Category Archives: Social Media

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.

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

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

Mobile Fix – March 28

Virtual Reality & Facebook

This has been a busy week for deals and flotations. Each of which has some significance for brands. The one with the most press is the Facebook acquisition of Virtual Reality headset maker Oculus. Shelling out $2bn – close after the WhatsApp deal – has unnerved some on Wall Street with the stock price now 18% off its high of 72 which was reached a few weeks ago.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

It’s clear that Virtual Reality has the potential to change how people play games and experience content but the time when Daft Punk style headsets will be commonplace is some time away. So we don’t see this as a really significant move – at least for brands – right now. 

(Some other news was revealed on the Investor call about the Oculus deal – Facebook now has 1 billion mobile users – and Instagram has 200 million users.)

Disney & newTV

Disney bought Maker Studios for almost $1bn – so one of the oldest brands in TV has bought one of the youngest. Maker have around 55,000 different channels on YouTube  and this is a good guess at why they have made the deal – talent, product promotion, new types of ad deals and preparing for Cord Cutters.

In London this week the Disney TV President Anne Sweeney talked eloquently about TV content becoming immersive more fully interactive and on demand via the internet – and says all these things are being worked on right now. Well worth watching the full video.

Doing some research around football and video, we looked at the key players on YouTube; Sky has 53K subscribers and ESPN has 12k. But the biggest YouTube channel focused on football, in terms of subscribers, is Copa90. One of the new channels to emerge with from producers partnering with YouTube Copa90 has 562k subscribers.

Add Chromecast the mix and, to paraphrase Disneys’ Sweeney, there is a Creative Transformation happening in newTV.

Gaming

The other significant moves were in gaming. UK success story King IPOd giving the company a value of $7.6bn  – although the share price dropped over the first days trading . This reflects concerns that the company is too dependent on Candy Crush – which accounts for nearly 80% of revenues

An interesting look at the numbers says;

So the question boils down to can King hold on to existing users and keep them spending. I would argue that other, similar games, like Clash of Clans from SuperCell, have proven that they can do this. It is getting very hard (and expensive) to launch a new title in mobile app stores.  Consequently, the longevity of existing titles is improving somewhat. This speaks to the way in which the App Store model has some serious flaws, but does provide something of a moat protecting Candy Crush.

This is a really good look at the King story and what it can teach other  British entrepreneurs  from VC Christian Hernandez.

The other interesting deal is in Asia. Continuing our interest in BAT (Baidu, Alibaba, Tencent) we thought the Tencent purchase of a stake in Korean game company CJ Games was interesting. At $500m for 28% this is a big deal. It’s another layer in their Vertical Stacks but given that gaming can inspire so much loyalty can we expect GAFA to be more explicitly involved in games?

They are all making lots of money indirectly from games – largely through sales and advertising (see below for a look at Facebook and app installs) 

We think that content will increasingly be used as a differentiator for platforms and devices, so could Google or Apple transplant the games that are big in Asia over to the West? Given how successful Flappy Bird was, it’s clear good games can work in different cultures.  So could someone import a big game from Asia and make it only available on their platform? Or could a Samsung – or a Huawei – preload a hit game to help sell their devices?  Or could a smart brand license an Asian game and introduce it in the West?

Intel made a big deal about wearables at CES this year and have followed through with the purchase of BASIS for $100m.  The other big news in wearables was the deal that Google struck with Italian sunglasses giant Luxottica – the maker of Ray-Ban, Oakley and Persol. It is vital that Glasses avoid the Bluetooth Headset prejudice and getting this talent on board should help.

5 things you should do before thinking about VR. 

The Oculus deal is interesting, but we think it’s going to be about gaming and home entertainment for the foreseeable future. And whilst your Agency’s Digital Prophet ( they all have one but few with haircuts this bad) may want to demo this in the Agency lab, there are probably better things that you could be focusing on.

Whether you subscribe to the McKinsey 80/20 rule for boosting the return on marketing investment or the 70/20/10 model Coke use to drive innovation, we believe there are lots of ways brands can unlock real value, right now.

* Make sure you are really FitforMobile – with mobile optimized sites for all your brands and a mobile approach on search, social and email

Get your digital metrics right

* Identify the top 5 YouTube channels covering the content areas your brand has an interest in and start a discussion about how you might collaborate. For example there are huge opportunities for smart product placement in these channels.

