Mobile Fix — Aug 10
2 weeks away. So what did we miss?
Facebook have the worst one-day stock market fall in history. The second biggest was Apple falling $60bn in 2013 but now they are the first $Trillion company — with Amazon is close behind.
But rather than concentrate on the money men view, let’s look at what people are doing. Because that’s what ultimately drives the value.
The latest Ofcom Communication Market Report tells us that smartphone penetration in the UK is at 78%. Smart TVs are at 64% and connected TVs are at 26%. And 16% of under 55s have a smart speaker.
The report has good insight into lots of digital habits but the key thing is they are all now mainstream. And the habits of the early adopters are spreading to others — as people see the benefits. So the old are embracing online grocery as they are often less mobile.
All the themes we follow are likely to accelerate and go mainstream. Not always quite the same as now, because things evolve so quickly. As an example we wonder if the flattening of Facebook and Snap usage is due (at least partly) to the huge success of TikTok — the Chinese short video app? With 500m Monthly Active Users and topping App download charts, it is clearly taking attention from somewhere. This deep dive into the Tik Tok app — which has now merged with equally popular Musically app — is a must read. So much to learn
We believe GAFA remains key to how people spend their time — this research shows Google take a third of online time — and they all remain brilliant at monetising these behaviours — albeit in different ways. And Advertising is at the heart of Google and Facebook, getting more and more important to Amazon and (I believe) soon Apple.
Stratechery has a typically well thought out view that Facebook will bounce back. And ex FB exec Antonio García Martínez is bullish too. Both arguments are convincing.
(And the FT has a good long piece on the second act for Big Tech as they push for 2$Trillion.)
Old world
The huge changes in peoples’ behaviour doesn’t just benefit GAFA and new players; there are more and more examples of trad businesses managing their evolution really well. In media the digital success of the New York Times is well known but they keep growing — subscriber revenue is up 20% and they gained over 100k new digital subscribers in the last quarter.
German media institution Alex Springer is also prospering — having bought titles like Business Insider and NowThis they are showing great growth — digital is now 80% of profits.
You can’t get much more traditional than a Soup business but Campbells have seen the value of first party data and are transforming their business.
New Retail
Staying with our optimism, we see lots of new innovation is retail. This look at New Retail in China is fascinating and there are new convenience concepts in LA too. An interview with the team behind the new Nike store in Melrose sums it up;
..retail is not dead, but boring retail is dead
Our friends at KBSAlbion are doing lots of thinking around #RebootingRetail too. We have been talking about stores as Brand Cathedrals for over a decade and just as the other last week someone talked of them as profitable billboards.Talking of stores that don’t want to sell you anything, this quote nails the opportunity;
We see pop up stores as a smart media opportunity and are building partnerships that enable stores to be mined for first party data — driving the opportunity for shop staff to have a data informed Dialogue with customers and enabling next generation retargeting.
London fashion brand Matches are working on this opportunity to better connect online and offline too. Cult sneaker brand AllBirds ( coming to the UK soon) have a few shops and this interview with the founders looks at their obsession with the product and the customer
New TV
Our other perennial theme shows no signs of slowing either. We have bored everyone with the Leeds connections to Eleven Sports; they have now agreed to distribute some of their UK rights to La Liga and SerieA through Facebook. So very soon we will have one top game a week live on Facebook. How they present this and how they monetise it will be very interesting. And not that long until the first Amazon games in December.
We expect to see something similar to Sky etc in terms of ads — before and after the game and though half time. But using digital tech — like our friends at Spirable — can make these ads much more powerful than the good old 30 second TVC. And broadcasters are trying new formats — ITV have done really well with product placement in Love Island with partner Misguided talking of 500% increase in sales when Islanders wore items. Extending the partnership into the Love Island app really paid off.
In the US the big content firms are shaping up their new strategies; Disney has appointed a head of content and Jeffrey Katzenberg has secured $1billion from Hollywood and Alibaba for his short form video business. He plans both a premium subscription with no ads and a cheaper version with ads. And Disney and Comcast are still battling out for Sky; this UK firm is going to be very influential for its tech as well as its subscriber base.
Quick Reads
The mysterious AR firm Magic Leap has launched its first product and is getting a mixed reaction. There has been so much hype it is hard to live up to expectations. My view is that all these headsets are really the next generation of consoles and if you didn’t buy a PS4 or the latest XBox i can’t see you buying these.
AR that lives on your phone is going to get scale first and the new speech recognition lens from Snap shows how fast that is developing. Though the head of Spectacles at Snap is leaving.
Good piece on the fascinating You and Mr Jones — rethinking the agency model
Long read on Gwyneth Paltrows Goop — a modern media empire
Andrew Chen keeps sharing great thinking on marketing metrics — like this on the power user curve
The head of AT&T talking about how he can use content to drive new ad models. It’s all about signals;
Finally …a long but really good read from the New Yorker on how ecommerce is changing rural China. Just as we started with today, people love mobile and all it brings because it makes life better. We are still early in this journey and getting really good at this stuff is a competitive advantage. We are here to help.
Fix is my thinking rather than that of MediaKitchen. We now have over 5600 subscribers across Google, Facebook, Snap, Amazon etc as well as many VCs, Brands and Agencies.
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