Mobile Fix / January 24
Good morning
I’m Simon Andrews and I have been sharing this newsletter first thing Friday for almost 10 years, with news and my views on Mobile, Digital, Social and more. It only goes to people who have subscribed — and lots of the growth comes from readers sharing it with their friends and colleagues. (hint)
Let’s continue the conversation on Twitter — I’m @SimonBIgPicture
#AdtechPerfectStorm
You can look at the current AdTech climate as a problem or an opportunity. The demise of 3rd party cookies combined with GDPR and California Privacy closes lots of doors, but it also opens others.
Seeing a bunch of people who should know better asking for the stable doors to bolted is a touch depressing. The fact they appear not to have noticed clues like the absence of iPhone traffic is a sign of the hands off approach too many take to digital. Maybe they are the same people who have their programmatic ads running on Russia Today. They are certainly the ones that don’t spend with the Guardian; well they probably do, but only to reach the people that buy the paper. The Commercial lead at the Guardian rightly sees now as a chance to rethink digital — and media owners like them should prosper. What media planning genius decides the Guardian is the right choice for their press advertising brands but doesn’t bother with those with the £1000 smartphones? And why do they demand a different standard of metrics for digital that don’t apply to press ads?
As the article on Russia Today points out, there are real benefits to a smarter approach;
Advertisers and ad agencies that limit their programmatic ads to trustworthy news sites do more than keep their brands safe: They also return advertising revenues to news publishers that badly need the support.
I am also convinced that brands that invest in the right context with good digital ads get a real competitive advantage — huge impact and attention (look at this wonderful Google ad from our friends at Responsive — happy to make an intro)
There is obviously lots of energy looking at how adtech should evolve. The Google Privacy Sandbox is front and centre of these efforts — and explained well here but it’s a complicated space and we shouldn’t expect too much too soon. Evidence this is a complicated space? Google have worked out that the Apple Intelligent Tracking Prevention, that killed cookies in Safari can actually be hacked to allow tracking of individuals
But there is lots going on with publishers, who recognise that their 1st party data can be used in lots of smart ways and a collaboration with the IAB looks to be bearing fruit. Our friends at Permutive seem to be in the vanguard here.
How are you adapting your marketing to this new climate?
newTV
Two big stories in newTV this week.
Netflix Q4 figures beat expectations for overall subscriber growth but the US numbers were weak and forecast for 2020 are lower. With a few weeks of competition from Disney and Apple (both of which launched in November) the heat is on. But as this good Bloomberg pieces argues, neither are real substitutes and nor are the imminent launches. So will many people cancel Netflix for the new rivals or will people add them?
The shareholder letter (PDF) is always a good read and this line stood out for me;
The exceptional breadth and quality of our film slate was recognized as we led all studios with 24 Academy Award nominations across eight different films
Lots of people have entered the Streaming wars talking of huge budgets for content. But no-one has the experience of delivering both quantity and quality like Netflix.
On the perennial question of advertising, Reed Hastings explains their thinking in the Earnings Call video — he thinks GAFA have it all sewn up and without oodles of data there is no easy money for Netflix. Not sure I agree, but we will see.
The other story is Peacock (part of Comcast, who also own Sky) where they are more positive about ads, launching with 3 tiers
As Comcast have a big cable business they are different to most of the competition in that they don’t want to accelerate cord cutting. And they also are thinking more deeply about Sports than many because of the rights they hold — including the Olympics this year.
Another Bloomberg piece is pretty positive about the Ad model and how Peacock will manage this. My favourite quote from the piece is a smart Wall Street analyst saying;
Their Peacock Advertising and Partnerships Fact Sheet (PDF) is worth a read. And the video for the Investor Meeting is long but worth flicking through.
And Comcast is taking aim at CNN with a joint NBC-Sky global news channel -
Audio
Apple is an amazing company and they rarely fail, but the way the music business has been wrestled away from them will be a Business School case study in the future. With iTunes and the iPod they owned the digital music business — I still have thousands of tracks held hostage in iTunes and they are only really accessible through an Ipod in our kitchen, permanently on shuffle — one of the few things I have in common with Christiano Ronaldo
Otherwise the family subscription to Spotify is the main source of music, along with occasional use of Amazon Music. In a rare bit of openness Amazon shared they have 55m subscribers — closing in on Apple who have 60m — but both are dwarfed by Spotify.
Midia Research, a consultancy, estimated that as of last June Spotify had a 35 per cent market share of music subscriptions, trailed by Apple with 18 per cent and Amazon with 13 per cent.
But Rolling Stone think the market is reaching maturity and says that in the UK less than 20% of the population pay for music streaming — and they cite a report suggesting more options are needed — and lower prices.
Jimmy Iovine, of Interscope, Beats and Apple, knows more about music than most, and sums up the challenge
The Rolling Stone piece thinks Amazon are best suited to solve this — and of course ‘owning’ the speakers is a useful advantage too.
And Spotify are trying to build a moat with Podcasts where they can have originals and exclusives and are rumoured to be buying Ringer for their network of Sports podcasts.
Publishing
Axios points out that a number of publishers are finally making money, making the category attractive to those VCs taking a longer view. This look at Publisher Business Models shows why — advertising is still core but a wider set of revenue sources helps too.
