Mobile & Money
Currently there are two fairly distinct centres of gravity in mobile money. One is here in the west where incumbents are looking to use mobile to reduce costs. The other is in emerging markets where people see the potential to transform peoples live through better access to financial tools.
These two will collide before too long – with incumbents disrupted by allowing new players to offer better tools and products.
“In the next 15 years, digital banking will give the poor more control over their assets and help them transform their lives. By 2030, 2 billion people who don’t have a bank account today will be storing money and making payments with their phones. And by then, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit to insurance.”
But if you spend any time looking at what Western banks are doing, it’s fairly unimpressive. Essentially the core element of banking technology hasn’t changed in generations; the written ledger was translated into the paper bank statement listing transactions in date order. Online banking took that statement and made it scrollable and with mobile they have just made it a bit smaller. The smart people at Adaptive have been looking at this space and have a very interesting report looking at how the big bank apps fare – and how they could be easily improved.
The tsunami of money invested in Fintech hopes to disrupt these firms and we will see lots of activity in this space. Spain is shaping up as an early mover with lots of innovation – both from existing banks and startups. And the impact of Apple Pay is yet to be seen – but early indicators suggest it is going to be successful. This MIT piece is very positive;
Samsung have stepped into this space with the purchase of LoopPay – where retailers don’t need to change their existing POS systems so potentially this will work in more places than Pay. Both Apple and Samsung see that having your mobile wallet on your smartphone is a potential Anchor – keeping you buying the same make of device.
We can’t talk about mobile and money without mentioning Bitcoin. This video from the FT is a good simple explanation of a terribly complicated space. And Dave Birch, one of the smartest thinkers on mobile money, talks about how Blockchain may be more interesting than Bitcoin. Let’s not forget that really smart people see Bitcoin as (potentially) having more impact than the Internet.
We are now just weeks away from the Apple watch going on sale and the hype is building. A very long (but fascinating) article on Jonathan Ives manages to capture the spirit of Apples designers and gets over their obsession for delighting users. And it makes you really want the watch.
Lots of brands we talk with are thinking about what to do with Watch. It’s clear that the potential for notifications is huge – but making them useful – even valuable – rather than annoying, is the challenge. Some great thinking in this piece, that digs into the Apple guidance for Interface. There is a big prize here to make the killer app for the Watch and it may well be someone unexpected who does break through.
Location, location ,location
An event we spoke at last year coined the notion that location is the cookie of mobile. At it’s most simple we know people that use the broad location of the user to thwart ad fraud. And at the bespoke end, clever people are identifying real football fans by their presence at the Emirates, Elland Road and even Old Trafford at certain times. Using location history or in real time can be a significant aid to targeting.
The intersection of location and local has huge potential too, as Facebook recognise with their hyper local ads targeting people within 1 mile of a store and their new Place Tips.
Fix friend Russell Buckley digs deeper in this piece on hyper local. And banks are starting to use location to reduce fraud - and remove a major irritation to regular travellers. Rather than declining a transaction because it’s in a foreign country, the banks will now use location data from the phone to see if that is also in the same country. We pitched this concept to a number of banks 5 years ago, with a business case around the fact a traveller will choose to use a card where the change of a decline is reduced. I think we were a little too early.
The other hot spot in location is beacons and we are seeing more experimentation. A trial with a Swedish newspaper and Unilever shows how they can be used them to gather data to drive retargeting.
The potential for connecting mobile with the real world is enormous - this report speculates it could influence $40bn in US retail sales next year. The friction is the tech back up needed to scale beacons in a robust way. There is a lot of smoke and mirrors in this space. One of the best startups in this space seem to have cracked this and their partnership with one of the worlds biggest retailers should be a great case study - when they can go public with it.
As we all now know, it looks like Apple want to play with cars. People in the automotive industry say it’s not their best idea but experts in musicplayers, phones and the watch industry have told Apple the same in the past. The long New Yorker piece on Ives points out he used to drive a vintage DB4, so he gets cars and has taste.
This FT article points out that Google is partnering with firms like Bosch rather than Ford to develop their cars, as the proportion of a cars cost for electronics has doubled in the last 10 years – with the cost of the electronic parts in the average car now hitting 40% of the total car cost.
