Category Archives: Google

Mobile Fix – July 18

Old Media

The big deals this week are in old media rather than new. Rupert Murdoch is trying to buy Time Warner to merge it with his Fox business. His $80bn offer has been rejected but the feeling is that the deal will happen if/when he ups the offer.

Why buy them? He sees that the whole world of content is becoming even more of a hits business. And as digital drives the value of content down through ease of sharing (and piracy) we are seeing a polarization; most content is worth very little and the small minority that people feel they have to see shoots up in value. 

A quote from VC Chamath Palihapitiya now shapes much of our thinking;

Experience = Social Capital

So content that is an experience, and therefore has social capital, is hugely valuable. And Rupert gets this – an analyst said 

“He clearly feels that as other players try to enter the media business, content will be more valuable and he wants to get his hands on as much content as possible.”

It’s worth reading a blog post from the same analyst where he dissects the logic of the deal and outlines the key assets of Time Warner; Harry Potter movies and 80 years of classic films, Friends, West Wing and other TV classics, Superman and Batman and the rest of DC Comics. And HBO, which some feel is the real reason for the deal.

But if the value is clear to Murdoch who really only has old media assets to monetise this content through what would it be worth to GAFA who need to improve the monetization of much of their new media assets?

The stories around Apple thinking of buying Disney may have gone away but there is still some logic there. Which is why the story keeps coming back.

Will someone else step up to fight Murdoch for this deal? Maybe, but a little history may dampen down enthusiasm. Time Warner was already bought by a digital giant; AOL bought them for $164bn back in 2000 and the then CEO subsequently called it “the biggest mistake in corporate history

Mark Andreessen is probably right when he says most of the dotcom boom were actually good ideas – just too early – but it would be a brave CEO to rerun this move. We still think its more likely GAFA will move into content with a big Sports deal.

This is a good thinking on how the value of content assets is changing – and how the tactics of digital are trying to slow this change.

Mobile Money 

Our piece on mobile and money last week got some good reaction. There is a general feeling that the legacy issues that are holding traditional banks back, are being overstated and that workarounds can solve some of the key hurdles. 

A new McKinsey report this week makes a similar point about European banking tending to be slow, but sees some reason for optimism. One quote stands out as good sense for every business;

Increase the focus on business outcomes, not digital activity. Too often, banks manage the progress of their digital transformations by tracking activity metrics, such as the number of app downloads and log-in rates. Such metrics are inadequate proxies for business value. Banks must set clear aspirations for value outcomes, looking at productivity, servicing-unit costs, and lead-conversion rates, and link these explicitly to digital investments.

A key issue is where the thinking comes from – too often the IT team are seen as a barrier – if not an enemy – and the big System Integrator contracts are complained about by many people we meet. In a world of MVPs and pretotyping having thousands of people in Pune isn’t always helpful.

A conference this week saw someone make the point that anyone can be a player on money now – and we made the point that c90% of all the money held in US mobile wallets is on the Starbucks app.

The news that the Barclays PingIt app now enables users to send money to India, as well as several African countries, using just someone’s phone number reminds us how fast things are changing.

A little step by Apple is another glimpse of the future. In the US you can now store money in your Passbook app. It’s a little clunky right now in that it involve a visit to an Apple store but we’re sure it will get easier. With around 1 billion credit card relationships, when Apple lets people move money into their Passbook from their cards, they essentially own the payments market. And they create a Money Anchor to stop people switching to Android.

In our conversations with consumers people love the fingerprint tech on the iPhone and it removes much of the worry about security of the phone as a wallet. 

But of course others have similar ambition. PayPals David Marcus has gone to Facebook to run their messaging service and folding in payments seems an obvious step. And Snapchat – who have Chinese BAT giant Tencent as an investor – seemingly plan to add some of the payment and money services that Chinese messaging services do so well from.

London is a key player on all this with the focus on FinTech here – this is some  background on why it’s so important 

Fashion Luxury & tech

One of the hottest areas for VC investment at the moment is Fashion. Startups like NastyGal, Farfetch and Lyst have all been backed by major VCs as the combination of high margins, ecommerce and a fragmented market attract disrupters.

