Category Archives: Social Media

Mobile Fix – November 7

Mobile Money

The word on Apple Pay seems positive in the US. As this article points out the rapid adoption is one of the key strengths of Apple.  And this well thought through post points out the strategic importance of Pay for Apple. Having tested all the key ingredients Apple could launch a fully ready product and they are taking advantage of the fact the upcoming switch to chip and pin requires everyone to install new POS terminal – (nearly) all of which will have NFC.

As we mentioned last week, US retailers have an alternative system – CurrentC – brewing and some stores have refused to accept Pay in the meantime – switching off the NFC terminals as it’s the only certain way to stop Pay. This interview with the CEO of CurrentC doesn’t suggest that Apple have much of a fight on their hands.

It’s hard to see anyone really countering Pay in the iOS ecology so I guess the opportunity for all these other Mobile Money players is Android, But can any get the scale to dominate? 

The obvious contenders are Google, Amazon & PayPal. It seems to have gone quiet at Google Wallet but we should expect some movement. And newly independent Paypal are still innovating – their One Touch payment is coming to Europe soon.

Amazon showed one strategy with their partnership with AllSaints. As well as being able to pay using your Amazon account, being a Prime member gets you free shipping.  As they get more sites using the Amazon pay button, an offline payments system makes more sense. But will high street retailers feel comfortable partnering with Amazon and sharing data on purchases 

As well as helping push payments this partnership is probably part of a bigger Amazon (stealth) push into fashion.

China

As the debate continues over how apps and mobile content evolve what can we learn from China? Their BAT, like our GAFA , are dominant and shaping the market. And finding the big switch to mobile something of a challenge.

Because of the great firewall that keeps US competitors like Google, Facebook & Twitter out of China, the Galapagos effect is interesting as it shows alternatives to the way our market is changing.

It’s the largest internet market by far – with 632m internet users it’s over the twice the size of the US (in second place with c270m users) – even though penetration is relatively low at 48%. When/if it gets to the UK figure of 90% the market would be over 1.2 billion users – the vast majority by that time on mobile.

The three big players in BAT (Baidu, Tencent & Alibaba) see messaging apps as the key to maintaining their dominance and both Alibaba and Baidu are investing heavily to compete with the Tencent owned WeChat and QQ.

These apps that have daily usage often have ‘smaller’ apps bundled within them; the most quoted example is a hotel booking app bundled in the Baidu maps. As linking between apps become more common we expect this focus on partnerships to grow in the West too.

Alibaba have taken another approach that has paid off really well. They invented the idea of Singles Day, where Chinese people who don’t have a partner treat themselves with some online shopping. Last year this event drove nearly $6bn in sales – twice the size of the US Black Friday and Cyber Monday – and with Alibaba sales up by 54% in the last quarter expectations are high for this November 11.

Of course just as the Chinese own lots of physical infrastructure in the west who is to say they don’t become equally acquisitive of digital businesses?

Visual recognition

One of the issues for the CurrentC people in their fight with Apple, is that their payments system uses QR codes and, despite that being hugely successful for Starbucks, it positions the product as a little dated. Even Google Goggles seem quite old hat now – but their acquisition of WordLens suggests they are still moving forward .

One area where there is lots of action is in FashionTech where a Shazam for clothes is the Holy Grail for many. Upmarket US department store Neiman Marcus have been quick to embrace mobile and have launched a new service called Snap Find Shop. Using a Canadian technology called Slyce, shoppers take snaps of clothes or pictures of clothes and the NM app shows you matching items.

That’s actually quite hard to pull off and this piece points out the difficulties andlooks at the various players – many of whom are in London.

One killer application of this tech is in making print catalogues and magazines shoppable. When Net a Porter launched their print magazine Porter they also launched a Layar powered app to make all the content shoppable. Other AR players like Blippar (who now own Layar) are active in this space too.

Mad Men/Math Men

It’s one of the most persistent clichés, but the tension between Mad Men and Math men gets repeated because it’s largely true.

