Category Archives: Social Media

Get Up Stay Up

The key challenge for Graffiti artists in New York ( or anywhere)  is how to Get Up and how to Stay Up; how to get your art on the side of that subway train or high wall and is it good enough to Stay Up or will another artist decide they can do better and paint over your work?

It’s the same for Apps – how do you Get Up on a users home screen and how do you Stay Up, rather than being deleted or just pushed back across screens until your in the App Graveyard 7 or 8 screens back?

Just like the power laws that mean 80% of all Google traffic comes from the first page of results (with 80% of the rest from the second) and 80% of all TV viewing is from the first page of the Sky EPG, we suspect a huge amount of app usage is driven by those apps on the home screen

So the phone home screen has the same role – and we find apps can get put there then are relegated as new apps come along – over time the most useful stay there.

But we don’t know. There is very little data available on how people use apps. Apple and Google know what we have downloaded, and Apple know (?) how we have grouped apps. Facebook know through their Facebook Connect a lot of the apps we have –and some insight into how they are used. And Yahoo have a good idea on Android with their Aviate app.

The other people with really good insights into app usage are Flurry and their latest research shows the half life of apps – that is how long before the number of monthly average users hits 50% of its peak.

Half of apps lose half their peak users in just 3 months. For games the half life is 2 months whilst news apps average 7.

But for real insight you can’t beat talking to users and seeing what apps they have on their home screens is really valuable. But its not scalable. Or is it?

The clever people at Betaworks came up with a way of boosting their sample – people sharing their homescreen on Twitter and Instagram. From this they have built a fascinating report that is a must read. Our favourite fact is that 14% of people don’t have the phone ‘app’ on their home screen.

For further insight the new Deloitte report is interesting – one trend they note is that the number of apps downloaded is down by around 10%.

Messaging

Still lots of debate and buzz around messaging, and this chart comparing the cost per user of many big tech deals suggests WhatsApp was a bargain. The counter argument is that since messaging apps have access to the contacts book; the raw material of virality Facebook could have – and should have – built their own.

Of course they did and Facebook Messenger as a standalone app has done OK, but why take the long road. 

The CEO of Line shared his views in this interview and his thinking on new revenue streams like ecommerce and music distribution is interesting. This presentation from a Line event gets into a bit more detail on new developments, with a means for brands to message users and Stamps. They are also planning voice services too.

As a result of Line success and all the buzz around Messaging, the share price of Nayer (Lines Korean owner) is up by 80% and there are rumours that Softbank want to buy Line.

For more insight around messaging this blog from Taiwan is a good read.

Mobile Fix – February Feb 21

 Whatsapp 

When a tech acquisition is all over the newspapers and TV, you know that tech, mobile and social are truly mainstream. Ben puts it very well in his tweet.

Spending $19bn on anything will get you a lot of attention. Spending it on a service that most people don’t know that well- because its 450m users tend to be young and in emerging markets – invites some skepticism

But Facebook have the cash – they are giving away around 10% of their value to buy WhatsApp – and have a highly successful means of monetizing eyeballs, so getting a big chunk of extra eyeballs makes sense.

They also have ambitions to grow in emerging markets and this deal certainly helps there;

55 percent of those surveyed by Jana in India said they used WhatsApp the most among mobile apps; less than 1 percent said Facebook was their primary app. And it was a similar story in Brazil (63 percent favored WhatsApp versus 5.6 percent for Facebook) and Mexico (76 percent versus 5 percent).

And when Wall Street values FB at around $140 for each user, getting that extra chunk at just $35 per user make sense too.

But how is Facebook going to make the money that justifies this buy? Advertising is something that WhatsApp have never done and their ‘manifesto’ suggests they don’t want to. And blending ads with messages it less easy than mixing them into people newsfeeds.

Weve and others have shown you can monetise messaging, but WhatsApp don’t have much info on their users – but one imagines that Facebook will be using their customer audience technology to work out just how many people use both services. Linking a Facebook profile to a WhatsApp user instantly makes them more valuable –  if advertising is an option. ( You can use your Facebook profile on WhatsApp but it only uses the basic profile)

But maybe WhatsApp will become the FB lab for learning about the new business models – like stickers – that other Messaging apps are pioneering.

http://wattsjones.org.uk/post/61010619439/messagingappmonetisation

VC firm Sequoia talk of 4 numbers that explain the deal; 450m users, 32 employees, the $1 a year they charge users and the 0 marketing spend. Equally impressive is the return Sequoia are thought to make on the $60m they invested – $3.4bn

As well as being a billionaire, one of the funders will be feeling good about being bought by the firm that turned him down for a job back in 2009.

Wired have some good background on the firm and the team. And Ben Evans – now working with Facebook board member Marc Andreessen  – shares typically smart thinking.

GAFA

This deal supports our view that Google, Apple, Facebook and Amazon essentially control the tech world. They have the power and the cash to ensure future innovations get snapped up, rather than become a significant competitor. Google have done more deals than any one else over the past 3 years and whilst they have bought Waze, Nest and Robot companies, WPP – in second place – have spent a lot less buying agencies.

Twitter, Yahoo and Microsoft are all players but don’t shape the ecology like GAFA do

StartUps

Given a business with just 32 people can grow into a global leader in just 5 years and command a value of $19bn, perhaps we should retire the idea of a bubble? Marc Andreessen talked at this weeks Goldman Sachs conference about tech still being in a depression;

He argued that advances in mobile and chip-making technology signaled exponential expansion of the market. He said tech isn’t overhyped and could have “decades” of growth ahead of it. Echoing economist Carlota Perez’s research, he said world-changing technologies like the web usually settle into a more mature deployment phase after an initial period of hype and investor frenzy.

