As we approach Christmas we are seeing more device launches. Next week Apple have invited journalists to an event on Tuesday promising We still have a lot to cover. This is almost certainly the new iPads – with more powerful chips and retina screens likely to be the main new features.
With upgraded Kindles and the new Nexus 7 already announced (as well as the Tesco Hudl and the Argos MyTablet) Apple need new products for the peak selling season. Also arriving in time for Christmas is the upgraded Nike Fuelband.
And the rumours of an Amazon phone have surfaced again with the FT claiming they are working with HTC on a smartphone. This makes lots of sense for both Amazon and HTC; Amazon extend their kindle success into the phone sector and reap the benefits of more content sales and usage on their devices. And HTC get a partner likely to drive some volume – which the Facebook collaboration failed to deliver.
The issue that is still unclear is how they get a price advantage given the operators subside smartphone sales in the US. However given the Amazon track record in eschewing profits in favour of volume and the promise of more sales, we should expect aggressive pricing. But it’s likely to be 2014 before we see a launch.
The big news of the week was Apple luring the CEO of Burberry to join them to run their retail operations. Given that Angela Ahrendts earned around £18m at Burberry last year this is a significant hire. And it seems to make more sense than the previous incumbent who came from Dixons and lasted less than a year. As well as being a brilliant retailer Burberry have spent around 60% of their budget on digital and have been strong partners for Apple, as well as Instagram Vine and all the usual suspects
So she clearly gets digital and retail. But we wonder if there isn’t more to this.
We have argued before that Apple is the BMW of mobile; could it be that they are a luxury goods brand? This good FT piece looks at the move and points out that HSBC make the argument the real competitor to Louis Vuitton is Apple. And of course Apple hired the ex CEO of Yves Saint Laurent a while back.
And as people start to get the scale of opportunity of beacons the Passbook concept starts to make much more sense. Could the retail role also encompass making Apple Passbook the defacto shopping assistant for luxury brands and their customers? We spent a lot of time talking with Gucci a couple of years ago and it was clear that luxury retailers need a way of identifying their most valuable customers as they walk into their stores – so they can deliver the best service to their best customers.
The overriding motive for the Apple vertical stack is to keep people buying the latest iPhone and iPad – because that’s where Apple make their money – so baking in services that are hard to give up act as a barrier to switching to Samsung etc. Passbook has the potential to be that must have, but only if the right brands are participating.
Phones are a now a hits business and Apple have turned their products into fashion items too – the colours of the 5C owe a lot to the way the Japanese market their phones – with collaborations with designers quite common. Of course fashions come and go, so a key role for this creative talent is to keep the iPhone franchise on track. This look at the way blockbusters drive movies is relevant reading as we see the same trends in mobile.
The news that Google has changed their T&Cs so they can use your name and picture in Google products (Reviews, ads etc) just like Facebook do – has prompted more focus on privacy. Its actually really easy to opt out – but how many people will bother with that.
When you to talk to civilians about Facebook Sponsored Stories – and the friends names you see on them saying they like the brand – you find people don’t mind them. Until they realize their friends are seeing their name ‘endorsing’ brands. Few people think this technique influences their views – although the thinking around Social Proof suggests it probably does.
We think the real advantage of friend’s names being included in an ad is perceptive filtering; we know the brain is good at ignoring stuff it thinks is irrelevant but when a friends name is there the cocktail party effect kicks in and we notice the ad. Which should make it more effective and hence more lucrative for Google.
But the big picture is about who owns your data – you or the platform you are using. Google make it relatively easy to influence the ads you see – which is a way to take some ownership of your data. And this works well for both parties – people (hopefully) see less irrelevant ads and Google have a better idea of what advertising you are interested in – which should make it more effective and hence more lucrative for Google.
We expect other platforms to do more in this area – not least to try and thwart people like AdBlocker who claim 200 million downloads and helpfully suggested that Twitter should sign up for their acceptable ad guidelines. And a TechCrunch writer suggests that people should participate in tools like the Google one as they can help make advertising better - which we sort of agree with but people still need better tools. This is likely to be the next big thing in AdTech.
But adtech continues to get a bad press. An Adweek expose details just how much ‘questionable’ online advertising there is – suggesting that as many as a quarter of online ads are never seen by a real person.
Some of then fault here is with the media agencies who are buying blind in many cases. This sometime causes a little embarrassment; the same day the Sun ran a headline condemning the AskFM site over bullying, their ads were seen on the site – it turns out their agency was buying blind through a network.
So some of the large brands have decided to look at going direct and lots of the adtech firms have jumped at the chance to deal direct. One of the smarter thinkers on the agency side has pointed out that it’s actually not that easy to do media even when the computer is doing lots of the work.
New tools continue to emerge, and that Lumascape chart isn’t going to simplify anytime soon – so brands need smart advice on how to get the best out of both the media and the creative. But will they get the best advice from the existing agency networks?
We continue to enthuse about Google Now in all our consultancy work, as it’s a glimpse of the future of mobile – context driven information and services. This is some good thinking about what an advantage this is for Google and looks at how they could evolve the business model.
