Mobile Fix – May 30

New Mary Meeker

And she’s back. Mary Meeker shared a new deck at the recode conference yesterday and whilst there is not that much new, it’s still hugely influential.  The stats on growth no longer surprise but her thoughts on the changes caused by this growth are always interesting.

Her most shared chart is the Money one – showing that time spent remains out of kilter with where advertising money is spent. Her estimate of the Big Opportunity for Digital (AKA the Big Problem for Print) is that $30bn is in motion in the US – so probably over $50bn globally. And the vast majority is mobile.

As we have discussed before there is a lot of friction slowing this change, but we are convinced it is happening and it will probably accelerate.

One other key theme from this deck is that Meeker refutes the idea of a bubble and shares some convincing data to support that view.

The whole deck is worth spending time on, but if you want a quick take on the key points this Guardian piece is a good cheat sheet

Content, Curation & Anchors

So finally we have confirmation that the Apple beats deal is happening. It continues to divide people – Ben Evans calls it a Rorschach Blot – it confirms your view of Apple – visionaries or past it.

We have come back around to seeing Apple as real innovators and we think that they are poised to use content and services in really smart ways to protect and build their core hardware business. 

Some analysts support our view that the software side of Beats – is the streaming – is more important than the hardware- even though Apple say headphones will drive profits for them straight away. And their awesome production and sourcing skills should see that product improve and maybe even come down in price.

Another makes the point that Apple are now getting involved with Pop culture and you can understand the Beats acquisition by understanding Lady Gaga. Think back to the Beyonce deal where her album was debuted on iTunes as an exclusive with great success.

This type of promotion can be a win win and Apple have been actively looking for more – the Beats team should make that process a lot more effective and Tim Cook has been very vocal in his praise of the Beats team. Their role in bringing curation the Apple services will be really important.

Interestingly the Beyonce product was innovative in format as well as how it was promoted; it was all about video. We know that YouTube has a huge share of the music market with views counting towards the US charts. Could Apple use Beats and music as a way to kickstart their ambitions for TV too? Again a curated service could beat the slightly anarchic discovery within YouTube.

Either way Apple is going to use music as one of its Anchors. A service that is so useful – addictive even – that customers will be reluctant to consider a switch to an Android. Beats will almost certainly be available on Android devices but we expect it to be so baked into iOS that it’s a noticeably better experience.

And it looks like home automation could be another Apple Anchor. Once your smartphone turns on your heating and your lights, moving to another device becomes a chore.

Streams

We couldn’t make the IAB Mobile Engage event the other week, but we heard lots of good reports. One thing that got a few mentions was Twitters’ Bruce Daisley talking about how mobile users consume content in a stream. He makes the good point that even the newspaper sites now constantly update and some use a stream – the Guardians Politics blog works that way.

He also refers to the very interesting talk that Evan Spiegal of Snapchat made a while back where he talks about profiles no longer being necessary in a world where everyone is constantly connected. Your stream says everything about you – and if you don’t update it you are just not present.

This is a parallel to the death of the home page – as the New York Times lamented last week people just go to the stories they want to read – underlining the Big Problem for Print, as the key locations that are so valuable in the real world don’t translate into digital. And remember when we had homepages – the places we started our web session when we turned on the PC? Now most people never turn their device off and most browsers open with all the tabs you had open last time, so we’re sort of in our own stream even on PCs

Flow

In our work for media owners on what advertising needs to look like to deliver on that $50bn Big Opportunity for Digital we talk about Flow.  This is our term for advertising that doesn’t disrupt the Stream – like banners do. The most successful ad formats fit the Flow of the Stream – best evidenced by Facebook and Twitter, but also true of Google PPC ads and even TV. Look, I am searching for coffee shops and there are all these useful links to ones just around me. Or I am watching an extended piece of video and it occasionally stops and shows me short pieces of video that (sometimes) entertain me and inform me.

The quest for native is about trying to fit with the Flow but sometimes its more about masquerading as editorial – and the New York Times is writing a rule book on native

Bruce showed some good examples of creativity on Vine in his talk and makes the point that only people who consume media as a stream can really crack making content that fits. Here is a good selection of recent Vines and this is a good example of how a brand can use Snapchat by fitting with the Flow.

As these new short formats can deliver significant reach there is more interest in how to make them. As well as Vine and Instagram video, GIFs are getting used more and more in art as well as in marketing. And this new tool to make them is interesting.

We are keen to meet people with skills in this area – people like Son who get new ways of doing things – so please point us in the right direction. The space is getting more commercialized and there is a big opportunity for brands to benefit from these new skill 

Programmatic, Context and Fraud

The new ways of doing creative are moving more slowly than the new ways of doing media – and that may prove to be an issue.

Especially as the context of the message seems to be increasingly absent from the channel thinking. Is a Guardian reader really just as valuable when she is checking her Yahoo Mail as when she is reading the Guardian? We have pointed this out as a real problem before and liked this new thinking about the issue from a US publisher. We agree and are happy to work with anyone who can make some progress on this – is it an opportunity for a smart research programme? We tried last year and couldn’t get enough publishers to get involved. But proving the value of context might even help with the Big Problem for Print.

The FT have a good round up of how advertising is getting automated. If you are not too sure about the pros and cons of Programmatic its well worth a read. Especially as the scale is increasing with two major players partnering to better compete with Google and Facebook.

But as the ways of doing things evolves so too does the appetite for ad fraud. A Mercedes digital ad was seen by more computers than actual people. The fraud in adtech is a growing problem and will slow the shift to digital unless it is dealt with quickly and effectively.

Quick Reads

Interesting thoughts on web apps vs native apps. We still think that open standards will win out and the power of search makes good browser experiences essential for the vast majority of brands. Native apps are good for some brands but probably only really worthwhile for a minority.

No one has come close to cracking mobile and money. Yet. A new survey from Accenture looks at attitudes to banks in the US – and a large proportion would be quite happy to bank with Google or Apple. Here in Europe Vodafone still have ambitions in this space and their new partnership with Bluesource to scan in plastic loyalty cards is interesting.  GoCompare tell us most people don’t make the most of card based loyalty schemes, but we suspect Apple intend to solve this with Passbook as they create a money focused Anchor.

Visual recognition has been a promising feature of mobile for a while and the Google acquisition of WordLens reminds us what can be done with the camera. Camfind is an interesting app that combines algorithms with Mechanical Turk to identify products and provide links to buy them. How long before Amazon buy them? The most interesting uses of visual search are in Fashion and this interview with the CEO of London start up Cortexica is worth reading.

How Yahoo made itself relevant in Mobile – again

McKinsey think that companies must stop experimenting with digital and commit to transforming themselves into full digital businesses. We sort of agree – experimentation is a good way to learn about news things like Streams and Flow – but it’s no longer enough to treat digital as emerging media. It’s now mainstream and a machine for making money. McKinsey have 7 habits of highly effective digital businesses. How many are you doing?

Finally….. the lure of Apple devices has been a core factor in their success since the early days. Here are some of their prototypes from the 1980s. But we don’t get the Bashful branding?

 

Mobile Fix – May 23

GAFA quiet period?

With anticipation building for both the Apple developer event (just over a week away) and the Google one at the end of June, you could argue things have gone a little quiet with GAFA.

Still no news on Apple & Beats. It seems that US financial rules mean that Apple don’t need to talk about a deal unless it’s much bigger than $3bn. So it could still be on. The Spotify results this week underline our belief that streaming is going to be a major business and Apple do need to step up to regain anywhere near the dominance they had with iTunes. With 10 million Spotify subscribers – and around 30m listening to the free (ad supported) version – people are starting to accept that streaming will reinvent the music business. This is more on the numbers.

Google did make one acquisition, buying the Word Lens Translation app. This is one of those really innovative services that demonstrate just how magical mobile can be. Take a minute to watch the demo and download the app whilst you can. Along with the Google Goggles Sudoku video it’s something we have used a lot in workshops. But since launch back in 2010 it’s been quite low profile and now Google see it can enhance their Translation service.