The Chief Creative Officer of Facebook has made an impassioned plea for creative people (the talent celebrated in MadMen) to get more involved in the distribution of ads. He is right that at the moment the Math Men tend to drive the digital element and the benefits of right/left brain collaboration are lacking.

Too many creative people still dismiss digital as just banner ads and on their 20th anniversary they are getting a bit of a kicking. Somewhat unjustly really , as many very smart digital creatives have and continue to make them work for both brand and response. But too often they are left to the last minute and given to the most junior people. On mobile it’s even worse, as frequently desktop assets run unchanged  – just smaller – or are chopped up by mac jockies at the media network.

But there are better formats on mobile, as we find ways of integrating messages into the flow of peoples mobile stream.

Michael Wolff laments the loss of the old (Mad Men) advertising world here, but we remain optimistic – you can blend art and science and those brands that do can perform alchemy; turning the lead of small ad formats into the golf of customer attention and action.

We have been doing a lot of work looking at how Programmatic and Creative interface and we see a huge divide. And a huge opportunity.

The best way to improve any Programmatic campaign is by making the creative more relevant and more effective. As we develop our new project in this space we’re keen to talk with anyone who wants to see the two worlds realign. If you are interested get in touch.

Quick Reads 

Building on the Apps are the new CDs thought we shared last week Forrester have made 8 predictions  on how apps are going to change

And a look at how Messaging Apps are so addictive

An interesting look at how Facebook are approaching partners in Europe

More on the new Twitter developer tools Fabric

Good stats on the rapid rise of Mobile Search – you need to be getting this right, right now.

Finally – our favourite media remains Vanity Fair magazine which always has a great mix of insightful articles. This one on the Uber CEO is well worth reading

 

 

 

Mobile Fix – September 26

Mobile & Money

As the details of Apple Pay become clearer, analysts are generally positive – although not quite as bullish as the Chamath Palihapitiya view we shared last week. Many people site Starbucks as evidence that payments can and do work.

In the last data we saw, Starbucks dominates mobile payments in the US. In 2012 around $500m was spent using mobile payments – and Starbucks was around 90% of that. They have been hugely successful – and now 15% of all their US transactions are using their app – but the Starbucks Chief Digital Officer points out it’s not just about payments – the loyalty aspect has been a big driver. 

They are one of the brands that Apple have partnered with for Pay – but interestingly they don’t intend to let people but coffee with Pay – just top up their Starbucks app. Their brand is so strong they have ambitions to expand outside of Starbucks;

“We want to get mobile ordering right first, but you could be hearing more about us in the mobile wallet or universal loyalty space sooner than later

A smart Fix reader made a similar point about the Oyster card and how it could have become a means of paying for items outside of Tube tickets. Now with a plethora of new players like PayM, Zapp Powa etc as well as the Mobile Operator wallets, PayPal and Google iPhone  et al users have a lot of options. But it seems to us that Pay will become a real Anchor for Apple by making it so easy.

And as more people use Pay, more retailers will come on board. Talking with UK supermarkets, they have resisted payments because they tended to slow down the checkouts. Starbucks have focused on their point of sale tech and processes; 

We were able to save 10 seconds a swipe for any kind of Starbucks card, mobile payment, credit card or debit card transaction. That ended up saving us 900,000 hours of line time a year. 

If Apple Pay can contribute to that sort of improved efficiency, people will rush to sign up.

(btw  – one of most hyped mobile money startups has been Clinkle; ran by a 23 year old, they raised $25m seed money and has a  long list of VCs as investors, along with Richard Branson. Lots of smart people have joined and many have quickly left. And it was in stealth so no-one knew quite what they were up to.

After 3 years it has finally launched a rather average debit card linked to an app. Sounds a lot like the Osper card we mentioned the other week)

The Chinese are coming

The Alibaba IPO was the biggest float ever, raising $25bn – eclipsing the $16bn that Facebook raised. Some have questioned the ethics of investing here – largely because the BAT Chinese digital giants  (Baidu, Alibaba, Tencent) benefit from having no competition from Google, Facebook, Amazon, eBay etc in their home market.

There is a lot to learn from how these companies operate and we now look at BAT when consider the vertical stacks of GAFA. And this good article looks at how important China has become to the global tech economy – with good insight into their M&A activity.

