Google released their latest financials at the start of this week and got a good reaction - mainly because it exceeded the expectations of Wall Street. With revenues up and a great contribution from international markets, the business looks healthy. Whilst click prices have declined year on year, in the quarter they were only 6% down against 15% down in Q3. So the impact of mobile search generating a lower price from advertisers seems to be abating.
Perhaps brands are recognizing the message we have been pushing; mobile search is a bargain right now – lower costs and higher ciick rates. What’s not to like?
It’s worth taking a few minutes to read the transcript of the earnings call where Larry Page talks about his view of the business. We loved this quote;
People carry a supercomputer in their pocket all the time. In fact we feel naked without our smartphone! And many users have more than one device … a laptop, a phone, and a tablet.
We’re living in uncharted territory.
And when answering questions he suggests that they are very optimistic about mobile.
So I think we have hit some uncharted territory, because of the rapid rate of change in these things but I am very, very optimistic about it. I think that CPCs will improve as these devices are improving as well.
On the earnings call Nikesh Arora says that 4 billion hours of video are watched per month. With a previous statement saying 25% of YouTube views are on mobile, can we deduce that 1 billion hours of video is watched on mobile each month? It’s clear that mobile video is huge, so we should see more investment in the mobile focused version of TrueView – the innovative ad format where brands only pay for ads that actually viewed.
And whilst Larry grows into the role of CEO, Sergey has been riding the New York subway testing out Google Glass. This video of him taking about Glass is worth watching.
Apple also released their latest figures this week and the reaction wasn’t quite as good. Whilst Google stock price went up by 5%, the Apple price dropped 10% – wiping $47 billion off their value.
They sold 18 million more iPhones and iPads than the previous year, and made $13bn profit in this quarter alone but, because that’s around the same as the previous year, investors hammer them.
There has been lots of speculation that the Apple story is over, with reports of low demand leading to cancelling orders for parts etc. But it’s hard to believe that Apple won’t continue to bring out great products that millions of people want to buy.
We see them as the German car of the smartphone market; the BMW/Audi/Mercedes. Not something bought by early adopters, but highly prized by those that can afford them.
These people don’t really care that the Samsung Galaxy and Google Nexus do (virtually) everything that the iPhone does for a much lower price – just like they don’t care that a Ford has a pretty similar spec as a more expensive German car. Apple is now a hugely successful luxury brand – but probably no longer the innovator in this market.
If you want to dig into Apples performance there are some great charts here.
Amazon don’t release their figures until next week, but given how buoyant online sales were generally we suspect they’ll be good. The two questions are; do they beat market expectations and – on a more micro level – does eBays great success in mobile represent a threat to Amazon?
One area where there are great expectations is advertising. Currently this is a $500m business for Amazon – largely through selling ads on their sites. Now that’s a lot of money and many media owners would love to have that sort of revenue – but it’s only around 1% of Amazons total revenue.
But as we have discussed before, they are taking the data they have on 150 million customers and using that to facilitate advertising through third party real time exchanges. But this year they plan to roll out an on house platform and take the ad business seriously. Now this will be a challenge to Google and Facebook, but we think the main driver is increasing product sales.
Using its data to expand its advertising business could open up new fronts of competition with Google, which also owns a real-time bidding exchange and an ad-delivery network. But Amazon might be mainly interested in using its ad technology to help the retailers that sell products on its sites and through its Kindle tablets and e-readers. Voytek put it this way: “The question that is open: is this Amazon competing with Google or is this Amazon competing with Walmart?”
And Amazon continues to surprise – today they bought a voice recognition business. Now what do you do with that, unless you plan to have a smartphone?
Facebook should release their figures in the next week, so we shall see how much of the hype around big investments by brands is real. And we should get a sense of how much mobile is contributing. Data from one ad buyer suggests mobile is 20% of the total.
With Graph Search still restricted to a small number of US users, we can only glimpse what the service might look like through this great Tumblr – Actual Facebook Graph Searches. It does seem there are a few privacy issues still to be thought through.
It’s worth playing with a new analytics tool for Facebook from search firm Wolfram Alpha. This service lets you see which of five groups your friends fit into; insiders, outsiders, gateways, connectors and neighbours.
This clever use of data highlights the opportunity of social and mobile to deliver insights – valuable and not so valuable. But Big Data does seem to be turning into a cliché. It’s hard not to be cynical when the trade press is full of senior people at traditional agencies waxing lyrical about Big Data (and the other current fad in adland; Agile) when they still make the vast majority of their income from good Big Budget Telly campaigns.
If you do want to understand a little more about data, then watch this great Ted Talk from Kevin Slavin on how Algorithims shape our world
An interesting look at how TV and search work together. As we keep saying TV has lost the war for attention and we think money will – eventually – follow eyeballs in the living room too. Mobile Search is a great way to build on a TV campaign – as long as you have a mobile optimised site. The article draws on the good research on the Multi Screen World that Google published last year.
As WPP look to build their digital business they are taking the lessons learnt in online and applying them to the Outdoor industry.
Amongst the digital success stories this Christmas John Lewis stood out – this interview is a good insight into their approach.
Some new research suggests that around 400,000 apps in the iOS App Store are zombies – apps that have no ranking and that no-one downloads. Wonder how many were ill-conceived brand apps?
Our friends at WeRInteractive (the clever people who brought you IamPlayr) have a really interesting new Facebook game that solves a key issue for the Music industry. Lyroke uses music videos as the basis for an addictive game that drives discovery of new music.
Finally …We are old to remember when the animated gif of a flame went around the industry in the mid 90s and caused wonder and excitement. Animated GIFs have been hipster fodder for a while now but they are about to go mainstream with Vine.
Vine is the new app from Twitter focused on video. But in keeping with the 140 character limit on Twitter, Vine limits you to 6 seconds. So we think a lot of GIFs are going to make the transition.
And we think that we may see this new format link up in some way with Kevin Kellys supercuts.