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Ever since they poached David Marcus from Paypal we have known that Facebook were going to get into money and they have now launched their payment service for Messenger. It’s very simple – once you have added a debit card to your account – and it’s free. (Credit cards aren’t accepted right now because of the fraud risk and the fees) Once it’s all working we can expect it to roll out to the WhatsApp user base too.
With Forrester estimating mobile payments will triple to $142bn by 2019, this puts Facebook in the money game – but we think the real prize is people paying for things rather than paying their friends. Which is why the interesting news from Facebook this week is their purchase of shopping curation site The Find.
Whilst big brands are switching spend to Facebook it’s the smaller advertisers who arguably can have the most impact – the 2 million advertisers. Demonstrating how well the new Products ads work by enabling payments would solve the attribution issue once and for all.
One of the most prolific bloggers about Financial Services wonders whether banks are heading for their Kodak/Nokia moment.
Another of the smarter thinkers around Money has 5 suggestions on what banks should be thinking about – which all make good sense. But is anyone listening?
And the innovation is coming from everywhere – in China Alibaba are trialling facial recognition for payments – which sounds similar to what Square does in the US and what Paypal trialled in Richmond.
Wearables & Proximity; Mickey Mouse technology?
Halifax Bank is trying a wearable that reads your heartbeat to unlock your account but it seems rather complicated and one suspects a double espresso or running up the stairs might cause a problem. This sounds more like a PR stunt.
The Disney wristband sounds like a PR stunt too, but they do seem to have a really exciting service – because it solves real problems. This longish piece is worth reading as it also gets into how proximity can be helpful. If you are thinking about beacons – and who isn’t ? – there is a lot to learn here.
And the new VC backed bus service in San Francisco is a good use case for Bluetooth / proximity. As well as showing how tech (and tech focused investment) is starting to impact every aspect of life. One other interesting example is Subway rewarding customers who use their instore wifi. Why – because the data is so valuable – knowing how often someone visits your stores can drive your CRM and – now – your programmatic and retargeting. The ability to connect your physical world with the digital world enables great experiences for customers
Programmatic going mainstream
As mentioned here a while back WPP are looking to take a stake in DunnHumby – the Tesco owned data powerhouse that drove the phenomenal success of the Tesco Clubcard and now works with retailers around the world. Now cynics may suggest this story has popped up again because Tesco is reviewing its £100m media account – something Sir Martin has been after for years. How better to out maneuver the competition than by negotiating for an acquisition?
But it would be an expensive tactic and the real value of Dunn Humby is the data which could fuel the WPP programmatic play. Just like their stake in MySupermarket and the recent deal with Comscore this deal would fit with WPPs ambitions in data and insight – well explained in this WSJ piece.
Whilst programmatic and its plethora of TLAs* can be a little arcane for many, it is going mainstream very quickly. Every publisher is trying to work out their best approach – the UK ‘quality’ news brands have combined to launch the Pangea alliance. This alliance lets the publishers combine their reach and their data to better battle GAFA in programmatic buys.
Of course the original Pangea continent eventually split and formed the various continents we are familiar with today. Can this alliance last? The first thing the buyers will do is try and see which approach gets the best value – buy everything from Pangea or divide and conquer and deal direct.
Smart clients see the opportunity and are experimenting – this look at what some UK brands are doing is interesting. A few are even taking programmatic in house – Kelloggs are very positive about their experience and the numbers for taking it inhouse seem to add up – if you know what you are doing.
*Three Letter Acronyms
We have argued before that the industry obsessions with metrics – like clicks and views – that are poor surrogates for what really counts; impact on sales.
P&G know a little about marketing and they have called for more consistency around advertising and the sales outcome. This interview with Global Brand Office is good insight into how smart brands are approaching digital; he sees further growth from the current 35% share for digital.
Unilever are also looking for better research but want to move from recall and persuasion to measuring engagement.
A new study from the Mobile Marketing Association provides some real metrics – they replicated the studies the IAB did for digital 10 years ago to measure the impact of mobile in multi channel campaigns for Coke, Walmart, Mastercard and others. All the studies showed a very positive impact for mobile – on footfall in stores, purchase intent and actual sales. They argue that mobile merits a double digit share of total spend – not just of the digital budget,
Apps for news
This is an interesting look at how the news industry uses apps – and argues that most publishers would be better to concentrate on mobile web. It also tackles the myth about app use dominating mobile use – pointing out that a huge proportion of the time allocated to the Facebook app is actually spent on web pages delivered within Facebook.
There is no right or wrong answer – as ever the right strategy is dictated by the problem you are solving – for your business and for your customer.
Meerkat & Periscope
There is no doubt that the app that won SXSW this year was Meerkat. It is everywhere and everyone is streaming – although lots of them are not that interesting. We did see one example that demonstrates just how disruptive it will be. Social media guru Gary Veynerchuck gave a great keynote at this weeks Guardian Changing Media Summit – and he streamed it on Meerkat. Not a perfect experience but it worked really well and the 250+ people watching didn’t pay the £999 delegate fee.
