Fix / Friday — July 10
GAFA goes to Washington
The heads of Google, Apple, Facebook and Amazon have all been invited to Washington on July 27 for a Hearing on “Online Platforms and Market Power, Part 6: Examining the Dominance of Amazon, Facebook, Google and Apple”
The notice says it is critical that their CEOs are forthcoming. As we have said from the start, their testimony is essential for us to complete this investigation.
This should be interesting — and it will be live streamed — although past events have not had very good questioning.
A new infographic from Visual Capitalist reminds us how central GAFA are to our world of Content Community and Commerce. Facebook and Google make the vast majority of their revenue from advertising and, as we covered in Fix newTV on Wednesday, analysts think a third of Amazon valuation is down to their Media business — that’s $500billion.
Merchant
Another Visual Capitalist image reminds just how dominant Amazon is.
Research shows there were 45m US online grocery shoppers in May — 3 times the number from last August — and this growth has to be good for all the players. Walmart are working hard to reduce this dominance — and their own version of Prime is planned to launch shortly. For $98 a year customers get same day delivery of groceries and some other items, discounts at their gas stations and early access to offers. But…
The other challenge is how Amazon now use Prime as the access point for their media products and services. We shared this quote from a Needham analyst in our coverage of Amazon in newTV on Wednesday, but it’s relevant here too;
Walmart do have plans for entertainment but they are vague right now. Could Walmart use their customer base to fuel partnerships with those that rival Amazon in media? I’d be talking with Disney, Roku and Comcast about how to collaborate against Amazon.
The other Amazon story is that PrimeDay seems to have been delayed to October. That suggests a brutal quarter for ecommerce; Prime Day and Black Friday within a few weeks of each other.
In a conversation about ecommerce apps this week I wondered how Snap Minis were doing? This note on Chinese ecommerce looks at how brands can use mini programmes and QR codes to make everything shoppable. This cross over with newTV is also hinted at in the IAB thinking on shoppable video.
Last mile
The deal between Uber and Postmates has gone through for $2.6 billion — all in stock. This quote from the Uber CEO backs up our view that the last mile is the real prize;
One of the jewels within Postmates is their API which means just about anyone can use them to deliver just about anything. It’s worth looking at Indian firm Dunzo to see the full potential for this business model. Google have invested.
And in more proof about their strategy Uber grocery delivery launches in Latin America and Canada, US to follow later this month
Adtech Perfect Storm
I have been a little surprised by the lack of comment on the new CMA report we led with last week. Where this graphic comes from. It is a very long, thorough document and by not triggering an investigation — yet — it probably doesn’t need a reaction. But, like the invitation to Washington, this is more evidence that governments are taking this space seriously. And in a world where governments need new revenue sources I think GAFA is seen as a Golden Goose.
The author of the missing 15% ISBA report shares his reflections one month on . This did provoke more debate but it remains to be seen what action is taken. The IAB response by Jon Mew is sensible thinking and rightly defends the role of adtech. Done properly it’s highly effective and good for all parts of the advertiser Trinity.
Refreshingly there is now lots of action around the demise of cookies, as well as lots of talking.
The Google Sandbox Experiments are examined and they hint at a Cookie-Free Future. The Telegraph have an interesting way to use their data with their advertisers using Clean Rooms. Permutive — who have pioneered some of the best ways to replace 3rd party data — have raised $18m to drive growth. The new Criteo CEO Megan Clarken talks about how they are trying to reshape their business for a Post-Cookie world.
My friends at the Media Kitchen have a good report reprising the key issues with Cookies and making recommendations on how to manage this situation. And Google in Asia shared some smart thinking on how brands can make the most of first party data
Next we need to apply fresh thinking to the Apple world and work out how to deal with the loss of the IDFA. This is a good start.
Carry on this discussion in our Guild group on Adtech — lots of smart people talking under Chatham House rules.
newTV
This weeks’ Midweek Fix was on newTV and we went deep on Hamilton, Amazon and Churn. Catch up here.
We also looked at the Chinese experience of releasing films on streaming, rather than in cinema. This long piece looks at the economics of both approaches — and avoids a conclusion other than it’s difficult. Many years ago I ran the advertising for Universal and Paramount and learned that releasing a film at a cinema, even for just a week, was worthwhile, as that would earn it newspaper reviews. And having reviews on the VHS or DVD box is crucial in sales and rental. With Amazon and Netflix looking to own cinemas it seems this logic still holds true.
On YouTube we are going to see more mid view ads. The length of a video has to be over 10 minutes to have mid view ads — that is reducing to 8 minutes. Creators can choose to not have mid rolls, but from late July all 8 minute videos will have them, until creators again opt out.
The upfronts seem to be running of steam. Few have reached any agreements and it’s likely that more and more money will be committed ‘late’ — which would seem to auger well for newTV.
Social ads
More developments on the craft of social ads. Facebook now lets you create custom audiences based on shopping activity. A major benefit is that you can capture customers who were going to checkout on Instagram etc but didn’t finish. Saving the 5% commission makes this quite lucrative if you can get it to work.
AR
Talking about L’Oreal the other week we mentioned that their AR tool was embedded in a number of retailers sites. In South Korea a cosmetic firm has taken the concept into stores as a way of dealing with Covid reticence to touch product. Not sure how a touch screen helps.
The future of AR is on people’s own devices and the energy in Glasses is building;
Facebook Research on Glasses Holographic optics for thin and lightweight virtual reality
A good summary of news about Apple and Glasses
And a good round up of all the key players activity
Agencies
A Fix reader kindly shared with me the new Credit Suisse paper on Ad Agencies: Beyond the Pandemic. It’s not great reading for the Holding Companies as these two charts show. I still think the original model of an Agency is still really valid — smart people who act as marketing architects. Ideally being paid fairly for the value they create.
But most have turned into builders, charging for whatever their particular factory churns out. Lots of relevant data and thinking in the doc and I have shared it in our Guild group.
Other than Martin Sorrels S4Capital, few get a reasonable mention but You and Mr Jones does. This is a good podcast interview with their founder David Jones
Plus
A good research report on China Internet
Play like a girl: Key ways to engage one of Asia’s fastest growing gaming audiences
Microsoft Building One Platform To Run Ads On Bing, Google, Facebook, Instagram, LinkedIn 07/06/2020
VideoWeek Podcast #9, Richard Kramer
YouTube Presents The Vanilla Ice Cream Problem
Adversarial training improves product discovery — Amazon Science
How Instagram helps The Economist to reach a new generation
Introducing the Storage Access API — Microsoft Edge Blog
Founders Factory x L’Oreal — interesting moves in beauty
Ten years of the Times digital paywall: How Murdoch’s ‘big gamble’ paid off
UK newspaper publisher Reach to cut 550 jobs
Mmhmm turns your boring Zoom call into a Weekend Update-style TV show
Finally…. we are very focused on TikTok and i am partnering with Fix friend Anthony Maguire to run a free webinar; TikTok — The Time is Now
We are delighted to have two great guests — a senior RB exec to talk about their seminal Dettol campaign — now at 125 billion views — and a senior TikTok exec too. Full details and tickets here.
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