Fix/Friday — November 20
Peak Ads?
As the graph shows the voracious appetite for ads continues. But are we nearing Peak Ads?
Facebook don’t talk about their ad load problems any more but their algorithm is designed to utilise all their surfaces. Google search does not have much room for any more ads. TV breaks are not getting any shorter — 16 minutes an hour is fairly standard in the US. On the web there are banners and MPUs everywhere — plus the pop ups. Even Amazon has few surfaces not carrying ads. You Tube just changed their T&Cs so they can now run ads in more videos — even those outside of the YouTube Partner Programme.
When we run out of space for ads what happens? Economics means prices need to rise.
With the push towards subscription in newTV do we have less ads? Does the demise of cookies and tracking mean less ads? When people fully recognise the effect of Creative on media performance do we move to richer formats? I don’t think the money has peaked but could we see a flight to quality? Fewer better ads?
Adtech
So it is 6 months since the ISBA report on Programmatic was published. After the headlines that accompanied the report, has anything actually changed? Can you imagine any other industry where a BIg 4 accounting firm could highlight that 15% of the money disappeared in a black hole and nothing would happen?
Augustine Fou is one of adtechs top voices, very focused on the fraud and waste that the ISBA study called out. A new article from him celebrates a marketer that has elected to go direct with their digital media.
Going direct works. It works for GAFA and it works for many of the top Premium Publishers. But they have struggled to get Agencies and Brands to invest — evidenced by the crap ads that appear so often..
The UKs Ozone Project has got further backing from the premium publishers who formed it a couple of years ago. Assembled to win back spend to premium media, it is performing well and now has the funds to expand.
Of course smart people do make the Programmatic world work for them and if you have the right talent — and aligned goals — it can be highly effective. This long post about IDFA deprecation (already having an impact) and the mobile app ecosystem gets into some of the issues all marketers will face next year.
And if you are interested in how Premium Publishers are faring, this leaked internal report from the WSJ is sobering.
Merchant
Whilst Covid has brought lots of big brands into the Merchant space those who leaned in early are reaping the best rewards. The L’Oreal ecommerce business is growing twice as fast as the market and is worth almost $6bn — and is profitable. Their CDO said
Nike gets it too. They even hired a CEO with a digital track record, who recently said
To paraphrase the old saying, the best time to lean into ecommerce was 5 years ago. The second best time is now. Whilst many big firms are dabbling with ecommerce, to succeed as a Merchant you need the top executives to get it — and too often the smart Digital people are quite distant from the Board.
Over the holidays we are going to see who has adapted and how hasn’t. The FT have a good piece looking at how retailers have prepared for Christmas and delivery looks like it could be where the big problems are. Everyone is hoping we don’t see a repeat of 2014 when Sainsbury and Asda had huge problems with Christmas grocery orders.
There is no shortage of advice around the future of shopping. Lots of it is about getting the obvious things right — as these 5 tips from Facebook show. But to really win, the company leadership need to see the scale of the opportunity — and really commit.
Everyone can learn from the people at the sharp end of the business. These insights from US agency Common Thread are really useful. And everyone should be watching out for Livestreaming. It is poised to be huge and we will go deep in next Wednesdays Fix. In the meantime Fix friend Anthony has a good summary of the current state in China and draws on his Facebook experience to consider why the West is still being slow.
Social
A note from Deutsche Bank lauding the work Snap are doing with AR led to a spike in their share price. They are around their all time high and value the firm at $60bn. An odd story in the Telegraph pointed to the UK business borrowing $500m from the US firm to cover their losses of $453m. Feels like financial wizardry rather than anything fundamental.
Still little clarity on the fate of TikTok but everyone seems to be carrying on as normal. The new Learn tab on TikTok suggest they want to emulate the huge range of how to videos on YouTube
New Tabs are a thing this week. Instagram has two. Shop and Reels. Reels feels like work in progress and is an aggressive move by Facebook — it will be interesting to see how quickly this gets populated — as it’s the range of the content that feeds the algorithm.
The Shop feels like a more concrete move and is a recognition of an existing user behaviour, rather than a hoped for one. Web Smith from 2PM has unlocked a good thought piece on this;
Amazon
Another industry falls under the relentless march of Amazon. Not that unexpected following their $753m acquisition of PillPack in 2018, but — finally — Amazon have launched their Pharmacy business. They will deliver your prescription medicines within 2 days for free — and the system connects with the arcane US healthcare insurance system, to make sure customers pay the best price.
I think Amazon crave items that drive regular deliveries as these can act as the funding for more occasional ones — wouldn’t everyone prefer one delivery of all the parcels rather than the constant deliveries one at a time. Their push into logistics is further proof of this — getting someone else to pay for the delivery.
But whilst pharmacy and logistics are classic Amazon, they still want to go upmarket and play in Fashion too — and have hired a former Vogue Creative Director as the Head of Fashion Direction.
The constant experimentation continues — a new version of their Smart Glasses has launched. Still not sure the product makes sense but they are learning what works and what doesn’t. And one day they can add AR to Alexa and it will make sense.
Creative
Building on our focus on Creative Tech I liked this new Facebook report where they have analysed 67 successful Facebook ad campaigns and derived six breakthrough creative behaviors.
And two Fix friends are collaborating with a fascinating conversation looking at the similarities and differences between creative on Instagram and TikTok. Worth reading and do sign up for their webinar
newTV
This week’s deep dive was on newTV and we covered Disney / Sports / Gatekeepers / Netflix / Cinema and the Balkanisation of TV. If you missed it, catch up here.
One big topic in Cinema was the fate of Wonder Woman and whether it would go on HBO at the same time as the cinema release. It has now been confirmed that it will launch on both on Christmas Day — a huge step for DTC as this is a movie predicted to make $1billion at the box office. We also looked at the fact a deal with Amazon for HBO has finally been agreed. No coincidence.
Plus+
Apple will reduce App Store cut to 15 percent for most developers starting January 1st
Firehose #181: 🚴♂️ Dashing to IPO. 🚴♂️ — great analysis of the DoorDash business
Benedict Evans — Are you a Seal?
Marissa Mayer’s Next Act Is Here — Former Yahoo chief has a new start up
E.gg — free your creativity — New Product Experimentation — a new App from Facebook
Google Pay’s massive relaunch makes it an all-encompassing money app
Good Strachery thinking — Playing on Hard Mode
THE FUTURE OF PLAY — GroupM on gaming
6 things marketers need to know about Google’s new analytics platform, GA4
The Apple finger controller — ready for Smart Glasses
PepsiCo Wants to Grow Its In-House Ad Measurement Unit
Finally — I often describe my value as being an architect. This old Seth Godin article makes the point well;
If you need your digital business to be reassembled we should talk.
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