It’s another source of rich contextual data – once Google know I am using Word Lens to translate a menu or a road sign it has another powerful signal to decide which ad to show me next. Coupled with my location and all the data that Google Now can cook up, context is getting more and more usable.

Facebook 

Facebook were turned down when they offered $3bn for Snapchat a few months ago. So now they seem to be making their own version. Slingshot sounds like a better bet than Poke, but the FT say it may not get launched. Given the way that Facebook is taking the constellation approach to its apps, we can’t see why they wouldn’t roll the dice on this. The video messaging space is very attractive to the audience Facebook is struggling with and the reach of WhatsApp is a useful lever. Maybe this is the first sign that the fail fast regime really is over.

Another interesting move from Facebook has the potential to spook people. A new service lets you automatically post about the TV show you are watching or the music you are listening to. The microphone option when writing a post lets Facebook listen to the sound and identify the tune or the show. It’s another way of getting a signal that helps sell advertising. Remember Yahoo bought a firm with a similar technology; the IntoNow app was closed a few months ago – but Yahoo said the technology would be incorporated into some of their other apps.

Given how many TV viewers use their smartphones whilst watching TV, this tech could allow Facebook and Yahoo to offer synchronized ads to brands. The smart people at Xaxis are already looking at this type of service with their Sync product but their approach is a little less sophisticated.

And Facebook gave just announced some new policies on privacy.

Old Media

Whilst we wait for news from GAFA, the legacy media (arguably the biggest victims of the shift in both time and ad revenue to digital) continue to struggle. A new report castigates the BBC  for not going fast enough in digital. A little unfair given the pioneering work on iPlayer etc but their Non Exec points out that Buzzfeed has a bigger global reach than BBC News despite only launching in 2010.

And much has been made of the New York Times Innovation report (leaked via Buzzfeed ironically) where the division of church and state are shown to be very pronounced. And the practice of journalists doesn’t seem to have changed much;

“Stories are typically filed late in the day. Our mobile apps are organized by print sections. Desks meticulously lay out their sections but spend little time thinking about social strategies,”

This piece looks at how so many people curate content from old media and do really well with it. We heard a similar story about a UK magazine that had a great cover of Little Britain – and when they PR’d the story a day before publication it got picked up by the Mail and the Telegraph websites and was soon being shared. But with no mention of the magazine. A friend working at the company went to ask why it wasn’t on the magazine website – only to be told their policy was that nothing from the magazine could go on the site prior to the print onsale day.

In our client workshops we often use a great quote from GEs Jack Welch about change;

If someone is going to eat your children, it may as well be you.

In media it’s so true, but few people seem to have the appetite.

It is getting better. The Mirror announced a big increase in digital revenues and the Telegraph are pushing mobile first sites for the World Cup and experimenting with new ways of working.

newTV

Wired have produced some really good nativeadvertising /brandedcontent /advertorial for Netflix. It’s worth a look as a good example of what can be done – and its also interesting thinking for Fix readers interested in newTV. Surprisingly it doesn’t work that well on mobile. Adage take a look at the back story on its development here.

Wired also have another (apparently unrelated) piece on Netflix – looking at their Chief Product Officers views on the future of TV. It reports a presentation he gave suggesting what TV will be like in 2025.  We’re not sure we agree with the idea of the smart TV being central – we favour the dumb screen with the smartness in a smartphone. Watching the NBA playoffs this week by Chromecasting from a BT Android app felt like a glimpse of the future. Will it really take another 10 years to reinvent TV? YouTube is only 9 years old this month.

Social

One thing we keep reminding brands is that being early – and smart – in using new opportunities in mobile and social can deliver real competitive advantage. We think Ford have done a great job by being very focused on social and this interview with the main guy behind their social is a must read. He is leaving Ford and it will be interesting to see what he does next. Interestingly he has a good piece on the lessons brands can learn from the  NYTimes Innovation report we mention above.

Quick reads 

The latest version of the Google Mobile Playbook is now out. Lots of good examples of best practice.

Another Think with Google initiative– people celebrating good digital marketing. This one is their own (and Fix friend) Ben Malbon looking at global campaigns

Another good deck on growth hacking 

Marc Andreessen thinking is always worth listening to – in this interview he is bullish about Bitcoin – talking of it as a trillion dollar industry in

Finally.…with our social start up SkratchMyBack getting traction in its Manchester beta, we are very interesting in the sharing economy or Collaborative Consumption as its called. A new service in the US shows how much mileage there is in this space- Instacart lets you ‘hire’ a personal shopper who goes off and buys the groceries on your list and delivers them to you. There are so much room for business model innovation these days.

 

Mobile Fix – May 16

Apple, Beats & Anchors 

Is it happening or isn’t it? Almost a week on and it is still unclear whether Apple are going to buy Beats.

But the lack of news hasn’t stemmed the opnions and speculation. As someone on Twitter said; when Google, Amazon or Facebook announce something everyone goes – Ooh Interesting move. Yet when Apple announce something (or even a rumour) lots of people say Oh Stupid move.

We don’t think Apple is at all stupid and believe this could be a great deal. Beats is a very successful company with a really string brand

First reason is that Beats could resolve the issues around a cheaper iPhone. Many people have pointed out that a lower price iPhone – an iPhone Nano – could allow Apple to take the fight to the mid price androids that are doing so well all around the world

But the problem has always been about what a low price version does for the brand and does it affect the higher price iPhone? We have termed Apple the Audi of smartphones before and its worth considering how that brand deals with market segmentation.

There are many flavours of Audi but all at the top end of the market. For lower price points they have VW and Skoda -all sharing the same technology as Audi but each operating in its own market sector.

So a Beats phone at around $300 could be a big hit; iPhone 5 technology – which is still top parity with the best androids even though it’s a year old – with the very popular Beats branding, sold through the awesome distribution networks of Apple.

The second reason why is would be a good deal is that it should allow Apple to reinvent its music offering. Remember the renaissance of Apple was driven by the iPod and iTunes. As streaming grows in importance iTunes Radio – which is to be ad funded – probably isn’t a strong player. Now Beats streaming hasn’t done that well so far – but with some Apple love it could do a lot better.

Music industry insiders are very excited about the potential of streaming – but they see a different model to Spotify etc. Mark Geiger, the head of music at talent agency William Morris Endeavour believes streaming can transform the music industry . He envisions Streaming revenues of $72bn – 5 times the total music sales (globally) in 2013. Lucian Grange who heads up the biggest label Universal tends to agree. But Geiger thinks it will take one of the the big players – GAFA – to make it work and they need to have all music on it, not the relatively limited supply that current players have. 

In his presentation at Mipcom he makes it clear that the people behind the streaming firms aren’t from music – but the Beats people clearly are. Could Apple deliver the 500 million users who pay $15 a month for all you can eat streaming music?

One other point on this – we are told that he music rights that Beats have can be transferred in the event of a takeover whilst the Spotify rights can’t. So Apple may have pulled up the drawbridge behind them with this deal.

Music as an Apple Anchor

Is music that critical for Apple? Sure they built a big business with iTunes but everyone now has a music offer and many thought that it had become a commodity – something you have to offer but unlikely to make  a big difference to a customer.

We disagree – we think if you can get music right then it can be very powerful. Along with sleep, music is the most underrated drug in the world. Hearing the right song at the right moment can enhance your mood just as well as any narcotic 

But whilst the music that does that for me may be Marvin Gaye, Frank Ocean or 1960s Brazilian Jazz, yours will be different. And that’s where music services have to go next – to discovery and personalization. Jimmy Iovine of Beats talks about curation;

“There’s an ocean of music out there,” said iconic engineer, record producer and Beats CEO Jimmy Iovine. “And there’s absolutely no curation for it.”

