Category Archives: disruption

Mobile Fix – July 4

Digital Transformation

We delivered a big Digital Transformation workshop this week and developing the content and the exercises reminded us how many businesses are struggling to understand how to best embrace digital. At the C level it’s usually the CMO that has the best handle on digital – but digital is so much bigger than marketing.

As this Adweek chart shows CMOs expect digital to grow to 75% of their budget – but 42% worry about managing that change.

When we talk with a wider C level audience we tend to find a hunger for knowledge across two areas 

What is the topline on digital marketing? – so they can judge whether the marketing team are moving fast enough

What can we learn from other businesses that will help us evolve into a business that uses digital throughout the enterprise?

The Accenture study of CMOs that the Adweek chart is based on, suggests just 21% believe their company will be known as a digital business in 5 years time. So we need the whole C suite in board if progress is to be made.

So a new McKinsey report on the digital tipping point is well timed. Their research shows executives believe their CEOs are increasingly involved in digital initiatives. But they believe the most important digital focus will shift from digital engagement of customers to the digital innovation of products, operating model or business models in the next 3 years.

Another McKinsey piece highlights the breadth of issues with a look at digitising the customer journey –and the opportunity to design a better experience and reduce the ‘leakage’ across channels. But even within this a key question is who owns the customer and how you can get a silo based organization to collaborate in the way needed to make radical change.

Our work in the area of Digital Transformation ranges from Workshops and change management programmes through to briefing CEOs and Boards on how companies have embraced digital with different degrees of success. There is lots of interesting learning and a clear opportunity for those who take the initiative, rather than waiting to be disrupted by someone more nimble. If you would like to learn more about our work in this area let me know.

UK Mobile Adspend to hit £2bn

To reinforce the pace of change emarketer have predicted that mobile advertising will be bigger than print next year and bigger than TV in 2016. There is a slim chance it could be bigger than print this year as the forecast shows them neck and neck.

Does looking at spend this way actually help though? Should brands be measuring the % of spend on mobile or is the smart approach to spread the money across the channels where your audiences are? If you want to reach the people who value the Guardian then you will spend across print, online and mobile – tailoring the message to suit the channel it will be delivered in.

AKQAs’ Tom Bedecarre made a great presentation which gets into how the opportunity is so much bigger now and that the incremental approach just wont get you very far.

As we have said before, there is a danger we are building an industry on sand. A high proportion of mobile ad spend is VC money chasing app downloads from the rare people who pay to jump a level on Candy Crush. New research from Venture Beat shows that much of the app download spend isn’t actually that efficient Couldn’t better creative have an effect here? 

But talking with another publisher this week we learned they do the creative for free to incentivize the media buy. Until we get creative talent engaged with mobile, there is danger a large proportion of the mobile spend is being wasted.

Mobile Money

Talking with a bank about mobile and money this week was interesting. There is a real recognition that there is an opportunity with mobile to reimagine money – but there doesn’t seem the appetite to try things. In the meantime startups are experimenting and an interesting new mobile focused start up, with a prepaid debit card service aimed at kids, has launched in the UK.

If you are as fascinated by mobile and money as we are, you will want to read this long piece looking at the disruption in the US market.

Inevitably it ends up looking at Bitcoin and this article by Peter Diamandis  – the man behind the $10m XPrize programme to encourage private spaceflight – is  a good summary of the current state of Bitcoin and predicts we are just a couple of years from it really disrupting.

More on Google I/O

Following the Google I/O event there has been some smart thinking on the implications. This interview with Larry Page and Sundar Pichai adds some colour to the various announcements. This quote jumps out

Today, computing mainly automates things for you. But there’s an evolution from, today we tell computers to do stuff for us, to where computers can actually do stuff for us. For example, if I go and pick up my kids, it would be good for my car to be aware that my kids have entered the car and change the music to something that’s appropriate for them.

Ex Google Patrick Mork share his thoughts on I/O and thinks the Google strategy is moving from maximizing its share of mobile and is now moving to maximising share of time. So Android being present in your Car and on your TV as well as your phone plays to that – and as Google is more deeply baked in to Android they get more learning to drive the sort of thing the quote above alludes to.

New TV

The good performances of the US team has led to the World Cup breaking records for digital stream of sports events in the US. With research showing interest in the World Cup is strongest amongst the young we continue to think that one of GAFA will buy the mobile rights for either the Champions League or the Premier League. Our money is on YouTube, but Facebook continue to build out their video capabilities so don’t rule them out.

This Economist article thinks that eventually the US will get soccer, but it will take a little longer to get India and China on board.

Beacons & Retail

We recently met with the mobile lead at one of the US largest retailers when visiting London to see who was doing what with instore tech and Beacons. He had seen the Tesco trial at Chelmsford and the Waitrose one at Swindon and was off to Paris to see what Carrefour was doing. It seems that the US is just as cautious over beacons as over here. The Carrefour trial does seem a little more ambitious, but when will we see some real testing and learning 

Quick Reads

Very interesting look at how programmatic data could be really useful for search

A really interesting piece on how print has a lot to offer digital . We are convinced there is lots of potential for smart content on mobile and good print titles can inspire this.

We think Apple is engineering an interesting collision of smartphone, wearables and beacons. This look at what Disney is doing with location and tech is a good clue to what’s possible. And the theory that Apple could buy Disney isn’t as daft as it first seems – all that content to offer as an Anchor.

This FT article makes the case the Amazon Fire is more about buying things than connecting people. We agree but think that FireFly will be a separate app by the end of the year. That capability is too powerful to leave locked in a phone with a low market share – especially as a Walmart or Tesco could roll out their own version.

Facebook buys video ad tech firm Live Rail

The nice people at Unruly have a new report called the Science of Sharing, looking at what works in viral

7 clues for the collaborative consumption future from the AirBnB CEO

Finally – as part of our Digital Transformation Workshop we talked about accepting failure – as the learning can be so useful – and one example we used was Google. Remember Google Wave? – a really interesting messaging and collaboration tool that never quite took off and was quietly handed over to Apache – but not before this genius Pulp Fiction homage demonstrated the potential. 

Another experiment has finally failed – Orkut was Googles first attempt at social networks in 2004 – launched after Friendster turned down Googles offer to buy them. Whilst big in Brazil, it never really took off and has now closed. 

But if you don’t try, you never know what does work. As we always end our presentations; It’s time to Experiment.

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Mobile Fix – June 20

Another week and more significant new products from GAFA.

The most anticipated was the Amazon Fire – their smartphone has been rumoured for years and it’s finally available- at least in the US. The UK website has no mention of it at the time of writing.

One key features is Dynamic Perspectives – a sort of 3d that seems to be powered by an accelerometer type tech that changes the content as you move the smartphone. It looks interesting but we suspect the partnership with AT&T is partly designed to get the device into all their shops where people can play with the phone and get the experience – the video isn’t going to be enough.

The other is Firefly , which is a sophisticated visual recognition tool – think a QR reader combined with a Google Goggles type of tech. This enables the device to ‘read’ text on posters, magazines and business cards and recognize live TV, movies and TV shows as well as hear songs. And they claim it will recognise 70 million products – letting you add items to your wish list or just order.

Why does Amazon need a smartphone of its own? The Vertical Stack means it makes sense to have a device that drives consumption and sales of its core products and the Kindle has proven this strategy – although no one has any idea on the number of devices sold.

