Fix / Friday — Feb 5
Adtech
So much noise in this sector — and so much up in the air as we wait for Apple to implement their much anticipated changes around Privacy.
Probably the best place to start is this Stratechery interview with Fix friend Eric Seufert — the Don of App Marketing and Mobile Advertising. It’s a great explanation of the current situation and has interesting thinking on how Apple and Facebook are affected in the short and longer term.
(It’s also a good explanation of how smart people are using Facebook right now — ignoring the targeting options and letting Facebook use creative as fuel to find the right people.
So the more ad creative you give it, the more surface area it has to explore these very granularly defined groups and find the best ad creative for that group based on their proclivities to engage in apps like yours.)
To go deeper read Eric on how Apple is giving its own ad network privileges that others cannot get.
The other element of the Perfect Storm is Google looking at how to replace 3rd party cookies. They have come out heavily in favour of Cohorts and this Wired piece is a good summary of the proposals and the pros and cons.
As it shows, industry opinion is divided. Fix friend Dave Morgan is in favour believing they Will Get Ad Targeting Biz Back On Track but some on the Programmatic side are more reticent, with an ID advocate arguing Why cohorts is a privacy detour the media industry should avoid.
There is more In the WSJ and it seems clear that Apple, Facebook and Google all look likely to benefit in the long term — just as they did with GDPR. I haven’t seen much comment on how all this is going to affect Amazon? With that $8bn in Q4 ad revenue they are a major player.
While GAFA make the weather, everyone else has to work out how to stay dry. Walmart are investing more in their ad business — with a new name (Walmart Connect) and an ambition to become a Top 10 ad player. They have partnered with Trade Desk and acquired a DCO firm Thunder that will let them make ads quickly and cheaply for SME advertisers.
German publisher Axel Springer came out heavily in favour of Privacy with an open letter from their CEO demanding a European Constitution, to stop the platforms using data. ( But Netflix — where he is on the Board — is OK) You can learn more about his thinking in this excellent conversation with Mark Thompson (formerly of the New York Times) at a Founder Forum event last year.
Another consequence of the Perfect Storm is consolidation, as people rethink their strategy. App marketing platform Applovin has been on an M&A spree since raising $400m last year and have now bought Adjust a mobile attribution firm for $1bn. With huge changes in attribution imminent this is an interesting move — but does enable Applovin to offer a full service to its clients.
BTW — Apple has been accused of being lax on privacy in that it doesn’t vet the App Privacy Nutrition labels it now insists on. Some are misleading and some are untrue.
Dollar Dollar
It’s earnings time again, and more stellar performances over Q4. First from Google, with large parts of their good fortune down to the ad spending recovery. These two quotes underline how Google (and Digital as a whole) is now core to smart businesses;
This Bank analysis on the Google results is quite interesting.
Amazon we mentioned the other day, where the results were very good but were overshadowed by the news that Bezos is taking the role of exec chairman.
But one thing that is worth digging out is this.
And Terry Kawaja makes a really good point in this interview that businesses are being ‘trained’ by the examples set by app marketing (and DTC) to think about advertising as something you can actually measure now, This idea of outcome based advertising has to be a good thing for ad tech.
Alibaba also shared their results. Another case of up and to the right in China too. Revenues were up 37%. year on year and the number of people they have is quite staggering. Mobile monthly average users on the retail marketplace are 902m. 21% up on last quarter. The report is worth reading to see the range of their business activities and see the product innovation.
newTV
In the latest AT&T results some big claims were made for HBOMax subscribers — saying they had reached 40m, two years ahead of schedule. Clearly the release of Wonder Woman was a big factor here. Dig into the numbers and those who activated their subscription is somewhat lower — closer to 17m. Still it’s a good start and the HBO content should keep them in contention. And they have a smart plan to launch a cheaper subscription with ads later this year.
The Comcast results were OK — their exposure to theme parks and movies hit them and their cable TV customers continue to quit — down 1.4m in 2020. Their streaming service Peacock seems to have done OK , but again the numbers were a little opaque.
The really interesting news was that they claimed some of the Peacock success was down to their Flex device — a set top box for streaming. They are considering making it available to non subscribers — so taking on Roku, Apple and Amazon.
Now who knows more about this than just about anyone? Sky — who they acquired in 2018.
Fold in their plan to double the Broadband speed (to 50mbs) for all their basic customers and we can see that the Sky strategy might travel well. Something to watch.