We talked about the changes in news and this memo from the FT editor to his staff about reshaping their business is another step in the evolution.
Still more new players and products in mobile money. Simple is very interesting as is Square Cash, the new payment product from Square. Just send someone an email with an amount of money in the subject line, copying in Square – and they make the transfer. A few security issues but these companies are changing how people see money – and traditional financial services firms need to respond.
The competition between Twitter and Facebook seems to be intensifying and this article looks at how Twitter seems to be getting their platform right and matching Facebook product for product. Their issue is that they are so much smaller than Facebook.
Amazon is getting closer and closer to big brands – here they are putting their own people in P&G depots so they can better sell their products.
Finally ….the pace of change in tech, media and marketing continues. When we originally planned Fix we thought we would do it weekly to start with and then, when things calmed down, we would go monthly.
Doesn’t look like that’s going to happen anytime soon.
This article peers into the future of media and is a good round up of likely change – but we still think our Futurology video (that we did some 10 years ago) is a pretty good take on where we are now, even if a little cheesy.
If you would like us to peer into the future for their business, get in touch.
But next week we are focusing on Cornish beaches and waves, so no Fix next Friday – back on November 1.
Google Now, next
It looks like Google are going to spend big to launch the Moto X – and essentially relaunch Motorola as a player in smartphones. Reading about context being important and thinking through the examples given, we wonder if we can expect a new version of Google Now to coincide with this launch?
It’s hard to imagine that Google would have Motorola develop new contextually aware software. And given the constant reminders that Motorola won’t get any special treatment in Android we can’t see that a new version would only be available on the MotoX.
If you haven’t used Google Now yet, you really should. It’s a glimpse of the future of mobile.
We had an interesting chat with the nice people from Apple this week and as well as getting a much better understanding of the design changes of iOS7 we were very interested in Beacon. There hasn’t been a lot of buzz around this but we do think it could be a big deal.
Another demonstration of the revival in Bluetooth, beacons can ‘recognise’ ios7 apps and business rules can allow all sorts of interactions. The obvious use case is retail where they could mimic the Shopkick service by identifying the user and serving them an appropriate coupon. And it could see that a customer has arrived in the store but if they then leave – and your data shows they didn’t buy anything – they could be served a coupon for their next visit.
Right now Passbook is being used well by a few people but hasn’t really taken off – with many retailers concerned about having Apple potentially disintermediate their loyalty scheme. But we think Beacon will drive reappraisal.
Whilst the actual Beacons don’t seem to being made by anyone – yet – this might slow down adoption. But the beauty of the concept is that any ios7 device can act as a Beacon. So if you are using an iPad as your POS device, then you can use the Beacon functionality. And yes, Square are seemingly working on building Beacon into their retail ecology, including Stand, their new iPad card swiper.
If you are as interested as we are in how mobile is reimagining retail, this is a good round up with some great examples. And if you would like some help navigating this space, get in touch.
Social at Scale
This week we have seen two great examples of how social operates at scale.
We have been helping out our friends at Trekstock with some social strategy for the amazing promotion they have cooked up with One Direction. Given how accomplished the band have been at building a social following we knew that the promotion would blow up. But as soon as the promotion was announced with a tweet from Harry Styles we were amazed at the speed. The hashtag was trending worldwide within an hour and we got 100k views of the video within 12 hours. The tweet was retweeted 35k times. And the amount of money raised is astonishing. If you know anyone who would like to #HangwithLiamandHarry point them to http://www.prizeo.com/liamandharry
The second example is #Iceclimb where a socially smart stunt by Greenpiece is having a huge impact.
Seth Godin has been a big influence on how we think about marketing. And we still use the value cube which we derived from his thinking on turning strangers into friends.
He wrote a god piece this week on the book and how relevant it is. But he shares that he ;
… underestimated how much fun it is to act like a big advertiser or a big media company, and how profitable it is to keep that industry moving forward. As a result, there are ever more techniques and ever more tools to act as if you’re doing brand advertising in the new media space, when of course, the results are a mere shadow of what you used to be able to do with TV.
Both the Trekstock campagn and the Greenpeace one are good examples of permission marketing. It’s crucial that we raise money for Trekstock to do their great work. But the bigger prize is having permission to talk to the thousands of young people tweeting and instagramming about the campaign.
And for Greenpiece the exposure is really important, but so is building a database of followers that can be activated in the coming weeks and months.
The book may be nearly 15 years old, but it is a must read so we have made it our Book of the Week.
We continue to think many (most?) Agencies struggle with the world of mobile and social and, well, modern digital. There is some smart thinking around from some agencies and this is a good piece on how one West Coast agency is approaching the brave new world of marketing. And this article looking at how agency models are changing is worth reading too.
One agency that does get it is Droga5 – who have now taken investment from talent company William Morris Endeavour – the company led by the inspiration for Ari from Entourage. As the worlds of content and marketing get closer, this sort of deal makes sense. WME are also investors in very smart social ‘agency’ Audience. Of course this isn’t that new – rival talent agency CAA rocked the advertising world by signing Coca-Cola back in 1991 when they came up with the Polar Bears.
