Google’s Priority Inbox approach of limiting Gmail user’s daily exposure to email overload from retailer newsletters and flash deals also makes it’s advertising business more profitable. Gmail has added a Promotions tab to separate promotional emails from other daily inbox tasks. In doing so, retailers will become more reliant on Google’s other products of Search Advertising and Display Ad Network retargeting to reach their consumer base.
Email is one of the simplest forms of ID for syncing purchases to internal CRM data. As your login for online eCommerce sites and mobile apps, email addresses also offer a persistent way of remarketing to consumers that is significantly cheaper than most forms of advertising. Reaching the inbox was once a slam dunk for most major brands as long you were certified as not SPAM by your mass sending provider, but now Gmail’s Priority Inbox tabs are changing the game.
For retailers to re-engage with users who have previously made purchases, many will start investing more advertising dollars into retargeting, particularly into product search retargeting across all channels. When a mobile consumer searches for a product, often that search is happening within a Retailer’s own in-app. Almost immediately, embedded advertising technologies also understand that consumer’s mobile device advertising identifier (IFA) can be used to continue the reach the consumer in other apps, whether they’re browsing Huffington Post or playing Angry Birds. Retailers are now using mobile device identifiers to recognize and message customers, which is almost always dependent on Google’s revenue generating advertising side of their business, rather than the open channel relationship of email.
Gmail’s changes operate in the same way it cost retailers millions of dollars to reach the Facebook news feed. On Facebook, even if a customer Likes a brand page on Facebook, it’s not a guarantee that a post will make an user’s news feed. Major retailers on average pay Facebook $250,000 – $500,000 per quarter for the privilege of a higher likelihood that 75-85% of their sponsored stories will reach fans. On top of fees, retailers pay per post for access to their own fans that they’ve already paid to accumulate on Facebook. Advertisers always learn the hard way that the platforms that command current audiences, also dictate ever increasing complex new terms.
Those retailers who incorporate real-time messaging intro retargeting though, will begin to see the benefits of reaching consumers at the moment of truth when purchasing on mobile devices. Nearly all consumers who make purchases online also have their mobile phone with them as they make purchases in-store. Knowing when a consumer is nearby your retailer location coupled with their purchasing and search history creates a powerful advertising targeting data set that can be used to drive spending habits. In the case of Google, they’re confident that consumers will continue to use Gmail, have apps installed that incorporate AdMob, see Google Display Network Ads on publisher websites, trust AdWords, buy Android phones, search for products on Google, and stay within the reach of Google’s advertising collection power. Retailers will continue to purchase advertising from Google by any means, but it’s going to be a more expensive means than traditional email.