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Mobile Fix – July 11

Mobile &Money

On a recent project we did looking at mobile and money we found a great quote from US economist Paul Volcker

The only useful thing the banks have invented in the last 20 years is the ATM

For all the advances in online banking and mobile banking, essentially it’s the old paper statement made available on a screen. And whilst it’s now possible to pay someone using their phone number, you don’t get the impression any of the banks really wants to innovate. Most banks look at tech as a way of reducing costs rather than driving new services or innovating with products. 

But tech doesn’t always deliver in the way people want. The ATM led to people reducing bank visits and online/ mobile banking has eaten away at brand visits too. A few years ago people went to their bank branch twice a week. Now it’s likely to be twice a year or less. New research shows the era of the traditional bank branch is dead.

One of the best thinkers on banking is Brett King and his presentation at the Wired conference on money is well worth watching. His start up Moven is one of the most interesting start ups in banking – but the whole FinTech movment is massive – Accenture estimate there is almost £3bn invested in these start ups.

Talking with VCs about why there is the focus on FinTech reminds us of the Butch Cassidy quote; When asked why he robbed banks.

Because that’s where the money is.

VC Chris Dixon talks of why he is interested in Bitcoin

The payment industry is a $500 billion industry (or larger, depending on how you measure it). That means banks and payment companies charge $500B per year in fees to provide a service that mostly involves moving bits around the Internet. There are other services they provide like credit, security, and dispute resolution, but in any reasonable analysis these services should cost dramatically less than they currently do. The payment industry should be at least an order of magnitude smaller than it is today 

Just like every other sector digital is transforming the money industry and smart people are reimagining the business. If the incumbents don’t step up, they will be stepped over.

Google & the Future

One of the many things that came out of Google I/O the other week was Material Design which – just like Swift from the Apple WWDC  – didn’t seem that big a deal at the time. But on reflection these are significant changes to how digital experiences are designed and built. This is a deep dive into the implications of Material Design.

Just as the web is evolving from a text medium to a visual one, so will apps move from flat pages to something more like motion graphics. 

And if you want more on where Google is going watch this long interview with Larry & Sergey. Lots about the benefits of long term thinking versus the short horizon most companies have and some thoughts on how society will have to change as robots take over more and more jobs.

In one of our talks on GAFA & Vertical Stacks this week we had a great new example of the intense competition in GAFA – Google are taking on Amazon in the grocery home delivery market

Why would Google get into that space? Simple. Ads and Delivery.

On the ads they know many people go directly to Amazon when looking for a product, which impacts their search sales. So the more product they sell, the more search revenue they are likely to get.

But more importantly, grocery brands are amongst the biggest spenders on TV and if Google can link advertising with actual sales – measured by their grocery deliveries – they open up that market. Imagine how powerful the sales case for YouTube is when you can show the effect on sales through people seeing different frequency or sequence of ads.

And delivery is going to be key in ecommerce. Having vans driving around making grocery deliveries is a convenient tool for Google to deliver other goods – as is Uber. And we can expect driverless cars to be an ingredient too.

But Google isn’t neglecting the day job and Jason Spero talks here about their latest mobile ad innovations.

Samsung & China

Talking about GAFA we were asked if we think anyone can threaten their dominance? We have always felt the answer was probably no, as the other big players (Microsoft, eBay, Twitter etc) tend to have a narrower focus.

But we are rethinking this as we watch the Chinese BAT (Baidu, Alibaba & Tencent) grow.  They are only really active in China right now, but as the latest Samsung financial results show China is a big enough market to impact global performance.

One of the biggest factors in Samsung troubles is Xiaomi – the Chinese device manufacturer. New data from Flurry shows that their user base is very mobile savvy – spending 8% more time using apps than iPhone users in China

Xiaomi are spreading out across Asia – with a launch in India imminent – and if they continue to attract the most mobile savvy users they represent a significant threat to Apple as well as Samsung.