Lots going on at Twitter – a new second screen experience and – maybe – a new homepage. Gary V is unconvinced by Twitter and in his talk he calls on them to sort the ‘noise’ https://www.garyvaynerchuk.com/and find a way to emulate the Facebok feed – and their algorythms
The Homescreen project is an interesting insight into how people use apps and someone has dug further into the data to see how people group them- suggesting how the apps are primarily used.
The Apple retail stores are a huge success for Apple – arguably one of their most effective marketing tools. It turns out that they tend to pay reduced rents in malls given their ability to pull in shoppers.
More on Apple - looks like they are finally going to make a play in TV content
The big trend for agencies and brands at SxSW was the Start Up competitions – but with 80 taking place the standard was variable. They are not as easy as they seem and like hacks a couple of years ago it can look like start ups are being exploited.
Finally , with CES, MWC and SxSW over the next stop on the merry go round is Cannes. Google and AKQA have a good round up of what it takes to win a Futures Lion
Addictive helps businesses profit from Mobile, Social & Content
Our clients hire us to do strategy consulting, creative thinking and to create the mobile and social apps, mobile sites and ad formats needed to make the strategy deliver.
If you could do with some smart thinking or doing around any of the subjects we cover then do get in touch
We produce Mobile Fix every week to share news and views on mobile and related topics. We have over 3500 subscribers across tech firms like Google, Facebook, eBay, Yahoo etc as well as many Brands and Agencies. We’re happy for you to forward this mail to anyone you think might be interested. If they do find it useful they can sign up for email here.
Connectivity has given us 3 Internet eras.
Dial up modems gave us a text based internet – not that different to the dial up walled gardens of AOL and Prodigy that preceded it. Then Broadband gave us an Internet with pictures – you no longer groaned when a page had a photo on it and things like Flickr took off. Now with 4G and mobile we are clearly in the Video era.
As these eras roll out, nothing disappears – but people gravitate to the richer experiences and decades of Hollywood and TV show us that people like watching video. But whilst something that looks a lot like TV is more appealing to many marketers than the previous internet era ever was, we should recognise that quite a lot has changed.
The means of production are now in everyones hands. Just like the smartphone has more tech than the Apollo Space mission the average smartphone user now has a video camera and editing tools virtually as good as a Hollywood director
So everyone is rushing to make and share video. The Ice Bucket challenge was a huge success for Facebook, as well as the charity, as millions of people learned how easy it is to make and share a video.
Naturally lots of people are turning to those who have made a success of online video – the YouTube vloggers and the Vine superstars. The BBC have drafted in Zoella to give the Comic Relief Celebrity Bake Off some street cred. And one of the keynote sessions at the ISBA Conference ( ISBA is the advertisers trade union) is the MD of Google sharing the stage with MD of Talent Agency Gleam who represent Zoella and many other social media celebs.
We think that focusing on these celebs are sort of missing the point. The potential of online video is about more than here today and probably gone tomorrow teenagers. There is some real talent here, but are endorsements from these people really worth what they cost?
We think the focus should be understanding the tropes of these media and how to get the most out of each new channel. The talent can clearly help here but brands should be thinking through how they can create content for Vine, Snapchat and Facebook that delivers their message.
VC Mark Suster knows more about the video space than most and points out here that most online video companies will fail. His key point is the content people think it’s all about the content and the tech people think its all about the tech. It is, of course, a balance between both. His forensic analysis of how Upworthy do it is a must read.
One of Susters big investment successes – and a key source of his knowledge – is Maker, which was bought by Disney for $500m. Here one of their key execs looks at how they use data to identify the talent they should bring on board. And how they know when these creators are ready to work with brands.
Twitter too now see video as major opportunity – at the Goldman Sachs conference this week Dick Costello talked about how video storytelling fits well into their platform. And they have bought the US social media talent agency Niche to help connect the talent with the brands.
VC Jason Calcanis – who also knows a bit about video – sees video as a big step for Twitter and suggests that sharing revenue with users could drive growth.
Pointing out that its coming up for 10 years old, The Sunday Telegraph have a good round up of YouTube and How It Has Changed the World.
Talk to anyone in digital marketing and you soon get to talking about attribution. Knowing what works is still the holy grail in digital – despite billions being spent on traditional marketing with relatively little accountability.
Google has got rich on last click attribution as most revenue goes to the provider of the last click – whether that be search or affiliates. But everyone knows its a more complicated, nuanced story and that brand activity has an effect. As does many aspects of digital beyond the source of that list click before the purchase or other action. Fold in a multi device world and it just gets worse.
One reason that mobile ads have taken so long to scale is that people are still reluctant to complete a form or entering a credit card on mobile – so whilst mobile marketing probably did have an effect, they go to a tablet or desktop to complete the transaction and the crude attribution models we have reward that click. Knowing which half of marketing is wasted continues to be a problem.
So it’s no surprise to find that publishers continue to see the surge in mobile traffic a problem
The nearest thing we have to an answer is first part data. Google and Facebook and others with continually logged in users can – in theory – know exactly what marketing messages their users have seen within their empire. The bigger that empire, the more useful that first party data. As long as your users T&Cs let you use it for that purpose.
