Mobile Fix — January 10
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This week saw the Facebook Trump Cambridge Analytica issue flare up again when the NYTImes published an internal Facebook note saying Facebook should not ‘ tilt the scales against Trump’. The author of the note Boz published another note seeking to explain and I was struck by this quote
So was Facebook responsible for Donald Trump getting elected? I think the answer is yes, but not for the reasons anyone thinks. He didn’t get elected because of Russia or misinformation or Cambridge Analytica. He got elected because he ran the single best digital ad campaign I’ve ever seen from any advertiser. Period.
I think the CA angle is a red herring. We had them come and present when i was with MDC and Alexander Nix is unconvincing, but their commercial lead was a Googler friend and I think they were just really good at running FB campaigns. This piece debunks a lot of the myths about Cambridge Analytica
Essentially the point of the Boz note was that Trump has a good chance of winning again because he continues to work Facebook ads really well. In our experience with our friends at Spirable and others, if you are not making Facebook ads work really well, you’re just not doing it right.
There is an issue where some brands start to hit diminishing return as they have topped out on their audience within Facebook and especially Instagram — where Stores now account for almost 10% of all Facebook revenue. This issue of making the ads work is a factor for clever VCs — they don’t want their investment handed over to Facebook; the ads should be paying for themselves through sales.
The opportunity for online ads is demonstrated with a PE firm investing $220m in Facebook marketing partner Smartly. To understand the thinking it’s worth watching Laura Desmond of the PE firm that bought Smartly (and ex agency CEO ) talking about the future of ads.
This deal contrasts with the sale of Unruly where a super team with good tech have been acquired by Tremor for a bargain price. The difference in fortunes is — I think — a reflection on where each firm plays. Firms like Smartly and Spirable are essentially Social — where the data remains abundant — whilst Unruly is more Display focused where the #AdTechPerfectStorm means third party data is drying up fast. To be fair the exclusive access to News Corp inventory — and the precious 1st party data — should mean Unruly benefit from the flight to quality we expect in the display space.
With the FT running stories on the astonishing scale of fake ads, I do think we will see more advertisers question the focus on quantity. I added my two penn’orth with a piece on the Mobile Banner being the Cockroach of Digital advertising
Voice & Audio
Unsurprisingly voice is huge at CES this week — especially Alexa. But the new entrants into the Speaker market have incurred the wrath of an older brand; Sonos is suing Google for stealing their technology but accusing Amazon too.
The spectacular growth of podcast audiences is well known but monetisation lags behind as the RSS technology has made it difficult to track. acast have been the leaders in this space and now Spotify — who use Streaming rather than RSS — have new ad tools for Podcasts
Retail / DTC
As Amazon is rumoured — again — to be ready to take on luxury Fashion its key rivals are investing in their back end capabilities with Walmart looking at automating its grocery warehouses. The biggest grocery chain in the US is Kroger and their deal with Ocado would seem further along than this experimentation.
I am convinced that Amazon will enter the grocery market in a big way but feel that can only really come through an acquisition. Their partnerships with Morrisons in the UK and Casino in France show they know the grocery supply chain is too complicated for them to do this on their own.
If regulators prevent the deal with Deliveroo, do they reallocate that money into buying Morrisons (who have the best vertically integrated supply chain) or Sainsbury? (Can we imagine Walmart selling Asda to Amazon even though they are keen to divest?)
The next phase of DTC is where the platforms get involved in the transaction. I think Google Shopping will evolve like Travel as Google ‘improve’ the user experience and blur the line between ads and purchases. Instagram are moving quickly and this piece has some good insight from the Product Lead on Instagram shopping as well as this quote from a VC;
“When someone shops on Instagram, there is the question of ‘whose customer is this?’” he said. “There is a lot of data that Instagram is not sharing with the retailer or giving the rights to the retailer to share, making it less attractive. Plus, Instagram is not going to ask customers to sign up for your newsletter.”
And Facebook are investing with the acquisition of a startup focused on live stream shopping. QVC is a great model to copy here.
Vice points out the persistent issue in online shopping — knowing which product to buy when so many seem very similar. This is one of the opportunities for live streaming shopping — the presenter can get really into the details on a product — and even answer questions
The other big issue is retailers grapple with $100bn returns problem. Today we heard the Christmas results from High Street retailers but online brands will have to watch returns flood back over the next couple of weeks before they know how well they did.
Food Tech
Given I included one in my 2001 futurology project for 2010, I always check with CES whether a new Internet enabled fridge is being launched — and just like every year since 2011, LG and Samsung had new models this year. (Not sure anyone has ever bought one though)
A Swedish startup is using Smart fridges to help distribute waste food — to avoid it being thrown away. Users pay for the food on the Karma app and get a code that unlocks the fridge.
Taking the concept further a SF start up will come round and fill your fridge — working out what needs replenishing and having a key so they shop and then fill your fridge before you get home. That may be a little extreme but it’s on the same arc as Deliveroo and Ocado and this report from Sift goes deep into Dark Kitchens, food delivery and the rest.
