Mobile Fix – October 3

What Apps?

As a warm up for client workshops we often do a WhatApps exercise. We get everyone to unlock their phone and pass it to someone else and then get people to talk about what apps are on the homescreen of the phone they have.

It gets 3 important points over really well;

1/ People feel deeply uncomfortable seeing someone else holding their phone, demonstrating just what a very personal device it is – so marketing risks being very intrusive if not done really well

2/ Most people have a few of the same apps; Facebook, Twitter, YouTube, Google search etc plus their bank app and a news app perhaps

3/ Everyone has a few niche apps that are very important to them – Dads have games for their kids, sports fans have apps about their team or sport, others have things like YPlan and apps for nights out or travel

And we are also starting to see that people are organizing their apps with the home screen for the most used apps and unused apps migrating to later screens and being forgotten about.

Knowing what apps someone has is hugely valuable for advertising and everyone is trying to get this insight. Apple and Google clearly have the best view but some others have good data too. Facebook has some knowledge through those apps that use Facebook connect in some way  – and where someone has downloaded as a result of a Facebook ads. 

With the Flurry acquisition Yahoo now have a pretty good view too and along with the Aviate launcher app they acquired a while back are building an interesting data set on the apps people have.

Whilst the number of new apps downloaded is declining, we believe there is still a huge opportunity to help people discover apps they will find useful/ entertaining. Especially given how poorly the app stores perform if you don’t know exactly what your are looking for. People have done very well with apps designed to help find new apps but just as Apple kicked out AppGratis last year they have just kicked out an iOS launcher app. Launcher was different to AppGratis and seemed a good way to improve how you use the apps you have – but Apple clearly don’t want anyone but them to know what apps you have.

Of course the other people who have some idea of what apps you have – at least theoretically – are operators and we think they are missing a trick by not providing a really elegant service that helps their customers discover new apps.  There have been some attempts but no one has nailed this; the upside of happier customers and a chance to get some of the burgeoning app download spend should make it a priority.

Facebook & Adtech

When Facebook bought the Atlas adtech business from Microsoft last year the price was rumoured to be around $50m – a very low price when Microsoft had paid $6bn+ for the whole aquantive business. Nothing much was heard about Atlas until recent rumours that it had been complete rebuilt to give Facebook a robust platform for serving and tracking ads.

Its now officially launched and is a big part of the new Facebook ad network where they use their profile data to target Facebook users across sites and apps outside the Facebook empire. It’s more evidence of the antipathy across GAFA and means Facebook starts to get a better view of what’s happening across the open web, which should let it improve ad performance within Facebook.

Mobile & Money

Building on our thoughts on Starbucks last week, mobile money is heating up. We see that Apple has hired two very senior Visa execs in Europe. And Capital One have launched a pretty good wallet app in the US whilst Barclaycard are rolling out their bPay bracelet – which is interesting but could do with some love from a designer.

But the big news is that eBay and PayPal are going to split into two companies. Many people believe PayPal will be more valuable on its own, but it will also probably be more attractive to a potential suitor who doesn’t want the distraction of eBay. Who could be interested? Well Google needs a response to Apple Pay and folding PayPal would be a great way to revive Google Wallet.

Content is King?

Last week we speculated that Softbank – now ran by ex Googler Nikesh Arora – could be interested in buying Yahoo, as they look to build out their Sprint and broadband business by adding content.

This line of thought is probably validated by the story that they are in talks to buy Dreamworks – the hugely successful movie studio ran by Jeffery Katzenberg.  

This blending of content and pipes has always been talked of, but the AOL Time Warner debacle still scares most people off. Like most dotcom bubble hubris though, the issue was essentially one of timing – and poorly executing the merger.

Yahoo, Softbank & Alibaba

As we discussed last week these 3 companies are closely linked and this long article is a great look at how they came together. If you believe in fate, choosing then Chinese Civil servant Jack Ma (now the Alibaba founder) to guide Jerry Yang around the Great Wall of China in 1997 is right up there. A must read


If you talk to any enlightened media planner they will tell you they now see TV and online video as essentially the same thing; if you want to reach Downton viewers you are equally happy to buy them on broadcast TV or online catch up. And they also know that smart use of pre rolls or any of the online video formats will probably add reach to a traditional TV campaign, as the elusive light viewers are added.

But regulatory things are still more compartmentalized. Now that is starting to change. In the US it looks like regulators will treat online video services as the same as cable and satellite providers. This means they can get cheaper access to programming and the old divisions will start to melt away.

Some brands get this already and Mondelez have done a global deal with Google for video to accelerate their ambition to put 10% of their spend into online video.

Adding to the momentum is the new Twitter TV ratings, where Kantar will report on levels of Tweeting related to TV programming with data around how twitter affects audience.

Many years ago we tried to prove that data on recording a programme correlated with better engagement in the live viewing. If you like a show so much you record it when you are out, you probably are more attentive when actually watching it live. So ads in those programmes are probably more effective and more valuable.

Those enlightened media planners will be looking at whether Tweeting is a similar engagement metric 

Quick reads

Still play Angry Birds? No us neither. And they are firing 130 people. More proof that apps is a hits business.

Did you know people launch brands on Amazon? Coke and Pepsi have both launched products only available through Amazon.

Google have acquiesced to German publishers and won’t publish extracts from their stories – they will just show the headlines. It will be interesting to see how this plays out.

Product placement is getting tech – Music videos can now feature brands in a way that the product can be changed according to region etc.

The Google Internet of Things play is now public – The Physical Web. Very interesting.

Lots of the smart people at Tesco know that their real competition is going to be Amazon rather than Lidl, but (understandably) short term thinking is prevailing and they are going to sell or close Blinkbox

Apple debut Watch at our favourite Paris store, Colette. And as they reposition themselves as a luxury brand, Vogue profiles Jony Ive.

GE Enhance your Lighting is a great example of a brand using video and social really well.

We have mentioned Shopkick before – a great example of where mobile, physical and promotions meet. It’s been acquired for $200m to fund international expansion so expect to see it in Europe soon


We heard Peter Thiel talk about his excellent new book and lots of his thinking applies to any business – not just startups. In our Digital Transformation workshops we talk about how big companies can learn from startups and this book is very useful. So too is this Stanford lecture on how to start a Startup and this piece by YCombinators Paul Graham.

Oh, and we have finally revamped our website outlining the range of things we do for clients and for our own projects. <sell> If you ever need any help lets have a chat <sell/>

Mobile Fix – September 26

Mobile & Money

As the details of Apple Pay become clearer, analysts are generally positive – although not quite as bullish as the Chamath Palihapitiya view we shared last week. Many people site Starbucks as evidence that payments can and do work.

In the last data we saw, Starbucks dominates mobile payments in the US. In 2012 around $500m was spent using mobile payments – and Starbucks was around 90% of that. They have been hugely successful – and now 15% of all their US transactions are using their app – but the Starbucks Chief Digital Officer points out it’s not just about payments – the loyalty aspect has been a big driver. 