As and when BAT follow and start to look outside China they could threaten the GAFA dominance – especially in emerging markets. The size of BAT is already impressive  – but bear in mind that vast majority of their revenue is from China where only around an third of the population have internet access. When the whole country catches up with big cities and has levels similar to the West these 3 companies could be 2 or 3 times bigger.

newTV – the 7% switch

The Sunday Times chose a new TV show called Extant for its pick of the day for yesterday. And if you have been watching the World Cup you will have seen lots of ads for it. A SciFi thriller it looks like the latest attempt to capture viewers who liked Lost and XFiles etc.

The unusual thing is that it isn’t on ITV or the BBC. Or one of the SKY channels. It’s on Amazon Prime

Most people accept our premise that TV is changing and the newTV ecology is being watched by most. But with the traditional TV industry in good health, many feel there is little to worry about

This deck (by the guy behind those scary LUMA charts that some just how complicated the digital world is) should be a must read for anyone involved in TV or advertising.

If you don’t have the time to read the whole thing look at chart 65. This makes the point any media planner knows – the last few points of a TV spend are inefficient as they just deliver frequency rather than extra reach. Smart planners are always looking for the elusive light viewer and already that is driving much of the investment in online video.

But this deck makes the point that taking the ‘inefficient’ 7% and switching it to digital would double the digital market. And it wouldn’t be that good for traditional TV businesses margins.

Of course the digital experience needs to improve – right now there are two many ads and the balance needs to be improved – this research says there are 1 minute of ads for each 2 minutes of content.

There is a lot of money in flux – and those that make the moves quicker and smarter than the other brands in their sector can get real competitive advantage.

Quick Reads 

The whole world of Programmatic is moving very quickly and we suspect there is an element of emperors new clothes here; do brands and agencies really understand how this works and what the pros and cons are for them? This interview with GroupM top buyer shows the market is still evolving and his comments tend to make sense

Good thinking on Digital Transformation from Russell Davies

One of the key issues around Digital Transformation is whether you need a Chief Digital Officer or not. Smart Fix friend Peter Kim (who has just gone to Cheil as Chief Digital Officer) has written a good report on how best to approach this 

Last week we mentioned Google Wave as a product that Google tried and failed with – but probably learnt loads. This is a link to the Google wave homage to Pulp Fiction that actually works

Finally As more and more companies gather more and more data on consumers, the issue of ethics and responsibility is becoming more prominent. I just signed yet another 80+ page Ts&Cs for iTunes – I have no idea what I have agreed to and whilst I don’t worry that Apple is about to do evil, I do believe people are starting to get concerned. A story about the NSA may not get much traction with people yet we find consumers don’t like retargeting and when they realize that there data is being used to drive this they find it a little creepy. They don’t see being stalked by a brand as acceptable. This good article argues that GAFA etc need to act responsibly

Mobile Fix – March 21 – GAFA & BAT

GAFA

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

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

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

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

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

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

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

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

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

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

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

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

Lets not hold our breath for that one 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It feels a little premature to write Apple off.

BAT

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

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

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

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

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

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

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

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

Quick Reads

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

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

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

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

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

A good summary of native advertising

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

 

 

 

 

Mobile Fix – March 7

Given we’re in the post MWC pre SXSW lull, we decided to go back to the future – and look at some of the things that have gone out of fashion but are still major parts of the digital ecology.

Banners are dead? 

It’s almost 20 years since the first banner was run and they have never got much love. Despite clearly working for ecommerce and other response focused brands they have always been derided. And as a tool for branding they have never gained any credit – despite lots of evidence that they can and do drive traditional brand metrics and clear proof they can drive sales – particularly for CPG (FMCG) brands.

This prejudice has carried over and been amplified on mobile. Obviously the smaller screen size means they tend to be both smaller and more visible – but again, they work.

Goldman Sachs report that MCommerce will grow from $133bn in 2013 to $204 in 2014 – and mobile advertising is a key element in that growth.

Things like native are going to be important and more and more media owners are adopting them. But are they really scalable to the extent they can drive the market? We saw that the Daily Mail is now running what might be termed Native, but older readers may recognize it as what used to be called sponsorship or advertorial

Banners can and will get better and we are seeing the early signs of a new creativity. Some friends in the US are pioneering truly responsive banner ads that adapt to whatever screen they are on – and incorporate rich media. These ads for Mastercard are running for SXSW and feature live Twitter feeds, video and map driven navigation.

