Mobile Fix — March 22
newTV
Some new research from Deloitte looks at how US households are building their own entertainment services with a variety of subscriptions. But the costs and the difficulties in discovery frustrate many.
This is only going to get worse — DisneyFlix and BritBox are just two of the new services coming and both will see IP (Marvel, Blue Planet etc) shuffling from one service to another; making finding a show harder.
But, like Jim Barksdale said, there are only two ways to make money; bundling and unbundling. Someone will try and solve discovery and bundle services better. My money is on Amazon, who are acting as a reseller for some channels already, but until we know the Apple plans it’s hard to predict. Rumour has it they will bundle HBO and Showtime with their new service to be announced on Monday. But more casual arrangements like Spotify offering free Hulu to Premium customers will proliferate.
One of the issues discussed in the Deloitte study is ad load and how people have different acceptance levels. This week saw the first fruit of the Comcast Sky deal, with NBC announcing they will roll out the Sky Adsmart tech in the US. As well as all the benefits of Signal driven TV ads, the effect on channel hopping has been profound in the UK.
OldTV
It seems traditional TV has a viewability problem too — up to 29% of TV ads play when there is no one in the room to watch them. The bottom line is that if your ad doesn’t appeal to its audience they stop watching it — online by scrolling past it and offline by looking somewhere else — probably at the smartphone constantly beside them.
Matthew Ball has revisited his analysis of TV audiences in the US, with the latest data showing the decline continues — in fact the age group 2–34 watches half the amount of pay and over the air TV they did in 2010. But don’t worry; 65+ are watching more.
In the UK Thinkbox have a new analysis of viewing data and that shows that amongst 16 -34 live TV is now only 28% — but adding in time shifted and on demand viewing of Broadcaster content gets it to 45% — versus 50% in 2017.
As Streaming gets even more choice it’s hard to see a positive outlook for the traditional TV players — but we should remember that excel at making great content; Line of Duty, Fleabag, Killing Eve, Vanity Fair etc. Great content attracts eyeballs and hence revenue — it is just the business model of ads that is shifting.
Video Creative
With any creative it is now essential to make it bespoke for each channel — what works on Instagram probably won’t work on Facebook or YouTube etc. In our experience the additional creative costs are more than covered by the improved media performance.
Twitter are sharing advice on how to make the most of their platform — pointing out that repurposed TV ads do not work. YouTube devote a lot of effort to helping brands understand how to use online video and this advice on experimentation from their Unskippable Labs team is good.
Instant shopping
Our imminent Venture Capital Conference in New York looks at how digital, data and signals are transforming the purchase journey and we have chosen the theme of the End of Serendipitous Discovery.
The latest news from Instagram of a checkout within the platform is more evidence of the pace and scale of these changes. For the 20 brands trailing this, people can click on their ad and buy straight away without visiting the brand site.
It’s a fascinating development but we wonder who owns the customer data? Clearly the brand gets the customer info for fulfilment but the platform has an enhanced knowledge of the customer and their purchase habits. We’ll be watching this.
And if the question of how Signals is changing shopping intrigues you — and you work at a brand — we maybe able to sort you a ticket for our VC event on April 4. Check out the stellar line up of speakers and drop me a line if you would like to join us.
Data and Dark Kitchens
I was slow to see the network effects of food delivery — it seemed like another business relying on minimum wage workers to take a margin on a growing business. But the data learned from knowing I like a Smokey Robinson from Patty and Bun on a Friday evening can be really valuable.
As both sides of the business (restaurants and delivery) recognise Dark Kitchens can transform the economics of the business, data becomes gold dust. Uber are experimenting with dark kitchens in Paris, competing with their former CEO. This piece summarise the switch from platform to operator that Deliveroo is making.
Patty & Bun don’t know i love the Smokey Robinson and when i visit the local branch they don’t know I am a regular — albeit on takeaway. But Deliveroo know what I like and can point me to Lucky Chip — or their own private label Burgers.
It’s a similar story with booking tables. If we want to book our local favourite Bistrotheque calling them gets us a good table. If we use the Open Table link on their site it works well too. But some worry that the booking service starts to have the advantage, knowing the range of my bookings.
This is why we worry slightly over Instagram handing the checkout; does the brand lose out over time? The advantages of a Direct to Consumer business model does rely on going direct to consumers. You let someone disintermediate you at your peril
Private Label
A survey arguing that most Amazon private labels are duds has attracted quite a lot of press. I think this is wishful thinking; the idea that DTC brands can and do drive great success, but Amazon can’t, makes no sense.