Thomas Friedman, the author of the hugely influential The World is Flat, is equally bullish on startups – suggesting they are the best hope for the US economy.

And here in London, Mobile Monday held an interesting event looking at startups finance and acceleration, which we wrote up here. Our view is that the big funding investments tend to overshadow the real innovation;

Our take is that too many people focus on the quick win of an accelerator place and funding. The reality is that these are lottery wins – great when they happen, but not something to rely on.

Smart entrepreneurs get their team right and build a business around solving a problem. Getting people to pay for your solution validates your idea and demonstrates you have the grit and persistence to make a success of your business. And that story could well open the doors to the accelerators and the funding.

Quick reads 

Really interesting look at Social & Content from @revilopark Helping Celebs to Embrace Fans in the Social Sphere

Interesting look at a UK business building a YouTube channels for brands and rights owners.

eBay have published  a fascinating report on omnichannel retail. Essential reading. 

Netflix & HBO in  “an arms race in programming.

Smart thinking on Cards from @avc Fred Wilson

Madison Avenue cool on Apple and Amazon ad opportunities

We are finding the Yahoo Aviate app a good way to manage our Android homescreen. Well worth trying.

Japanese ecommerce giant Rakuten have been busy; buying messaging app Vyber for $900m and opening a R&D centre in Paris – seeking the next big thing in ecommerce.

MIT have published a report on the 50 smartest companies. Well worth studying.

Finally….. the new Spike Jonze movie Her is about a man that falls in love with his Mobile OS – sort of Siri version 79. Who better to review it than the father of Artificial Intelligence Ray Kurzwell. He finds the whole construct quite feasible – except he sees it as more 2029 than 2025 as the film predicts.

As we started Fix with today, tech is changing things on a huge scale. And it’s not going to stop anytime soon.

 

 

GAFA earnings

Google, Apple Facebook and Amazon all report earnings this week so we’ll look at how they are faring. GAFA is one factor that drives so much of our work – with their huge reach they shape the market for everyone else; people and businesses.Apple reported first. Despite record sales for iPhones and iPads investors were disappointed by the guidance for the next quarter and shares dropped by around 8%The problem Apple have is that people expect them to keep inventing amazing new products. And because it’s been a while since the last one people are getting nervous. And Apples institutional secrecy doesn’t help.We suspect that Apple are poised to announce new products in payments, TV and wearables (or peripherals as we prefer to think of watches etc as you still need a smartphone close to get the most from them).Tim Cook dropped some hints;

“..the mobile payments area in general is one we’ve been intrigued with”

“We’re working on things you can’t see today.” 

“We have zero issue coming up with things that we want to do that we think we can disrupt in a major way……..The challenge is always to focus to the very few that deserve all of our energy.”

And there are some clues. On payments they have moved one of their key execs to focus on this space. And on their site Apple TV has moved from the iPod page to its own section and the same status as the iPhone and the iPad.

They are hiring talent from disparate industries and with $159bn in cash, almost 600 million credit card relationships and an army of devoted fans you would be foolish to write Apple off.

Facebook went next and amazed many. Revenues were up by 76% on the same quarter last year at $2.34bn – with mobile accounting for 53% – double then proportion of a year earlier.

Growth in daily and monthly active users occurred in all regions and mobile MAUs reached 945 million – mobile DAUs are 556m. It’s worth flicking through the deck that accompanied the announcement. Digging into this data we see that in every territory user growth continues and the proportion of MAUs that are DAU also grew – now at 62%. So the much publicised exodus of teenagers isn’t actually happening – although this group is more promiscuous in its use of other social apps.

So Facebook is clearly a mobile business now and after dropping hints about more mobile products they have announced Paper – a standalone mobile app that feels much more content focused. It’s clearly influenced by Flipboard – amongst others – and offers new ways of sharing content. It launches for IoS in the US next week – no news yet on when it comes it Europe or Android. Quite why they announced it before it’s available is unclear though.

The initial reaction is good and we should expect Facebook to continue to offer discreet apps that do certain of the multitude of things that Facebook offers – especially given the success of the Facebook Messenger app. This plays to the clear issues around navigation in mobile – a separate icon on the home screen is probably more efficient that searching within the app.

The initial version doesn’t appear to have any advertising, so seeing how they add that will be interesting. And it looks like video ads on mobile Facebook are imminent in the UK – a one off pop up offers you the option of restricting the silent autoplays to when you are on WiFi by adjusting your settings.

If you want more background on Facebook this interview with Zuck is worthwhile

Even before announcing their results Google have been busy this week. They paid $400m for London start up Deep Mind, underlining their commitment to Artificial Intelligence and Robotics. As they use their deep pockets to buy up business focusing on this area, one of their people said that Google employs;

less than 50 percent but certainly more than 5 percent” of the world’s leading experts on machine learning.

And that’s before the Deep Mind acquisition. They hadn’t released any product but were apparently working on a better recommendation engine for ecommerce, image search and games.

Google then surprised everyone with the sale of Motorola to Chinese tech firm Lenovo for $3bn – which means they paid just $4bn in total for all the patents that Motorola had. In their time Google have revitalised Motorola and the product line is now not bad. With the focus of Lenovo behind Moto, Google may have created an effective competitor for Samsung and rebalanced the Android ecology.

When the results did come out the Motorola sale made sense – the losses for Motorola had continued losing $384m in Q4. Otherwise the figures were good, beating estimates in everything but earnings per share

The surge in the number of clicks bought – largely driven by mobile – compensated for the fall in the cost per click – largely driven by mobile. This suggests that the best way for Google to boost its performance in the next year is to demonstrate the efficacy of mobile clicks – so brands are willing to pay more. We already see initiatives to improve mobile destinations and should expect an increased effort.