What better raw material to start with than someones iTunes collection, and scrobbling that (remember how clever LastFM was at that) to deliver a curated stream.

If Apple can use their knowledge of my music and deliver a great personalized stream – helping me discover new music that I love  – they have something hugely powerful. And 500m people paying $15 a month generates $72 billion a year – and a 30% share gives Apple over $20bn a year in new revenue.

Apple Anchor – Passbook 

We see music as a crucial Anchor – something that will cause Apple users to pause before moving over to android and losing something they value.

Right now getting your music out of iTunes is a huge faff and that acts a sort of negative anchor – as does the way iMessage buries your texts once you quit Apple.

If you are Apple though you now want to build positive Anchors that keep people with the iPhone. The Appstore used to be an anchor but now most of the top apps are on Android too.

Music can be one and we are convinced that Passbook could be another. If I have a passbook full of my loyalty cards, coupons and boarding passes, will I just leave that behind as I switch to a Galaxy? And if Apple get the Passbook working really well with iBeacons to offer a new level of utility around shopping, will I just leave it? 

When Apple leverage their 600m credit card relationships to offer a real wallet service it becomes even more of an Anchor. Like moving banks – I know I can be done but do I really want to?

Apple Anchor – Health

If Apple do make health a key part of the new iPhone experience this quickly becomes another Anchor. The breadth and depth of your records from the iPhone apps and wearables (peripherals) will become crucial to health. Friends built a simple Diabetes app for sufferers to record their eating habits, mood swings etc. This has transformed the way Doctors treat them as the diagnosis is now based on fact rather than a selective memory. As the next generation gets smarter and more intuitive, the data gets richer and the barrier to churn gets stronger. A key Anchor 

And….?

If you accept the premise that the hardware is no longer going to be a key differentiator (the Amazon smartphone and the Tesco one are not going to be that different to the new iPhone or the next Galaxy etc) then services are key.  What else could Apple do to create differentiation and Anchors?

Everyone in the TV business knows sport is a key to differentiation. Sky built their business around football and BT is trying hard to emulate that strategy. Could Apple decide to invest in sports content as way of driving uptake and loyalty?

Charmath Palihapitiya – very early Facebooker, VC and owner of NBA team Golden State Warriors – believes it’s a 100% likely that Apple or Google or Amazon will buy the rights for a major sports league in the next couple of years

The US rights to the Premier League are with NBC and seem to be doing well. What if Apple wanted to buy global mobile rights for the Premier League – leaving the TV rights with the current players? 

That would be some Anchor – and a great way of making a Beats smartphone a must have in emerging markets too.

Idle speculation on our part, clearly. But there is something happening here and the question is what do brands do?

We advice all our clients to have a GAFA strategy; a real understanding of how they are involved and connected with Google, Apple, Facebook and Amazon and an appetite to test and learn on new opportunities as soon as they arise. For Apple we think Passbook is a huge opportunity for many brands and it is fairly straightforward to start learning what works and what doesn’t.

Mobile Gaming ads – a bubble? 

Finnish gaming company Supercell is insanely profitable – this article says that one day last October just two of their games totalled over $1m in revenue. The actual games are free – like most of the rest of the gaming market these apps are free to buy, but make money through in app purchases.

Most people don’t buy the gems or smurfberries, but a small number do. This chart from a great presentation at Facebook F8 conference shows the math.

Around a quarter of paying customers  – a very small proportion of all players – will spend over $1000 in a game and account for 90% of the game revenue. This writer thinks gaming is essentially gambling and worries we may end up with regulation.

Should we be worried that a large proportion of the booming mobile ad market is focused on finding these whales? Are we building an industry on sand?

The sooner we get real brands spending real money on mobile advertising designed to build brands and sell product the better.

Ephemeral?

There have been lots of new services that offer privacy – although Snapchat isn’t as private as people thought and they are proving very popular. Secret has raised more money and new data from Sandvine shows SnapChat is bigger than Whats App in the US

The same data source says “On several LTE networks in Asia 3rd-party messaging apps such as Line or WeChat R used by 40%+ of mobile subs each hour”

And Yahoo have bought Blink – a snapchat style service  – which they intend to close suggesting they wanted the people more than the product.

Square in trouble? 

Whilst a Bain report talks of the next step in mobile money being imminent, former mobile wallet poster child Square is in trouble. Reported to be losing $100m a year the business started by Twitter founder Jack Dorsey is up for sale. Despite a plethora of startups in this space we can’t see that anyone other than GAFA or maybe a Operator backed business can win. And only then, by solving a real customer problem. Paying for something with cards or cash still works fine. In our opinion, bundling payments with offers seems to be the only way forward.

The new Square app – replacing their wallet app – may be the last throw of the dice but being able to order on advance does solve a problem.

Quick Reads

Smart thinking on the evolving media agency model and their relationships with clients.

Interesting look at the relentless rise of ecommerce and the risk to retail

Foursquare are unbundling and their new Swarm app is now available. This Techcrunch piece sees Swarm as a service layer – using context to see when your friends are around.

This video from F8 is worth watching. Titled Disruptive Mobile Business it feature a panel with key people from Nike, Square, Pinterest, Estimote and Beats . It’s 45 minutes but if you are short of time the Beats bit starts at 19 minutes.

Finally…. we are out and about next week. On Monday I am on a panel at Open Mobile. And on Wednesday I am speaking at the Mediatel Media Playground. If you are at either event do come and say hello.

Mobile Fix – May 9

Chinese IPO

Last week the focus of Wall Street was on GAFA – now it’s the turn of BAT (Baidu, Alibaba, Tencent) as Alibaba prepares to IPO in New York

We have talked before about how the Vertical Stack model we apply to GAFA also works on the Chinese BAT. Baidu, Alibaba and Tencent all compete ferociously across virtually all online sectors– take a look at this infographic to get a sense  of the scale – we’d include it in the mail but it doubles the length…

Analysts estimate that the IPO will value Alibaba at between $136bn and $245bn – which sounds a lot until you consider their sales in 2013 were $248bn. And look at how many western firms you would have  to combine to match Alibaba; Amazon, eBay, Twitter, PayPal, uber, Spotify and more

A major beneficiary of the IPO is Yahoo who own 22% and they are expected to sell off $10bn of shares – prompting the question what will they buy with that cash?  Almost certainly something mobile

“When I got to Yahoo, mobile was everyone’s hobby. It was no one’s job,” Marissa Mayer

Talking about the new focus on mobile she talks of serendipity – the idea that people who go to the desktop site to check their emails and end up reading Yahoo news. In their apps you will be able to easily switch between emails, news and weather. Hasn’t she heard of the trend for unbundling?

Given how hard it is to get an app onto the home screen, we think that this type of cross pollination has more legs than the unbundling.

First Party Data

In the era of the PC, digital advertising built its infrastructure on top of the third-party cookie, a reliable workhorse that wasn’t exactly controversy-free, but at least remained nonproprietary. In our post-PC world, however, it appears that the infrastructure we need will be provided by large and proprietary first parties. 

This quote is from a good piece by a smart US agency head, pointing out the power of Facebook and Twitter in mobile advertising. As we have stated, the new ad world is divided between those with rich data – essentially first party data – like GAFA and Twitter – and the rest who use their adtech to add value to raw inventory through third party data.

Given the scale that GAFA and Twitter can deliver we wonder whether brands will continue to take the trouble to go buy others cheap inventory, in the hope of turning the lead into gold. Which is a worry for the main suppliers of this other inventory – traditional media owners.

Spend any time on a newspaper mobile site and the quality of advertising is terrible; poorly designed banners that often click through to non optimized sites and a surfeit of house ads. Yet they have something that could be almost as valuable as first party data – context.