Facebook are probably winning here, as their huge reach of constantly logged in users gives them the best market visibility. And their nascent Atlas play looks to extend that empire. Google come close but it seems they have issues with what data they can use. Whilst they know exactly where each Google user has been across a day by tracking their smartphone, they can’t use that to show someone turning up at a Walmart store an hour after seeing a Walmart ad. Instead they have to use
Now if you are the worlds largest agency group – who see Google and Facebook as frenemies – this is really annoying. The people with the best idea of what works are the vendors and the WPP spend with GAFA grows significantly every year.
So their latest bit of M&A is for WPP to buy 20% of the leading online measurement company Comscore – using some of their Kantar business and cash. Remember they recently bought a similar stake in Rentrack – who are the leading measurement company in TV so they could
… integrate its national and local TV measurement with a number of Kantar’s US-based services that focus on digital media and purchase data, providing US advertisers, agencies, TV networks and local TV stations with even more powerful tools to understand consumers’ TV and purchasing habits.
With significant stakes in these two complimentary businesses – and the talent in WPP – they must hope to cook up a way to better understand the interplay between TV, digital and purchases. State of the art attribution. If they do crack this they have the chance to take back the ringmaster position, deciding where brands should spend their money. Otherwise GAFA and programmatic will continue to erode their influence and position.
Facebook have a new tool that looks at user reaction to ads to determine relevancy. This is an interesting step –and like the Quality Score tool Google uses to assess search ads – makes for a better user experience.
We were reminded of this analysis suggesting Facebook is charging more for ads. We think this is down to the increasing share of ads that are video – but it also supports our view that the healthy growth of mobile advertising hides a polarized market. Those with relatively rare first part data are making more and more money whilst the ad networks with infinite supply of raw undifferentiated inventory are flatlining.
An interesting look at how ecommerce is changing the business model of retail. This is focused on fashion but the thinking applies to other sectors too.
We mentioned last week that some fitness apps were acquitted by Sportwear brand Under Armour. This rolling up of apps continues with Rocket buying a number of food takeaway apps across a number of markets. This is probably a good indicator that we are quite early in this game; whilst big players can acquire smaller apps, it leaves market opportunities for smaller more nimbler niche players. Consider the coffee shops in London. The early mover Seattle was bought by Starbucks and then the big chains like Costa and Nero arrived and the market seemed sewn up. But today most every street has a cool independent coffee shop doing pretty well. As one of our smart Google friends says about mobile – It’s still not too late to be early.
Fix readers know most of this but the US PBS have a good general view on how mobile is changing how the news is delivered. A good read.
This long read from Stratchery looks in depth at how Apple are evolving and it picks up some of the themes from our Anchor theory – how Apple create services so compelling that the “cost”of switching from the iPhone is very high. He mentions the CarPlay, which we haven’t focused on yet. We are convinced Apple want to make music an Anchor with Beats and their new Apple Photo service looks like it could be another Anchor. We were asked to help someone consider how Photos was going to evolve with mobile and whilst the project never happened, the preliminary work was fascinating. Our parents had one or two albums with all the key photos from their life, yet we take dozens of pictures which are all stored in various places online. Finding a specific one – or even a good one – takes forever. Our initial thinking was that social feedback could be used as a quality indicator – if you had lots of Facebook likes then that picture –and ones like it – had a value.
When we first came up with the GAFA idea back in 2010 we were asked about excluding Microsoft. It has never felt like an omission as – for all their size and reach – they never did anything that moved the market. Even the Nokia debacle felt like a diversion. But they now do seem to be stepping up. This piece looks at their new strategy and latest moves – a very interesting read.
Finally ….we keep coming back to Bitcoin and Blockchain as what’s next. This is a good piece on these topics from someone who thinks they will be bigger than the internet. A long but worthwhile read.
Addictive helps businesses profit from Mobile, Social & Content
Our clients hire us to do strategy consulting, creative thinking and to create the mobile and social apps, mobile sites and ad formats needed to make the strategy deliver.
If you could do with some smart thinking or doing around any of the subjects we cover then do get in touch
We produce Mobile Fix every week to share news and views on mobile and related topics. We have over 3400 subscribers across tech firms like Google, Facebook, eBay, Yahoo etc as well as many Brands and Agencies. We’re happy for you to forward this mail to anyone you think might be interested. If they do find it useful they can sign up for email here.
This week feels like a switch was flipped. Or a target reached. Or is it just that mobile has finally grown up?
A number of the things we have been predicting finally happened this week. Now these predictions weren’t like our (cheesy) 2002 Futurology piece where we called a fair bit of todays tech enabled world.
These are more logical next steps or inevitabilities. But they have taken longer to happen than we expected.
Google use mobile optimised as a signal in ranking.
Google have finally announced that they are going to tell users which sites are mobile optimized. And they are going to experiment with using this data as a signal for ranking. So Google will now reward those people who have invested in their mobile experience. And (gently) start to penalize those who haven’t
If you think about it, Google has one key job; help the user find what they are looking for as quickly as possible. Everything in the Google armoury has been focused on this – using your location, your previous search history, landing pages score etc. But until now Google has ignored one key factor – your device. Knowing you are using a smartphone and returning answers that are not mobile optimized doesn’t make any sense for the user. Or for Google. But now they are correcting this anomaly and a huge amount of SEO work is about to be made redundant.
