Mobile-Commerce Convergence Brings Change At Sprint Nextel

scott-zalaznikSprint Nextel has seen mobile visits as a ratio of overall traffic spike dramatically in recent months. And it has responded by throwing marketing investment at mobile touch points – including paid media and mobile-in-retail experiences.

“The embrace of mobile in commerce, in shopping, in everything we’re doing across marketing has been a huge shift,” says VP Digital Scott Zalaznik.

In a recent interview, Zalaznik described Sprint Nextel’s latest thinking with regard to mobile, social, and programmatic media.

What are the biggest drivers of change in the wireless telco space and at Sprint? 

Fundamentally it starts with commerce. It used to be there was brick-and-mortar, and then everything else. There’s been a fundamental evolution in retail around embracing ecommerce.

From an owned media perspective, in the category and certainly at Sprint, we realized seven years ago we needed to invest in our web presence. At the time it was about driving self-service and loyalty to your base. It has grown to become more commerce focused. Customers want to have this omni-presence. The sheer number of touch points a customer goes through before they make decisions has grown. You could ask, did you just not know before? But I believe it’s grown. That’s caused us to invest in other branded channel distribution points.

And then mobile, as a category across paid and earned, is a huge percentage of our traffic now and has been growing like no other metric as a percentage of traffic. The embrace of mobile in commerce, in shopping, in everything we’re doing across marketing has been a huge shift.

We’ve gone from having a VP of ecommerce, or VP of, to having a VP of digital which includes ecommerce but also social and what-not.

Then, when you talk about digital marketing, you see a handful of shifts. You see digital advertising growing over non-digital. And you see a shift within digital to new areas of spending. We’re driving not only more dollars to digital, but on a percentage basis within digital we’re driving more dollars to performance digital. A handful of year ago you were buying reach based on the destination, versus the point the consumer is in the journey or purchase cycle. That’s been a huge change.

Another example: as our percentage of mobile traffic has gown, our interest in mobile ad spend has grown substantially. We’ve spent a great deal more on mobile as a percentage of digital media.

The last major trend has been embracing social as an advertising means, and the complexity that comes with how you think of paid reach as a complement to your earned reach within social.

How do you think about data-driven paid media?

The arrival of the DMP is wildly interesting and compelling to the brand and to agencies. When you talk about what DMPs and DSPs bring to buyers, it’s really strong. On the DSP you’re getting a targeted reach of remnant inventory on your segment.

But when you’re buying through more black boxes, you need some objective oversight and aggregation that protects you from unknowingly (and non-maliciously on the seller’s part) having your brand be over-committed relative to your own frequency and reach targets.

The companies that are going to be the most important are going to be the most efficient in buying that model and delivering oversight practices that give the buyer more visibility into where they’re buying.

I think the buyer benefits from programmatic, from the shift away from what was once direct buys. But what you risk is understanding where you’re buying and how efficient it is. The world where there could be multiple DSPs becomes more difficult to get your hands around because you have now exponentially grown the risk.

What about the case for programmatic media early in the consideration phase?

Yes, I think that’s a core use case for programmatic. The hard part is making sure you have the right triggers to know they’re in the consideration phase. Assuming you have the right chemistry on that, the nature of programmatic is spot on.

Somebody reading an article about a new device — did that trigger consideration or did it trigger that they’re an avid tech reader? It’s about figuring out when someone in your category is doing something behaviorally.

Do you find the premise of “programmatic reserve” or “programmatic direct” ads convincing, versus pure RTB?

The simple answer is, yes of course.

The idea that brands want to buy against a more targeted reach across domains, partners, and the customer journey implies there’s an opportunity across the customer journey. When we talk about building intent and awareness for your brand in the earlier stages, we still have lessons to learn about where best to drive that dollar. The curse and promise of digital is that you can measure everything. Sometimes you don’t want to know on a stimulus buy. The reality is you do. Programmatic for me is about systematically and scientifically building buckets of consumers that have intent and are most likely to enter consideration.

How do the retail outlets factor in?

Did the retail organization have as much interest in digital five years ago? It was more about channel conflict, now it’s about channel enablement.

Being the e-commerce guy and then evolving to be the digital guy has been really powerful. I’ve looked at it as a conversion mechanism, a funnel mechanism. I know how to talk about funnels from my heritage. When you talk about frequency targets, CPMs or GRPs, people outside the industry don’t know what we’re talking about. When you say, here’s our strategy around the funnel [it resonates more].

Any thoughts on the trend toward “in-feed” inventory, be it mobile or social?

Whether it’s mobile or social, what you want to believe as a marketer and as a consumer is that there’s value added context. The promise of social is the same belief that you wanted your neighbor to talk about your car, 30 years ago.

The risk to social, and I won’t say Facebook, is do you lose that sincerity? The reason why it was a right rail banner is that it was informed with some context but it wasn’t confusing. I think the more the consumer is in control about what they’re promoting, the better it can work. The more you lose that, the more it will not only drive blindness but also will drive for different models and frameworks.

If you could earn that (neighbor car) it would be powerful. The more it goes away from earning that, the more it’s traditional advertising. But then you have new issues. You have content adjacency issues. Now you’re a network.

How far along are you in solving the attribution riddle?

I think we’re fairly close on desktop. We’re getting to a place where with the use of some technologies that you have a fairly good sense we’ve already aspired to have.

The next step is mobile. If mobile is 15 to 30% of your traffic and 3 to 8% of your advertising, and none of us see mobile conversion at the same level as desktop, we have to be able to solve for mobile-to-desktop attribution. And maybe more importantly, we have to get better about the use of location and attribution and understanding the impact on retail.

That’s one Rosetta Stone. The other one is, as we talk about TV and the use of the second screen, which I know is over-documented, that is such a compelling tool to be able to proxy engagement with your customers. TV to video, desktop to mobile, and all to retail are the next step.

I think we’ll have fairly decent proxy methods in the next year.

What aspects of the marketing plan you prefer to handle in-house, versus in partnership with agencies or other service companies?   

What you’re always looking for are the right partners that bring not only ideas but also credible background to how they form the ideas. I love my relationship with my agency because they’re constantly brining me learnings that I don’t have on my internal staff. If you’re doing this with 20 companies and I’m only one of them, there’s probably good perspective you can bring to bear.

And there’s probably good perspective you can bring from me and bring to the other 19.

What does a consumer and a rep best benefit from with digital technology in a store? That book’s not written yet. Are you familiar with anybody doing NFC as a check-in mechanism at the front door? Many of us are trialing and dabbling in those things, and seeking practical use cases. Digital and retail are two good areas. The brands haven’t figured that out, any brand.

We’re all looking for ways to convince ourselves and others to make investment. Those areas of practical knowledge… are calls I’ll take or make.

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