This event in Paris recently had Seth Godin posing the question is digital the end of luxury brands but feels the effect is one of democratization. Godins point echoes the one we made earlier – as social status and social capital become more important what is the role for luxury brands? And the answer is smart luxury brands will deliver an experience; just ask anyone who has had NetAPorter delivered to their office and you will see what we mean.

But tech is adding more than the efficiency of ecommerce. There is lots of R&D looking at what tech can add to the fashion experience. Tools around sizing are a big focus and so is discovery. The holy grail is how tech can enable shopping from print magazine and TV and film – and there is a way to go yet. But the opportunity to make content shoppable is huge.

UK Fashion colossus ASOS was started with just that idea –you could buy a pair of Sunglasses or a dress As Seen On Screen and a Shazam for vision is getting closer 

London is a big centre for fashion tech and both ASAP54 and SnapFashion are London startups leading the quest for a tool that takes an image and shows you clothes that match. Pinterest are also interested in the space and bought Visual Graph.

We think that the most likely winner could be GAFA – Google bought the visual recognition app Words Lens. And they already had Google Goggles.  With their machine learning focus they have solved how to read the numbers on houses.

Firefly on the new Amazon phone also has smart visual recognition – and developers can use this tech.

This is a good list of some of the most interesting Fashion startups in Europe.

Redefining Retail

We always talk about Brand Cathedrals as the epitome of the High Street – retail stores that are so good fans go to worship the brand. Apple stores are clearly Brand Cathedrals and so are some of the Nike stores – especially 1948. Luxury brands are over represented; Dover Street Market, Corso Como in Florence and Seoul are great examples.

Ron Johnson was the man behind the first generation of Apple stores and this interview is a good read – especially as he tells how Steve Jobs let him define what the stores should be.

Samsung have concept stores in some major cities – the London ones and the New York ones are quite interesting – and have now developed a new retail concept for a BestBuy store in Chicago. Built by digital agency Barbarian the use of technology sounds interesting and the video is a must watch. Perhaps not a Brand Cathedral but a good example of what can be done with tech in retail. This Guardian article goes into a bit more depth on how brand are embracing retail and concept stores.

Quick reads

IBM and Apple may seem odd bedfellows to those who remember the PC wars but they are now partnering to focus on getting entereprise mobile. Worth watching.

Facebook are partnering with Nielsen to look at TV viewing habits. 

Microsoft are firing 18000 people – many who joined in the Nokia deal. In better news they are thought to be ahead of Yahoo in ad revenue for the first time ever.

Social guru Gary Vaynerchuk is very bullish on Facebook ads

Finally – it’s going to be hot in London today, so you may want to take a look at a great weather app that is built in HTML5 so runs in the browser. We would love to think the name Forecast.io is some sort of homage to the Fast Show and Scorchio.

And if you want to escape London, check out the new EasyCarClub iPhone app. Backed by Brent Hoberman and Stelios, this is the AirBnB of cars and we worked with our friends at Ocasta as Architect/Builders on the app.

We are escaping London for a little while, so no Fix until August. Enjoy the sunshine.

Why not sign up for the weekly email version of Fix – delivered first thing every Friday morning.

Mobile Fix – July 11

Mobile &Money

On a recent project we did looking at mobile and money we found a great quote from US economist Paul Volcker

The only useful thing the banks have invented in the last 20 years is the ATM

For all the advances in online banking and mobile banking, essentially it’s the old paper statement made available on a screen. And whilst it’s now possible to pay someone using their phone number, you don’t get the impression any of the banks really wants to innovate. Most banks look at tech as a way of reducing costs rather than driving new services or innovating with products. 

But tech doesn’t always deliver in the way people want. The ATM led to people reducing bank visits and online/ mobile banking has eaten away at brand visits too. A few years ago people went to their bank branch twice a week. Now it’s likely to be twice a year or less. New research shows the era of the traditional bank branch is dead.

One of the best thinkers on banking is Brett King and his presentation at the Wired conference on money is well worth watching. His start up Moven is one of the most interesting start ups in banking – but the whole FinTech movment is massive – Accenture estimate there is almost £3bn invested in these start ups.

Talking with VCs about why there is the focus on FinTech reminds us of the Butch Cassidy quote; When asked why he robbed banks.