It is worth reading the whole feature list as it is impressive – and if you are an Amazon prime customer it probably deserves consideration when you think about your next phone –especially as it saves you the $90 Prime fee.

There are lots of good points – the camera looks good and free cloud storage of all your photos is a good offer. They will extend their video help service MayDay so they should be good at getting people to understand more of the device capabilities. They even claim their headphones won’t tangle…..

But the price point puts the Fire into competition with the iPhone and the high end Androids and we can’t see that many people choosing it over the iPhone 6. We expect it to be a modest success – although we doubt we will ever hear about actual sales numbers (which is a problem for developers who won’t build unless they believe there is a substantial potential market for their apps.)

And we think that the Firefly technology could soon emerge as a standalone app (just like the Kindle software). The upside for Amazon of millions of people using their tech as a way to discover products and content is too valuable to leave this locked in a proprietary device that will never reach more than a fraction of the potential userbase.

This is a good take on the launch and this is the FT view. Techcrunch walk through the features you won’t get elsewhere. Wired take a view on the hidden agenda behind the launch – but we’d argue little is actually hidden 

Slingshot

The other launch was also anticipated – mainly because Facebook launched Slingshot by accident a couple of weeks back. The official launch was this week and early reaction has been good.

Pigeonholed as a Snapchat clone, Slingshot makes it easy to take photos videos and selfies and lets the user customize them with drawings and captions – then you send it to your friends. The shot can only be viewed once – like Snapchat – but the time period isn’t fixed at 10 seconds. But they only get to see your picture – or shot – when they send a shot back. This is a new behavior and feels counterintuitive – but we think people will get used to it.

It also means that Slingshot has the one thing that Snapchat doesn’t  – a way to send to all your friends. The reciprocal model means that it shouldn’t descend into spam.

The app is only available in the US appstores at the moment but, if you know how to get around that, the service works fine in the UK.

Like all the messenger apps, Slingshot uses your contact list to find users amongst your friends – as well as tapping into your friends on Facebook. Mashable has a good look at the service and an interview with the team behind it.

The last Facebook new app Paper has been updated but has yet to launch outside the US suggesting it hasn’t got traction – so everyone will be watching to see how fast Slingshot grows 

Social Retail

Last week we mentioned that Goldman Sachs are very bullish about the opportunity for Amazon to disrupt grocery with their home delivery service that is rolling out across the US – and strongly rumoured to be heading to the UK.

We also recently mentioned another grocery start up that is getting traction – Instacart. Here you hire a personal shopper who takes your shopping list and goes and buys everything delivering back to you.  The idea seems niche at first but as the collaborative consumption world grows the idea does seem to have legs – in every sense. VC Andreessen Horowitz see the potential and have just invested $44m and one of their people will join the board. Along with AirBnB, Uber (who the Instacart founder used when he start the business as he didn’t have a car) and even our own Skratch, the idea of using digital technology to connect people and unlock the value of their time and/or assets is fascinating.

Publishing

Of all the sectors facing disruption, publishing probably gets most attention. One of the most agile and most successful at managing their evolution is the FT – who have been at it a long time – we worked on the launch of FT.com in 1999. This Nieman piece is a good look at how they are evolving how they work ;

“The biggest challenge for the FT, we feel, lies not in its transition to digital, which can be achieved with web-savvy staff, but in the transition of the print staff to this ‘post-news’ method.”

But as Fix readers know the bigger challenge is monetizing the audience and the FT are innovating in this area too. Their new focus is on time spent rather than a simple view and it will be worth watching to see how successful this new metric is.

Regional newspapers are going through a similar evolution – albeit possibly at a slower pace. This really good look at how smart publishers are focusing on their audiences rather than the platform is a must read. Regional audiences are really valuable to brands and especially to retailers. Who wants to advertise to people who don’t live near enough to use your stores?

Ben Evans has curated a set of interesting charts on digital news drawn from a Reuters report on The Study of Journalism.

Seth Godin has a typically smart look at what publishers should be doing to adapt to the digital world –and warns of Buzzfeed envy.

Quick reads

An interesting look at Google moving beyond search

How Facebook works with advertisers to make ads sharable

A couple of must read articles on Apple in the NYTImes. An in depth look at how Tim Cook is making his mark and an interview with Jonny Ive

We have talked about the way tech firms are starting to use content exclusives to drive usage (eg Beyonce and iTunes & Samsung and JayZ). This article argues that the key for music services is the depth of content rather than a few exclusives. As a marketing tool both exclusives and curation will, in our opinion, differentiate what can be commodity services.

Finally – I am speaking at Facebook tomorrow on the current mobile advertising climate – if you are there come and say hello. This article suggesting we have no idea whether digital advertising works will fuel the debate. Much of the research they point to has been debunked and we know – like many digital businesses – that digital advertising can – and does – work. They point to a study by the author that proves Location, Repetition and Proximity increase ad effectiveness.

Our view remains that, done properly, digital advertising – and mobile – solve a problem for users and becomes advertising so good it’s a service 

The problem is most of it isn’t done properly. Too often its left to the media owner to chop up desktop assets or it’s done by a junior team that doesn’t quite get the big idea and only have a little time to devote to it.

If you want to dramatically improve your advertising, we’re happy to help 

Mobile Fix – June 6

The Apple event this week did what it was meant to. Despite being a developers event the real audience was the rest of the industry, the press and Wall Street.

And it seemed to work. The coverage has been (mostly) favourable and the share price even went up a little. The general view is that  – for the first time without Steve Jobs – Apple have momentum. Lots of ideas and incremental things that roll up into a big picture view of what Apple offers for the future.

Remember their business model is all about selling high end hardware – so the real test is when they unveil the iPhone 6

But in the meantime they are creating more synergies between Apple devices – so if you have a Mac then the iPhone is the natural companion. Content can now be shared between devices and you can even makes calls and get texts on your PC

As expected we saw new Anchors unveiled – HealthKit and HomeKit both have the promise of being incredibly useful and making your iPhone even more central to your life.

Not much on the other Anchor – the Passbook cum wallet – but at a developers event we weren’t expecting too much. The brief mention of TouchID does set up the wallet idea – what better to keep your money and financial info safe than your fingerprint?  (83% of iPhone5 owners use the fingerprint scanning) When the iPhone 6 launches we’re sure Apple will leverage those billion credit card relationships to announce a wallet.

There is some gentle sniping that Apple iOS 8 has learnt a lot from Android and others pointing out that a number of apps look a little superfluous now that Apple has embraced their function. DropBox, WhatsApp, Skype all seem a little less essential than last week. Of course they are arguably better than the iOS8 version but Google maps is better than Apple maps but most iPhone users go with the default.

Another interesting move is the addition of privacy focused search engine Duck Duck Go as option in Safari. We have banged on about the fact the only Google left baked into the iPhone is as the default search. This doesn’t change that but is another option. In Siri Bing has already replaced Google as the default search and we still expect further moves.

Apple is now allowing app extensions so apps can talk with each other  – as on Android) and it will now be possible for any app to offer a Notification Centre widget – which look like they would work really well on a watch or other wearable. And a new coding language that will make it easier to build apps.

There is so much to digest here – and little things keep being spotted  – like the ability to quick launch apps from the lock screen. This is a good attempt at a list of everything you need to know and if you want to dig deeper the Ben Evan post is worth reading as is the Fred Wilson one. 