If you don’t have a mobile site, now would be a good time to get one. And if you do have one, you should be constantly testing to make sure it’s as good as it can be – too many mobile sites are designed by desktop web people and are not really focused on touch and fat fingers. (
Google kicked out by Firefox
When we talk about GAFA and vertical stacks, we cover the way Google have been eased out of iOS. When the appstore was launched Google were baked in with 3 key integrations; the YouTube app that Apple built, Google maps as default and Google as the default choice is the Safari browser. As we all know Apple have evicted Google from Maps and if you want a YouTube app you have to go download the one Google made. Both have had an impact on Google, but they are still pretty big in Maps and Video on iOS
We have long argued that, at some point, Apple will kick Google out of search by changing the default setting for search in Safari. They added DuckDuckGo, so the 4 options are now Bing, DuckDuckGo, Google and Yahoo, with Google getting the default tick – for which they pay around $3bn. And we are convinced that Bing and Yahoo would happily pay more.
Firefox have tested this scenario out and in just a few weeks time Yahoo will be the default search engine for the Firefox browser. We can’t imagine that both Bing and Yahoo aren’t pitching a similar deal to Apple every single day.
How long before Apple decide they would rather not have Google know what all their users are searching for? And such a deal could help Apple with legislators like the EU worry about the Google ‘dominance’ of search; by making the default setting an alphabetic one they could rebalance the market.
We’ve been advising our clients to focus more attention on Bing and Yahoo SEO for a while now – you should start too.
Apple have released some advice for developers focusing on the Watch; essential reading around on what can and can’t be done. The key thing for us is that the iPhone is heavily involved in most possibilities so as to leverage the more powerful CPUs and longer life of the phone. So the Watch is a peripheral rather than a wearable. Slightly pedantic I know, but we have to develop experiences that use both devices, not just the Watch.
And last in our told you so list, we now have some more good proof that mobile advertising can and does build brands. We laboured against the belief digital is purely a response medium 10 years ago and it’s slightly frustrating that the same mis-informed nonsense has been trotted out about mobile. But a good case study from Havas and Sky proves what many people have known all along – you can drive brand metrics and response metrics with mobile advertising.
You just need to think carefully about how you use the medium and recognize that an investment in good creative is just that – an investment. One that usually pays off.
Future of apps
Over the past few weeks there has been a lot of debate about how apps are going to evolve. There is data showing that time spent in mobile apps is now more than the time spent using the browser on both desktop and mobile.
The Wall Street Journal take the view this means that the web is dying as the walled gardens of GAFA and others dominate. (We would argue that much of this time is actually games and music where one would have used a different device before smartphones).
The very nature of these apps is changing as the latest versions of both the Apple and the Android OS enable notifications purely etc to do more, reducing the need to open the apps. We pointed to this smart thinking about what that means for brand apps and one of the people who initiated the debate has come back to say his thinking as misinterpreted – apps are not dying – they are just evolving.
Both these pieces are worth reading as is this other viewpoint what the web is pretty resilient and could still come out on top.
Just like they say in Hollywood, no-one know anything and brands should remain nimble and avoid making moves based purely on technology. Instead focus on creating valuable experiences for your customers on the devices they choose to use and in the channels where they spend their time.
Flurry have some new research showing time spent in apps now exceeds time spent watching TV in the US. This doesn’t mean one should ditch TV but where are the examples of people looking to link these two hugely powerful media? There is huge potential to marry the power of TV with an immersive mobile experience; essentially delivering part 2 of the commercial.
Interesting look at how GAFA (and Microsoft) are developing their vertical stacks. And how their value has doubled in 3 years.
Snapchat say their ads work even though there is no targeting. Reach – combined with the targeting inherent in the channel – can be enough
Retailers continue to test how mobile can improve the instore experience. Target are trying in store navigation
BAT – the Chinese GAFA – have a way of investing in promising startups and using their reach and muscle to accelerate the growth. Could they bring this Kingmaker strategy to the West?
Finally …More proof that content is king. A podcast has gone viral and is getting over a million downloads for each episode. We believe episodic content has huge potential in modern digital. Imagine a 3 minute video version of something like Hollyoaks published on Facebook at 12 noon every day with storylines expanded in Snapchat Stories. A weekly omnibus on YouTube. And each character has a rich social presence too.
It’s time for brands to reinvent soap operas. We are developing an interesting format and would love to talk with potential partners and collaborators.
Apps; the CDs of Mobile?
As big music fans we were late into CDs. For quite a while after the launch of this “revolutionary new format” we stuck with buying the Vinyl albums. But eventually the convenience – and the difficulty getting a vinyl copy – saw us make the transition and now we’ve more CDs than Vinyl.
Of course making the music digital led to a subtle change in how music was listened to; in the car a CD changer meant songs could be listened to randomly. Then along came the iPod and burning CDs to iTunes – there even used to be businesses offering this service – soon led to the Shuffle and Genius. More songs played randomly. Which essentially laid the way for streaming, where the song is the hero and the album concept devalued.