* Review how you are getting the most from GAFA – getting search and social right, understanding what Apple products you could experiment with (Passbook is on millions of peoples home screens) and looking at whether your brands could be sold through Amazon.

* Audit the integration between the different strands of your marketing- how could mobile add an extra dimension? Add Shazam to your TV and/or develop a Two screen search strategy. Test what happens if you use AR and QR codes cleverly in your press ads. Use responsive creative so your digital ads are perfectly optimized whatever screen they appear on.

If that sounds a little dull, look at what the smartest Brands are doing and saying. The partnerships that Start Ups that Mondelez have pioneered bring in companies across mobile and digital with solutions that can solve problem at scale, right now. The same with the Unilever Go Global programme.

All the companies chosen use digital as a tool rather than a toy.

Which, without being rude, is what Oculus is right now. Albeit a rather expensive toy aimed at geeks and gamers.

App downloads

In the piece on King the author says it is getting very hard (and expensive) to launch a new title in mobile app stores. A big part of this is that the appstores just dont work. Discovery is huge problem. So advertising is the only solution

@ChetanSharma tweeted a comment from M&CSaatchi saying they were putting 50% of their mobile ad money on Facebook but it is getting expensive  – and that the only thing that works on Facebook is App installs. He then retweeted someone else saying they put all their ad spend on Facebook app installs – but reach is decreasing and costs are skyrocketing.

Quick Reads

More interesting thinking from Mondelez- one of their top marketers thinks the Agency of Record is an outdated concept

The video of the Larry Page interview we mentioned last week is now available. Well worth watching

Ex Googler Hugo Barra talks about Xiaomi in this new interview – their devices will be on sale globally within 2 years.

Some good thinking around Growth Hacking

Seth Godin has some typically smart advice on marketing

If you look at every successful marketing story over the last 10 years–Airbnb, Lululemon, and work your way up or down or sideways–all of them are the same. They make something the market wants to talk about. Companies should let the market decide what they make, not the other way around.

More on Cards – the future of user experience

AOL have new tools that they hope will make them then one stop shop for buying digital media. We suspect Google may have something to say about that.

It’s been a while since we have seen a good infographic but this one on the Internet of Things is really good

Finally….We are looking forward to taking part in Adweek next week – speaking on a panel on mobile targeting and metrics, organised by Weve;  I am 67% of Female – is that OK?

It’s on Tuesday at 10.30 in the David Lean room

If you are there come and say hello.

 

Mobile Fix – March 21 – GAFA & BAT

GAFA

This was a big week for Google. Whilst everyone at SXSW was talking about wearable devices, Sunar Pichai – the head of Android said that ;

“When we think of wearables, we think of it as a platform. We see a world of sensors. Sensors can be small and powerful and gather a lot of information that can be useful for users. We want to build the right APIs for this world of sensors.”

This week they announced Android Wear – initially focused on watches. Developers can now tailor their apps to work with Android watches although many will already work well.  The new UI is focused on voice and contextual information – and right now it’s essentially Google Now on your wrist. Plus voice activation that uses the OK Google phrase as the trigger.

Within hours the first watches were announced. The Moto 360 from Motorola got most of the press but the LG G Watch looks really good too – and their experience collaborating on the Nexus phones should help them nail the experience.

When you boil this down though, the watch is little more than a second screen for your Android smartphone. A peripheral.

All the smartness and the connectivity stays with the smartphone.  Do Google plan to incorporate other data from other sensors? In his talk at SXSW Sunar Pichai talked about Mesh networking and digital tattoos – Motorola projects that are staying with Google, rather than being sold to Lenovo with the device business.

Mesh Networking is key to the Nest acquisition and we can all foresee being able to control heating, lights etc from your smartphone. But a digital tattoo – actually a sticker – could be the ultimate wearable;

The tattoo is made up of various sensors and gages, such as for tracking strain in multiple directions (how the user is flexing), EEG and EMG (electrical impulses in the skeletal structure or nerves), ECG (heart activity), and temperature, as well as light and other factors. In total, it’s a mini-lab for your arm, the side of your head, or anywhere else on the body.

Collecting that data within Android Wear enables a whole world of health apps.

