So it’s been a while and there is lots to catch up on..
The big news over the last few weeks was Apple finally coming off the rails. We’ve talked about device sales having to peak at some time and the interesting question now is how they fill the gap. Their services revenue has grown substantially over the past couple of years and their ambitions for music and video will drive this further.
So too does the shift away from ownership, towards an Apple Prime service where your monthly fee covers all their content and the latest hardware. We see the these new business models emerging in various sectors, from fashion with Rent the Runway etc through to cars with Polestar from Volvo.
But when you look for substantial revenue streams to replace iPhone sales you have to look at advertising. And when the fastest growing segment of a $500bn industry flows through the device you make, it would be insane not to get involved.
The Apple presence at CES shown above is part of this shift. The Apple emphasis on privacy is designed to put pressure on their GAFA rivals — who have got rich from tracking that makes many people feel uncomfortable. At least when they understand what is actually going on.
Hiring a vocal Facebook critic to their Privacy team is more evidence that Apple are ready to fight over tracking. The new ITP2 rules change the game.
Steve Jobs saw iAds was a way for app developers to make money. He was right but the revenue came through more focused rivals and iAds disappeared. The logic remains and using privacy as a lever could make a new attempt more robust. And having an Ad free Prime service versus a free ad supported version should justify a higher Prime fee.
One of the most obvious and common uses of digital tracking is location.Having spent the last week in New York it has been invaluable. But like most things it can be misused and the press having been digging into the downsides of location.
Two recent articles cover the topic but conflate quite different approaches. One in the FT sees the Weather Channel (owned by IBM) selling data suggesting certain weather conditions may make it likely people in a location could have an overactive bladder, so may buy more drinks.
Another in Vice looks at another level of intermediaries that sell location data to bail bond people looking for individuals.
Both are worth reading though I would argue that the first case is just the ad industry getting smarter over the Signals that could make an ad investment perform better. But the second use case gets the creepy headline and worries people.
We need to make the case better for targeted ads and highlight the permission options.
Future of Ads
So starting 2019 we should be thinking about the future of ads. Three long pieces do just that but are quite gloomy. One on the dark future of advertising says
But this what great salesman have always done — In Dover Street Market the staff don’t show me to the coolest Balenciaga sneakers — but they do for my 18 year old son. I get the slightly boring classic knitwear.
Another article on the end of the ad supported web rightly mentions the huge volume of ads — our friends at Ezoic work on how sites can show the right mix of fewer ads and make more revenue than a plethora of ads across each page. The piece ends with the reservation that we need to ensure that creators are paid for their work.
A third piece is better thought through and looks at the bloodbath as news and content sites pull back and merge or close. Much of this is because ad revenue is hard to come by as most flows to GAFA. But maybe that can change ? We have seen evidence that context matters in how ads perform — someone reading a story on a newspaper app or site is more likely to be affected by an ad than when they are scrolling through a social feed and clicking to a story then clicking back.
As advertising gets smarter does context become a more powerful signal? And the first party data News titles have on their readers may turn out to be more sustainable than the third party data relied on now.
As our Advertising Trinity argues, Brands People and Content creators all benefit from advertising done well. I remain an Ad Optimist. What about you?
One of the side benefits of my week in New York was a chance to see who retail is doing over there. I plan to write a longer piece on this, which i will share next week.
In the meantime this HBR piece on how algorithms will curate shopping is really interesting. And so too is this look at how the drops of trainers has changed over the past couple of years. Scarcity and a sense of occasion are still vital but tech is changing the experience. And rather than fighting off people wanting to tax you outside the shop, the brands are now fighting the bots.
A new Bain report looks at what retailers can learn from Asia. A long report from Business of Fashion and McKinsey on the State of Fashion is a must read, especially the pieces on digital and ecommerce. The link is in the video description. And if that’s your thing the HighSnobiety white paper on the new Luxury is worth a read too.
In the next few weeks I will be in Sweden talking Voice. So much happening and this tweet sums up our excitement. And the most popular Skills on Alexa demonstrate this is a new medium in development
This is a great round up of the progress Amazon is making. As well as much wider distribution, Alexa is getting smarter as Machine learning is employed. Tom Goodwin has some smart thinking on Voice — good common sense.
It’s not just about Amazon though. Google are really committed to Voice and continue to innovate. At CES both Google and Amazon have lots of new features but the key thing seems to be third party partnerships. Both have their owned and operated devices but no matter how hard Amazon push their speakers Google have the huge advantage of their Android footprint to push Google Assistant to. For third parties Amazon seems to have first mover advantage but some like Sonos are trying to have both work on their products.
Also at CES we are seeing firms trying to escape the GAFA restrictions — Sony will enable Apple Airplay on their Android TVs
There is no doubt that the future of Agencies will remain a hot topic. Two stories on the big consultancies are worth a read. Adobe recognised Accenture as a key partner in Experiences. The reach into big companies of Adobe, Salesforce etc is sometimes underestimated, so having a strong relationship can be a huge advantage.
And Deloitte claim they don’t have any ambitions to take over agencies — certainly much less interested in media than Accenture.
Someone seems to have pushed PR up the agenda at Snap as they have a few features out. The most interesting is CEO Evan Spiegel lunching with the FT — at Nandos. International VP Claire Valoti talking with the Observer is also worth reading. A WSJ article is less favourable.
It’s odd how they get so little attention from big brands. Yes Instagram has more users but the Snap record of product innovations and a pretty substantial user base in a key demographic surely merits more investment?And seeing how many people in NY wear AirPods the whole time, I do think glasses will take off at some point.
Perhaps their success with Snap Originals will help — they have better adapted Social TV than their rivals.
Finally ….as we kick off 2019 I am out and about lots. As well as talking Voice in Sweden I am delighted to be keynoting at Vidcon in London in February. If you are interested in newtv it’s the place to be and we have a discount code — Addictive 20
Then I am speaking in Dublin in late February with some great speakers and i have also been invited onto the excellent IAB Podcast.
And so some work gets done while I galavant around, we are hiring — particularly interested in people with experience across EMEA. Please share with your network. Apart from having to work with me, it’s a great opportunity.
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