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Mobile Fix – January 22

Apple ads

The Apple exit from the ad business by shuttering iAds has caused lots of speculation around what could be the motivation. Some think its part of a master plan to take down Google – or at least a big chunk of their ad business. A Goldman Sachs report from last year suggested that around 75% of Google mobile ad revenue was through iOS. So - the thinking goes – making ads on the iPhone less viable damages Google

But does Apple really want to hurt Google that much? They have yet to go nuclear and drop Google from being the default search engine on Safari and therefore the search engine for most iPhone users.

We are big believers in collateral damage – that GAFA cause pain to various people as they extend their business. So Amazon video hits Netflix, Apple Pay hurts Paypal, Facebook video affects YouTube etc. But this is an secondary consideration as GAFA usually have sound strategic reasons – and see significant benefits to their core business ,- by doing this. And, hey, if it hampers a rival, that’s a bonus.

Creating an ad free iOs ecology may – arguably - improve the user experience for iPhone users but it would hurt developers – and hurt lots of them hard. One of the key reasons for the continuing success of the iPhone is that developers focus on this platform over Android – for good reason as iPhone users end to be more active in terms of traffic and spend. But cut off ad revenues and that could change.

Remember that for all the cant about not collecting data, Apple do collect quite a lot. Go to settings on your iPhone, find privacy and scroll right the way down to the bottom and click on advertising. Then click on the small print Advertising and Privacy and read through all that data that Apple does collect on you. My favourite part is right at the end – you can opt to limit adtracking but you may still receive the same number of ads, but the ads may be less relevant to you

Our view remains the same – Apple are exiting the Insertion Order ad business but will become a player in Programmatic – maybe just as a source of data and inventory, but maybe more. At the very least they want to facilitate a world where their developers can profit from advertising. The big AdTech players are certain to be plotting to get (more/better) access to the Apple ecology and we should expect more news on this.

Facebook & Ads

The rich mosaic of Facebook properties is constantly evolving. This week we see that they are pushing Instagram ads harder by making them accessible through the same tools as ads on Facebook itself

Their Audience Network - which is their way of supporting developers and publishers - is growing quickly with the apps running on AN accounting for 6% of all time spent on mobile. Add that to the huge share of mobile time that Facebook and Instagram constitute and you can see just how big Facebook is. And with Atlas growing quickly, the reach available through Facebook is set to keep growing. As they get better at monetizing Audience Network - with a run rate of $1b announced this week – they are choosing to focus on this rather than ad serving and Live Ramp won’t accept any new customers and will offload those it already has.

This fast evolving space creates new opportunities and whilst adtech isn’t as attractive to VCs as it was a couple of years ago, the pace of innovation continues as this blog by one of the most active Angels in ad tech demonstrates.

Whats App

When Whats App was bought by Facebook they promised never to run ads – and instead they have been charging users $1 a year - but I don’t know anyone who has ever paid. Now they are dropping the charge and have another nascent business model – charging businesses to use the platform to communicate with their customers.

So another platform wants brands to build bots for it – just like Slack, Telegram and Facebook Messenger. We have seen some very cool examples of these bots and can see huge potential – but getting bots built bespoke for each platform is a challenge, as is getting your customers to use the bots. We can expect a new set of bot app stores and a need to manage / optimize the app store experience

With nearly 1 billion users WhatsApp will be near the top of the list for developers to focus on – but will brands choose just one platform and learn or go will they choose to invest across a number to see how different platforms perform? Sounds like a job for experts.

Ad problems

But last year it was estimated that some $18bn was lost due to fraud. No-one really knows how much money is wasted but everyone agrees it’s too much – much too much. And along with ad blocking, fraud, viewability and the general gooblydegook that can characterize digital it is putting some people off. In the US TV revenues are predicted to grow slightly and this worrying about digital is cited as a reason

Done well, by people who know what they are doing, digital and programmatic are really powerful levers to build your brand and sell your product. If you are significantly suffering from ad fraud etc, you are really just doing it wrong. Or you have the wrong partners.

And this is how some publishers are dealing with adblockers – and they tend t see around athird turn off the blocker when asked (nicely). We are watching to see what the Sun does about ad blocking. How can they go from a paywall to letting people using adblockers read for free?

But its not just digital where things get a little muddy – travelling to Paris this week the water in WH Smith was £1.89. But buy a copy of the Telegraph for £1.40 and you get it for free. Hopefully all the brands advertising in the paper have factored this into what they pay?

Quick Reads

Good thinking from VC Fred Wilson on notifications – we need better control over when and why an app notifies you of something

Whilst Facebook and Apple might have made the early running with their services for publishers Google seem to be getting really good traction with their Accelerated Mobile Pages. The notion that not being part of AMP could hit search volumes – as Google algorithms favour fast loading pages - probably helps. Although this seems to be just conjecture at the moment..

Interesting look at where mobile commerce is going – and an interesting piece suggesting VCs are not very good at ecommerce. Both are worth reading.         

As more and more content is delivered ad free this blog post looks at how marketing can adapt to an ad free world

Seems to be lots of people quick to criticise the Guardians commercial policy. Hope none of them are those who will book ads in their print but don’t wont support their online properties

Finally... this is a good read on Facebooks’ quest to get everyone online. Of course they benefit but then so does everyone else – especially the next billion users

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