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.
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