Beacons

Hardly mentioned at the last Apple event iBeacons and Low Energy Bluetooth (BLE) have proved to be big news. Much of the clever stuff in HomeKit and HealthKit relies on BLE 

This is a good summary on just what a big deal it is. Yet few people have actually done much with the technology yet – lots of talk and little action. But a Fix friend has taken their beacons out of the box and started to experiment – read the learnings here.

Meeker backlash

There has been a bit of a backlash to the new Mary Meeker deck. One thing that welcome is an attempt to improve the charts themselves – as this example shows the data can be even more powerful when presented well.

Of course the money and time are never going to balance – we know that the analogue dollars of Print turn into digital pennies in mobile – but there is a lot of money in flux. Someone points out that chart overstates the case as some of the mobile time is spent on email etc but we think that is angels on pinheads stuff.

You can watch the full presentation video here – Meeker talks even faster than me.

One other piece caught our attention this week  – Michael Wolff makes the point that even in decline print does generate a lot of cash. Clearly the smart Print people are using this cash to build a digital future, but some are just taking the money. We loved this quote;

Print is the hopeless past, but one left with enough cash flow to be somebody’s excellent future

Quick Reads

Amazon are about to launch their much anticipated phone. This video shows people amazed by the mystery device. Will it be 3D? All will be revealed on June 18

The Google lab that gave us the intriguing Field Trip app also has a game. We have played with Ingress but never really understood it. This Guardian article suggests it has really caught on.

Our friend sat OnDevice have gone public with their Brand Effectiveness study. We have been working with them in this and its really impressive. As is the case study 

A good piece on the way Twitter has become embedded itself in public life.

Programmatic continues to be a hot topic. P&G have announced plans to but the majority of their digital advertising that way. And GroupMs Irwin Gottleib talks a bullish game on their approach to programmatic in this video interview.

A look at the amazing scale of Tencent  -one of BAT the big 3 Chinese digital players.

Finally…at the excellent Prince concert on Wednesday they made a big thing about people not filming with their phones. So for  once the view wasn’t blocked by peoples phones – or even worse their iPads.

This piece we happened to the same day highlights the Attention Deficit Disorder type behavior that smartphones bring out in people. We think we are going to a new mobile etiquette develop where people consciously wean themselves off mobile for sometime each day. The emerging trend for old Nokia phones is part of this – in Asia you seen taxi drivers with a Phablet for videos and games when on WiFi and a featurephone for calls. Try Phone Stacking – at a bar you all stack your phones and the person who cracks first and checks theirs pays for the drinks 

 

 

 

 

 

 

Mobile Fix – May 30

New Mary Meeker

And she’s back. Mary Meeker shared a new deck at the recode conference yesterday and whilst there is not that much new, it’s still hugely influential.  The stats on growth no longer surprise but her thoughts on the changes caused by this growth are always interesting.

Her most shared chart is the Money one – showing that time spent remains out of kilter with where advertising money is spent. Her estimate of the Big Opportunity for Digital (AKA the Big Problem for Print) is that $30bn is in motion in the US – so probably over $50bn globally. And the vast majority is mobile.

As we have discussed before there is a lot of friction slowing this change, but we are convinced it is happening and it will probably accelerate.

One other key theme from this deck is that Meeker refutes the idea of a bubble and shares some convincing data to support that view.

The whole deck is worth spending time on, but if you want a quick take on the key points this Guardian piece is a good cheat sheet

Content, Curation & Anchors

So finally we have confirmation that the Apple beats deal is happening. It continues to divide people – Ben Evans calls it a Rorschach Blot – it confirms your view of Apple – visionaries or past it.

We have come back around to seeing Apple as real innovators and we think that they are poised to use content and services in really smart ways to protect and build their core hardware business. 

Some analysts support our view that the software side of Beats – is the streaming – is more important than the hardware- even though Apple say headphones will drive profits for them straight away. And their awesome production and sourcing skills should see that product improve and maybe even come down in price.

Another makes the point that Apple are now getting involved with Pop culture and you can understand the Beats acquisition by understanding Lady Gaga. Think back to the Beyonce deal where her album was debuted on iTunes as an exclusive with great success.

This type of promotion can be a win win and Apple have been actively looking for more – the Beats team should make that process a lot more effective and Tim Cook has been very vocal in his praise of the Beats team. Their role in bringing curation the Apple services will be really important.

Interestingly the Beyonce product was innovative in format as well as how it was promoted; it was all about video. We know that YouTube has a huge share of the music market with views counting towards the US charts. Could Apple use Beats and music as a way to kickstart their ambitions for TV too? Again a curated service could beat the slightly anarchic discovery within YouTube.

Either way Apple is going to use music as one of its Anchors. A service that is so useful – addictive even – that customers will be reluctant to consider a switch to an Android. Beats will almost certainly be available on Android devices but we expect it to be so baked into iOS that it’s a noticeably better experience.

And it looks like home automation could be another Apple Anchor. Once your smartphone turns on your heating and your lights, moving to another device becomes a chore.

Streams

We couldn’t make the IAB Mobile Engage event the other week, but we heard lots of good reports. One thing that got a few mentions was Twitters’ Bruce Daisley talking about how mobile users consume content in a stream. He makes the good point that even the newspaper sites now constantly update and some use a stream – the Guardians Politics blog works that way.

He also refers to the very interesting talk that Evan Spiegal of Snapchat made a while back where he talks about profiles no longer being necessary in a world where everyone is constantly connected. Your stream says everything about you – and if you don’t update it you are just not present.

This is a parallel to the death of the home page – as the New York Times lamented last week people just go to the stories they want to read – underlining the Big Problem for Print, as the key locations that are so valuable in the real world don’t translate into digital. And remember when we had homepages – the places we started our web session when we turned on the PC? Now most people never turn their device off and most browsers open with all the tabs you had open last time, so we’re sort of in our own stream even on PCs

Flow

In our work for media owners on what advertising needs to look like to deliver on that $50bn Big Opportunity for Digital we talk about Flow.  This is our term for advertising that doesn’t disrupt the Stream – like banners do. The most successful ad formats fit the Flow of the Stream – best evidenced by Facebook and Twitter, but also true of Google PPC ads and even TV. Look, I am searching for coffee shops and there are all these useful links to ones just around me. Or I am watching an extended piece of video and it occasionally stops and shows me short pieces of video that (sometimes) entertain me and inform me.

The quest for native is about trying to fit with the Flow but sometimes its more about masquerading as editorial – and the New York Times is writing a rule book on native

Bruce showed some good examples of creativity on Vine in his talk and makes the point that only people who consume media as a stream can really crack making content that fits. Here is a good selection of recent Vines and this is a good example of how a brand can use Snapchat by fitting with the Flow.

As these new short formats can deliver significant reach there is more interest in how to make them. As well as Vine and Instagram video, GIFs are getting used more and more in art as well as in marketing. And this new tool to make them is interesting.

We are keen to meet people with skills in this area – people like Son who get new ways of doing things – so please point us in the right direction. The space is getting more commercialized and there is a big opportunity for brands to benefit from these new skill 

Programmatic, Context and Fraud

The new ways of doing creative are moving more slowly than the new ways of doing media – and that may prove to be an issue.