But perhaps the most immediate effect of the IPO is that it (probably) puts Yahoo into play.

Yahoo’s market capitalization is about $39 billion, while its Alibaba stake is worth $37 billion and its Yahoo Japan stake is worth $8 billion.

So someone could buy Yahoo and sell those stakes and essentially get Yahoo for free. Who could that be? No doubt clever Private Equity people are hunched over their calculators right now, but to GAFA, Yahoo would be a valuable acquisition.

Despite some peoples misgivings over their progress under Marissa Mayer, Yahoo still have huge reach (on desktop and mobile) and throw off huge amounts of cash.

Given that Yahoo is still a major player in search its hard to see the EU etc allowing Google to swallow them without divesting the search business to Bing. But for Facebook and Apple they would get lots of content to feed their userbase. And Amazon would get lots of potential buyers that it currently has to advertise with Google to reach. And perhaps even Microsoft or Murdoch could be interested?

Or how about Softbank?. This Japanese company has been very aggressively trying to grow the US business with the merger with Sprint, but its pursuit of TMobile has been unsuccessful. Combing an operator with a content business like Yahoo has been talked about lots, but this could be a first.

As JV partners in Yahoo Japan, the two sides know each other well. And, of course, Softbank now has a new leader who knows a little about the digital space; Nikesh Aurora moved over from Google a few months ago. Is this how he makes his mark in his new role?

We think it’s unlikely that the Wolves of Wall Street will leave something this vulnerable (and valuable) alone, so watch this space.

Beacons

Just like Big Data there is rather more talk about Beacons than there is action. It’s clear there is huge potential, but so far few people have actually started to use them. This piece looks at some of the innovations around the internet of things that use beacons – but there isn’t a killer app. Yet

The people at Estimote have done much to shape the market, and this article considers how they see the potential – including indoor locations. We think that Beacons will be used for simple ideas that improve various situations. For example when Starbucks get around to pre ordering, how do they stop the coffee going cold before you get there? A beacon could detect when you arrive at the store and the coffee is made then and there – and you don’t need to wait.

This example of coupons in Passbook working really well shows the potential – and Beacons could add another dimension. There is a huge opportunity for good old fashioned sales promotion thinking (or Shopper Marketing as its now called).

We’re keen to help kick start this area, so hungry to work with retailers, restauranters etc to test out ideas and try and make some progress.

Quick Reads

Blackberry has a new square device that is going to save their business. We’ll see.

The clever people at Betaworks have revitalized Digg

Apple have bought a firm that makes it easy to create magazines for mobile. Another sign that content creation is being democratized. Will we see the return of the fanzine?

More good thinking on the Apple Watch

More proof that Apple are only human. After the live screening debacle at the launch event, the latest iOS update has been withdrawn.

Eric Schmidt has a new book out – How Google Works. It’s now on our Kindle but we are still engrossed in Goldeneye

Finally…we are big believers in the sharing economy and are looking to rollout our collaborative consumption platform SkratchMyBack in more regions. But the some elements of this movement are proving controversial.

In New York lots of people don’t approve of their neighbours renting to strangers and this long piece looks at both sides of the argument. And the way Uber treats its drivers is questioned in this MIT article. Enabling people to share their assets makes perfect sense but we need to consider the losers as well as celebrate the winners.

 

 

 

 

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 – 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 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 – April 25

Google

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

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

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

Facebook

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

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

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

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

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

Apple

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

Couple of bits of speculation that relate to Apple;

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

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

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

Amazon 

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

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

Mobile advertising

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

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

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

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

The Home Screen battle

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

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

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

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

Mobile Sites

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

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

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

Quick reads

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

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

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

More Google thinking on blending mobile and desktop shoppers

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

Finally

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

It’s time to experiment

 

 

 

 

 

Mobile Fix – April 11

Mobile Innovation at risk?

I am currently rereading Burn Rate, Michael Wolf’s excellent book on his adventures running a content business in the early days of the web. Starting in 1996, his stories of VCs and startups still sound quite contemporary. The figures are amazingly small though – he talks of Excite having a $40million warchest.