The tools for measuring the effect of mobile banners are also evolving. Our favourite analytics guru Avinash Kaushik describes the numerous options for brand metrics here. But the holy grail is being able to get an idea of brand effect in (nearly) real time – so that creative can be optimized just as media is optimized. This too is imminent and some friends will shortly launch this service.

(If you would like to know more about either of these innovations give us a shout)

We don’t believe banners are going away and we think smart brands will look at how they can get the most from this format.

QR codes are dead?

As we pointed out the other week, no-one has told the Chinese that QR codes are pointless – and they are using them in lots of interesting ways

No-one has told serial entrepreneur Dan Wagner either and he has launched a new business with QR codes as a central element. PowaTag promises to start a ‘retail revolution’ by making mobile shopping easy. QR codes are read on print and point of sale, and an audio watermark works in TV and YouTube. Coupled with a mobile wallet and one click  buying, Wagner thinks this is Britains first potential Google or Facebook

Getting past the hype, he seems to have lots of retailers signed up and he might just get past the chicken and the egg dilemma of mobile – can you get enough people to download the app to keep the retailers pushing it?

Back in 2009 TMobile had a huge success with an ad that featured a Flash Dance. Everyone in Shoreditch knew that Flashdances were over, but TMobile recognised that no one had told the rest of the UK.

No-one has told the average mobile user that banners and QR codes are dead – so maybe smart use of them can be successful.

Pre Loaded Phones are dead? 

In the early days of mobile the holy grail for a game developer or content producer was persuading a network to preload their content on the mobiles they were selling. In the era before app stores this was really the only way to get significant reach.

Once the Appstores came along this approach when out of fashion, but it is now coming back.

The Samsung S5 isn’t particularly exciting as hardware – as we said last week its getting harder and harder to get standout as hardware. But you can make some noise with content. Their JayZ partnership got lots of attention and the new S5 has $500 worth of content including free access to the Wall Street Journal, premium member ship of Evernote and Runkeeper and free cloud storage. Users can also gets discounts when they use the Paypal to buy from certain retailers.

This type of deal will become a key BizDev tool for apps and a common marketing feature for devices.

And it could be a game changer in the battle for TV services. The new Roku Streaming Stick is a Chromecast like device that plugs into the back of your TV and gives you just about any of the online video services through its 1200 apps.  And it’s available in the UK soon. 

But it gives you essentially the same as the Google Chromecast and the Apple TV. We think that we will see differentiation through content;  a 3 month subscription to Netflix or HBO would be a good way to drive sales and that’s likely to appeal to the content channels too.

But Charmath Palihapitiya – VC and owner of NBA team Golden State Warriors – has  a reallyinteresting view on how sports rights could reshape this market. Asked whether it’s likely that Apple or Google or Amazon will buy the rights for a major sports league in the next couple of years he says its 100% likely. Why – because the only way people will pay a premium for an Apple TV will be bundled sports. A must watch video.

Subsidised Data is dead?

As the Net Neutrality debate rolls on, Netflix have struck a deal with Comcast so their quality is better for users.  No one is saying how much Netflix have paid but the idea of better service for paying customers is contentious – but good business for both sides

On mobile it used to be the case that some advertisers would pay for the data costs of their messages so users didn’t have to. Again this went out of fashion and in the era of all you can eat data the operators had to pick up the tab. 

But it now seems to be back. AT&T have announced a sponsored data service ;

Data charges resulting from eligible uses will be billed directly to the sponsoring company, with AT&T picking out the healthcare, retail, media and entertainment and financial services industries as prime targets.

Telefonica are experimenting with this type of approach too. Our friend Simon Birkenhead said;

“Telefónica Germany is already running an advertising-financed mobile phone tariff called Netzclub. This allows users of the service to surf the internet with their mobile for free and make phone calls or send text messages for a low fee. In return customers receive special offers from various brands and products directly to their mobile phones, which allows them to benefit from special offers for things such as games, music or lifestyle products.”

