Snap — Ups & Downs
Lots of reaction to the Snap partner event we mentioned last week; some very positive but some not so much. Wall Street firm BTIG follow Snap closely and have had their doubts in the past, but are now pretty positive saying Snap is becoming a platform for the Mobile Generation.
The share price jumped after the event as their ad network promises more revenue and their product road map suggests they are more ready than most for the world of AR. And with gaming they channel WeChat — where casual games are hugely popular.
For an idea of how the West is emulating WeChat games take a look at those played in Messenger; GamePigeon is the most popular app on Messenger — even ahead of Giphy and Connect4 is really popular too. Even their ideas for location check in seem to be ahead of the competition.
The suggestion that the user base is in decline caused a drop in the share price but after Snap refuted that research, the price recovered.
What we think people miss with Snap is that it is truly mobile first, whilst much of the competition is essentially a desktop experience re-rendered for Mobile. Think of how similar Facebook, Twitter, Google search and YouTube are across desktop and mobile. Yes they all now have features which improve the mobile experience, but they were not built for mobile in the way Snap and Instagram were — and don’t really use the smart camera.
These native platforms get a huge amount of attention from digital natives and the Chinese experience shows the appeal is not just to the young. At our VC event last week we saw SnapTravel talk; a smart Travel firm that just uses Messenger And in London Threads, a cool fashion business is focused on messaging too. As AR leverages the camera and goes mainstream, the way we access services is going to migrate to messaging and who is best placed to prosper? Clearly Facebook wants to become the SuperApp that WeChat is, and plan to use WhatsApp and Instagram to do this, but is that really feasible?
Whilst old Department Stores like Debenhams struggle we are seeing a DTC reinvention with US brands like b8ta, Bulletin, re-store, Neighborhood Goods and Showfields rethink that model by curating a range of DTC brands. They understand that shopping needs to be an experience and again we can learn from China where a new Sunglasses store was launched with WeChat truly delivering O2O (Offline to Online)
H&M are responding to Instagram turning into a retailer by launching a new retail site that looks like instagram and uses Influencers to answer shoppers fashion queries.
In DTC Bonobos has launched the careers of many DTC entrepreneurs and their influence is huge. That could explain why so many brands look alike but a founder of Red Antler — the New York branding firm behind some of the most successful new DTC brands — argues that much of what makes a brand is below the surface, and comparing logos and fonts misses the point.
This video panel of DTC brands look at the new rules of retail and — as you would expect in a panel run by Appear Here — majors on stores and experiences
Their UK rivals ITV are making great strides on their Tech, and after deciding not to work with SkyAdSmart have partnered with Amobee — taking advantage of their recent acquisition of the Videology tech. They are also using their own tech to better understand who uses the ITV Hub.
The big issue in newTV is how the ads work and Fox — like many others — are looking at how to lower the ad load; their latest test is short (1 minute ) breaks called Fast Breaks — and viewers are told before the break how long it will last
A survey into Netflix viewers finds that the absence of ads is a major attraction of the service, but also that a large proportion don’t pay a subscription — they share passwords with others who do. Netflix have never seemed to be bothered by this but we think that one day, an ad funded service will launch alongside a crackdown on password sharing. It’s an inevitable step as they will run out of growth eventually and the Wall Street hunger for cash will force their hand. That may well coincide with the arrival of the imminent Disney streaming service.
Some OTT services already take ads. Hulu and Roku took almost $2bn last year and rapid growth is forecast.
The World Federation of Advertisers invited Terry Kawaja to speak at their global summit last week and he focused on what he sees as the real trends in the industry; DTC & OTT, data & identity and the ecosytem. With a Pulp Fiction homage to procurement at the end.
His firm Luma also published their latest report on Q1 — essential reading.
The challenge of adtech is illustrated by the troubles at Sizmek — having raised millions their costs kept growing when their revenue didn’t.
With Apple Airpods becoming essential wear for many Amazon are to launch their own version that will work with Alexa.
Apple Music seems to have overtaken Spotify in the US. I think they have quite different audiences — as does Amazon — and one clear winner is unlikely
Is Google Maps the Western SuperApp ? They are now taking monetisation much more seriously
Finally… a fascinating UK survey asks people what they think about ads and one positive finding is that people like the idea of personalised ads.
Unfortunately when people have adtech explained to them the acceptability of ads plummets. Work to be done.
No Fix next week — I am taking a holiday and Fix on Good Friday feels a little unnecessary. Enjoy Easter.
What’s cooking at the Media Kitchen
We ran our annual VC conference in New York last week, with another set of stellar speakers and a full house of clients and colleagues. The theme was the End of Serendipitous Discovery and this article sums up the speakers.
We will be working with some of these startups to bring them to Europe, so if any sound interesting let me know and we can connect you up.
And the Drum published my article on Why does Advertising still treat People as Strangers?
“Making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity” Charles Mingus
We’re with Charles. Too many people make things complicated. We try to understand what’s really going on, keeping it as simple as possible and looking for patterns.
We use these patterns to identify opportunities for profit for our clients.
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