And Tesla have shown you can enter the car market and be disruptive. Some predict that Apple will buy Tesla to get traction. When you have Google driverless cars being tested, Uber changing the economics of owning a car, Daimler replicating Boris Bikes model for cars and electronic charging points sprouting all over London, the transport market is clearly in flux. Why couldn’t Apple take it to the next level?
The New York Times know they need a distributed presence across digital and this is a good look at how they use Instagram
Apple do product placement at another level – a whole Modern Family episode filmed on iPhones and played out on Apple devices.
The question Facebook never answer is just how much of their revenue is app install advertising. Now a report says the total spend in the US will be nearly $5bn this year. It’s hard to say how robust this figure is but we do know mobile agencies that are spending ten of millions of dollars on app install ads every month. As brands see the value of apps to their business they can justify significant spend on acquiring a new customer. We saw MyFitnessPal bought for a figure that represented around $5 a user, and King, Amazon and Google etc will know what they can afford to keep spending.
Route55 – Using Tech to make Creative better
Our interest in this space is constantly reinforced by new evidence that tech can add real value. A new Microsoft tool is better at recognizing images than people are. Ikea create 75% of their catalogues using CGI. Nike sent personalised videos to 100k users of their apps – and this approach could work as a programmatic buy. Facebook have a new ad format where brands can promote a range of their products by tailoring the ad to data on the viewer. (Our friends at HighStreet can already do a lot of this with Google Shopping ads etc )
New research from Celtra highlights how brands want to do more with programmatic but struggle with the current tools and the investment of time and money needed to make creative work harder.
We are working to solve this and we’re looking for brands that want to collaborate with us. We are exploring how we unlock the value of creative optimised against the data signals that programmatic throws off. Keep in touch with this project by following @Route55
Finally …. At Chinese New Year it’s a tradition to give friends and family a red envelope containing cash. As you might expect this behaviour has migrated to mobile and last year around 20 million envelopes were sent on WeChat.
This year over 1 billion envelopes were sent. This huge growth was partly driven by a Chinese TV show which invited users to shake their WeChat app at certain points in the show, to have a chance to win a share of $80million donated by corporate sponsors. This show generated 11 billion shakes – at one point over 800million per minute.
The sheer scale of China is amazing but the thing for Fix readers to think about is that the power of combining TV and mobile has yet to be unlocked in the west. Imagine if ITV and Shazam combined to do this sort of thing?. Or the BBC and Facebook? Or what if a brand comes up with a truly compelling reason to interact with their TV commercial.
Xin Nian Kuai Le
Addictive helps businesses profit from Mobile, Social & Content
Our clients hire us to do strategy consulting, creative thinking and to create the mobile and social apps, mobile sites and ad formats needed to make the strategy deliver.
If you could do with some smart thinking or doing around any of the subjects we cover then do get in touch
We produce Mobile Fix every week to share news and views on mobile and related topics. We have over 3400 subscribers across tech firms like Google, Facebook, eBay, Yahoo etc as well as many Brands and Agencies. We’re happy for you to forward this mail to anyone you think might be interested. If they do find it useful they can sign up for email here.
Addictive helps businesses profit from Mobile, Social & Content
Our clients hire us to do strategy consulting, creative thinking and to create the mobile and social apps, mobile sites and ad formats needed to make the strategy deliver.
If you could do with some smart thinking or doing around any of the subjects we cover then do get in touch
We produce Mobile Fix every week to share news and views on mobile and related topics. We have 3400 subscribers across tech firms like Google, Facebook, eBay, Yahoo etc as well as many Brands and Agencies. We’re happy for you to forward this mail to anyone you think might be interested. If they do find it useful they can sign up for email here.
Happy New Year
It’s 2015 and the world has changed. Flurry tells us app usage grew by 76% in 2014. Variety point to 3 key deals from last year with the potential to transform the entertainment industry. Video views on Facebook grew by 75%. Messaging is huge and WhatsApp has 700m monthly users. And the Washington Post points out that tech disruption is only really getting started.
Everything is Mobile. Everything is Social. Anything is possible.
And smart brands have never had a better opportunity to profit from change, as their slow competitors continue to do what they did 5 years ago. What are you waiting for?