Especially as the context of the message seems to be increasingly absent from the channel thinking. Is a Guardian reader really just as valuable when she is checking her Yahoo Mail as when she is reading the Guardian? We have pointed this out as a real problem before and liked this new thinking about the issue from a US publisher. We agree and are happy to work with anyone who can make some progress on this – is it an opportunity for a smart research programme? We tried last year and couldn’t get enough publishers to get involved. But proving the value of context might even help with the Big Problem for Print.

The FT have a good round up of how advertising is getting automated. If you are not too sure about the pros and cons of Programmatic its well worth a read. Especially as the scale is increasing with two major players partnering to better compete with Google and Facebook.

But as the ways of doing things evolves so too does the appetite for ad fraud. A Mercedes digital ad was seen by more computers than actual people. The fraud in adtech is a growing problem and will slow the shift to digital unless it is dealt with quickly and effectively.

Quick Reads

Interesting thoughts on web apps vs native apps. We still think that open standards will win out and the power of search makes good browser experiences essential for the vast majority of brands. Native apps are good for some brands but probably only really worthwhile for a minority.

No one has come close to cracking mobile and money. Yet. A new survey from Accenture looks at attitudes to banks in the US – and a large proportion would be quite happy to bank with Google or Apple. Here in Europe Vodafone still have ambitions in this space and their new partnership with Bluesource to scan in plastic loyalty cards is interesting.  GoCompare tell us most people don’t make the most of card based loyalty schemes, but we suspect Apple intend to solve this with Passbook as they create a money focused Anchor.

Visual recognition has been a promising feature of mobile for a while and the Google acquisition of WordLens reminds us what can be done with the camera. Camfind is an interesting app that combines algorithms with Mechanical Turk to identify products and provide links to buy them. How long before Amazon buy them? The most interesting uses of visual search are in Fashion and this interview with the CEO of London start up Cortexica is worth reading.

How Yahoo made itself relevant in Mobile – again

McKinsey think that companies must stop experimenting with digital and commit to transforming themselves into full digital businesses. We sort of agree – experimentation is a good way to learn about news things like Streams and Flow – but it’s no longer enough to treat digital as emerging media. It’s now mainstream and a machine for making money. McKinsey have 7 habits of highly effective digital businesses. How many are you doing?

Finally….. the lure of Apple devices has been a core factor in their success since the early days. Here are some of their prototypes from the 1980s. But we don’t get the Bashful branding?

 

Mobile Fix – May 23

GAFA quiet period?

With anticipation building for both the Apple developer event (just over a week away) and the Google one at the end of June, you could argue things have gone a little quiet with GAFA.

Still no news on Apple & Beats. It seems that US financial rules mean that Apple don’t need to talk about a deal unless it’s much bigger than $3bn. So it could still be on. The Spotify results this week underline our belief that streaming is going to be a major business and Apple do need to step up to regain anywhere near the dominance they had with iTunes. With 10 million Spotify subscribers – and around 30m listening to the free (ad supported) version – people are starting to accept that streaming will reinvent the music business. This is more on the numbers.

Google did make one acquisition, buying the Word Lens Translation app. This is one of those really innovative services that demonstrate just how magical mobile can be. Take a minute to watch the demo and download the app whilst you can. Along with the Google Goggles Sudoku video it’s something we have used a lot in workshops. But since launch back in 2010 it’s been quite low profile and now Google see it can enhance their Translation service.

It’s another source of rich contextual data – once Google know I am using Word Lens to translate a menu or a road sign it has another powerful signal to decide which ad to show me next. Coupled with my location and all the data that Google Now can cook up, context is getting more and more usable.

Facebook 

Facebook were turned down when they offered $3bn for Snapchat a few months ago. So now they seem to be making their own version. Slingshot sounds like a better bet than Poke, but the FT say it may not get launched. Given the way that Facebook is taking the constellation approach to its apps, we can’t see why they wouldn’t roll the dice on this. The video messaging space is very attractive to the audience Facebook is struggling with and the reach of WhatsApp is a useful lever. Maybe this is the first sign that the fail fast regime really is over.

Another interesting move from Facebook has the potential to spook people. A new service lets you automatically post about the TV show you are watching or the music you are listening to. The microphone option when writing a post lets Facebook listen to the sound and identify the tune or the show. It’s another way of getting a signal that helps sell advertising. Remember Yahoo bought a firm with a similar technology; the IntoNow app was closed a few months ago – but Yahoo said the technology would be incorporated into some of their other apps.

Given how many TV viewers use their smartphones whilst watching TV, this tech could allow Facebook and Yahoo to offer synchronized ads to brands. The smart people at Xaxis are already looking at this type of service with their Sync product but their approach is a little less sophisticated.

And Facebook gave just announced some new policies on privacy.

Old Media

Whilst we wait for news from GAFA, the legacy media (arguably the biggest victims of the shift in both time and ad revenue to digital) continue to struggle. A new report castigates the BBC  for not going fast enough in digital. A little unfair given the pioneering work on iPlayer etc but their Non Exec points out that Buzzfeed has a bigger global reach than BBC News despite only launching in 2010.

And much has been made of the New York Times Innovation report (leaked via Buzzfeed ironically) where the division of church and state are shown to be very pronounced. And the practice of journalists doesn’t seem to have changed much;

“Stories are typically filed late in the day. Our mobile apps are organized by print sections. Desks meticulously lay out their sections but spend little time thinking about social strategies,”

This piece looks at how so many people curate content from old media and do really well with it. We heard a similar story about a UK magazine that had a great cover of Little Britain – and when they PR’d the story a day before publication it got picked up by the Mail and the Telegraph websites and was soon being shared. But with no mention of the magazine. A friend working at the company went to ask why it wasn’t on the magazine website – only to be told their policy was that nothing from the magazine could go on the site prior to the print onsale day.

In our client workshops we often use a great quote from GEs Jack Welch about change;

If someone is going to eat your children, it may as well be you.

In media it’s so true, but few people seem to have the appetite.

It is getting better. The Mirror announced a big increase in digital revenues and the Telegraph are pushing mobile first sites for the World Cup and experimenting with new ways of working.

newTV

Wired have produced some really good nativeadvertising /brandedcontent /advertorial for Netflix. It’s worth a look as a good example of what can be done – and its also interesting thinking for Fix readers interested in newTV. Surprisingly it doesn’t work that well on mobile. Adage take a look at the back story on its development here.

Wired also have another (apparently unrelated) piece on Netflix – looking at their Chief Product Officers views on the future of TV. It reports a presentation he gave suggesting what TV will be like in 2025.  We’re not sure we agree with the idea of the smart TV being central – we favour the dumb screen with the smartness in a smartphone. Watching the NBA playoffs this week by Chromecasting from a BT Android app felt like a glimpse of the future. Will it really take another 10 years to reinvent TV? YouTube is only 9 years old this month.

Social

One thing we keep reminding brands is that being early – and smart – in using new opportunities in mobile and social can deliver real competitive advantage. We think Ford have done a great job by being very focused on social and this interview with the main guy behind their social is a must read. He is leaving Ford and it will be interesting to see what he does next. Interestingly he has a good piece on the lessons brands can learn from the  NYTimes Innovation report we mention above.

Quick reads 

The latest version of the Google Mobile Playbook is now out. Lots of good examples of best practice.