As the tools of creation are made more generally available, we think good talent will surface. The rise of Youtube has shown that to be true and these are some great examples on Instagram videos. Expect to see some of these ideas in TV ads soon.
Google Maps are adding new features in their new apps, rolling out shortly
Finally a couple of longer pieces looking at where mobile is right now. One argues that the growth on mobile means its now hard to get cut through and consequently investment is harder to get than it was. But the writer remains optimistic.
The second is also optimistic- a guy who has recently left Facebook talking about how a $billion mobile company might be created.
in truth we are still in the first inning of New Mobile reshaping just about everything we do and everywhere we do it.
We remain optimistic too.
Fix is being rested for the next few weeks as we go be optimistic in Cornwall. Back in early August.
With revenues of $38billion Google is now thought to be the biggest media owner in the world. The competition is likely to come from other GAFA players with Facebook growing very quickly – especially in mobile – but they are a long way behind. Amazon are also a growing threat – as their unique insight into peoples buying habits theoretically allows for very granular targeting.
This shouldn’t cause too many sleepless nights at Google HQ, but the very different business models do suggest Amazon can trouble Google in the future.
Because Amazon profit from the actual sales of goods, they can treat the advertising in a different way to Google – and as they could close the loop between advertising and actual sales they could be an attractive alternative for brands struggling with attribution. Of course Google hope their wallet will one day give them similar data on actual sales.
We see the Tesco investment in media as part of a similar strategy. Persuading brands to allocate marketing funds to Tesco TV as part of the deal for distribution could be attractive to both sides. Although we know that many (most?) CPG companies fear retailers getting more control over what brands do to promote their products. The biggest expenditure of many CPG brands isn’t media spend as is often believed – it’s the funds they give to Tesco, Walmart, Carrefour etc to fund BOGOFs and other instore promotions.
And this is why there is so much interest in mobile shopping list tools and coupons. Brands would love to find a way to use mobile to build relationships with their customers – and retailers are keen to thwart this. Could we see a mobile revival of the Project Jigsaw initiative in the UK in the 90s – where Unilever, Cadbury and Kimberly Clark combined their CRM efforts to offer coupons by direct mail?
The other part of the ecommerce business where Google and Amazon are going head to head is delivery. Google (and eBay) are trialing same day delivery in San Francisco and Amazon are expanding their warehouses across the US and here in the UK. Now they have announced plans to expand their grocery delivery service in the US adding Los Angeles and San Francisco to their current Seattle service.
This is seen as madness by some, but it looks like Amazon could use the low profit grocery business to subside daily delivery for non grocery items. Interestingly one of the sources suggested that the roll out will include some non US markets. Given the persistent rumours that Ocado is a possible acquisition target for Amazon, that could be interesting. Would using the ubiquitous Ocado vans to deliver Amazon orders push Ocado finally into profitability?
And given the very long term view that Amazon take, would they care as long as it cements their position as the dominant player in ecommerce? Despite their amazing revenue growth they seem quite uninterested in profits – which makes them a dangerous competitor to anyone with a more traditional affection for ROI.
This week saw Ocado announce they are to expand into non food areas with a standalone website targeting petowners and soon, toys, beauty and homeware sites. They are also allowing other retailers to use their platform and delivery service – we understand a very good Italian wine specialist will be one of the first.
Making digital efficient
Boston Consulting Group have taken a look at the inefficiencies most agencies have in the way they approach digital advertising. It’s a frightening picture – which we certainly recognise. Someone once said that digital advertising is the only billion dollar cottage industry as it is (was?) largely managed on excel spreadsheets.
BCG obviously recommends embracing technology to solve this problem. Given the report was commissioned by Google we wonder if they are about to ride to the rescue with some sort of platform for agencies to use? Bolting together DoubleClick and Google Analytics with some of the insight tools built into Adwords would be a good start. And Google have the most to gain as the biggest player. Maybe the fruit of their partnership with Publicis could about to be shared.
Channel 4 are to launch an iPad app so they have a proprietary 2 screen service. We remain convinced that all broadcasters will want to develop their own 2screen service so they keep control and keep all the ad revenue. Zeebox is building strong partnerships with broadcasters around the world and Shazam is doing well with some of the others in a narrower way. But the real competition is Twitter, which is where consumers go to share their views on TV.
Like a lot of the competition the C4 app incorporates Twitter, but we wonder whether on air promotion can pull a significant audience away from their usual Twitter client.
As agencies wind up for Cannes, the shortlist for the innovations Lion has been published. We have covered a few of these projects in the past and we will look at some more in coming weeks
Our piece on product placement last week didn’t really get into the way tech is adding new possibilities. MirriAd are doing some interesting stuff – particularly in Asia – and a Finish company Supponor demonstrated its approach in the England Brazil game the other day.
“With the exception of a few projects in Asia-Pacific, there are only three NFC mobile wallet services in the world that have an effective addressable market of more than 100,000 people”
As responsive design grows in popularity, various people are developing responsive advertising solutions. We see this becoming really important in the next 12 months.
PWC have released an interesting report on the Entertainment and Media Industry. These are some of the key points.
More Tech company M&A in the marketing space. Salesforce have paid $2.5billion for email/CRM company ExactTarget. Forrester think it’s a very significant deal and likely to lead to even more consolidation.