Some sectors are changing faster than others and retail is one of the canaries in the coal mines everyone should be watching. Over Christmas we saw that digital has profoundly changed the way people shopped.
John Lewis saw over a third of their sales online – up 19% – with click and collect bigger than home delivery. House of Fraser saw digital sales increase by 31%. Mobile was a key factor with John Lewis telling us their mobile sales on Christmas Day peaked during Downton Abbey.
This year we will see more of this online offline mélange, with delivery and click to collect driving who succeeds and who doesn’t. Making your stores work for you as both experiences that inspire purchases and destinations for the collection (and returns) of ecommerce is key. But lots of the high street are struggling with this.
Amazon sort of won Christmas in the UK, as they managed to make their delivery system work just as well over the holidays as it does normally. So too did Ocado. The people that had problems with late or non deliveries of parcels and groceries are not going to give people a second chance next Christmas. Owning delivery is an increasingly important part of vertical stack.
Ebay are looking at how they stay relevant and as well as the Rebecca Minkoff concept stores we mentioned they have an interesting innovation lab too. And Westfield are being very active, looking at ways of keeping their malls an attractive option. In this interview their head of digital talks about their experimentation with search on apps and using beacons to connect before people arrive at a mall.
Knowing how online and offline channels are connected remains the holy grail and the new Google metric of Store Visits as a Conversion Action in Adwords. Now the scarily detailed data Google have on its app users would let them see exactly who and when visits each store, but that would freak out those concerned with privacy. Instead Google use estimates from aggregated anonymous data from a sample of people with location enabled on their phones.
One fascinating snippet from the Flurry data shows how shopping apps are used across a typical day and commuting and lunch times are key. US retailer Target view mobile as the new front door to their store.
This whole area is clearly crucial for online and ecommerce retailers, but it is also hugely important for the brands stocked in these stores.
The other canary is Media – a business that is attracting increased investment but it’s still unclear as to whether new entrants will find the mobile world any easier than legacy media. The poster child of the sector is Vice, which has attracted investment and partnerships from a number of old media businesses.
Digiday have a good look at the difficulties faced by those who seek to emulate Vice, Buzzfeed and the Huffington Post. And Elizabeth Spiers – who has been involved in some of the better attempts – goes into detail on how to be a good media owner. Essentially, be good at herding cats. Though this long New Yorker read on the King of Clickbait shows that you can still do pretty well by gaming the system.
And this piece from an investor boils media businesses down to one thing; Revenue. And he predicts carnage in 2015 as the VCs look for a return – or at least some indications that one is likely.
As the Flurry data shows apps are taking a bigger and bigger proportion of peoples time on mobile – reflecting the fact that a handful of destinations now monopolise peoples attention.
The new data from Apple showing that their AppStore revenues grew by 50% in 2014 – to around $15bn – proving some people are making a good living from apps
But the very nature of apps continues to morph and whilst the constellation effect (where an app ‘splits into two or more connected apps) doesn’t seem to be working that well, deep linking is getting traction.
This long piece from the NYTimes gets into some detail on who is doing what with deep linking. And this piece from the former Deezer head of Mobile gets right into how to make it work. Both essential reads.
Along with things like motion design, this level of sophistication means app development a now a fairly rare, specialist skill. Even though there are still lots of mac jockies knocking out cheap and cheerful ones, that are unlikely to ever get any traction.
Forrester have taken to calling mobile the anti channel as it eliminates the whole notion of channels by blurring online and offline. Their new report suggests only 4% of brands are truly prepared to take full advantage of mobile. Getting your apps right is a big part of this – along with a truly mobile optimized site.
Twitter found Ev makes a great case for better metrics. Monthly users just isn’t goo enough
Google continue to push for faster cheaper internet access – now with a new way to make wifi work with an underused section of wireless spectrum.
A new book dishes lots of dirt on Yahoo. VC Jason Calcanis comes out in strong support of CEO Marissa Mayer. And it looks likely they will merge Flurry with Gemini to take on Google and Facebook for mobile ad revenue.
