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Fix / Friday - May 1

TLDR If you read just one thing make it this seminal piece on Modern Brands. It’s not just us who are excited about the new Social talent emerging and developing fascinating business models. Super smart Darren Herman has written a great framework for marketing based on what MSCHF, 100 Thieves and Fortnite are doing. Essential reading.

If you do have some time take a look at the latest MSCHF drop Severed Spots - the deconstruction of a Damien Hirst spot painting which sold out in hours. (That's another trend we are intrigued by - the increasing crossover between ‘luxury’ brands and Art - mentioned in our Retail Safari). And watch the Travis Scott concert in Fortnite - Wired have written it up well.

Talking on BBC newsnight Martin Sorrell summed things up well; “Q2 is going to be a bit of a blood bath. We are finally seeing enterprises transform to digital much more strongly because they have nothing to lose now.”

That transformation to digital will not be about the web 2.0 let's rebuild the physical world with digital tools that many people are still labouring on. A digital bank or shop that does little more than a traditional bank or shop just isn't enough.

Smart people will be reimagining what their business can do to provide real customer value in a Mobile First, Digital Native world. Learning from people who - like MSCHF, TikTok, Snap and Influencers - truly understand the architecture of modern digital will be essential. Even if you have to discard the fluff in some of the thinking. This post from UsTwo is right on point.

Social

As they passed 2 billion downloads TikTok broke the record for downloads in one quarter - 315m in Q1. Only Facebook apps have more downloads - Google apps have bigger numbers but come pre installed on many devices.

Their product features keep coming and signal future priorities. Small gestures lets users send gifts to other users - choosing from a selection of brands that will have paid well to be involved and benefit from this customer acquisition tactic. Donation stickers let creators add a button to their video that lets users make a donation to a range of good causes, curated by TikTok.

They have all the elements needed to roll out a commerce offering. Bbuy the clothes the influencer is wearing? Levis have been piloting commerce with TikTok and claim success. Or the music playing? Rolling Stone looks at how TikTok is influencing music sales and how the industry is trying to keep up.

The tools for making content are getting easier to find and to use. TikTok parent Bytedance has made their highly successful Chinese video making tool Viamaker available in 4 languages - including English.

YouTube have their own video maker - but only in beta and you need to register to use it. But it looks promising and better tools democratise content creation. The only issue with these proprietary tools is how easy it is to port the finished content to other platforms.

Another content creator you should know about is David Dobrik - 24m subscribers and growing at 100k a week. He started on YouTube and is still active but now focuses on TikTok too where he has the most popular video of 2019.

GAFA & Money

Not going to spend too much time on the GAFA Q1 results. They are well covered elsewhere and, because of the Virus, not that informative on what’s going to happen next. Whilst Google asked that people not …. extrapolate for just a couple of weeks that is only sensible until we have evidence to the contrary.

The most interesting thing about Google was the growth of YouTube - up 33% year on year despite growth falling to single figures by the end of March. And employee numbers were up by 20k on the previous quarter - their former HR chief thinks hiring will slow down

The remarkable thing about the Facebook results is the growth in users. Daily average users for Facebook grew by almost 5% - largely outside the US and Europe, although both these regions showed growth too. Almost 3 billion people use at least one of the family of products each month. Revenue grew but they warn that demand dropped the last 2 weeks of March. The first 2 weeks of April are at the same levels as a year earlier. And their headcount grew 28% year on year. Again we need to wait and see, but growth looks unlikely for the next few weeks.

This Twitter thread on the Facebook investment in Reliance in India is worth reading to see that Facebook growth is going to come from Asia. As is this piece asserting that Zuck is taking back control at Facebook. Which sort of explains this video of him announcing their new video products. The new suite of products looks good - and it has all happened remarkably quickly. And their Portal has proved the cynics wrong - it’s sold out everywhere.

Whilst we won't see it in their figures for a while Apple are ramping up their ads business. I have long predicted they will become more active so as to help their developers maximis ad revenue - without compromising privacy.

