Picking up on this from last week, the UK is one of the most monitored societies in the world — it’s estimated that there are over 500k cameras in London alone. Bloomberg looks at how Facial recognition is being used in Europe and aren’t keen.The current BBC drama Capture focuses on CCTV and it looks like deep fakes are going to be part of the storyline too. Worth watching.
Benedict Evans has written a good piece pointing out that — like most technology — facial recognition can be used for good and bad. He makes the excellent point that the way tech is ‘regulated’ is polarised between Europe and China
The really interesting question here, which I think goes far beyond face recognition to many other parts of the internet, is the degree to which on one hand what one might call the ‘EU Model’ of privacy and regulation of tech spreads, and indeed (as with GDPR) is imposed on US companies, and on the other the degree to which the Chinese model spreads to places that find it more appealing than either the EU or the US models
Trying to get ahead of the inevitable problems the BBC have gathered news groups and tech companies to fight disinformation
Retail / DTC
When Sainsburys announced their first till free store a few months ago, we covered it as more evidence of retail innovation — but I expressed some reservations. So guess what? They are putting the tills back. An unexpected item in the bagging area?
And others have spotted that Amazon don’t seem quite so gung ho about their Go stores anymore. At the other end of the store scale Puma are opening a Brand Cathedral on News Yorks’ 5th Avenue — lots of experiences and visitors are encouraged to use the Puma app to get AR experiences by scanning barcodes. In our last Retail Safari we saw that many of the big Fifth Avenue stores have a similar approach.
Winning with tech in store relies on adding something extra to the experience rather than — as Sainsburys did — merely outsourcing a job to the customer.
Over in DTC world, stores are a key strategy — and Neighborhood take the Department Store approach and aggregates a range of DTC brands
As DTC brands evolve into more complex models, retail stores make sense and modern brands will follow what 2PM call the Bonobos Curve. The back end support for these changes can be a challenge but Shopify have evolved their model too — securing their dominance in modern retail. The Economist have a article on Shopify, which is a good introduction to a remarkable company.
Another way to connect the real world with the online world is visual search and more and more brands are experimenting with the tech — whilst one of the leading players — Tel Aviv based Syte — has raised $21m.
And more experimentation from Burberry — who are seen as real innovators — with their own Instant Messaging service, developed with Apple.
Whilst luxury brands avoid (gaming) terms like Whales, they too have a small number of very important customers who spend heavily — so the better the dialogue the more likely that customer is to spend.
“We’ve always felt like developing the technology for ‘chat’, because the relationship between associate and customer is so personal. It comes back to that luxury concierge concept,”
Some other luxury brands already do this on WhatsApp and WeChat and London based Threads sells only through chat messaging. The success of DirtyLemon selling only through SMS is another indicator this approach is going to grow into a strong retail channel. Even GaryV is doing his new wine business through text
The pace of change makes calling winners hard in the DTC space and innovation around customer acquisition and lifetime value is crucial. Here VC Lerer Hippeau explain what they look for to benchmark DTC brands — i think it’s a little light on detail but still interesting.
A provocative piece asks Are mobile marketing agencies relevant in 2019? The thinking revolves around the fact that the Facebook (and to a lesser extent Google) algorithms now handle much of the work an agency exec would have done. This is true and the workload has reduced. But if you are doing the work at the right level there are lots of other things to do that add value — as this blog post by a game developer shows. This example looks at how the Facebook Campaign Budget Optimiser can be made to work better.
My point is that smart people can still add real value and the automation of tasks can free up time for going deeper. Take this detailed look at Lifetime value for SaaS businesses from a VC firm. So much detail as its a B2B business, but thinking about what a customer is really worth drives how a business grows and should inform customer acquisition work. The thinking from Andrew Chen and other growth experts around subjects like Viral Loops is another area that needs serious consideration. Who is doing that for your business?
Our friends at Contagious have a great interview with Nick Law who is moving from the Agency world to Apple, in which he nails the problem with agencies;
For 50 years, that output was dominated by broadcast because, from a business model point of view, that was where most of the revenue came from. So we ended up designing agencies that were really good at delivering that.
Most Creative Agencies still worship TV and all agencies tend to be factories producing what they worship; TV ads, websites, mobile apps, Media plans etc.
What clients need is really smart people who can solve problems for them. But if you think the answer to every problem is what your factory makes, you have compounded the problem.
Now there are loads of smart people in Agencies who recognise this issue and are working hard to evolve. A great example are the clever people at Essence who are celebrated to this good Campaign article
Everyone worries about consultancies but they tend to be factories too — this new case study from Accenture and Illy coffee is good, but at the end of the day they built a website.
In our podcast conversation with Rory Sutherland (available soon) we get into this. The point I make to Rory is that Agencies no longer get paid properly for the value they create — instead they get paid for what their factory produces. And procurement drives that down.
So the journey Gin Lane took, from an agency to running a set of their own brands is fascinating. The same skills and approach but a different business model where they are rewarded for the success of their thinking.
Big Tech & Government
Leave aside the ramifications of privacy and the changes to cookies, the long arm of the Government and regulators are all over adtech. 50 US states have launched investigations into Google dominance in search and advertising. And 8 of these States are also taking a look at Facebook.