Another Think with Google initiative– people celebrating good digital marketing. This one is their own (and Fix friend) Ben Malbon looking at global campaigns

Another good deck on growth hacking 

Marc Andreessen thinking is always worth listening to – in this interview he is bullish about Bitcoin – talking of it as a trillion dollar industry in

Finally.…with our social start up SkratchMyBack getting traction in its Manchester beta, we are very interesting in the sharing economy or Collaborative Consumption as its called. A new service in the US shows how much mileage there is in this space- Instacart lets you ‘hire’ a personal shopper who goes off and buys the groceries on your list and delivers them to you. There are so much room for business model innovation these days.

 

Mobile Fix – May 16

Apple, Beats & Anchors 

Is it happening or isn’t it? Almost a week on and it is still unclear whether Apple are going to buy Beats.

But the lack of news hasn’t stemmed the opnions and speculation. As someone on Twitter said; when Google, Amazon or Facebook announce something everyone goes – Ooh Interesting move. Yet when Apple announce something (or even a rumour) lots of people say Oh Stupid move.

We don’t think Apple is at all stupid and believe this could be a great deal. Beats is a very successful company with a really string brand

First reason is that Beats could resolve the issues around a cheaper iPhone. Many people have pointed out that a lower price iPhone – an iPhone Nano – could allow Apple to take the fight to the mid price androids that are doing so well all around the world

But the problem has always been about what a low price version does for the brand and does it affect the higher price iPhone? We have termed Apple the Audi of smartphones before and its worth considering how that brand deals with market segmentation.

There are many flavours of Audi but all at the top end of the market. For lower price points they have VW and Skoda -all sharing the same technology as Audi but each operating in its own market sector.

So a Beats phone at around $300 could be a big hit; iPhone 5 technology – which is still top parity with the best androids even though it’s a year old – with the very popular Beats branding, sold through the awesome distribution networks of Apple.

The second reason why is would be a good deal is that it should allow Apple to reinvent its music offering. Remember the renaissance of Apple was driven by the iPod and iTunes. As streaming grows in importance iTunes Radio – which is to be ad funded – probably isn’t a strong player. Now Beats streaming hasn’t done that well so far – but with some Apple love it could do a lot better.

Music industry insiders are very excited about the potential of streaming – but they see a different model to Spotify etc. Mark Geiger, the head of music at talent agency William Morris Endeavour believes streaming can transform the music industry . He envisions Streaming revenues of $72bn – 5 times the total music sales (globally) in 2013. Lucian Grange who heads up the biggest label Universal tends to agree. But Geiger thinks it will take one of the the big players – GAFA – to make it work and they need to have all music on it, not the relatively limited supply that current players have. 

In his presentation at Mipcom he makes it clear that the people behind the streaming firms aren’t from music – but the Beats people clearly are. Could Apple deliver the 500 million users who pay $15 a month for all you can eat streaming music?

One other point on this – we are told that he music rights that Beats have can be transferred in the event of a takeover whilst the Spotify rights can’t. So Apple may have pulled up the drawbridge behind them with this deal.

Music as an Apple Anchor

Is music that critical for Apple? Sure they built a big business with iTunes but everyone now has a music offer and many thought that it had become a commodity – something you have to offer but unlikely to make  a big difference to a customer.

We disagree – we think if you can get music right then it can be very powerful. Along with sleep, music is the most underrated drug in the world. Hearing the right song at the right moment can enhance your mood just as well as any narcotic 

But whilst the music that does that for me may be Marvin Gaye, Frank Ocean or 1960s Brazilian Jazz, yours will be different. And that’s where music services have to go next – to discovery and personalization. Jimmy Iovine of Beats talks about curation;

“There’s an ocean of music out there,” said iconic engineer, record producer and Beats CEO Jimmy Iovine. “And there’s absolutely no curation for it.”

What better raw material to start with than someones iTunes collection, and scrobbling that (remember how clever LastFM was at that) to deliver a curated stream.

If Apple can use their knowledge of my music and deliver a great personalized stream – helping me discover new music that I love  – they have something hugely powerful. And 500m people paying $15 a month generates $72 billion a year – and a 30% share gives Apple over $20bn a year in new revenue.

Apple Anchor – Passbook 

We see music as a crucial Anchor – something that will cause Apple users to pause before moving over to android and losing something they value.

Right now getting your music out of iTunes is a huge faff and that acts a sort of negative anchor – as does the way iMessage buries your texts once you quit Apple.

If you are Apple though you now want to build positive Anchors that keep people with the iPhone. The Appstore used to be an anchor but now most of the top apps are on Android too.

Music can be one and we are convinced that Passbook could be another. If I have a passbook full of my loyalty cards, coupons and boarding passes, will I just leave that behind as I switch to a Galaxy? And if Apple get the Passbook working really well with iBeacons to offer a new level of utility around shopping, will I just leave it? 

When Apple leverage their 600m credit card relationships to offer a real wallet service it becomes even more of an Anchor. Like moving banks – I know I can be done but do I really want to?

Apple Anchor – Health

If Apple do make health a key part of the new iPhone experience this quickly becomes another Anchor. The breadth and depth of your records from the iPhone apps and wearables (peripherals) will become crucial to health. Friends built a simple Diabetes app for sufferers to record their eating habits, mood swings etc. This has transformed the way Doctors treat them as the diagnosis is now based on fact rather than a selective memory. As the next generation gets smarter and more intuitive, the data gets richer and the barrier to churn gets stronger. A key Anchor 

And….?

If you accept the premise that the hardware is no longer going to be a key differentiator (the Amazon smartphone and the Tesco one are not going to be that different to the new iPhone or the next Galaxy etc) then services are key.  What else could Apple do to create differentiation and Anchors?

Everyone in the TV business knows sport is a key to differentiation. Sky built their business around football and BT is trying hard to emulate that strategy. Could Apple decide to invest in sports content as way of driving uptake and loyalty?

Charmath Palihapitiya – very early Facebooker, VC and owner of NBA team Golden State Warriors – believes it’s a 100% likely that Apple or Google or Amazon will buy the rights for a major sports league in the next couple of years

The US rights to the Premier League are with NBC and seem to be doing well. What if Apple wanted to buy global mobile rights for the Premier League – leaving the TV rights with the current players? 

That would be some Anchor – and a great way of making a Beats smartphone a must have in emerging markets too.

Idle speculation on our part, clearly. But there is something happening here and the question is what do brands do?

We advice all our clients to have a GAFA strategy; a real understanding of how they are involved and connected with Google, Apple, Facebook and Amazon and an appetite to test and learn on new opportunities as soon as they arise. For Apple we think Passbook is a huge opportunity for many brands and it is fairly straightforward to start learning what works and what doesn’t.

Mobile Gaming ads – a bubble? 

Finnish gaming company Supercell is insanely profitable – this article says that one day last October just two of their games totalled over $1m in revenue. The actual games are free – like most of the rest of the gaming market these apps are free to buy, but make money through in app purchases.

Most people don’t buy the gems or smurfberries, but a small number do. This chart from a great presentation at Facebook F8 conference shows the math.

Around a quarter of paying customers  – a very small proportion of all players – will spend over $1000 in a game and account for 90% of the game revenue. This writer thinks gaming is essentially gambling and worries we may end up with regulation.

Should we be worried that a large proportion of the booming mobile ad market is focused on finding these whales? Are we building an industry on sand?

The sooner we get real brands spending real money on mobile advertising designed to build brands and sell product the better.

Ephemeral?