The other big news this week was that the Chromecast went (back) on sale in the UK and a number of other key markets. Its already the best seller in Computer and Accessories on Amazon and we think it’s a must buy if you want to understand newTV. As can be seen from the reviews it’s well liked by buyers – and since we bought ours when they first launched in the US, we have used it lots.

And its usefulness is increased with apps for the iPlayer amongst others. The iPlayer announcement is worth reading as it shows how the BBC are thinking about newTV – one interesting point is that they are lobbying Google to get the kindle supported;

We recognize that the Kindle is an important device for BBC iPlayer in terms of usage and we have, on behalf of our users, asked Google to do what they can to support this platform.

Lets not hold our breath for that one 

It’s also been an interesting week for Google’s core business, search. At SXSW one of their people said

he “wouldn’t be surprised” if mobile search exceeded desktop queries this year

There has no official comment from Google who don’t want to get into mobile versus desktop as they (rightly) encourage people to think multiscreen and cross platform. But analysis of data from Marin – who handle around$6bn in search – suggests that mobile will be bigger than desktop in the US by the end of this year.

In terms of paid ad clicks, mobile will be over 50% by December. But the share of revenue lags  – mobile was around 34% of revenue at the end of 2013.

This data suggests something we’ve been predicting for years is getting close. If you think about Googles purpose it’s to give the user the best possible results for each search. This keeps the user happy (and loyal) and – because of the genius of the Google business model – keeps Google shareholders happy.

Over the years the results have improved through factoring in location, past search history, landing page quality score etc. But consistently Google fails to give its users the best experience in one key way – despite knowing the user is searching on their smartphone, the results include pages that are not optimized for mobile. 

How long before Google decide to make mobile optimization a key factor in the results shown? It has to happen at some time and this data shows the time is getting closer. Given the bemusing amount of sites that are still not mobile optimized, doing it too soon would make huge changes to results but as brands slowly, slowly adapt to mobile, it eventually will happen.

One thing is clear though – brands that have a mobile friendly presence can get competitive advantage through mobile search and, as one article pointed out, the Marin data suggests that is especially so in the UK;

An intriguing perspective in Marin’s report is its comparisons of different international markets. In the UK, for instance, more paid search clicks come from mobile and a greater proportion of agency spending goes to mobile search. But the cost per click on mobile is 75 percent less than in the US, which shows that the American market is already more competitive and mature.

In every case we have looked at the cost of making the site mobile friendly can be quickly recouped through the additional value unlocked through mobile.

Finally on Google, Larry Page was interviewed at TED this week and talked about the many things Google are doing – and we loved this quote

Lots of companies don’t succeed over time. What do they fundamentally do wrong? They usually miss the future. I try to focus on that: What is the future really going to be? And how do we create it?

Facebook have had a good week too. Video ads are finally here – but in a slightly muted way. The 15 seconds videos will start playing silently as they appear on screen – and stop if people scroll past. Sound will only come on if people tap the ads – when they expand to full screen and the audio starts.

The 15 seconds is interesting – that’s the most common format for US TV and some people worry that brands will just start running their TV spots on Facebook – especially as they are being sold in a TV like way with GRPs etc.  Recognising the danger Facebook are working with a firm called Ace Metrix to pre test ads – so creative is assessed for engagement;

Ace Metrix will allow us to objectively measure the creative quality of the video in the Facebook environment, and highlight performance indicators for advertisers such as watchability, meaningfulness and emotional resonance

We don’t know what happens if Ace doesn’t rate your ad – do Facebook stop you running it? – but this has to be a good thing. We are working with a smart company that is introducing this type of research for mobile advertising and it makes perfect sense that – before you spend the media money – you asses the creative to ensure  it delivers on brand metrics. 

Facebook gets a hard time from some quarters and Forrester keep suggesting that they are failing marketers. Fix friends the MagicBeanlab have refuted the claims with an interesting post – suggesting that it may be marketers are failing to us Facebook properly. And as the way brands use Facebook evolves there seems to be more agencies fighting to control this area of their clients marketing.

This week saw Facebook launch some research into digital in the UK and a key finding is that mobile is almost as big as desktop in terms of time spent and will shortly take the lead.

Amazon had a quieter week but rumours about new hardware continue. Given their push of Video – with all Prime customers now getting access with it now bundled – their strategy for TV requires a hardware play.