Because that’s where the money is.

VC Chris Dixon talks of why he is interested in Bitcoin

The payment industry is a $500 billion industry (or larger, depending on how you measure it). That means banks and payment companies charge $500B per year in fees to provide a service that mostly involves moving bits around the Internet. There are other services they provide like credit, security, and dispute resolution, but in any reasonable analysis these services should cost dramatically less than they currently do. The payment industry should be at least an order of magnitude smaller than it is today 

Just like every other sector digital is transforming the money industry and smart people are reimagining the business. If the incumbents don’t step up, they will be stepped over.

Google & the Future

One of the many things that came out of Google I/O the other week was Material Design which – just like Swift from the Apple WWDC  – didn’t seem that big a deal at the time. But on reflection these are significant changes to how digital experiences are designed and built. This is a deep dive into the implications of Material Design.

Just as the web is evolving from a text medium to a visual one, so will apps move from flat pages to something more like motion graphics. 

And if you want more on where Google is going watch this long interview with Larry & Sergey. Lots about the benefits of long term thinking versus the short horizon most companies have and some thoughts on how society will have to change as robots take over more and more jobs.

In one of our talks on GAFA & Vertical Stacks this week we had a great new example of the intense competition in GAFA – Google are taking on Amazon in the grocery home delivery market

Why would Google get into that space? Simple. Ads and Delivery.

On the ads they know many people go directly to Amazon when looking for a product, which impacts their search sales. So the more product they sell, the more search revenue they are likely to get.

But more importantly, grocery brands are amongst the biggest spenders on TV and if Google can link advertising with actual sales – measured by their grocery deliveries – they open up that market. Imagine how powerful the sales case for YouTube is when you can show the effect on sales through people seeing different frequency or sequence of ads.

And delivery is going to be key in ecommerce. Having vans driving around making grocery deliveries is a convenient tool for Google to deliver other goods – as is Uber. And we can expect driverless cars to be an ingredient too.

But Google isn’t neglecting the day job and Jason Spero talks here about their latest mobile ad innovations.

Samsung & China

Talking about GAFA we were asked if we think anyone can threaten their dominance? We have always felt the answer was probably no, as the other big players (Microsoft, eBay, Twitter etc) tend to have a narrower focus.

But we are rethinking this as we watch the Chinese BAT (Baidu, Alibaba & Tencent) grow.  They are only really active in China right now, but as the latest Samsung financial results show China is a big enough market to impact global performance.

One of the biggest factors in Samsung troubles is Xiaomi – the Chinese device manufacturer. New data from Flurry shows that their user base is very mobile savvy – spending 8% more time using apps than iPhone users in China

Xiaomi are spreading out across Asia – with a launch in India imminent – and if they continue to attract the most mobile savvy users they represent a significant threat to Apple as well as Samsung.

As and when BAT follow and start to look outside China they could threaten the GAFA dominance – especially in emerging markets. The size of BAT is already impressive  – but bear in mind that vast majority of their revenue is from China where only around an third of the population have internet access. When the whole country catches up with big cities and has levels similar to the West these 3 companies could be 2 or 3 times bigger.

newTV – the 7% switch

The Sunday Times chose a new TV show called Extant for its pick of the day for yesterday. And if you have been watching the World Cup you will have seen lots of ads for it. A SciFi thriller it looks like the latest attempt to capture viewers who liked Lost and XFiles etc.

The unusual thing is that it isn’t on ITV or the BBC. Or one of the SKY channels. It’s on Amazon Prime

Most people accept our premise that TV is changing and the newTV ecology is being watched by most. But with the traditional TV industry in good health, many feel there is little to worry about

This deck (by the guy behind those scary LUMA charts that some just how complicated the digital world is) should be a must read for anyone involved in TV or advertising.

If you don’t have the time to read the whole thing look at chart 65. This makes the point any media planner knows – the last few points of a TV spend are inefficient as they just deliver frequency rather than extra reach. Smart planners are always looking for the elusive light viewer and already that is driving much of the investment in online video.

But this deck makes the point that taking the ‘inefficient’ 7% and switching it to digital would double the digital market. And it wouldn’t be that good for traditional TV businesses margins.

