So Home from Facebook has arrived and it’s … interesting. Because of the limited range of android handsets that Home will work on, its initial impact may be a little muted. And as a sort of modern equivalent of a Google Toolbar it’s likely to only really appeal to hardcore users. But with a billion users you don’t need big percentages to make a big impact.
Home underlines the laser focus on mobile that Facebook now has and is a clear signal of intention – so the reaction of Google and Apple will be interesting.
Does Google tighten it’s hold on Android to curb the enthusiasm of Facebook and Amazon to hide data from Google? Or do they push forward with Chrome and evolve that into a mobile operating system?
For Apple this is also an issue. There is no way that Apple would allow anything like Home, but on the basis your enemies enemy is your friend, we should expect to see even deeper integration of Facebook on the next version of iOS. For a more in depth look at Home, you should read this Guardian blog.
Advertising will be included and we think Facebook may be about to realize one of the most enduring mobile business models – homescreen advertising. Lots of people have tried to build a business monetizing the fact we look at our phones 150 times a day – but outside Celltick in Asia no-one has made this work. Maybe Facebook can
This good Vanity Fair article on Facebook is worth a read too – a typically thorough look at how their approach to advertising has evolved.
But just out is some really big news from Facebook; Partner Categories - a new targeting option that uses data from 3rd parties such as Acxiom and Datalogix. This allows brands to target people based on actual purchase behaviour – although anonymity is preserved.
This ability to blend the precision of direct marketing with the scale of Facebook is really exciting.
Quantity – now what about Quality?
The recent mobile push from Facebook isn’t reflected in these figures but the new numbers on mobile advertising in the UK are impressive. At £526m it’s up 2000% since 2008 and now accounts for around 10% of total digital spend. The £300m of fresh money accounts for half of the overall digital growth over the last year.
Search is still dominant at 69% of the mobile total (versus 58% of all digital), so Google are the major beneficiary. With both Apple and Amazon hiring salespeople we can expect lots of energy from GAFA helping drive this space forward.
Clearly there is still lots of potential growth but any brand should question why mobile isn’t a substantial part of their digital marketing now.
So the quantity of mobile advertising is doing OK – we would argue that the quality has a way to go. But with that level of spend we’d expect brands to start investing in creative that makes the most of the opportunity. However we see mobile suffering from the issues that plague digital as a whole – a lack of focus on how creative can transform the economics of digital marketing campaigns.
My philosophy has been if you’re not serving the customer with what you put online you’re going to end up in a bad place. Most [banners] aren’t serving value. They’re in the business of interrupting what you’re doing. There’s a limited creativity that’s been applied with what you can do with that space and the space itself is very limiting
The Brazilification of advertising
(This has nothing to do with Agencies being scalped by client procurement teams…. )
With MadMen back, there is quite a lot of looking back at the golden age of advertising. In one piece Keith Reinhard of DDB points out;
A lot of bad ads were created at that time too that we don’t remember and that we shouldn’t remember
But in that golden age the craft and tools needed to make advertising were rare and expensive. Laying out and typesetting the VW Lemon ad was a craft, as was preparing it for printing. Now it can be done by anyone on a laptop really quickly.
So it seems prescient that we come across Blur in the same week. This UK start up acts as an exchange for business services and a large proportion of the jobs are around marketing. In the FT they report 359 briefs in the first quarter, with an average value of $11k.
The live briefs cover all sorts of marketing needs, with a lot having a budget of £2500. That would buy around 3 hours of a designer at some London agencies but the site has lots of big clients listed and glowing endorsements; Butlins were…”thrilled with the results at half the price of other alternatives for our apps” Now some Butlins apps look like they were designed and built by Redcoats, but others aren’t bad, so this service works for some clients.
Brands are waking up to that fact that making stuff has never been cheaper – - we are seeing clients realize that the assets inexpensively created for Facebook and YouTube can be used in traditional media – causing them to question the usual cost structure for traditional media production.
Of course some brands will always be happy to pay top dollar for the top talent and the top tier agencies – especially the ones owned by a tech firm – have a fairly secure future. And there will be a growing market for the people who offer their services through Blur and all the similar services.