Could we look at Apps the same way? Is web content the “analogue original” existing as destinations and do Apps package that content in a more convenient way? Are homepages of apps the mobile equivalent of CD racks? Now notifications and cards are staring to devalue the app experience by reducing the need to visit the app.
So the question is – what’s the Mobile equivalent of streaming? Will Apps no longer be needed as all the content and the functionality is distributed through the stream of notifications and cards? Do we see a near future where the home screen blends notifications with Tweets and social updates , mediated by some all powerful algorithm?
Given that Google Now gives us a glimpse of this future and the Apple home screen is evolving in a similar direction will GAFA control these streams? Is the power law of the top 25 apps coming from a small number of big players going to consolidate?
We continue to advise clients that they need to think through how they work with GAFA – partnerships and distribution across these big players – and Twitter is going to be key. Having Uber feature as an option within Google Maps is a huge win for them – helped by a $250 VC investment – and a disadvantage to their competitors.
There is lots happening with mobile content and services and just building an app doesn’t seem enough anymore. Having a Card strategy feels like a smart next step so that, as more opportunities to distribute your content/service arise, you have some learning on what works and what doesn’t.
CDs promised a better way to consume content but ended up a stepping stone to the atomisation of music. Are apps going the same way?
Lots more smart thinking on this topic in this piece – which ends with more good articles to read.
One significant move from Twitter is to use the phone number as a way to sign in to apps, with Twitter handing the SMS authentication. This seems a win win as it makes it easier for the user and the app developer, and give developers an alternative to the Faustian pact they must do with Facebook and Google over the data shared on social sign ins. Fred Wilson sums up this sign in issue well.
But whilst the industry see the new tools as a step forward Wall Street still worry about user growth and it seems inevitable Twitter is going to make some changes so that new users can get more value from the service more quickly.
We still think that curated lists could be a way to solve this problem; reading the tweets from a list of Leeds United players, fans and journalists for example would give people a quick easy way to follow the current Elland Road soap opera. Danny Sullivan makes a similar point when he argues that people should be able to follow interests rather than users.
Whatever Twitter decide to do, they have to hope it works for both new users and for existing ones. Whilst lots of people – including us – love Twitter and find it really valuable, these days it is easy to lose traction and relevance can be lost really quickly. If they are going to offer New Twitter they should make sure Classic Twitter remains available too.
The Facebook results didn’t disappoint many people, and they now have 456 million mobile only users.
This scale is encouraging their efforts to woo publishers and they are suggesting that media companies use Facebook as their primary distribution means for mobile, rather than bother with a proprietary app.
As we discussed earlier this could be one future and there are lots of upsides for publishers being in the stream rather than a diversion from it, but there are quite a few downsides too. As Wired point out, do we want Facebook to control everything we read or watch online? News Corp have been quick to say no, not ever but they largely exist outside of social as their firewall makes sharing their content pretty pointless.
Publishers need a smarter strategy around distribution. (The plan to sell the Guardian and Telegraph together is interesting too)
Apple Pay is up and running in the US and seems to be quickly getting traction – Tim Cook talked of 1 million users in the first few days and we hear that’s now around 3 million.
But there is some resistance. A consortium of retailers are developing their own mobile payments service called CurrentC. The only problems seems to be that it won’t be ready unto next year, it uses QR codes and is quite complicated for both the user and the retailer. Oh, and it’s been hacked already.
These retailers are refusing to accept Apple Pay and some are even disabling their NFC terminals. Turning away people who want to use Apple Pay probably isn’t a huge issue right now but as the adoption grows it could be risky. Already other retailers are making a point that they do take Pay.
A primary point in CurrentC is that the retailers get data on what people are buying and that’s valuable – as the ShopKick acquisition showed – but given Apple are pushing privacy and not using any data from Pay, this could be a hard sell to consumers. But the other ambition is to reduce the fees paid to Credit Cards firms
Techcrunch have a good look at CurrentC here.
Is no news on iPad sales, good news? Probably not.
Facebook have launched another new app. Rooms. Described by the Guardian as reinventing the 1990s chat room you don’t have to use your real name which is further evidence that Mark Zuckerberg is less fixated on people having a single identity
Is Google an Artificial Intelligence business? Good look at AI from Kevin Kelly
Finally…Tim Cook has come out. It seems a little sad that this is seen as news
The Chinese are coming
At IAB Engage this week Martin Sorrel warned the audience that the Chinese are coming, and pointed out the size of Alibaba and the growth of Xiami as two examples. Fix readers know this and also that the size of BAT (Baidu Alibaba & Tencent) is based on a market where internet penetration is around half that of the UK, so lots more growth to come. Of course not having Google, eBay, Facebook and Twitter to compete with, helps this stellar growth.
But the really interesting thing about China is that this Galapagos effect – an ecology cut off from the rest of the world – has inspired some fascinating business models. So there is a lot to learn from China, other than merely the growth story.
As this chart shows the messaging apps across Asia are developing business models other than taking ads and its likely Snapchat will be amongst the first to monetise their reach as a platform for other content and services.
And whilst Jony Ives may think that Xiaomi are little more than copycats this HBR piece shows they have an innovative business model that may prove more resilient than Apples.