Once upon a time the environment delivered by media owners was a key factor in the decision to advertise and the price paid. Of course you can now reach New York Times readers on eBay and Guardian readers on the Trainline app – but is it the same as reaching them in the right context? And could context be helpful as the debate around  viewability in digital – and the continuing scandal of fake traffic. This NYT article looks into the problems around online video and we suspect many of the same issue plague display on mobile and desktop.

Despite great tech and robust research in digital, every time these problems get aired, conservative brands have another reason to maintain their investment in traditional media.

How do we get a sense of the value of context?

One brand that monetizes its context well is the FT – this is a great insight into their digital strategy.. Of course their subscriber base gives them some first party data too. 

A key issue for Yahoo is how to revive their first party data – once they had millions of people logging in for Yahoo mail etc and that has virtually disappeared.

iPhone 6

Despite no announcements and no leaks there is a huge amount of speculation around the next iPhone – googling it gets 2.5m results.

One thing that is commonly accepted is that the new device will be bigger. One issue this throws up is getting apps optimized for the new devices – could this be a way for Apple to reboot the app store?

Finding anything in the appstore is a nightmare – it’s a digital jumble sale with a million apps. Solving this is a problem that Apple have not really focused on. But if we have a new device with a different ratio screen, there could be a way Apple get to restart the app store. Clearly with a new device and new OS, smart developers will be quick to optimize their apps. But lots wont and all those zombie apps that never get downloaded are unlikely to be updated.

So stealing an idea from the Google PlayStore, Apple could organise the app store based on apps that are compatible with (or optimised for) your device. All the key apps are there and discovery should be much more manageable.

More idol speculation over the next few weeks.

Quick reads

Amazon will now let you buy from Tweets – Amazon Cart (or Basket here in the UK) is a good idea and we expect it could be used more by brands in sponsored tweets. A huge proportion of tweets relate to music, books and film – could Twitter build advertising around media brands?

Groupon want to play in the grocery market – Groupon Basics competes directly with Amazon Pantry

Google apparently pressure Android device makers to include Google search etc. Google dispute this.

An interesting read about the Twitter purchase of Gnip –one of the firms that sells Twitter data to brands

eBay is getting into the content business – hiring talent to create a digital magazine. We think that they would be better to open up the site to curators – people who know a topic well and can help people find the right items on the site. We proposed this sort of role for our friends at Trekstock, so they could get a donation from people who found their help useful.

An interview with Hugo Barra gives more insight into Xiaomi – who are expanding into Malaysia. Very interesting Chinese company

When it comes to first party data the person best able to deliver that is you. Vendor Relationship Management is the term for people managing their own data and profiting from it. This is a good look at the area from a smart NY entrepreneur who is focusing on this exciting opportunity.

Facebook have launched a new tool so brands can better understand  -and target them. Audience Insights is US only at the moment.

AOL results disappointed – leading to their stock price falling. Most interesting stat is they still make $138m profit from people who still use AOL as their dial up internet access.

Finally….a bunch of really smart people were asked their views of the future – on the basis that they are quite likely to invent it. Well worth reading

Mobile Fix – May 2

F8 - Facebook steps up

Since we first came up with the GAFA construct a few years back, some people have questioned the inclusion of Facebook. Yes it’s huge, but when you do the Vertical Stack analysis it’s a much more straightforward play than the others.

But at F8 yesterday, Marc Zuckerberg firmly planted Facebook right at the heart of the mobile world and trod on the toes of Google, Apple and Amazon.

The idea of a light Facebook Connect – Anonymous Login – allowing users to try apps without sharing any of their FB profile info – and avoiding any other sign up process is a big step up for Faceboook. Removing the friction of signup means most developers will probably start to use this – putting Facebook right in the middle of the app economy.

The new Facebook Login also gives more control to users to decide what info they share with the app – if anything. So the rather cynical harvesting of data that lots of apps use FB connect for will start to decline – especially as Facebook will start to review new apps to ensure they only ask for data they actually need.

This is a very smart move. It plays to a core principle we always work to – you solve business problems by solving consumer problems.

The business problem is how does Facebook continue to fuel their dramatic ad growth?. The consumer problem that gets solved is the need to sign in to new apps. As people probably experiment with more apps, developers get more users but no way to recontact those users. So the best (only?) way to drive repeat usage is to buy Facebook ads.

For example Flipboard no longer knows that you have downloaded their app, as you use Facebook to login. But Facebook gets to see more of the apps you are using, making the targeting for app install ads even more effective than it is now.

Of course Google and Apple also know what apps you have, but Facebook have one advantage; they can see what you have downloaded on your Galaxy and on your iPad. And if you switch from an iPhone to an Android phone, Facebook know, whilst Google and Apple probably don’t. 

Other big news includes the ability to link            direct to in app content – something Google are pushing too and the ability to send to mobile so a user on your site can be sent a link to your app on their mobile.

The Facebook Audience Network was also unveiledso their reach is hugely increased. We met with a couple of the key product people on this a few months ago and the opportunities are really exciting. 

Our friends at Yodel are experts in the media side of app discovery and have shared some interesting stats on how well Facebook works.  They see Facebook currently performing twice as well as much of the competition and cost per installs of around £2. These new moves should make Facebook even more competitive.

Well worth spending time reading about all these changes – lots to digest. QZ has a good round up here 

How many apps do people have?

Whilst Fix readers probably have numerous screens full of apps, civilians tend not to. Some McKinsey data from 2012 showed the average number of active apps was 23. New data from Ofcom shows the average smartphone user in the UK has is 23 but that the mean number used regularly is just 10.

So all these app install ads are trying to be part of this limited repertoire. How many of these VC funded ad campaigns make sense paying £2 per install when they may well be soon deleted or just ignored? Again the new Facebook tools can be used to get an app revived.

One other thing that jumps out is data on app usage versus mobile web. We are not convinced that the balance is as app focused as some recent reports suggests and this data supports our view. A big proportion of app usage is around games and music – which in the pre mobile days would have been consumed on different devices for most people.

Clearly apps are important and the data on news shows this – but just comparing time spent with apps versus browser doesn’t give anyone a very clear view on what people are doing.

One other point – when asked which media they would miss most, everyone under 55 would miss their smartphone more than their PC or laptop. And amongst the under 34s, they would miss it more than watching TV.

There is lots of great facts and figures in this paper and we’ll be doing some insights for our clients. If anyone else would like our take on this get in touch.

Tablets

The big story from the Apple results last week was the slow down in sales for the iPad. There is lots of speculation about why this may be the case – especially after such incredible growth since launch –and the many Android tablets that followed 

Ben Evans does a great job digging into the data, coming up with the thought that maybe tablets have more in common with laptops than with smartphones and that people are seeing they can do most things on their smartphone.

It has always been a little lazy to bundle tablets in mobile as most tablets never leave the home. We see two issues. Firstly relatively few people have developed bespoke content or experiences for tablets, with the fact that desktop content works pretty well on a tablet driving people to save the expense of tablet version. So for the user the tablet gives you a desktop experience – albeit using fat fingers on content designed for a mouse.

Secondly, because there is less specific content and apps, there is less requirement to update the device. Our original iPad – bought on launch day – still does the majority of things well at home – web browsing, video and email etc. Some apps have stopped because the device can’t be updated to the newer OS, but not that many. Even the short lived HP Touchpad still does the job. The first Kindle Fires also.

So it’s hard to see how Apple – or anyone else – can kickstart the growth again. But does that matter? Tesco have sold 500k Hudls and are planning an update version. The addressable audience is still huge and people still love using them, so it’s worth considering whether bespoke content is worthwhile. And as an opportunity for advertising its really attractive.

One analyst points out that the Peak iPad meme may be overdone – making the point that as a standalone business the iPad is big enough to be in the top 100 US companies.

One key action though, is to separate out tablets from smartphones in your Google Analytics and other data – one figure for Mobile is really misleading.

Twitter

The other question we always get when talking GAFA is what about Microsoft/eBay/Twitter? These firms do have big influence but not at the GAFA level.

