Philipp Westermeyer: State of the German Internet | OMR Keynote

Name: Philipp Westermeyer: State of the German Internet | OMR Keynote
Uploaded: 2022-05-20T06:28:21.000Z
Duration: 1 h 34 min 13 s

Introduction

The speaker introduces the presentation and explains its purpose.

The team puts together a yearly presentation on the current state of things.

The presentation covers what's up online, numbers, examples, and trends.

The primary objective is to make the visit worthwhile by providing inspiration and actionable learnings.

The presentation is called "State of the German Internet."

Digital Losers

The speaker discusses how digital companies have lost significant value due to various factors.

Last year, there were no digital losers in terms of market capitalization or stock price.

This year, however, many digital companies have lost significant value.

Factors such as reintroduced interest rates, new investment opportunities, war, and inflation have impacted the digital space and the value of things.

Additionally, covid has affected digitization.

Commonalities Among Digital Companies

The speaker discusses commonalities among different digital companies that have experienced losses.

Different digital companies from around the world with different business models have all lost significant value.

Interest rates being reintroduced and other factors such as war and inflation are some reasons for this loss in value.

Water cooler talk suggests that digitization or covid may also be contributing factors.

Digitization and Revenue during COVID-19

The speaker discusses how the COVID-19 pandemic has accelerated digitization, but this has not necessarily led to an increase in company valuations or revenue.

Impact of COVID-19 on E-commerce Revenues

E-commerce revenues have increased due to the pandemic.

However, they are now approaching a curve that would have been seen without the pandemic.

Company valuations and e-commerce revenues are normalizing.

German Internet Index (GIX)

The GIX was created to show how listed German digital companies are faring.

Listed internet companies from Germany have lost nearly 60% of their value in the past year.

Chinese Internet Companies

BAT (Baidu, Alibaba, Tencent) have also shrunk significantly.

Concerns over regulation caused a significant decline in value before the tech sell-off started.

GAFA Companies

Google, Amazon, Facebook, and Apple (GAFA) continued to grow at a very high level despite war, inflation, and interest.

They increased in value.

The State of Digital Giants

In this section, the speaker discusses the current state of digital giants and how they are performing individually.

Performance of Four Companies

Google and Apple are driving growth forward.

Meta and Amazon are struggling in comparison.

Amazon is facing challenges due to the ecommerce situation.

Facebook is dealing with the emergence of TikTok and new forms of privacy regulations that have impacted both Facebook and Apple.

Investing in Social Networks

Major investors such as Andressen Horowitz have recently decided to begin investing in social networks again.

This is a new trend as no professional investor would have given money to a social network before.

Perhaps we can see new social networks emerge.

New Social Media Apps

There are relatively new companies named BeReal, Poparazzi, and Dispo that are still small but interesting.

BeReal is from Europe, and if one of these apps blows up, it could be significant news for the industry.

Other Digital Trends

In this section, the speaker talks about other digital trends that were popular in the past year.

Popular Trend: Digital Startups

One thing that was especially "in" in the past year was digital startups.

Behind me are names of digital startups.

Naming Rights and Roll-Ups

In this section, the speaker discusses the trend of using first names for digital startups and how crypto companies are allocating massive budgets for marketing. The speaker also talks about roll-ups, which are online market consolidation measures.

First Names for Digital Startups

Using first names is a trend in digital startups.

Examples include Corona app Luca and Horst, an online hardware chain.

Massive Crypto Budgets

Crypto companies have massive budgets for marketing.

They allocate their budgets to places where ad space is expensive but highly visible, such as naming rights to stadiums or football clubs.

Binance paid €35 million for two years of naming rights to Italian football club Lazio.

Crypto.com paid €700 million for 20 years of naming rights to the stadium in LA.

Roll-Ups

Roll-ups are online market consolidation measures that involve purchasing smaller platforms and consolidating them into one larger company.

Examples include SellerX consolidating Amazon sellers, Moonbug consolidating YouTube accounts, and Openstore consolidating Shopify stores.

Raising Capital and the Popularity of Older Music

This section discusses the difficulty in raising capital, the popularity of older music, and how it has led to unexpected paydays for investors.

Difficulty in Raising Capital

It is currently difficult to raise large amounts of capital.

Companies may not have money next year to further consolidate markets.

Popularity of Older Music

Listening to older music, or catalog music, is becoming more popular due to streaming platforms.

Songs that are 10 or 20 years old or more are being listened to much more frequently than before.

