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Fix / Friday - March 27

I still think that a business as usual approach makes sense, despite the challenging times. At some point life will get back to some sort of normal and businesses still need to serve their customers. The best thing we can all do over the coming weeks is invest our time in getting smarter. I hope Fix can help.

TLDR

It’s 150 pages long but the Furman Report on Unlocking Digital Competition – published just over a year ago - lists 20 recommendations between pages 8 and 16.

As the summary says it makes recommendations for changes to the UK’s competition framework that are needed to face the economic challenges posed by digital markets, in the UK and internationally. Their report recommends updating the rules governing merger and antitrust enforcement, as well as proposing a bold set of pro-competition measures to open up digital markets.

A super smart Fix reader pointed out that this was given the go ahead in the budget the other week;

To ensure that the UK remains a dynamic and competitive regulatory environment, the government is launching a Reforming Regulation Initiative to collect ideas for regulatory reform, as well as implementing the recommendations of the Furman Review of digital competition, publishing further detail on the Financial Services Bill which will ensure that the UK maintains its world-leading regulatory standards and openess to international markets.

And in the same conversation I was reminded that the interim CMA report on Online platforms and Digital Advertising market was published just before Christmas and the full report is due this summer.

AdTechPerfectStorm seems even more appropriate. Join the debate in our Guild group

Corona impact

Lots of businesses are hitting the stop button. As the chart above from a Beeswax survey shows, most people in Adtech think Q2 spend is crashing – and over half think it’s too early to call Q3

One consequence of this is lower costs for those that are tempted to spend - Socialbakers shares good data on the rising audiences on social and the falling spend - creating opportunities for brave businesses with the right product. This is backed up by data from Nest who are proposing global thinking to capture value from markets that are recovering quicker.

There is some macro thinking around too; Sorrell talks about how the crisis will accelerate digital transformation and a good Digiday piece recognises there is no long term now: it’s a total focus on the short term - another Sorrell quote.

New Behaviours

I am always fascinated by new behaviour from people. Combine new technology with life and you get people adapting their behaviours; think of the Selfie - invented by people around the world when they saw their phone now had 2 cameras. This crisis is already driving Video calls for all of us WFH - some more tips here from the NYTimes - but the interesting stuff happening is all about people rather than work.

We have talked about Houseparty before - it was the hot Group Video Chat app for a while and Facebook tried to buy it, then launched their own version Bonfire - which they closed last year. HouseParty was bought by Fortnite developer Epic last year and we talked then about the desire to add a social layer to games. But whatever Epic paid it has turned out to be a bargain as Lockdown has pushed it to the top of the App Download charts.

This desire to socialise around video is not going to go away - within a keynote on 5G for Kinetic late last year I talked about always on video chats and I think we are seeing this take hold now. Instagram are testing shared watching on Instagram as part of their CoVid activity 

Merchants

This should be a great time for DTC businesses but the demand in some categories has been overwhelming. Amazon are struggling, so for mere mortals….

The decision by Amazon to focus on essentials makes sense but the effect has been dramatic with delivery times of other products going to a month. As well as upsetting customers this has impacted sellers too.

None of the UK supermarkets have any delivery slots at the moment and the Ocado queue regularly tops 20k people

The FT have a good analysis of the growth of online across southern Europe as Covid hits but grocers there have had similar issues to the UK. At the same time Amazon are to stop shipping non essential items in France and Italy. US analyst Dan Frommer has a good look at the US grocery scene with some insight on Instacart. And in India both Amazon and Flipkart are having problems

Like the UK supermarkets the US players are all rapidly hiring people - as we mentioned last week Amazon say they want 100k, Walmart 150k and Instacart want 300k

No-one makes any money doing online grocery and funding that level of hires for any time is expensive, but will people go back to schlepping to the stores once they have relied on online for a few months? These retailers certainly hope not.

Some good news in this space as Nike show you can reject Amazon and still prosper - in their latest results they see a 36% growth in digital.