The Twitter results this week disappointed as they show huge growth in revenues, but slow growth in users.

On ad revenue people tend to be bullish and the way they are using Cards has some interesting possibilities. This is a good round up and whilst longish, it is worth reading.

Unlike most media the problem with Twitter isn’t quality. It’s quantity. The volume of content can be overwhelming and we are still convinced that curated lists could be the way to go. Users are loyal and we believe there is still lots of potential here – and they are hiring clever people to help work out their future  – including the former head of Google Maps and very smart planner (and Fix reader) David Wilding.

Quick reads

Deloitte research shows digital influences $1trillion retail sales in the US – with mobile at half of that.

Foursquare continues to reinvent itself with a new app called Swarm that focuses on who and what is around you. And the Foursquare app is going to focus more as a recommendation engine and take on people like Yelp.

Snapchat adds video messaging

McKinsey have published a new piece of thinking around balancing entertainment and information across the customer journey. We liked this quote;

“An effective TV ad today drives people to engage with the brand on a second medium, either on a mobile device or a computer.”

Google have shared 25 rules for building a better mobile site. A big issue now is that many companies have crap mobile sites, which is better than no mobile site – but only just.

The head of the US IAB says brands must prepare for the post TV world

Forrester research shows Instagram is a brilliant tool for engagement 

Are websites back in fashion? Jack Daniels has started driving traffic back to theirs.

More proof that Mobile is a hits business – Rovio sales slump as Angry Birds runs out of steam

Finally… Facebook are very keen to become the developers friend and this video Lets Build gets that point over well.

Mobile Fix – April 25

Google

It’s that time again. The financial results for Q1 are out for Google, Apple, Facebook & Amazon. Google was a few days ago and despite a 19% year in year increase in revenue the results were seen as a disappointment. Why? Because whilst paid clicks were up by 26%, the average cost per click fell by 9%. This is clearly a mobile factor and until brands can see mobile conversions are as good as desktop, the value of a mobile click remains in question. Better attribution of transactions that cross multiple screens is a focus for the whole industry. But until brands have sites that work as well on mobile as they do on desktop, the potential of search is reduced. More on this below.

It is worth listening to Nikesh Arora talk about the 4 sectors of Googles business on the earnings call. One topic pulled out was how Super Bowl advertisers nearly all used YouTube to extend the reach and life of their TV ads.

But when asked about mobile pricing Nikesh reiterates his view that in the medium to long term mobile pricing will be better  - and talks through the reasons why. 

Facebook

Facebook had no such problems – their success with mobile continues. The two issues that plagued them at the IPO – where would revenue growth come from and how would they deal with mobile – are both now non issues.

With revenue up by 72% and user number growing in all regions – and mobile grew to be 59% of all ad revenue – they are being lauded as a big success story.

They look likely to maintain growth – and the pressure on Google – with their own ad network seemingly imminent.

An interview with Zuckerberg a few days before the results, is worth reading to get an idea of the issues he is focusing on; innovation and privacy feature heavily.

And this interview with the WhatsApp CEO is worth a look too – 500m active users each day and 700m photos shared each day.

Apple

Whilst Google and Facebook both talked up their plans for the future, Apple did nothing more than share their latest figures. The figures were good enough though. Increased iPhone sales e surprised everyone – and success in China and Japan seems to have been a big factor. More worrying was a 16% fall in iPad sales, which no one seems to understand. We are going to look at this more next week.

Couple of bits of speculation that relate to Apple;

As we have been saying for ages we expect Apple to switch the default search in Safari from Google – they can’t be happy at giving that amount of data and insight to their key competitor. Seemingly Yahoo want the deal and are pitching hard. Given that the Yahoo search product is essentially Bing we don’t expect Bing to let this go. Danny Sullivan doesn’t think a Yahoo deal is likely either.

But we now advise all our clients to pay more attention to BING seo – especially on mobile.

And Nike this week downsized their Fuelband team, whilst denying they were closing the programme down. They never did do an Android app so we stopped using the Fuelband as without the app it’s just not that useful. We also found that apps like Moves (just bought by Facebook) do the job of the wearable/peripheral equally well. Should we expect Nike to have their fitness app baked in to the new Apple Health everyone expects with the next iPhone?

Amazon 

The Amazon results are out and they are pretty much right on the estimates – so no real news. But this pre results speculation from an analyst shows the scale of the change Amazon is going through;

Though desktop page views at Amazon.com declined by about 9 percent in the first quarter compared to a year earlier, mobile page views increased by more than 50 percent, RBC Capital said.

Mobile advertising

We see the digital advertising world separating into two states; those players that have rich data on their users (GAFA plus Twitter are clearly in the lead here) and those who have rich data they can apply to raw inventory bought from media owners (The Agency RTBs and some of the ad networks).

Mobile network operators have long been considered as possible players but despite lots of talk there has not been much action. It is changing; Weve have got some good traction on the UK and now Telefonica have made an aggressive statement of intent with the launch of Axonix.

This new company is jointly funded by Telefonica and Private Equity firm Blackstone and is built around the tech from Mobclix – a fast growing mobile ad firm that ran out of money after Velti bought them. With the cream of the Telefonica Digital ad team running the business and a tech platform that enjoyed a good reputation, this looks like the first credible ad play from a MNO. If they can leverage the rich data they hold on over 300 million customers, they could have an impact on GAFA etc.

This move by Telefonica highlights the various false starts by US Operators – and most of the others – although AT&T are investing in an interesting deal around ad supported video, working with a former head of News Corp. This sort of deal demonstrates the issues around net neutrality – will AT&T customers who want to watch YouTube or Netflix get as good a service as those who want to watch the AT&T service?

The Home Screen battle

If you want to be a player on mobile advertising you need rich data. One way to get that is through knowing what’s on someones homescreen. Flurry have evolved their research business into a good ad network and become probably the only non GAFA firm with insight into the apps people have.

But with the new crop of homescreen apps, this data is becoming more widely available. We mentioned Yahoo buying Aviate a few weeks back and then Twitter bought Cover – and Facebook arguably kicked off the trend with Home. Newer players like EverythingMe are emerging.

All these apps – and their Chinese equivalents – take over the home screen and intend to serve up the right apps at the right time. The ambition is to emulate the Google Now type contextual service and these apps want access to all the data on the phone – diary, contacts and email. So privacy is an issue. The FT have a good round up here.

Is the first big mobile trend that started on Android? Of course Apple don’t allow anyone to mess with their homescreen.

Mobile Sites

New data from the IAB shows that slowly, brands are getting around to having mobile optimized sites. Now it’s only around a third of top brands that don’t have a site that’s works on mobile. The next problem is that many of the optimized sites aren’t actually that good. We see many that are slow loading – and this research suggests that two thirds of responsive sites load unacceptably slowly 

It’s actually not that hard to build a site that is Fit4Mobile but it requires ongoing work to sort the basics like image size etc as well as looking to improve conversions and actions on the site. Every time we have done the math, the value that can be unlocked from search means the investment in getting the site right is paid back quickly.

We remain convinced that Google will start to reward optimized sites with better placing in organic search when people are using mobile, so this value could soon be dramatically increased. A good story this week was around the new Ryanair website where the amateur approach meant it performed really badly in search. We took a look and found they hadn’t bothered to make it mobile optimized either.

Quick reads

Here is more on the Twitter ad network play, using the MoPub marketplace they acquired last year.

YouTube continues to push for TV budgets and a new interview with Susan Wojcicki outlines the next step – making YouTube stars famous in the real world­ with press and outdoor ads and even local TV spots.

There is also more and more information on the habits of youTube viewers – with this infographic debunking some of the key myths.

More Google thinking on blending mobile and desktop shoppers

China continues to fascinate and this look at the digital landscape is well worth reading

Finally

The team at Flurry have put together a great deck called The Age of Living Mobile. As well as celebrating the immense progress made by the industry in the last few years it also points out that there is still lots more potential for growth.

