Mobile Fix — April 27
Money
With all the noise about privacy and data some wondered whether it would affect the business of GAFA. It’s probably too early to say definitively, but it would seem not.
Both Google and Facebook had very good first quarters. Google revenue was up over 20% year on year and Facebook rose by 49%. Digging into the Facebook numbers their US Daily users rose slightly — cancelling out the drop last quarter — but overall daily users are up by 13% year on year with APAC growing at almost double that rate.
On the analyst calls there were lots of questions about the likely impact of GDPR, but we think it will benefit the duopoly.
Data
The noise isn’t over on data and privacy though. Whilst many people we know have downloaded their Facebook data it seems that the download isn’t as comprehensive as some would like.
The World Federation of Advertiser have come out with a clear call for a more responsible use of data. Their manifesto makes good sense and will help frame the debate in the industry.
Creative
The piece of the marketing business with most potential right now is mobile creative. As the new IAB figures show Mobile Video is the most fastest growing online format — with spend of almost £ half a billion in 2017. So we no longer have the excuse of restrictive (pointless) formats like mobile banners.
With all the data available there is huge potential for creative. In fact i am now convinced that the best way to optimise a media plan is by optimising the creative. The best way to make your £milion budget work harder is by getting great creative, that is informed by the data and bespoke to the platform. And worries about the production budget are allayed by a new way of looking at the economics; if creative makes the campaign work 10% harder the value created is significant.
There are smart tech firms that enable great creative. Some agencies do it well. But most do it really badly. We see the best opportunity for talent is to get great at making 6 second ads for Snapchat, True View Ads for YouTube and Instagram stories.
Having spent the last two decades running digital creative agencies i know you can do great work, which is highly effective. And if you have media and creative working together, you get real magic. Mobile is now truly mass market so a brand that gets this right will run rings round its competitors. We’d love to help
Content
With the news Comcast have upped their bid for Sky, causing Sky to withdraw their support for the Fox bid, we are in for an interesting few weeks. Some think Comcast will also bid for Fox and snatch it from Disney.
With the Disney streaming service due to launch next year, they will reshape the industry whether they get Fox or not. This piece looks at how that might affect Netflix.
As Netflix recognise they can’t rely on other people making their content available they double down on their own productions. Their 2018 budget for content is around $8billion. Amd they are investing in other aspects of the business too. They are trying to buy the preeminent billboard company in LA — as they think marketing is a multiplier on the content spend.” And now it seems they looked at investing in their own theatres in an attempt to break the deadlock over windowing — Netflix want to release their films into theatre and streaming on the same day. Cinema owners across the world want an exclusive window when the only option is the cinema.
This will keep coming back; when Disney have a streaming service they will look to maximise revenues. These old analogue models are vulnerable whatever industry you look at.
Owning the distribution is both defensive — as it means no one can restrict your access to customers — and the best way to manage discovery. Which is still the big issue for any digital content; with so much content available getting the right audience is crucial. Netflix have agreed a deal with Sky to make their content available through SkyQ and Amazon are getting into the TV market.
The ultimate distribution advantage is devices — just ask Apple and Google. Whereas everyone has expected Apple to start making truly smart TVs it is Amazon who have moved first. Good analysis from Monday Note here. The user experience on the Sky Fire stick is very good, and with voice search too, we wonder what impact they can have when people buy TVs relatively infrequently. An Amazon smartphone still makes the most sense to me.
DNVBs
This is a good piece on direct brands and one of the US colleges that has been a petri dish for this whole sector — as Warby Parker came out of Wharton too.
There is lots to learn as Europe has yet to see many of these brands and there is no reason local start ups cannot take precedence — although we know Allbirds are getting close to a UK launch. Lots of Europeans have done well with tech firms inspired by US start ups that eventually get bought by US firms wanting a presence in Europe. Will product start ups go the same way?
It is an over supplied market in the US in some categories, as this demonstrates. And the tropes of modern digital marketing can be used for nefarious purposes — as these Wolve sof Instagram show
VCs
The logic behind our VC event in New York is that the firms that shape the industry are funded by the VC business from an early stage, so their insights can help us think through who we should be working with. And obviously the earlier you know, the better.
The same applies over here and knowing what is exciting VCs beyond adtech is also pretty useful. All these businesses need to grow and may well be potential clients.
At the excellent Rutberg conference this week I heard so much smart thinking, including some very good VC talks. It’s all Chatham House but I can tell you that the view was that Europe will grow some very big businesses and Fintech is the strongest sector at the moment. Revolut is London based, only 3 years old and already valued at $1.7bn. And UIPath is a Romanian start up in AI driven back office automation and is valued at $1.1bn
One of our favourite VCs is Chamath Palihapitiya — who also owns the Golden State Warriors and this video is a good summary of his investment views. He spoke in London recently about how his firm Social Capital sees VC as a platform.
Quick Reads
Fascinating look at tech in fashion and how Style is now an algorithm
An in depth Guardian look at Amazon. Very interesting.
A luma style chart on MarTech — the 6,829 firms in MarTech.
User interfaces from the man who was science advisor for Minority Report.This video takes us through the near future of how user interfaces should evolve
An interesting report from Mindshare on the future of AR
Whilst much is made of subscription media businesses, ad supported models are still important. Spotify have revamped their free version .
Finally ….the IAB data shows digital adspend was £11.5bn last year and almost half was on mobile. An IAB friend pointed out that when they did the first mobile study, mobile ads were at £38m and we all thought it was finally the year of mobile. With well over 40m people in the UK spending over 3 hours a day on their smartphones, Mobile is still the big opportunity.
What’s cooking at The Media Kitchen?
Two days this week at Rutberg at Claridges, but time really well spent. Interviews included the CEOs of Mercedes, Sky, Visa, Citi, Orange, Guardian, Absolut, Pizza Hut, Pearson and more, plus equally impressive panels. I moderated a lunch time session. I learned lots, caught up with some old friends and met some super smart people.
The rest of the week has been pitches and new business. How could we help you? Are you sure you are making the most of the amazing opportunities?
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