So we are back from the beach and what did we miss? Facebook keep nailing it. Amazon seem to be getting close to launching their UK grocery business. Apple share price under pressure as their exposure to China turns from a positive to a (perceived) negative. Oh and Google decided to completely change their corporate structure and become Alphabet.
This seems more like corporate engineering and probably bears the fingerprints of their new CFO. It made the TV news and has inspired lots of comment from lots of people. Most see it as a positive but there is some complete nonsense out there too – does anyone with half a brain really think Google have run our of ideas? This is one of more comprehensive pieces on the changes .
A smart HBR analysis points out how this restructure will enable them to better raise the appropriate finance for their disparate businesses
Older readers may think of this as a way to apply a Boston Matrix to their business – separating the Cash Cows from your Stars – and your dogs. With high market share but facing relatively low growth, search and advertising can be seen as cash cows. Nest Calico Fiber etc are clearly stars – high share in high growth markets – or at least the potential for high growth. Google has few dogs but Google+ could be probably be squeezed in that quadrant. And the Questions are still there; Payments and Content for example.
With a 5% pop in the share price and the generally good reaction, the launch of Alphabet must be seen as a success. But the real test is probably whether the new structure means regulators take a more enlightened view of Google.
Mobile Maturity & Mobile Natives
Ofcom published their annual Communications report with lots of great data on how the UK are using technology and media. The key thing to emerge is that smartphones are now seen as the most important device for connecting to the internet – with 33% agreeing - beating the laptop into second place with 30%. Add smartphones and tablets together and you get to 52%.
When you dig further you see that smartphones are strongest amongst the young and less well off – it’s by far the most important device for internet access amongst under 35s and C2DEs.
So these are the real Mobile Natives. Interestingly just about everyone we meet in our industry has a laptop in their Rucksack and if you spend any time in a coffee shop in East London or the West Coast everyone is sat behind a Macbook Air. So we all probably still need to think and act more mobile first.
Try leaving your laptop at home and spend a few days mobile only – which we did over the holidays - and you see how far many businesses have to go to deliver a good mobile experience.
But spend some time with the Ofcom report and it’s clear that the opportunity is huge. Ben Evans did a good post summarising some of the key charts if you are pushed for time.
The battle between YouTube and Facebook over video seems a little fabricated- we’re not sure that users see them as alternatives but Facebook have done a good job of getting their video chops on Brands radar.
Some creators aren’t convinced by Facebook yet. With 2.6m subscribers Hank Green is a big player on YouTube and he accused Facebook of Lying, Cheating and Stealing. After this got lots of attention Facebook responded with a defence of their metrics and the promise that their tools for tracking Freebooters will get better over the coming months.
It’s unlikely this situation gets sorted any time soon; unscrupulous people ‘share’ others people content in social all the time – Twitter will now takedown jokes that are copied.
We think the most interesting aspect is working out what qualifies as a view – is the 3 seconds Facebook use adequate? Most TV is bought on the basis of 50% of an ad being viewed, which seems a better metric, but this whole area is in flux as brands, agencies and platforms push metrics that suit them. Going back to the jokes, is hearing a fraction of a joke enough? Will 50% or just 3 seconds make you smile? So why do we accept that a partial view of a video ad is enough?
One consequence of this thinking is questioning what length ads need to be. The 30 second commercial was the standard but shorter ads are used more and more - 10 seconds in the UK and 15 seconds in the US. But just as films and TV have speeded up their storytelling – watch an old Bond film after watching a Bourne one and it’s quite soporific - maybe ads can be quicker too. Perhaps the Vine 6 second format is enough to get your message across. The learnings from idents in TV sponsorships may help here.
And the move to vertical video is also gathering steam. Porting your 15 second horizontal TV ad to mobile video (maybe as a non skippable pre roll?) will tick boxes for brands and agencies, but we think those that invest in messaging that is tailored for mobile are more likely to get consumers smiling.
When we talk with any retailer the topic of Beacons comes up pretty quickly. The promise of being able to message customers in store based on their profile is pretty intoxicating. But despite lots of low profile trials no-one seems to be using them at any scale – yet. Carrefour have an interesting case study but the general problem is people seem to find the experience of pushed messages a little creepy.
