Friday / Fix — June 12
Adtech / Perfect Storm
Following good responses from Essence and 7Stars on the ISBA report and the missing 15%, this is the Zenith response. Not too much insight but more good intentions to change. I learned more about the topic from this interview with (an old colleague) Steve Pollack of Nestle. Nestle was one of the brands in the report and his commentary is very interesting.
Nick Manning has written a long piece on How to Fix Programmatic which makes a lot of sense.
Another former colleague has written a great piece on what to watch for in the cookieless web emphasising the need for action
In any case, begin putting the puzzle together piece by piece now, rather than waiting until it’s too late.
My webinar last week with Liveramp on the Perfect Storm got into some of these issues and what the options are post cookie. You can listen here. This guide to Identity from ID5 is helpful too. And this webinar with NewsCorp, Criteo & ID5 and Paul Gubbins is a good build on this debate. Lots of talk about how GAFA are controlling the identity space.
Paul has another opus on Things to know in AdTech, today — which is a super useful summary of the key issues.
All of which get discussed in our Guild — a community of Fix subscribers sharing news and views on AdTech. Do join the debate there.
The regulators interest inGoogle and their involvement in adtech is Shaping up to be the next big issue. This Politico piece is a good introduction to the issues and the US Justice Department actions to date, although their suggestion that Google could take 42% of digital adspend doesn’t seem to have much foundation. CNBC thinks individual states may join in;
Fifty attorneys general have been probing Google’s business practices for months, alongside a similar probe being led by the U.S. Department of Justice. Both the states and the DOJ are looking to file a suit against the internet giant as soon as within the next few months, the people told CNBC.
Our favourite analyst Arete has published a great paper looking at this Battle Royale and it goes through the potential Lines of attack, the Obstacles and considers what might happen. They conclude;
We think Google has anticipated a pending DoJ case for some time, and is prepared to make “blood sacrifices” (e.g.,spinning out Network) that mis-direct regulators away from its most-profitable business (which exercises the most market power), notably Search and the core ad buying, data gathering and publishing ecosystem around it
This is a must read. Richard shared it in our Guild and invites feedback.
Another Google issue resurfaced this week. An analyst thinks Apple should acquire the DuckDuckGo search engine to reduce its reliance on Google. The article acknowledges the huge amount Google pay for the right to be the default search engine in Safari and hence dominate search on iPhones.
I think this is a non story. Apple like the revenue ($7bn?) and actually switched from Bing to Google on Siri, a couple of years ago. But I can see that Apple may resent the fact Google knows so much about their customers.
It’s more likely that they follow the Android precedent and let users choose between search engines on setup rather than just having Google as default. And that model — imposed by regulators — has the search engines bid for inclusion in the top 3 choices — by agreeing to pay a bounty for every customer who selects them.
It’s very likely that most people would choose Google so Apple would still get a fat cheque from them — but it’s unlikely to be as much as $7bn a year. So how much is their customers’ privacy worth to Apple?
The success of TikTok inevitably means copiers. Zynn comes from a Tencent company and has been aggressively marketed over the last few weeks. But rather than ape the Tiktok approach of heavy advertising (especially with Snap) they have chosen to hand their marketing budget to users — ‘paying’ them to watch videos ($1.20 per hour) and to recruit their friends as users (as much as $20). It’s actually quite hard to get the money you earn until you have $50 but this strategy has paid off with Zynn topping app downloads on both Apple and Android in the past couple of weeks.
The background is worth reading but they are hitting problems. Lots of the content appears to have been taken from TikTok and some creators have been surprised to see profiles in their name. And they have now been removed from the Google Play Store.
Sometimes looking at Social you wonder if people are just making stuff up? Elite Tiktok is apparently people posting as their favourite stores and brands.
Back in the real world TikTok is getting traction with advertisers and this post shares the experience of being part of the self serve beta. With the firm focused mainly on app downloads the main learnings are that TikTok is fraction of the price of Facebook but that installs run at around half that of Facebook. Those economics are still good but it seems the TikTok algorithm and tech is less sophisticated than Facebook so need a quite different approach.
This case study from TikTok shows how their best campaigns are structured and both articles are must reads.
This is an interesting look at how a CPG brand gears up for DTC — Clorox made an acquisition and hired people with the right experience — meaning they could move much faster than they were used to. Mondelez has moved ad budgets to ecommerce sites to better support increased ecommerce sales.
New categories can innovate and Impossible see that their plant based burger suits DTC and they are not limited by physical distribution — which will be slow to grow for a new category.
With retail stores closed fashion brands have had to look at their websites as more than a nice piece of brading. Vogue has an index comparing the web to stores and it sees real disparity. Buy Online Pickup in Store is still not standard and omnichannel thinking is a challenge for many. Chanel scores 80 for stores and just 23 for online offline integration.
The crisis is causing everyone to consider the role of stores and given we were seeing issues even before the virus, profound changes are inevitable. In the US there are around 1000 malls and this analyst thinks just 100 are A rated;
The McKinsey Pulse survey shows some dramatic shifts in retail — 17% changed their primary grocery store — and the majority intend to continue with these new behaviours
This weeks Midweek deep dive was all about newTV — and the issues around the huge amounts of money shifting from linear to new TV and the fragile economics of streaming
Last Mile delivery
The restaurants these businesses serve are increasingly vocal about the way they are treated — one said “It almost turns into a hostage situation.” Complaints about fees are common, among other things. In the journalists Twitter feed he shows how restaurants that leave are labeled as no longer doing online orders.
This WSJ article goes deeper into the challenges facing restaurants and how some are thriving without the big delivery firms. They also highlight how well the Domino model works. Just the other week `i was talking with someone and he mentioned he had a friend that had the Domino franchise for Dundee and how no matter how many new stores they opened they still did well — he reckoned there was a near insatiable appetite for Dominos there.
Amazon in talks to buy $2 billion stake in Bharti Airtel — sources With Google looking to invest in Vodafone India and Facebooks investment in Reliance, India is the new frontier.
Ben Thompson — Platforms, Ecosystems, and Aggregators — a good podcast
Welcome to the United States of Amazon — excellent long piece from Tortoise
Finally as we all look for ways to build on the momentum of Black Lives Matter this is an easy one…