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Mobile Fix - July 5

So bored with all this talk about brand versus performance and long term versus short term. And how wastage is good. The best way to have someone love your brand is through them experiencing the product.

The purpose of advertising is to sell.

DTC

So lots of conversations around DTC this week as my Bonsai Brands thinking was shared around. Looking to keep this going as i will share my thinking on the opportunity for a House of Brands approach, and this interview with Laundry Service founder was informative. Jason Stein is interesting as he built and sold a new model agency (and that is covered in some depth) but hearing about his new focus on helping DTC brands is also really useful.

One thing he mentions is the amount of DTC brands that are doing significant volume of wholesale too. If we are right with the Bonsai theory of a natural size limit, then going beyond DTC is sensible. Web goes into a similar argument using Harrys as an example.

News from Walmart illustrates that DTC isn’t quite as easy as it looks. Their strategy of acquiring ecommerce business makes sense but it seems the board is losing patience and they are about to start selling some of the businesses they bought This reminds me of Tesco - their strategy to build devices and own content made some sense but the pressures on the core business led to a change in thinking; The Hudl is now redundant as they have withdrawn support

Working out how to best fight Amazon is tough, but dealing with your more traditional competitors can hurt you more than Amazon does right now.

The success of DTC encourages would be middle men and Instagram isn’t content with the huge ad revenues - they want to manage the actual sales. Building on their recent trial of in app purchases they now want to;

This is quite an attractive proposition for brands - in the short term. But giving up a share of the transaction will be expensive and losing ownership of the customer - and that consequential understanding - is a huge advantage to lose.

As we keep saying about Direct To Consumer; the clue is in the name.

TikTok

It turns out that the rapid growth of TikTok is not totally viral - they apparently have spent 1$billion on ads across Snap, Facebook and Instagram. And they have now appointed new agencies so the spending isn’t going to stop. (Those spend figures seem ludicrously high to me)

Parent company Bytedance isn’t doing that well according to Bloomberg and keeps getting involved in legal spats with Baidu. The WSJ piece also says they are looking at acquisitions - Snap and Twitter have been considered.

And now it’s getting attention from regulators. In the US they were fined $5.7m for being lax over young users - and now ask for age when the app is opened, but no checks are in place. The UK Information Commissioner has said it is investigating how children's data is handled and how messaging works. And the BBC has shared how kids are paying ‘gifts’ to TikTok Creators - including £100 for a creators phone number - which was never answered.

The influence of the platform continues though; following Old Town Road this piece looks at the new hits TikTok has spawned - Sueco the Chiid and more. And the visual memes are spreading; #bottlecapchallenge has 50k posts on Instagram (versus 40m views on TikTok)

If there isn’t an imminent Coke ad based on this, their agencies deserve to be fired.

Adtechs Perfect Storm

As we roll into summer it feels like digital advertising is facing a Perfect Storm. Apple ITP 2.2 and Firefox are rolling out soon as are the changes from Google. And just as these tech tweaks change the nuclear structure of digital ads the regulators are turning up the heat too.

We reported the other week that the ICO report seems to find most programmatic advertising problematic;

Now the Competition and Markets Authority are looking at the Digital Ad Market in the UK. the full report will take a year and the Guardian quotes the CMA Chief Exec;

The Treasury report which triggered this investigation said;

a new digital markets unit should be set up in Whitehall staffed by people with technological expertise and equipped with the powers to set and enforce greater competition.

And the French CNIL have also announced they will shortly issue new guidelines;

Along with the continued scrutiny over scandals like Cambridge Analytics and the way political ads are felt to be somewhat out of control GAFA is going to get a lot of attention

Respected industry commentator Dave Morgan makes the point that the long time cookie critics have been proved right. He is positive and feels new ad models are feasible. But who is leading the thinking on what we need to do next? Where are the solutions for privacy protected ad models? Firms like Permutive Illuma and Rezonence seem to be going in the right direction and context is coming back into fashion in some agencies.

Who else is innovating? We are keen to meet anyone doing interesting work in this space; I’ll buy the tea

Peripherals & AR

Someone pointed me at this article on Airpods, Always In given my previous comments on how common this now is. So far the Apple devices have escaped the ignominy that Bluetooth headsets used to have - once used only by annoying cab drivers and in an early Breaking Bad episode Walt was once so annoyed by an Estate Agent using one he blew his car up.

But new technology always causes new behaviours, which generally take a while to go mainstream. It is 40 years since Sony launched the Walkman and that took a while to become acceptable.

The next big thing is Glasses and this video from Verge is a good summary of whats happening with Google Glasses, Microsoft and others. But oddly no mention of Snap or the new Bose glasses.

Econsultancy have some good examples of how brands are using AR and there is more on the Snap Spiderman campaign here. And YouTube has done cool AR with Mac cosmetics

Audio

Research shows there are over 700k podcasts - but almost a fifth haven’t released new episodes in the last 3 months.

Still lots of new launches though. Podimo from Denmark wants to be the Netflix of podcasts and launches with a freemium model. Wondery from Hollywood are looking to go international and favour ad supported content. Both have raised healthy sums.

newTV

The BBC have been slow on podcasts and they are struggling with digital generally. BBC3 has not cut through as a digital channel and whilst iPlayer is getting big audiences and the 12 month window makes sense, it is not clear how it will sit alongside Britbox.

The fate of Britbox is almost certainly going to be decided by the global players, as the UK is a natural market for them to expand into. When Hulu was owned by Fox the family connections to Sky made a UK launch difficult - now they are Disney owned those problems have probably lightened. With all these choices can a UK only service really get traction? Again we think a subscription model will struggle but an ad supported service has a chance. But how will the BBC feel about that?

What ads will look like on these OTT services is still up for grabs. This interview with the Hulu Ad Sales chief is really interesting as he talks about their innovations like Pause ads and also how they are being really careful with programmatic so they keep control of who is running what ads.

We mentioned the Liveramp acquisition of Data plus Math last week, but as more details emerge it’s a significant deal. Getting paid 24 times revenue - mainly in cash - is an amazing piece of negotiation and underlines what is at stake. All TV measurement is currently about eyeballs - how many, and what sort, are watching. This deal allows Liveramp to supplement that quantity with some measures on quality;

One other thing on newTV. One of the reasons Disney is betting the ranch on streaming TV is that one of the main distribution channels for their IP is struggling; cinemas are having a tough time and whilst Disney does disproportionately well from cinemas, the decline is hitting them too.

Quick Reads

Great example of how contextual video works in this Cannes Silver winner that our friends at Spirable did working with Facebook for Deutsche Bahn

Mary Porta agrees with us that shop staff are key to the future of retail;

Finally... there is a lot of hype around AI and too many people are using it as part of the alphabet soup they rely on to sound smart. But this State of AI report is the real deal - lots to learn.

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