Mobile Fix — October 4
#AdTechPerfectStorm
Just like Wyle E Coyote we think many people in adtech haven’t quite realised they have run out of road. With the rise of privacy — driven by GDPR and the imminent California Consumer Privacy Act — running parallel to the demise of third party cookies through browser policy changes, we think it’s a Perfect Storm for adtech.
And that everyone needs to change their approach.
The canary in this coal mine is retargeting giant Criteo — with a share price currently at a third of its 2017 peak. Their story isn’t bad — they claim 2 billion Criteo IDs — with just 6% reliant on cookies but does their complaint against Facebook show they are feeling the heat?. I think it’s unlikely a French authority is going to find against a French tech star, so this will be worth watching — but if anyone knows the detail of their complaint please share.
Whether UK regulators show any patriotic favour remains to be seen. This video from the Rezonence event we mentioned last week show the ICO lead give a veiled threat they will go after the people who are not complying — and from his repeated use of the word proportionate I think they start with big players. The video of the full interview is here.
The putsh on Cookies firm Apple continues with a new update on their Tracking Prevention ITP3 designed to counter link decoration.
New research from search engine DuckDuckGo shows 80% of US adults have changed their privacy settings on social media — or dropped out completely. And beyond social, significant numbers have taken action to protect their privacy
Privacy advocate Doc Searls shared an old article suggesting that one of the causes of the increased use of ad blockers could be the rise of retargeting, which we all know annoys people, but unfortunately the ads work sufficiently well to justify pissing people off. Back to Criteo — who made a fortune out of this.
We know there is a lot of positives with AdTech and there are ways to make digital advertising work better for People, Publishers and Brands. Reading the latest Luma report you see a lot of M&A activity as people try to better position themselves. To ride out this Perfect Storm needs a fresh approach but it’s not going to be easy. How are you getting on?
newTV
BritBox has announced new distribution deals with Samsung, YouView and Freeview. It’s interesting that Sky is not included and that there is no mention of Channel 4 as a partner — after we mentioned the deal between Sky and C4 last week. If this does indicate a divide in the UK market — and remember ITV chose not to follow C4 and C5 to use Sky Adsmart — it’s a weakness. BritBox will need all the help it can get to fight off the big US services launching soon. It’s interesting that Apple will struggle to meet the EU requirement for 30% of content to be local. Leaving aside whether current affairs affect this for the UK — the natural strategy for Apple would be to flex their cheque book and buy local content. But much is made by / for the BBC and ITV and therefore destined for BritBox. How strong are those deals and will Content creators be tempted away from the BBC and ITV? Or will we see more joint projects — but in that case they won’t end up with BritBox?
For example the Night Manager was a co production between the BBC and AMC — who have a deal with Netflix, yet the Night Manager is now on Amazon Prime.
It’s been a bit quiet on GAFA and sports for a while but despite the lack of headlines there is plenty going on. It’s just a few weeks before Amazon show all the midweek Premier League games live — then the same on Boxing Day.
They are working with BT Sports to lets Pub show the games — if they buy the Pass Reaching a deal with Sky so their customers can see these Amazon games is proving trickier — with Amazon apparently unwilling to pay the Sky asking price. We haven’t heard anything to suggest that Amazon change their Prime policy of no ads and the ROI for Amazon here is selling some more Prime memberships in the run up to Christmas. I expect we will see Amazon promoting these games heavily and they already have a very active Twitter presence focused on sports.
Facebook have a new sports deal — digital rights to Cricket in India. The exclusive is for India itself but the deal also lets them show match recaps around the world. In the official Press Release the Facebook exec talks up AR and VR too. If GAFA just show sports in the same way Trad TV does, the opportunity is missed so we expect innovation around how the Sport is shown.
Where newTV is adfree Brands can and do get involved with product placement as this piece shows.
DTC
The relationship between DTC and big Trad Brands — particularly in CPG — is fascinating. We have seen the acquisitions like Dollar Shave and Harrys and the attraction is around two axis; data and NPD.
In the old days launching a new brand was hard and expensive; 1/ get the product right, 2/ get wide distribution — by promising to 3/ spend heavily on promotion and then pray. Letting DTC brands innovate, test and learn — then buy them — is becoming good business for big brands. (The Luma report also covers some of the more notable DTC M&A)
P&G and others are also learning how to do this themselves — P&G Studio has created 4 brands. But they need $billion brands and we think many / most DTC brands are Bonsai Brands, so there is some tension.
McKinsey has decided to learn by doing and are opening a store selling underwear and make up — and testing instore tech. Things like magic mirrors don’t do anything for me and we have seen no evidence people like this tech. And you can pay in Crypto currency. We spend most of our time telling retailers to accept Apple Pay etc — virtually guaranteed to boost revenue. Taking Ethereum as payment for a lipstick is unlikely to have much effect.
Ex Murdoch super exec Peter Chernin is investing in DTC and has bought a majority stake in Food52 — recipes and cookwear. About2pm have thoughtful coverage of this combination of content and commerce.