Of course the digital experience needs to improve – right now there are two many ads and the balance needs to be improved – this research says there are 1 minute of ads for each 2 minutes of content.

There is a lot of money in flux – and those that make the moves quicker and smarter than the other brands in their sector can get real competitive advantage.

Quick Reads 

The whole world of Programmatic is moving very quickly and we suspect there is an element of emperors new clothes here; do brands and agencies really understand how this works and what the pros and cons are for them? This interview with GroupM top buyer shows the market is still evolving and his comments tend to make sense

Good thinking on Digital Transformation from Russell Davies

One of the key issues around Digital Transformation is whether you need a Chief Digital Officer or not. Smart Fix friend Peter Kim (who has just gone to Cheil as Chief Digital Officer) has written a good report on how best to approach this 

Last week we mentioned Google Wave as a product that Google tried and failed with – but probably learnt loads. This is a link to the Google wave homage to Pulp Fiction that actually works

Finally As more and more companies gather more and more data on consumers, the issue of ethics and responsibility is becoming more prominent. I just signed yet another 80+ page Ts&Cs for iTunes – I have no idea what I have agreed to and whilst I don’t worry that Apple is about to do evil, I do believe people are starting to get concerned. A story about the NSA may not get much traction with people yet we find consumers don’t like retargeting and when they realize that there data is being used to drive this they find it a little creepy. They don’t see being stalked by a brand as acceptable. This good article argues that GAFA etc need to act responsibly

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 27

 

Google I/O

The arms race continues. On Wednesday Google held their I/O developer event – the Android version of the Apple WWDC  a couple of weeks ago.

As well as sharing growth figures and a long list of new features, products and ideas – and having a bit of a pop over who does what first –  the event was notable as evidence Google want to take back some more control over how Android is used.

Android is only really useful to Google in two ways;

More Android devices means more distribution for Google products – feeding more data back to Google and giving them more eyeballs to sell ads against

More Android devices means less Apple devices. Every high-end android sale is probably a lost sale of an iPhone. So Google is less at risk to the ongoing Apple deGoogling of their ecology.

But when people can use Android without baking in Google, there is little advantage and Google have spent the last couple of years tightening their grip on the platform

Benedict Evans made the point that when people fork Android – creating their own flavour of Android – they lose much of the Google magic ingredients and that looks increasingly pointless (other than China where Google has different issues).

Like Apple, Google see a world where people effortlessly switch between devices – smartphones, watches, Chromebooks etc and Android and Chrome recognise and enable this. For example when you are wearing an Android watch your smartphone wont require you to use the pattern to unlock the home screen

As predicted when Pichai took over Android – whilst still running Chrome – the distance between Android and Chrome is shrinking. What this means for the ‘distance’ between native apps and the web is a topic for another day – but its clear that Google – essentially a web company – are looking to close this gap.

To get more on I/O its worth reading VC Fred Wilson  and this interview with Sundar Pichai is good background on Google and their take on GAFA. And if you want to dig deep then check out the I/O site – lots of good video on topics that are going to be really influential – like Material Design

Its also worth remembering what didn’t get mentioned – Glass, Robots and more

Ad Formats

One element of our talk at Facebook last week was about how little creativity gets applied to mobile advertising. Because many see banners as the work of the devil, they are ignored by most creatives and usually end up being worked on by junior staff. And doesn’t it show? 

If you look at the Cannes winners in mobile little could be called advertising and we think that’s a problem.

Yet if you treat banners as little billboards or posters you can convey an idea with them. You just need to have an idea to start with.

It’s clear that we need new formats and new ways of working to breathe life into mobile advertising and win back the attention of the talent. French publisher Le Monde are pushing a new format, which looks quite elegant. 

But the other issue around mobile and digital creative is the production costs – delivering a campaign that works across a whole range of different formats usually means that a disproportionate share of the budget goes on repurposing assets to fit a range of different shapes and sizes

Just as responsive sites is the right approach for most people building a web presence these days, we are convinced that responsive advertising is the only real answer for anyone wanting to unlock the value of digital advertising. We are working with our friends at Responsive Ads to bring their really effective platform to Europe. Beta trails at with the LA Times, Mashable and Mastercard and more have proven really successful at delivering Rich Media creative that can be adapted in real time. Google have a similar, though arguably less sophisticated tool and it has proven very effective for TalkTalk – reducing eCPA by 12%.