The world of content, mobile and social is evolving quickly and just like in Hollywood; Nobody knows anything 

Quick reads

Google tell us Mobile First is dead – brands now need to develop messaging that works on multiple devices simultaneously. (Like the responsive banners mentioned above)

Recognising the value of the signed in user Yahoo is turning off Facebook and Google logins and encouraging people to sign in, so they have  better data on their users – which should translate to better revenues.

Mondelez continue to lead the pack on Corporate venturing with their latest start up programme – partnering with PreHype to develop two new startups (Pranksta and Betabox) that their brands can leverage. Unilever should soon be announcing the results of their similar GoGlobal initiative.

US Retailers are seeing huge number of mobile only shoppers – 50% of Target online shoppers online accessed via mobile.

Flipboard has acquired a rival Zite

Good look at Facebook Paper and its implications for building apps

Apple announced their push into automotive with CarPlay. Not sure what you do if you are an Android user?

Planning for Networks is a great piece of thinking on how to think about the digital space. If you like it you can vote for it in Neil Perkins Post of the Month. Lots of good stuff this month.

A really good deck on the Internet of Everything

The Man Who Invented Bitcoin has been revealed

Is the Back to the Future Hoverboard coming true?

Finally…One of the tropes we use when talking about the tech disruption is that in many sectors affected by digital – music, publishing, retail, transport etc – someone from that industry 50 years ago would now find the world unrecognizable.

Yet a character from Madmen transported here from 1964 would find the agency world quite familiar – the tailoring is not quite as good and the drinks cabinet is less visible but otherwise …

So to us this suggests one of two possibilities; Either the world of advertising is immune to the changes digital has wrought. Or, the disruption hasn’t happened. Yet.

The annexation of marketing by tech firms like Adobe and Salesforce and consultancies such as Accenture and Deloitte is one factor. And the fact

Marketers are doing more in house is another.

Is your agency facing the future – or is it still focused on the way things used to be?

 

 

 

 

 

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

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.

 

 

Accelerators, Finance and Good advice

(Update – Mobile  Monday now has this review along with the slide decks and some videos on their blog)

Mobile Monday  had a fascinating event in London last night (February 17). Titled Acceleration and Finance the team put together a great panel representing accelerators, VCs, entrepreneurs and Nesta (see below for the full list)

Now when you mention money to the mobile community, you get their attention and the event at Centre Point was packed.

The Chair John Spindler kicked off with a whirlwind look at the overall VC and accelerator space, and a blizzard of stats and links to resources and more information. Even with 40 slides in 10 minutes, he got a lot about the shape of the market over, making the point there is no shortage of people/ organisations that want to help. His full deck is available from Momo and deserves some close reading.

The key point we took away was that across the US there are around 69000 seed findings on $100k each year. In the UK last year there was probably only around 1500. So there is a way to go yet.

Next up Jessica Stacy from Nesta took us on a little less frenetic tour of the ecology, summarisng the accelerator space and drawing upon some of the research Nesta has done in the space. Again a clear message that there is no shortage of resources.

She had a neat summary that we liked, suggesting there are essential three types of accelerator  - ecosystem, matchmaker and investor. Again Jessica is sharing her charts and they are well worth a read.

We then moved to the panel and this session opened with each of the panelists introducing themselves and their organization.

Jon Bradford of Techstars went first and whilst the Techstars model is pretty well understood he also talked about their partnerships with corporates and how important he thought that was. They are currently doing programmes with Barclays and Disney, whilst there is no investment a clear focus on the appropriate vertical is ideal for some startups.

Building on the corporate venturing theme Simon Devonshire of Telefonicas’ Wayra went next. With bases in numerous cities the Wayra initiative is proving a success in terms of number of applicants and the progress of the teams accepted.

Rather newer is the Microsoft accelerator and Diane Perlman spoke about their experience in other markets and their ambitions for the new programmes across Europe. Jon Bradford suggested – tongue in cheek – that they had stolen the idea after Techstars ran a programme for Microsoft.