There have been lots of new services that offer privacy – although Snapchat isn’t as private as people thought and they are proving very popular. Secret has raised more money and new data from Sandvine shows SnapChat is bigger than Whats App in the US

The same data source says “On several LTE networks in Asia 3rd-party messaging apps such as Line or WeChat R used by 40%+ of mobile subs each hour”

And Yahoo have bought Blink – a snapchat style service  – which they intend to close suggesting they wanted the people more than the product.

Square in trouble? 

Whilst a Bain report talks of the next step in mobile money being imminent, former mobile wallet poster child Square is in trouble. Reported to be losing $100m a year the business started by Twitter founder Jack Dorsey is up for sale. Despite a plethora of startups in this space we can’t see that anyone other than GAFA or maybe a Operator backed business can win. And only then, by solving a real customer problem. Paying for something with cards or cash still works fine. In our opinion, bundling payments with offers seems to be the only way forward.

The new Square app – replacing their wallet app – may be the last throw of the dice but being able to order on advance does solve a problem.

Quick Reads

Smart thinking on the evolving media agency model and their relationships with clients.

Interesting look at the relentless rise of ecommerce and the risk to retail

Foursquare are unbundling and their new Swarm app is now available. This Techcrunch piece sees Swarm as a service layer – using context to see when your friends are around.

This video from F8 is worth watching. Titled Disruptive Mobile Business it feature a panel with key people from Nike, Square, Pinterest, Estimote and Beats . It’s 45 minutes but if you are short of time the Beats bit starts at 19 minutes.

Finally…. we are out and about next week. On Monday I am on a panel at Open Mobile. And on Wednesday I am speaking at the Mediatel Media Playground. If you are at either event do come and say hello.

Mobile Fix – May 9

Chinese IPO

Last week the focus of Wall Street was on GAFA – now it’s the turn of BAT (Baidu, Alibaba, Tencent) as Alibaba prepares to IPO in New York

We have talked before about how the Vertical Stack model we apply to GAFA also works on the Chinese BAT. Baidu, Alibaba and Tencent all compete ferociously across virtually all online sectors– take a look at this infographic to get a sense  of the scale – we’d include it in the mail but it doubles the length…

Analysts estimate that the IPO will value Alibaba at between $136bn and $245bn – which sounds a lot until you consider their sales in 2013 were $248bn. And look at how many western firms you would have  to combine to match Alibaba; Amazon, eBay, Twitter, PayPal, uber, Spotify and more

A major beneficiary of the IPO is Yahoo who own 22% and they are expected to sell off $10bn of shares – prompting the question what will they buy with that cash?  Almost certainly something mobile

“When I got to Yahoo, mobile was everyone’s hobby. It was no one’s job,” Marissa Mayer

Talking about the new focus on mobile she talks of serendipity – the idea that people who go to the desktop site to check their emails and end up reading Yahoo news. In their apps you will be able to easily switch between emails, news and weather. Hasn’t she heard of the trend for unbundling?

Given how hard it is to get an app onto the home screen, we think that this type of cross pollination has more legs than the unbundling.

First Party Data

In the era of the PC, digital advertising built its infrastructure on top of the third-party cookie, a reliable workhorse that wasn’t exactly controversy-free, but at least remained nonproprietary. In our post-PC world, however, it appears that the infrastructure we need will be provided by large and proprietary first parties. 

This quote is from a good piece by a smart US agency head, pointing out the power of Facebook and Twitter in mobile advertising. As we have stated, the new ad world is divided between those with rich data – essentially first party data – like GAFA and Twitter – and the rest who use their adtech to add value to raw inventory through third party data.

Given the scale that GAFA and Twitter can deliver we wonder whether brands will continue to take the trouble to go buy others cheap inventory, in the hope of turning the lead into gold. Which is a worry for the main suppliers of this other inventory – traditional media owners.

Spend any time on a newspaper mobile site and the quality of advertising is terrible; poorly designed banners that often click through to non optimized sites and a surfeit of house ads. Yet they have something that could be almost as valuable as first party data – context.

Once upon a time the environment delivered by media owners was a key factor in the decision to advertise and the price paid. Of course you can now reach New York Times readers on eBay and Guardian readers on the Trainline app – but is it the same as reaching them in the right context? And could context be helpful as the debate around  viewability in digital – and the continuing scandal of fake traffic. This NYT article looks into the problems around online video and we suspect many of the same issue plague display on mobile and desktop.

Despite great tech and robust research in digital, every time these problems get aired, conservative brands have another reason to maintain their investment in traditional media.

How do we get a sense of the value of context?

One brand that monetizes its context well is the FT – this is a great insight into their digital strategy.. Of course their subscriber base gives them some first party data too. 

A key issue for Yahoo is how to revive their first party data – once they had millions of people logging in for Yahoo mail etc and that has virtually disappeared.

iPhone 6

Despite no announcements and no leaks there is a huge amount of speculation around the next iPhone – googling it gets 2.5m results.

One thing that is commonly accepted is that the new device will be bigger. One issue this throws up is getting apps optimized for the new devices – could this be a way for Apple to reboot the app store?

Finding anything in the appstore is a nightmare – it’s a digital jumble sale with a million apps. Solving this is a problem that Apple have not really focused on. But if we have a new device with a different ratio screen, there could be a way Apple get to restart the app store. Clearly with a new device and new OS, smart developers will be quick to optimize their apps. But lots wont and all those zombie apps that never get downloaded are unlikely to be updated.

So stealing an idea from the Google PlayStore, Apple could organise the app store based on apps that are compatible with (or optimised for) your device. All the key apps are there and discovery should be much more manageable.

More idol speculation over the next few weeks.

Quick reads

Amazon will now let you buy from Tweets – Amazon Cart (or Basket here in the UK) is a good idea and we expect it could be used more by brands in sponsored tweets. A huge proportion of tweets relate to music, books and film – could Twitter build advertising around media brands?

Groupon want to play in the grocery market – Groupon Basics competes directly with Amazon Pantry

Google apparently pressure Android device makers to include Google search etc. Google dispute this.

An interesting read about the Twitter purchase of Gnip –one of the firms that sells Twitter data to brands

eBay is getting into the content business – hiring talent to create a digital magazine. We think that they would be better to open up the site to curators – people who know a topic well and can help people find the right items on the site. We proposed this sort of role for our friends at Trekstock, so they could get a donation from people who found their help useful.

An interview with Hugo Barra gives more insight into Xiaomi – who are expanding into Malaysia. Very interesting Chinese company

When it comes to first party data the person best able to deliver that is you. Vendor Relationship Management is the term for people managing their own data and profiting from it. This is a good look at the area from a smart NY entrepreneur who is focusing on this exciting opportunity.

Facebook have launched a new tool so brands can better understand  -and target them. Audience Insights is US only at the moment.

AOL results disappointed – leading to their stock price falling. Most interesting stat is they still make $138m profit from people who still use AOL as their dial up internet access.

Finally….a bunch of really smart people were asked their views of the future – on the basis that they are quite likely to invent it. Well worth reading

Mobile Fix – April 25

Google

It’s that time again. The financial results for Q1 are out for Google, Apple, Facebook & Amazon. Google was a few days ago and despite a 19% year in year increase in revenue the results were seen as a disappointment. Why? Because whilst paid clicks were up by 26%, the average cost per click fell by 9%. This is clearly a mobile factor and until brands can see mobile conversions are as good as desktop, the value of a mobile click remains in question. Better attribution of transactions that cross multiple screens is a focus for the whole industry. But until brands have sites that work as well on mobile as they do on desktop, the potential of search is reduced. More on this below.