We will soon be knocking on the doors of European publishers and agencies to find partners for Responsive Ads – if you would like to jump the queue let me know.

Internet of things

Just prior to their I/O event Google made a further play in their internet of things strategy with Nest buying Dropcam – the video monitoring camera system – for $555m. They also announced they are launching a developer programme – with Mercedes, Jawbone and Whirpppol amongst the launch partners. This will be a space whare Google and Apple go head to head – how long before Apple stop selling Next and DropCam?

This interview with a garage door company gets into the detail of how these partnerships are being forged.

Recent Pew research suggests the internet of things will be thriving by 2025. We don’t think it will take that long.  The CEO of the newly merged Dixon Carphone talks of the connected home as part of the logic for the merger.

Quick Reads

Great example of how UX and design can transform a process from Virgin America

More on different ways to measure engagement or media performance. Upworthy use engagement minutes. Back in our Mindshare days we tried to get minutes earned – ie YouTube views – accepted as comparable to minutes bought (they are actually more valuable because people are viewing by choice rather than through interruption) Hard to get traction with the idea but as video gets real scale we think there is mileage in this.

Interesting take on the inexorable rise of Product Placement. The effect of this type of tactic is debatable but we did see evidence that Coke ads in the breaks of the US XFactor – where they had lots of product placement  – performed much better than the same ads on other shows.

The Daily Mail have hired the mastermind of Buzzfeeds advertising success. Should we look forward to brands in the sidebar of shame 

Finally if you think the animosity between GAFA and especially Apple and Google is bad take a look at BAT in China. People wanting to place World Cups bets with the Tencent mobile betting site QQ Lottery, were told they couldn’t pay with Alipay – the payments arm of Alibaba. Whilst it was claimed to be a technical issue many people suspect it’s the BAT vertical stack at play. 

Both companies resorted to social media and things got a little heated. At least GAFA remain fairly civil to each other.

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 13

newTV

Viacom are the latest ‘old’ TV business to invest in newTV with a deal with DefyMedia, trading a couple of their games properties for a stake in Defy.

Next to go could be Fullscreen who reportedly are about to be bought for $1bn. Their head of talent talks about what’s happening with YouTube in this good Guardian article;

“I really believe there’s a tipping point that’s happening right now, where you see studios, networks and advertisers all starting to look at these creators and what’s happening,”

“…What Madison Avenue and all of traditional media has yet to understand about this is that there is this authentic bond between these creators and their fans. Their fans represent their distribution channel: it’s a living, breathing organism, which I don’t think traditional media understands, nor do they really understand the power of that. The fans helped build their distribution channel: they told their friends to subscribe, to retweet something. They’re part of this whole process.”

Here in the UK we have a similar set of emerging talent and this C4 video looking at them is worth watching – as are the related interviews. Brands are already starting to get involved. In New York a new talent agency is representing the talent emerging on Vine and Instagram. How long before this goes mainstream? 

Apple Agency?

We have talked a lot about how a lot of the work traditionally done by agencies is getting hoovered up by new competitors. The big professional services firms like Accenture and Deloitte have built big practices around digital and made smart acquisitions. Big tech firms like Adobe, IBM and Salesforce offer more and more marketing services too. And increasingly businesses are seeing that digital is a core competence and building skills inhouse.

This is one reason we like our architect builder model- we can work with any builder that a client already has a relationship with and add value through strategic thinking, big ideas and UI expertise. Because those soft skills tend to be under represented in these new competitors Agencies still see a valuable role for themselves.

But a new move by Apple might shake things up a little. They are building an internal agency with 1000 people and using them to compete with their long time Agency partner TBWA. Whilst there are no stars moving over – yet – this will be worth watching. Google has hired some remarkable creative talent but still partners with agencies. Can Apple replicate this success or will they struggle to persuade talent to forgo the variety inherent in an agency job to concentrate on one brand – albeit quite a special one?

Another sign of the evolving marketing services landscape is the partnership messaging app Line announced with Salesforce – where Salesforce users can now schedule campaigns in Line alongside Facebook and Twitter.