Book of the week
Dave Trott is one of the advertising legends and his blog is always worth reading. So this collection of blog posts is our book of the week. Predatory Thinking proves what we have always thought; great creatives are usually great strategists too.
Finally a couple of good articles that are well worth reading;
And she’s back. Mary Meeker has shared new data on what is happening on the global internet. This is the video of her presenting the deck – she talks even faster than I do – and you can read the deck here.
Lots to digest but a couple of things jumped out. Obviously the data shows mobile is still growing very quickly. Video is growing so fast. And the section on China is really interesting. Especially that QR codes are huge in China – has no-one told them they are really uncool now?
We’ll be digging deeper in the data in the next few days and we’ll tweet the good stuff we find.
Whilst there is rightly some questioning of the business sense of chasing likes and followers, we are seeing social mature as a strategic discipline for brands,
As well as disrupting marketing social is driving new business models too. We met Oliver Luckett when he was with Disney and his new business is blending social with the entertainment industry. The social profile of artists is becoming a key factor in their careers; whilst her acting ability was a factor in Rihanna being given a role on Battleships, we suspect her 30m Twitter followers probably helped too.
This interview with Oliver gets into the thinking of social and as well as some great examples, there is this killer quote;
“If you are sitting in the boardroom and someone says to you here is our 6 month strategy and here’s how it is going to work… They are lying to you. They don’t have any idea…”
Our friends at Dachis have been amongst the pioneers of professionalizing social with tools that turn the data into insight. Here they look at how the sort of cultural relevance that Oliver talks about has worked for H&M through their use of Beyonce.
Ever since soap operas arrived, brands have been looking for ways to get their product associated with content that their customers enjoy. Picking up on how social is being used to promote content, we think there is going to be lots of innovation around integrating product in modern marketing.
I ran a very early product placement test for Kenco Coffee in the early 90s – as an example of what could be done we had the new packaging featured in Coronation Street – Alf Roberts held the jar clearly as he chatted in the corner shop for around 50 seconds.
It was very impressive but we couldn’t see any real commercial value so didn’t pursue it. But the morning after it ran around a dozen people at the client mentioned they had seen it – a good example of Cocktail Party Syndrome.
And some old research into the Coke sponsorship of American Idol shows similar effect; when people were asked if they had noticed the product placement of Coke in the show nearly everyone said no – but ad tracking showed Coke ads perform much better in breaks in the show than when they ran elsewhere.
The new Great Gatsby film was significantly funded through brand integration and whilst the social element wasn’t as high profile as it could have been, this looks like the type of partnership we will see more of.
Will we see more of this thinking in mobile and social? Definitely
As part of the new Google Think insights there is a good piece on Constant Connectivity – the idea that people are using multiple screens so wherever they are they are constantly connected.
This multi screen multi channel approach makes perfect sense and informs much of our current thinking on projects. But it relies on being able to get a connection. And as we know that isn’t always possible in the worlds biggest Cities– even with 4G rolling out and increasingly ubiquitous free WiFi.
But Google have predicted that by the end of the decade everyone on Earth will be connected. How’s that going to work?
The GoogleX labs think that Blimps are the answer – tethering balloons in the stratosphere to ’beam’ down broadband. As a way to bring in more potential customers for the range of Google products and services this makes sense – like their investment in fiber in Kansas and Austin and free Wifi in Manhattan. And owning the infrastructure as Africa evolves into a major economic power makes good sense too. Google is very active in Africa and looking to have be involved in a range of ways to provide the internet infrastructure
Yet another Square like mobile money service is getting traction with investors. Sumup has raised money from American Express and Groupon.
The Economist has a good look at the success of mobile money in Africa . Nothing we haven’t covered before but a good summary.
And NFC seems to be having a few hiccups – it seems that the relatively few NFC enabled readers in retailers have been debiting cards whilst they are still in the customers wallets. We were told that the Oyster system on the tube didn’t take off at first as people were unsure whether their card had worked. So they introduced the beep when your card was read and the rest is history.
NFC payments – whether by card or phone – need some service design to give users confidence around when a transaction has taken place
Next week we are speaking at the eConsultancy Future of Digital Marketing event, and preparing the deck has surfaced lots of interesting thinking around wearable devices – glasses, watches and wristbands like the FuelBand and UP.
This look at the secret Google X lab is really interesting – even if most of the projects are well outside what you would call mobile. Pilotless planes that fly in circles to power wind turbines that send power to the ground, anyone?
And a key member of the Motorola team is looking at electronic tattoos that could replace passwords – and a password you swallow ; the pill is swallowed and the acid in your stomach powers a battery so it emits an 18 bit signal – so your whole body is the password
Motorola are developing the next Nexus – to be called MotoX. It sounds very cool and continues the Google strategy of making Apple look like the luxury end of the market. It will be much cheaper than the iPhone5 so we can expect a similar price point to the Nexus 4, which is around half the price of an iPhone and arguably just as good.
As we start to think of the Mobile Majority – that time soon when most of your users will be on mobile, this is a good look at the mobile only user.