If you want to dig a little deeper on China this report from Campaign Asia is worth a look.
With Samsung, Google and Apple all launching new product this week we have seen each brand get their 15minutes of social buzz before the next launch. First the Samsung Note 4 had everyone extoling its virtues. Then along comes Google with their new Nexus 6 – even bigger than the 6+ their new tablet Nexus 9 and the new version of Android, Lollipop. Early indications are that the new devices are impressive and the look and feel of Lollipop is a clear improvement and the other features sound promising.
And then there are the new iPads – with lots of upgrades and some data on sales to counter the theory sales are flattening out.
The Xiaomi model of longer production windows for their product does look smart as they profit from falling component costs– what are Google and Apple going to do with the 7 that makes people what to upgrade? And what will the next iPads do?
Clearly the iPhone and the top end Androids work as Veblen goods – status symbols – or at least as social objects; many people have raised bendgate when they have seen our new iPhone 6 and we know people comment on the size of the 6+.
But because most tablets aren’t actually mobile- they stay at home or in the office – they don’t cause comment and therefore don’t act as social objects – so is the desire to upgrade to the very latest model less powerful?
And because so few people bother to make tablet optimized apps- a huge mistake in our opinion – is there less need to upgrade to benefit from the new version?
Should ad fraud stop you investing in digital?
The recurring problem with fraud in digital advertising, is polluting the discussion over how much investment brands should be switching over to digital. Whilst the argument is clear – as consumers change their habits, so should brands that want to keep up – the background noise over fraud and viewability is a diversion.
The problem is that just as the sheer volume of money attracts VCs to invest in AdTech, it also attracts criminals. So the arms race between the adtech that can verify your spend is going in the right places and the bad guys is heating up.
This week we heard two great examples that demonstrate the problem. You have probably seen the meme of your porn name? The name of your first pet is the first name and your mothers maiden name is the surname – so mine is Pluto Clement. Great fun, but everyone now knows two answers to the most common security questions online.
Then at an event this week discussing fraud, one of the audience made the sensible comment that where a campaign is measured against a purchase, fraudulent views and invisible impression below the fold etc don’t really have any effect as the bots don’t buy things.
It turns out they do.
Filling forms online is pretty straightforward to a fraudster but they also have lists of stolen credit cards with which to make the purchase. Eventually the sale will be cancelled and the money refunded to the person whose card is used, but the fraudster is long gone with the CPA commission.
Now having the right partners and paying attention to how your campaigns are being managed can protect you from most if not all of this. And not investing in digital for these reasons is no more sensible than pulling your money off TV because people do go make cups of tea when the ads are on.
On the panel at the Facebook upfronts this week I made the point that we now have an unprecedented situation; for the first time for a long time it is possible to get a significant competitive advantage on your sector.
Your rivals have the same distribution as you do, similar brand awareness and a product that is probably top parity. So gaining advantage has been hard.
But we are now at a point when being much better at mobile and social can give you a clear advantage.
Your competitors’ agencies are probably just as good at making the most of ITV etc as are yours.
But if your team can get more reach, attention, engagement and, yes, sales from Facebook, Google etc then that’s a great place to be.
What are you waiting for?
The Mobile Marketing Association say that brands should invest 16% of their ad budget. Now the right figure for any brand depends on their objectives and strategy, but it’s clear most (all) brands should be spending more. What will you do if your main competitor gets there first?
Benedict Evans has shared a good presentation on the Industrial Internet – another name for the Internet of Things
Pinterest is gearing up to be the next big ad opportunity. Are your agency partners geared up to advise you on this? Really?
Finally… no Fix next week as we are off to Cornwall for half term. But there will be a RCKSCK Friday Edit later today and next week, so if you’d like some tips on how to get the most out of London sign up here.
As a warm up for client workshops we often do a WhatApps exercise. We get everyone to unlock their phone and pass it to someone else and then get people to talk about what apps are on the homescreen of the phone they have.
It gets 3 important points over really well;
1/ People feel deeply uncomfortable seeing someone else holding their phone, demonstrating just what a very personal device it is – so marketing risks being very intrusive if not done really well
2/ Most people have a few of the same apps; Facebook, Twitter, YouTube, Google search etc plus their bank app and a news app perhaps
3/ Everyone has a few niche apps that are very important to them – Dads have games for their kids, sports fans have apps about their team or sport, others have things like YPlan and apps for nights out or travel
And we are also starting to see that people are organizing their apps with the home screen for the most used apps and unused apps migrating to later screens and being forgotten about.
Knowing what apps someone has is hugely valuable for advertising and everyone is trying to get this insight. Apple and Google clearly have the best view but some others have good data too. Facebook has some knowledge through those apps that use Facebook connect in some way – and where someone has downloaded as a result of a Facebook ads.
Whilst the number of new apps downloaded is declining, we believe there is still a huge opportunity to help people discover apps they will find useful/ entertaining. Especially given how poorly the app stores perform if you don’t know exactly what your are looking for. People have done very well with apps designed to help find new apps but just as Apple kicked out AppGratis last year they have just kicked out an iOS launcher app. Launcher was different to AppGratis and seemed a good way to improve how you use the apps you have – but Apple clearly don’t want anyone but them to know what apps you have.
