In our Deep Dive on newTV this week, we focused on the Super Bowl — and how it proves the value of Creative — and on Sports. If you missed it, catch up here.
A friend at Samba TV shared their interesting analysis of the Super Bowl and its audience.
Are we seeing the first signs of some issues for newTV? All the plans were done pre Covid so it’s no surprise people are rethinking. One story is that NBC are concerned over the poor performance of Peacock since launch and are looking at potential partnerships — with Warner in the frame. And the geography may be one area of consolidation — Dazn are pulling back from US rights to focus on their heartland in Europe and Japan.
A Fix friend has a good piece on the practicalities of buying newTV advertising
Just as we are seeing a rise in M&A in Adtech, there are more deals being done with Merchants. We have mentioned Thrasio before — their model of rolling up Amazon sellers inspires imitators around the world. They have raised another $750m and are now valued at $6bn — and closing 2 or 3 deals a week.
The businesses they buy tend to be relatively small and Thrasio adds value through their ability to;
….bring economies of scale with suppliers, boost customer data and marketing capabilities, and provide the working capital to facilitate international expansion.
Ecommerce pioneer NotOnTheHighStreet is on a different scale and have been acquired by PE firm GreatHill — described as Digital Growth experts. It is the expertise that matters here — post Covid the numbers for any Merchant business will be good enough to attract finance, but the smart move is getting smart money — investors who can help you scale the business in ways other than just cash.
Australia is an interesting market for advertisers. In many ways it’s a smaller version of the US or UK and far enough away to enable discrete experimentation. The squabble over Google links to news publishers has captured some attention recently. Especially as the EU look to be copying their approach and plan to enable publishers to charge Google and Facebook for links to news.
But this synchronisation goes deeper. Australian regulators have a new report arguing of a lack of competition in adtech and its negative effects. It’s pretty thorough at 200+ pages — and seems well written. And there are numerous mentions of the various UK and US Regulators reports on this topic. It’s pretty clear that the adtech usual subjects will face similar regulatory issues in most markets.
Because no one ever bothered to point out that ads are the reason people can enjoy media for free, people don’t make that connection. So we risk heavy handed intervention that breaks that model. This recent post “Allow this app to personalize advertising for you?” has some of the answers.
As Publishers see new life in the old open web, we need to make the ad model work better. But the FT look at how New York Times take a different approach — with subscriptions booming as election and pandemic fuel readership.
One stat in there is sobering — in a market that saw GAFA, Snap, Pinterest etc grow ad revenue by well over 50%, the ad revenue at the NYT fell by 18%. Now clearly a lot of that is the ongoing decline in print as but their release shows Q4 2020 digital advertising revenue decreased 2.3 percent, while print advertising revenue decreased 37.9 percent (PDF)
Why has the ad industry decided to ignore all those wealthy New Yorkers reading great NYT content on their iPhones?
Snap reported great results this week — daily active users are up 22% to 265m and revenue grew by 67%. But their honesty on the call afterwards about Q1 caused their share price to drop. Citing advertisers pausing spend around the time of the insurrection and the unknown consequences of the Apple moves, seems prudent.
Twitter also reported but the numbers were less impressive.(PDF) Daily active users grew by 27% in Q4 but revenue only grew by 28% year on year. Against the performance of Snap, Google, Facebook and Amazon this indicates a problem. As Fix friend Richard Kramer points out in this CNBC interview.
Kuaishou, a Chinese short form video app ( inevitably described as a TikTok rival) IPOd in Hong Kong this week, reaching a valuation of $160bn as shares surged on the first day of trading. Such demand must be tempting for those who were planning the TikTok IPO — which may be back on. The new US administration is backing away from the Trump ban on TikTok and other Chinese apps.
In the latest Spotify results the number of users is up 27% and the time spent is up too — something they are keen to attribute to podcasts. Paying subscribers were up 24% to 155m.
Clubhouse continues to grab attention. This explainer may be helpful. And this substack looks at how it could work with Music — pointing out that the sound quality in Clubhouse rooms is generally poor. I think the success of Clubhouse will inspire a lot of audio products and a music focus seems obvious. Could that be something Spotify lean into?
When we started using the term GAFA, Apple was key as the devices and apps were constantly changing. Then things settled down and the main story was their growth. But now they are back in the spotlight with numerous areas of great interest.
The Appstore ecology is looking a little fragile as big brands try to escape it and regulators consider its workings. With their Privacy push they are shaking up the advertising world — and it feels like there is more to play out here. This week I heard of publishers with lots of inventory on Apple News, that isn’t really monetized at the moment. AppleTV is getting some traction — they just won the bidding for a high profile move Dolly, and are building a slate of high profile originals. There is huge anticipation over new products — the glasses are on the way but maybe the car isn’t. Hyundai denied they are in talks with Apple. But they have been, so we should watch this space.
For a big picture view of Apple there are two good pieces to read this week. A long Bloomberg article looks at how Tim Cook has managed the company post Steve Jobs.
A typically long piece from Matthew Ball on the AppleMetaverse also breaks down the growth of Apple, but concludes it has too much power — ending with this;
Yet problems arising from Apple’s controls are becoming larger every day, as is the company’s unprecedented strength. The future of the global economy is digital and virtual. Broad prosperity depends on platforms that compete to create value for developers and users, and that give birth to new platforms that do the same. Apple is not meeting the moment. The defenses it provides for the controls it demands are not convincing.
Goldman Sachs video on Europe’s Digital Economy at a Tipping Point
Good report on Luxury from the Verb Agency, with some input from TikTok — State of Luxe
Lots of M&A. EA games paid $2b for Glu — helping them balance the business with more mobile reach through Glu.
And a good explanation of last weeks big deal — why did Applovin buy Adjust?
Good thinking on Creative — although Google make it hard to get their Creative Solution Guides — I got turned down for some reason. WEBINAR: ‘Mastering Creative Effectiveness’ — A Roundtable with Google, MediaMonks, and MightyHive
More smart thinking from Benedict Evans — Retail, rent and things that don’t scale
Lots going on with maps and location at the moment. This is a good read; Postcodes from the edge: how an upstart app is changing the world’s addresses