They are one of the brands that Apple have partnered with for Pay – but interestingly they don’t intend to let people but coffee with Pay – just top up their Starbucks app. Their brand is so strong they have ambitions to expand outside of Starbucks;

“We want to get mobile ordering right first, but you could be hearing more about us in the mobile wallet or universal loyalty space sooner than later

A smart Fix reader made a similar point about the Oyster card and how it could have become a means of paying for items outside of Tube tickets. Now with a plethora of new players like PayM, Zapp Powa etc as well as the Mobile Operator wallets, PayPal and Google iPhone  et al users have a lot of options. But it seems to us that Pay will become a real Anchor for Apple by making it so easy.

And as more people use Pay, more retailers will come on board. Talking with UK supermarkets, they have resisted payments because they tended to slow down the checkouts. Starbucks have focused on their point of sale tech and processes; 

We were able to save 10 seconds a swipe for any kind of Starbucks card, mobile payment, credit card or debit card transaction. That ended up saving us 900,000 hours of line time a year. 

If Apple Pay can contribute to that sort of improved efficiency, people will rush to sign up.

(btw  – one of most hyped mobile money startups has been Clinkle; ran by a 23 year old, they raised $25m seed money and has a  long list of VCs as investors, along with Richard Branson. Lots of smart people have joined and many have quickly left. And it was in stealth so no-one knew quite what they were up to.

After 3 years it has finally launched a rather average debit card linked to an app. Sounds a lot like the Osper card we mentioned the other week)

The Chinese are coming

The Alibaba IPO was the biggest float ever, raising $25bn – eclipsing the $16bn that Facebook raised. Some have questioned the ethics of investing here – largely because the BAT Chinese digital giants  (Baidu, Alibaba, Tencent) benefit from having no competition from Google, Facebook, Amazon, eBay etc in their home market.

There is a lot to learn from how these companies operate and we now look at BAT when consider the vertical stacks of GAFA. And this good article looks at how important China has become to the global tech economy – with good insight into their M&A activity.

But perhaps the most immediate effect of the IPO is that it (probably) puts Yahoo into play.

Yahoo’s market capitalization is about $39 billion, while its Alibaba stake is worth $37 billion and its Yahoo Japan stake is worth $8 billion.

So someone could buy Yahoo and sell those stakes and essentially get Yahoo for free. Who could that be? No doubt clever Private Equity people are hunched over their calculators right now, but to GAFA, Yahoo would be a valuable acquisition.

Despite some peoples misgivings over their progress under Marissa Mayer, Yahoo still have huge reach (on desktop and mobile) and throw off huge amounts of cash.

Given that Yahoo is still a major player in search its hard to see the EU etc allowing Google to swallow them without divesting the search business to Bing. But for Facebook and Apple they would get lots of content to feed their userbase. And Amazon would get lots of potential buyers that it currently has to advertise with Google to reach. And perhaps even Microsoft or Murdoch could be interested?

Or how about Softbank?. This Japanese company has been very aggressively trying to grow the US business with the merger with Sprint, but its pursuit of TMobile has been unsuccessful. Combing an operator with a content business like Yahoo has been talked about lots, but this could be a first.

As JV partners in Yahoo Japan, the two sides know each other well. And, of course, Softbank now has a new leader who knows a little about the digital space; Nikesh Aurora moved over from Google a few months ago. Is this how he makes his mark in his new role?

We think it’s unlikely that the Wolves of Wall Street will leave something this vulnerable (and valuable) alone, so watch this space.


Just like Big Data there is rather more talk about Beacons than there is action. It’s clear there is huge potential, but so far few people have actually started to use them. This piece looks at some of the innovations around the internet of things that use beacons – but there isn’t a killer app. Yet

The people at Estimote have done much to shape the market, and this article considers how they see the potential – including indoor locations. We think that Beacons will be used for simple ideas that improve various situations. For example when Starbucks get around to pre ordering, how do they stop the coffee going cold before you get there? A beacon could detect when you arrive at the store and the coffee is made then and there – and you don’t need to wait.

This example of coupons in Passbook working really well shows the potential – and Beacons could add another dimension. There is a huge opportunity for good old fashioned sales promotion thinking (or Shopper Marketing as its now called).

We’re keen to help kick start this area, so hungry to work with retailers, restauranters etc to test out ideas and try and make some progress.

Quick Reads

Blackberry has a new square device that is going to save their business. We’ll see.

The clever people at Betaworks have revitalized Digg

Apple have bought a firm that makes it easy to create magazines for mobile. Another sign that content creation is being democratized. Will we see the return of the fanzine?

More good thinking on the Apple Watch

More proof that Apple are only human. After the live screening debacle at the launch event, the latest iOS update has been withdrawn.

Eric Schmidt has a new book out – How Google Works. It’s now on our Kindle but we are still engrossed in Goldeneye

Finally…we are big believers in the sharing economy and are looking to rollout our collaborative consumption platform SkratchMyBack in more regions. But the some elements of this movement are proving controversial.

In New York lots of people don’t approve of their neighbours renting to strangers and this long piece looks at both sides of the argument. And the way Uber treats its drivers is questioned in this MIT article. Enabling people to share their assets makes perfect sense but we need to consider the losers as well as celebrate the winners.





Mobile Fix – September 19

Thinking about Apple

The ramifications of the Apple launch last week continue. Pre sales of the new phones have gone very well – too well perhaps; as the wait time on Apple is weeks. Some of the operators were quick to offer the iPhones too and have done really well.

iOS8 is available and that has kept people thinking about Apple –once they could actually get it downloaded. It looks beautiful and the elegance of much of the interaction whets the appetite for the iPhone6 too.

We are also starting to get an understanding of just how much better the new devices are – and the camera in particular is getting a lot of praise. As we talked about last week, the Ice Bucket Challenge has taught millions of people that making and sharing video isn’t that hard. Add a great camera to that new expertise and we can expect some great content.

For a long time we have argued that video is going to be democratised just like music was with the launch of technologies like the Roland 808 –that enabled talented people to make music in their bedroom and bypass the traditional stranglehold of the record companies. As the explosive growth of YouTube has shown, the talent is there and even with a webcam they are making content people want to see. Better camera will accelerate this. SXSW showed a film shot entirely in an iPhone5 and the guy behind that is very bullish.

It’s the Apple watch that is driving most of the commentary though. Last week the feeling as the launch was a little vague and that was a bad thing.  This week the feeling seems to be that the vagueness was actually pretty smart – as it allows Apple to set the agenda over the coming months as they drip feed feature and functionality news. Talking in a US TV interview Tim Cook talks about their desire for developers to come on board before the device launches. Just like no one expected Uber, Moves or Flappy Bird when the iPhone launched, great watch apps could make the device a must have.

One of the best Apple commentator blogs is DaringFireball and he makes some good points over pricing – suggesting the gold watch could cost as much as $10k. He also gets into some of the possible functionality – which, along with some of Tim Cooks comments, make the Watch sound like less of a peripheral. It will clearly have many ways to enhance the iPhone in your pocket or bag but will be able to do a lot on its own. He also thinks that the S1 computer on a chip that powers the watch could be replaceable, meaning the Watch is truly comparable with luxury watches where people expect them to last a lifetime.