One of the problems with digital is that we have made it complicated. Too many people talk technology rather than ideas, and this does confuse and or scare people. This is a good deck to have to hand as it defines lots of buzzwords you might get thrown at you.
Finally…. are our friends at GAFA risking hubris? With all the debate around tax, it seems politicians are all ready to point the finger at these global players. As the FT points out these people could be the next public enemies.
And this piece on the plans by each to build amazing HQ buildings suggests they could be risking a Leeds United goldfish moment.
Apple is building a huge circular building that they liken to a spaceship. Facebook have got the Bilbao Guggenheim architect Frank Gehry building them a new HQ with a park on the roof. Google plans 9 buildings that lean in, so none of the thousands of workers are more than a two and half minute walk away from each other. And Amazon has just asked for permission to build 3 glass spheres to connect 3 new skyscrapers.
We love great architecture and it seems fitting that todays Industry titans commission great buildings. But the danger – apart from the accusations of hubris – is that they become white elephants – just as the amazing building modernist genius Eero Saarinen built for Bell Labs has become.
As well as the eConsultancy event I am speaking at Sapient Nitro next week and chairing the IAA Mobile event too – as ever do come and say hello if you are there.
The future is already here – it’s just not evenly distributed
Whilst the pace of change of GAFA and the huge scale remains a key issue for any brand, its still worth looking around the world to see how people are using mobile and social in a simpler way.
The geeks amongst you will recognise the William Gibson quote – and nowhere is it truer than in mobile.
Take the Unilever campaign for Wheel detergent in India. Promoted on radio and by outbound calls people were encouraged to call a 0800 number, then hang up. They were called back and hear an entertaining clip from a well known comedian and his endorsement of the product. 16 million calls drove higher brands awareness and a spike in sales. Watch this video for the full story.
Still in India, Intuit has developed a new mobile service for farmers that gives free advice and information on agricultural issues by SMS. For example, helping the farmer make more money through telling them crop prices at local markets – so they can go to see at the one paying more. And Intuit make money by selling advertising on the service.
In Africa IBM are using mobile data (looking at where SMS messages are sent from) to map bus services and look for ways of improving the routes. A similar service in the West is Waze where 47 million drivers share their location and traffic news – and it seems Facebook are about to buy them.
Back in India, an IT company called Mastek have taken the traffic idea one step further. To help make the company buses that pick up employees more efficient, they developed a featurephone app so the driver of each bus has their phone on the dashboard. This means their system can poll the app for exact location of the bus at any time and send a SMS to the employees waiting for it, when it is 10 minutes away then 5 minutes away. There is a big opportunity in apps that work on featurephones, but this tends to be overlooked as developers focus on smartphones. Back in 2005 we worked on the market entry of Refresh Mobile – now better known as Mippin – and did a lot with java apps. There is a lot of friction in developing for phones with small memories and requiring lots of accepts to install etc – but it can be done.
Of course GAFA is active in these emerging markets. Facebook have a team focused on partnerships with operators to encourage Facebook usage whatever sort of device you have. Google are pushing NFC payments in Kenya and their very interesting Trader platform – where you can buy and sell just about anything – works on SMS in Uganda, Nigeria and Ghana.
“It’s the medium of future and the future has already arrived”
Eric Schmidt has caused a bit of controversy this week by implying YouTube has already crushed regular TV. We’re not sure he actually said that; and we do have some experience of journalists misquoting you to make their story hang together better – especially when Google is involved.
For us the two key quotes were Eric Schmidt saying;
“It’s not a replacement for something that we know,” “It’s a new thing that we have to think about, to program, to curate and build new platforms.”
And Jeffrey Katzenberg of Dreamworks saying;
“This is a whole new form of content, content delivery and content consumption,” “It’s the medium of the future and the future has already arrived.”
This NYT video on the video upfronts shows how seriously people like AOL, Yahoo and Hulu etc take this . OK, Sarah Jessica Parker presenting a series on ballet isn’t much of a threat to the Village or Broadchurch but it compares well to the typical programming of those channels not on the first page of the Sky EPG. The key thing with all these new opportunities is can they get the scale advertisers like
…broadcast TV remained “the dominant form of event television” but was stuck with “historical practices” such as creating hundreds of pilots for series which never air. Broadcasters needed to target investments to fewer shows, he added
As Amazon have entered the world of Pilots it is clear that everyone now see the web as a video medium rather than the text one we have grown accustomed to, because of bandwidth restrictions. Looking at the Amazon initiative the LA Times puts it well;
..what makes the Amazon pilots impressive is not that they create something radically new but that they do “real TV” so well. Their true message is that there are new Big Guns in town, and that, just as broadcast TV lost much of its market share to cable, both are going to have to make room for the major players of digital television — not the diffuse, if sometimes brilliant voices of the medium’s shoestring pioneer age, but rather highly professional ones, well-funded and well-positioned to own the Web-based future
The VC community also gets this opportunity. Mark Suster – who just hired the former head of Endemol – summarises the argument well;
The ad industry already gets this to some extent – just look at the YouTube leader board where ads are getting 10s of millions of views – through paid and organic views. And an event we spoke at last week, organised by Brainient, underscored how well developed the ecosystem is for video on both the desktop and mobile – although the creative community have yet to really step up.