Both Simon and Diane were at pains to point out that teams were not locked into the sponsoring corporate; Simon said they would and had facilitated deals with Vodafone etc and Diane stressed that the teams on the Microsoft programme could build on any tech platform they liked – although clearly links with xBox were a huge advantage for gaming start ups.

But what is it like for an entrepreneur? The next panelist was Brian Taylor who has a start up called PixelPin and is currently navigating the world of accelerators and funding. He talked about the benefits of grants and match funding but emphasized the need for persistence – a point that kept coming up. His view on the key advantage of accelerator programmes? The connections that they open up – he mentioned that he has met 10 banks in then last few weeks  – something that would have taken years without the contacts of his accelerator.

Last up was Simon Cook of DFJ Esprirt – the European arm of legendary valley VC Draper Fisher. The track record of both the US and Europe is amazing and he talked from the viewpoint of later stage investing.  He thinks the key role of accelerators is to teach entrepreneurship – giving people the skills to build a business.

His general view probably resonated most with us – he believes there is too much focus in fundraising as a measure of success; there are 10 million SMEs across Europe that people have started and made a success of – compelling evidence of entrepreneurship.

All the panelists spoke of the intense competition to get into their programmes and when asked what were the factors that differentiated the chosen few there was some consensus; it’s all about the team. Jon put it best when he shared his 5 criteria for selecting someone into Techstars;

Team, Team, Team, Opportunity & Team

The questions dug a little deeper into these issues and Simon Cook made an interesting point – despite the rapid expansion of accelerators and the buzz around start ups the actual number of a Series A fundings has stayed really constant at around 1000.

The best advice from the panel? Probably Jons’ advice to find the 3 smartest people you know and go buy them a coffee and ask them to tear your idea apart. Then ask them to suggest another 3 people to do the same with. This way you quickly start to find the issues you need to address.

And Simon Cook ended by pointing out that even the biggest successes gave been through tough times. He talked of board meetings where it was feared the next salaries could not be paid – yet these companies had gone on to huge success.

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. 

Good luck.

 

The Panel

John Spindler, CEO of Capital Enterprise (@CapEnt), will be in the chair. Before we get into the discussion, John will be giving us an updated lightning tour of funding options and Jessica Stacey from NESTA will be giving us some insights into NESTA’s research into acceleration. For a flavour of the event, check out last year’s event roundup

Jessica Stacey - @JessStacey – Programme and Research Manager, Accelerators and Early Stage Businesses, NESTA

Jessica has been working on an update to NESTA’s report on start-up acceleration and will be sharing some of their conclusions.

Simon Cook - @venturejedi, CEO and Co-founder DFJ Esprit

DFJ Esprit are leading VC investors on the London scene. Simon, who has been described by Esquire as “A rock ‘n’ roll figure with a blonde faux-hawk and some billion-dollar swagger” will hopefully share with us what they look for and how they view acceleration.

Brian Taylor - @Brian_PixelPin, CEO & Inventor PixelPin

PixelPin goes from strength to strength – a graduate from the Wayra London Academy, PixelPin has now gone on the the Fintech Innovation Lab and has interesting stories to tell about raising finance on the way. Not to mention that we’re proud that Brian is a graduate of The Mobile Academy.

Diane Perlman - @Diane_Perlman, Microsoft Ventures, Start-ups Lead

Microsoft’s own London acceleration programme has just started at Central Working. Diane will undoubtedly have lots of say about selection of candidates and differentiation of programmes.

Simon Devonshire - @simondevonshire, Director, Wayra Europe (Telefonica)

Simon has been responsible for setting up Wayra Academies across Europe, you might call him a serial accelerator creator. He’s certainly in a good position to comment on the value created.

Jon Bradford - @jd, MD, Techstars London

To say that Jon has been on the inside track of the start-up, acceleration and investment scene here in the UK and else where would be to miss the point. Jon has promised that his contribution will be “fun and lively” …

Wearable or Peripherals?

After a year or so our Nike Fuelband is being retired. Why? It’s getting slightly battered but the key thing is that – without the sync with ones phone – it doesn’t do that much. And given they still don’t have an Android app we have given up.