And as we pointed out at the top publishers with strong audiences are in quite a good position as the Perfect Storm rages. The excellent Flashes and Flames looks at the UK newspaper scene and points out how US issues are driving divesting and M&A — and the Telegraph is getting more suitors than anticipated. This too is down to US activity, as analysts are looking at the success of the New York Times and recognising that similar approaches could build on the good progress of the Telegraph team.
The Journalism, Media, and Technology Trends and Predictions 2020 is a good read to learn more about this sector.
TikTok
We spend a lot of time watching TikTok — not literally — as it’s quite an amazing phenomenon. It’s clearly shaping culture and still has plenty of potential for growth, as this new Comscore data shows.
A TikTok creator with 1.6 million followers explains how she gets paid for brand partnerships, song integrations and live streaming, where fans give her ‘gifts’ which get converted to ‘Diamonds’, which then get turned into cash.
And the firm is changing; hiring a new CEO to handle commercial issues out of the US ( possibly in LA) whilst the current CEO handes tech back in China. And the sales team keeps expanding.
For some more insight read this translated document on Douyin, the Chinese counterpart to Tiktok, which is only available to users in mainland China. It’s an official report from Bytedance who own both TikTok and Douyin
Games
As well as TikTok, Bytedance plan to go big in games and take on Tencent who dominate mobile gaming in China. Tencent are looking to grow globally and just offered to buy a successful Norwegian game firm, following their $8bn acquisition of a majority stake in Supercell
The new Sensor Tower report on apps (PDF) has good game data — as does the AppAnnie report shared last week
Merchants
This is a good topline on Shopify the one company that can take the fight to Amazon for ecommerce. But with their success comes competition — Elliot — a new US firm — is pushing its no code ecommerce store that works in 130 countries straight out of the box — for a 1% fee plus Stripe costs
Some negative press around as the issues over high ad costs get discussed. This piece supports my Bonsai Brand thinking as it argues that VC is not always good for DTC. It’s not that surprising that the Australian Orthodox Marketing mafia ( Ritson, Byron Sharp et al) are not taken with DTC and Mark Ritson on Casper has put the boot in here. Quite why evolving from pure DTC and digital to a blend of DTC, retail and wholesale (and a wider media choice) upsets people escapes me.
The one thing I can agree with him is his football team. Maybe it’s the pressure of supporting Leeds that makes him so grumpy?
The various badges (DTC, DNVB, eCommerce, High Street retail etc) don’t make that much sense though and smart businesses are blending all aspects of distribution and marketing to get to what’s right for them. These people are Merchants and Merchants have always embraced change and built amazing businesses. That’s the term we are using from now on.
These are two good pieces on the revival of the high street; this one picks up on talks at the big NRF show in New York last week and this uses Boston as an example of change.
And the Finnish post office are behind this Box concept to create a new self-service store for online shopping customers. It’s a good build on Amazon lockers.
There is a lot of smart thinking around the DTC / Merchant space — this is a look at Why taste communities are the future of marketing and this a long read on Owned Commerce — essentially the advantage of having an audience;
Publishers with organic reach can launch and test products without paid media. Intimate customer touch-points remove the need for focus groups
We keep coming back to Seth Godin;
“Don’t find customers for your products, find products for your customers.”
Deloitte on retail AR and VR — I still need some convincing that this solves any real problems
Privacy
As mentioned above, the Apple push into Privacy — they are now running TV ads on it — risks foundering as the anti tracking tech enables tracking. But more seriously Apple have dropped plans for encrypting backups after the FBI complained. And it turns out US cops have a few ways to get access already.
The big privacy issues are probably away from the devices. An obscure US firm has helped many US police forces with a facial recognition app that really invades privacy. This can take any picture and run it through 3 billion photos that it holds, looking for matches. Making it easy to identify anyone really quickly.
Actually it turns out the firm isn’t that obscure. Digging deep the New York Times found the firm is funded by Peter Thiel. The same guy who saw the real potential of Facebook and became the first investor. And whose other main business is Palantir, where the first investor was the CIA.
You can do something about this by blocking Google and Facebook from identifying your picture but it’s probably too late. Another case of closing the stable door after the horse has bolted.
Etc
Google CEO wants to regulate AI
BARB to Begin Measuring Unduplicated Cross-Screen Programme Reach
MIT on the new Leadership Playbook for the digital age
AppsFlyer on a decade of App marketing
Interesting thinking on SparkAR ads from a Fix reader
The FT on the struggles faced by Cinemas as they get squeezed by the Disney blockbusters and Netflix
UK watchdog sets out ‘age appropriate’ design code for online services to keep kids’ privacy safe
If you install the corporate version of MS Office, it changes the search engine in your Chrome browser to Bing
Sonos to deny software updates to owners of older equipment That cool speaker you bought is about to turn into a brick
Instagram’s VP of Product Provides Insight into its Hidden Like Count Test
Instagram growth hinges on Stories: Cowen 2019 advertiser survey
Surreal cuisine: Why investors and entrepreneurs are intrigued by ghost kitchens
And this guy sold Frozen pizza on Uber Eats for a week
Google’s ads just look like search results now
The Canvas8 expert outlook for 2020 is worth a look
Finally — Apple is annoyed the regulators want a universal charger — do they need the money that badly?
