Fix /Friday November 13

newTV

When he announced the Time Warner deal in 2018 AT&T Chief Executive Randall Stephenson was bullish — he expected to be profitable the next year. Well that didn’t happen and two years on his successor wants to break up the firm. His focus is three key growth areas: wireless — particularly 5G — fibre-optic network connections to accommodate surging data traffic; and HBO Max. So businesses are for sale, like DirectTV — bought for $67 billion 5 years ago and now likely to be valued at $15bn in an imminent deal. Warner Media — which includes HBO — is shedding people too.

But who is buying? As we keep saying all the math for the plethora of streaming services was done pre Covid. So the only thing that has retained its value is IP. And there are few decent libraries of content around.

The people at Quibi first realised how much trouble they were in when they spotted CEO Meg Whitman had put her $6m condo on the market. Bloomberg dish the dirt on the Quibi closure and lay the blame firmly at the door of Whitman and particularly Katzenberg — talking of self sabotage. He clearly mezmorised the investors — one who invested $35m said The company painted a relatively positive picture to us that things are going well.

A more successful story in newTV is Roku — new results show revenue up 73% year on year and profits up by 81% Just about every significant advertiser in 2019 came back and spent with them in 2020. Shares are up by 500% this year, yet the market cap is under $30bn. This interview with their head of Ad Marketing is great insight into their business.

Their combination of hardware in US homes (reaching 54m people) plus a very healthy ad business, makes them an attractive buy to anyone who is serious about newTV. If I worked in M&A, I would be on my way to Menlo Park.

The big challenge in newTV is discovery — what should we watch now. In a new experiment Netflix have launched a linear channel in France — so the content is spread across a schedule. Anyone who has ended up watching a movie on any of the channels on Sky knows that this is quite powerful.

Tiktok

Seems like banning Tiktok is no longer top of the Trump agenda. They have taken up a legal case to challenge the ban, saying;

“In the nearly two months since the president gave his preliminary approval to our proposal to satisfy those concerns, we have offered detailed solutions to finalise that agreement — but have received no substantive feedback on our extensive data privacy and security framework,”

Audio

Big week in Audio. Spotify doubled down on podcast advertising with the acquisition of Megaphone and Acast partnered with Patreon to help creators get paid.

The Megaphone deal is great for Slate, who were early movers in podcasting and who built Megaphone to better monetise their content. For Spotify it gives them increased distribution for their Streaming Ad Insertion tool and adds the publishers who use Megaphone redistribution to the Spotify library of content. With their strong sales force across music and podcasting, this should bring more money into the medium.

In this interview with the Megaphone CEO he talks of their business as like an ad network for podcasting. Worth watching.

The Acast deal with Patreon is focused on the subscriber or patron only content on the Patreon site, where a creator makes a podcast available just to those who pay the monthly membership. The Acast deal broadens the distribution for these private podcasts to all the major podcasting platforms / players. Other than Spotify.

There is so much happening with voice and audio. We mentioned Discord last week and I have talked with many of the key players in synthetic voices — listen to the Sonantic demo — and feel we are on the verge of something really interesting. So the news Snap have acquired an Israeli firm that creates AI Agents — voice bots that sound human and can deal with human callers is intriguing. Check the demo here.

I don’t think Snap plan to go into the call centre business. But imagine their excellent product team looking at things like Discord blowing up and wondering what you get if you add this Voice capability to messaging, the camera and Stories?

China

Guess what, Singles day set a new record — $74billion. Nearly 500 brands each did GMV of more than 100m Yuan — about £11m. The same step change we saw with Covid and ecommerce here is apparent in China too — even with their crisis abating;

“These shifts are having a major impact on shopping behaviour. We’re seeing the digital ‘shelf’ becoming the primary shelf, if not the only shelf, in some Asia-Pacific markets.”

The coverage is worth reading as it also talks about the entertainment shows that accompany Singles Day. How long before Amazon add a prime time TV show to Prime Day?

The latest results from some of the big Chinese platforms emphasise the colossal size of the Chinese market. Tencent saw Q3 revenue rise 29% YoY — at $18.4b. Profit of $5.6 was up 89%. Gaming was the fastest growing segment, up 45% YoY to $6.2 billion.