In parallel the big tech firms are talking with the US government about the 2020 election — and the sort of difficulties faced are shown by the imminent book by Trump Junior called “Triggered: How the Left Thrives on Hate and Wants to Silence Us” (and topics) will include free speech, censorship and Big Tech
Facebook have a new policy for the news they showcase — recognising that promoting ‘mainstream’ media is often seen as biased. Quartz are going to be investigating the whole space of online political influence.
A timely report from A16Z on how group chats are growing and what they call conversational commerce. Using a cohort of good customers in this way would be equally interesting in the west.
A new Chinese video app is growing fast — with 3 million daily users in Brazil. Backed by Tencent, could Kwai be the next TikTok?
Is this the first YouTuber to switch to the Chinese internet? Sure he won’t be the last. The scale of the market and the money is demonstrated by the success of the Little Red Book which as a major platform for luxury brands and Key Opinion Leaders. But it got out of control and was removed from the app stores by the Authorities. Now with a much tighter focus on which KOLs are allowed and a purge on paid content they are back in business.
As TikTok goes mainstream Instagram are launching a feature called Clips which seems ‘inspired’ by their Chinese rival. If you want to appear au fait with TikTok this is a good guide to Duets, Cringes and Challenges and everything else that makes it so compelling.
As the new IPA Touchpoints research shows that UK viewers are watching less TV than ever it seems counterintuitive for the Broadcasters to be increasing the amount of ads shown. Yes it makes sense as the advertiser demand is there and revenue isn’t as healthy as it could be. But we all know that those who don’t watch on delay (so they can fast forward the ads) are pretty likely to pick up their phones during the adbreak.
Now we know how effective relevant ads are wouldn’t it be better to go for quality rather than quantity? The revelation from Sky that showing the right ads reduces channel switching by 48% and boosts ad recall by 49% should herald a new approach in TV. Not longer breaks.
Change is happening. In the US, NBC will now sell against impressions rather than rating points and the new Nielsen research methodology will measure audiences watching out of their home — at a friends or in a bar.
But, like just about everything else in life, the ubiquity of the mobile phone and the way people use it constantly, changes TV. We are still waiting for someone to take advantage of this and run ads that are trailers for amazing mobile experiences — connecting the two media has huge potential.
Forrester have a new report on Cross-Channel Video Ad Platforms, under the title TV Is Dead! Long Live TV! I am not a subscriber so don’t know how good it is but this paper from the TMK team in New York is a really good take on connected TV and all the key players. And for the big picture the WARC coverage of my talk at Vidcon may be interesting — and happy to share the original deck.
I watched most of the Apple launch this week and two things stood out. First how important content is as an Anchor — a reason to stay with Apple. Most Apple customers won’t pay the $4.99 a month as they will buy a new phone — so Apple hope that they will be so enamoured with AppleTV — another reason to stay with Apple.
The second was how everything interesting was about the camera. We once did a project imagining that the iPhone was launched as the iCamera — and Jessops was the big retailer rather than Carphone Warehouse.
There has been lots of coverage but Stratechery has a good take on the services strategy of Apple
Last week we looked at How Apple uses its App Store to copy the best ideas. Essentially taking inspiration from a successful app and launching a similar one themselves.
This week the New York Times tells the story of how the App Store favours their own apps — as well as being a good story the way they tell it is fantastic too. Spotify is the best example — before Apple Music launched it would usually be the top result for an App Store search for Music. Shortly after launch Apple Music had the top spot and Spotify dropped to number 4. By the end of 2018 the top 8 slots were all Apple Apps and Spotify was number 23. After complaining to the European regulator Spotify is back to 4th.
It’s a long read but it’s an important one. Paying 30% of your revenue to Apple is a lot, but if they also promote house apps over others it’s clearly unfair. Apple now claim they have improved the algorithm but it looks likely they will be investigated.
Audio / Voice
One of the key commentators on the podcast space makes the good point that the Apple podcast chart is broken — with lots of scams. Given the pace at which this market is growing this is a subject that is only going to get more important.
Spotify want to take the crown from Apple and have an ambitious strategy to become the key hub for podcasts. Discovery remains the main challenge of digital and it’s the same with podcasts — if Spotify can make it really easy to surface the podcasts that people want they have a chance. And Spotify is OS agnostic.
Another new Forrester report looks at how Amazon are going to impact the Duopoly. This is some more coverage that mentions Forrester also look at the media networks Walmart and Target are developing.
We understand many Agencies are outsourcing Amazon buys to specialists and the transparency over this varies. Some have bought in talent and that’s likely to continue. This take from a media agency guy is interesting — the points about the tech and need for richer inventory make sense but I can’t see that Amazon private label strategy really impacts ad spend.
Artificial intelligence for marketing is at the peak of inflated expectations — according to the Gartner Hype cycle. Their is a clue in the name.
Our Friends at Spirable have raised £6m — this is a good Techcrunch piece on their business. Happy to make an intro
Finally… as I contemplate the next Fix events I think of those I have been to that are worth the investment of time and money. The TBD event last year was really good and this years looks even better — speakers from Alibaba, Twitter, Economist and more. I have negotiated a handful of tickets at just £200 — a third of the price — for Fix readers. Click here to get the discount.
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