It is worth listening to Nikesh Arora talk about the 4 sectors of Googles business on the earnings call. One topic pulled out was how Super Bowl advertisers nearly all used YouTube to extend the reach and life of their TV ads.

But when asked about mobile pricing Nikesh reiterates his view that in the medium to long term mobile pricing will be better  - and talks through the reasons why. 

Facebook

Facebook had no such problems – their success with mobile continues. The two issues that plagued them at the IPO – where would revenue growth come from and how would they deal with mobile – are both now non issues.

With revenue up by 72% and user number growing in all regions – and mobile grew to be 59% of all ad revenue – they are being lauded as a big success story.

They look likely to maintain growth – and the pressure on Google – with their own ad network seemingly imminent.

An interview with Zuckerberg a few days before the results, is worth reading to get an idea of the issues he is focusing on; innovation and privacy feature heavily.

And this interview with the WhatsApp CEO is worth a look too – 500m active users each day and 700m photos shared each day.

Apple

Whilst Google and Facebook both talked up their plans for the future, Apple did nothing more than share their latest figures. The figures were good enough though. Increased iPhone sales e surprised everyone – and success in China and Japan seems to have been a big factor. More worrying was a 16% fall in iPad sales, which no one seems to understand. We are going to look at this more next week.

Couple of bits of speculation that relate to Apple;

As we have been saying for ages we expect Apple to switch the default search in Safari from Google – they can’t be happy at giving that amount of data and insight to their key competitor. Seemingly Yahoo want the deal and are pitching hard. Given that the Yahoo search product is essentially Bing we don’t expect Bing to let this go. Danny Sullivan doesn’t think a Yahoo deal is likely either.

But we now advise all our clients to pay more attention to BING seo – especially on mobile.

And Nike this week downsized their Fuelband team, whilst denying they were closing the programme down. They never did do an Android app so we stopped using the Fuelband as without the app it’s just not that useful. We also found that apps like Moves (just bought by Facebook) do the job of the wearable/peripheral equally well. Should we expect Nike to have their fitness app baked in to the new Apple Health everyone expects with the next iPhone?

Amazon 

The Amazon results are out and they are pretty much right on the estimates – so no real news. But this pre results speculation from an analyst shows the scale of the change Amazon is going through;

Though desktop page views at Amazon.com declined by about 9 percent in the first quarter compared to a year earlier, mobile page views increased by more than 50 percent, RBC Capital said.

Mobile advertising

We see the digital advertising world separating into two states; those players that have rich data on their users (GAFA plus Twitter are clearly in the lead here) and those who have rich data they can apply to raw inventory bought from media owners (The Agency RTBs and some of the ad networks).

Mobile network operators have long been considered as possible players but despite lots of talk there has not been much action. It is changing; Weve have got some good traction on the UK and now Telefonica have made an aggressive statement of intent with the launch of Axonix.

This new company is jointly funded by Telefonica and Private Equity firm Blackstone and is built around the tech from Mobclix – a fast growing mobile ad firm that ran out of money after Velti bought them. With the cream of the Telefonica Digital ad team running the business and a tech platform that enjoyed a good reputation, this looks like the first credible ad play from a MNO. If they can leverage the rich data they hold on over 300 million customers, they could have an impact on GAFA etc.

This move by Telefonica highlights the various false starts by US Operators – and most of the others – although AT&T are investing in an interesting deal around ad supported video, working with a former head of News Corp. This sort of deal demonstrates the issues around net neutrality – will AT&T customers who want to watch YouTube or Netflix get as good a service as those who want to watch the AT&T service?

The Home Screen battle

If you want to be a player on mobile advertising you need rich data. One way to get that is through knowing what’s on someones homescreen. Flurry have evolved their research business into a good ad network and become probably the only non GAFA firm with insight into the apps people have.

But with the new crop of homescreen apps, this data is becoming more widely available. We mentioned Yahoo buying Aviate a few weeks back and then Twitter bought Cover – and Facebook arguably kicked off the trend with Home. Newer players like EverythingMe are emerging.

All these apps – and their Chinese equivalents – take over the home screen and intend to serve up the right apps at the right time. The ambition is to emulate the Google Now type contextual service and these apps want access to all the data on the phone – diary, contacts and email. So privacy is an issue. The FT have a good round up here.

Is the first big mobile trend that started on Android? Of course Apple don’t allow anyone to mess with their homescreen.

Mobile Sites

New data from the IAB shows that slowly, brands are getting around to having mobile optimized sites. Now it’s only around a third of top brands that don’t have a site that’s works on mobile. The next problem is that many of the optimized sites aren’t actually that good. We see many that are slow loading – and this research suggests that two thirds of responsive sites load unacceptably slowly 

It’s actually not that hard to build a site that is Fit4Mobile but it requires ongoing work to sort the basics like image size etc as well as looking to improve conversions and actions on the site. Every time we have done the math, the value that can be unlocked from search means the investment in getting the site right is paid back quickly.

We remain convinced that Google will start to reward optimized sites with better placing in organic search when people are using mobile, so this value could soon be dramatically increased. A good story this week was around the new Ryanair website where the amateur approach meant it performed really badly in search. We took a look and found they hadn’t bothered to make it mobile optimized either.

Quick reads

Here is more on the Twitter ad network play, using the MoPub marketplace they acquired last year.

YouTube continues to push for TV budgets and a new interview with Susan Wojcicki outlines the next step – making YouTube stars famous in the real world­ with press and outdoor ads and even local TV spots.

There is also more and more information on the habits of youTube viewers – with this infographic debunking some of the key myths.

More Google thinking on blending mobile and desktop shoppers

China continues to fascinate and this look at the digital landscape is well worth reading

Finally

The team at Flurry have put together a great deck called The Age of Living Mobile. As well as celebrating the immense progress made by the industry in the last few years it also points out that there is still lots more potential for growth.

It’s time to experiment

 

 

 

 

 

Mobile Fix – April 11

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.

Social Evolution

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

Social Revolution

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.

This is a good take on Facebook messaging and the new Asian competitors; Line, WeChat and Kakao

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.

Marc Andreessen says;

“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.

Quick(ish) Reads

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.

When Google sold Motorola it kept the bit that is designing a modular phone. This is a sneak peak of Ara. And you can sign up to help design the project by doing Special Missions

A good look at Yahoo mobile ambitions and the thinking behind their excellent Aviate app.

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;

Confidence in creating digital and mobile campaigns is still low among marcoms and media professionals in the UK

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

Creative agencies used to manage 100% of our communications; now they manage 60% or 50%. As that happens, we keep adding agencies which is not sustainable,” 

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.

If you would like to get Mobile Fix by email each week you can sign up here.

And if you need help profiting from Mobile, Social and Content get in touch.

Mobile Fix – April 4

Mobile  - Problem or Opportunity?

We spoke on a good Adweek panel organized by Weve this week. Along with other sessions across the event, we were left with the feeling that there is quite a lot of friction holding mobile back. Lack of clarity of measurement , lack of creativity, dissatisfaction with formats etc.

