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Mobile Fix — June 15

M&A

With the news that AT&T have been cleared to buy Time Warner we can expect lots of mergers and acquisitions in the coming months as the industry tries to better organise itself in away that protects them from GAFA. We shared a version of this chart in our New York NewTV session and it’s now been updated.

The Wall Street Journal has a good video explaining the thinking behind this M&A frenzy

This piece on the Hollywood Horror Story from investment bank BTIG a few months ago gets to the heart of the problem; Southern California is running scared of Northern California.

Whilst still dwarfed by GAFA, these are big companies and the size of these deals is far bigger than anything we have seen from the big tech firms — they buy lots of firms but the prices are much lower

The interest for the ad industry is whether any of these new conglomerates can put together an ad business that has the scale to compete with the Duopoly. We are pretty sure that Amazon will be the fabled third force in ads, but could AT&T emerge as a major player? Will whoever ends up with Sky take Sky Adsmart and make it mass market. This is a good look at how the AT&T deal will affect advertising

At their heart all these conglomerates are made up of teams of people making content. A key difference with GAFA is that they believe in making content to distribute, whilst GAFA essentially distributes other people’s content. So this in depth look at Netflix and how their development / creative process works is worth reading.

 

Sports

It looks like Amazon paid a similar price to BT for their package of games, so somewhere under £100m. Although the BT CEO paid a bigger price in being pushed out — partly because shareholders are unconvinced over his sports strategy. This BBC article looks at the details of the Amazon package and it’s clear Amazon can build a more convincing business case than BT; all those new Prime customers joining to get the Boxing Day games will boost the Christmas take. And this will hit the High Street hard on the traditional start of the Sales.

With their NFL deal in the US, Amazon sold 2 minutes of ads for each hour of coverage and got positive reaction from the brands — especially as they could see how many people who saw their ads went on to Amazon.com and what they did. I am convinced we will see ads around the Premier League games too.

One key issue for the tech firms investing in sports rights is how the coverage evolves, because they know — like we do — that Millennials do sport differently.

This is very different from the old days of everyone crowding around the TV — that Chelsea Leeds FA Cup replay in 1970 is in the top 10 most watched programmes ever with 28m viewers ( We were robbed). So we should expect some innovation from Amazon and they will be learning from one of the UKs’ most valuable tech firms Perform who have won streaming rights for 3 Serie A games each week next season.

 

GDPR

Three week in and it’s still unclear what effect GDPR has had. At the IAB last week Triplelift shared how their inventory was affected; European traffic fell off a cliff but premium publishers did OK — reflecting our belief in a flight to quality.

Our friends at Ezoic looked at the effect of GDPR on ad rates and see that CPMs are down in Europe — but it’s a little early to draw too many conclusions.

 

Tracking

With all the coverage of GDPR the issue of tracking is moving beyond the industry and this twitter thread on the many ways tracking works has had lots of coverage. And it has now been expanded into an article.

Now we all know this, but talk it through with family and friends and people are quite shocked. And there is a whole other level which was exposed in the Facebook submission to congress — with mouse movements, battery levels and mobile operator ae all signals.

These signals are hugely valuable when used smartly but with higher standards of consent, how long before Privacy regulations get to this level?

 

Ads

The opportunities with digital are constantly evolving and making sure you are taking advantage of the most appropriate is key. Instagram shopping has been here for a while and now Instagram Stories has clickable shopping basket tags — a good move forward. But making sure this doesn’t detract from the imagery will be a challenge. Balancing brand with response is vital.

Many brands are leaning into using signals, with smart creative, to take advantage and this is a good summary of some recent US activity. But being able to prove ROI is often given a s a challenge and a new initiative from Snapchat is designed to help; the effect of a campaign can now be measured against grocery sales

 

Quick Reads

After all the bluster about Cambridge Analytics this is a good explanation of Psychographics

With Twitter share price riding high as they make money, they are improving the product too. With Explore and a new look for Moments this is the innovation we have been missing.

We have all seen the headlines telling is retail is dead — yet shares in Macys up by 56% so far this year, beating Amazon who have ‘only’ risen 46% Smart retailers have a strong future and we — along with our sister agency KBSAlbion — are very focused on this opportunity.

Wearables have had a checkered ride. The Apple Watch is a big success but Apple Airpods are the next big thing as they become ubiquitous. And the second generation of Snap spectacles can be bought on Amazon — no reviews yet but probably a better strategy than the vending machines

A good write up of the excellent IAB conference last week

 

Finally….. Ad-serving has become so democratized that any company with an audience is now able to steal advertising dollars away from traditional media companies. A good look at how media lost advertising to tech companies.

 

What’s cooking at The Media Kitchen

In the talks we have been doing around our optimistic take on the future of ads, we look at the idea of Mad Men and Math Men and conclude that blending both skills sets is now essential.

In their review of the new book Frenemies, which we mentioned last week, the FT asks if data will kill advertising. The book seemingly — I am still on the early chapters — thinks that GAFA will disintermediate the Agencies. I am not so sure — the very fact that consultancies are seen as a threat underlines that brands need smart independent thinking on how to make the most of GAFA.

 

The problem is that many — most? — agencies are not well qualified to help as their business models are — as Unilever say — predicated on the past.

I believe we at The Media Kitchen are well positioned though. Since our launch in 2001 we have been totally transparent; charging for the team and rebating all commissions etc. We prefer our clients to have direct relationships with the tech firms we recommend. Born out of a creative agency we pride ourselves on collaboration, recognising that great experiences come from media and creative working together. And our thinking on the space is pretty well respected too.

If you believe you could do better with digital, we should be talking. I am very happy to work on projects; we are looking for success stories. Can we build one with you?

 

Fix is my thinking rather than that of MediaKitchen. We now have over 5600 subscribers across Google, Facebook, Snap, Amazon etc as well as many VCs, Brands and Agencies.

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