Everything Google does is designed to gather data – search, maps, Android, Nest etc – and no one is better at monetizing data than Google through their ad products. This interview with Susan Wojcicki shows the level of Googles ambition for extending their success into brand advertising. A must read.

Amazon seem poised to move into payments too. Their customer base isn’t as large as Apple, but with 230 million credit card relationships they can have a big influence. And of course the data they get on what people buy offline helps make their online sales smarter. The Kindle is central to the idea and would work as a checkout system. Amazon have already extended their reach online with a pay with Amazon option.

Results were very Amazon – they missed the estimates as they do quite often. But sales were up by 20% so their power continues to grow.

Read the rest of this weeks Mobile Fix;

http://www.addictivemobile.com/blog/2014/01/31/newtv-sky-epg-update.html

http://www.addictivemobile.com/blog/2014/01/31/messaging-apps-innovate.html

http://www.addictivemobile.com/blog/2014/01/31/mobile-fix-quick-reads-jan-31.html ‎

 

Facebook Content – what gets shared and why

As the organic reach of content diminishes – everyone is looking for ways to maximise the sharing they get. Facebook have announced that text only updates from brands will have reduced distribution – but most smart brands already know a picture is pretty essential.

But when you dig into what does get shared on Facebook its gets interesting.

Those publishers who get Facebook tend to do much better than traditional news sources. And they do it with a much smaller number of posts; Huffington Post has nearly 17000 posts to get into second place. Buzzfeed beat them with just under 3000 posts. But Upworthy came in third with just 220 posts.

A fascinating NewYorker article looks at what drives these viral breakouts -

…two features predictably determined an article’s success: how positive its message was and how much it excited its reader.

There is more to it than this, but the obvious problem is that as more people us the formula it gets less effective. But is has worked incredibly well for ViralNova – just 8 months old and in 7th place – from just 105 posts. This one man band claims to be very profitable – as he looks to sell the business 

If you want to dig deeper the Facebook data team have looked at how memes evolve on Facebook and see parallels with genes; well worth a read. And our friends at Unruly have some smart thinking and useful tools around sharing nd spreading.

But you can be too clever. Two Princeton PHds have used the maths of infectious diseases to predict the death of Facebook by 2017. Using the rise and fall of MySpace and the decreased searches for Facebook in Google trends they foresee a rapid drop in usage. Of course it could be that having a Facebook button to press on ones phone means you need to use search a little less often?

Mobile Fix – January 17

In our piece on CES last week we talked about the Internet of Things (IoT) as a big theme – but were a little scathing about connected fridges, connected toothbrushes and connected coffee cups.

Google then paid $3.2 billion in cash for a connected thermometer company, so what do we know?

But with the Nest acquisition Google get so much more than a business that has sold maybe just over a million devices;

They are getting some phenomenal talent. One of the founders designed the iPod and has been able to lure many people from Apple to Nest. Whilst Google have got a lot better at design and UX recently, this injection of talent should have a big effect.

They now have a successful foothold in the connected home  – which means they can revive some of the thinking behind the Android@Home debacle. Abandoned before launch a couple of years back, the idea of using Android as the infrastructure behind the connected home still makes lots of sense. A connected Fridge makes a lot more sense if Tesco or Ocado can use a common infrastructure – like Android – to connect. And a wide range of OEMs already use Android in consumer technology 

The other thing Google get from this deal is data. They will know when people are in their houses and which rooms they are in. They will know when people are cold and when they are too hot. And expanding the Nest range gives them lots of other data points in the future; maybe even knowing what that connected fridge is running short of.

Google feeds off data like this to make its ad products better. Having this simple business model gives Google a clear advantage over the other IoT players. Cisco want to be the glue, but they need to sell the hardware and software to make money. Wolfram have a play in connected devices but again it is unclear how they would make money.

Sorry for harping on about our futurology project yet again, but in there we talked about Tesco sponsoring the connected fridge so they handled the restocking of the groceries. Could Google afford to subsidise connected home appliances because of the data and the marketing opportunity it gives them? Amazon does that with the Kindle. And Google does it a little in their WiFi and Fiber projects.

Given Google have around $50billion in their cash reserves and their stock is at an all time high – and has just about doubled from June 2012 – this isn’t that big a buy for them. But we think it’s really significant and worth watching. 

One thing we are pretty sure about; Nest won’t stay on sale in the Apple store.

Mobile & Money

Whilst O2 shelved their plans for a mobile wallet, there is still huge momentum in the space. Weve are pushing ahead with their plans and recognise that initiating the transaction through an offer makes more sense than just launching a wallet app. They are also looking to use loyalty cards as a core component, which makes sense. Paypal continues to innovate but a new player has grabbed the headlines this week.

Zapp is backed by a number of leading banks in the UK and promises to spend millions building its brand. There isn’t a lot of detail about yet, but digging around we see a slightly convoluted user experience; you find something you want to buy using your smartphone browser and hit the pay by Zapp button. Your bank app is opened and you sign in, then you see the Zapp transaction. You choose which account you want to pay from, confirm with a click and you are taken back to the retail site to see a receipt for the payment. The goods have to be sent to the address your bank has in record.

For launch Zapp will just work with online purchasing –with instore promised later.

We’re not convinced this is the next big thing. Is this really that much easier than paying by debit card – or Paypal? Anyone wanting to use a credit card can’t use this option. Anyone wanting the parcel delivered to work can’t use this option. And the task of persuading retailers to add this option isn’t going to be easy – we suspect the millions on marketing are designed to get retailers signed up. Maybe then people will follow – but there will be more compelling options available.

In this good look at how eBay is fighting Amazon for the future of retail, the PayPal mobile payments app sounds impressive – lots of personalization and a blend of offline and online whilst in store. And Square is now valued at $5billion. The bar is being set very high in this space.