Of course the other people who have some idea of what apps you have – at least theoretically – are operators and we think they are missing a trick by not providing a really elegant service that helps their customers discover new apps. There have been some attempts but no one has nailed this; the upside of happier customers and a chance to get some of the burgeoning app download spend should make it a priority.
Facebook & Adtech
When Facebook bought the Atlas adtech business from Microsoft last year the price was rumoured to be around $50m – a very low price when Microsoft had paid $6bn+ for the whole aquantive business. Nothing much was heard about Atlas until recent rumours that it had been complete rebuilt to give Facebook a robust platform for serving and tracking ads.
Its now officially launched and is a big part of the new Facebook ad network where they use their profile data to target Facebook users across sites and apps outside the Facebook empire. It’s more evidence of the antipathy across GAFA and means Facebook starts to get a better view of what’s happening across the open web, which should let it improve ad performance within Facebook.
Mobile & Money
Building on our thoughts on Starbucks last week, mobile money is heating up. We see that Apple has hired two very senior Visa execs in Europe. And Capital One have launched a pretty good wallet app in the US whilst Barclaycard are rolling out their bPay bracelet – which is interesting but could do with some love from a designer.
But the big news is that eBay and PayPal are going to split into two companies. Many people believe PayPal will be more valuable on its own, but it will also probably be more attractive to a potential suitor who doesn’t want the distraction of eBay. Who could be interested? Well Google needs a response to Apple Pay and folding PayPal would be a great way to revive Google Wallet.
Content is King?
Last week we speculated that Softbank – now ran by ex Googler Nikesh Arora – could be interested in buying Yahoo, as they look to build out their Sprint and broadband business by adding content.
This line of thought is probably validated by the story that they are in talks to buy Dreamworks – the hugely successful movie studio ran by Jeffery Katzenberg.
This blending of content and pipes has always been talked of, but the AOL Time Warner debacle still scares most people off. Like most dotcom bubble hubris though, the issue was essentially one of timing – and poorly executing the merger.
Yahoo, Softbank & Alibaba
As we discussed last week these 3 companies are closely linked and this long article is a great look at how they came together. If you believe in fate, choosing then Chinese Civil servant Jack Ma (now the Alibaba founder) to guide Jerry Yang around the Great Wall of China in 1997 is right up there. A must read
If you talk to any enlightened media planner they will tell you they now see TV and online video as essentially the same thing; if you want to reach Downton viewers you are equally happy to buy them on broadcast TV or online catch up. And they also know that smart use of pre rolls or any of the online video formats will probably add reach to a traditional TV campaign, as the elusive light viewers are added.
But regulatory things are still more compartmentalized. Now that is starting to change. In the US it looks like regulators will treat online video services as the same as cable and satellite providers. This means they can get cheaper access to programming and the old divisions will start to melt away.
Some brands get this already and Mondelez have done a global deal with Google for video to accelerate their ambition to put 10% of their spend into online video.
Adding to the momentum is the new Twitter TV ratings, where Kantar will report on levels of Tweeting related to TV programming with data around how twitter affects audience.
Many years ago we tried to prove that data on recording a programme correlated with better engagement in the live viewing. If you like a show so much you record it when you are out, you probably are more attentive when actually watching it live. So ads in those programmes are probably more effective and more valuable.
Those enlightened media planners will be looking at whether Tweeting is a similar engagement metric
Still play Angry Birds? No us neither. And they are firing 130 people. More proof that apps is a hits business.
Did you know people launch brands on Amazon? Coke and Pepsi have both launched products only available through Amazon.
Google have acquiesced to German publishers and won’t publish extracts from their stories – they will just show the headlines. It will be interesting to see how this plays out.
Product placement is getting tech – Music videos can now feature brands in a way that the product can be changed according to region etc.
The Google Internet of Things play is now public – The Physical Web. Very interesting.
Lots of the smart people at Tesco know that their real competition is going to be Amazon rather than Lidl, but (understandably) short term thinking is prevailing and they are going to sell or close Blinkbox
Apple debut Watch at our favourite Paris store, Colette. And as they reposition themselves as a luxury brand, Vogue profiles Jony Ive.
GE Enhance your Lighting is a great example of a brand using video and social really well.
We have mentioned Shopkick before – a great example of where mobile, physical and promotions meet. It’s been acquired for $200m to fund international expansion so expect to see it in Europe soon
We heard Peter Thiel talk about his excellent new book and lots of his thinking applies to any business – not just startups. In our Digital Transformation workshops we talk about how big companies can learn from startups and this book is very useful. So too is this Stanford lecture on how to start a Startup and this piece by YCombinators Paul Graham.
Oh, and we have finally revamped our website outlining the range of things we do for clients and for our own projects. <sell> If you ever need any help lets have a chat <sell/>
Thinking about Apple
The ramifications of the Apple launch last week continue. Pre sales of the new phones have gone very well – too well perhaps; as the wait time on Apple is weeks. Some of the operators were quick to offer the iPhones too and have done really well.
iOS8 is available and that has kept people thinking about Apple –once they could actually get it downloaded. It looks beautiful and the elegance of much of the interaction whets the appetite for the iPhone6 too.
