Mobile Fix / August 23
Why treat customers as strangers?
Since I heard the CEO of Sky mention that addressable ads were really effective at curbing channel switching (at an Isba event last year) I have been using the quote everywhere. Now the full study is available and we see that addressable ads ran by Sky Adsmart perform really well. As well as halving channel switching they improve ad engagement, attention and ad recall.
Show people ads that are relevant and they like them. Who knew?
We do lots of work around taking the wealth of data available from digital channels and using it to inform creative. And it works — often incredibly well. Automating the process with smart tech (like Spirable) makes it possible to give everyone ads that are relevant and contextual.
Now new tech lets the writing of messages be automated — JPMorgan saw AI ads outperform human written ones.
The single best way to improve marketing performance is to stop treating customers as strangers.
Lots happening around Privacy and adtech — let’s start with DuckDuckGo telling us what Google and Facebook do with your data
Google are finally joining the IAB framework for GDPR but some still think it is not possible to design Real Time bidding in a way that meets GDPR requirements. I guess we need to wait for the ICO to give some guidance here.
“RTB is a massive data breach,” said Johnny Ryan, chief policy and industry relations officer at browser Brave. “That means it fails the GDPR at the first test. It also means that consent is not possible because nobody can say where the data in question will end up or what will happen to them.”
Now we need to see what Google does with Chrome
Facebook are to introduce a way of controlling your data by letting you disconnect off Facebook activity. You will be able to access this tool from settings in the coming months. It will be interesting to see how this is promoted to users when it’s actually made available.
The FT doesn’t think it goes far enough; But, in a move that will anger privacy activists, Facebook will not delete data from its servers completely, even if users opt out. Instead, the company will continue to collect information to provide third parties with analytics; however this will not be linked to a specific, identifiable account.
These policy changes are starting to have real effects — YouTube plan to stop ads targeted at kids and we will see profound changes to current best practise in digital marketing. Adtech guru Bok thinks Google could drop its adtech services to protect its core business. If you are not preparing for a different approach you are in for a shock. One area to investigate is context — some smart new ways of providing context are emerging and getting traction with key media owners.
Does WeWork work?
With an IPO imminent WeWork share a lot about their business in the prospectus. Scott Galloway goes to town on this and doesn’t think much of it. He says
As usual it is an entertaining read and makes lots of sense.
But others entertain an alternative take;
If WeWork can raise a giant pile of cash in its IPO and then not die in a multi-year recession starting any time now, it could find itself in a position where no one else is able to raise and money and get off the ground to compete with them without dying first.
And Stratchery makes a good argument that access to unlimited amounts of cheap capital has changed the game;
The bull case is that WeWork has seized the opportunity presented by that capital to make a credible play to be the office of choice for companies all over the world, effectively intermediating and commoditizing traditional landlords. It is utterly audacious, and for that reason free of competition. The bear case, meanwhile, is that unlimited capital has resulted in a complete lack of accountability and a predictable litany of abuses, both in terms of corporate risk-taking and personal rent-seeking.
It’s hard to imagine public investors — burned by Uber etc — will be willing to fund this experiment in new economics.
Voice & Audio
VC firm Loup have done their annual IQ test for digital assistants (using smartphones rather than smart speakers) and Google won out.
In market share of Speakers Amazon Echo remains the clear leader in new US research — clocking 70% of the 66m units sold with Google Home second with 24%. eMarketers research says a third of the US population use a smart speaker at least once a month — over 111m people.
This new medium still feels like unrealised potential; how could you use it?
A related area is podcasts which are also growing fast and this is a good summary of the current state of podcasts but it feels similarly unstructured and underused. A smart Google friend used to say about mobile ‘it’s not too late to be early’ and that feels so true here.
The FT reports that Apple are to ‘splurge’ $6bn on content but this seems to be a cumulative figure rather than for one year — and even then some smart people question whether the actual spend is that high.
Commissioning shows with big budgets is one thing — those shows becoming hits that justify the spend is another. HBR looks at the most successful franchise Marvel and breaks down how they have built a blockbuster machine.
But talent doesn’t always need big budgets — these kids in Nigeria are making horror movies with their smartphones. The low cost of entry through ubiquitous mobile tech unleashes talent, as does the plethora of platforms for distribution; from TikTok to YouTube to Amazon Prime. Would the wonderful Take Us Home ever have been made without Amazon to distribute it?