It’s time to experiment

 

 

 

 

 

Mobile Fix – April 11

Mobile Innovation at risk?

I am currently rereading Burn Rate, Michael Wolf’s excellent book on his adventures running a content business in the early days of the web. Starting in 1996, his stories of VCs and startups still sound quite contemporary. The figures are amazingly small though – he talks of Excite having a $40million warchest.

But the thing that resonates most is the description of the shift taking place from AOL, Genie, Delphi and Prodigy towards the web – and the huge excitement as people moved from a controlled environment to the free web, where anyone could do what they want.

I’m old enough to remember that era – we had just started Poppe Tyson in London – and many prospective clients were still investing marketing budget in AOL and Compuserve.

As we discussed last week, the web seems to be taking a back seat on mobile and the rise of apps is arguably taking us back to that controlled era. Chris Dixon of VC firm Andreessen Horowitz points out;

Apps have a rich-get-richer dynamic that favors the status quo over new innovations.

VC Fred Wilson agrees that the dominance of apps is stifling innovation and looking at the top 200 apps sees very few that are recent venture backed businesses.

GAFA are crucial in the discovery and distribution of apps and we all know that without a substantial budget for Facebook app install ads (etc) it’s nearly impossible to get an app to scale. And the appstore tax of 30% is a major factor too. Are the Vertical Stacks the new Walled Gardens?

The Net Neutrality arguments are designed to give similar status to the Mobile Networks – which, as we know, stifled innovation in mobile prior to the GAFA era. This is a good summary of the various points of view on apps and the threat to innovation.

Yet the combination of the mobile web and mobile search are still low cost options – and therefore great opportunities for innovation. And in our research we find that people think of apps as the icons on their home screen; click on them and something happens. Few know or care about them being native apps or bookmarks for mobile websites. If it solves a problem, it will probably earn its place.

So in our projects we usually advise that a blend of mobile web and native apps is the right way to go – together with smart thinking on how to use search and social to drive discovery and get than icon on the home screen.

As Ben Evans points out, the mobile opportunity is still wide open and current trends are no real indicator of where we might end up. The size of the mobile opportunity means that everyone needs to get involved and invest smartly in learning what works and what doesn’t for your business.

Reading Burn Rate you remember that those early days were just the start of the digital switch that has changed how millions of people live their lives and transformed every business sector.

We are now just at the start of the Mobile switch where billions of people are going to have their lives changed. And every business sector is going to get transformed again.

It’s time to experiment.

Social Evolution

A very experienced smart marketer slightly stumped us this week when he posed the question Why should I spend any effort on Facebook? He totally saw it was a valid media channel for ad buys, but with a modest number of followers he wonders why he should invest in time and content to grow his likes, when there is now little benefit in free reach. Of course as part of a social strategy of ubiquity, the effort in Facebook improves results on Twitter, Google+ etc as some content can be reused. And knowing what content resonates with fans does help improve ad performance.

But as the Facebook Feed evolves we see both users and brands frustrated with the experience. This TechCrunch piece gets into the details on how the Feed is now constructed and looks at the various complaints, but we don’t see a solution yet. John Batelle argues – quite convincingly – that Facebook should let the user take control.

It is essentially the same challenge that Twitter potentially has. Twitter is a hugely valuable service but you always have the nagging doubt that you may have missed some good stuff if you haven’t checked for a while. But I prefer that to a feed that Twitter have decided is the right one for me. Again we thinks lists are an underused asset for Twitter; setting up some specific lists allows for an occasional browse of a certain set of Twitterers, without needing to have those feeds in your timeline.

With a whole swathe of new ad formats on the way, Twitter is  ramping up their advertising push and by redesigning profile pages potentially make them much more usable. Some think that these profile pages could evolve to be someones main profile on the web; you may have a blog and a LinkedIn page but an improved Twitter profile would probably be a better representation of you.

Just as Facebook and Twitter share similar problems – and similar ad formats – the new profile pages makes Twitter look a lot like Facebook.

A couple of other useful bits on social;

This is a good roundup of thinking on what the ideal length of a Facebook, Twitter or Google+post is. We were told a while back by Facebook that the average brand message is much much longer than the average users posts – the challenge for a brand is finding a way to convey their character in as few words as possible. It has always amazed us that brands often leave their most important language – search ads and social – to inexperienced media buyers and project managers. There is wealth of copywriting talent that should be employed for these crucial tasks; the easiest way to double response to both search and social is great creative.

Twitter have shared why people follow brands; people want to hear from these brands – especially with promotions and special offers

Social Revolution

It’s clear that messaging is going to change social and Facebook are keen to stay ahead of the curve. They demonstrated this when they bought WhatsApp, but many questioned the role for their own Messenger service. They are now stripping out the Messenger functionality from the Facebook app, so users have to download the separate app – continuing the single purpose app strategy they showed with Paper.

This is a good take on Facebook messaging and the new Asian competitors; Line, WeChat and Kakao

Ex Facebook exec Christian Hernandez has a good look at these new apps in this piece on the pros and cons of relying on someone else’s platform. Well worth reading.

Hardware – Cheap & Useful

Working on an ebooks project a few years ago, we recommended the backers ( a number of publishers and a major retailer) to ignore the siren call of developing their own hardware and instead develop for the nascent tablet market as well as smartphones. As it turned out that was sound advice. Then

Now it is possible to develop hardware that is cheap enough and good enough to differentiate your business. Tesco are making a pretty good job of it with Hudl and Google are having a lot of success with Chromecast (we are less convinced about the Chromebooks).

Amazon have done a brilliant job with the Kindle, straddling both hardware and software, and Fire seems to have started well – it’s the bestseller in electronics on Amazon.com.

Their latest piece of hardware is really intriguing. Dash lets users scan a barcode of any product to add it to their shopping list – and it can also work with voice too. It is only available to customers of AmazonFresh – their grocery home delivery service currently in Seattle, Los Angeles and San Francisco.

The biggest problem for people like Ocado and Tesco is online grocery basket size tends to be smaller than a shopper in store as the impulse buys don’t happen. But once on the list they tend to be reordered again and again.

So for Amazon to have a tool that people can use around the kitchen to reorder should be great for both retention and revenue. And as a physical object it should also help with customer acquisition as people see it in their friends’ houses.

Most of the smart people we know in the Grocery business are convinced that its only a matter of time until Amazon launch Fresh in the UK. This is a good look at the US market for home delivered grocery and it reminds us that dotcom casualties like Webvan actually did have market impact – it was just way too early.

Interestingly Dash has dotcom ancestry too. Does anyone remember CueCat? Launched in 2000 this barcode scanner needed to be plugged into a PC before it could read a code on a product or in an ad. Called one of the 25 worst tech products of all time, it didn’t last long. But as we see with Dash, these ideas have real potential once you unlock them from the desktop and define the problem that needs solving.

Marc Andreessen says;

“All the dot-com ideas were correct,” “They were all too early. They are happening now.”

We’re looking for content ideas in Burn Rate to reimagine for today.

Quick(ish) Reads

Dropbox is looking to play a bigger role in its millions of users lives, with new apps for email and photo sharing.

The Music business isn’t in as bad a state as many think. This profile of Lucian Grainge suggests streaming will soon turn into a major revenue stream

The New York Times has an interesting new app called NYT Now and it’s getting good reaction. With a subscription model and native ads, the key question is whether it differentiated enough from the Times itself?

There is a lot of interest in news content at the moment, with a focus on niche plays. But the business model is in question; as the writer of Burn Rate points out, the ad business wants scale.

When Google sold Motorola it kept the bit that is designing a modular phone. This is a sneak peak of Ara. And you can sign up to help design the project by doing Special Missions

A good look at Yahoo mobile ambitions and the thinking behind their excellent Aviate app.