And some think banks haven’t got their act fully together on mobile and security yet, which could hold the whole sector back. This report suggests 90% of mobile banking apps have security issues.

Creative & Social

Talk with anyone about Facebook and the subject of too many ads comes up. We suspect the problem is less about quantity and more about quality.

With all that targeting capability brands can target people really precisely. But without creative that is tailored to that group, the potential of additional targeting is diminished.

Facebook are retiring Sponsored Stories and extending the social actions to all formats. With the erosion in organic reach for posted content, the logic for creating better brand messaging is obvious; good free posts will go further through sharing and good paid for content is more likely to work – justifying the media spend. When we spoke at Facebook in the summer this was a hot topic and continues to be so.

But for agencies this remains a problem – industrializing the creation and production of content at scale needs lots of people and lots of time. So the cost is high. But given great creative can have a huge effect on performance this effort can be the best way to make your ad budget go farther.

Google have shared some good examples of work that goes the extra mile and how it has spayed off for Burberry, VW and others.

newTV

Sky Adsmart is finally here, with a good selection of brands using the opportunity to targeting their TV spend based on geography and household profile. It will be interesting to see how these brands get on.

Addressable TV is a big focus for Google and this report looks at their strategy and their options. It’s clear that sport would be a good place to start and watching BT take on Sky shows how to do this.

But rather than going for the big expensive deals could Google find a smarter cheaper way in? The NBA game at the O2 last night sold out quickly and its clear that basketball has a big following in the UK yet it gets little or no TV coverage. Sky showed some playoff games last season and BT shows some games now. But could YouTube make a deal with the NBA to show their games in countries where they don’t have a TV deal? And could they do a similar deal to show Premier League soccer in the US.

Dreamworks have partnered with YouTube to produce YouTubeNation, a show that curates the best YouTube content and provides playlists. Is there an opportunity to do the same thing with a more local flavour here in Europe?

Quick Reads 

Samsung are rumoured to be investing in Deezer

This is the Yahoo memo announcing their key ad person is out. Given he may walk away with over $40m after little more than a year he probably isn’t that upset 

Brands can now target on Twitter using customer email addresses. Facebook offer something similar meaning brands need to rethink their CRM strategy.

A media Agency friend pointed out that a key reason for schlepping to Las Vegas for CES is the chance to discuss media deals with the big digital players – often without ever making it the show.

Net Neutrality is an issue in the US after a legal ruling – suggesting Comcast, Verizo etc can start to choose which content has priority. VC Fred Wilson articulates the issues here. It is less of an issue in Europe where we have much more competition but we will feel the effects.

Apple told to compensate parents whose kids fell for the in app purchasing scams where kids buy $65 bundles of smurfberries etc. Wonder if that applies here as we are £35 down. Surprised that Apple risks it reputation by letting these practices fester for so long.

A great example of using data – how Google reads the house numbers in Street View 

China has half a billion mobile web users

Finally a Gartner survey says less than 1% of apps will be considered a financial success. The survey doesn’t look at brand apps but given other research showing most are rarely downloaded, there has been a lot of money wasted. Not many brands need an app, but they all need a Mobile Strategy. That’s where we can help.

 

 

Retail Evolution

Deloitte research says that mobile influences $18bn of UK retail sales this year – and that is forecast to grow to $41bn by 2017. But we suspect most UK retailers are like their counterparts in the US, where research suggests they are struggling with mobile and social;

“Retailers know they must embrace multiple channels to stay competitive this holiday season,” says Natalie Kotlyar, partner in the Retail and Consumer Products practice at BDO . “But the truth is, many brands are playing catch up with the digital movement. Consumers have come to expect social engagement; mobile is now the challenging frontier for many brands seeking to test the waters more before making a major investment during such a critical season.”

We think this may change quickly as Apple lead by example with beacons in all their stores. They have been demonstrating the technology, but the use cases don’t sound that exciting;

Using the iBeacon feature, the app will notify you if the computer you ordered is ready for pickup, for example. Show a clerk your screen with the order number, and the clerk will get it for you. Walking by an iPhone table? You may get a message asking if you want to upgrade, check your upgrade availability and see if you can get money for trading in your old phone.

The Shopkick trlal with Macy’s is probably a better example

As one article points out;

It’s easy to be down on this technology—location-based push advertising sounds like both a privacy disaster and a threat to our peace and quiet.

But, like any other technology, good ideas can help gain user acceptance. Our favourite example so far is a UK firm with an interesting new business model. As the people behind the mobile versions of a number of magazines they are now offering cafes and bars the opportunity to subscribe, so their customers can read the magazines for free whilst on the premises. This is a useful service for both the venue and the customer – and creates a new revenue stream for the magazine publisher.

Foursquare are leveraging their data to focus more on allowing retailers to use the location of uses to make offers too.

Knowing where somewhere is –inside or nearby your store – has real value. But that value in only unlocked when the idea is right and the message adds value for the user.

Mobile Fix – November 22 – the future is already here

The future is already here The Google chief business officer Nikesh Arora has pointed out something we believe in too.

The disruption has happened. The future is here. Now we need to invent what comes next. And it will take the collective imagination and creative energy of all of us to redefine the role of our industry, to rethink the way billions of people interact with the Web and, in turn, with the changing world around them.

Like William Gibson we think;

The future is already here – it’s just not very evenly distributed. 

We don’t believe there is a lot of big new stuff coming down the line. Mobile will keep getting bigger. Social will keep getting deeper into our lives. And whilst we will see more hardware innovation, the cleverness will remain in the smartphone; aided by cheap connectivity like Chromecast.

So for business this means we need to make the most of what we have, and do it in a way that allows us to iterate and adapt as things evolve. But for all those people waiting for things to slow down before they get involved, the overall pace of change isn’t going to slow.