As we saw with Chromecast the forked version of Android they use means the Kindle isn’t supported and nor does Apple TV work for them. So the Vertical Stack ecology means Amazon need a way to ensure content bought or streamed through them is not denied access to their customers TV set.

A set top box isn’t that much of a surprise – especially as Amazon is so powerful as a retailer for TV and accessories. But suggestions they will bundle Hulu and Netflix is less expected.

To us this is probably an example of your enemies enemies are your friends. Rather than get into a fight with Netflix  – who have made a strong play in TV tech with their DIAL initiative (developed along with YouTube) – they can build their own route into customer homes

So lots going in GAFA – but not much from Apple. They have launched a cheaper phone – an 8gb iPhone 5C – but not in the US. Trouble is, it’s just not that cheap. In the UK it’s £429 – £130 more than an, arguably superior, 16gb Nexus 5.

ITunes radio still hasn’t arrived in the UK – it sounds like a good service and the advertising proposition makes sense.

Given nature abhors a vacuum and that lots of people now like to stick the boot in, Apple is getting some bad press – partly driven by the PR for the new book Haunted Empirewhich Tim Cook calls nonsense.

Business Insider has a field day with its Worst Case Scenario – hedging its bets whilst painting a future where Apple has lost its way.

But even as they list all the sectors where Apple may or may not have faltered, you are reminded just have active Apple have been.

One area where they are definitely moving things forward is ibeacons and it has been noted that the latest iPhone update turns your Bluetooth on. We think that Passbook is a hugely underused opportunity unlocked by beacons and bluetooth; on millions of peoples phones and perfectly positioned to handle the loyalty schemes and offers that iBeacons can trigger. And if they fold in the credit card details they hold for hundreds of millions of people, they could very quickly dominate the mobile wallet space.

It feels a little premature to write Apple off.

BAT

GAFA remains the key drivers for mobile social and tech around the world. But we are big fans of the William Gibson quote;

the future is already here, it’s just not very evenly distributed.

And whilst GAFA is rooted on the West Coast of the US, much of the most interesting innovation is coming from the other side of the Pacific.

The Chinese market is fascinating. The imminent IPO of Alibaba could value them at as much as $140bn and they just invested $215m in Tango, one of the few big messaging apps based in the US.

And if we think the Vertical Stack model works for GAFA we see similar strategies from BAT – the big Chinese firms Baido, Alibaba & Tencent– but played out much more aggressively.

This infographic shows how Alibaba and Tencent compete in virtually all digital sectors.

The most recent conflict has been in taxis where Didi Dache (Tencent) and Kuadi Dache (Alibaba) are battling for customers.  If you have been to Shanghai or Beijing you will know about the traffic and how crucial taxis are. The BAT strategy is to get people used to paying for taxis using their apps and migrate them to buying other products and services with their apps. The ability to offer bigger tips through these apps has made them very popular with taxi drivers, but with slightly anarchic results – if you didn’t book with an app then you just can’t get a ride. So the Shanghai government has stepped in to regulate the market.

This FT article on Mobile Wars is a really good look at the Chinese market as is this look at App Slingers

Quick Reads

Really smart thinking on media and content. We are fascinated by the thought that some media companies are

technology companies first, publishers second, because they approach content as a product first and foremost.

More data on Mobile ad spend showing that it’s a 2 horse race between Google and Facebook. Pandora and YP (Yellow Pages) are a long way behind.

Building on the news about Chromecast and the Amazon set-top box this article thinks the future of TV is pretty great.

Very smart analyst Peter Kim worked as a UberX driver during SXSW

A good summary of native advertising

Finally ……The Daily Mail – the most popular newsbrand on mobile in the UK has finally gone mobile optimized. The home page is still the same as the desktop but the story pages are now mobile friendly. What’s everyone else waiting for?

 

 

 

 

Mobile Fix – March 14

Mobile truly Mainstream?

This week we saw research suggesting that mobile ad revenue in the UK will surpass newspaper ad revenue. This year.

And over the next couple of years it will pass TV and be the biggest single medium. With 90% growth forecast this year and a total spend of £2.26billion, mobile is clearly mainstream. And given that a high proportion of this spend is with Google and a big chunk of the rest is response driven, mobile is a machine for making money.

