Mobile Innovation at risk?
I am currently rereading Burn Rate, Michael Wolf’s excellent book on his adventures running a content business in the early days of the web. Starting in 1996, his stories of VCs and startups still sound quite contemporary. The figures are amazingly small though – he talks of Excite having a $40million warchest.
But the thing that resonates most is the description of the shift taking place from AOL, Genie, Delphi and Prodigy towards the web – and the huge excitement as people moved from a controlled environment to the free web, where anyone could do what they want.
I’m old enough to remember that era – we had just started Poppe Tyson in London – and many prospective clients were still investing marketing budget in AOL and Compuserve.
As we discussed last week, the web seems to be taking a back seat on mobile and the rise of apps is arguably taking us back to that controlled era. Chris Dixon of VC firm Andreessen Horowitz points out;
Apps have a rich-get-richer dynamic that favors the status quo over new innovations.
VC Fred Wilson agrees that the dominance of apps is stifling innovation and looking at the top 200 apps sees very few that are recent venture backed businesses.
GAFA are crucial in the discovery and distribution of apps and we all know that without a substantial budget for Facebook app install ads (etc) it’s nearly impossible to get an app to scale. And the appstore tax of 30% is a major factor too. Are the Vertical Stacks the new Walled Gardens?
The Net Neutrality arguments are designed to give similar status to the Mobile Networks – which, as we know, stifled innovation in mobile prior to the GAFA era. This is a good summary of the various points of view on apps and the threat to innovation.
Yet the combination of the mobile web and mobile search are still low cost options – and therefore great opportunities for innovation. And in our research we find that people think of apps as the icons on their home screen; click on them and something happens. Few know or care about them being native apps or bookmarks for mobile websites. If it solves a problem, it will probably earn its place.
So in our projects we usually advise that a blend of mobile web and native apps is the right way to go – together with smart thinking on how to use search and social to drive discovery and get than icon on the home screen.
As Ben Evans points out, the mobile opportunity is still wide open and current trends are no real indicator of where we might end up. The size of the mobile opportunity means that everyone needs to get involved and invest smartly in learning what works and what doesn’t for your business.
Reading Burn Rate you remember that those early days were just the start of the digital switch that has changed how millions of people live their lives and transformed every business sector.
We are now just at the start of the Mobile switch where billions of people are going to have their lives changed. And every business sector is going to get transformed again.
It’s time to experiment.
A very experienced smart marketer slightly stumped us this week when he posed the question Why should I spend any effort on Facebook? He totally saw it was a valid media channel for ad buys, but with a modest number of followers he wonders why he should invest in time and content to grow his likes, when there is now little benefit in free reach. Of course as part of a social strategy of ubiquity, the effort in Facebook improves results on Twitter, Google+ etc as some content can be reused. And knowing what content resonates with fans does help improve ad performance.
But as the Facebook Feed evolves we see both users and brands frustrated with the experience. This TechCrunch piece gets into the details on how the Feed is now constructed and looks at the various complaints, but we don’t see a solution yet. John Batelle argues – quite convincingly – that Facebook should let the user take control.
It is essentially the same challenge that Twitter potentially has. Twitter is a hugely valuable service but you always have the nagging doubt that you may have missed some good stuff if you haven’t checked for a while. But I prefer that to a feed that Twitter have decided is the right one for me. Again we thinks lists are an underused asset for Twitter; setting up some specific lists allows for an occasional browse of a certain set of Twitterers, without needing to have those feeds in your timeline.
With a whole swathe of new ad formats on the way, Twitter is ramping up their advertising push and by redesigning profile pages potentially make them much more usable. Some think that these profile pages could evolve to be someones main profile on the web; you may have a blog and a LinkedIn page but an improved Twitter profile would probably be a better representation of you.
Just as Facebook and Twitter share similar problems – and similar ad formats – the new profile pages makes Twitter look a lot like Facebook.
A couple of other useful bits on social;
This is a good roundup of thinking on what the ideal length of a Facebook, Twitter or Google+post is. We were told a while back by Facebook that the average brand message is much much longer than the average users posts – the challenge for a brand is finding a way to convey their character in as few words as possible. It has always amazed us that brands often leave their most important language – search ads and social – to inexperienced media buyers and project managers. There is wealth of copywriting talent that should be employed for these crucial tasks; the easiest way to double response to both search and social is great creative.
