Mobile Fix — April 26
10 Years in
Dollar Dollar
The Q1 figures for some of the big tech firms are out this week. Facebook showed a 26% year on year increase in revenue, and no sign the various controversies are impacting advertiser demand. No surprise that 93% of that revenue total is Mobile.
User numbers are flat in the US and almost flat in Europe, with some growth elsewhere. And they have put $3bn aside for a likely US regulator fine.
As this new Pew study shows there is little growth in social — at least in the US
The chasing group seem to be doing better with advertisers though; Twitter showed an 18% year on year improvement in ad revenue and Snap beat estimates for both revenue growth and user growth. They think their new Android App will drive more growth in the coming months. Pinterest have IPOd and are keen to build their ad business with this new optimization tool
Smart brands are looking beyond Facebook and Instagram, supplementing their investment across GAFA with experimentation on other platforms and media properties.
One huge beneficiary is Amazon which last night announced they had beaten estimates with a 19% increase in revenue — but at the time i wrote this, no breakout of ad revenue. But it will be big as this article explains
newTV
Disney CEO Bob Igers has a pretty clear view on how Disney will win in newTV. And with all their IP and a pricing around half that of Netflix you would not bet against them.
But everyone else has to. There are only so many hours a day to watch TV and there is a limit to what people will (can) spend on subscriptions. So everyone is competing with Disney.
Netflix are raising $2bn by selling bonds and their approach to funding TV shows is interesting. They are changing the way TV production is paid for by buying longer licenses on IP and will drip-feed $19.3bn to producers over the next five years. And they are going to start sharing audience data on their shows.
Another of the new players AT&T missed their numbers and announced they were selling back their Hulu stake for $1.4bn. Disney own 60% of Hulu. Established brand AMC hope their creative reputation (Better Call Saul, Killing Eve) will pay off and this podcast interview with their CEO is good.
A great reminder of the power of creativity is this Simpsons clip (played at the Disney launch) welcoming Synergy. The picture of Murdoch in the bin prompts this article on how his deal for the NFL transformed the TV landscape in the early 90s.
We are going to see the TV industry reshaped by what happens in the next couple of years. Sports rights are going to be just as influential as they were in the Murdoch disruption, but we don’t yet know really what Google, Apple and Facebook plan in this space. The importance of sports is evidenced by the amount of piracy that goes on with illegal streams.
One other area to watch is how the plethora of channels opens the doors for brands to make content — as AirBnB are showing with their ambitions for content that drives travel. And in Japan a mobile operator has created a mobile soap opera — the worlds longest teen drama.
The weather for Facebook continues to be terrible; bad news story follows bad news. This long Wired piece on 15 months of fresh hell is a must read. The platform they have built is being used in completely unforeseen ways and getting control back from bad actors is proving a huge challenge.
The issues around political advertising feels closer to home than the nightmares they face with Christchurch and Sri Lanka and this piece on the Ted Talk from Guardian journalist Carole Cadwalladr is essential reading.
My view is that Facebook (and the rest) should just turn off all political advertising. They don’t need the money and they really don’t need the controversy. Hate speech is harder but we all know that organic reach is a problem on social, so removing the oxygen of an ad budget will help.
Amazon
Some years ago a friend at eBay told us they found UK retailers where close to accepting returns for competitors just to get store traffic. US retailers like Nordstrom and Walgreens are doing this now. And Amazon are making this happen with a partnership with US retailer Kohls, one of the largest Department stores chains in the US with over 1100 doors.
Closer to home Amazon is partnering with French grocery retailer Casino to put Amazon lockers in 1000 stores and are selling more Casino products on Amazon.
If you are as obsessed with Amazon as we are, this look at how they organise their people (from an HR specialist) is an interesting read; How Amazon Uses Agile Team Structures and Adaptive Practices to Innovate on Behalf of Customers
Voice & Audio
Both Amazon and Google have released ad supported music services from their Smart Speakers. Alexa now offers a slightly restricted version of Amazon Music, with ads. And Google have made a similar move with their Home speakers offering ad supported YouTube Music. Users are offered an upgrade package for more functionality — and no ads.
Both are trying to reign in Spotify — even though Spotify has offered a free Home to its Premium users. This rare interview with Daniel Ek goes into the Spotify relationship with the music industry — without too much new news.
Last issue we mentioned the brands using messaging as their key consumer interface and Gucci are leaning into this with new customer centres where customers can phone in, email or live chat with the sales team. This isn’t the first time that luxury brands have tried this sort of innovation; LVMH watch brand Hublot has a digital boutique as part of their 5th Avenue flagship in New York
Creativity
People are still doing good work with digital ads — it’s just rarer than it should be. PopGrips — which are huge in the US — are using Facebook playable ads with good results, measuring brand metrics like ad recall rather than clicks.
In the BOK podcast he talks about how little innovation there has been in ad formats and how so few ads even fill the screen width; our friends at ResponsiveAds continue to do great work making the most of IAB ad formats with truly responsive rich media ads. It’s a smart way for publishers to offer more for your money and drive stand out.
Chinese platforms tend to have richer ad formats and on WeChat we see some great creative — these are the top 10 for Q1 based on WeChat users’ interactions, including likes, comments, and shares, with the ads.
Not just the west
Learning from other markets makes perfect sense and we see lots of innovation outside the West. Jumia — the Amazon of Africa — IPOd a few days ago and is the first African Unicorn. With a range of business models, their approach to payments and logistics offers learnings to the West
The Indian answer to Deliveroo and Ubereats is Swiggy and again their approach offers lots of learnings — especially as they built out their own delivery logistics. Of course India has an advantage in this business as Dabbawallas have ran an amazing lunch service for over a century in Mumbai
Learning from China is a constant theme for us but with TikTok we see some potential friction. The hoo ha over Huawei and its role in the UK 5g network highlights concerns over China. And a US Government agency is trying to have the new Chinese owner of gay dating app Grindr sell to to a US firm to avoid worries over blackmail. So we think that people are going to get concerned that huge numbers of Western kids are spending all their time on a Chinese owned app. The Indian government have already banned TikTok but that now seems to have been overturned
This Bloomberg piece is a good summary of TikTok and its’ owners ByteDance. It is still the place to find new visual memes and they are leveraging their reach with a talent contest — who better to find and package the next big teen music sensation?
Quick reads
Amazon and Google have agreed a truce over streaming, meaning YouTbe runs on Amazon Fire and Prime Video will work on Chromecast.
Our friends at KidTech leaders SuperAwesome are seeing their value soar.
Great insight into the scooter economy from an investor in Bird
Is Instagram about to lose the Like counter?
The WSJ looks at in store tech — with the title Big Brother in the Mall
Great piece on the CEO of YouTube and how she is dealing with their many challenges
The new GroupM report on adtech and the future landscape is a good read
More on the theory that Google Maps is the first western Super App — as it nails restaurants
Finally…. It’s 10 years since I left the Mindshare global team to go mobile and the new IAB figures for digital spend in the UK shows how far everyone has come in that time.
Mobile is now mainstream, mass market, highly measurable and — arguably — pretty mature. So why is so much mediocre?
I listened again last week to the BOK podcast — Brian O’Kelly is one of the key figures in adtech — and he too questions what we have done;
So we have solved for quantity but there is still a huge opportunity in quality.
Imagine if you started to do really good mobile ads. This would probably give you a huge competitive advantage, as it is highly likely your competitors are crap at mobile too.
So take the mobile banners off your media plan, invest only in media properties that can deliver audience in the right context and really focus on the creative. I am happy to help
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