Ben Evans thoughts on the Watch are worth reading – particularly his point that the delight of glancing at your wrist, to see that Leeds have scored or that your flight is being called, could be just as addictive as the smartphone. People check their phones dozens of times a day – can a watch replace much of that? 

The chatter around Pay is more muted – largely because there is still a lack of real insight into how the service will roll out. Sure, we know the key points but as Apple need all the various partners on board, its not easy to see where they could end up in a couple of years. Right now the US is poised to move to Chip & Pin or Chip and signature, so retailers will have to upgrade their terminals. And just like in Europe most will include NFC technology. So Apple have been smart and adopted a less optimal technology largely because someone else is paying for the hardware roll out. And partnerships with Visa, Mastercard Amex etc make perfect sense. 

But one of the smartest investors Chamath Palihapitiya thinks Apple have pulled off a masterstroke. He believes Apple is poised to disrupt the global banking infrastructure in the next decade or so and earn trillions of dollars. He likens the deals with the credit card firms to the way they got the record labels to support itunes. And he thinks that – eventually – an iPhone will act as a POS terminal so you then don’t actually need the credit card. Very interesting.

It is worth watching the Tim Cook TV interview for a good take on where Apple is and some hints on what’s next. Asked about TV, he says its still stuck in the 70s and then politely declines to talk about their plans for the space. And he also talks about the move into enterprise and the IBM partnership. (this long Bloomberg interview covers a lot of these issues too)

Another piece of the jigsaw is the Apple announcement on privacy, making the point that advertising is a small part of their business and hence they can be very focused on privacy. It also makes the point that Apple don’t cooperate with the NSA – which begs the question who else can say that?

Google & Nest

The $3bn acquisition of Nest did more than position Google as a key player in both the Internet of Things and the connected home. It also injected 300 people with an Apple DNA into Google. The CEO was instrumental in the launch of both the iPod and the original iPhone, and at Nest he attracted lots of Apple people.

This interview is a good reminder that Google value design thinking too.

Fashion tech

We have covered Londons dominance in FinTech before, but as well as leading the field in the Financial world London is a major player in Fashion Tech. This FT piece looks at Burberry as a great example of a luxury brand embracing digital and others using tech to show at London Fashion week. The Burberry Kisses campaign from last year is also worth a look – not least for showing how digital marketing is maturing 

Metrics & ROI

Preparing for a workshop for a Financial Services brand we have been looking at best practice in metrics. As ever the key is having a small number of important metrics to focus on and ensuring that everyone can see (and understand) what’s going on. The Don of analytics  Avinash Kaushik shows us how simple a dashboard can and should be. His latest look at Mobile measurement is essential reading too.

The desire for comparison means we often measure the same as everyone else, but here we see that a less usual measure can be really useful too. Weekly users is a lot more valuable metric than monthly users for many businesses.

Twitter – what’s next?

Comments from the new twitter CFO around improving the timeline in Twitter caused consternation. This is a thoughtful piece on how Twitter can evolve to deliver on the timeline that so many value and provide other ways for more discreet conversations 

Quick reads

Bubble anyone? A veteran VC doesn’t think so, but worries there is too much money going to startups, and that the burn rates are unsustainable for most of them.

A good case study on responsive design and ecommerce from long time Fix readers at Schuh 

Long article on the riser and rise of GoPro

The Economist takes a look at programmatic. Good round up on where adtech is and some of the key issues. Our favourite quote;

“We are only where search advertising was in 2001,”

Once called the Ministry of Magazines, IPC is probably managing the transistion from print to digital better than most. Newly rebranded as Time, this is a good interview with the man now running the business globally.

Finally the rise of growth hacking is seen by some as an indictment of marketings failings, but to us the technique of product/market fit is just modern marketing. This piece looks at how engineering works as a marketing tool. We think modern marketers work to the Malcolm X / Jean Paul Satre mantra By any means necessary. 

Mobile Fix – September 12

The huge hype of the Apple launch reminds us just how far mobile has come in the last few years. TV news coverage and stories in every newspaper. Celebs, fashion journalists and Rupert Murdoch at the event. 

Apple isn’t just a tech company anymore. They are a lifestyle. A hybrid of fashion, content, devices, services and U2. The mycube from that Simpsons episode never felt more insightful;

I see you’re admiring our myCube

It’s fueled by dreams and powered by imagination.

(Homer) What does it do?

You should ask yourself what can I do for it

The new iPhones are pretty much as the leaks suggested – and whilst Android fanboys make the point the spec is virtually the same as the 2 year old Nexus 4 – we think they will sell really well. Ben Evans has a good take on how the product and pricing hits Android – and particularly Samsung – hard.

It’s likely that the imminent Nexus 6 from Google – (& Motorola) will be a more innovative device, but that’s unlikely to dent iPhone sales.

The Watch also lived up to most of the hype but has divided opinion – especially given the price point. It’s telling that no-one seems to be talking about battery life

Our take is that it won’t replace many peoples current watch. If you still wear a watch, it’s probably as much a piece of jewelry as it’s a timepiece. Will people want to wear something that’s the same as everyone elses?

But some people have more than one watch and we can see the Apple watch being added to that repertoire – particularly for sports.

For those people who have stopped wearing a watch as their phone tells the time, this could be good enough to tempt them back. Once people can actually try the watch we’ll have a better idea – one horology expert does rave about the level of finish and the detail. Given he wears a $40k vintage Omega it’s a pretty positive viewpoint.

So one thing we should expect is lots of ways to customize the watch, with more straps and more apps offering unique dials. Just like Swatch did in the 80s, partnerships with fashion and art brands will keep the device fresh. Remember the Japanese phone market has lots of partnerships with fashion brands like Marrimekko and Pucci. Expect a Kanye West watchface as part of his next album promotion.

But the big problem with the watch is that it’s not a wearable. It is actually – like most of this sector – a peripheral 

Wear an Apple watch without having your iPhone in your pocket and we suspect it’s pretty useless. Like the Nike Fuelband we gave up on as they didn’t have an Android app.

And if you have the iPhone in your pocket, the question is what does the watch do, that is that useful. But we can expect lots of app developers to focus on this issue. And, as someone on Twitter said, Do Google put Google Now on this device or keep it back for Android?

Pay is a big deal and Apple have revived the NFC market. The only issue is how they persuade retailers to invest in the instore devices, but that should just be a matter of time. A big surprise is the fact Apple don’t know what you buy – which erodes a potential advantage for their ad sales.

Overall Tuesday supports the view that all Apple really want is to keep selling premium price devices. And they are building Anchors to keep people in the iPhone franchise; the wallet, health kit, home kit etc. And as the U2 music spam showed, they will use content as an Anchor too. Will they buy Netflix next?

Probably the best commentary we have read is Jason Calcanis, who is very positive. And yes, we’ll be buying a Plus to replace our Nexus.

As more details emerge we’ll get deeper into Pay in the coming weeks.

(One more thing. Apple now has a mobile optimised site. Finally.)

Another interesting peripheral.

