Fix / Friday — October 16

Adtech

Gartner have a new Magic Quadrant for AdTech. And you can get it for free from Amobee — who — guess what? — do well in the report. The other firm that does well is the Trade Desk and this FT profile is a good take on How an advertising minnow outgrew the big beasts.

But the big beast is still there; Google occupy the top slot.

Adweek have some good insight into discussions over the cookie replacement debate and Dovekey. A Fix reader made the good point to me that Dovekey comes from the Google ads team whilst the original Turtledove proposal came from the Chrome team. One good point made in the Adweek piece is how well represented Google is on the W3C — 106 members.

Maybe we Brits don’t need to worry too much, because the Government is poised to get involved in AdTech. The Competition and Markets Authority plans to hire staff with PhDs in applied mathematics or physics, as well as trained psychologists and their task is ‘scrutinising how digital businesses use algorithms and how this could negatively impact competition and consumers… we believe it is not acceptable for firms not to be able to explain the outputs of their algorithms’.

To be fair most of this was flagged in the CMA report in July. But there is quite a lot going on in Whitehall that we should watch out for. The recommendations of the Furman report on Unlocking Digital Competition were accepted and included in the last budget — good thread on this with all the links in our Guild group.

The ICO parked their original investigation but now have academics at Kings College looking at Programmatic. And Dominic Cummings seems to want us to diverge from GDPR with a new data regime. What could go wrong?

Whilst the headlines misrepresented the facts, those Facebook may quit Europe stories raise an interesting point — what happens if any new data requirements just get ignored by GAFA? Regulation by Europe carries some weight. Will our voice alone mean anything?

If you haven’t joined Guild yet, this should work

Ads

Inevitably much of the focus on AdTech is on the tech, but I believe the big opportunity is now with the ads. So a lot of my focus is on the creative tech space — and I am really keen to talk with people who are active here — both at tech startups and at brands and agencies that get it.

Google have been at the forefront of thinking about ads and creativity. Their own team — spending $500m + annually — have shared their thinking on the impact of creativity before — confident that well over 50% of the effect of their adspend is down to the creative.

They even have an internal model of what constitutes a good ad. Of those ads that pass the test 80% had a positive impact on brand metrics. Of those that did not pass, none had a positive impact.

This analysis of a campaign for the United Nations is really interesting for its findings that sequential ads can be highly effective. Which fits with the Google exec we shared the other week saying;

Three ads are more powerful than the same ad three times over.

But just as remarkable is the effort that has gone into planning and executing this campaign — effort that clearly paid off. But just today we heard from a top platform exec about a major brand about to launch their Christmas activity and the Agency were still struggling to find anything that could work as vertical video. This lack of effort is still too common.

Because a lot of people do not understand the new economics of Creative.

Imagine that brand has £1million to spend. Let’s assume both the platform and the media agency have done their job well, so that’s a £million well spent. But even if Google are only half right and the impact of creative is just 25%, that means a quarter of a million pounds of media value can be achieved by better creative versus an average one.

With a prize that significant, Creative that is perfectly suited to the platform should be the main priority. One factor in this is testing creative before and during campaigns. This example shows what is possible — many good vendors now offer something similar.

Talking of Google, their former creative director convened a webinar on digital creativity with speakers from Facebook, YouTube, Coke and Deloitte, organised by Ad-Lib

And this Twitter thread is worth sharing — why is it that so few Display campaigns are any good? I work with a number of tech firms that can do amazing creative for Display (both for IO and Programmatic) but most ads are crap. Why?

New TV

The re-org announced by Disney appears to pivot them to a full focus on streaming — and answer the criticism from their new activist shareholder. Some think it’s less profound than this. But it seems that streaming isn’t always the perfect solution — some data shows that whilst Hamilton was effective in driving subscriptions, Mulan wasn’t. But priced at $30 PPV, Mulan made about $150m. So not too bad.

But not enough to stop a number of films being pushed back to 2021 although Disney do plan to launch the next Pixar movie Soul on Christmas Day. As part of the standard subscription. That’s a big deal.

The new Stratechery analysis of Disney is a must read.

One of the smart things Disney did was to drop the free trial on Disney+ — announcing this just before Hamilton launched so, if you wanted to see it, you paid. Netflix have quietly dropped their free trial in the US but their Watch Free service continues as a sampling exercise — just with older content. Wall Street analysts continue to enthuse about Netflix — with a new target price of $650, valuing the firm at $286bn — $50bn more than its current market cap. They also suggest that AT&T may screw up HBO as a competitor.