The people who wrote that older music have become incredibly rich. Investors and major companies are buying music rights because streaming platforms have to pay for every streamed song. Each play triggers a royalty.

Unexpected Paydays for Investors

Bruce Springsteen sold the rights to his catalog for half a billion dollars.

Bob Dylan received nine figures for his catalog.

David Guetta made 100 million euros.

Linda Ronstadt and David Bowie also got 250 million euros.

Older streams are more popular which makes the situation more interesting for investors.

The QR Code is Back In!

This section discusses how QR codes have become popular again due to the pandemic.

The QR code is back in! It was pretty much dead, but all of a sudden it's back.

Then the pandemic came and everyone was using the QR code. QR codes were on every scooter and everywhere else.

Two people in central Germany got €300 million for their company, named Egoditor, which makes QR codes for other companies.

New Trends in Business

In this section, the speaker discusses some of the new trends in business and finance.

Cathy Wood and Digital Investing

Cathy Wood is a prominent digital investor who heads up the Ark Fund.

Despite losing nearly 80% of her portfolio's value, her fund received more money.

Many feel that this is the floor and that they can give her more money as tech starts taking off again.

Hollywood vs Netflix

Hollywood no longer has an absolute monopoly on good content.

The hottest stuff now comes from Netflix and elsewhere, such as South Korea with Squid Game or Spain with Money Heist.

Good content can come from anywhere, which is a good thing.

IPOs Are Out

There was an 80% drop in IPOs in Q1 of this year compared to last year in the US alone.

The trend is similar elsewhere as well.

Paywalls for Content

Many German news outlets have put their content behind paywalls recently, including FAZ, Stern, Spiegel, SZ everywhere.

Good content costs money to make so it's not easy to say whether it's a good or bad thing that people are now paying for it.

Changes in Performance Marketing

In this section, the speaker discusses how performance marketing has become more difficult due to changes in data privacy regulations and cookie technology. The speaker also introduces the concept of "hacking the feed" as a way for companies to reach users without paying for direct advertising.

Harder to Reach Users

Due to new data privacy regulations and changes in cookie technology, it has become harder for advertisers to see ad recipients.

Hacking the Feed

Companies are thinking of ways of getting into users' feeds on social media platforms like Instagram, Twitter, and Facebook without paying for it directly.

This is becoming more frequent because everything has become blurry and visibility is down.

Axel Hefer from Trivago paid money to be the sponsor of Chelsea's training shirt as a way to get into users' feeds without paying for direct advertising.

"Hacking the feed" is becoming an increasingly popular strategy because it allows companies to appear in users' feeds where attention and relevance are high.

Sponsorship and Advertising in Football

In this section, the speaker discusses how sponsoring match jerseys for football clubs can be an effective advertising strategy.

Sponsoring Match Jerseys

Sponsoring match jerseys for popular football clubs like Chelsea can cost around €50m.

However, sponsoring training jerseys like the one Trivago sponsors only costs €8m.

Despite being a training jersey, it still provides significant exposure due to the large following of the club and its players on social media.

The exposure is valued at between €30m and €40m by experts.

IWC's Advertising Strategy

IWC has used oversized ads in premium locations around the world to create attention and land in people's feeds on social media.

They want people who see their ads to post them on their feeds, which they often do if the ad is well done.

Indirect Advertising

In this section, the speakers discuss how companies can indirectly advertise their products by aiming for a spot in the feed. They use IWC as an example and share figures about their ads in NYC.

IWC's Ad Campaign

Companies can indirectly advertise their products by aiming for a spot in the feed.

IWC reached a total of 8.7m people with their ads in NYC.

They paid €200k for four weeks for Times Square, which is a CPC of roughly €20.

CPCs around €60, €70 or €80 are the norm for luxury marketing.

IWC only pays €20 for a massive campaign, which is a clever way to get into the feed.

Other Examples

Nike, Balenciaga, and Netflix also use indirect advertising to get into the feed.

Offline Marketing Strategies

In this section, the speakers discuss offline marketing strategies that can be used to crack feeds of people in digital space. They mention cloud bursts and letters in the sky as examples.

Cloud Bursts and Letters in the Sky

To crack feeds of people in digital space, companies need to make little cloud bursts or letters in the sky.

Young Poets Society did this type of stunt and generated 2m views from people who saw it.

The stunt provided a CPC of roughly €15 for highly effective brand activation campaign.

The search volume received an 800% bump after the stunt.