It’s unlikely to be a paywall but most of the competition use one to manage access and drive subscriptions and this study of 500 newspapers is fascinating — especially as so many other content businesses experiment with subscriptions.
But newspapers still face at least two existential threats.
One is the naive blacklisting of news by blocking keywords, which seems to be growing;
The use of lengthy keyword lists “is going to force publishers to do lifestyle content and focus on that at the expense of investigative journalism or serious journalism,” said Nick Hewat, commercial director for the Guardian, a U.K. publisher. “That is a long-term consequence of this sort of buying behavior.” The Guardian has had some advertisers block words such as “Brexit,” he said.
The second is specialists focusing on core content areas and taking audience as the Sports site The Athletic seems to be doing
Done well, news remains valuable and the FT buying a stake in Business of Fashion is evidence. Focus and depth are smart strategies and content creators who adopt this have a chance.
Politics & Social
I keep saying platforms should avoid political ads so was interested to see Twitter act to refuse ads from State Media. But their policy highlights how hard it is to discern what is political. As does this piece showing that one of the biggest pro Trump advertisers on Facebook is tied to Falun Gong — a movement that wants to bring down the Chinese Government.
The FT believe the food industry is due another revolution and that data-rich delivery companies will know their customers far better than a restaurant ever can. And the New York Times goes deep into Ghost (Dark) Kitchens and how Uber have used their data to encourage restaurants to change their menus to reflect local demand.
In Europe the consolidation continues — Deliveroo have exited the German market leaving the Dutch firm Takeaway the only player in Germany Takeaway think markets can only sustain one firm. Does the capital glut mentioned in our coverage of WeWork apply here too? Can someone get so big no-one else can get traction? And won’t Uber or Amazon eventually win out as they can improve utilisation with other business lines?
More and more happening in AR. Talking with a very interesting start up in the space I learned about the Apple AR tours. And our friends at Three are showcasing Magic Leap MR at their Oxford Street store as they launch their 5G service.
The AR feature on YouTube we mentioned a few weeks ago is now live for Mac cosmetics — letting users ‘try on’ lipsticks. And we were reminded of the Snapchat AR promotion for Nike featuring that Michael Jordan dunk. The shoes sold out in 23 minutes.
Talking of Snap some more coverage of their new Spectacles, getting into the benefits of the two cameras which enable AR and 3D — but clearly version 4 next year will be the ones.
Shopify is now worth more eBay, Twitter and Spotify. With 800k merchants in 2018 (double that of 2016) they are expanding into fulfilment so taking the battle right to Amazon. The push by Instagram into ecommerce with Checkout doesn’t seem to worry them — despite bankers thinking Checkout will be a $10bn business for Instagram
Despite all the hype about online shopping, high street retail still works as new figures for Target and Lowes show. But we all know that the future is about combining both so there is lots of tech coming into retail stores as this FT story shows. I think getting your store app on your customers phone is the best way to bridge online and offline — as we found on our Retail Safari in New York a few months back. The key benefit is first party data on shoppers.
In China they have different ways of achieving the same objective — with facial recognition and hidden cameras
Still on China, BAT quarterly results are out. Baidu surprised everyone with a great performance from their video service iQiyi which has 100m users and made $1billion in revenue.
Alibaba did less well with adsales and commissions disappointing by only rising 23%. Their breakout performer was Ant Financial which tripled its’ income against the previous quarter.
With Tencent, profits beat forecast but on lower revenues than expected. Gaming is coming back as the Government relax rules but the advertising market in China is slowing. That may have implications for the US as the Chinese buy $500m of ads from Facebook — even though domestic ads target a domestic audience and Facebook ads are for western customers.
A new study into how brands spend on Key Opinion Leaders — Chinese influencers — is worth a look. It seems that nearly half of buyers will buy straight from a KOL link, while the other half will go compare prices. And 58.4% of Chinese Internet users have a positive outlook on online advertising. Lots to learn here.
Snap is back in fashion — big brands like Prada are investing in Snap ads again. The FT looks at the success of online fashion brand Boohoo. And 2pm looks at the competition between LVMH luggage brand Rimowa and its DTC rival Away
Data is valuable in this category too — Vogue Business look at how Google tracking is used alongside Trend forecasters
10 Wild Predictions for Europe’s Big Ad Tech Week from Ciaran Kane
Finally…Does VC work? The alternative to VC investing everyone has been waiting for?
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