We are also starting to get an understanding of just how much better the new devices are – and the camera in particular is getting a lot of praise. As we talked about last week, the Ice Bucket Challenge has taught millions of people that making and sharing video isn’t that hard. Add a great camera to that new expertise and we can expect some great content.
For a long time we have argued that video is going to be democratised just like music was with the launch of technologies like the Roland 808 –that enabled talented people to make music in their bedroom and bypass the traditional stranglehold of the record companies. As the explosive growth of YouTube has shown, the talent is there and even with a webcam they are making content people want to see. Better camera will accelerate this. SXSW showed a film shot entirely in an iPhone5 and the guy behind that is very bullish.
It’s the Apple watch that is driving most of the commentary though. Last week the feeling as the launch was a little vague and that was a bad thing. This week the feeling seems to be that the vagueness was actually pretty smart – as it allows Apple to set the agenda over the coming months as they drip feed feature and functionality news. Talking in a US TV interview Tim Cook talks about their desire for developers to come on board before the device launches. Just like no one expected Uber, Moves or Flappy Bird when the iPhone launched, great watch apps could make the device a must have.
One of the best Apple commentator blogs is DaringFireball and he makes some good points over pricing – suggesting the gold watch could cost as much as $10k. He also gets into some of the possible functionality – which, along with some of Tim Cooks comments, make the Watch sound like less of a peripheral. It will clearly have many ways to enhance the iPhone in your pocket or bag but will be able to do a lot on its own. He also thinks that the S1 computer on a chip that powers the watch could be replaceable, meaning the Watch is truly comparable with luxury watches where people expect them to last a lifetime.
Ben Evans thoughts on the Watch are worth reading – particularly his point that the delight of glancing at your wrist, to see that Leeds have scored or that your flight is being called, could be just as addictive as the smartphone. People check their phones dozens of times a day – can a watch replace much of that?
The chatter around Pay is more muted – largely because there is still a lack of real insight into how the service will roll out. Sure, we know the key points but as Apple need all the various partners on board, its not easy to see where they could end up in a couple of years. Right now the US is poised to move to Chip & Pin or Chip and signature, so retailers will have to upgrade their terminals. And just like in Europe most will include NFC technology. So Apple have been smart and adopted a less optimal technology largely because someone else is paying for the hardware roll out. And partnerships with Visa, Mastercard Amex etc make perfect sense.
But one of the smartest investors Chamath Palihapitiya thinks Apple have pulled off a masterstroke. He believes Apple is poised to disrupt the global banking infrastructure in the next decade or so and earn trillions of dollars. He likens the deals with the credit card firms to the way they got the record labels to support itunes. And he thinks that – eventually – an iPhone will act as a POS terminal so you then don’t actually need the credit card. Very interesting.
It is worth watching the Tim Cook TV interview for a good take on where Apple is and some hints on what’s next. Asked about TV, he says its still stuck in the 70s and then politely declines to talk about their plans for the space. And he also talks about the move into enterprise and the IBM partnership. (this long Bloomberg interview covers a lot of these issues too)
Another piece of the jigsaw is the Apple announcement on privacy, making the point that advertising is a small part of their business and hence they can be very focused on privacy. It also makes the point that Apple don’t cooperate with the NSA – which begs the question who else can say that?
Google & Nest
The $3bn acquisition of Nest did more than position Google as a key player in both the Internet of Things and the connected home. It also injected 300 people with an Apple DNA into Google. The CEO was instrumental in the launch of both the iPod and the original iPhone, and at Nest he attracted lots of Apple people.
We have covered Londons dominance in FinTech before, but as well as leading the field in the Financial world London is a major player in Fashion Tech. This FT piece looks at Burberry as a great example of a luxury brand embracing digital and others using tech to show at London Fashion week. The Burberry Kisses campaign from last year is also worth a look – not least for showing how digital marketing is maturing
Metrics & ROI
Preparing for a workshop for a Financial Services brand we have been looking at best practice in metrics. As ever the key is having a small number of important metrics to focus on and ensuring that everyone can see (and understand) what’s going on. The Don of analytics Avinash Kaushik shows us how simple a dashboard can and should be. His latest look at Mobile measurement is essential reading too.
The desire for comparison means we often measure the same as everyone else, but here we see that a less usual measure can be really useful too. Weekly users is a lot more valuable metric than monthly users for many businesses.
Twitter – what’s next?
Comments from the new twitter CFO around improving the timeline in Twitter caused consternation. This is a thoughtful piece on how Twitter can evolve to deliver on the timeline that so many value and provide other ways for more discreet conversations
Bubble anyone? A veteran VC doesn’t think so, but worries there is too much money going to startups, and that the burn rates are unsustainable for most of them.
Once called the Ministry of Magazines, IPC is probably managing the transistion from print to digital better than most. Newly rebranded as Time, this is a good interview with the man now running the business globally.
Finally the rise of growth hacking is seen by some as an indictment of marketings failings, but to us the technique of product/market fit is just modern marketing. This piece looks at how engineering works as a marketing tool. We think modern marketers work to the Malcolm X / Jean Paul Satre mantra By any means necessary.