But the thing that resonates most is the description of the shift taking place from AOL, Genie, Delphi and Prodigy towards the web – and the huge excitement as people moved from a controlled environment to the free web, where anyone could do what they want.

I’m old enough to remember that era – we had just started Poppe Tyson in London – and many prospective clients were still investing marketing budget in AOL and Compuserve.

As we discussed last week, the web seems to be taking a back seat on mobile and the rise of apps is arguably taking us back to that controlled era. Chris Dixon of VC firm Andreessen Horowitz points out;

Apps have a rich-get-richer dynamic that favors the status quo over new innovations.

VC Fred Wilson agrees that the dominance of apps is stifling innovation and looking at the top 200 apps sees very few that are recent venture backed businesses.

GAFA are crucial in the discovery and distribution of apps and we all know that without a substantial budget for Facebook app install ads (etc) it’s nearly impossible to get an app to scale. And the appstore tax of 30% is a major factor too. Are the Vertical Stacks the new Walled Gardens?

The Net Neutrality arguments are designed to give similar status to the Mobile Networks – which, as we know, stifled innovation in mobile prior to the GAFA era. This is a good summary of the various points of view on apps and the threat to innovation.

Yet the combination of the mobile web and mobile search are still low cost options – and therefore great opportunities for innovation. And in our research we find that people think of apps as the icons on their home screen; click on them and something happens. Few know or care about them being native apps or bookmarks for mobile websites. If it solves a problem, it will probably earn its place.

So in our projects we usually advise that a blend of mobile web and native apps is the right way to go – together with smart thinking on how to use search and social to drive discovery and get than icon on the home screen.

As Ben Evans points out, the mobile opportunity is still wide open and current trends are no real indicator of where we might end up. The size of the mobile opportunity means that everyone needs to get involved and invest smartly in learning what works and what doesn’t for your business.

Reading Burn Rate you remember that those early days were just the start of the digital switch that has changed how millions of people live their lives and transformed every business sector.

We are now just at the start of the Mobile switch where billions of people are going to have their lives changed. And every business sector is going to get transformed again.

It’s time to experiment.

Social Evolution

A very experienced smart marketer slightly stumped us this week when he posed the question Why should I spend any effort on Facebook? He totally saw it was a valid media channel for ad buys, but with a modest number of followers he wonders why he should invest in time and content to grow his likes, when there is now little benefit in free reach. Of course as part of a social strategy of ubiquity, the effort in Facebook improves results on Twitter, Google+ etc as some content can be reused. And knowing what content resonates with fans does help improve ad performance.

But as the Facebook Feed evolves we see both users and brands frustrated with the experience. This TechCrunch piece gets into the details on how the Feed is now constructed and looks at the various complaints, but we don’t see a solution yet. John Batelle argues – quite convincingly – that Facebook should let the user take control.

It is essentially the same challenge that Twitter potentially has. Twitter is a hugely valuable service but you always have the nagging doubt that you may have missed some good stuff if you haven’t checked for a while. But I prefer that to a feed that Twitter have decided is the right one for me. Again we thinks lists are an underused asset for Twitter; setting up some specific lists allows for an occasional browse of a certain set of Twitterers, without needing to have those feeds in your timeline.

With a whole swathe of new ad formats on the way, Twitter is  ramping up their advertising push and by redesigning profile pages potentially make them much more usable. Some think that these profile pages could evolve to be someones main profile on the web; you may have a blog and a LinkedIn page but an improved Twitter profile would probably be a better representation of you.

Just as Facebook and Twitter share similar problems – and similar ad formats – the new profile pages makes Twitter look a lot like Facebook.

A couple of other useful bits on social;

This is a good roundup of thinking on what the ideal length of a Facebook, Twitter or Google+post is. We were told a while back by Facebook that the average brand message is much much longer than the average users posts – the challenge for a brand is finding a way to convey their character in as few words as possible. It has always amazed us that brands often leave their most important language – search ads and social – to inexperienced media buyers and project managers. There is wealth of copywriting talent that should be employed for these crucial tasks; the easiest way to double response to both search and social is great creative.