Eddystone, the new format from Google has reinvigorated the sector and people are getting their heads around suitable use cases. Target have announced a roll out which has got other retailers paying attention – as they are limiting push notifications and instead focusing on using the location data to inform the content on their app.
And Estimote, one of the leading suppliers of Beacons, has shared a very interesting state of the nation which foresees a good future for this technology.
We have parked our Sharing Economy project Skratch to rethink the business model and, whilst we learned loads about the space, we don’t think the sector is anywhere near mature.
As incumbents complain, regulators are taking a real interest in the sector through the two leading players; Uber and AirBnB. One theme that keeps recurring is startups getting a push back on the idea that the people working for them are independent contractors.
In California Uber drivers have been categorized as employees – with all those expensive rights like healthcare, tax etc. After other moves by regulators, some companies are proactively changing the status of their people to employees but some can’t make the numbers add up any more. Jeremiah Owyang is perhaps the smartest thinker on this space and his summary of the changes is well worth reading.
Giving people a new way to work flexibly is a good thing and so too is stripping away barriers that stifle innovation and competition, But if this new economy is really little more than using a mobile app as a mechanism to move work from people paid a living wage with benefits, to people on zero hours contracts, it would be a shame
Bloomberg have published a very comprehensive report on the Sharing Economy if you want to dig deeper.
Twitter is having a torrid time – share price pretty much at an all time low (the company is currently valued at a little less than $20bn) and searching for a new CEO. But there is still lots going on.
They have dropped the 140 character restriction – for Direct Messages
The Twitter owned MoPub has published an interesting report in what they are doing in Programmatic
Vine is possibly the sleeping giant – with 1.5 billion loops ( or views) each day, new data suggesting it is outperforming Snapchat.
Another Twitter owned property Periscope has published some numbers. 10 million people have opened accounts and the daily active users is getting close to 2 million. We think the potential for live video is huge but no one has taken the concept outside the tech community – real people don’t really know about it or Meerkat. It could be that a UK startup called MyEye will be the ones to capture the mass market. In beta well before Meerkat and Periscope surfaced, they have one big advantage; David Beckham is an investor and their brand ambassador.
Our friends at PageFair have released their new ad blocking report. No good news on there and as we have discussed here before, it's going to get worse. The Monday Note people continue to dig into this area and their thoughts on the likely impact of the Safari Content Blocker in the next version of iOS are sobering.
The IAB are focusing on this area and their report shows people don’t like being interrupted and that they believe ads slow down their experience online. So when an easy fix lets them solve this it's going to get used. More incentive to move adtech out of the slow lane.
The City is using a WW2 Radar Tower in Kent to speed up their trading. How long before we see new players using technology to close the gap between the adtech slow lane and the speeds Wall Street rely on? Being able to guarantee your ads load faster than anyone’s else’s could be a real competitive advantage.
We continue to be fascinated by China. The Galapagos effect – where their business has evolved in a world without Google, Amazon and Facebook - offers great learning for any digital business.
One interesting trend is the push to O2O – online to offline. Alibaba is huge in online and looks like becoming a big threat to Amazon and eBay. But they surprised everyone by paying $4.6bn for a stake in a traditional retail chain in China. Suning has 1600 stores in China and the idea is people can experience products instore and buy them online – hopefully making them more likely to do other ecommerce with the same platform.
VC firm Andreessen Horowitz have taken an in-depth look at WeChat the hugely successful chat app launched by Tencent – one of the 3 major players on China we refer to as BAT. This is a really interesting read – and perhaps the key thing is the way this app does everything; it has ‘lightweight’ apps within the app letting users do pretty much anything without leaving WeChat. With the Western Constellation model of individual, single purpose apps foundering this could become important over here too. Lots to learn.
ITV are dipping their toes into YouTube buying a share in ChannelMum
Facebook are extending their autoplay native video ads to partner apps through their Audience Network.
Can a beautifully designed smartphone make any impact?
Another interesting example of programmatic creative – this time in video for Axe. So much potential here.
Some good thinking on mobile UX
Our friends at Time have invested in visual search pioneers Snap Fashion
Finally the litmus test for mobile natives is probably Snapchat. Aimed young, it's not that intuitive and we tend to find anyone over 25 struggles to get it. So this Adults guide may be useful.
With everything mobile we believe you have to experience what your audience is doing to really understand what’s going on.
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