Young pretender PingDuoDuo — started in 2015 — also showed remarkable growth. Their active buyers grew by 36% to 730 million and average spend was $300 — up 27% YoY. But their business model is quite different to Tencent and Alibaba in that they generally take a zero commission on sales — and almost 90% of their revenue is from advertising.

The other big news in China is that the Government pulled the plug on the Ant IPO — projected to be the biggest of all time. This article speculates that the Chinese are looking to regulate their big tech, just as the West begins to do so.

My talk on China trends with our friends at Ezoic may be of interest.

Adtech

The results for The Trade Desk continue to be impressive — Q3 was the biggest yet in terms of revenue at $216m — up by 32% yoy. The stock price leapt 27%.They are very bullish and talked up their Unified ID initiative — which now has Liveramp, Criteo and Nielsen participating. Their deck for investors is worth reading.

The issue of personal data remains the heart of the Adtech perfect storm. Tim Berners Lee has a new start up called Inrupt designed to improve how data is stored and used by enterprise — whilst remaining under the control of users. It will be interesting to see if any of his thinking influences Adtech.

Most European governments seem to be pushing for more control over the use of data and with things like GDPR embracing better privacy. But a French consortium of ad organisations has complained to the French competition authority (the ALDC) about the plans by Apple to deprecate the IDFA. I don’t think the cause is much helped by the Dark Arts cohort of adtech constantly seeking to thwart attempts to reduce tracking. The trick of ‘cloaking’ CNAMES has been stopped with the latest version of iOS. The energy that goes into this cat and mouse game is better spent on adtech that improves the user experience — lets start with more relevant ads and less excess frequency.

Merchant

On Wednesday our deep dive on Merchant shared lots of great resources — an excellent blog post and a podcast by Benedict Evans, good reports from the IAB and Activate. And lots on what Facebook call Discovery Commerce. All well worth reading. We aso covered China, Fashion, Creative Tech, Amazon, Stores and more. Catch up here.

Lyft are looking at a delivery business.

7 Ways to Make E-Commerce More Profitable — from Business of Fashion.

Creative Tech

Last week I was extolling the power of creative as a tool to improve media performance;

Imagine you have a £1m social spend. The media team have done a good job and the campaign is well planned across the right set of platforms and formats. But poor creative that runs everywhere, can mean that money is wasted. Great creative — made to suit the grammar — can make the campaign hugely successful. If it performs 20% better, that’s £200k of value created

One of our smartest readers @Thomasbcn DM’d me to say;

“In my experience, a +20% creative performance can unlock x10 volume at a fraction of the price.

TLDR: in perf, finding creative winner is a 10x game changer”

And another smart reader has a great twitter thread on the topic — with this great quote;

..many companies think their marketing creative teams are over-resourced, but it’s almost impossible for that to be the case

Some Agencies are starting to take Creative Tech seriously — Dentsu and VidMob working together

And just this week I saw a Vendor with amazing display ads — big, bold, beautiful digital ads for top brands, earning CPMs of $60+ and driving high clickthroughs. And they work on mobile too. More on this to come, but if you are a premium publisher looking to better monetise your PMPs and 1st party data we should talk.

Plus+

Great resource from our friends at Guild — Community Based Marketing Strategy — Free Guide — proud to have our AdTech Guild group featured as a case study.

Focuses On Ad Content Effectiveness 11/10/2020

Instagram and TikTok are the new battlegrounds for digital banks

Explore a day in the life of our synthetic media future- Samsung and the metaverse

Thoughts on Sea Limited — another fascinating Asian business

Introducing Snap Connect: Specialized Courses Taught by Snapchat Experts | Snapchat for Business

The New Marketing Infrastructure Layer

Homebrew VC Hunter Walk Talks Twitter, TikTok, and Tech in the Time of Biden

U.S. vs. China in 5G: The Battle Isn’t Even Close

(Sign up for the email edition — and the mid week deep dives — here & are we connected on LinkedIn and on Twitter?)