Branded Content – back to the future
We have talked about how The Hire from BMW set the bar for branded content some 10 years ago and now see that Jaguar have taken some inspiration for their latest launch – even using the same production company.
Their film for the new F type is interesting but doesn’t seem to have got much traction yet – 67k views on YouTube after 3 weeks doesn’t seem too impressive, but we don’t know how many views there have been through the Jaguar website.
Still it doesn’t quite have the panache of the BMW films. Our favourite Beat the Devil, featured one of our heroes James Brown – who would have been 80 this week – and was directed by Tony Scott. Well worth 10 minutes of your time.
Content is the hot topic amongst brands and the response amongst agencies has been quick. This US blog lists out some of the responses by US agencies. A key quote is
Before a brand hires an agency for content marketing, they should ask to see the work they’re using on their own behalf.
Given you’ve chosen to read our content, we’d like to think we get this space well and we’re looking to do more for our clients. It’s clear that modern digital marketing has to deliver in content, social and mobile to be effective.
Mobile & OOH
After a big consultancy project around this topic recently, we were very interested in the excellent Mediatel event on this subject this week. It is clear there is a real synergy here. We think things like the ClearChannel 10,000 bus shelters across the UK with NFC and QR built in should drive innovation in this space.
But we believe the real opportunity with mobile and DOOH is the ability to create campaigns that match supermarket catchment areas. Few brands are stocked in all supermarkets – and even within, say, Tesco products may be in a limited set of stores. The ability to target people who can actually buy the brand advertised should be a big boost.
But we wonder whether the big retailers could play a part in making this happen. As both Tesco, Amazon and others start to play in content and start to use their customer data to help brands reach consumers the game changes. Tesco want the advertising on their developing media platform to drive sales in Tesco – and they will start to expect brands that want to be stocked to invest in these new opportunities. But given it will take some time to build their own audience, why wouldn’t they buy DOOH around their stores and resell it to brands – with mobile geo fencing as well?
Sound farfetched? Well how about Target building a tool with Facebook to offer deals that can only be redeemed instore.
We will see retailers collaborate with all sorts of media owners to better drive sales. Interesting times for SoLoMo and for retail.
And the MIT view of breakthrough technologies for 2013 has just been published.
Half of brands still don’t have a mobile optimised site. And of those who do, too many still have a rubbish one. In our experience the quickest ROI is building a really good mobile optimised site and unlocking the huge value in mobile search.
Book of the week
Another brand new book – but pretty much everything Brian Solis writes is worth reading.
So our book if the week this week is What’s the Future of Business by Brian Solis
Finally…..More evidence of the annexation of marketing by tech and consulting firms. The very smart service design firm Fjord has been bought by Accenture. The AdAge headline Agencies, Look Out: Accenture’s Invading Your Turf in a Bigger Way Than Ever is slightly hysterical but there is something significant here.
A couple of weeks ago we quoted Antony Mayfield and his Firestarter deck where he said the challenge for agencies was become McKinsey faster than McKinsey becomes you. It looks like we need to get a move on.
Not convinced? How about this then; BMW have appointed Accenture to manage their global digital presence, all their digital marketing and the agencies. And in the US Amazon have given Accenture the job of managing the review of their media buying account.
Can agencies get past their old business model and be credible partners to brands in the age of GAFA? It requires taking digital much more seriously than most currently do.
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.
The big news this week is happening as we write Fix – Facebook are to launch their latest redesign. Rumours suggest that the key feature will be to atomise the news feed making heroes of music feeds, photo feeds and perhaps even feeds of links friends have shared and updates from other apps like Instagram and RunKeeper. TechCrunch also remind us of a rumoured radical redesign of the mobile app that could be part of the redesign.
In a New York Times piece Zuckerberg is quoted as saying that;
“Advertisers want really rich things like big pictures or videos, and we haven’t provided those things historically,”
Remixing the experience so it looks more like Flipboard, Google +, Path etc could create an environment where ‘richer’ ads feel more at home. But will users go for that?
Teenagers over Facebook?
Stories of user malaise are circulating again, with new reports that teenagers don’t like Facebook and prefer to spend their time with Instagram and Snapchat
As we have talked about with Apple, with big success comes a big problem – early adopters want something new. Facebook crossed the chasm a while back and they can have a great future as the ITV of social – and let Instagram be the MTV.
The problem about users not liking advertising is an industry one rather than just for Facebook (and everyone else in GAFA). We are always quick to argue against the myth that people don’t like advertising. People don’t like irrelevant advertising but they do like relevant, useful advertising – and it doesn’t hurt if it’s entertaining too.
We’ve been spending quite a lot of time looking at the ad opportunities on Facebook and they are quite intoxicating. The wonderful granularity of targeting that Facebook allows means it is quite easy to find the right people. And there are now some really interesting rich media ad formats with video, through vendors like Celtra and Moontoast. Combine these with the huge reach that Facebook can deliver and it’s hard to argue with the Facebook pitch – especially when it comes to mobile.
