Fix / Friday - June 5
Ads & Agencies
A good FT article called The virus has brought the digital future closer includes this quote from the Microsoft CEO;
“We’ve seen two years’ worth of digital transformation in two months.”
It’s affecting every sector and looks like it may finally change the ad business. If you took Don Draper round the big creative agencies now (well pre lockdown) he would recognise much of what goes on. That’s not true for just about any other industry — the 55 years since 1965 have revolutionised most businesses
So maybe 2020 will see things really change. The NYTimes point out that The TV Commercial, Once Advertising’s Main Event, Suffers in the Pandemic. When you can shoot a TikTok on your smartphone, do you need or want to pay for a full crew and studio? As platforms reward multiple creatives, brands can now spend money on personalisation and real time optimization and get a better return. Real talent can work without huge budgets.
The disruption to the Upfronts changes things too. The idea of an upfront commitment was to get better value than the brands buying Scatter nearer the time. Now Scatter is cheap that old model looks outdated. And the way it rewarded volume perpetuated the advantage of the Big 6 holding company buyers. That advantage is slipping away as anyone with a laptop can buy -so now quality of thinking trumps quantity of spend. More on how the upfronts are being handled here.
As Fix readers know, there is lots going on with tech and new business models and these innovations are finding some traction in the more forward thinking parts of the Agency business. This is a good take on how AI impacts Madmen — but I can’t help thinking the revolution will come from outsiders rather than incumbents. The skills of Facebook marketing partners and App marketers (for example) will better translate into improving brand marketing than the other way around.
Social
No end to innovation from Social platforms. Snap have been successful letting 3rd party app build in their Snap Kit — so Tinder, Pandora, Giphy and others are authorised. Now it seems they may enable apps to run within Snap — emphasising the Platform aspect and echoing WeChat. Maybe we will learn more at the Snap Partner event next week?
Instagram is testing monetizing for creators — with ads in IGTV where the creator gets 55% of the revenue — and with Badges the creators call sell to their fans — for either $0.99, $1.99 or $4.99. These badges show in the fans profile and give their comments priority. At this stage Instagram will not take a cut.
The New Products and Experience team at Facebook are busy too. Venue is an events Companion App. Collab lets people make music together — very timely for lockdown. And CatchUp lets you join one on one or group chats. Wonder if the team have heard about Clubhouse?
Lots happening with ads too. A note on how Tiktok charge for various ad formats and placements. Snap are rolling their dynamic product ads out globally as are Google with their Discovery Ads.
Merchant
This week’s Deep Dive was on Merchants and we covered CPG vs DTC, Amazon and Ads. The most clicked link was my favourite ice cream shop now doing delivery across London. Treat yourself.
This Grocer piece builds on my call for CPG brands to experiment with DTC and looks at how Heinz and others moved really fast to get to market. What was a gimmick is now getting some traction — The Co-oP are expanding their Robot delivery — with 8 robots serving Milton Keynes
newTV
I’m convinced that better targeted ads — so they are more relevant to the user — solve lots of the problems in digital. It’s what the smart brands want (from P&G to DTC). It’s what viewers want (witness the collapse on channel hopping when watching Sky Adsmart). And it’s what the publisher / media owner wants, as they can extract more value.
So Blockgraph is a big deal. This Comcast tech firm that enables data driven targeting on TV is now owned equally by Comcast, Charter and Viacom so it can go mainstream really quickly. And remember Comcast now own Sky so are learning from their success with AdSmart.
Whilst digital news has suffered through the dumb use of Blocklists, TV News is highly valued by US advertisers and we are seeing more unorthodox brand integrations. Cheddar pioneered this space bringing native advertising to TV — from its Buzzfeed roots.
The state of streaming in the UK is covered in a new BARB report; over half of UK homes now subscribe to either Netflix, Amazon or Now. Almost a third subscribe to both Amazon and Netflix — up from 9% at the end of 2015. There is some interesting stuff in this report — they measure unidentified viewing — anything other than the classic TV channels Barb measures — on TV sets at 21% of total viewing. And this quote sums up the change;
Conviva go deeper with data on streaming across Europe. All pointing to the top right hard corner.
Facebook are part of our newTV ecology and are developing new ways of buying video on their platform that fit better with current practices;
Apple are leaning into newTV and have just hired this guy from Amazon to lead a sports division on AppleTV. This is good background on him and why Amazon hired him. It’s just odd his LinkedIn profile has him as an Audible exec?
Games
More M&A as Tencent buys a majority stake in Czech studio Bohemia for $260m. And Zynga spend $1.8b to acquire Peak Games of Turkey.
These figures need the context of revenue to make sense. This analysis gets into detail but one example is that Peaks Toon Blast — the leader in Match 3 games — made $67m in just 90 days. And that’s just in app purchases so Zynga can add in app ads. With huge numbers of logged in users these games are rich in 1st party data and have the scale to be interesting to advertisers and agencies
Plus
Warner Brothers was the biggest IPO of the year so far and is now valued at 4 times the $3.3bn Len Blavatnik paid for it in 2011. So the rise of Spotify hasn’t been as bad for the music industry as many anticipated
Interesting thinking on The economics of news & how to monetize quality journalism. I know it’s not a fashionable view but improving the ad support for journalism feels slightly easier than inventing new business models.
There are emerging models which can help but can they replace ads? This look at niche TV channel Talking Pictures show there are Ways to reinvent media
How Artists Are Building their Fan Funnel Using Instagram
The latest Luma interview has Terry Kawaja talking with former Publicis exec Rishad Tobaccowala
Google explores Vodafone Idea stake as part of India push
Invest some time in this Customer Experience.. Experience with video and PDF from John Maeda of Publicis Sapient
To Do List
Free Download: Buyology for a Coronavirus World — The nice people at Contagious are giving away a book of insights into how the pandemic is changing consumer behaviour by Martin Lindstrom
Nudgestock, The Rory Sutherland curated festival of smart thinking on behavioural economics is virtual this year — and free.
Brent Hoberman and his team at Founders Forum know how to put on an event — and the #FFLIVE digital series showcasing the world’s most inspirational founders is great (sign up to join each week ). They also have a great weekly newsletter, Founders News, which uses AI to show you the most relevant founder stories. Interesting tech and good results — subscribe for your personalised edition.
Get involved in our AdTech Guild
Finally — it feels trivial to write about business when people are being murdered and brutalised. My son articulates this much better than I could with some of his art and an Instagram post. And he is selling T shirts to raise money for the families of George Floyd, Breonna Taylor and Ahmaud Arbery.
Black Lives Matter