But there is still a long way to go. With media brands seeing a huge switch in traffic from desktop to mobile, their ad revenue evaporates as mobile is sold too cheaply. Ecommerce brands see their customers migrate from desktop to mobile, but conversion falls away. Charities tell us their mobile traffic is surging, but donations drop.

IAB research shows that a quarter of the top financial service brands still don’t have a mobile presence. And over half hadn’t optimised their data capture. In many other sectors it’s even worse. And even when brands do have a mobile site its so often functional, rather than a fulfilling brand appropriate experience

We think the next step for mobile is to embrace creativity and use that to improve the user experience;

Make mobile sites more intuitive and rethink shopping carts, data capture and ways of paying.

Better ideas in better advertising formats. This is a video of the rich media responsive banners we mentioned last week – we’re keen to bring them to Europe ASAP.

Smarter thinking about tracking and research that enables brand metrics and response to be looked at across all screens – so we see the real value of mobile.

Brands must think about the digital experience first – and agencies need to get their best creative minds focused on digital. Or be prepared to cede their role as brand guardians to those that are Digital First.

Big Brands at SXSW

Austin Texas is the latest place to be adopted by the marketing community. Along with CES, MWC and Cannes, SXSW is now on the circuit for forward thinking brands and their ever protective agencies. 

The days when new services like Twitter and Foursquare blew up at SXSW and started their stellar growth with great buzz are over. It was big brands that hogged the limelight. But the reason for being there is to get closer to tech

“Some people say it’s gotten too big — but people have been saying that for ten years. Many of the most influential people and interesting people in the world of tech marketing can be found at parties and panels throughout the week.”

Whilst lots went on, for us – observing from Clerkenwell – Mondelez were the most adept brand there. It’s hard to imagine anything more on trend for SXSW than 3D printing of Oreo cookies. And this interview with their main Digital guy Bonin Bough gets into how and why some big brands are trying to use the start up world to reshape their business.

Big Brands struggle with digital

But whilst these SXSW events are high profile, it seems many brands don’t believe they can walk the walk, even if they get the talk right. A new Forrester survey says; 

While 74% of business executives say their company has a digital strategy, only 15% believe that their company has the skills and capabilities to execute on that strategy

Leaving aside the fact that 26% of execs don’t seem to think their company has a digital strategy, this lack of confidence is a big issue. Execs from General Mills, Kraft and Walgreens share their concerns here and Nestle have announced they are opening an office in Silicon Valley, to get closer to Tech.

And last week the excellent Albion Society ran an event about Intrepreneurs and the challenges of changing big business from the inside.

Further insight into how hard it is to change came at the excellent Firestarter talk from Russell Davies on how the Government is now dealing with digital. As he said It’s not complicated, its just hard. Neil Perkin who organises Firestarters has a good right up, as does our favourite Belgian blogger.

Lots of people in big brands are trying lots of ways to turn digital from a threat to an opportunity and there is a clear role for the right partners to help.   But taking a trip to Austin probably isn’t enough.

Mobile Money 

The Telegraph have a good round up of Wallet news, with another headline about how your phone is about to replace your wallet. We’re not so sure – the huge range of wallets available confuses consumers and until some clear winners emerge we think the sector will be dogged by the chicken and egg scenario.

And as some traditional cards embrace the contactless technology that mobile wallets use we find new issues. Travelling on the tube now means you hear constant announcements about Card Clash. Touching in with your Oyster whilst it’s in your wallet, risks having the transaction done by contactless card instead. Or, as well.

Mobile money is a big opportunity and we’ll keep seeing players iterate to try and get cut through and customer acceptance. But these tech gremlins slow progress down.

New features of Google Wallet show where things might be heading; the latest version now keeps track of your online purchases and delivery though looking at what comes to your Gmail account. Now its unclear whether that’s just things you bought with Google wallet or whether its anything from Amazon etc. Clearly Google can mine your Gmail for all online purchases and that data – neatly collected in your wallet  – is gold dust. The Wallet now also allows you to save loyalty programs and offers in one place – getting more and more like Apple Passbook.

We spoke at a retail round table on loyalty this week with key people from Tesco, Sainsbury, Whitbread and others. It was clear from the discussion that, so far, digital hasn’t really moved this sector on much. The plethora of offers and coupons is felt to have driven customer promiscuity rather than customer loyalty.