Amazon keep investing in Sports rights — now a deal in Italy to show the mid week Champions League games

Platform Shift

We think there is a platform shift taking place with Fortnite, YouTube, Snap, Twitch and TikTok and others all gaining ground with GenZ. This FYSTT group and their users establish behaviours that influence others.

It has to be remembered this group is around a third of the population and ranges from 10 year olds to 25 year olds — but the thing they have in common is they are the first generation to grow up with mobile. Snap talk about the Snapchat generation.

The latest Piper Sandler TAKING STOCK WITH TEENS report shows Snap is the top social media channel, with TikTok second and Instagram third.

Within this group things can grow very quickly — multi player game Among Us being the latest example. This shows the influence of Twitch.

MSCHF personify this group. Their relentless programme of Drops is amazing — both the quantity and quality. Their latest drop is the Anti Ad Ad Club, where they pay influencers to ‘take down’ evil brands. They have produced a number of sounds — think anti brand jingles — targeting Amazon, Facebook, Palantir and more. You use these sounds in your TikTok and, if you achieve enough views, you get paid.

This is a great breakdown of the user experience of TikTok and its algorithm.

Merchant

This week’s deep dive was Merchant and we opened with the original ASOS website. Lots on Stores and Footfall, CPG x DTC, Grocery, Amazon and Live Streaming. See what you missed here.

The FT asks Can Amazon upend the luxury sector? I think they will struggle with this, as the big fashion brands would prefer to see the current key players succeed. Net A Porter, Farfetch, Matches, Zalando and ASOS are all better — safer — partners for the likes of LVMH.

We see similar moves in China where LVMH have done live streaming with Little Red Book and TMall has made good progress. Like the competition LVMH are active digital marketers with all the platforms — but ecommerce is still just 12% of luxury sales — around the same as the West but this is expected to double. This BCG and Tencent report from last year is a useful reference.

Luxury and fashion brands have been early adopters of digital and embraced innovation, but most fashion advertising is done by small specialists. Whilst big agencies lust after the iconic brands, few have held on to business. One team that were successful were Wednesday at BBDO but they have now been bought by Media Monks and this explanation of the deal has some great examples of innovative digital marketing for fashion.

Media

We have covered the New York Times quite a lot and recently featured a number of interviews with outgoing CEO Mark Thompson. Why? Because it’s a great case study of a business truly transforming. This is a remarkable deck that tells the whole story — a real must read.

Another media success story is Morning Brew — a free daily newsletter focused on accessible news aimed at a young demographic. Having bootstrapped the business to 2 million subscribers, they are selling to Business Insider for as much as $75m.

Plus+

Scott Galloway: CMOs should become chief intelligence officers. A must read as Scott argues there is new breed of CMOs;

“I find there’s two CMOs. There’s the CMO that came from the world of Don Draper and wants to spend money on marketing, uses the term ‘brand’ every other sentence and wants a bigger budget for marketing and advertising. I don’t think those CMOs last,”

After deepfakes, a new frontier of AI trickery: fake faces

How Cameo put a new price on fame

Google in Talks to Take Over More Search Tasks on Samsung Phones

Spotify introduces a new music-and-spoken word format, open to all creators

Alibaba Stock Hits Record — with a valuation of $800bn it’s the fifth biggest tech firm.

Will the evolution of digital OOH follow the evolution of TV?

Snapchat finally lets all iOS users put music in their snaps

Snap Sales SVP Peter Naylor On Upstart Competition, Why Snap Avoids Exchanges And The Wide Release Of First Commercial

Another good essay from Benedict Evans — The end of the American internet

Benedict has a new podcast too — with Toni Cowan-Brown — and in the first episode ask whether Europe is a market and why are there no huge European tech companies?

And I am excited to announce that Benedict and I are doing something together;

A fireside chat with Benedict Evans and Simon Andrews: Tech, commerce and discovery

Benedict has spent a lot of time looking at the ways that ecommerce, brands, TV and discovery are being destabilised, and I have been doing much the same but with different and overlapping perspective, coming from the world of advertising. As we go into a winter lock-down, we thought it would be interesting to do a ‘fire-side chat’ on Zoom — all the cards are being thrown up in the air, across TV, brands, retail, footfall and advertising. What can we know?

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

Pattern Recognition / Strategy / Consulting / Creative Thinking from Simon Andrews — Sharing knowledge through our email newsletter Mobile Fix every Friday