A good piece on BlockChain – the technology behind BitCoin that may have more potential than the currency
A valuable part of the Tesco firesale ( after TalkTalk bought Blinkbox) is Dunn Humby. This firm was profiting from data before anyone started with the Big Data cliché and where it ends up will be a good sign of how the industry us shaping up. WPP have made it clear they are interested but some private equity firms have also declared an interest. Any of the big players in adtech and marketing automation would find this a smart acquisition. Adobe, Oracle and Salesforce are all looking to help brands make the most of their data services and even Facebook and Google could benefit from the expertise here.
Facebook search has matured and their ability to mine the resultant data is quite amazing. Maybe Dunn Humby would help here.
Nike ( and AKQA ) show us the future of advertising – 100k personalised videos. Smart use of data to make layered/relevant messaging.
Finally…there is some more quality thinking around what is likely to happen in 2015, so here are three of our favourites;
The moves in the Quad Play space we talked about last week continue, with rumours that Vodafone will take Blinkbox off Tescos’ hands to accelerate their move to video content. Blinkbox has had a lot of investment from Tesco when their management were focused in the potential threat from Amazon rather than the more urgent disruption from Aldi etc. This could be a good deal, which when added to the content Vodafone already offers to mobile customers (Netflix, Spotify and Sky Movies) and with a settop box would catapult them into the battle with Sky, BT and Talk Talk.
There are also rumours of a much bigger move by Vodafone; a takeover of Virgin owner Liberty Global which would give them a significant base of TV customers as well as their broadband network.
One area that will be impacted by these changes are the upcoming negotiations for the Premiership TV rights. BT changed the game by winning a chunk of games – surprising everyone – and used this to launch their TV offer and aggressively compete for broadband. If, as seems likely, they do end up with a mobile operator their appetite for football will increase. The same applies for Vodafone.
In our opinion it’s the mobile rights that are more interesting. News Group have the digital rights now having paid around £20m. That was apparently an increase on the previous deal when Yahoo had the desktop rights and ESPN bought the mobile rights – which they struggled to monetise.
And it looks like it may have paid off for News Group. Digital subscribers to the Sun have doubled to 225k – with the Times reporting profit for the first time since 2001, so the Paywall seems to be working but growth in subscribers is slowing. How much of this growth is driven by the football is debatable, but £7.99 a month for the Sun and Footie seems reasonable value.
We have often suggested that GAFA could be bidders as Google and Apple look at their TV ambitions. As YouTube moves to a subscription model what better case study than the way Sky built their business on the back of the Premiership? And we still feel that content could become an Anchor for Apple – although they currently seem to prefer to retail other peoples rights in music, games and film.
The FT look at the main rights and how the balance could shift between Sky and BT. This time around the mobile rights are going to be worth a lot more and we can forsee more bidders. But as News Group have shown, you need a subscription revenue model to get the real value – ad revenue is just a nice bonus.
Whilst a surprising number of people choose to us adblockers most ad avoiding is less calculated, More and more content providers are choosing to offer ad free services for subscribers – Spotify, Netflix etc. And if you buy or rent content through iTunes or Amazon its ad free. And YouTube are moving to an ad free subscription model.
This opinion piece from betaworks summarises it well – the rich can avoid advertising through subscription, whilst the poor will just have to put up with ads. You can even imagine that Spotify source the worst ads to drive people to upgrade from their free service.
This article makes the point that we have made advertising so cheap it’s no longer that attractive for many publishers – especially when people also block ads too. But it makes the very good point that, whilst inventory is virtually infinite, peoples attention is fixed. And consequently, quite rare.
And that’s what all marketers really want to buy – the attention of the right people. There is a media issue here – being willing to pay the right price for the right amount of attention. And a creative one too; having just the right message to make the most of that attention.
Wall Street takes a real interest in advertising, given the number of adtech companies that have floated as well as GAFA dominating the market in terms of sheer size.
Barclays have released a fascinating report that looks at many of the big tech players and makes a good job of explaining the market – including the rise of programmatic where they are bullish. Their conclusion is that the market will reward the biggest players and that Facebook and Google are likely to grow at the expense of the rest. This supports our view that brands should be maximizing their investment with Facebook and Google and trying to understand how to make the most of these 2 huge opportunities.
