This week provided yet more evidence that mobile is changing everything.
Apple made more money than any other company ever. $18bn in profit in just 3 months. Only oil companies have come close. And Facebook blew through predictions to have a record quarter – their results deck is worth flicking through. Whilst the topline figures above are amazing, the stat we think most relevant is that over half a billion people use Facebook each month only from their mobile. And over on the other side of the world Alibaba customers spent over $50billion on their mobiles in 3 months.
The world has changed and we need to evolve marketing to take advantage..
The huge success of the iPhone drives the Apple performance, as iPad growth continue to slow. It’s likely they sold more iPhones than all the devices that Samsung sold over the same quarter. And they lost more money due to currency fluctuations than Google made profit in Q3.
The watch is next and the talent drive continues with the hire of the person behind Burberry digital retail initiatives – who dreamt up things like this Christmas window display at Printemps in Paris.
Pay is a key Anchor for Apple – a service so good people will be reluctant to move to an Android – and a new deal takes it into 200k vending machines and self serve locations across the US
Another key stat from the Facebook investors deck- is that the Advertising ARPU is $8.26 – up 55% on the same quarter last year – whilst in Europe it is just $3.22 – up 36% on 2013. So despite fantastic growth, there is still more potential – supporting what we hear from brands.
They continue to grow their suite of tools for brands and a new tool lets advertisers test ads against control groups. The FT looks at their ambition to take TV budgets and concludes by quoting an analyst who says she thinks it will happen very slowly. We disagree. The ability to target video and optimise creative messaging using data will be hugely attractive to smart brands.
And the other end of their mission is to bring people in emerging markets onto Facebook which is helped by a new app for emerging markets. Designed to work on low end Android devices this ‘lite’ app is being launched in 8 markets across Africa and Asia.
The Google results were OK - not quite good enough to beat estimates but healthy rises in revenue and income was 40% higher than the same period last year. Although this was helped by the proceeds of selling Motorola.
Google search share declined by 1.6% after Mozilla switched to Yahoo as its default search engine – showing its vulnerability to the same happening at Apple.
And they continue to drive new/better ways of connecting to the internet, with Fiber rolling out into new cities and investments in Elon Musks’ SpaceX programme so they can use satellites to deliver internet access to remote parts of the world. But the most surprising thing is their rumoured partnership with Sprint to develop an MVNO – where US phone users could use Google as their phone network. It’s what Virgin and GiffGaff do in the UK and we suggested it was a good idea for Google back in 2006
Not all Google projects are on such a grand scale – the ability to pay bills via your gmail still solves a problem and is now available in the UK.
Amazon beat estimates - the first time for a while – and surprised everyone with a modest profit and impressive growth in Prime customers. But their wallet has been withdrawn - although the benefits to Amazon of knowing what people are spending on is so huge we are confident they will keep trying.
And they continue to try new products – they now offer email with a new WorkMail product.
Of course we now know that GAFA is not the only game in town and the moves made by BAT in China are increasingly influential. Yahoo cooked up a smart way of dealing with their hugely valuable Alibaba stake saving billions in taxes.
The key thing though is that Alibaba users spent $126 billion over the last quarter – of which $53 billion was on mobile.
There is a lot going on at Snapchat. Their news service looks really good. Their ad products are getting a good reaction. And they are attracting brands looking to innovate, with ATT launching a scripted content play. The production company behind HollyOaks have already used Snapchat stories to reveal a storyline and we are convinced that episodic content with thrive on social media.
I think the ad industry massively underestimates the amount of ad blocking software that users deploy #Adblock
— Darren Herman (@dherman76) January 28, 2015
We agree with this tweet from a key person at Mozilla. The economics of content creation are fragile enough without users avoiding the main monetization method. Our friends at econsultancy have taken a good look at how publishers play with pay walls and subscription barriers. We probably need better ad models to deal with this and Rezonence are doing some good work on this with their Freewall, as are TrueX for video, who were bought by Fox recently
An FT feature on mobile money points out that across Africa innovations with mobile continue to get mass market acceptance. Lots for Western banks to learn here.
A good take on driverless cars and how they will change the world – faster than you think. One thought – will Google use these as mobile wifi hotspots?
And Googles own futurologist Ray Kurzweil makes some very interesting predictions about the future here. In 25 years non biological intelligence (robots) will be a billion time smarter than biological intelligence (us)
We are increasingly convinced that O2O retailers are going to beat online pureplays. Having an offline presence makes so much sense and this article looks at how people like Warby Parker are investing in shops. And even good old fashioned mail order catalogues are enjoying something of a comeback. Combining the best of both worlds has to be the best bet.
With the inexorable rise of programmatic there is some debate over how agencies are approaching the space. This anonymous account of the UK scene is interesting but should probably be taken with a pinch of salt.
But the targeting inherent in smart digital can cause unexpected problems. WeChat users have reacted angrily to a BMW campaign – people complaining that they haven’t been targeted.
Finally… this presentation from the DLD event in Munich last week is a must watch. One of the few people I have found that talks even faster than me, Scott Galloway gives a great take on GAFA.
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