There is a new dimension for cooks, with the rise of dark kitchens — the ability to sell your food direct and have Uber etc market and deliver it for you. US celebrity chef Rachael Ray has partnered with Uber Eats to do this. Imagine if the day after the Masterchef winner is chosen, you could get a dinner cooked by them, through Deliveroo. That would be the epitome of a Fan made Brand
Amazon
I have been quite skeptical over Amazon claims on the roll out of their cashierless Go stores. Now they are looking to partner with existing chains to install there tech in airports and Cinemas. Makes more sense, though the idea of cashierless Pick and Mix sounds like trouble. (Another firm is trialling similar technology at sports grounds)
At an excellent dinner focused on Retail this week a push back on the strength of Amazon was their lack of success in fashion. I think their continued efforts will eventually pay off but others doubt that. The Amazon partnership with Rihanna supports my view. As well as premiering the Savage X Fenty fashion show Amazon carries the whole range of products. This is a good take on the strategy.
We know that Amazon keeps trying Private label brands and another firm — who play in that content and commerce space — are doing something similar. Leveraging the data they have on their newsletter readers they develop products that are only available on Amazon. And use their newsletter to carry ads driving traffic to the product pages. Really smart idea and worth watching to see how they do.
In all the excitement about Alexa glasses and earbuds last week I missed the Alexa Ring — here someone reports about testing the product.
Audio
There is a theory that BAT (the Chinese GAFA) should change from Baidu Alibaba Tencent to ByteDance Alibaba Tencent. TikTok is doing so well that Bytedance is a real contender but Baidu are fighting back. As we have mentioned before they are a big player in smart speakers in China and think they have the potential to be the next smartphone so plan to shift their search business to Voice.
A sign of the growth in voice is the IAB doing an Upfront for Podcasts in London this week and this is a good summary of the current state of podcast advertising
Novel ways of using Voice are emerging; Foursquare see that blending their location knowledge with earbuds could be a winner and A16Z have backed an audio focused learning platform called Knowable. The commitment of A16Z to audio is colossal and their expansive look at the Podcast ecosytem from a few months ago is still a must read.
The latest Instagram app Threads was leaked a few weeks ago and we were intrigued by it then — now it’s officially out and it does look good. It reminds me of the Path app where the number of friends was limited to 50 but the addition of messaging make it a clear Snap competitor. It automatically populates with your Instagram Close Friends list and things like automatic status updates look interesting.
The main app keeps adding features as well — brands in the retail programme can now use reminder notifications to build anticipation for product launches
Instagram efforts to keep control of brand / creator partnerships extends to IGTV with a new Branded Content tag
China
As everyone looks to learn from China this detailed look at WeChat is very helpful — I have the app but other than some of the mini games it’s hard to navigate without good Chinese language skills
More evidence of China as an example is the data in the new McKinsey report on Digital Consumer trends in China, Ecommerce could exceed $1.5 trillion this year. It is already 25% of total retail and compound annual growth rate over the past 4 years have been 24%. For comparison, the UK is at $135bn and 22% of total retail with growth of 14%. The full report has loads of data and there is huge amounts to learn here.
Snap
I enjoyed the Snap Upfront this week — standing room only as they focused on their content — this IAB report is a good summary but doesn’t include the research Snap shared on how well their formats perform
This video interview with Snap founder Evan Spiegel is good although he makes sure he talks ‘at a high level’ on the Voldemort folder about Facebook etc. One of the best bits is 15 minutes in when he describes the creative process that led to them inventing Stories.
And new research for Snap shows that what we used to call pester power is still a big factor in retail;
Quick reads
Good tip on managing remarketing with Google
Stratechery has a good piece on Uber, WeWork etc and are they tech firms; Neither and New
Then read this FT piece on the latest results from Deliveroo — Sales of £476m and expenses of £350m, so a loss of £232m. And a valuation of 4$bn
And this on why newTV success Cheddar was sold
Long piece on the impact of OTT on sports rights — basically GAFA isn’t going to make rights owners even richer. I tend to disagree as i think when strong teams can go DTC they will do really well. Secondary clubs will come a poor second
Good infographic on mobile fraud from the experts in that space — sorting fraud not committing it
Google photos can now read text in Photos — so making screenshotting even more useful
Beauty brand Mac targets gamers with Twitchcon sponsorship
The hottest ticket in New York last week was for the premiere of the Irishman — the new Scorcese gangster movie. That is being released by Netflix. But cinema screenings qualify you for Oscar consideration and can drive lots of publicity. Apple plan to do the same with their top content.
Our friends at Spirable are doing a webinar on Personalised Video with Facebook and Pandora — it’s a great case study and well worth joining
We mentioned last week how Instagram is letting people monetise their close friends but missed out the link — here it is
Finally… you know how you reach the end of a webpage and suddenly the page is full of clickbait headlines, dodgy pictures and a few random ads? Well the two firms that do this are to merge. They make a lot of money and say the ads work, but the context is terrible and they ruin the customer experience of well established, respected publications. A good example of how poor ads can really spoil things.
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