AVOD service. But Roku has toughened its approach now that it has more content and a larger footprint. Google pulled all YouTube apps from new Roku devices this month over a distribution standoff, and Roku has reportedly made its case to the DOJ that Google’s actions are anticompetitive. According to Roku, Google is wielding the YouTube app – the most popular CTV app download out there – as a cudgel to extract unfair terms. Amazon, though, is a different kettle of fish, since it's one of the biggest sellers of Roku streaming hardware.
To The Letter
The New York Times is beefing up its newsletters as a way to drive up overall subscriptions. One change earlier this year came when its stable of opinion writers who pen free personal newsletters through their Times email accounts – and backed by NYT promotions – had their newsletters bundled into the paper’s digital subscription, thus forcing subscribers to pony up or lose access to the newsletter. Even so, only 12 of the 50 Times email newsletters are paygated by a subscription. But last week, the Times announced it would add 12 new newsletters written by celebrities and artists about social issues. One contributor will be Rage Against the Machine guitarist Tom Morello. The Times is working hard to cultivate celebrity writers who can draft a series of columns on social issues, opinion editor Kathleen Kingsbury tells Digiday. But there’s a strong business angle as well. “We want this to feel like a value-add for our subscribers,” she said. “We hope that it will help with retention of subscribers, that the package that people are paying for feels more valuable.”
But Wait, There’s More!
YouTube’s chief business officer on why ecommerce will become a creator “juggernaut.” [The Information]
Neustar added its unified identity solution to Snowflake’s data marketplace, [release]
Yahoo is expanding its Merkle identity partnership. [The Drum]
Here’s how Twitter and Google really feel about Facebook’s troubles. [Protocol]
Zendesk is set to acquire Momentive, including its SurveyMonkey brand. [MediaPost]
How a mistake by YouTube reveals the power it has over media. [NYT]