Despite protestations the key drivers of Facebook growth –and most of the rest – is still app download advertising – although both Google and Facebook are very focused on getting brands on board.
TechCrunch have a good look at the app download ad market and get into some detail on what Facebook, Twitter and Google are doing to improve their attractiveness to app developers. Fabric from Twitter and Parse from Facebook are really smart attempts to get closer to developers and bake themselves into the app landscape
Of course Google and Apple could change this market overnight were they ever to sort out their appstores. It is amazing that Google can’t use their unrivalled expertise in search to make Play easier for users to find things. And it’s equally amazing that Apple, with their obsession over user experience, leave users to stumble through long lists of apps, in seemingly random categories.
A smart VC, that used to be at Facebook, has a good look at how Facebook are using Parse and think it has huge potential.
There are huge revenues at stake in this area and anyone who can help improve performance can make a lot of friends
The surprise is that other brands seem to have missed the fact 35 million people in the UK are using a smartphone to rewire how they live their lives. Eric Schmidt makes this point well when he talks of the world moving from Mobile First to Mobile Only
Benedict Evans has a new blog post where he talks of the New Questions in Mobile. This is really interesting stuff and we’re excited about the future possibilities of cards, notifications and deep linking between apps. But the war is over and Mobile has won – there are just too many brands acting like Japanese soldiers who didn’t get the memo and continue to fight the old battles.
For the first time in a long time brands can get real competitive advantage by being much much better at this new stuff than their rivals. Let the laggards focus on their big Christmas telly ad whilst you unlock the value of your data with smart advertising that delivers the right message at the right time to millions of your customers.
At a Ridley Scott premiere this week we were reminded of a quote we heard that the tech people like Scott use in epic movies, only takes a few years to arrive on everyones laptops. The new Beyonce video demonstrates how tech is transforming the creative world, with a great film shot entirely on an iPhone.
Blending retail with tech and mobile is still more talked about than real but a new eBay initiative shows what is possible.
The Chinese influence on new developments in messaging continues – everyone wants to be the western WeChat.
Finally… one simple benefit of digital is that you can now learn from the best people in any field. Follow them on Twitter, read their decks on Slideshare and find interviews on YouTube. This long interview with Reid Hoffman (Linked In & PayPal) is very good.
As we mentioned before we play WhatApps at the start of any workshop we do; people pass around their unlocked phone so others can see what apps are on their homescreen. As well as reminding people just how personal their phone is, people see that people tend to have a number of the really popular apps and a few that are very personal to them.
Twitter is the latest media company to take an interest in what apps you have downloaded. By doing this they claim to deliver tailored content that you might be interested in. This plays to their need to better engage new and occasional users who don’t follow many people and hence tend to see little content when they use Twitter
In a happy coincidence, this same data can also be used to better target advertising and equips Twitter with a stronger argument to win spend from the app download campaigns that still drive a large proportion of mobile ad spend.
We think there is good learning for any brand from the apps that have been downloaded. In the old days we believed that knowing which TV shows people watched, and the newspapers and magazines they read, was a much richer insight into people than their age or social class. Now apps probably define people as well or perhaps even better than much of the other data available.
Apple and Google have the best knowledge here through their, appstores. Facebook have a good idea through the apps that use the social login. And Yahoo with the acquisition of Flurry and Aviate, are building their understanding.
And this is why peoples homescreens are so interesting. Betaworks probably started this with their study of people sharing their homescreen on Twitter and Instagram. Now they have launched an app that makes it easy for you to share your homescreen. #Homescreen takes your screenshot and posts it to Twitter and adds it to a website, where people can hover over the apps to see how popular they are. You can see ours on the site here.
We find more and more people are starting to organize their apps and for many people the home screen is where the most used apps are – so this should become a great source of data on which apps are getting the most traction.
The revival of BT continues and they are believed to be in the market for a mobile operator and either O2 or EE could soon be swallowed up so BT can offer their customers a complete comms package.
The mobile operators have pushed broadband in the past but none have made that much progress, with O2 handing their broadband customers over to Sky. EE have preserved and Vodafone are now taking it seriously.
Virgin have been very aggressive and their cross selling is shaking up the market as they use the experience of new owner Liberty to focus on a Quad Play – Mobile and fixed line telephony, home broadband and TV.