Motorola have some interesting product around. The Hint is really intriguing –an in ear headset that you can speak to and cintrol your phone. Bluetooth Headsets suffer from the Ken syndrome – most people who wear them aren’t very nice. Maybe this can revive the sector.

The Fire phone

The Amazon fire is finally coming to the UK – on an exclusive with O2. It’s hard to see many people choosing this over a new iPhone. But the pricing is very aggressive – and in the US the price has dropped to 99 cents. So whilst the strategic logic of Amazon having their own phone remains, getting significant distribution is proving a problem.

We are still convinced that Amazon will make the Fireflly technology available on other devices. This is the most interesting feature of the phone and makes everything identifiable and hence buyable. What’s the point of restricting it to the few people with a Fire phone, when you could add it to the Amazon app on millions of peoples iPhones and Androids? In time for Christmas.

Video & Facebook

It looks like the Ice Bucket challenge is over. As well as a great case study for fundraising and social it’s also possibly the first mass participation video meme. Most previous memes on social have been about sharing rather than making content – remember the old 1 9 90 rule where I % create content, 9% share it and 90% just view?  Whilst the % sharing has been growing, the % creating hasn’t.

But this showed that people now can and will create and share video. And even more interestingly a huge proportion of this video lives on Facebook, rather than just being on YouTube. Facebook had 17m Ice Bucket videos shared and seen by 440m people in total.

Facebook have been conscious of how big video is for them, but only now are they showing viewcounts. The baked in ability to share on Facebook is a big advantage over YouTube. A new Beyonce video got 2.4m views on Facebook in the first 4 hours after release – against just a few thousand on YouTube 

This NYT piece looks at how Facebook video has grown but also looks at how media brands are using social to drive views.

Facebook are being quick to push the use of  video to their customers


More on the O2O Retail (Offline to Online) partnership in China that we mentioned last week. The intention is to fight back against the dominance of Alibaba and one of our readers in China pointed us to this video of the Alibaba founder telling the story of the business

As they prepare for the IPO they are moving into mobile games – where rival Tencent is very strong. The Chinese BAT vertical stacks show how keeping customers in your stack on mobile is so crucial.

The O2O article gets into some good detail on why Chinese retail is different and also looks as some of the most recent BAT investments.

Quick Read 

Microsoft are killing the Nokia brand name (and Windows Phone) and focusing on Lumia and Windows. Not sure that’s such a smart move.

Twitter have added a buy button. Is eCommerce going to be big for them?

One of the smart people we worked with at WPP was Jeff Cole from the Centre or the Digital Future. His views on the future of advertising are worth a listen

One of the smartest Internet of things ideas is finally launched – Tiles are such a good idea, but we’ll probably wait to version 2

The US NFL is starting talks over their next TV deal. TV companies are bidding up prices as live games are seen as an edge over online services, But they are talking to Google et al and their VP of media says; 

Selling game-streaming rights to an online company is a matter of “when, not if,”

Over here consultant Claire Enders told the Royal Television Society that youth is deserting TV, with a 22% fall amongst 4 15 year olds. Are they all watching YouTube?

And more evidence that TV is changing; Sky have expanded the targetihg options for their AdSmart service. Brands can now choose the households their ads are seen in based on postcode as well as MOSAIC data etc. And you can use your own data to target.

Ages ago we mentioned that Sainsbury was trialing a mobile shopping service in Clerkenwell and Mile End. The Shop and Scan seems to have gone well and its being rolled out to more stores. Despite using QR codes. Why hasn’t some mobile expert explained that QR codes don’t work?

Mobile adtech firm Medialets have shared lots of data on mobile advertising.     

Cards are probably the biggest step forward in how mobile is put together, but they are still misunderstood by many. This is a good guide to what they are. And this is a good guide to how to use them on Twitter.

Finally…    John Batelle is one of our favourite bloggers. He runs a very successful digital media business and really gets the whole space, although he admits he was lateish to mobile. He has written a good summary of his thoughts on where mobile is now and where its going. Well worth reading.


Mobile Fix – September 5

Digital Transformation

More and more of our work is helping businesses deal with digital transformation. The rise of mobile and social seem to be convincing C level execs that digital is no longer something that can be quarantined in a division.

But most find it hard to work out where the drive and management should come from. Marketing seems like the obvious place to start in many businesses but often this restricts the effectiveness.

For example is Twitter a marketing channel or is it customer service? Clearly it can be both, but we see this skill will migrate from Soho ad agencies to call centres in Fife.  And another hot issue; given the use of customer data in smart programmatic buying, who drives that area? This is an interesting look at how clients are moving their business out of their traditional agencies and either taking it inhouse or using specialists.

Many studies point out the potential conflict between CMO and CIOs and in many cases the dead hand of IT frightens Boards; who want to be the person who over rules IT when your system crashes or you get hacked. In the US the firing of the Target CEO after their data hack made people realize the responsibility lies with the top people. In his excellent keynote at the Dots conference Russell Davies told us that the IT people at GDS now report to the Digital team.

Given the broad impact of digital on business and the potential for data to be transformational (McKinsey say that data driven companies are 5% more productive and 6% more profitable than others) the answer is to get the CMO and CIO working in partnership.

Done properly digital is a core business function rather than a marketing channel and more and more brands are balancing getting outside advice with building internal skills.

Dumb Pipes 

Fix reader James Haycock of adaptive labs was one of the many great speakers at the excellent Dots conference this week and made a great point by applying the Dumb Pipe theory (that, for many, describes the future of Mobile Network Operators) to Financial services. We have talked here a lot about the energy and momentum in FinTech and this analogy sums up both the opportunity for startups and the danger for incumbents.

A real life example is our 14 year old who now has an Osper card – a new start up that gives him a debit card, funded by me transferring money into it. So my bank is the dumb pipe. The app we both have shows where the money is being spent. A really simple, elegant service – with no significant involvement from a ‘real’ bank. When will he go open a ‘proper’ bank account? Who knows. 

Smart Pipes

Thinking about MNOs, there is one huge opportunity that seems untapped – so far.. With the appstore discovery so flawed, what could an operator do to help their customers find apps that they may find useful? Why don’t they build a permission based dialogue with smartphone customers around the latest and greatest apps? Before the iPhone and the Appstore, getting an operator (or a device manufacturer) to feature your mobile content or service was the holy grail for any developer.

A simple authoritative email or MMS that offered help on discovery – based on learning what apps you already had – would be really useful for customers.

And given how much money is spent chasing app downloads this could be really profitable too. Happy to share our thinking with our MNO readers.

Looking at how other markets approach appstores is interesting and suggests there are alternatives to simply hoping the Appstore and Google Play will sort themselves out. This in depth look at Chinese Appstores is a good read.

O2O Retail – Online to offline

With Amazon offering payment solutions to real world retailers, the line between online and offline commerce is blurring. Fold in click and collect and the potential for beacons to bridge the gap between a smartphone and a store and the line starts to disappear.

This article predicts Amazons secret plans – but if you get past the slight hysteria it’s a good take on where retail may be going. And the idea of online to offline is also being taken seriously in China.