As Marc Andreessen says Software is eating the world and whatever business you are in, no matter how much digital and tech has disrupted your sector, you ain’t seen nothing yet.

Looking at Marketing, Andreessen points out there is lots to do, saying;

I know two things for sure. One: I know for sure that most offline marketing spending is going to move online in the next five to 10 years. The reason I know that for sure is because most consumer attention is moving online, just look at how people are spending their time. Offline media consumption generally is dropping, certainly on a relative basis, and increasingly on an absolute basis. And so if the majority of people’s time and attention is going to be online, then you’re going to want to reach them online.

Two: The other thing I know is that marketing spending hasn’t moved over yet, and it’s primarily my industry’s fault. The consumer Internet industry, really the consumer Internet media industry, has done a terrible job over the last 20 years at giving brands the marketing solutions that they need. Solutions that provide the level of trust—the provable metrics, audience segmentation, and targeting—and the assurance that if something goes wrong it’ll be made good: all the things that traditional advertising companies have been very good at providing.

Of course the tools we do have – even the humble banner – do provide really useful tools and metrics but adtech has a way to go.  The CEO of AOL also argues that advertising is about to transform – suggesting the automation of media through programmatic or exchange buying will free up more time for creativity. We would like to agree but the talent isn’t necessarily sitting in the right places, right now for this welcome transition to happen.

Bubble?

In the excellent Everything Store book on Amazon, we learn Jeff Bezos was looking for investment in 1995 and he forecast sales in 2000 of $74m – and if things went really well they could get as high as $114m.

Amazon sales in 2000 were actually $1.64bn. So getting forecast right isn’t that easy. Even if you are as smart as Jeff Bezos.

Henry Blodgett takes a calm look at Snapchat and shows why a $3bn valuation is actually quite reasonable – if they can get traction with advertisers. And we think it has as good a chance as Instagram etc.

…based on the valuations of other “web scale” social platforms — Twitter ($22 billion), Facebook ($115 billion), and LinkedIn ($26 billion) — $3 billion just doesn’t seem that outrageous.

New data this week supports this – Snapchat users share 400m photos a day – more than Facebook.

The skepticism over Snapchat is a function of what we call Blackberry Myopia.

When we meet someone who is not that enthusiastic about mobile, social and content, we always ask what phone they use. So, so often we get told they use a Blackberry. And if you still use one of those it’s like it must have been watching TV in black & white when colour TV arrived.

If you don’t experience smartphones, Twitter and YouTube etc you just don’t get it. And you are not really qualified to advise your clients or colleagues.

Snapchat, WhatsApp and Line all suffer from this. Some brands are playing with Snapchat – probably for the PR buzz more than anything else – but we expect youth focused brands to experiment more.

Reinventing retail

Few sectors are feeling the effects of disruption more than retail. As the majority of shoppers now have smartphones and more and more realize the potential to improve shopping, showrooming becomes the norm. The word even made the shortlist for the OED Word of the Year, but lost out to Selfie.

The next big change is retailers using beacons to improve the shopping experience and the first people to do so is – unsurprisingly  – Apple. 

With some of the most profitable retail space in the world – and one of the worlds smartest retailers at the helm – everyone will be watching to see how Apple use their own technology.

One of the most successful US retail apps ShopKick is also trialing beacons and there seems to be some competition to get going before Apple. The ShopKick model relied on an audio signal from a box installed in each store and clearly they see beacons as an improvement. And they will have it working on Android too.

The ShopKick model is pretty sophisticated – rewarding users with offers as they enter a store. The system looks at previous stores visited and offers redeemed to determine what is the best offer for that store to make.

This is both the opportunity and the problem with retail and mobile. It’s easy to give away margin, but the art is knowing what is the best offer to make to motivate a sale and maximise the profit. Just like the early days of Foursquare when stores used to give the mayor a free coffee etc. The smart thing may be to give a buy one get one free so they bring a friend. Sales Promotion has never been that cool but it is now the sexiest market discipline and we should all be reading old school experts like Stan Rapp and Don Schultz

New techniques like smart shopping screens are getting more traction too, with eBay putting them in more and more places. And a new Nielsen study looks at what attributes drive loyalty in different markets.

Retail is going to keep evolving.  Those who are testing and learning how mobile, social and tech affect them, have got a chance to evolve too.

TV & Twitter

This vjdeo of Twitters Chief Media Scientist (watch that job title get copied) talking about the synergy between TV and Twitter is worth half an hour of your time.

If you only have a minute this article covers some of the points

Quick ReadsThe guys at Percolate have a really good take on content marketing and this deck on The State of Content Marketing is well worth reading

This article looking at Amazon and Alibaba picks up some of the points we made last week and looks at the prospects for Amazon in India and other markets.

Mondelez are taking mobile more seriously than most and this article looks at how they are working with startups.

Our favourite data guru has shared his views on how to prioritise digital marketing initiatives. The Digital Awesome Staircase from Avinash Kaushik suggests getting a acceptable website as the first step and a great mobile experience as the second.

One of the original big thinkers on Digital was Nicholas Negroponte and he is still active at the MIT Media Lab. This interview is really interesting – especially his focus on education. And he agrees the next big changes are not in computing but in genomics and biology.

Finally….  If you are reading this on our weekly email you already know how powerful email is.  The ability to read email on mobiles  – in those stolen moments waiting in a line etc – can be an intrusion but it has led to a revival in smart email marketing. New McKinsey data shows how effective it can be – if done properly.

And the email address is the one thing that connects your consumers profile on Facebook, Twitter, Amazon etc so we think it has great potential for cross platform measurement.