And a couple of smart people in the US make similar points this week. Ian Schafer of Deep Focus suggests the digital ad economy is heading for a correction as the stuff that works on desktop doesn’t translate to mobile.

And Barry Lowenthal of The Media Kitchen points out many mobile focused businesses are rejecting advertising as a business model – which is a problem for those who need to reach consumers when they are on mobile.

Now we probably don’t need reminding just how big the mobile opportunity is (but these 5 charts do a great job) but if the ad industry doesn’t make the most of this others will.

The CMO of Walmart is a big believer in adtech and is bringing in engineers to help solve the problem.;

“There are so many choices on where you can put your precious investment. It’s a software problem.”

And here in the UK a Tesco exec talks about the lack of expertise around mobile;

“Lack of expertise is a big challenge, not just in our company, but a lot of agencies don’t get it. They claim they do, but if you scratch the surface they don’t.”

Whilst tech and mobile have disrupted many sectors – retail, money, publishing, transport etc the changes in marketing are less apparent. Someone from any of these sectors 50 years ago would struggle to recognize their business now.

Yet as MadMen proves, someone from a 1965 agency would feel fairly at home in an Agency today. Which either means we’re immune to disruption. Or it just hasn’t happened. Yet.

Mobile is a huge opportunity. Embracing the possibilities of mobile, social and content can be the way we change the way Agencies add value for clients. Or we can leave it in the too hard box and let the consultancies eat our lunch.

It’s time to experiment.

Apps vs Browsers

A perennial question on mobile is whether brands should focus on apps or moble web. Various studies have shown that most brands apps struggle to get users and even once downloaded often languish on the last screen before being deleted. And the surge in mobile search  - along with huge mobile use of email and social – means a mobile optimized site in a must have.

But new research from Flurry suggests that the vast majority of time spent in mobile is spent in app – as much as 86%in the US.

Data from Comscore suggests  a similar profile – and shows  mobile app usage now accounts for more time than desktop. 

We still believe the mobile web is vital; the fact that half of searches are now mobile underlines this, as does anecdotal evidence.

If your brand doesn’t have a mobile optimized site you are at a serious disadvantage. Not having an app is much less critical. 

“TV is just an app”

A big week for newTV – the term we use for the fusing of digital video and traditional TV. BT have thrown their weight behind the Chromecast with all their sports available this way to their Broadband customers – potentially reducing their reliance on Sky – their main rival. It also has the potential to reduce their reliance on YouView where other partners include the main free to air broadcaster. The C4 CEO is skeptical about Chromecast calling it; 

one of “a plethora of devices that will trickle into homes”.

Dixons are more positive – saying they sold one every 4 seconds on first day of sales – and it’s still the top seller on Amazon.

Amazon now have their own streaming device; the Amazon Fire.  At $99 it looks good and they make a point of comparing it to Chromecast and Apple TV where its higher spec may justify the higher price. No word on when it will be available in the UK – but we would expect it to be soon and with some UK partners – like BT and BBC iPlayer.

  

Another piece in the Vertical Stack and another device to support, if you are a content player.

A US presentation on the future of TV is worth looking at – and this quote is interesting;

“As you unbox the cable box and allow other devices to become the TV experience, you’re going to get much better consumer experiences,” Mr. Greenfield said. “On the flip side of that, TV is just an app.”

The charts from this presentation are available here.

As we said when talking about Disney last week, this game is about creative transformation rather than revolution, as the money involved is huge – old school traditional media companies that sell video are hugely profitable

So they want to protect their business and new media companies want a share.

As a further incentive for brands and agencies to move TV budget to online video YouTube will now guarantee audiences for big spenders – and reserve them space in top shows. Sounds a lot like TV.

Yahoo have ambitions here too. Already a big player in online video Yahoo are rumoured to be planning a YouTube rival and looking to poach some of the YouTube stars. There is some latent dissatisfaction with YouTube but the lack of a viable alternative has meant there has been little churn yet.

Ben Evans has written a really good piece on TV too

Twitter & TV

One area where TV is embracing digital is through social. New research from Twitter shows the symbiotic relationship – evidenced by 4.2 million tweets using the Brits hashtag. And one very interesting snippet is the finding that being retweeted is strong social capital.

Building on this, Twitter are buying 2screen analytics firms in Europe – SecondSync in the UK and Mesagraph in France. Both have strong relationships with broadcasters in their markets.

So we should expect more lame use of #hashtags in the end frames on TV ads, but smart brands will find better ways of unlocking the social element. We think that brands could have a role as curators on Twitter – maybe using Lists an underexploited asset of Twitter.

For example could a Champions League sponsor direct fans to a curated Twitter list for each match – featuring the players and pundits who are likely to add value for that particular game?

This is good thinking around the potential for curation.

Net Neutrality

One key issue around TV switching from cable to broadband is capacity. In a turkey not voting for Christmas type surprise, EU Mobile network operators have come out against Net Neutrality.  The EU believe there is a compromise to be had;

“If we all agree on the need to end blocking and throttling, and we agree on the need to manage specialised services carefully, then the debate that we are having is about how we achieve this, not about being for or against the open Internet,”

But MNOs are not keen on building the fatter pipes that YouTube, Netflix etc need, without some way of profiting

As BT looks to re-enter the mobile market with a quad play – landline , broadband, TV and now mobile – we have a complicated ecology.  And it is possible BT will emulate the strategy of French ISP Free where their extensive broadband network – coupled with Femtocells – could give them an advantage in coverage.

The one thing MNOs lack is content, so will we see BT extend their content strategy to mobile? With all that TV money at stake, the idea of your enemies enemy is your friend springs to mind. There are still rumours of a tie up between Vodafone and BSkyB.

Mobile Money

Whilst the various mobile wallet initiatives struggle to get traction, mobile banking has really taken off for existing banks. Over 12 million people have downloaded banking apps and usage has doubled to 18.6 million transactions a week.

The downside of this for the banks is that footfall in their branches has dropped dramatically – down 30% at RBS/NatWest over 4 years.

As new services launch  – like PayM which enables people to make payments to anyone whose mobile number you know –, this is a one way trend.

PayPals David Marcus has shared their view on how this is going to play out – and with news that MPesa, the African money success story is coming to Europe, disruption is going to continue.

The question is whether new players can drive the change or do existing banks – along with Visa and Mastercard – have enough as incumbents to win?

(Looking even further ahead this futurology piece imagines money in 2040)

Quick Reads

The move to omni channel is not just a western phenomenon. Chinese ecommerce giant Alibaba is investing in Chinese department stores.

IBM is investing in their services division to build what is essentially a global digital agency. IT giant. Cognizant are aggressively growing their consulting business and Accenture have made a really big hire too. Tough competition for agencies.

A good look at the ingredients of a successful social campaign – #Selfie

After Apple potentially reshape the marketing world with low energy Bluetooth and beacons are they about to do the same with Multipeer Connectivity and Mesh networks?

It’s 10 years since Gmail launched

Are we getting over excited about Big Data?  This good FT piece makes the case for Big Insight and points out the flaws in some of most discussed examples of Big Data success

Tesco are getting into adtech Can we expect Tesco to use their big data to target ads for the products they stock?

Finally ….As we have mentioned before, no-one has told the Chinese that the QR code is over. Nor, it seems, that local newspapers are dead. So they are combining the two to create portable online shopping catalogues

We think there is real potential to connect local press with digital via the mobile. This is worth watching.