It makes sense that the ad supported IMDB service from Amazon should be available on Roku, but it must have been an interesting negotiation. Both Amazon and Roku usually insist on the right to sell 30%+ of the ad inventory. Will Roku be selling ads on Amazon content? Roku own content service launched on the Amazon Fire earlier this year, so maybe they balance out?
This research into UK streaming subscribers is interesting but not too surprising — it shows the dominance of smartTVs and how half the users use their smartphone whilst watching TV. And there is a high tolerance for ad supported content. The Telegraph tells us that Freeview is facilitating a conversation between all the key UK broadcasters about a combined service that will aggregate live broadcasts and catch-up programming in one place. This issue of distribution and prominence is really important and James Harding ( ex BBC and now the founder of Tortoise) looks into this too — suggesting that at some point News has to feature in Streaming and regulation may make this happen.
I think a rethink of Britbox, with a wider remit and an ad focused business model, could solve a lot of these issues.
With a handful of key players (NAD feels like the next Industry acronym) and a similar number of gatekeepers ( Roku, Amazon, Apple Cromecast, Samsung etc) there isn’t a page 1 of the EPG to showcase the Public Service Broadcasters.
In an odd sort of way the demise of WWE supports this. Having started with DTC ambition they are now exclusively on Peacock — and it’s hard to see how niche services can survive.
Audio
Clubhouse has got lots of attention this week. From the outside it seems like CB radio for VCs — but I am sure there is value in there somewhere. One thing it does demonstrate is the interest — and potential — in audio.
Read this report by a smart analyst on the future of social audio — good thinking and a list of the most interesting social audio start ups. And podcasts are evolving — or at least the business models are. Spotify plan to enable charging for individual podcasts — is this the first step towards a Substack (or Revue) for podcasts?
The always in earpods have changed things. And I am convinced we will start to consume more content as audio rather than text.
Apple Cars
It’s long been rumoured, but it does now seem Apple plan to build a car and are about to do a deal with Hyundai. There are lots of stories speculating on the car spec — but it doesn’t yet make sense. One article talks of a top speed of 160mph — and another that the car will be autonomous. Who wants a self driving car that can choose to accelerate to that speed.
But who wants a self driving car anyway? The idea seems to have been driven by the idea of eliminating drivers to rescue a flawed business model. But whilst Uber can’t make money with drivers, they seem to see delivery as a better bet than driverless cars.
Electric cars have a big future but i think people enjoy driving them too much to give up on them and take a back seat.
The Google partnership with Ford seems a much more practical approach.
Platform Shift
As you know I am fascinated by TikTok. Our Good TikTok Creative newsletter is getting good traction and this week (Issue 25) we covered Little Moons — a CPG startup that is using TikTok in a very smart way — and getting great sales results.
Another CPG brand taking a novel approach is Chobani — including launching a new, limited edition yogurt product, Chobani Flip Cookie Dough that is only available through TikTok
VC Li JIn studied 50+ startups on TikTok and here’s what she found
In our TikTok webinar we did a while back I floated the idea of a Platform Shift — that the young now focus their attention on FYSTT ( Fortnite / YouTube /Snap / Twitch & TikTok) rather than GAFA. And these platforms enable fresh new behaviours. Part of that is the conflation of crypto and content.
Juventus used Fan Tokens to let their fans choose a new goal celebration song — avoiding the usual bot voting shenanigans. Although they did end up with a Blur song.
And dotcom billionaire turned Dallas Mavericks owner is excited by Digital merchandise enabled by Non Fungible Tokens (NFTs) — a LeBron James Video Highlight sold for $71k so NBA Top Tokens are a thing. His thinking on Crypto is interesting.
Imagine you could buy a favourite TikTok? There is something happening here.
Plus+
This week our Deep Dive was Merchant — High Street Blues / High Fashion / Credit and Last Mile — catch up here
You can now watch Benedict Evans present his excellent trends deck. Well worth your time
The Contagious Pioneers report celebrates great work from 10 agencies
Fortune ask if our friends at Pencil will bring back the 3 martini lunch with their Machine Generated Creative?
Still on Creative Tech, Copy.ai automates copywriting
Google ‘Key Moments’ YouTube Video Timestamp Desktop Test
Google Maps on Android just got a killer upgrade you’ll wish the iPhone had
IBM Report on Platforms and Ecosystems: The Future of Media and Entertainment
FT — Big advertisers sit out Super Bowl during pandemic
Finally….Last week I recommended the excellent @packym essay on The Value Chain of the Open Metaverse and this week you must read Matthew Ball on the Apple Metaverse