Mobile Fix – October 18

Devices

As we approach Christmas we are seeing more device launches. Next week Apple have invited journalists to an event on Tuesday promising We still have a lot to cover. This is almost certainly the new iPads – with more powerful chips and retina screens likely to be the main new features.

With upgraded Kindles and the new Nexus 7 already announced (as well as the Tesco Hudl and the Argos MyTablet) Apple need new products for the peak selling season. Also arriving in time for Christmas is the upgraded Nike Fuelband.

And the rumours of an Amazon phone have surfaced again with the FT claiming they are working with HTC on a smartphone. This makes lots of sense for both Amazon and HTC; Amazon extend their kindle success into the phone sector and reap the benefits of more content sales and usage on their devices. And HTC get a partner likely to drive some volume – which the Facebook collaboration failed to deliver.

The issue that is still unclear is how they get a price advantage given the operators subside smartphone sales in the US. However given the Amazon track record in eschewing profits in favour of volume and the promise of more sales, we should expect aggressive pricing. But it’s likely to be 2014 before we see a launch.

Apple retail

The big news of the week was Apple luring the CEO of Burberry to join them to run their retail operations. Given that Angela Ahrendts earned around £18m at Burberry last year this is a significant hire. And it seems to make more sense than the previous incumbent who came from Dixons and lasted less than a year. As well as being a brilliant retailer Burberry have spent around 60% of their budget on digital and have been strong partners for Apple, as well as Instagram Vine and all the usual suspects

So she clearly gets digital and retail. But we wonder if there isn’t more to this.

We have argued before that Apple is the BMW of mobile; could it be that they are a luxury goods brand? This good FT piece looks at the move and points out that HSBC make the argument the real competitor to Louis Vuitton is Apple. And of course Apple hired the ex CEO of Yves Saint Laurent a while back.

And as people start to get the scale of opportunity of beacons the Passbook concept starts to make much more sense. Could the retail role also encompass making Apple Passbook the defacto shopping assistant for luxury brands and their customers? We spent a lot of time talking with Gucci a couple of years ago and it was clear that luxury retailers need a way of identifying their most valuable customers as they walk into their stores – so they can deliver the best service to their best customers.

The overriding motive for the Apple vertical stack is to keep people buying the latest iPhone and iPad – because that’s where Apple make their money – so baking in services that are hard to give up act as a barrier to switching to Samsung etc.  Passbook has the potential to be that must have, but only if the right brands are participating.

Phones are a now a hits business and Apple have turned their products into fashion items too – the colours of the 5C owe a lot to the way the Japanese market their phones – with collaborations with designers quite common. Of course fashions come and go, so a key role for this creative talent is to keep the iPhone franchise on track. This look at the way blockbusters drive movies is relevant reading as we see the same trends in mobile.

Adtech

The news that Google has changed their T&Cs so they can use your name and picture in Google products (Reviews, ads etc) just like Facebook do – has prompted more focus on privacy. Its actually really easy to opt out – but how many people will bother with that.

When you to talk to civilians about Facebook Sponsored Stories – and the friends names you see on them saying they like the brand – you find people don’t mind them. Until they realize their friends are seeing their name ‘endorsing’ brands. Few people think this technique influences their views – although the thinking around Social Proof suggests it probably does.

We think the real advantage of friend’s names being included in an ad is perceptive filtering; we know the brain is good at ignoring stuff it thinks is irrelevant but when a friends name is there the cocktail party effect kicks in and we notice the ad. Which should make it more effective and hence more lucrative for Google.

But the big picture is about who owns your data – you or the platform you are using. Google make it relatively easy to influence the ads you see – which is a way to take some ownership of your data. And this works well for both parties – people (hopefully) see less irrelevant ads and Google have a better idea of what advertising you are interested in – which should make it more effective and hence more lucrative for Google.

We expect other platforms to do more in this area – not least to try and thwart people like AdBlocker who claim 200 million downloads and helpfully suggested that Twitter should sign up for their acceptable ad guidelines. And a TechCrunch writer suggests that people should participate in tools like the Google one as they can help make advertising better - which we sort of agree with but people still need better tools. This is likely to be the next big thing in AdTech.

But adtech continues to get a bad press. An Adweek expose details just how much ‘questionable’ online advertising there is – suggesting that as many as a quarter of online ads are never seen by a real person.

Some of then fault here is with the media agencies who are buying blind in many cases. This sometime causes a  little embarrassment; the same day the Sun ran a  headline condemning the AskFM site over bullying, their ads were seen on the site – it turns out their agency was buying blind through a network.

So some of the large brands have decided to look at going direct and lots of the adtech firms have jumped at the chance to deal direct. One of the smarter thinkers on the agency side has pointed out that it’s actually not that easy to do media even when the computer is doing lots of the work.

New tools continue to emerge, and that Lumascape chart isn’t going to simplify anytime soon – so brands need smart advice on how to get the best out of both the media and the creative. But will they get the best advice from the existing agency networks?

Quick Reads

We continue to enthuse about Google Now in all our consultancy work, as it’s a glimpse of the future of mobile – context driven information and services. This is some good thinking about what an advantage this is for Google and looks at how they could evolve the business model.

We talked about the changes in news and this memo from the FT editor to his staff about reshaping their business is another step in the evolution.

Still more new players and products in mobile money. Simple is very interesting as is Square Cash, the new payment product from Square. Just send someone an email with an amount of money in the subject line, copying in Square – and they make the transfer. A few security issues but these companies are changing how people see money – and traditional financial services firms need to respond.

The competition between Twitter and Facebook seems to be intensifying and this article looks at how Twitter seems to be getting their platform right and matching Facebook product for product. Their issue is that they are so much smaller than Facebook.

Amazon is getting closer and closer to big brands – here they are putting their own people in P&G depots so they can better sell their products.