The speakers did a similar stunt in Hamburg by flying planes and dropping letters in the sky.

Conclusion

In this section, the speakers conclude their discussion on indirect advertising and offline marketing strategies. They emphasize the importance of real cases to show effective marketing strategies.

Key Takeaways

Indirect advertising can be done by aiming for a spot in the feed.

Companies can use offline marketing strategies like cloud bursts and letters in the sky to crack feeds of people in digital space.

Real cases are important to show effective marketing strategies.

Skytexter Advertising

The speaker talks about the success of using skytexters for advertising campaigns and how it generates immediate attention.

Immediate Attention Bump

Skytexters generate a lot of attention on social media for advertising campaigns.

There is an immediate bump in attention, similar to TV ads during primetime.

Good weather is needed for skytexters to fly and depending on where you want them to fly, the cost may vary.

Regional Impact

The speaker mentions that there was an immediate bump in search volume in Hamburg when skytexters were used for advertising.

Cost

The speaker mentions that the cost of using skytexters is around 30k but suggests that contacting Skytexter directly may result in a lower price depending on where you want the planes to fly.

Documentaries and Docutainment

The speaker discusses the popularity of documentaries and how they can be used as a marketing tool.

Popularity of Documentaries

Documentaries are currently popular with viewers, accounting for 10-15% of all content on Netflix.

People love documentaries even if they are about trivial things, as evidenced by successful documentary accounts on YouTube with millions of subscribers.

Biopic About Gucci

A biopic movie about Gucci generated increased search volume for the brand after its release in theaters.

Penny Documentary Outlier Case

Penny, a discount supermarket chain in Germany, has been making documentaries with Spiegel generating millions of views including 23.5m views on YouTube alone for one of their documentaries.

Documentaries as a Marketing Tool

This section discusses how documentaries can be used as a marketing tool to attract younger audiences and grow digitally.

Documentaries for Penny and F1

Documentaries have helped Penny greatly by injecting new life into the brand.

Documentaries for F1 was a good investment, resulting in over 70m new followers on social media.

The digital world impacted the real world, leading to new F1 races in the USA.

Impact of Netflix Series on F1

Christian Horner, Red Bull Team Principal, discussed the impact of the Netflix series on F1.

The series attracted a "much younger fanbase," helping F1 reach younger audiences.

Case Study - Vanmoof

Vanmoof is an eBike brand that created shorts showing bike hunters in action to go after bike thieves.

The shorts were very popular with 1 million views and low production costs.

How to Docutain?

This section provides inspiration for SME's or anyone else looking to use documentaries as a marketing tool.

Using Docutainment to Promote Brands

In this section, the speaker talks about how brands can use docutainment to promote their products and services. The speaker gives examples of companies that have successfully used docutainment to generate attention and views on YouTube.

Examples of Successful Docutainment Campaigns

Fischer Academy: A driver's ed school in Thuringia used documentaries featuring influencers like Katja Krasavice getting their driver's license with them. The videos were filmed and made into video clips that generated 36 million views on YouTube.

Farmer Hansen from Husum: A small farm store near the northern German town of Husum used a camera to film what he does on the job, such as planting seed, tilling the land, harvesting crops, etc. The videos were put online and led to nearly 40 million views for his farm store documentary.

Gamification as a Marketing Strategy

In this section, the speaker discusses gamification as a marketing strategy. The speaker breaks down gamification and provides examples of how it has become big business.

Top Shopping Apps from Last Year in Terms of Downloads

Amazon is the top shopping app in terms of downloads.

Other popular shopping apps include Walmart, Target, and Wish.

What is Gamification?

Gamification is using game design elements in non-game contexts to engage users and solve problems.

It involves creating an experience that motivates people to take action by tapping into their natural desires for achievement, competition, status, self-expression, and altruism.

Examples of Gamification in Marketing

Nike: The Nike+ app uses gamification to motivate users to run more by tracking their progress, setting goals, and rewarding them with badges and trophies.

Starbucks: The Starbucks Rewards program uses gamification to encourage customers to buy more coffee by offering rewards like free drinks, birthday treats, and early access to new products.

Duolingo: The language learning app uses gamification to make learning a new language fun and engaging by using game-like features such as levels, points, streaks, and leaderboards.

Shopping Apps Bigger Than Amazon: How They Do It

In this section, we learn about the three shopping apps that are bigger than Amazon and how they generate so much in sales.

The Three Shopping Apps

Shopee from Southeast Asia, Shein from China, and Meesho from India are the three shopping apps that are bigger than Amazon.

