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Mobile Fix - July 22

Ads & Programmatic

As ever, lots of initiatives and developments from GAFA. Few of these are headline grabbing and most can be seen as incremental, but as Dave Brailsford said when talking about the marginal gains that transformed British cycling;

Ensuring you know about the new developments and being quick to apply the relevant ones can deliver a huge improvement – and advantage over your more pedestrian competitors

As part of their Accelerated Mobile Pages initiative (designed to speed up the mobile web experience), Google are now pushing ads that use the same technology – with the result that pages load 4 times faster using 10 times less data. We saw this presented to Publishers a few weeks ago and it does look impressive. Their Video ads revenue is also growing quickly since they made their TrueView ads available programmatically. We’d be interested to see what creative is being used here as TrueView needs a different creative approach to the typical video ad.

One interesting bit of data on Google is that Merkle think mobile Cost per Click is trending up – quite dramatically. If that is the case the imminent Google results should be interesting

Talking of imminent results, one thing that has never been clear is just how much Facebook revenue is derived from app install ads. Cynics think it’s pretty high, and that this makes them vulnerable should VC money dry up. From the brands we talk to, we think the balance is shifting to more traditional advertising, but is clearly an important segment – as it is anyone reliant on mobile ad revenue. So the new opportunity for customized calls to action in Facebook install ads looks interesting. Together with a new cost per action that lets developers pay when someone registers or makes a purchase, this raises the bar for app installs and it will be interesting to see how long before others adopt a similar approach.

Of course one factor that holds back mobile advertising is the way that cookies – so useful on desktop – don’t translate well to mobile web. Safari is the most common mobile browser for the audience that brands value and it limits cookies other than 1st party ones. This piece argues that a Safari Single Advertiser ID would be really helpful. Given what is possible with Safari to aid the web view experience within apps it’s pretty clear that Apple have thought this through and  like the ways things are organised and it seems unlikely to change anytime soon.

The FT have been experimenting with new business models for ads and their idea of a time based metric seems to be gaining favour – particularly where the objective is branding rather than immediate response. Could we see this concept of time viewed lead to a new trading metric across both display and video, where viewability means just that?

The revised Digiday Programmatic Guide is now out and worth reading whatever your level of programmatic knowledge.

One final thing on mobile ads. For a long time we have been arguing that the focus on audience, which the rich blend of tech and data allows, is somewhat out of balance with context. Common sense says that reaching a FT reader on the FT site – or app - is probably better than reaching them on eBay or Yahoo Mail, even though it’s more expensive. We have tried and failed a couple of times to get a research project off the ground to substantiate this theory. So we are delighted that the smart people at Comscore have a study which shows that ads on news sites are more effective and hence more valuable. Hopefully this study will get lots of attention and start to change the approach of many buyers.

GAFA & Content

The Eddy Cue quote last week that Apple are; …not — at this point, certainly — actively trying to buy any studio. got lots of attention. So seeing that Chinese digital giant Baidu have looked at buying Hollywood studio Paramount is interesting.

The logic – to me anyway - is unassailable; GAFA need to create Anchors that keep people on their platform and within their ecosystem. Photos, Money and Music are the key focus but it’s likely that exclusive access to content could work too. Be that the Champions League, the next series of Downton or a behind the scenes of the next Star Wars.

SmartCamera

Image recognition is progressing really quickly. Apps like Blippar are getting traction with big brands – Bentley had a DPS in the FT How to Spend It Magazine that was totally dependent on the reader using the Blippar app. Lots of interest obviously in fashion and Time invested in the UKs Snapfashion

Now Snapchat has a patent on object recognition in the pictures a user takes, and using them to trigger a filter or an ad based on the subject matter of the image. The slightly corny example given is a picture of the Empire State Building triggers a King Kong filter.  Or a tasteful snap of a Flat White could trigger a coupon for coffee.

This sounds really like one of the best examples of magical mobile in the early days; Google Goggles – which even went on to be able to solve Suduko problems. Goggles was eventually dropped from Google Mobile in 2014 due to being "of no clear use to too many people."  And we mentioned their acquisition of Moodstock the other week, which uses machine learning to identify objects in pictures.

We also met a cool startup that applies image recognition to Instagram, so you can aggregate an audience of people who take pictures of Flat Whites. Or you could group people who like pictures of white flowers and create ads with that aesthetic.

It is interesting that Snapchat have detailed a business model for this use case, whilst Google never really did. The sheer scale of smart cameras and widely used apps means new revenue opportunities arise. Already in the Snapchat ecology there are hundreds of people offering GeoFilters to small brands. And in Pokemon Go smart people are creating Pokemon lures and driving crowds into coffee shops and a more formal way for brands to add locations is coming.

Location and smart cameras are two of our favourite trends at the moment – huge potential.

Modern Media

Digging deeper into the Tubular Labs research we mentioned last week its fascinating how big media brands are struggling to compete with Modern Media brands. In the top 10 Facebook video publishers we see BBC News, The Mail and the Telegraph being outperformed by Unilad and the Lad Bible.

With inspiration from these and other good examples like BuzzFeed, new ‘publishing’ start ups are popping up.  Elizabeth Murdoch is to launch a lads type channel called Brother for Snapchat Discover – which will eventually extend to other platforms. Getting a Discover channel from launch should help, supporting rumours that Snapchat own a chunk of Murdochs Vertical Network studio. The Snapchat London team also share office space with Murdoch for the moment.

These Modern Media brands understand their audience, and are just as skilled at distributing their content across the GAFA and beyond as they are at creating it. And the ability to combine embedding brands within their ecology with affiliate type deals that give them a share of the sakes they drive should be a good business model.

Quick Reads

Still on the energy tip – Google look like paying for the Deep Mind acquisition by using their AI skills to reduce the power bills for all those Server Farms that power the Cloud

It’s the end game for Yahoo. Sales were up in the last quarter but a massive write down on Tumbr - the acquisition Marissa Mayer promised not to screw up - spoilt the figures.  Apparently the final bids for Yahoo are in and a decision on what happens next is imminent.

Finally we are off to the West Coast for the next couple of weeks so no Fix until the middle of August. One holiday task is to plan the second half of the year. I am now splitting my time between interesting consulting projects and advisory roles where typically I spend a day a month with the board of a company, helping them work through the challenges and opportunities of this amazing time.

To help to think through whether I could help you, read this great article on the two types of knowledge and ask yourself whether you are getting Plank knowledge from your advisors or merely Chauffeurs knowledge

Enjoy the summer

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