But of course we see that many agencies are missing the opportunity by eschewing the targeting in favour of mass reach, with just one or two ads used. The real value of Facebook can only be unlocked with lots of creative work where each message is relevant to a specific target group. Building a messaging tapestry like this can still deliver huge numbers – and everyone sees relevant ads; it’s just a bit more work for the agency. But we are convinced the returns will make this worthwhile.
MIT has a good look at the considerable progress Facebook have made on mobile so far – with a good quote
Everyone, including Zuckerberg, worried that users might balk at ads mixed with posts from friends. So far, that hasn’t happened. Tests that Facebook ran found the insertion of ads reduced comments, likes, and other interaction with news feed updates by 2 percent, a small decline that the company deems acceptable.
Carolyn Everson, the head of sales at Facebook, shares this illuminating quote in a good interview;
“When Mark [Zuckerberg] first interviewed me, he said: ‘I want the content from marketers to be as good as that from your best friend.’ That was his vision – I don’t think we’re there yet; I think it’s a long-term vision that we have to get to – but the goal is to have marketing become as integrated an experience as any content you’d get from your friends.”
It’s our job to make this happen.
In an interesting video interview the Google head of sales Nikesh Arora makes a similar point about advertising – people want advertising that’s virtually indistinguishable from information. Google built their business doing this with adwords – which 40% of UK consumers don’t know are ads.
Of course the key factor that caps adspend is the uncertainty over whether it works. And the best way to know whether it works is to be involved in the sale – something Google has got closer and closer to with analytics etc.
Now it seems Google want to go further. They capture the intent, they can facilitate the transaction with their wallet and now they are going to deliver the goods on the same day.
“The transaction is the ultimate click,..”
This takes them head to head with both Amazon and eBay who are trialing similar services.
As Marc Andreessen has said, all (most) of the dotcom ideas were good ideas, just too early. Kozmo was heavily backed and its model of 1hour delivery was popular with people – they just burnt through their VC money really quickly. But just as ASOS looks a lot like Boo.com and Groupon like LetsBuyIt, maybe the Kozmo idea will actually work now.
But as the supermarkets know, it’s not hard to acquire customers for home delivery services – it’s just hard to make money. For all the vans tearing around London streets delivering groceries it’s rumoured that the supermarkets lose £15 on each delivery.
Given that lots of people just aren’t at home to take delivery, we wonder if these same day services won’t be part of the colonization of the High Street by GAFA. eBay have experimented with popup stores, Amazon have lockers in Spar and the idea that Google should have retail stores in getting traction.
In a neat demonstration of just how intertwined GAFA is we saw data this week showing that the biggest user of Google paid search is Amazon – by a huge margin.
One group that does seem to buy the Google story is investors, with a lot of money switching from Apple to Google.
Tesco continue to build out there content play. They have hired top talent to run their book and music divisions. And in an audacious move they are taking on Amazon and Netflix with a film and TV streaming service – which is free for their 16 million Clubcard customers.
With all the data they have on customers brands will be able to target advertising precisely – and in theory they should be able to measure effectiveness through sales. This is a very significant move and we’ll come back to look at it in more detail soon.
This week Amazon kicked off its new advertising play, with the launch of their mobile ad network for Android devices,
Nature thrives on complexity and so too does innovation. As of yet, few marketers are meeting the demands that accompany this seismic shift in consumer behavior, and the effects are showing
Growth hacking score high on buzzword bingo right now – this article explains and demonstrates how crucial this focus on the detail is. We think MoneyBall Marketing is a better term.
In 2012 we exceeded our original targets for mobile sales reaching $13 billion and we’re expecting to see this grow to over $20 billion this year.
Ever wondered just how search actually works? How your esoteric search query triggers millions of results all nicely ordered in terms of relevance – within a fraction of a second? Google shows you here.
This is a good round up of the current state of mobile advertising - agreeing with our take that its still early days yet. Yet again we find ourselves agreeing with Marc;
“I think mobile advertising is going to be more lucrative than Web,” said Marc Andreessen, the tech entrepreneur and investor, during an interview in New York City in December. He described a smartphone that knows you, your money, your habits, your wants: “The targeting is going to be amazing [and] more valuable.” He paused, and added, “These formats don’t exist yet. They have to be invented.”
We have never been convinced by NFC, suspecting that something new will make it redundant before it gets anywhere near massmarket take up. And now we think we know what will take its place – Graphene.
Finally …. we sometimes get stick from people over our constant refrain that our business is changing . Lots of people think it’s still pretty much business as usual – as long as you throw in a bit of social and use the latest buzzwords. This piece from the media team at New York agency Kirshenbaum shows the profound changes that result from embracing the new opportunities. – Everything you know about the media business is about to change.
We are out and about speaking at the moment. We have another talk at Google next week – this time as part of their Squared initiative – then we are talking about Tablets at the WARC Measuring Ad Effectiveness conference. And next week we will be taking part in the MediaTel Media Playground event - always a very interesting event.
If you are at any of these events do come and say hello.
The demise of HMV and Blockbuster hasn’t surprised many people (except those of us amazed that Blockbuster still had over 400 stores). But it does disappoint. There is still a huge value in advice and discovery that the online players don’t do that well – yet.
