The latest Mary Meeker extravaganza is out and we went straight to this chart. I have used it for years, as it highlighted the huge opportunity for mobile. ( Check out how it has changed over the years)
Now I think it highlights a different opportunity.
We have solved the quantity of mobile ads. Now it is imperative we solve the quality of mobile ads.
Chartbeat data shows that as Facebook dials down news coverage, people are going direct to mobile news sites. And we are convinced that ads work harder when people go direct rather than bounce in and out from social.
And this is mobile web traffic which is still treated as the poor relation, with so many sites built as responsive rather than mobile first. Having a fast mobile site that is truly optimised for mobile search — and voice search — is a huge win. Especially as Chrome article suggestions are developing into a major source of traffic
We also know that people leave slow sites. What causes them to be slow? Too much tracking. Latency remains an issue — especially with video — so anything we can do to speed things up makes sense.
Faster mobile sites, Fewer, better ads. Less tracking. The industry to do list.
Just as GAFA see content as key to their future success at retaining attention, so too do mobile network operators
Telefonica and Netflix are partnering — bring content and distribution together. As the TV set becomes a channel for digital content — be that through Roku apple TV Amazon fire stick or Chromecast — we will see the MNOs being more active. Especially if the AT&T deal to buy Time Warner goes through.
Just how the TV experience is being changed by digital is shown in this look at box sets, binging and on demand and the effect on the industry economics.
The changes also impact rights owners — right now they look at the fat wallets of GAFA but soon they will look at taking control themselves. The new owners of Formula One are investigating their own digital service which unsurprisingly worries the broadcasters who have paid the TV rights.
And in Football the big clubs want this too — why give the minnows so much?. The new Leeds owner knows all about media rights and has realised that owning a big club is the best way to participate in the next phase. I just hope he can get Leeds back to their rightful place in time.
The firm behind many of the best DNVBs talks about naming your start-up. We have talked before about how scale ups need to go beyond digital at some point and, as in the UK, US out of home is an obvious choice.
Mary Meeker covers China in some detail — which we will dig in to next week — and the scale of BAT is underlined by the imminent IPOs. The Tencent music service is going to be valued at $30bn and there are more — bigger ones — planned for this year. The Alibaba Financial services giant Ant is valued at $150bn and US Banks fear the streamlined model their Chinese competitors have — as this Bloomberg analysis shows. Payments are a big deal, as we learned at the recent Rutberg conference where a banker explained that the global Airline Industry pays around $3bn a year in card processing fees — whereas the profits of the industry are just $7bn. Imagine how much Amazon pays; change is coming and the Chinese model looks more future ready.
Building on that, read this twitter thread speculating how BAT could threaten GAFA using credit for ecommerce within their platforms — exactly what they offer in China
And Qualcomm think 5G will provide the opportunity for Chinese phone firms to leapfrog Apple and Samsung. One of those IPOs is Xiaomi who plan to raise $10bn — a respectable marketing budget.
As the market for new phones slows — also covered by Meeker — Apple look to their services business for growth.
Morgan Stanley data shows just how successful their app store is versus the Android competition. Finding new content for their affluent audience makes perfect sense and I expect them to accelerate their adventures here.
And I still think at some point they will come back to advertising. Their developers depend on ad revenue and their devices are a major conduit. So at some point do Apple choose to clean up mobile ads — making the experience better for their customers and driving more revenue for their developers? They see the rest of GAFA making huge amounts from ads they facilitate through the devices they sell. Not sure they have the talent for this now, but it could be a future strategy.
This a good video interview with Snap founder Evan Spiegal — suggesting Facebook copy their moral code as well as their product features
And this look at Yellow, the new Snap Content Creator incubator, is interesting
Few know more about privacy and adtech than our friends at SuperAwesome who focus on advertising to kids. Their guide to GDPR for kids is worth reading.
Fortnite is making so much money — with an estimated run rate of $3bn for this year.
AdFraud is really frightening but with a focus on quality rather than quantity you can minimise this.
Pinterest is a great ad opportunity — and growing fast. Great context
Good examples of retail stores using tech well. Done properly stores are a great source of First Party Data
Surprisingly Booking.com is almost as big as AirBnB on renting non hotel rooms and VC Chamath Palihapitiya points out how important customer acquisition and lifetime value is in a tweet;
It’s sad when the industry confuses strategy, tactics, good execution, bad execution vs a market dominated by LTV/CAC and where the winner MUST have the most efficient traffic acquisition possible. Welcome to the future of Airbnb vs Booking and why Booking has caught up..
In the comments some smart people weigh in on how good the Booking.com team is. Which is true but then so too are the AirBnB people. But the key point is that advertising drives huge business value. So you need the best people on your team.
Finally… we are out and about this week. Today I am sharing our views on the ad opportunity with the smart people at Weve and next week with the Contagious team. If this could be useful/interesting for your team, get in touch.
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If the things we cover in here resonate with you, we should be talking. There has never been a better opportunity to seize competitive advantage — and we are well equipped to help. Let’s have a cup of tea.
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