This quote could have been applied equally well to Warby parker, Allbirds etc;
Even when Amazon says ‘check out our own brands,’ consumers don’t know what it means and wonder why should they buy this thing they never heard of before
I believe the rise of DTC brands makes private label easier for Amazon are people are constantly seeing new, unfamiliar brands. This long read on the Aldi grocery business includes their success with private label. Amazon are not going to give up on Private label as their new skincare launch shows; they have made the transition from platform to operator and their data will make this work for them, eventually.
Google Regulated
In my one conversation with Eric Schmidt, he talked about how Google would be pressured by the EU rather than regulators in Asia and the US. Ten years later we see how right he was with a €1.5 billion fine from the EU for freezing out rivals in the online advertising business. Google have announced a number of policy changes including making it clearer to Android users that there are alternative browsers and search engines.
But the climate in their home market is deteriorating too. A leading Democrat is calling for GAFA to be broken up and if you read the Trumps’ tweets they feel GAFA is being anti conservative.
Google Stadia
Despite being assailed by regulators everywhere, Google continue to push new products and services and their latest initiative is a very disruptive game service called Stadia. This leverages Chrome and Chromecast to enable people to play games on any screen, without needing any more hardware than the new Google controller.
The issue that has prevented streaming gaming in the past is latency, but Google believe they have solved this. No word on the business model yet but the competition is fierce — the console firms are powerful and so too are the game publishers. And Amazon and Microsoft have ambitions for streaming too.
The sizzle video from Google captures the excitement of gaming well and as we have seen with newTV that people like the idea of content that is available on any screen.
GAFA & News
The terrible events in New Zealand have focused attention on GAFA too. The atrocity was designed to go viral and it’s depressing to consider how many people were uploading the content — thwarting the efforts of Facebook and YouTube to take the content down. This is a good summary of the issues — we have to find ways to stop extremists exploiting the open nature of these platforms.Especially as Instagram seems to be blighted too.
The behaviour of some reputable news sites was disappointing — as I tweeted; When you run video of terrorist atrocities on your news site don’t be surprised when brands exclude news sites from their ad campaigns.
Adtech
Adtech royalty adding lots of value this week. Ari from Beeswax describes how the Google ad stack now connects up, with a fascinating diagram. Lots of good stuff in the comments too. And this podcast with Bok — who essentially invented Programmatic — is a must listen, especially as he talks about how the obsession with audience has led to the chronic undervaluing of Context.
China & Influencers.
More good insight into KOLs in this long article. And more in this interview with a leading fashion KOL. In the west I think we have missed the point with Influencers and a rethink, using learnings from China, would be useful. This FT piece on influencers in high end Jewellery hints at the opportunity.
And Tencent have published their annual report as interactive mobile content. Have a look at this and tell me again why your mobile advertising is so poor.
Apple News
As well as unveiling their streaming TV service, the Apple event on Monday will give us insight into the revamped Apple News service and it is rumoured the Wall Street Journal are participating. Read about Apple News on their site and the user experience sounds great;
But what about the ads? Surely we don’t want dull MPUs floating about in the middle of the screen? One of our adtech friends have a wonderful creative tech solution that works on Apple News and enables Publishers to offer amazing creative. Let me know if you would like an early peek.
Apple didn’t wait until their event to launch the eagerly awaited new version of Airpods.
Quick Reads
Is Voice good for sampling? Nutella are testing it.
Darren Hermann points us to Headless commerce -very interesting. Darrens newsletter is a good read.
The hottest teen app is Google Docs — a neat way to message your pals in school
VC Andrew Chen on what he looks for in an investment
Good piece on some fashion entrepreneurs — including some Fix subscribers
More top execs leaving facebook.
Finally….. the real asset of good Agencies is their strategic thinking. Two of the best Agency planners shared smart thinking this week. Wiedens Martin Weigel nails the power of words and Saatchis’ Richard Huntington talks of the value of Deep Work and reminds us that;
You are not paid to be on top of things, you are paid to get to the bottom of them.
Fix is my thinking rather than that of MediaKitchen. We now have over 6000 subscribers across Google, Facebook, Snap, Amazon etc as well as many VCs, Brands and Agencies
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