Audio

In their Q1 result Spotify shared they now have 130m subscribers with revenues up by 22% - although ad revenue was up by 17% they too saw a dip in March. Some new product features with a new tool enabling video calls to be turned into podcasts.

The health of podcasting is being debated but new data suggests listening time is up in recent weeks. Paid podcasting seems to be suffering though; Luminary launched a year ago with the ambition to be the Netflix of audio but it has made little progress.

For data across all audio the new Rajar data is a good resource

As those who listen to the podcast version of Fix know, I am interested in the text to speech tools and have been following the leading companies in this space. This new post from Amazon is a good summary of the latest tech and - as you would expect - you can choose to read or listen.

I believe audio will eventually become the most popular way to consume all content on mobile and the rise of always in Airpods is helping to accelerate this - but more content needs an audio version.

newTV

We went deep on new TV this last Wednesday in our midweek Fix and you can catch up here.

Inevitably our focus tends to be on the new players and the emerging newTV ecology, but existing strong players are still doing interesting work. Following the pioneering work of Sky with addressable TV we will see more of that from ITV, Channel 4 and Channel 5.

C4 is particular, have been smart about data for some time and their BrandMatch lets them ‘share’ their 23m audience data in a Clean Room with brands, to improve targeting on All4.

This is a good take on how Agencies are managing newTV right now from a Media Kitchen friend.

Adtech

Beeswax did another good webinar this week - focusing on digital identity - half an hour presentation with some good information - and then nearly half an hour of questions. Plus there is a good white paper.

Just as GAFA got hit in the last few weeks of the quarter Criteo took a pasting too - saying they lost $24m due to the crisis. Q2 figures out at the end of July will give us a good idea of who has a chance of surviving and who is toast.

Merchants

The big news is the new Shop App from Shopify - actually a development on their successful Arrive app, which tracked parcels from Shopify stores;

The app helps you throughout your shopping journey: from discovering new products, placing orders with your favorite brands faster, to tracking your packages, all in one place.

This Shop app feels like a mall and it is clear that Shopify wants to take on Amazon and Google in the war for commerce. Not everyone is on Shopify but they have over a million merchants so can rival anyone for range and choice. As a Merchant we recommend you have a DTC offering as well as being present and active on Amazon and Google Shopping. When - and it is a when - Shopify offer paid promotion it will be another essential platform for Merchants. Working out how to make the most of GAS for Merchants will become just as important as working out how to make the most of GAFA is for Brands.

This is some interesting thinking on Google Shopping and their offer of free listings. The new shopping features from Pinterest are working well - with 330 MAUs maybe Pinterest becomes a key commerce play. Is it GASP? And it's interesting to note that GaryV has bought a Shopify build agency and launched VaynerCommerce - to add real value you need to be able to deliver right through the customer experience.

There has been some controversy around Amazon own label after the WSJ accused them of using data from its sellers to launch own label products. Clearly they have never seen how Tesco own label cereals (etc) look just like their branded equivalents. With the proportion of Amazon Basics products in the Top 100 doubling over two years this strategy clearly works. But it has worked for traditional retailers for decades - across CPG, fast fashion, autos et al.

Tesco have gone from 400k weekly delivery slots to over 1 million - partly by closing stores at night so pickers have sole access and hiring 4000 more drivers.

Plus

The smart people at Essence have collated views on the future of advertising in 2030. Interesting but in 10 years lots change and much of these predictions feel likely to land sooner. My own futurology on 2010 - done in 2001 - got a lot right but the timing was a little out.

And Google now requires all advertisers to prove their identity. Good initiative but hard to make it work for the bad guys? This is a real problem - some big brands are seeing fraudsters set up Shopify stores and run Facebook ads for their brands. Then disappear with the money.

Next Steps for TV Advertising Measurement - no breakthrough but interesting

How the New York Times did it - good story on how the NYT turned their business around

A good podcast from a DTC growth agency - really interesting how they are reinventing the agency model - lots to learn here

Finally.. Kevin Kelly has had a major influence on tech and is always worth reading - here he has 68 bits of unsolicited advice

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