Necessity is the mother of invention and when your rivals constantly copy your product innovation you need to go find more fresh ideas — or roll over and die
Snap don’t look like they are going to give up the fight. They have the loyalty of a key demographic and keep demonstrating they know what that group want in terms of product features.
They see that the gap between content and commerce needs to dissolve and their work with Nike and others on blending ads with commerce influences the whole social space
Their new visual search tool takes the idea of a camera app and commerce to the logical next level — buy whatever you see through the camera, on Amazon. There is lots of interest in this space with Pinterest, Bing, Google and Amazon all playing.
Their young audience is throwing up some interesting success stories; London based Fanbytes are getting millions of views a day with content that is designed for the platform.
One group remains less interested in Snap though; Advertisers. It seems some agencies and clients just focus on the bigger audiences on Instagram. But with a dramatic price drop they are getting more consideration and people are seeing good results. But just as Fanbytes demonstrate it’s crucial that ads are tailored to Snap is they are to work well.
Commerce driven by visual search is just one of the ways retail is impacted by digital. When the customer has the best tech on their phone, your instore staff are going to struggle. Boston Consulting see the problem as one of IT investment and that is true to some extent but lots of store IT is wasted on gimmicks that customers never use. Hire the staff with the best attitude and empower them with a smartphone and you can start to compete. Then build a tech stack that lets you and your people recognise customers and you can start to improve service.
As ever we can learn from China. This new report from PWC looks at new Retail in China and goes into lots of detail (PDF). The Chinese consumer expects retailers to have data and use it make relevant offers across all channels. Right now the US view is quite different but show people how well it can work and attitudes will change. Do we really think people in Bradford and Brooklyn are that different to those in Beijing?
There is more on China in this FT piece looking at the intense competition between the competing platforms and how KOLs ( Key Opinion Leaders; The Chinese term for Influencers) are key to build trust.
The new LA concept from Nike shows where this might go; retail becomes more about your community and the stock reflects local needs — based on the data you hold.
Just good use of data can be a real help. Foursquare can see where people go and they have used that insight to develop some good thinking on the mall of the future. A must read.
The Amazon Virtual Flywheel applies to their whole business model but is worth thinking about in Retail — is everything you are doing focused on improving the customer experience?
In housing of agency skills such as digital media buying seems to have gone mainstream very quickly. We are seeing more examples with the New York Times the latest. But scratch below the surface and it’s not quite what it seems. The driving force is often the recognition that the GAFA algorithm is where the value is, so the agency isn’t always adding a lot of value. And we keep coming across agencies where their only contribution is to pass the brief on to a Facebook marketing partner and then share the results.
The contribution from Agencies has to be around smart thinking rather than just efficient doing. Routine jobs, whether that’s executing a buy on GAFA or repurposing some creative for a different format, will gravitate to the lowest cost. Which is often going to be in-house. The thinking on what context to buy and who to target is a creative skill that remains rare and hence valuable. So is knowing how best to reinterpret the brand idea for a specific platform. A Snap 6 second, a YouTube True View and an Instagram Story may all be video but each needs a very different approach. The lovely thing about todays’ ecology is the value of that thinking is reflected in the results.
GroupMs Exchange Lab make a similar point — that there is no reason why Agencies shouldn’t be thriving. A WARC article gets to the heart of it; Clients need big ideas and that is what planners should be providing. This makes good sense but the other points about Agencies losing interesting in CPG brands also resonate. Todays’ big ideas need to work across GAFA and in the complex new world of retail.
One of our theories on content is that device distribution matters. So Apple have a huge advantage with getting on for 1 billion of the worlds most affluent people using the iPhone. It’s an open platform and Spotify, Netflix Amazon etc all play there too. But the news that Apple are now around the same size as Spotify in the US shows this advantage working. It’s partly about streaming crossing the chasm too; Drake is pretty mainstream and Spotify still have the early adopters. As we saw with Amazon the other week a more restricted catalogue may not be a problem with different audiences.
But could Tencent be a player here? They are going public in the US with a valuation of $30bn When Spotify floated a few weeks ago their value was $26bn. Translating Chinese success (they have a 78% share in China) globally can be done; TikTok — the non Chinese version of music video app Douyin is the worlds most downloaded non game app. We covered Douyin and what’s happening in Video a couple of weeks ago.
Most players in content have some fingers in devices and distribution ( Google Android Chromecast and Home, Amazon Echo and Firestick (and I still think they will try a phone again?) Facebook Speaker etc.
But Netflix doesn’t. This is a long in depth look at their strategy by a former Amazon Studio exec. His take is that;
The company doesn’t want to be a leader in video, or even the leader in video — it wants to monopolize the consumption of video; to become TV.
The only thing he misses — in my opinion — is the likelihood they will offer an Ad funded service. Just as with Amazon, this strategy offers a gateway to full subscription, amortizes their huge library of content and makes money.
It also reflects the economic truth — the rising cost of digital TV will become too high for many; the idea that the world is moving to subscriptions and ads will be just for poor people is a myth.
HQ has quickly built a good UK user base — we see 200k players in many UK games now. They leveraged a real consumer behaviour — who hasn’t shouted out the answer to a TV quiz show? — and solved the considerable tech challenge of that number of concurrent sessions without the latency that would kill the concept. Now they are looking at ads to monetise the idea.
I have spoken at a couple of Google events before and after Luke Wroblewski and he is a fount of knowledge on all things to do with User Experience. This new video of his latest talk is long but really good stuff — everything from Bottom Sheets to good stats on how people are using mobile. Essential viewing. (The slide deck is here but Luke adds a lot with his commentary)
Whilst I have loved this World Cup the TV coverage seems a little stale. When Sky started showing the Premiership they made some real improvements. GAFA will do the same and this NBA example shows what can be done with Tech to add real value.
We are obsessed with how 1st party data makes the distinction between CRM and advertising redundant. We are developing our thinking on how to create and maintain a profitable Dialogue across devices and channels. This look at how mobile apps are being used for Loyalty is good food for thought.
Signal driven TV is a major focus and this coverage of a Cannes event from Freewheel is interesting
The consequences of GDPR are still not apparent but it looks like it has been good for Programmatic Guaranteed — as premium content, context and consent coincide.
Still not convinced that social media and influencers are effective marketing? Look at how 20 year old Kylie Jenner has built a $900m fortune in just 3 years.
Finally…. With the US holidays last week readership of Fix was much lower than usual — from around half to less than 20% of the total. If you want to catch up you can read it here.
What’s happening at The Media Kitchen?
Lots of networking this week— Industry Bodies, Journalists, the launch of a new Media empire and more. I have also been meeting some Fix readers and talking about how they can leverage our knowledge and expertise on their business. If you enjoy Fix I feel sure we can add value to your team — lets discuss.
And for all our US subscribers recovering from the 4th, we are looking for a Managing Director for our New York office — full details and apply here.
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