China
The latest data from China suggests users spend over 6 hours a day online — almost twice as much as in the West. And this article on how mobile has developed in China over the last decade shows how it has become so dominant. Are we heading the same way?
#AdTechPerfectStorm
Lots going on in this Perfect Storm. The California Consumer Privacy Act came into effect on January 1. This is the US equivalent of GDPR and likely to be adopted by the rest of the US.
Any time now the ICO is going to be clearer what is and isn’t acceptable post GDPR and quite possibly throw the book at someone.
Other than that the next big event is February 4 when Google unveil SameSite where 3rd party cookies evolve to include labelling. Quite what effect this will have is being debated and some are optimistic as Google — unlike Apple — has lots to lose if Privacy gets in the way of the advertising business. I think the changes will be a catalyst for better quality in digital ads.
newTV
One of the bigger stories from CES is the launch of Quibi — the mobile first streaming service from Hollywood royalty Jeffrey Katzenberg — this FT piece is a great summary of the service and the challenges
Their launch video captures the excitement and gives a glimpse of their turnstile technology which means the user gets full screen whether they watch portrait or landscape.
It doesn’t show what they plan for advertising — where they expect to get a third of their revenue. This Fast Company piece is a good look at how ads are going to play a key role in streaming in general and is essential reading.
And Apple have their own Hollywood royalty with the architect of the HBO success story confirming he is taking a role with them.
Whatever happens in the US with the streaming wars, we will have a different version in Europe as Sky is so dominant over here. Their deal with the BBC seems likely to impact Britbox and whilst Disney have pulled around half their shows from the Sky Box sets, Sky have a new deal with Warner which means HBO Max won’t launch in the UK.
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Gaming
Despite the huge amounts of money generated, the Gaming industry still doesn’t get its fair share of attention. Matthew Ball argues that’s about to change as the decline in TV viewing makes space for the new model of gaming that is emerging around streaming and Twitch. It’s a long read but worth the time.
These predictions on esports for 2020 complement that take, as does this look at the Talent Agency for esports stars — including Ninja who was paid $30m by Microsoft to move from Twitch to their Mixer platform and had 1 million subscribers within 5 days
Influencers / GenZ
Which takes us to a great A16Z post on making a living off likes. When people like Ninja inspire such devotion the Chinese model of letting fans get closer to their idols through some payment mechanism makes good sense. The thinking of Kevin Kelly on the value of 1000 true fans is so relevant here.
Hype House is a good evidence of this trend — a Hollywood mansion full of Influencers constantly creating content for TikTok. There is a charitable side to this — Twitch telethons are raising millions for good causes
AR
Facebook think the mass adoption of AR glasses Is years away. That’s reasonable — but I think Glasses will be a thing before then — starting with the Snap generation. A new patent from Apple gives them essentially quadrophonic sound ask your Dad) which enables audio AR
The latest Snap acquisition whilst not quite AR is certainly rich video, with the ability to add selfies and animate them in videos.
If you want to get a sense of what Creators are doing with the AR and VR space keep an eye on TenderClaws
Music
TikTok revenue is blowing up — estimated at $50m for Q4 which is over double Q3 and three times Q4 the previous year.
Its’ new music streaming service Resso — which we mentioned a few weeks ago — has made it to Product Hunt
And it is inspiring new startups with Triller claiming to be growing even faster that TikTok
etc
The top Andrew Chen essays/tweetstorms in 2019 on product/market fit, investing, KPIs, YouTubers, and more
The Top 10 A16Z Consumer Tech Posts of 2019
Stripe Founder on speed — great examples of fast achievements
How QSRs are leading the way on personalized, omnichannel experiences
It Seemed Like a Popular Chat App. It’s Secretly a Spy Tool.
How Deliveroo invented Virtual Neighbourhoods in order to grow Paid Search by 166%
Amazon spent $30m on a swedish tech firm that improves streaming quality — link in Swedish
Fintech users just can’t get enough of traditional banks
Pitch deck: How Target is pitching its advertising network to retailers
Finally,… I am excited about a New Year and a new decade. Mobile is now mass market and mainstream. It has changed how millions of people live their lives — as it has solved problems for them. As we look at the world through a lens of advertising and marketing it’s a great time to be involved. We can blend the latest possibilities of technology with an understanding of new business models and knowledge of what makes people tick. And consequently, makes businesses thrive.
For inspiration, loads of smart people have made predictions and some of the best are here. How you can best take advantage? I would be delighted to collaborate with you to capture the value of the coming decade. Let’s plot.
Key Google people make predictions for 2020
Ashley Friedlin of Econsultancy looks at trends for the whole decade
The Carat Top 10 predictions are excellent as usual
John Battelle with his 2020 predictions
VC Fred Wilson on what will happen in the 2020s
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