It’s the TV service that has really turned BT around and TalkTalk have used YouView to offer a reasonable TV service which has given them around 1m TV customers. They are switching their MVNO from Vodafone to O2 and are being very aggressive on pricing
Vodafone hinted they are going to offer TV services bundled with their home broadband and they are getting closer and closer to Sky – who have long lusted after a mobile offer.
So what does this mean for brands? Advertising has never been that significant for any of these players when compared to subscriber revenues – in the last quarter Sky took £104m in ad revenue against subscriber revenue of £1.6bn – but technology will change that.
Sky has started to make money from their AdSmart offer where brands can target individual postcodes (and targeted TV is getting traction in the US) Weve is now starting to drive mobile ad revenues for the mobile operators. And as cross device tracking improves – take a look at what Device9 are doing – the ability to run activity on both targeted TV and the smartphones of viewers watching that TV show will be feasible. That sort of opportunity will drive significant revenues and as the operators have to compete on price to attract and retain customers, ad revenue will become much more important to them
Last week we talked about the pieces falling into place as mobile matures, and now its time to focus on what brands can get from this mass market opportunity.
Like Marc Andreessen we believe that much of the thinking of the dotcom boom was actually quite sensible – it’s just that the scale of users weren’t there. With 35 million people in the UK using smartphones, digital is now both mass market and mature.
One line of thinking that we really believed in was the idea of 1 to 1 marketing. Championed by Peppers and Rodgers this approach argued that we could talk to people as individuals. Lots of email marketing has it’s roots in this thinking (although very little gets it right) and we developed the idea further to come up with Dialogue Marketing, where the ability to see some ones actions (their digital body language) also informs how you talk with them. DLKW Dialogue was so named to try and live up to this and we did some really interesting work across all digital channels.
But digital advertising spend then was a fraction of what it is now and CRM was another silo, often handled by another client team / and or agency.
Now the idea of fusing CRM and digital advertising is really feasible. Why? Because all the messaging gets delivered on the same device –a smartphone. And the CRM data on existing customers can be fused with first and third party data on individuals to target digital ads. Equally CRM can now be actioned through social (to some extent) and through app notifications
Custom audiences on Facebook and Twitter are hugely powerful tools – enabling your existing customers to be targeted – and helping find lookalikes. Yet few brands are using the services – perhaps because the idea of paying to reach people who have already given you permission to email them seems a little extravagant. Yet with Mailchimp saying typical open rates struggle to get over 20%, new ways to reactivate these users can be a really good investment.
It is getting easier to track people across devices and across channels. And many marketers recognize that getting more purchasing from existing customers can be a more effective approach than trying to find new users.
Of course advertising has always reached both existing customers as well as prospective ones. In smart digital advertising the level of targeting sophistication means brands can choose whether or not to speak with existing customers. But in most cases taking advantage of what you know about an existing customer should make driving a sale easier.
The one thing needed to deliver Dialogue Marketing though, is a range of creative messaging that fit the targeting – if you just give everyone the same message then you are probably wasting money on the targeting. This is still the Achilles heel of programmatic.
QR Codes just will not die. Despite many experts declaring them over, businesses are still finding ways to use them. Powa are trialing payments with Tesco using QR codes and the airlines find they work really well for boarding passes. A new firm is pushing a modified version of QR codes but we wonder whether they can get people to use yet another app.
Getting one of the YouTube stars to wax lyrical about your product to their millions of fans has got a lot of brands and agencies very excited. And the pay rate has got the YouTube stars pretty worked up too. Now the Advertising Standards Authority has dampened this enthusiasm, pointing out you have to make it clear when a brand has paid for a mention. Lots of native advertising is running the risk of an ASA sanction.
Dark Social is a huge factor in sharing. This is the new term for sharing done outside Facebook, Twitter and the other trackable social platforms. It includes email and messaging, which is how lots of content gets shared.
Last week we talked about Firefox changing its search partner to Yahoo and speculation is increasing around the Apple relationship with Google search that we mentioned. Now we see this pop up when you leave a Yahoo page on Safari. It doesn’t actually work, but it’s an interesting tactic.