Just 5 years ago HMV was worth around £500m. All the factors in it’s demise were already here; Amazon was a major player, iPods were everywhere, Facebook was taking off. Whilst Spotify wasn’t around, LastFM was. And the VAT loophole that enabled people like Play (which is also closing its retail business) to undercut UK retailers has been closed. So why was the business valued at just £5m before they went into administration?
As we know smart retail businesses are combining their high street presence with online; for example most fashion brands sell through eBay and ASOS as well as their own stores and their own websites.
Whilst HMV diversified into other aspects of music such as live venues, and sought to innovate around eBooks when they owned Waterstones, they were slow to innovate around their core business.
The one bit of the business that really worked was (is) Fopp –who HMV saved from closure a few years back. With a big selection of music, books and DVDs (in quite small stores) aggressive pricing and helpful staff, we have spent much more time -and money – there than in HMV in recent years.
As the recent revival in local bookstores has shown, there is a market for good selection and advice, so people can discover new content. Even Amazon struggle with discovery – other than the simplistic people who like this, like this.
We think the next big step in this space is social discovery – where knowing what your friends like is a big help, but still quite unstructured. And where you could see what people who like similar things to you, are enjoying. We have a concept in this space we have been working on, so happy to share thoughts with anyone in this space.
Facebook does Search
Social discovery came into the spotlight this week with Facebook announcing their Graph Search – enabling users to see what their friend have done and what they like. It feels like this is still early days, with a limited beta program. By the time it goes public we expect it to have evolved – and to have some advertising opportunities baked in. John Battelle has some smart thinking about Graph Search here, where he speculates it will (eventually) extend to content and to all the stuff that gets into Facebook through the Open Graph.
One thing he mentions is that people will work to polish their profiles as they understand how people use search. So will people still check in to cool bars o Foursquare and review the new local restaurant on Yelp, when doing so in Facebook will better populate your profile?
Recall that when Google burst onto the scene, it prompted a dramatic response from owners of web pages, who immediately began rewiring their sites to be optimized for search. Similarly, Facebook’s Graph Search will incent Facebook users to “dress” themselves in better meta-data, so as to be properly represented in all those new structured results. People will start to update their profiles with more dates, photo tags, relationship statuses, and, and, and…you get the picture. No one wants to be left out of a consideration set, after all.
There is also a new requirement for brands on Facebook – working to ensure you get found in the right kind of searches. So SEO comes to social.
It is another example of how Facebook is slowly sucking the oxygen out of the web ecology, increasingly positioning themselves as a rival to Google as the one stop shop for brands looking to reach people online.
The battle lines in the new search wars have now been drawn. From Amazon, which handles more product-related searches than any other company, to Apple’s iPhone-based Siri and now Facebook’s social search, the new combatants are starting from their own positions of relative advantage.
Last week we saw how some of the big retailers had fared over Christmas. We now have eBay sharing their success story – sales up by 18% in the last quarter with mobile for the year hitting $13bn. And Paypal did $14bn across the whole year.
Their CEO has been outlining plans to push Paypal into more retail partnerships – and says
Mobile is quickly becoming the new normal,
His forecast for this year is both eBay and Paypal to reach $20bn in sales. Of course in a flat economy that is a huge chunk if money that someone else is going to lose – so the tough times on the high street aren’t over yet.
Another big factor on the High Street is delivering targeted discounting and we think the best people in this space are ShopKick. This app has 4 million users making it the biggest shopping app other than Amazon eBay and Groupon.
They have announced they are profitable and their deals drove sales of $200m across their partner retailers. We expect them to arrive in Europe some time soon.
The interesting thing will be when they embrace payments, as without that they remain vulnerable to people like PayPal
We were invited into Facebook this week to share our views on mobile and social advertising. We talked about the need for ads that fit into the Flow of content and discussed the depressing fact that most campaigns use a very small numbers of creative and there is little creative testing going on.
.. levels of targeting granularity at IP, individual, household, set top box, zip plus four, zip and zone level and you can safely conclude that delivering exactly the right message to the right person at the exact time and place required, overlaid with feedback loops and data is a reality.
In all this lies a problem and it’s all about manufacturing the assets to populate the opportunity presented by the changes above.
As we keep saying, we need to find ways to industrialise creative production, without losing the magic of the idea. Are there any startups making any progress on this?
Ben Evans has found a way to hack Facebook to show what apps are being used and hence what mobile devices users have. There is some good detail in the data – and the key story is that Android is growing faster than iPhone. And there is more growth potential in Android too – so that’s why Facebook is hiring Android developers really fast.
Google have launched a new app that showcases some of the best mobile ads. Right now it’s Android only, so another reason to beg, borrow or steal the Nexus.
Following the success of PingIt for Barclays the ability to pay by text will roll out to the other banks in 2014 – without the need to set up a separate account as PingIt does.
Finally we spent this evening listening to Seth Godin talking in London as a promotion for his new book. With a sell out crowd, he spoke for over an hour and was as inspiring as usual.
The best quote?
We live in revolutionary times but we have forgotten how to see opportunity
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