This is a good look at the culture in Amazon and goes into how Jeff Bezos runs the business. An amazing character.

Facebook have bought a leading player in mobile analytics.

Finally ….the pace of change in tech, media and marketing continues. When we originally planned Fix we thought we would do it weekly to start with and then, when things calmed down, we would go monthly.

Doesn’t look like that’s going to happen anytime soon.

This article peers into the future of media and is a good round up of likely change – but we still think our Futurology video (that we did some 10 years ago) is a pretty good take on where we are now, even if a little cheesy.

If you would like us to peer into the future for their business, get in touch.

But next week we are focusing on Cornish beaches and waves, so no Fix next Friday – back on November 1.

Mobile Fix – September 27 – Content, Retail, Twitter & Mobile Money

Content- the 3rd pillar of Modern Marketing

Just as mobile and social are essentially inseparable in modern marketing, content is increasingly key, too. And as it gets adopted by brands (Adage say it was 12% of US marketers budget last year) their myriad of agency partners all jump up claiming they are the natural home for content.

“It’s a new space, and it’s clear that everyone is trying to get a piece of it,” said Shane Snow, chief creative officer at Contently, a technology company that offers publishing tools for brands, as well as a database of vetted journalists. “Everyone is coming up with a reason why their business model makes sense and why they’re the most appropriate way for a brand to tell their story.”

Many of the players make their case in this article and there is a focus on my old colleagues at GroupM, who have been doing this longer than most.

But whilst video is the usual output of a content strategy this piece points out that digging deeper can be beneficial

I can also imagine the head of content at P&G looking through the company’s patents and finding the original formula for Tide and then somehow turning it into a science experiment/contest in high school classes across America. That would certainly enhance Tide’s reputation as innovative and customer focused.

But too often content projects never reach significant scale and hence ROI can be an issue. Having a distribution strategy for the content is now key – and that may shape the market in the future.

But when you look to blend distribution skills with content creation you can run into issues. The success of GroupM is causing some concern in the UK with Richard Desmond voicing his worry that GroupM is too powerful – backed up by some of the independent producers who actually make the content. Sorrell has been quick to say that different parts of the WPP empire don’t exploit their position to get deals done.

The key issue in the whole debate is awho is investing the money and taking the risk – and who gets the reward.  In some cases it is brands who are funding the content and taking the risk, in others it is the agencies (like GroupM) who are spending their own money to develop IP they can then offer to clients.

This is the approach we are increasingly taking and it makes more sense that exclusively developing content, services and ideas for clients in return for time and team based fees. You just have to be really clear about what you are doing.

Sorrell gets to the heart of this debate with an article on LinkedIn pointing out how creativity is different in modern marketing -

“What we sell are pearls. Whether we are designers or planners or writers or art directors or corporate strategists, our raw material is knowledge. We turn that knowledge into ideas, insights, and objects that have a material, quantifiable value to our clients.

“They are all pearls: of wisdom, of beauty, of desire, of wonder. Only the human mind can perform this extraordinary alchemy. And only certain kinds of mind, at that.

“But here we must be very careful. We have come to believe that only very few are alchemists – and I think that’s wrong and dangerous.”

He doesn’t get into how you get rewarded for these pearls, but when a time and team fee structure pays pretty much the same for pigs ears as it does for pearls it’s no surprise people are looking for other models.

And we think brands are open to new thinking, as they get evidence that content and social can work at scale. Cadbury claim their blend of Facebook and TV was hugely effective for Cream Eggs last year  - but the way they got there was different;

We launched the trial to find a new approach to our media mix that was going to reach 18 to 24 year-olds. We used a Facebook process called the Publishing Garage where we got all our agencies together to establish our content pillars.

As brands adopt modern marketing – with mobile, social and content at the core – we are convinced they will embrace new types of partnerships and new models of investment. Our ambition is to share in the success of our work – and to be paid for being clever. Or not.

Retail  – Mobile and Real world 

No industry or sector is feeling the effects of tech more than retail. As consumers use tech as tools to make their lives easier, the idea of showrooming just makes sense. And with the ability to check reviews, pricing and delivery options in the pockets of most shoppers the gap between online and offline is shrinking.

These are great examples of some of the ways retailers are using mobile; we have been talking about the Neiman Marcus for the last year. Their insight – that if a customers talks with a staff member regularly they are much more likely to buy – means customers can see if Brandon Studebaker is working today and make contact.

Closing the delivery gap is the next major change and the news that eBay have partnered with Argos to offer a high street collect service is no surprise. Here the insight is that 3 out of 10 people (House of Fraser stats we think) collecting an item will buy something else when in the store. So the additional store traffic is really valuable to Argos. We expect the next step to be around returns – the part of ecommerce that separates the men from the boys. ASOS and Amazon have a really efficient high street return service using the 25000 Paypoint stores around the UK.

How long before a big name high street agrees to this sort of service? Which store on Oxford Street would turn down the chance to have dozens of people a day come into their store to return their parcels?

The Amazon high street play is around lockers – but they are running into some issues in the US with retailers like Staples and RadioShack pulling out of the programme. The model works for some retailers and not for others.

If one dimension is convenience of delivery, the other is speed of delivery and Amazon are very focused here. In the UK they have announced 3 more distribution centres and in the US they are moving really fast too, with 50 new centres opened since 2010. The opportunity is huge;

If Amazon can place fulfillment centers nearer to the top 20 U.S. metropolitan areas, the company could reach 50 percent of the U.S. population with same-day delivery, compared with 15 percent now, according to supply chain consultants MWPVL International. That would require only opening another 12 warehouses beyond those built and announced, the firm said.