But with Beacons etc there is understanding that mobile could change things – if used smartly. We are more and more convinced that consumers probably want one place to manage their loyalty cards, coupons etc and Passbook and Google Wallet are well positioned. But Apple and Google probably need to do more to get these big brands on board.

Hollywood gets YouTube

Disney are about to spend $500m buying Maker Studios  – one of the key players in video, with 9 of the top YouTube channels including the top rated one PewDiePie. This channel alone has 23 million subscribers and 267 million views in January alone. Following Dreamworks buying Awsomeness TV in a cheaper deal last year this move shows that Hollywood recognize the TV world is changing and don’t want to miss out.

Casting this as a bet on the future one video site said;

Maker – and other big MCNs – underscore 3 of the biggest emerging rules: (1) that talent can now break big without the backing of the traditional media, (2) that YouTube is a bona fide new distribution platform and (3) that traditional media’s grip on millennials may be slipping.

And underlining just how powerful TV ( whether delivered by a network, Netflix, YouTube or in a Box set) this piece looks at the excess of excellence in TV these days

Quick Reads

Facebook have announced their first Developer conference since 2011. Should we expect big news for apps inside the Facebook ecology?

The clever Monday Note people think people are underestimating Apple – pointing out they spending huge amounts on R&D. Are there new products in the pipeline? The author of a new book is less confident and thinks the magic has gone. But long time Apple watcher John Gruber takes issue with the book and ends by saying;

The simple truth, regarding Apple’s continuing ability to deliver breakthrough new products, is that we have to wait.

My sense is, we may not have to wait much longer.

One more thing on Apple – How Steve Jobs got the iPhone into Japan.

Some smart thinking from John Willshire on planning  - Fracking the Social web

And some smart thinking from Ben Evans on mobile, context and discovery 

Finally.. it’s 25 years since the web was invented and but we probably need to wait until September for the  20th anniversary of most people first web experiences – the first Netscape browser.

These are some stories from the first set of digital startups over 1994 and 95.

But the best piece of nostalgia is this clipping shared by VC Saul Klein

 

 

 

Mobile World Congress – The 4Ps of Mobile

Mobile World Congress is big, really big. 80000 people and 8 huge halls – plus many off site parties and events.

It’s changed and grown over the years – this post reflects on those changes – and 2014 saw it join Cannes, CES and SXSW as a place for brands and agencies to go learn what’s happening in Tech. Advertising has been the slightly poor relation in previous years, but its now clearly centre stage as the money ramps up – and the business models focus on ad revenue as the key monitisation.

 

Our 4Ps of Mobile Framework is now virtually vintage, but we still find it a good way to sort through the mélange of news, views, announcements and trends across mobile and social. So for Mobile Word Congress it’s the perfect tool.

Starting with the Devices at the centre of everything; MWC has always been about devices – we can remember seeing the DoCoMO stand covered in the next seasons new phones, many brightly coloured or patterned depending on which fashion company they had partnered with that year.

Whilst Google and Apple don’t show up, Samsung does and this year chose to announce significant new devices. The Galaxy S5 is the latest weapon in the war between Apple and Samsung for high end customers – those paying $500+ for a phone – often through a pricy monthly contract.

The screen on the S5 is a little bigger at 5.1 inches (the iPhone 5 is 4 inches) and has fingerprint scanner for locking the phone and authenticating PayPal transactions. We’re told people were trying out the devices, locking them with their fingerprints then wandering off, leaving them useless for anyone else. Oh, and it’s now waterproof.

Its an iteration of the hugely successful S4 and not that exciting; supporting our view that smartphones are now like the TV market – it’s very hard to stand out with hardware. Just as it’s hard to differentiate an LG from a Samsung in the TV department at John Lewis, it’s now hard to differentiate a Samsung from a HTC etc in the phone section. Everyone makes the bezels as small as possible so their screens are as big as possible, and the only opportunity for ‘design’ is the rear. To be fair an iPhone remains instantly recognizable – it will be interesting to see what the iPhone 6 does to standout.

Sony launched nicely designed tablets and smartphones, like just about everything else using Android.