Twitter have shared why people follow brands; people want to hear from these brands – especially with promotions and special offers
It’s clear that messaging is going to change social and Facebook are keen to stay ahead of the curve. They demonstrated this when they bought WhatsApp, but many questioned the role for their own Messenger service. They are now stripping out the Messenger functionality from the Facebook app, so users have to download the separate app – continuing the single purpose app strategy they showed with Paper.
Ex Facebook exec Christian Hernandez has a good look at these new apps in this piece on the pros and cons of relying on someone else’s platform. Well worth reading.
Hardware – Cheap & Useful
Working on an ebooks project a few years ago, we recommended the backers ( a number of publishers and a major retailer) to ignore the siren call of developing their own hardware and instead develop for the nascent tablet market as well as smartphones. As it turned out that was sound advice. Then
Now it is possible to develop hardware that is cheap enough and good enough to differentiate your business. Tesco are making a pretty good job of it with Hudl and Google are having a lot of success with Chromecast (we are less convinced about the Chromebooks).
Amazon have done a brilliant job with the Kindle, straddling both hardware and software, and Fire seems to have started well – it’s the bestseller in electronics on Amazon.com.
Their latest piece of hardware is really intriguing. Dash lets users scan a barcode of any product to add it to their shopping list – and it can also work with voice too. It is only available to customers of AmazonFresh – their grocery home delivery service currently in Seattle, Los Angeles and San Francisco.
The biggest problem for people like Ocado and Tesco is online grocery basket size tends to be smaller than a shopper in store as the impulse buys don’t happen. But once on the list they tend to be reordered again and again.
So for Amazon to have a tool that people can use around the kitchen to reorder should be great for both retention and revenue. And as a physical object it should also help with customer acquisition as people see it in their friends’ houses.
Most of the smart people we know in the Grocery business are convinced that its only a matter of time until Amazon launch Fresh in the UK. This is a good look at the US market for home delivered grocery and it reminds us that dotcom casualties like Webvan actually did have market impact – it was just way too early.
Interestingly Dash has dotcom ancestry too. Does anyone remember CueCat? Launched in 2000 this barcode scanner needed to be plugged into a PC before it could read a code on a product or in an ad. Called one of the 25 worst tech products of all time, it didn’t last long. But as we see with Dash, these ideas have real potential once you unlock them from the desktop and define the problem that needs solving.
“All the dot-com ideas were correct,” “They were all too early. They are happening now.”
We’re looking for content ideas in Burn Rate to reimagine for today.
Dropbox is looking to play a bigger role in its millions of users lives, with new apps for email and photo sharing.
The Music business isn’t in as bad a state as many think. This profile of Lucian Grainge suggests streaming will soon turn into a major revenue stream
The New York Times has an interesting new app called NYT Now and it’s getting good reaction. With a subscription model and native ads, the key question is whether it differentiated enough from the Times itself?
There is a lot of interest in news content at the moment, with a focus on niche plays. But the business model is in question; as the writer of Burn Rate points out, the ad business wants scale.
Finally.. a couple of our agency friends questioned our take last week that the Agency world hasn’t embraced tech yet.
But this week Agency bible Campaign is running a story saying;
Another survey suggests many Marketers don’t really get the idea of ROI and hence struggle to demonstrate the true value of marketing to their board.
And client de jour Bonin Bough suggest Creative agencies aren’t necessarily the best partners for brands
Now obviously this is a generalization and there is some great talent within Agencies producing great work. For smart clients who really do get it.
But nearly 20 years into the Digital Switch it’s still a little patchy and you have to ask yourself if you are getting the right thinking on mobile, social and content from your existing partners.
Or do you need some provocative Big Picture thinking?
(No Fix next week as we will be eating Chocolate in St Ives. If you fancy a change from Eggs check out our friends at CocoaRunners who can send you a box of fabulous artisan chocolate. If you use this link and use ADDICTIVE as the code you get a £3 discount and we get a free bar. Enjoy.
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