Long tail marketing for tech no longer means queues around the block
The days of tech companies luxuriating in sales off the back of pumped-up product launches are ending. Facebook ANZ's director tech industry strategy, Jason Juma-Ross, believes marketers need to take a new approach to launching successful products today.
When you picture a tech launch you almost certainly think of Apple. It’s the late Steve Jobs on stage announcing the iPhone, or kilometre-long lines of people camping out amid a clamour to get their hands on the latest device.
This format set the tone for a generation of manufacturers. Others quickly followed suit, turning the mundane launch of tech widgets into a cultural phenomenon. For almost a decade these launches were the catalyst for explosive sales of tech products.
But by 2016 something had changed. As we entered the middle age of the internet era, mobile technology grew up. While Apple’s launch of the iPod in 2001 and the iPhone in 2007 were game-changers, the latest iterations of its products (and others) were showing only incremental improvements.
Mobile phones also became even more ubiquitous. Today there are about 5.3 billion people on earth aged over 15. According to Andreessen Horowitz Partner, Benedict Evans, around five billion of these have a mobile phone (1).
Other tech categories tell a similar story. The global PC install base sits at 1.3 billion and has been declining since 2013 (2). There has been little growth in consumer console spending for the last five years (3). Even the growth of Nintendo’s runaway success-story, Switch, is slowing (4).
Here in Australia, last year’s Mobile Consumer Survey conducted by Deloitte showed that smartphone penetration was at saturation levels. Today 89% of surveyed Australians own a smartphone (5).
There’s also ample evidence that consumers are upgrading their phones with less regularity, another factor that can strangle revenue growth. The survey also revealed the proportion of respondents with a phone less than 18 months old has fallen from 61% in 2016 to 58% in 2018.
Apple’s own global sales figures for the iPhone year-on-year show the effect of device saturation combined with a rising ambivalence around new tech launches. In the first quarter of 2018, Apple netted $61.1 billion of iPhone revenue. But in Q1 of 2019 that number had shrunk 14.9% to $52 billion (6).
It’s an issue that appears to combine cultural, psychological, and financial drivers. Owning the next “thinner, shinier and wider” (7) piece of mobile technology isn’t captivating people like it used to. Especially when that phone is two-thirds more expensive than it was a couple of years earlier*.
This challenge calls for a new approach to selling technology products. It’s a shift that presents both risks and opportunities.
The biggest risk involves marketers being too slow to react in the face of rapidly changing consumer sentiment, particularly in developed markets.
For the first quarter of 2019, Gartner research showed that Australian smartphone sales dropped 10.2% to just over two million units (8). That’s a considerably higher drop off than the global Q1 average, which saw sales down 2.7%.
The lesson is clear. Marketers can no longer rely on the global hype-cycle to shift their products. It’s now time to play the long game, to get your devices into the consideration set and work on long term shifts in preference.
Achieving this is about a lot more than creating a splashy moment. A global Facebook meta-analysis of 158 brand and lift studies from consumer tech product launch campaigns across 2017–2018 revealed several factors successful campaigns had in common.
Specifically, they employed a customer-centric, mobile-optimised, always-on strategy that focuses on three key stages.
Pre-launch: This is the time to build awareness, excitement and early demand. It’s the period of discovery for shoppers. Mobile is the predominant shop window of today and people increasingly use phones to shop, so your product needs to be highly visible. Reach people with video and in-stream on Facebook’s family of apps so you’re in their consideration set even before they know they want to buy. For those that do, you can help them start their journey, generating early sign-ups and pre-orders.
The launch phase: Here is where you generate preference and convert it to sales. Strategies to maximise product launches should create, then broadcast anticipated moments. Some of the most effective involve people experiencing products in real-time. Others involve virtual trial, perhaps through augmented reality on mobile, and highlighting specific features that will interest particular groups of customers.
Sustain: An ongoing program that sustains the momentum of the first two phases. In a world of near infinite content and choice, it is more important than ever to stay top of mind, provide powerful onboarding experiences, and help customers discover recurring value. It involves moving your mindset from singular product drops, to an ongoing relationship. Serving your base and helping find new use cases for your product is the best way to ensure it burns more brightly, and for longer.
Summary
The speed that we’ve reached market saturation with mobile and smartphone devices has been remarkable, and the future is far from certain. Will 5G devices begin to kickstart smartphone sales growth in 2020? Maybe.
But for anyone shipping tech products today, there is no guarantee that the adoption curves of the last decade will return. Technology markets are now just too saturated to make it a certainty, and the rollout of new connectivity may not be as fast or significant as hoped.
So instead of hoping the next wave of tech will come to the rescue, I instead encourage you to take stock, and think beyond the launch when planning your go to market strategy.
Sources
(1) ‘The end of mobile’ by Benedict Evans, May 2019
(2) ‘Installed base of personal computers (PCs) worldwide from 2013-2019’ by Statista, accessed August 2019
(3) ‘Mobile games now account for 33% of installs, 10% of time and 74% of consumer spend’ by TechCrunch, June 2019
(4) ‘Nintendo Switch hits 34.74 million consoles sold, growth slowing’ by Venture Beat, April 2019
(5) ‘Mobile Consumer Survey 2018’ by Deloitte, June 2018
(6) ‘Apple Earnings Highlight Strength Beyond iPhone’ by The Motley Fool, January 2019
(7) Tien Tzuo (2018) Subscribed: Why the Subscription Model Will Be Your Company’s Future – and What to Do About It
(8) ‘Australia smartphone sales slump amid global decline’ by ARN, May 2019
*Comparing iPhone 7 flagship (2016) at US$679 with iPhone XS flagship at US$1099 (2018) on an inflation-adjusted basis. Prices sourced from http://digg.com/2018/iphone-prices