Finally.. a couple of our agency friends questioned our take last week that the Agency world hasn’t embraced tech yet.

But this week Agency bible Campaign is running a story saying;

Confidence in creating digital and mobile campaigns is still low among marcoms and media professionals in the UK

Another survey suggests many Marketers don’t really get the idea of ROI and hence struggle to demonstrate the true value of marketing to their board.

And client de jour Bonin Bough suggest Creative agencies aren’t necessarily the best partners for brands

Creative agencies used to manage 100% of our communications; now they manage 60% or 50%. As that happens, we keep adding agencies which is not sustainable,” 

Now obviously this is a generalization and there is some great talent within Agencies producing great work. For smart clients who really do get it.

But nearly 20 years into the Digital Switch it’s still a little patchy and you have to ask yourself if you are getting the right thinking on mobile, social and content from your existing partners.

Or do you need some provocative Big Picture thinking?

(No Fix next week as we will be eating Chocolate in St Ives. If you fancy a change from Eggs check out our friends at CocoaRunners who can send you a box of fabulous artisan chocolate. If you use this link and use ADDICTIVE as the code you get a £3 discount and we get a free bar. Enjoy.

If you would like to get Mobile Fix by email each week you can sign up here.

And if you need help profiting from Mobile, Social and Content get in touch.

Mobile Fix – April 4

Mobile  - Problem or Opportunity?

We spoke on a good Adweek panel organized by Weve this week. Along with other sessions across the event, we were left with the feeling that there is quite a lot of friction holding mobile back. Lack of clarity of measurement , lack of creativity, dissatisfaction with formats etc.

And a couple of smart people in the US make similar points this week. Ian Schafer of Deep Focus suggests the digital ad economy is heading for a correction as the stuff that works on desktop doesn’t translate to mobile.

And Barry Lowenthal of The Media Kitchen points out many mobile focused businesses are rejecting advertising as a business model – which is a problem for those who need to reach consumers when they are on mobile.

Now we probably don’t need reminding just how big the mobile opportunity is (but these 5 charts do a great job) but if the ad industry doesn’t make the most of this others will.

The CMO of Walmart is a big believer in adtech and is bringing in engineers to help solve the problem.;

“There are so many choices on where you can put your precious investment. It’s a software problem.”

And here in the UK a Tesco exec talks about the lack of expertise around mobile;

“Lack of expertise is a big challenge, not just in our company, but a lot of agencies don’t get it. They claim they do, but if you scratch the surface they don’t.”

Whilst tech and mobile have disrupted many sectors – retail, money, publishing, transport etc the changes in marketing are less apparent. Someone from any of these sectors 50 years ago would struggle to recognize their business now.

Yet as MadMen proves, someone from a 1965 agency would feel fairly at home in an Agency today. Which either means we’re immune to disruption. Or it just hasn’t happened. Yet.

Mobile is a huge opportunity. Embracing the possibilities of mobile, social and content can be the way we change the way Agencies add value for clients. Or we can leave it in the too hard box and let the consultancies eat our lunch.

It’s time to experiment.

Apps vs Browsers

A perennial question on mobile is whether brands should focus on apps or moble web. Various studies have shown that most brands apps struggle to get users and even once downloaded often languish on the last screen before being deleted. And the surge in mobile search  - along with huge mobile use of email and social – means a mobile optimized site in a must have.

But new research from Flurry suggests that the vast majority of time spent in mobile is spent in app – as much as 86%in the US.

Data from Comscore suggests  a similar profile – and shows  mobile app usage now accounts for more time than desktop. 

We still believe the mobile web is vital; the fact that half of searches are now mobile underlines this, as does anecdotal evidence.

If your brand doesn’t have a mobile optimized site you are at a serious disadvantage. Not having an app is much less critical. 

“TV is just an app”

A big week for newTV – the term we use for the fusing of digital video and traditional TV. BT have thrown their weight behind the Chromecast with all their sports available this way to their Broadband customers – potentially reducing their reliance on Sky – their main rival. It also has the potential to reduce their reliance on YouView where other partners include the main free to air broadcaster. The C4 CEO is skeptical about Chromecast calling it; 

one of “a plethora of devices that will trickle into homes”.

Dixons are more positive – saying they sold one every 4 seconds on first day of sales – and it’s still the top seller on Amazon.

Amazon now have their own streaming device; the Amazon Fire.  At $99 it looks good and they make a point of comparing it to Chromecast and Apple TV where its higher spec may justify the higher price. No word on when it will be available in the UK – but we would expect it to be soon and with some UK partners – like BT and BBC iPlayer.

  

Another piece in the Vertical Stack and another device to support, if you are a content player.

A US presentation on the future of TV is worth looking at – and this quote is interesting;

“As you unbox the cable box and allow other devices to become the TV experience, you’re going to get much better consumer experiences,” Mr. Greenfield said. “On the flip side of that, TV is just an app.”

The charts from this presentation are available here.

As we said when talking about Disney last week, this game is about creative transformation rather than revolution, as the money involved is huge – old school traditional media companies that sell video are hugely profitable

So they want to protect their business and new media companies want a share.

As a further incentive for brands and agencies to move TV budget to online video YouTube will now guarantee audiences for big spenders – and reserve them space in top shows. Sounds a lot like TV.

Yahoo have ambitions here too. Already a big player in online video Yahoo are rumoured to be planning a YouTube rival and looking to poach some of the YouTube stars. There is some latent dissatisfaction with YouTube but the lack of a viable alternative has meant there has been little churn yet.

Ben Evans has written a really good piece on TV too

Twitter & TV

One area where TV is embracing digital is through social. New research from Twitter shows the symbiotic relationship – evidenced by 4.2 million tweets using the Brits hashtag. And one very interesting snippet is the finding that being retweeted is strong social capital.

Building on this, Twitter are buying 2screen analytics firms in Europe – SecondSync in the UK and Mesagraph in France. Both have strong relationships with broadcasters in their markets.

So we should expect more lame use of #hashtags in the end frames on TV ads, but smart brands will find better ways of unlocking the social element. We think that brands could have a role as curators on Twitter – maybe using Lists an underexploited asset of Twitter.

For example could a Champions League sponsor direct fans to a curated Twitter list for each match – featuring the players and pundits who are likely to add value for that particular game?

This is good thinking around the potential for curation.

Net Neutrality

One key issue around TV switching from cable to broadband is capacity. In a turkey not voting for Christmas type surprise, EU Mobile network operators have come out against Net Neutrality.  The EU believe there is a compromise to be had;

“If we all agree on the need to end blocking and throttling, and we agree on the need to manage specialised services carefully, then the debate that we are having is about how we achieve this, not about being for or against the open Internet,”

But MNOs are not keen on building the fatter pipes that YouTube, Netflix etc need, without some way of profiting

As BT looks to re-enter the mobile market with a quad play – landline , broadband, TV and now mobile – we have a complicated ecology.  And it is possible BT will emulate the strategy of French ISP Free where their extensive broadband network – coupled with Femtocells – could give them an advantage in coverage.

The one thing MNOs lack is content, so will we see BT extend their content strategy to mobile? With all that TV money at stake, the idea of your enemies enemy is your friend springs to mind. There are still rumours of a tie up between Vodafone and BSkyB.

Mobile Money

Whilst the various mobile wallet initiatives struggle to get traction, mobile banking has really taken off for existing banks. Over 12 million people have downloaded banking apps and usage has doubled to 18.6 million transactions a week.

The downside of this for the banks is that footfall in their branches has dropped dramatically – down 30% at RBS/NatWest over 4 years.

As new services launch  – like PayM which enables people to make payments to anyone whose mobile number you know –, this is a one way trend.

PayPals David Marcus has shared their view on how this is going to play out – and with news that MPesa, the African money success story is coming to Europe, disruption is going to continue.