As Alibaba prepare for their IPO – possibly as soon as next week – which is expected to raise c$20bn making it the biggest ever IPO (eclipsing Facebook whose $16bn was the previous record) their competitors are trying to build their ecommerce revenues.

Baidu and Tencent have partnered with Dalian Wanda – the Westfield of China with around 100 malls and resorts – to focus on O2O; online to offline. This deal also helps them build their payments business.

All the big players (including GAFA & BAT) see that commerce has two huge advantages – you take a revenue share and you get the data on the purchase.

iPhone speculation              

Lots of noise, but little insight in the huge numbers of stories speculating on what might get announced next week.

The Stratchery thinking on iPhone pricing is worth a read though. Where we use the luxury car market as an analogy he used Handbags and makes some good points on how Apple can preserve their top end positioning and maximise their revenue. We still suspect that Beats budget phone would be the killer and one more thing.

The other theme we think is interesting is whether or whether not Apple embrace NFC and make a big move into payments. Our Anchors theory means we believe Apple need to turn Passbook into a full wallet, so useful no-one will ever move to Android

This piece points up the possibilities, but we wonder whether low energy Bluetooth means NFC is unnecessary?  Or, picking up on our point about the value of payments above, does the widespread base of NFC readers in real world locations makes it viable. Either way Apple will dictate the future of NFC; if it makes the cut in the new iPhone it’s the definitive platform for payments. If it doesn’t, it’s just another dead TLA 

Quick Reads

The Amazon Fire TV box is now available in the UK . Walter Mossberg – the don of consumer tech in the US thought the speech recognition was the killer app – although it only works on Amazon content for now.  It probably isn’t quite as revolutionary as the ChromeCast but it’s a great way to get more usage of Amazon movies etc. Costing £79 it’s another must buy if you have any interest in the future of TV.

Autoplay videos on Facebook are getting some heat from Money Saving Expert, as they think they are driving up users phone bills.

Another good session at Dots looked at how YouTube is redefining fame – and film of a make up artist from Norfolk drawing huge crowds in Covent Garden reinforced just what a parallel universe YouTube is for many. This is  a good article on the YouTube channel Awesomeness which was bought by Dreamworks for $100m and the business model emerging for Video

Can programmatic work for branding? The smart people at Infectious think so. We agree but the way creative is done needs to evolve. If Ikea can computer generate 75% of their catalogue can’t brands use tech to create and modify creative in real time?

More research showing a rosy future for streaming music and hence great potential for Beats. We can’t believe there won’t be some new Beats product next week. Could a Beats smartwatch have music as its core feature? 

Good look at BlinkBox  - the Tesco digital entertainment play. Will the new regime stick with this?

Finally – the next episode of the RCKSCK Friday Edit goes out tomorrow. This new project is designed as a tool for Urban Explorers and the email Edit is the first service, with an app in development.

The idea is to help people get the most out of whichever city they are in, with tips on great places to eat, drink and shop, based on their likes and dislikes.

As we get the tech sorted, the Edit is a simplified service focused on London.

Sign up here and see the first Edit here. 

( Get the email edition of Fix first thing Friday morning – sign up here)

Mobile Fix – August 29


Adtech & Vertical Stacks 

We all know how dominant GAFA is. But this one chart from a new Comscore report on US mobile users emphasizes how this plays out in mobile. Of the apps with the biggest reach half are from GAFA – with Yahoo also performing well.

This reach is clearly a huge opportunity for advertising but until now only Facebook and Google have really focussed on this. But that’s changing. As we have mentioned Apple have hired smart people and we expect a push for ad dollars around their music product once Beats is fully integrated. They had been gearing up for an ad supported iTunes Radio, but that now seems to be on the back burner outside the US.

Amazon have been hiring lots of smart ad people too – and in contrast to previous regimes when their smart ad people struggled to get advertising taken seriously by management – this time Amazon seem to be really gearing up to take on Google. With the launch of Amazon Sponsored Links they are looking at how brands sold through Amazon and the Amazon Associates can use advertising across Amazon to drive sales. With all that purchase data this turns online ads into a new version of in store sales promotion – with the ability to measure the precise effect.

This scale and the data make them attractive to brands and agencies. But so too does the fact they are not Facebook or Google 

Google probably suffers most as lots of ads that currently run on Amazon are Google Adwords and we should expect to see that revenue stream start to dry up.

The other huge advantage GAFA and (to a lesser extent) Yahoo have is logged in users so they have cross platform first party data. The insight from this is really valuable and will probably lead to these players growing their share of the ad market. But getting and using the data requires good Ad Tech 

The huge reach of Google is complimented by the dominance of their adtech – Doubleclick etc are used by a huge proportion of advertisers across all their campaigns and as such affect Facebook, Amazon and probably Apple. This irks many publishers and we can be sure that GAFA competitiveness means others would like to limit this dominance.

Facebook bought Atlas, the main rival to DoubleClick, for a knock down price last year – when Microsoft divested itself of what was left of their $6 billion buy of AQuantive. They have been quietly working in bring it up to date and plan to launch it in the coming weeks as a serious rival to the Google stack.

One of the models we use a lot in our strategy work is the Vertical Stack, where GAFA increasingly have proprietary products, services and tools right throughout their business. So it’s no surprise that this is extending to adtech. It is vital that brands understand how their business intersects with GAFA and their stack, and whilst this adds complexity it also adds urgency. As agencies scramble to evolve their adtech to gather data from the various vendors and get some insight, brands might ask who is looking after their interests.

It’s worth reading John Batelles thinking on this

And take a minute to remind yourself of just how complicated mobile advertising is with this infographic showing what happens in .3 of a second to get that ad in front of the user. Hat tip @PaulbMobile

App store discovery 

The other side of the Comscore chart above is how hard it is for an app from anyone outside the big players to get real reach. This piece gets into this in more detail using more of the Comscore data. It shows that people spend the vast proportion of their time in their favourite app and – picking up the point we made last week – most people just don’t download new apps. If you want to use an app as part of your ongoing dialogue with your customers – which makes perfect sense  then you can use your other dialogue to promote your app.

But if you are one of the many start ups chasing the next billion dollar valuation, you have your work cut out. One way to increase your chances of having a hit app is celebrity endorsement; TechCrunch looks at the Kim Kardashian app which has made $1.6 million in the first week – and at other celeb endorsements.

Apple expectations

With the stock price at an all time high, now the September 8 event has been announced the buzz is also at an all time high.

We wouldn’t get involved except it now seems the much anticipated larger iPhone and the iWatch may be joined by a new iPad. A much bigger iPad at 12.9 inches -so a similar screen to a 13inch Macbook Air

Given everyone decided tablets were over a few months ago, when sales growth slowed, this may seem surprising, but a good piece by consumer tech guru Walt Mossberg called In Defence of the Tablet explains just how well these devices have done and continue to do.

As people work out the use cases for their tablet and their smartphones – and as smartphone screens grow – there will be some substitution. And the renewal of tablets will be much less influenced by MNO contracts and the subsidized upgrades that drive so much of the smartphone growth.