Facebook have launched a new initiative to help app developers, including some funding
Finally… We see music as the canary in the coalmine for digital content. What happens to music is a pretty good glimpse of the future. So the way the US charts are changing is fascinating – including streaming and YouTube views as well as purchases and radio play gives you a much richer data set. And that data will now be a much better indicator of just how popular a track is as frequency of consumption is monitored as well. How might consumption data change the way other digital content is value and funded?
It’s all about Video
We missed this quote from a couple of weeks ago, but along with Susan Wojicki statement that over half of all YouTube viewing is now mobile this backs up our conviction that it’s now all about video. Now.
That’s why Yahoo bought BrightRoll – so they can continue to grow their display revenues and capitalize on the shift to online video spending by big brands. And look at the how the EMEA Yahoo team has so much experience in TV.
Some Yahoo investors seem to think that a merger with AOL would be a smart move as that would give the joint entity a third place position after Google and Facebook – but still some way behind. We tend to agree with this piece defending Marissa Mayer. With the hire of a top ad sales person from Amazon, the team seems well positioned. And this new buy shows they have a plan.
Video is display 2.0. It’s what brand advertisers love. It’s a format that elegantly and easily transitions from broadcast television to PC to mobile and even to wearables. This is why video is a key part of our strategy.
It’s all about Music
Along with photos we see music as a key Anchor, something that GAFA have to offer to have a chance to keep people within their vertical stacks. We still have thousands of tracks in iTunes many of which aren’t on Spotify etc and migrating them to a new service is a lot of friction. The threat to the money Amazon made selling music CDs by Apples iTunes store arguably kicked off the tension between GAFA, and all now have strong music strategies.
The new Google service is Music Key and it builds on the often overlooked fact that YouTube is already the biggest source of music listening on digital. The new service looks strong – this analysis by Musically is a good read – and raises the bar for Apple and Beats.
They were helped in the PR battle by Taylor Swift pulling all her music from Spotify. Music Key has all Taylor Swifts old music but doesn’t have the new one either. Swift and her label contend that Spotify isn’t paying them anywhere near enough money, but Spotify disagree.
The Music industry is divided over the future; those who believe streaming is going to generate much more money for labels and artists are seen as overly optimistic by the rest, who think making money from selling recordings is over and its now all about live shows.
The next stage in music is ad funded streaming and we expect that YouTube will continue to be a big player here as non subscribers watching music videos will still be pretty huge. A combined Beats / iTunes radio is expected to launch with ad funded models early in 2015 and we’ll see whether brands can take advantage of this opportunity with better creative. Anyone who has spent any time listening to the ads on the free Spotify service may be not be that optimistic.
We can expect to see lots more exclusive windows of top artists new albums – see JayZ with Samsung and Beyonce with Apple – as the key players see the value of being able to offer something their rivals cannot.
The other players in music are also active; SoundCloud has raised quite a lot of money and have now signed a deal with Warner where the label gets paid whenever one of their tracks is featured in a mix or a DJ session.
And the original music start up LastFM – now owned by CBS – is still around and we understand they are going to focus on discovery with their fantastic Scrobbler technology, with the music delivery left to Spotify etc.
We talked last week of the activity in visual recognition and Fashion Tech. The other side of this coin is how retail are using visual recognition and mobile in general. As we have covered before, most of the big supermarkets are playing with Beacons but none feel ready to subject their shoppers to personalized messages – yet. Asda are the latest to trial the technology – and we know their colleagues from Walmart have been scouring Europe to see who is doing what.
In our view, the big opportunity is around personalized pricing as a way to counter the general cheapness of Lidl etc. The next Clubcard type step change in retail will be a big player using a ShopKick style service to deliver real time discounts, funded by the brands of course.
The online shopping frenzy that Alibaba invented, took place this week and broke all the records. They took $9.3 billion – up by around 50% on last year and 43% of the orders were on mobile. To give that some context, Amazon takes $166million on an average day.
This is a fascinating look into how the Alibaba team ran the day – lots to learn.
Amazon are experimenting with using Taxis for delivery – the smart people at GetTaxi have been looking at that too
Finally… if you want to read a good business book the FT have published a list of the best ones from the past few years.