Fulfilment giant ShipBob is sharing interesting data on how Covis is affecting sales of various categories - using data from 3000+ Merchants

newTV

Disney+ launches this week with perfect timing - the ideal audience all sat at home desperate for distraction. But they did launch with a lower quality stream after being asked to delay to protect precious bandwidth. US data shows a huge spike in subscriptions for most streaming services - Disney up 300% on the previous week and Netflix up 47% - although Apple was apparently only up by 10%

Forrester cover the launch and sum up the implication for everyone;

Amazon have been smart though - they have made all their kids programmes available for free. It’s worth noting that Disney are keen to emphasise the new service is a Family one rather than a Kids one.

Last week we talked about Xumi, Tubi and Pluto being acquired by big players - this is a good interview with the Pluto CEO - talking about their jump in audience and their focus on advertising.

And ESPN has revealed what it plans to do without the live sport the service is built around - in this interview a key exec talks about repackaging classic games and balancing news with stunt programming. Sky is doing similar things over here - I watched Leeds thrash Liverpool (from 2000) followed by an interview about the game and last Sunday they showed 15 minutes highlights of all the Leeds games this season - perfect for Mothers Day. But they also have a button on the site to let you pause your Sports subscription.

Given the combination of a huge choice of content and a massive audience, the market is still lacking a guide to what is worth watching. Watchworthy is a new app using Machine Learning to try and solve this

There are few others in a similar space - Letterboxd is film recommendations, apps that recommend what's best on Netflix and here what services have the show you want to watch, but it still feels like an opportunity.

AdtechPerfectStorm

Safari pulls the plug on the last vestiges of 3rd party cookies - and Firefox partners with Scroll to block ads and pay publishers based on the time spent on their sites. Wired run a story asking why don't we just ban targeted advertising.

And as we opened with - the Regulators are coming.

The Wolves are at the door.

But new interesting approaches are emerging. Google is testing its ADH as a buying tool and it demonstrates the advantages of good 1st party data. It’s all about those higher-frequency, emotion-rich relationships

There are some great examples where firms have used 1st party data to really understand their customers and then found smart ways to rethink their approach to marketing. But when you find that sort of insight ,you keep it to yourself.

One consequence of losing 3rd party cookies is the impact on measurement - no more viewthroughs or detailed attribution so the collapse of the cookie heightens interest in brand-uplift studies

Gaming

AS ESPN and Sky consider their Sports content they have to be looking at eSports. Lots of people are investing heavily in Call of Duty franchises which draw huge audiences to live events. Ceding this space to Twitch or YouTube would be a costly error. But it's too late for Call of Duty as that is part of the 3 year deal YouTube have signed with Activision - valued at $160m

The players are now getting attention from brands too so another revenue stream.

But not all games are aimed at teenage boys - Robin focuses on games for women and has raised $7m

Whilst Google cancelled their Developer Summit this month they have made all the content available online - lots of great stuff to dig into

Voice and Audio

We are big fans of turning written content into audio - with Always In buds I think the natural way of consuming content will be audio and we see more publishers recognise this. So the New York Times buying a company that specializes in turning long form writing into audio sort of makes sense.

Sort of because there are a number of emerging tech firms that can automate this - our friends at Sonantic, Resoundly and Descript - and Amazon Polly. And the R&D team at the BBC are looking into the space too.

The tools for making a podcast are getting more widely available - Anchor lets you record with socially distant friends.

AR

Unsurprisingly the launch of the new iPad wasn’t big news given the timing. But hidden in the features is a LIDAR scanner that is a significant step for Apple and AR. This video is a good demonstration.

Social

A Fix reader pointed me to this article on D list celebrities making money through doing personalised messages and answers - and Wisio who operate a similar platform.

And is Instagram about to copy another Snap feature? Disappearing messages

Etc

The big topic across our whole industry is ad effectiveness. The old chestnut of not knowing which half of the ad spend is wasted remains highly topical. Amazon are about to enter the debate and are hiring a global lead on Ad Measurement 

Interesting look at how Depop blend data and tech from their head of growth

Fascinated by MSCHF - this week they reinvented Product Placement by editing Pride and Prejudice to feature dozens of DTC brands and sold all the copies - over text. They will have similar influence to Supreme over the next few years.

Finally... I am rereading Snow Crash after 20 plus years and it's just as good as the first time - or actually better as we now see how prescient Neal Stevenson was. His take on the Metaverse seems really timely now; Mathew Ball says every big tech CEO has a well thumbed copy in their office. It's worth reading Balls essay on the Metaverse.

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