Twitter have shared why people follow brands; people want to hear from these brands – especially with promotions and special offers

Social Revolution

It’s clear that messaging is going to change social and Facebook are keen to stay ahead of the curve. They demonstrated this when they bought WhatsApp, but many questioned the role for their own Messenger service. They are now stripping out the Messenger functionality from the Facebook app, so users have to download the separate app – continuing the single purpose app strategy they showed with Paper.

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

Ex Facebook exec Christian Hernandez has a good look at these new apps in this piece on the pros and cons of relying on someone else’s platform. Well worth reading.

Hardware – Cheap & Useful

Working on an ebooks project a few years ago, we recommended the backers ( a number of publishers and a major retailer) to ignore the siren call of developing their own hardware and instead develop for the nascent tablet market as well as smartphones. As it turned out that was sound advice. Then

Now it is possible to develop hardware that is cheap enough and good enough to differentiate your business. Tesco are making a pretty good job of it with Hudl and Google are having a lot of success with Chromecast (we are less convinced about the Chromebooks).

Amazon have done a brilliant job with the Kindle, straddling both hardware and software, and Fire seems to have started well – it’s the bestseller in electronics on Amazon.com.

Their latest piece of hardware is really intriguing. Dash lets users scan a barcode of any product to add it to their shopping list – and it can also work with voice too. It is only available to customers of AmazonFresh – their grocery home delivery service currently in Seattle, Los Angeles and San Francisco.

The biggest problem for people like Ocado and Tesco is online grocery basket size tends to be smaller than a shopper in store as the impulse buys don’t happen. But once on the list they tend to be reordered again and again.

So for Amazon to have a tool that people can use around the kitchen to reorder should be great for both retention and revenue. And as a physical object it should also help with customer acquisition as people see it in their friends’ houses.

Most of the smart people we know in the Grocery business are convinced that its only a matter of time until Amazon launch Fresh in the UK. This is a good look at the US market for home delivered grocery and it reminds us that dotcom casualties like Webvan actually did have market impact – it was just way too early.

Interestingly Dash has dotcom ancestry too. Does anyone remember CueCat? Launched in 2000 this barcode scanner needed to be plugged into a PC before it could read a code on a product or in an ad. Called one of the 25 worst tech products of all time, it didn’t last long. But as we see with Dash, these ideas have real potential once you unlock them from the desktop and define the problem that needs solving.

Marc Andreessen says;

“All the dot-com ideas were correct,” “They were all too early. They are happening now.”

We’re looking for content ideas in Burn Rate to reimagine for today.

Quick(ish) Reads

Dropbox is looking to play a bigger role in its millions of users lives, with new apps for email and photo sharing.

The Music business isn’t in as bad a state as many think. This profile of Lucian Grainge suggests streaming will soon turn into a major revenue stream

The New York Times has an interesting new app called NYT Now and it’s getting good reaction. With a subscription model and native ads, the key question is whether it differentiated enough from the Times itself?

There is a lot of interest in news content at the moment, with a focus on niche plays. But the business model is in question; as the writer of Burn Rate points out, the ad business wants scale.

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

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

Finally.. a couple of our agency friends questioned our take last week that the Agency world hasn’t embraced tech yet.

But this week Agency bible Campaign is running a story saying;

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

Another survey suggests many Marketers don’t really get the idea of ROI and hence struggle to demonstrate the true value of marketing to their board.

And client de jour Bonin Bough suggest Creative agencies aren’t necessarily the best partners for brands

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

Now obviously this is a generalization and there is some great talent within Agencies producing great work. For smart clients who really do get it.

But nearly 20 years into the Digital Switch it’s still a little patchy and you have to ask yourself if you are getting the right thinking on mobile, social and content from your existing partners.

Or do you need some provocative Big Picture thinking?

(No Fix next week as we will be eating Chocolate in St Ives. If you fancy a change from Eggs check out our friends at CocoaRunners who can send you a box of fabulous artisan chocolate. If you use this link and use ADDICTIVE as the code you get a £3 discount and we get a free bar. Enjoy.

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