Talking about this topic (and Googles ambitions in same day delivery) back in March we mentioned Kozmo as the dotcom boom pioneer that proved same delivery is a tough business to make money in and we speculated that their idea might now work. We’ll soon know as they have announced a comeback.

A lot of brands reading this may think it’s not anything that concerns them. But new research from one of the smarter US banks suggest that this trend has implications for FMCG brands. Already Amazon sell a lot of FMCG product – often placed with Amazon by third parties or wholesalers rather than the brand owner – and this will definitely grow as they ramp up grocery home deliveries. Even now their subscribe and save service is affecting the market – the best seller in toilet tissue is a 45 roll pack of Andrex.

If you are a prime customer it makes perfect sense and we get all the dull stuff for the office this way. The US research points out that the best selling brands on Amazon can be very different to those in supermarkets.

Are your brands sold on Amazon? By you? And how are you supporting this sales channel?

An increasing amount of our work is helping brands understand GAFA, Vertical Stacks and what tech could mean for their business. There is so much opportunity across Google, Facebook, Apple and Amazon for nearly every business – but often their only real connection with GAFA is that their media agency make some media buys.

If a GAFA audit of your business sounds interesting, let us know. And if you want some assistance around the retail landscape – especially with the huge opportunity for beacons – we are well positioned to help.

If you want to see what modern marketing means for a retailer you could do worse than look at B&Q  – lots of smart thinking going on.

Tesco vertical stack

The ecommerce battle is clearly all about eBay and Amazon, but Walmart are also looking at how they better mix offline with online. And here in the UK, Tesco continue to build their own vertical stack – now with Hudl - their own tablet.

Along with their push into entertainment with BlinkBox and Tesco TV, they are a brand that takes tech really seriously – we often use them as a retail case study.

But they retain their customer focus;

Today is more than just a product launch. It’s about having a single and direct relationship with customers, where everything they need from us is in one place and so more convenient for them. We’ve designed Hudl specifically for our customers because we care about the experience they have when they’re shopping with us. No other tablets on the market have been built with Tesco customers in mind.

The fact they are a major retailer of tablets means the Hudl launch will have a significant impact on Kindle and iPad sales, but we should expect improved product from the competition before the Christmas peak season.

Interestingly the new Kindle Fires was announced with a press release made up of 14 tweets. When will the new iPad arrive?

Mobile Money

Money is another industry that is getting an early look at how tech reshapes whole sectors. From MPesa to mobile wallets, the finance world is seeing rapid change as consumers gravitate  to new solutions that make their life easier.

Just as in retail, GAFA are shaping things, but again eBay are also right in there. Their subsidiary PayPal have struck a major deal this week, buying payments gateway Braintree for $800m in cash.

We mentioned Braintree back in June, when their CEO was looking at why Google wallet was struggling and their business was growing strongly – managing payments for business like AirBnB, Uber, Fab and Living Social.

The Paypal CEO gives a good explanation of the deal here and there is a logical speculation that another key reason was the ease with which developers can use Braintree

Another interesting reason is that a huge majority of the tech companies that work with Braintree also are closely integrated with Facebook. So as Facebook starts to do autofill on mobile Paypal is now in an even better position to dominate this area. We think Facebook will become a major player in mobile commerce and this deal positions Paypal well to be the payment method of choice for f-commerce

Google Wallet is still around and launching new features  - including now letting you send money by email – on both android and iOS, as they have dropped the NFC requirement. There are some issues with the devices it works on – for example we can’t used a Nexus4 as it doesn’t have a US sim card.

The next big thing is money is probably Clinkle – which has raised a lot of money – from a lot of very smart people  – for a payments system that can link mobile with the current card reading technology in retailers.

Rolling out in US colleges – which worked pretty well for Facebook – it’s not clear what the technology secret sauce is, but Richard Branson is the latest to invest

Twitter & TV

As Twitter prepare for their IPO we are seeing real momentum around product innovations and new partnerships.

The one problem Twitter has is the sheer volume and the feeling that if you don’t check your timeline you may miss something. Creating a compulsion to keep coming back isn’t that bad a problem to have, but with @MagicRecs their new smart alerts service they will reduce this problem – and create another great property for advertisers

For example, a user who tweets a lot about Apple or follows a lot of tech bloggers could have received an instant notification when investor Carl Icahn first tweeted about his stake in the iPhone maker, or when chief executive Tim Cook created a Twitter account.

More from Twitter on this here.

They are pushing hard to build even stronger links with the TV industry and the main focus is Amplify. This is where Twitter posts short videos of a TV programme or sports event to people who have tweeted about that programme or play. These happen almost instantly and feature an advertiser as sponsor. The ad revenue is split between the network and Twitter. Brands like this type of approach as it combines scale with engagement

They have made a big splash in New York Advertising Week by announcing a partnership with the NFL – which is similar to the NBA deal you can see demoed here

A great brand proponent of Twitter is Mondelez (the people behind the Crème Egg campaign we mentioned earlier) and this video shows Bonin Bough talking eloquently about their approach and how Twitter is changing the advertising industry.

Book(s) of the WeekThis week there are three of them  – chosen by the world’s most successful book seller Jeff Bezos. Seemingly he insists his top executives read each of these;

The Innovator’s Solution by Clayton Christensen

The Goal by Eliyahu Goldratt

Quick reads25 of the smartest things Jeff Bezos has ever said
Cards continue to grow in influence. Google are now using them in Gmail on android. This is some more good thinking on cards.The FT call the new Chipotle video a masterclass in digital.A good interview with Tim Cook after a great first week of sales for the new iPhones.

New research looks at how well Facebook ads do on mobile and desktop

The IAB says US mobile spend is going to increase by 142% by the end of this year and one in five brands plans to increase their mobile budget by more than 50%

Modern marketing is taking off. Are you ready?