Category Archives: Trends

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 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

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 ‎

 

new TV – Netflix & Amazon

We spoke at the Mediatel event on CES this week. Some of the debate focused more on the TV element of the show – which is huge – and there was a view that even in TV software is becoming more important than the hardware.

Results from Netflix remind us just how much things have changed in TV. Netflix have 33m customers in then US and accounts for around a third of all broadband traffic in peak times.  They have over 9 million customers outside the US. Revenue is $1.2bn and profits soared by 24% to $48m for the quarter.

Coupled with their success in content, many think Netflix will prompt Amazon to expand their TV business with rumours of an online Pay TV service – with other networks content licensed for inclusion. With huge numbers of Kindles out there this sort of move would be logical for Amazon – who are already producing exclusive content for their Prime customers. And they have been rumoured to be looking at an Amazon set-top box too.

One key difference is likely to be around advertising. Netflix say they are not considering advertising but we should expect Amazon to use all that purchase data to sell and track advertising for products they sell.

Of course TV isn’t an easy business, as Intel found; the TV business they had such big plans for has now been sold for to Verizon.

And it these big triple play companies like Verizon and Comcast who have driven the net neutrality debate – with them now winning the right to decide what content gets priority. This is a clear threat to Netflix, Facebook, Google et al as they don’t want to pay a tax to these gatekeepers. Netflix talked about the issue and say they will envcourag etheir member sto complain if / when it becomes an issue.

The point was made at the CES event that in the UK the big triple play companies like Sky, Virgin and BT have a TV focus and could shape the future of the web here. Given the proliferation of competition we’re not sure we agree, but we should watch for people looking to copy Verizons moves over here.

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 – 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 – July 5

NewTV

Yet more moves in the gradual blending of old TV and newTV. For ages rumors and speculation of Apples move into TV have been swirling around. Whilst some people expect Apple to develop a range of TV sets, we don’t. The economics aren’t that attractive and the replacement cycle is pretty slow.

We think the set-top box and the software is the sweetspot for Apple and it seems they are about to do a deal with Time Warner Cable to stream all their content through the Apple TV box. The 12 million people with the Apple TV would still need to be Time Warner subscribers but this sort of arrangement helps move Apple TV up the list of options –on the way to becoming a gateway.

One company already committed to the TV market is Samsung and they too are making waves – this week they bought Boxee to help them improve their connected TVs. Boxee started as a software business focused on streaming video then launched their own hardware – a settop box.

With bidding for Hulu coming to a head we may have a better view on the likely shape of this market in the next few weeks.

Retail   

One of the players with most potential to disrupt TV is Tesco and the interview with their CMO that we featured last week sparked a few interesting conversations this week.

McKinsey have a very good interview with the CEO of retail giant Ahold – who are big in Europe and across the US. This interview has a biog focus on multichannel and its fascinating to hear how they see online as complimentary to supermarkets. And their ideas around remote pick up points are really interesting. Of course, they are very focused on mobile.

Still on mobile this is a good look at how Amazon have put the band back together from dotcom boom and bust Webvan. The Webvan experience of building the first online grocery delivery business (spending $800m before closing down) is proving very useful as Amazon expand their grocery business. Lots of learning for the UK players here.

Old tech players still contenders

We have been pushing the GAFA theory for a while now  – how nearly all tech innovation either starts ( or ends up ) within Google, Apple, Facebook and Amazon. Of course there are exceptions; Twitter has resisted temptation and Yahoo are buying people like Tumblr.

But the old guys are still pretty influential. Microsoft have now got 100k apps developed for Windows phones and they continue to support Bing. One area where Bing is having some success in battling Google is social – where both Twiter and Facebook have partnerships with Bing

And this is a good look at all the things IBM are up to and how that could give them a strong position in mobile. The transformation of IBM is remarkable – back in our Modem days they were a client, partner and a competitor – and they have divested their hardware business and become a major player in consulting.

Old tech still contender

We should also recognise that old tech still has a bit of life. Fix is a great example; back when we were doing mobile, social and content at Big Picture in 2005/6 ( not a very lucrative business model then) we used our blog to air our thinking. It was highly respected and with RSS we got a pretty good readership – it’s still there and at least some of the thinking still stands up.

But for Fix we went back to email because it works incredibly well. Wired point out that for ecommerce businesses email outperforms social and the core part of any digital service remainss the email address

And Bluetooth is about to get another day in the sun – it is starting to look like one of most disruptive things in iOs7 is AirDrop – which uses Bluetooth and WiFi.

Whilst the new new thing is always appealing clever ways of using old tech can be just as interesting.

End of advertising?

Rei Inamoto of Akqa  has written a good piece on the End of Advertising as we know it. He sums up his well thought through argument by saying;

Brands should aim to solve real problems by providing connected services over 365 days and by inventing new businesses that benefit people, not just the brand.

The sort of thinking that inspired our Skratch project.

On a similar topic there is an interesting deck on Slideshare on the evolution of advertising – it’s really long with over 470 slides,       but is interesting. It ends up promoting the idea of brands creating their own content. Which we agree totally with – the question is where they go help to do that properly.

Book of the week

Book of the Week

Whilst we talk about tech, mobile and social we are still really looking at advertising. Most of the tech firms are essentially ad businesses in that their revenues come from brands looking to influence peoples behaviour. And if we want to get good at advertising that makes the most of these new opportunities, we should have a good sense of whats been done in the past.

The History of Advertising is an update of a book that came out 5 or 6 years ago and it’s a pretty comprehensive look at the key players and their stories. It is also a rewlly good read and we think its the perfect book for the beach – and ours will be read on Porthmeor in a couple of weeks time.

Quick reads

Forbes have a good round up of the trend we have been focusing on for the last year or so  – how tech and consultancies are annexing marketing services. As mentioned earlier IBM scores well here too.

Mobile operators are (finally) getting better at launching mobile focused services. Orange have their TVCheck app. Vodafone have invested in VoucherCloud and now O2 have launched an interesting travel related service called JetSetMe. This uses location and the wonderful IFTTT – “If This Then That” – to allow their customers to automate useful services like send a tweet when I arrive in a new country or update Yammer so colleagues know not to call as you are in different time zone. Well worth watching.

The CEO of Groupon who was sacked earlier this year (and wrote this great resignation letter) has a new career – singer songwriter. His album Hardly Working is apparently management hints delivered as soft rock. All sounds a little David Brent for our taste. Maybe that’s the idea?

Finally….. if the tracking and privacy issues we talked about last week concern you at all you should check out this MIT project – where linking the service with your gmail account allows you to see your own metadata. It’s a very good demonstration of how much can be gleaned from not much information.