Even Nokia announced a new phone that uses Android – sort of. They have chosen to use a forked version (like Amazon does) that means Google isn’t baked in, which must please their new owners Microsoft. They use their own Nokia appstore (it is relatively easy for developers to teak their android apps so they will work on these devices) and a range of MS products like Skype and Outlook. The interface is similar to the tiles that Windows Phone uses.

They are cheap, but are they cheap enough? Many OEMs see the low end market as the opportunity to go after and MWC was full of Chinese companies with good Android smartphones wholesaling at around $40. Firefox announced their own phone on their own OS that would sell for $25 – general view is that Android will probably get there first.

Mashable have a good round up of the main device news.

Wearables fit into Devices too and just like CES, everyone seems to have one on their stand. Samsung announced 3 new ones and their GearFit got lots of attention. With a curved screen and a heart rate sensor and we think it could trump the Nike Fuelband etc. But it is still most useful when paired with a phone, so again wearables peripherals.

Whilst Google didn’t show up they did steal some headlines with a leak that they are developing a Nexus watch, to be announced in June. Along with the Apple entry into this space that everyone expects, we think people will wait and see. Watches are so much of a statement we don’t think many will spend money on a Samsung etc that could look very dated against an Apple or Google device.

One other interesting fact about wearable  – Ben Evans tweeted he had seen just one person Google Glass; when you have 80k mobile people it’s odd that more people aren’t wearing them. Maybe even the evangelists aren’t that convinced?

People

We have long argued that social and mobile are essentially the same thing, and having Mark Zuckerberg keynote at MWC proves this. Of course he talked about WhatsApp and made the point that their reach is complimentary to FB and a key part of internet.org, which he focused on. This is the project to get the rest of the world on the internet and Zuck sees that providing free messaging, search etc is crucial for the worlds poor.

His plea for operators to allow this free access for Internet.org – and this basket of free services designed for everyone – rests on persuading them that this acts as a gateway drug or onramp to get people using data, that they will pay for.

Well worth watching the keynote video

WhatsApp dominated the news – both as people debate the valuation – with Zuckerberg arguing he got a bargain and because of their announcement that they will add voice services later this year

Places

Location now seems like hygiene in mobile – its there and most people are finding ways to use it – but there is a long way to go. One of the first Addictive Ideas we hawked around the industry when we started was the idea of using mobile to validate credit card transactions abroad. When travelling we all get used to cards being declined because the UK fraud people decide it’s unusual you are in Seoul or San Francisco. But whilst I may not take a while to know if my card is missing or has been cloned, I know when my phone has gone almost instantly.

So we approached banks, credit cards, their agencies and anyone we could think of. Zero interest. But now Mastercard are launching a similar solution. It’s all about timing.

The Foursquare deal with Microsoft is seeing its first fruit with Cortana – the Micorsoft answer to Siri. The core use of Foursquare appears to be on the wane – of the 80k people at MWC just 2600 checked in.

Physical

Whilst QR codes are no longer fashionable, no one has told the Chinese who use them in lots of smart ways. WeChat enable people to follow someone by scanning their personal QR code and invite people to a group chat with one.

But all the energy in physical is now around beacons and Apple have announced their specs for iBeacons, as they look at impose their usual command and control on the space. Whilst at this stage they are regulating the hardware we suspect there will be some restrictions on how the service is used. Apple doesn’t want its customers to start getting spam everytime they come close to a Beacon and we think some best practice will be forthcoming.

And unsurprisingly the Internet of Things clichés were at MWC – what’s more Physical than connecting your toothbrush to your smartphone?

Promotions

Continuing the emerging markets focus, new research showed that there are 219 mobile money services in emerging markets – with 13 now having more than a million users.

Coming back closer to home Greggs now has a mobile loyalty scheme where food lovers can pay using their mobile. With Eat taking a slightly different approach working with Pouch from Weve, people are going to get more familiar with using their mobile in stores and this should drive more mobile transactions.

 

Read the rest of this weeks Mobile Fix here;

http://www.addictivemobile.com/blog/2014/02/28/get-up-stay-up.html

http://www.addictivemobile.com/blog/2014/02/28/messaging.html

http://www.addictivemobile.com/blog/2014/02/28/new-tv-mobile-fix-feb-28.html

http://www.addictivemobile.com/blog/2014/02/28/quick-reads-mobile-fix-feb-28.html