Quick Reads

Yet more innovation in video – the new Hyperlapse app from Instagram uses the iPhone technology to enable wonderful new videos. Expect lots of homages to Scorcese long takes like the classic Copacabana shot from Goodfellas

Just as the best people to create content on new platforms like Vine are arguably the most avid users, brands are turning to SnapChat heavy users for brand partnerships. Watch the examples in this piece and you’ll see its not quite Scorcese or even ShakeNVac. But these people have reach and getting paid.

Snapchat is now valued at $10bn, which seems crazy until you see they have feature in the top 25 apps shown above. Insiders seem convinced about the potential and Twitter CEO says;

Snapchat at $10b not absurd. Crazy growth, clear monetization path, & one of the best social product thinkers out there. Long (figuratively) We are going to reread their agency pitch deck and see if we missed something

BAT – the Chinese version of GAFA – continue to amaze. In the latest results Alibaba showed 46% growth and a third of sales were by mobile – up from 12% last year. 

Tesco subsidiary One Stop are rolling out beacons across their 740 UK stores

Finally ….Last week we gave Fix readers a sample of our new RCKSCK project and encouraged sign up to the Friday Edit, which will be the first service from RCKSCK. The App will enable you to save and share all those interesting places you find or hear about (no more bits of paper torn out of the FT Weekend or Monocle). And as well as browsing, you will be able to discover places around your location, based on your profile – which will be built through the things on RCKSCK you like, love and loathe.

It’s early days and we’re keen to get feedback and talk with prospective partners and with brands that want to connect with Urban Explorers. Feedback from last week was really useful and we’d love your help making this better.

Our other side project SkratchMyBack is getting good traction in Manchester where we have been beta testing and we are now turning the heat up. We had some nice coverage in a Marketing piece on the Sharing Economy and we are now looking for Charity partners across the country, so we can help them recruit and manage volunteers. If anyone knows people who might be interested, please let us know. And have a think about signing up yourself.

We were talking through these projects in a Chemistry meeting with a prospective client and we were asked why we did them. Our response was around the fact that we have ideas we like that don’t fit client briefs. And that by doing these we learn lots that can be applied to more traditional projects. Our knowledge of the sharing economy gained through Skratch was very helpful on the EasyCar Club project.

A much better explanation comes from the smart people at Betaworks, which also covers some of the other people investing in side projects. We are not quite at the Betaworks stage (yet) but the model is fascinating – if you are interested in helping us develop this area let’s get a coffee.   

Mobile Fix – August 22

Evolving Video

One of the key themes for mobile and tech is video and our thoughts last week resonated with quite a few people – and someone pointed us to this fascinating celebration of unboxing videos. This development of the very popular haul videos – where people show off the results of their shopping trip – can be a little dull, but the toys videos from Disney Collector are staggeringly popular amongst toddlers (and their parents) with this unboxing of a Play Doh toy getting 45m views.

The scale of video can be surprising – for example over half of 18-24s in the US use Snapchat – and its rapid growth suggests it may go mainstream. With that sort of scale brands have been quick to find ways to use it as and Snapchat are now out selling to agencies focusing on SnapChat discovery.

This new service lets media brands share their content on the platform – with the Mail Online a likely early partner. This is the pitch deck they are using, which gives great insight into the platform

As we said last week the rate of innovation is astounding in this space and we see Vine have made a major move in allowing people to use their own videos as Vines now. Previously you had to create your 6 second video using the Vine app if you wanted to use the Vine distribution (although there were some hacks to get around this). As ever creativity flourishes where there are restrictions and we have seen some great examples.

Now you can just take any video and share it, will that water down the experience? Time will tell, but the danger is that brands just repurpose existing film and we would think that will tend not to work as well – but it will be popular with brands. Vine have also improved their desktop experience as they encourage people to explore the content

Instagram allowed this importing of video some time back and with a 15 second duration – the same as the standard US TV commercial – they have been popular with brands. They are now looking to monetise this with a new Advertising Chief.

Of course not everyone wants ads around their videos and Snapchat, Vine and Instagram now face the dilemma of getting the balance right. The people who have been most effective at monetizing video is YouTube and it’s rumoured they are about to offer an ad free version – getting the funding instead from users through a subscription service designed around music.

The stats keep getting bigger

The huge scale of the messaging and video apps leads VCs to say 100 million users is the new I million users. Whilst we used to cover the growth of mobile and smartphones, we stopped as the graphs all point to the top right hand corner and few people question the importance of mobile these days.

But the new UK data from the Office of National Statistics is worth considering. If only for us to recognize how far we have come 

38 million people access the Internet every day – 76% of adults – double the number in 2006. And 58% have used a mobile to access the internet – doubling since 2010. Lots of good data on what people do on the internet in the report

Perhaps even more convincing is data from another part of the Government which shows that over half of all driving tests are now booked on a smartphone or tablet. It’s interesting that the mobile element is up by 28% since March whilst the tablet figure is unchanged.

Some of this is due to the inexorable rise of mobile but it’s also down to the fact the Government now has excellent web services that are truly responsive and consequently work well for mobile. Too many brands have (finally) got to thinking about mobile but don’t yet realise they actually have a crap mobile site.  The government use data to keep improving their sites – a great example to follow.

The end for Apps?

In anticipation of the latest version of Deloittes 2014 Mobile report (due in early September) lots of press jumped on the stat that a third of smartphone owners don’t download any apps in a typical month.

Coupled with stories showing few app developers make any money, the general view seems to be that the App party is over. The FT takes a more reasoned look and points to the Apple research showing the impact of Apps on the European economy – claiming it’s created over 500k jobs.

We agree that civilians have already got most of the apps they want or need and it’s only the tech crowd who rush around downloading Swarm or Yo. But apps that do solve a real problem are still being launched – it’s just that the distribution model is broken as the bloated app stores hide the new amongst the million apps. 

Just like music, books and films, apps are now a hits business and, as people from those industries know, it’irs pretty much impossible to predict what will be a hit. So everyone tries to game the system and/ or spend a fortune on advertising.

It’s surprising that Google have yet to leverage their expertise in search on the Play store, but perhaps the new iPhone launch will give Apple a way to sort their appstore. The rumoured new form factor will drive smart app developers to adapt their apps to fit the bigger screen, whilst most of the Zombie apps won’t be updated 

So an Apple version of the PlayStore approach of showing only apps that are compatible with your device could be a help for users and developers. Do read the full FT piece as its full on useful insight.

Taxi wars

It’s a little surprising that an industry as old and unsophisticated as Taxis has emerged as a key battle ground for tech. But in many cities around the world there is a battle going on. 

In China there is something of  a ceasefire, as Alibaba and Tencent scale back the massive incentives they were giving drivers to encourage use of their Taxi apps. At one point these reached 100RMB – 5 times the typical fare. This caused all the drivers to stop driving around and just wait for an app request – meaning it was virtually impossible to get a Taxi without using one of the apps. We also heard of people being thrown out of a cab so the driver could take a more lucrative app booking.

Of course the end game isn’t about the cab ride; in Chine the taxi apps were a Trojan horse for BAT to acquire users for their other services such as mobile payments and chat.

