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Fix/Friday - June 26

Adtech

The Perfect Storm keeps getting worse. Now changes to the Apple IDFAs weaken the fabric of digital advertising and as the FT points out, the Virus has ripped a hole in newspaper business models. The new GroupM forecast tells us that newspaper revenues will show a 26% fall in 2020 and just a 2.6% rise in 2021. But digital does better.

Whilst problems with Ads affect all the participants in the Advertising Trinity - Brands, People and Publishers - the effect on the news business seems like the urgent problem.

It's worrying that political ads - with the US Election and Lockdown comms - are holding the business together. The latest Reuters Institute report on News is sobering - so many people now getting news from Social.

And this look at how a brand was using Criteo is interesting - especially seeing how that use changed when they dug into the tactics.

Share your thoughts and join the discussion in our Guild group - we now have 125 super smart people from across the industry sharing news, views, content and thinking.

Apple

Whilst lots of the attention at the Apple Developer event went on their Chips, their moves on privacy are going to change things over the coming months. As cookies disappear, the mobile equivalent - the IDFA (ID For Advertising) - will be emasculated. If an app wants to track you, the user will be asked to permit this. Whether this turns into a GDPR like experience that checks each time or whether it’s an occasional reminder isn’t clear yet. It may be that for many apps people just click OK - as we have seen with GDPR - but the additional requirement for privacy ‘nutrition’ label may encourage people to say no.

Lots of debate on likely impact but at a time when advertising is somewhat fragile this doesn't seem good news for anyone other than Google, Facebook and Amazon - with their constantly opted in and tracked users. Is Apple poised to join this club? I’ve been pushing the idea of Apple becoming a key player in ads for a while. As ever Eric Seufert has a smart point of view and Ciaron OKane predicted this too.

Google

Some interesting moves by Apple this week too. In two blog posts they have been very open about how they share revenue with publishers and how they work with news publishers. The posts are remarkable in that they go into some detail on how they charge. The AdExchanger coverage is a good summary of the issues.

Facebook

The (temporary) advertiser boycott of Facebook is getting some traction but for many it’s just too business critical - Business of Fashion wonders if it's too big to boycott. Of course a principle is not a principle until it costs you money (a quote attributed to Advertising Legend Bill Bernbach)

One Facebook executive admits there is a ‘trust deficit’ with advertisers. But in a good interview curated by Founders Forum, Mark Thompson of the New York Times is clear he doesn't want to see regulators getting involved in News - but does see a role for publishers and platforms to provide context.

The big issue to me is still political ads - letting big budgets drive the agenda seems dangerous.

China

Further proof China is getting back to some sort of normal was the record sales at the 618 festival - $136 billion. Second only to Singles Day ( invented by Alibaba) 618 - because it takes place on June 18 - was invented by JD.com

eMarketer believe China will overtake the US this year to become the worlds biggest retail market - topping $5 trillion.

Merchant

The lockdown has driven huge amounts of ecommerce trial and everyone is trying to work

out how much stays online. One interesting piece of research suggests shoppers are willing to pay slightly more for items in ecommerce versus traditional retail.

This surge in demand probably helped the Dada Nexus IPO - the Chinese grocery delivery giant raised $320m

As Pinterest finally starts to get the attention of Merchants, the Area 120 team at Google have launched Keen - a tool to gather content on topics you are keen on. Or as they put it

Curate, collaborate & expand everything you’re into.

The secret sauce is the Google expertise in Machine Learning - Pair are credited as part of the team - and the Search tools. Google really want to play in Social. Is this the way in for them? This blog post by the Googler behind Keen is good background

newTV

Our Midweek deep dive on Wednesday was on newTV - lots on Adspend trends, the New Fronts and Bundling. Catch up here.

The achilles heel of the SVOD world is how many people avoid paying for the content by sharing passwords and logins. People are starting to see consequences as the lockdown means more viewing and the limit on number of concurrent devices gets hit. One estimate is that $9billion in revenue is lost - but would all these users actually ever pay?

This new research looks at the US audience for streaming - both in terms of viewing and subscriptions - and highlights sharing is most common amongst the young

Spotify have a neat trick to manage subscribers who use their Family plan - a Google Maps integration to see who lives where. Maybe that’s the way Netflix et al start to squeeze the free riders?

One interesting element of the TV coverage of the Premier league is the Twitch coverage and the watch together feature on Sky. This social element feels like a significant step and likely to evolve further. There is lots of potential for better coverage of matches not getting the full treatment - the ifollow service that films all Championship games feels a little second rate.

AR

This super positive review of Snap Spectacles reminds how much progress has been (quietly) made. And their progress with AR in social commerce is creating a (tentative) business model.

No mention at WWDC but Apple are still active in AR as this Bloomberg article shows in some depth. Glasses are slated for 2023 so there is a wait. Ikea have partnered with Apple for AR apps before and continue to experiment.

But Facebook are to stop selling Oculus Go and focus instead on the Quest

TikTok

Just like all the other platforms TikTok sees ecommerce as a huge opportunity and parent company Bytedance has opened a dedicated business unit. Revenues are already ramping up - one source expects US revenue to hit $500m this year. That’s mostly advertising but it is almost double last years global revenue.

Do you remember we mentioned Elite TikTok the other week as an example of how differently online culture is developing? Well these were the people who gamed Trump and booked a million tickets for his event - then only 6k people showed up. This MIT piece looks at the groups like K Pop stans and illuminates how diverse this area is.

One consequence of this is to make the job of the new CEO a little harder. With the anti Chinese sentiment so strong in Washington, the fact millions of US teens spend hours on a Chinese app is a problem waiting to happen. Now Trump has suffered I expect it has moved up the agenda.

Manoeuvring to minimise these issues was probably behind TikTok sharing the secrets of its algorithm last week. But when you look at what was shared it’s pretty innocuous - little more than a general description of an algorithm. Lots of people have dismissed the sharing as PR memos.

Instagram has a TikTok clone called Reels and it’s expanding from its launch in Brazil to France and Germany. The product has developed and seems destined to become a new feature in Instagram rather than a real competitor.

Plus

Music Subscriber Market Shares Q1 2020 Spotify continues to win out over Apple and Amazon

Our friends at Spirable have a new partnership with Snap - bringing highly effective personalised ads to Snap.

I am pretty critical of Agencies these days but Uncommon are really good - this interview with their CEO is interesting. A cup of tea with... Nils Leonard | Can-Do Festival

Finally - one of the big changes yet to happen in much of the Agency world is recognition that great creative can now be done quickly and cheaply, thanks to everyone now having a smartphone. This is a perfect example of ingenuity

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