But for the agencies in the middle, Brazilification is real.
Brazilification – the widening gulf between the rich and the poor and the accompanying disappearance of the middle classes.
– Douglas Coupland – GenerationX
The rebirth of branded content
Content marketing is getting a lot of attention right now and Buzzfeed are the most obvious example of how successful it can be. With link baiting headlines and lists of the cutest cat photos the new UK version is similar to the US one – but tailored for a British sense of humour.
It’s easy to dismiss this, but they are getting client traction – this in depth look at the US business suggests they could make $40m in revenue from brands like Pepsi and Virgin Mobile. One thing that is really interesting is their thinking around how and why things get spread – they believe there is a Bored at Work group who drive sharing and they make viral hits. This deck from the founder gets into more detail on their approach.
We’re very interested in this space, especially as we see native advertising as being a driver for mobile advertising. Of course the space is not new – we launched Big Picture as a content agency in 1995, but got distracted by social (My Space) and mobile apps for Java phones. Back then the hot term was Branded Content and whilst much of the work focused on brand funded TV there was one example that demonstrated that done correctly, this stuff can work incredibly well. BMWs series of short films The Hire was viewed over 100 million times – in the days before YouTube so each episode was watched on the BMW site in a special player that had to be downloaded. And before Facebook, so all the sharing was done via email.
One of the factors that makes content marketing so promising is the constant evolvement of new TV. We looked at how Hollywood is embracing YouTube last month and there is now a good look at the UK scene. As well as this article there is a good series of YouTube shows exploring the whole sector . Not its unlikey any of these people will turn out to be the next David Frost or david Attenburgh. But there is a good chance that the next Piers Morgan or Ant and Dec will emerge through these channels, but we don’t think the transition to traditional TV is as likely as it once was.
There is so much money in TV its hugely attractive to new players who want to disrupt it. From Google investing in content through YouTube channels to Tesco investing in content and launching Clubcard TV there is lots of change. The games consoles and tablets are preparing the way for connected TVs and people are looking to learn now. This interview with the head of Tesco Digital Entertainment is worth reading;
We believe we are well placed to ride the entertainment on demand swell at this critical time as entertainment migrates from physical to digital.
And technology could play a part too – in the US a start up called Aereo is shaking the market up by allowing people to watch the key channels on their smartphones, tablets and PCs by exploiting a loophole in the US legislation. Backed by Barry Diller this could have a huge effect on the US market.
TVCatchUp is Europe has a similar approach, but its unclear following a new European court ruling what will happen next.
Neither of these players affect the advertising within the channels they carry but Michael Woolf has written a good piece on how advertising is so easy to avoid these days. He argues that – over the 6 year life of the MadMen series – the way people consume content has changed, whilst industry hasn’t.
In a very interesting talk, Susan Wojcicki of Google makes the case that – in the future – ad views will be voluntary. With TrueView ads on YouTube Google only get paid if people choose not to skip the ad – and around 70% of all YouTube ads are now TrueView. There has been a 40% drop off in ad viewing but one 4 minute ad for Pepsi has been seen 33 million times.
Is this the future? If so the Brazilification continues – only those that can create content people want to watch are going to get paid.
Google have upated their excellent Think Insights with new content around mobile Gen C – their take on the YouTube audience.
Saul Klein shared his thinking around the fact that the internet economy accounts for over 8% of the UKs GDP. This world leading position makes the UK a great place to be involved with digital. The presentation is a must watch.
Book of the week – Paul Adams is the man who architected Google + before moving to Facebook . This book is a really good look at how people are connected and how sharing works. Whilst it draws on lots of academic thinking Grouped is very readable and highly recommended.
A good specialist mobile agency will help to reduce the complexity of mobile and retain the simplicity that needs to govern a brand’s advertising outlook. Brands need to be free to focus on the age-old truths of advertising which is getting clear and impactful messages to the right customer. Mobile even extends this to delivering it in the right place and at the right time.
We’ll be talking about this sort of thing at the Facebook mobile event later today – if you are there do come and say hello.