In the west the end game isn’t quite as clear but it seems likely home delivery and ecommerce will be critical. Uber are testing Corner Store in Washington DC – where users can request that an Uber driver deliver anything from Pampers to Popcorn – for a fixed price. There is a lot of action around delivery right now and we know WunWun are working with GetTaxi in some US cities. The NY Times has a good look at this space reminding us of Kozmo etc from dotcom boom days.

It’s clear that the taxi firms are a factor in the new model and the new API from Uber is an open invitation to startups to build in an Uber partnership. The first round of partners is more traditional – Open Table, Hotels and Airlines – but anyone can use the API. But if you do  use the API, you have to agree not to use any other Taxi firm – so it’s another angle on the landgrab going on across the major cities of the world.

And with the Google Ventures investment in Uber, transport (and eventually delivery?) is part of the vertical stack. In Google maps Uber is now offered as a choice of transport when looking for directions. Will we see GetTaxi, Hailo and Addison Lee in there at some time in the future? Perhaps,

The next episode of delivery will be around groceries – where all those Amazon vans trundling around the streets should enable Amazon to offer same day delivery of Amazon Prime. Could they decide to invest in one of the Taxi firms to accelerate that? Some think the economics of grocery will prove a problem for Amazon so cabs could be a cheaper option?

Quick Reads

Just as Uber is a tech firm rather than a transport business, can it be argued that Buzzfeed is a tech firm rather than a media business?

Beacons – like big data – is one of those topics that everyone talks about but there are few real examples. This Q&A is a good sense check on the topic.

Very interesting thinking on deep linking in mobile and what the implications might be

Sometimes the best call to action on mobile advertising is to make a call. Google are making it easier to measure these calls.

Finally smart mobile thinker Chetan Sharma believes we are just entering the Golden Age of Mobile. His new whitepaper on the Connected Intelligence Era (PDF) is quite a heavy read but a good look at how sensors and connected devices are going to change how we live.


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Mobile Fix – August 15

Spending a couple of weeks on a Cornish beach is a highly recommended way of recharging the batteries – which, as this NYTimes piece reminds us, is a good thing.

As ever, lots happened but rather than look back we think it’s a good time to consider the Big Picture; the key themes that are driving how people use tech and consequently the opportunity for brands to grow by being smart about how they use tech.

The new Video Industry 

We’ve seen the transformation of the web from a text medium to a visual one as connection speeds improve – does anyone else remember the horror when the page you were downloading on a14.4mb dial up had a picture on it?

But the visual web is moving very quickly from photo to video – with Gifs and the clever stuff auto awesome does too. Vine, Instagram and Snapchat are constantly innovating and the power of YouTube is now recognized by traditional media owners and brands. This story of vlogging supergroup Our2nd Life shows how much brands will pay for promotions.

In the UK things are a little less frantic but a YouTube convention in London the other week drew 8500 people but biased towards the makers of video rather than the fans. But VideoCon in the US draws fans too and sold 18000 tickets paying $100 plus and we’d expect similar events in Europe soon.

With Disney buying Maker Studios for almost $1bn, the traditional media industry is keen to work with this new talent and Variety report that one is making a film and a TV show whilst others are sticking with the internet as the money is almost as good. These YouTubers from the London event talk about how their fans react to promotions.

The money from product placement and the slightly murky world of celebrity endorsements stays with the makers, but tbe real money comes from the advertisers buying pre rolls and YouTube is continuing to push this area. 6 months since stepping into the top job at YouTube Susan Wojcicki is talking about how Google want to help the space evolve;

“We have all these pretty nascent creators. What do they look like in five years? Do they have longer shows? Can we help them economically to grow their shows? I don’t think we need new creators. All that content is original content, but how do we make it even better? 

Could YouTube have ambitions to use this talent to drive into traditional TV? Packaging this content into a format that works for traditional TV is pretty easy and getting distribution on cable or Sky isn’t that hard either. The challenge is getting viewers and selling them to advertisers – something Google is pretty good at.

The New App ecology

As the fervour around the new iPhone builds and the new features of iOS8 and Android L become better understood it’s clear that the whole ecology of apps is changing

The first people to seize the opportunity have been the big players like Facebook, Dropbox and Foursquare who have unbundled their apps to take advantage of the ability to deeplink between apps. Ben Evans has a good take on the subject, pointing out that the Chinese BAT (Baidu, Alibaba & Tencent) are taking a completely different approach by adding in more functions in to their apps – but by only offering the services in the right context they retain a simple User experience.

Others think unbundling is still unproven as one of the core benefits is a way of improving discovery and suggests that rebundling will start to emerge.

Despite having constantly used Foursquare since launch, this year in Cornwall I hardly used the new Swarm Foursquare constellation and whilst both VC Fred Wilson and founder Dennis Crowley talk up the new version, we are not convinced.

It remains crucial to really understand both what your use cases are and exactly how deep linking, app extensions and push notifications can help. Getting the strategy and architecture right before rushing into building an app is even more important.

Real time marketing

Programmatic continues to get lots of coverage as it’s moving so fast, few really understand what’s going on. The model from agencies continues to evolve to meet brand reservations, and we can expect further evolution. 

But marketing needs it’s Big Bang to deal with the huge opportunity of mobile and social – and in a year or two the Mad Men agency will seem just as quaint as the red braced City Stockbroker did after electric trading reinvented the London financial markets in the 80s.

We still argue that advertising is one of the few industries where someone from 1964 would recognize their business in 2014. Imagine someone from Banking, Retail or even Transport in 1964 time travelling to today – they would be astounded at how the fundamentals of their industry had changed. But whenever we ask people in agencies and at clients if they recognize MadMen in their current set up they all do. Except the drinking is a bit more discreet and the tailoring is poorer.

As this AdAge piece argues most clients still need Agencies to help them navigate the new landscape but they want a richer skill set and a much more nimble collaborative partnership.

The raw materials of advertising are evolving and the model is in flux. Native advertising is as much a part as programmatic and the holy grail is being able to optimize the messaging as frequently and as fast as the media is optimized. That’s why we are so excited about new tools like responsive advertising, pre testing creative work – and better cross device reporting, but there is lots more to do.

Not so Quick Reads

It’s still the summer and we suggest you take time to think about the Big Picture  too. Invest some time and learn from these long read and views;

A great look at how Facebook is working with brands and their agencies to drive sales.

A series of presentations from the founders of some of the best start ups via  YCombinator Start Up School in New York and in London 

If you are back working so are we and we’re keen to partner with smart brands to unlock the potential for growth from mobile, social and modern digital. If you could do with some smart thinking or need help making things happen, do get in touch.

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Mobile Fix – July 18

Old Media

The big deals this week are in old media rather than new. Rupert Murdoch is trying to buy Time Warner to merge it with his Fox business. His $80bn offer has been rejected but the feeling is that the deal will happen if/when he ups the offer.

Why buy them? He sees that the whole world of content is becoming even more of a hits business. And as digital drives the value of content down through ease of sharing (and piracy) we are seeing a polarization; most content is worth very little and the small minority that people feel they have to see shoots up in value. 