But we get all that the Fuelband did and more from Moves. This app uses the smartphone GPS to work out how far you have walked, ran or cycled – and the iPhone version lets you measure much more. And the data can be shared with 30 complimentary apps.

And the Nike+ app on an iPhone 5 is arguably better than a Fuelband.

All this supports our thinking that wearables would be better termed peripherals – unless you have a smartphone in close proximity the functionality tends to be limited. And there isn’t a problem with this – using a watch or band as a sensor makes sense. And for glancing at a text or email the small screen makes sense too.

Once this small peripheral becomes common, we suspect that the smartphone could get bigger so the screens are suited for different use cases. Could the mini tablets become the norm – with watches and Glass used for calls etc? Or is the Phablet the form factor of the future?

The biggest advocate for Glass has voiced his concerns – suggesting Glass won’t be a success – in the short term. Scoble remains bullish in the longer term though.

It’s worth remembering how other ‘tech’ has gone from freakish to fashionable. Back in the 1930s Dark Glasses were a new Fad, but sunglasses are now everywhere. And until 1980 the idea of walking the streets listening to music on headphones seemed alien.

But equally some tech can give off the wrong signal – the stigma of Bluetooth headsets is best demonstrated by Ken from an early episode of Breaking Bad.

This is a good round up of predictions on wearables but for the key challenge is a marketing one. And we would put our money on Apple – if they can position their watch with the same genius as their white headphones they have a chance.

Tracking

The old John Wanamaker quote* “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” has never been more relevant.

With the avalanche of data from digital media it should be getting easier to see what works and what doesn’t.  Talk with any C level Client and they tend to be frustrated that such a major piece of expenditure still lacks the rigour of other major investments.

We were hugely influenced by a McKinsey paper from 2005 called Boosting Returns on Marketing Investment and it’s sort of depressing that so much of that thinking still feels novel for so many businesses.

But research on the desktop web is getting better. A new partnership between Comscore and Googles Doubleclick means that advertisers can now be more certain the ads they are buying are actually being seen  – and by the right audience. And the metrics so familiar from TV – like reach and frequency – are now possible on digital.

A significant improvement is the ability to integrate brand lift surveys with campaigns, so core brand metrics like awareness and favorability can be measure in close to real time, enabling ongoing tweaking of the campaign to improve performance.  We have advocated that digital creative should be pre tested with a limited media buy before the full spend kicks in and these tools would help in that pretotyping.

This research is available in the US later this year with eventual plans to expand the service for mobile and cross-platform.

Eventual plans highlights a problem; in mobile even some of the things that gave digital a degree of accountability don’t work that well; Cookies are now just as endangered as Flash intros

These tiny bits of data (stored in the users web browser allow marketers to track clicks, return visits, basket content and to store passwords etc) have been controversial but hugely useful. Yet just as EU regulations mean that every visit to a website requires navigating past a cookie policy popup, the industry is searching for an alternative.

Why? Because most people now use multiple devices to access the web –and cookies can’t effectively track across devices unless someone is signed in. And for the majority of mobile web cookies don’t work because Apple doesn’t support them.

One salvation in mobile was the UDID (Universal Device ID)  – but Apple stopped apps from accessing that last year. But the IDFA (Identifier for Advertising) introduced by Apple was more usable and didn’t have the same security worries.  But now the usefulness of that is reduced as Apple no longer allow apps to use this info unless they sell advertising. Which means that these apps can’t track where a download came from.

This may sounds a little niche but Facebook use the IDFA to demonstrate the effectiveness of their app download advertising, so a huge proportion of mobile revenue just lost it’s key KPI.

Even within the current tracking frameworks there are issues – Facebook have just dropped two mobile ad partners as they were holding onto user data for too long.  Balancing user privacy with advertising tracking is a tricky issue.

There are lots of people conjuring up new and novel ways to track mobile advertising but unless/ until we have a better understanding of what is working, this instability could jeopardize the rising investment in mobile.

The sooner Google and Comscore can find a way to bring their new tools to mobile the better.

*Actually half the time this is quoted, it’s misattributed. We just don’t know which half is right