The question is whether new players can drive the change or do existing banks – along with Visa and Mastercard – have enough as incumbents to win?

(Looking even further ahead this futurology piece imagines money in 2040)

Quick Reads

The move to omni channel is not just a western phenomenon. Chinese ecommerce giant Alibaba is investing in Chinese department stores.

IBM is investing in their services division to build what is essentially a global digital agency. IT giant. Cognizant are aggressively growing their consulting business and Accenture have made a really big hire too. Tough competition for agencies.

A good look at the ingredients of a successful social campaign – #Selfie

After Apple potentially reshape the marketing world with low energy Bluetooth and beacons are they about to do the same with Multipeer Connectivity and Mesh networks?

It’s 10 years since Gmail launched

Are we getting over excited about Big Data?  This good FT piece makes the case for Big Insight and points out the flaws in some of most discussed examples of Big Data success

Tesco are getting into adtech Can we expect Tesco to use their big data to target ads for the products they stock?

Finally ….As we have mentioned before, no-one has told the Chinese that the QR code is over. Nor, it seems, that local newspapers are dead. So they are combining the two to create portable online shopping catalogues

We think there is real potential to connect local press with digital via the mobile. This is worth watching.

Mobile Fix – March 28

Virtual Reality & Facebook

This has been a busy week for deals and flotations. Each of which has some significance for brands. The one with the most press is the Facebook acquisition of Virtual Reality headset maker Oculus. Shelling out $2bn – close after the WhatsApp deal – has unnerved some on Wall Street with the stock price now 18% off its high of 72 which was reached a few weeks ago.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

It’s clear that Virtual Reality has the potential to change how people play games and experience content but the time when Daft Punk style headsets will be commonplace is some time away. So we don’t see this as a really significant move – at least for brands – right now. 

(Some other news was revealed on the Investor call about the Oculus deal – Facebook now has 1 billion mobile users – and Instagram has 200 million users.)

Disney & newTV

Disney bought Maker Studios for almost $1bn – so one of the oldest brands in TV has bought one of the youngest. Maker have around 55,000 different channels on YouTube  and this is a good guess at why they have made the deal – talent, product promotion, new types of ad deals and preparing for Cord Cutters.

In London this week the Disney TV President Anne Sweeney talked eloquently about TV content becoming immersive more fully interactive and on demand via the internet – and says all these things are being worked on right now. Well worth watching the full video.

Doing some research around football and video, we looked at the key players on YouTube; Sky has 53K subscribers and ESPN has 12k. But the biggest YouTube channel focused on football, in terms of subscribers, is Copa90. One of the new channels to emerge with from producers partnering with YouTube Copa90 has 562k subscribers.

Add Chromecast the mix and, to paraphrase Disneys’ Sweeney, there is a Creative Transformation happening in newTV.

Gaming

The other significant moves were in gaming. UK success story King IPOd giving the company a value of $7.6bn  – although the share price dropped over the first days trading . This reflects concerns that the company is too dependent on Candy Crush – which accounts for nearly 80% of revenues

An interesting look at the numbers says;

So the question boils down to can King hold on to existing users and keep them spending. I would argue that other, similar games, like Clash of Clans from SuperCell, have proven that they can do this. It is getting very hard (and expensive) to launch a new title in mobile app stores.  Consequently, the longevity of existing titles is improving somewhat. This speaks to the way in which the App Store model has some serious flaws, but does provide something of a moat protecting Candy Crush.

This is a really good look at the King story and what it can teach other  British entrepreneurs  from VC Christian Hernandez.

The other interesting deal is in Asia. Continuing our interest in BAT (Baidu, Alibaba, Tencent) we thought the Tencent purchase of a stake in Korean game company CJ Games was interesting. At $500m for 28% this is a big deal. It’s another layer in their Vertical Stacks but given that gaming can inspire so much loyalty can we expect GAFA to be more explicitly involved in games?

They are all making lots of money indirectly from games – largely through sales and advertising (see below for a look at Facebook and app installs) 

We think that content will increasingly be used as a differentiator for platforms and devices, so could Google or Apple transplant the games that are big in Asia over to the West? Given how successful Flappy Bird was, it’s clear good games can work in different cultures.  So could someone import a big game from Asia and make it only available on their platform? Or could a Samsung – or a Huawei – preload a hit game to help sell their devices?  Or could a smart brand license an Asian game and introduce it in the West?

Intel made a big deal about wearables at CES this year and have followed through with the purchase of BASIS for $100m.  The other big news in wearables was the deal that Google struck with Italian sunglasses giant Luxottica – the maker of Ray-Ban, Oakley and Persol. It is vital that Glasses avoid the Bluetooth Headset prejudice and getting this talent on board should help.

5 things you should do before thinking about VR. 

The Oculus deal is interesting, but we think it’s going to be about gaming and home entertainment for the foreseeable future. And whilst your Agency’s Digital Prophet ( they all have one but few with haircuts this bad) may want to demo this in the Agency lab, there are probably better things that you could be focusing on.

Whether you subscribe to the McKinsey 80/20 rule for boosting the return on marketing investment or the 70/20/10 model Coke use to drive innovation, we believe there are lots of ways brands can unlock real value, right now.

* Make sure you are really FitforMobile – with mobile optimized sites for all your brands and a mobile approach on search, social and email

Get your digital metrics right

* Identify the top 5 YouTube channels covering the content areas your brand has an interest in and start a discussion about how you might collaborate. For example there are huge opportunities for smart product placement in these channels.

* Review how you are getting the most from GAFA – getting search and social right, understanding what Apple products you could experiment with (Passbook is on millions of peoples home screens) and looking at whether your brands could be sold through Amazon.

* Audit the integration between the different strands of your marketing- how could mobile add an extra dimension? Add Shazam to your TV and/or develop a Two screen search strategy. Test what happens if you use AR and QR codes cleverly in your press ads. Use responsive creative so your digital ads are perfectly optimized whatever screen they appear on.

If that sounds a little dull, look at what the smartest Brands are doing and saying. The partnerships that Start Ups that Mondelez have pioneered bring in companies across mobile and digital with solutions that can solve problem at scale, right now. The same with the Unilever Go Global programme.

All the companies chosen use digital as a tool rather than a toy.

Which, without being rude, is what Oculus is right now. Albeit a rather expensive toy aimed at geeks and gamers.

App downloads

In the piece on King the author says it is getting very hard (and expensive) to launch a new title in mobile app stores. A big part of this is that the appstores just dont work. Discovery is huge problem. So advertising is the only solution

@ChetanSharma tweeted a comment from M&CSaatchi saying they were putting 50% of their mobile ad money on Facebook but it is getting expensive  – and that the only thing that works on Facebook is App installs. He then retweeted someone else saying they put all their ad spend on Facebook app installs – but reach is decreasing and costs are skyrocketing.

Quick Reads

More interesting thinking from Mondelez- one of their top marketers thinks the Agency of Record is an outdated concept

The video of the Larry Page interview we mentioned last week is now available. Well worth watching

Ex Googler Hugo Barra talks about Xiaomi in this new interview – their devices will be on sale globally within 2 years.

Some good thinking around Growth Hacking

Seth Godin has some typically smart advice on marketing

If you look at every successful marketing story over the last 10 years–Airbnb, Lululemon, and work your way up or down or sideways–all of them are the same. They make something the market wants to talk about. Companies should let the market decide what they make, not the other way around.

More on Cards – the future of user experience

AOL have new tools that they hope will make them then one stop shop for buying digital media. We suspect Google may have something to say about that.

It’s been a while since we have seen a good infographic but this one on the Internet of Things is really good

Finally….We are looking forward to taking part in Adweek next week – speaking on a panel on mobile targeting and metrics, organised by Weve;  I am 67% of Female – is that OK?

It’s on Tuesday at 10.30 in the David Lean room

If you are there come and say hello.

 

Mobile 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?