A quote from VC Chamath Palihapitiya now shapes much of our thinking;

Experience = Social Capital

So content that is an experience, and therefore has social capital, is hugely valuable. And Rupert gets this – an analyst said 

“He clearly feels that as other players try to enter the media business, content will be more valuable and he wants to get his hands on as much content as possible.”

It’s worth reading a blog post from the same analyst where he dissects the logic of the deal and outlines the key assets of Time Warner; Harry Potter movies and 80 years of classic films, Friends, West Wing and other TV classics, Superman and Batman and the rest of DC Comics. And HBO, which some feel is the real reason for the deal.

But if the value is clear to Murdoch who really only has old media assets to monetise this content through what would it be worth to GAFA who need to improve the monetization of much of their new media assets?

The stories around Apple thinking of buying Disney may have gone away but there is still some logic there. Which is why the story keeps coming back.

Will someone else step up to fight Murdoch for this deal? Maybe, but a little history may dampen down enthusiasm. Time Warner was already bought by a digital giant; AOL bought them for $164bn back in 2000 and the then CEO subsequently called it “the biggest mistake in corporate history

Mark Andreessen is probably right when he says most of the dotcom boom were actually good ideas – just too early – but it would be a brave CEO to rerun this move. We still think its more likely GAFA will move into content with a big Sports deal.

This is a good thinking on how the value of content assets is changing – and how the tactics of digital are trying to slow this change.

Mobile Money 

Our piece on mobile and money last week got some good reaction. There is a general feeling that the legacy issues that are holding traditional banks back, are being overstated and that workarounds can solve some of the key hurdles. 

A new McKinsey report this week makes a similar point about European banking tending to be slow, but sees some reason for optimism. One quote stands out as good sense for every business;

Increase the focus on business outcomes, not digital activity. Too often, banks manage the progress of their digital transformations by tracking activity metrics, such as the number of app downloads and log-in rates. Such metrics are inadequate proxies for business value. Banks must set clear aspirations for value outcomes, looking at productivity, servicing-unit costs, and lead-conversion rates, and link these explicitly to digital investments.

A key issue is where the thinking comes from – too often the IT team are seen as a barrier – if not an enemy – and the big System Integrator contracts are complained about by many people we meet. In a world of MVPs and pretotyping having thousands of people in Pune isn’t always helpful.

A conference this week saw someone make the point that anyone can be a player on money now – and we made the point that c90% of all the money held in US mobile wallets is on the Starbucks app.

The news that the Barclays PingIt app now enables users to send money to India, as well as several African countries, using just someone’s phone number reminds us how fast things are changing.

A little step by Apple is another glimpse of the future. In the US you can now store money in your Passbook app. It’s a little clunky right now in that it involve a visit to an Apple store but we’re sure it will get easier. With around 1 billion credit card relationships, when Apple lets people move money into their Passbook from their cards, they essentially own the payments market. And they create a Money Anchor to stop people switching to Android.

In our conversations with consumers people love the fingerprint tech on the iPhone and it removes much of the worry about security of the phone as a wallet. 

But of course others have similar ambition. PayPals David Marcus has gone to Facebook to run their messaging service and folding in payments seems an obvious step. And Snapchat – who have Chinese BAT giant Tencent as an investor – seemingly plan to add some of the payment and money services that Chinese messaging services do so well from.

London is a key player on all this with the focus on FinTech here – this is some  background on why it’s so important 

Fashion Luxury & tech

One of the hottest areas for VC investment at the moment is Fashion. Startups like NastyGal, Farfetch and Lyst have all been backed by major VCs as the combination of high margins, ecommerce and a fragmented market attract disrupters.

This event in Paris recently had Seth Godin posing the question is digital the end of luxury brands but feels the effect is one of democratization. Godins point echoes the one we made earlier – as social status and social capital become more important what is the role for luxury brands? And the answer is smart luxury brands will deliver an experience; just ask anyone who has had NetAPorter delivered to their office and you will see what we mean.

But tech is adding more than the efficiency of ecommerce. There is lots of R&D looking at what tech can add to the fashion experience. Tools around sizing are a big focus and so is discovery. The holy grail is how tech can enable shopping from print magazine and TV and film – and there is a way to go yet. But the opportunity to make content shoppable is huge.

UK Fashion colossus ASOS was started with just that idea –you could buy a pair of Sunglasses or a dress As Seen On Screen and a Shazam for vision is getting closer 

London is a big centre for fashion tech and both ASAP54 and SnapFashion are London startups leading the quest for a tool that takes an image and shows you clothes that match. Pinterest are also interested in the space and bought Visual Graph.

We think that the most likely winner could be GAFA – Google bought the visual recognition app Words Lens. And they already had Google Goggles.  With their machine learning focus they have solved how to read the numbers on houses.

Firefly on the new Amazon phone also has smart visual recognition – and developers can use this tech.

This is a good list of some of the most interesting Fashion startups in Europe.

Redefining Retail

We always talk about Brand Cathedrals as the epitome of the High Street – retail stores that are so good fans go to worship the brand. Apple stores are clearly Brand Cathedrals and so are some of the Nike stores – especially 1948. Luxury brands are over represented; Dover Street Market, Corso Como in Florence and Seoul are great examples.

Ron Johnson was the man behind the first generation of Apple stores and this interview is a good read – especially as he tells how Steve Jobs let him define what the stores should be.

Samsung have concept stores in some major cities – the London ones and the New York ones are quite interesting – and have now developed a new retail concept for a BestBuy store in Chicago. Built by digital agency Barbarian the use of technology sounds interesting and the video is a must watch. Perhaps not a Brand Cathedral but a good example of what can be done with tech in retail. This Guardian article goes into a bit more depth on how brand are embracing retail and concept stores.

Quick reads

IBM and Apple may seem odd bedfellows to those who remember the PC wars but they are now partnering to focus on getting entereprise mobile. Worth watching.

Facebook are partnering with Nielsen to look at TV viewing habits. 

Microsoft are firing 18000 people – many who joined in the Nokia deal. In better news they are thought to be ahead of Yahoo in ad revenue for the first time ever.

Social guru Gary Vaynerchuk is very bullish on Facebook ads

Finally – it’s going to be hot in London today, so you may want to take a look at a great weather app that is built in HTML5 so runs in the browser. We would love to think the name is some sort of homage to the Fast Show and Scorchio.

And if you want to escape London, check out the new EasyCarClub iPhone app. Backed by Brent Hoberman and Stelios, this is the AirBnB of cars and we worked with our friends at Ocasta as Architect/Builders on the app.

We are escaping London for a little while, so no Fix until August. Enjoy the sunshine.

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Mobile Fix – July 11

Mobile &Money

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

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

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

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

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

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

Because that’s where the money is.

VC Chris Dixon talks of why he is interested in Bitcoin

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

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

Google & the Future

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

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

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

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

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

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

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

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

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

Samsung & China

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

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

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

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

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

newTV – the 7% switch

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

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

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

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

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

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

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

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

Quick Reads 

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

Good thinking on Digital Transformation from Russell Davies

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

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

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