These apps are not really shopping apps but games with a connected shop.

They generate up to 4.5 billion plays in a day by offering cloned versions of popular games like Farmville, Candy Crush, and Tetris.

How They Generate Sales

Users can win bonus points for discounts on their purchases by playing these games.

Shein sells inexpensive clothes and offers discounts every time users log into the app or spin a wheel once a day for more discounts.

Users can complete tasks to earn more spins per day if they want more discounts.

What They Sell

Shopee is a marketplace for knick-knacks ranging from heated toilet seats to cat toys and USB cables.

Shein sells very inexpensive clothes.

Conclusion

These shopping apps have found an effective way to generate sales by using games as a hook to offer discounts on purchases. While some of their tactics may toe the line ethically, they have proven successful in attracting users and generating revenue.

Making Your App Sticky

In this section, the speaker discusses how to make your app sticky by using gamification and discounts.

Examples of Gamification in Marketing

Scrolling down for 15 seconds on Shein's app will get you another spin, which increases your chances of getting a discount.

Snipes asks customers who bought shoes to post pictures of their kicks on their shop. For that, they get discounts.

Best Secret hid Easter eggs around the shop. Customers can scroll around the store and look for eggs. When they find one, they get a discount.

Moia hands out a bingo card to customers. If they fill it out by taking a Moia with four friends or booking a Moia three times in certain windows or taking one five days in a row, then they've scored a bingo.

Implications of Gamification in Marketing

Shein is the largest actor in the space with 30% market share due to its inexpensive clothes and intensified gamification.

People like playing games, which is why gamification is effective in marketing.

Conclusion

The speaker covers three major topics: Docutainment, Hacking the Feed, and Gamification.

The speaker acknowledges that some people may not see how these topics help them directly but emphasizes their massive implications.

Marketing Quick Wins

In this section, the speaker shares four marketing quick wins that can help businesses save money and boost their performance.

User-Generated Ads

User-generated content has been popular for years, but user-generated ads are now also effective.

Frank Juice, a juice treatment provider from Munich, used micro-influencers to create short posts about their product. They then turned these posts into paid ads with a click-rate of 78%.

Authentic user-generated creatives are more effective than polished and boring ads.

Local Meme Sites

Memes are good for marketing as they drive attention to brands in a funny way.

Local meme sites like Chemnitz Memes have built-in reach and can be contacted to post memes on behalf of businesses.

Influencer Marketing

Influencer marketing is still effective if done right. Businesses should focus on finding influencers who align with their brand values and have an engaged audience.

Micro-influencers with smaller followings can be just as effective as macro-influencers with larger followings.

Personalized Content

Personalized content is more engaging than generic content. Businesses should use data to personalize their messaging and target specific audiences.

Chatbots can be used to provide personalized customer service and improve the overall customer experience.

Local Meme Sites and Active Corporate Accounts

In this section, the speaker discusses the effectiveness of local meme sites and active corporate accounts in marketing campaigns.

Local Meme Sites

Local meme sites have significant reach with followers ranging from 20k-200k.

Companies can collaborate with these sites to launch effective marketing campaigns at a low cost.

Attention on these sites is inexpensive, making them an ideal channel for local campaigns.

Active Corporate Accounts

Some corporate accounts are starting to get creative and use their accounts in bold ways that go against expectations.

These creative uses of corporate accounts can be very effective in promoting new releases or products.

Marketing Hacks That Work

In this section, the speaker discusses two marketing hacks that are effective and free. The first hack involves corporate accounts commenting on high-attention posts to generate attention for themselves. The second hack involves using transactional emails for marketing purposes.

Corporate Accounts Commenting on High-Attention Posts

There is a massive amount of attention on high-attention posts, and millions of people watch and engage with them.

Corporate accounts have figured out that they can comment on these posts for free marketing in the comments section.

When done well, these comments can be very funny and generate a lot of likes.

French fry chain Frittenwerk got 800 likes just for commenting.

Using Transactional Emails for Marketing

Transactional emails, such as those telling customers when their order will arrive, have an open rate of around 80%.

Companies should use these emails for marketing since the attention is free. Amazon already does this.

Wasting Attention in Transactional Emails

In this section, the speaker talks about how companies from all sectors who send relevant emails are wasting attention. The speaker hopes to inspire the audience to take a look at their transactional emails.

Quick Wins for Companies

User-generated ads

Local meme sites

Active corporate accounts

Transactional emails