Music

Not that long ago Music was a basic element of the Vertical Stack for GAFA – offered by everyone, but not seen as that significant. With the recognition that streaming will transform the economics of the music industry, focus has shifted back – as the Beats acquisition shows 

Amazon made a big push into music last year with their Cloud player – and by giving customers digital versions of most of the CDs they had bought through Amazon. In the US they have now relaunched the Cloud Player app as Amazon Music and Prime customers now have access to over 1 million songs. They have some work to do as they don’t have some of the latest music – particularly from Universal who don’t share their most recent hits – and of course Spotify offer 20 million songs.

We suspect the average Prime customer is a little different to the typical Spotify customer and this is another play by Amazon to make Prime absolutely essential – their Anchor?

Google are also looking at this area – although a £15m deal to buy Songza isn’t going to worry anyone. Of GAFA Google seem least concerned with content – other than in YouTube.

One writer talks of his dissatisfaction with Beats and has switched back to Spotify  – largely because Spotify is more social than Beats. Do we think that will get better within Apple – who arguably don’t really get social? Or will Apple encourage a closer link between Beats and Facebook? What would that mean to Spotify? And how will Apple use their Shazam/Siri partnership to drive Beats?

A big focus for all the music services is curation – helping people discover music they might like. This piece points out that there is a risk this gets distorted by the money to be made. Just like Payola was a scandal in radio when people found the DJs were getting kickbacks to play certain records, curation might go the same way.

Beacons

With launch of iBeacons Apple have enabled a very interesting new way of connecting with people. There is a huge excitement at the potential of beacons – especially in retail- even if there hasn’t be too much implementation yet.

But Apple have also taken away one of the main ways people like retailers have been using to monitor customers. In a little noticed change in iOS8 Apple stop anyone from tracking people using WiFi. Amongst others JC Penny in the US have used it and Asda are using it in the UK.

It gives Apple a big tick in the privacy stakes and makes their new technology even more attractive.

(VC Jason Calcanis has written a good article on why he is so excited about beacons and points to some of the companies that are doing good stuff in this space)

Quick Reads

You probably saw that Google are investing in satellites. But as well as the story that was widely reported this week, they are also very focused on providing internet access by satellite. Together with their Fibre offering in the US this is a good way to strengthen your Vertical Stack  – own the ‘pipe’.

A good look at the fast growing Chinese device manufacturer Xiaomi

Goldman Sachs thinks Amazon can have a big impact on the grocery market. And Amazon are going to enter the local services market  - so you will be able to find a local plumber or babysitter. Seemingly paid, so we don’t need to worry about the threat to our Skratch project.

In response to Amazon, IBM are going to offer same day delivery to their clients

As everyone talks about content this is an interesting look at Branded Entertainment from an Ogilvy exec

Google continue to search for ways to signal to customers whether the link they are about to click will result in a mobile optimized experience.  Even as people -finally – get a mobile site, many haven’t bothered to make their links redirect properly. This Google initiative alerts users that they may be redirected to the sites home page. It’s really not that hard to ensure that a link goes to the right page on a mobile site – the new mobile site we launched this week for PlanUK does exactly that, so their efforts on SEO continue to pay off 

Top VC Ben Horowitz on why he is so excited by bitcoin

As if to prove the point about mobile causing attention deficit disorder, the link last week was wrong. This is the correct one.

Longer reads

Whilst much of what happens in tech comes from the US West Coast, LA is sometimes overlooked. When I visited last summer I was surprised at how much is going on – and this is a really good take on the particular focus of LA start ups; lots of video and lots of ecommerce.

A VC firm has shared its bullish thinking on mcommerce. Well worth reading

This is a long interview with the king of short form content, Buzzfeed founder Jonah Peretti. Again, well worth reading it all.

Finally…it’s the World Cup. Loads of tech companies are doing something related; Google have launched an interesting site to celebrate  And you can add all the matches to your Google calendar here

But the only medium that really matters for the next month is the TV. The World Cup ads from Nike, Adidas and Beats etc all look good. This is still our favourite  though – combining great Brazilian football and great Brazilian music. Enjoy.

(and if you want to hear more check out the excellent Gilles Peterson playlist from the FT.) 

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