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Mobile Fix — June 21

Adtech. Plan B?

Interesting week for adtech. For some reason the people at Cannes thought the Cambridge Analytics CEO would be a good guest. With Privacy and Trust top of the agenda, this session caused some controversy and it didn’t happen. But in a lovely bit of timing the Information Commisioners’ Office issued a report which seems to argue the basic model of adtech (RTB / Programmatic in particular) isn’t legal. It’s a very detailed report and whilst they look at all the issues they don’t draw any conclusions — yet — as they plan to learn more first.

But this isn’t going away — and builds on the Brave initiated complaint over Google and GDPR

Some respite may be coming from Google; their new initiatives around Private Join and Compute look like they could trigger some new thinking and new tools that may help the adtech industry, without collecting more data.

Some of the answers may come from Kidtech as YouTube change their approach to how they handle kids content . Fix friend Dylan Collins of SuperAwesome knows more about this space than anyone and his Thread on the YouTube news is worth reading. As is the PWC report his firm commissioned.

I think we have all known, since GDPR, that real change is inevitable and if we can respect peoples privacy concerns and still understand where value is created in digital ads, we will be doing well. All we stand to lose is lazy retargeting, dumb banner ads justified by 28 day viewthroughs and budgets that get dissipated over thousands of poor sites people get clickbaited into visiting. Doesn’t sound that bad, does it?

D2C & Retail

Thinking a lot about D2C and retail, I shared some thoughts on Bonsai Brands yesterday and have had good early feedback. If brands cannot now grow beyond a certain point — as the market structure no longer offers the scarcity of distribution needed for really big businesses — what’s next? My next piece is on aggregating brands, using data to build complementary brands. One way to think of this is a modern Department Store.

Former Snap head of strategy Imran Khan is building something similar — Verishop — with 150 luxury brands. This interview with him goes deeper and gets into the Amazon competitor idea.

The changes in how people buy are emphasised by this story that airport shopping is growing in importance — for the first time Estee Lauder sell more in airports than in US department stores. BAA was a client of ours a while back and their Airport shopping proposition was quite sophisticated.

This is a good summary of how D2C brands are switching money from digital into traditional as they chase new customers. We are starting to see this switch benefit from smart thinking; this Shopify poster makes connecting easy by using QR codes and they can attribute the value they get from each site

As Walmart seem to be turning their back on their $3bn acquisition of ecommerce business Jet, emarketer predict US online grocery sales will hit nearly $23bn this year. A big difference to the UK market is the predominance of Buy Online Pick Up in Store (BOPUS) in the US. As we mentioned last week it is two years since Amazon bought Whole Foods and we have yet to see that much synergy.

In the UK though Amazon are expanding their partnership with Morrisons and adding 5 new cities to the grocery delivery business. Morrisons are the most vertically integrated UK supermarket and look a likely candidate for an Amazon acquisition, but the current strategy seems to be partnerships — like Casino in France.

Money

The Facebook virtual currency is interesting but seems like there is a lot more to understand before we can think through the pros and cons. Already seeing debates over whether its a real blockchain.

And the idea of money running on a totally encrypted system would seem better for money launderers than the rest of us; look at the scandal of Brexit Party taking donations through PayPal in (apparent) contravention of electoral law.

Against that, we heard a banker say that the Airlines credit card charges bill is higher than the whole industries profit, so ways to reduce the cost of money moving around are very attractive. That’s why Revolut does so well.

newTV

Someone on Twitter seemed surprised that Cannes Lions named Jeffrey Katzenberg Its Media Person of the Year. Well perhaps the guy who has reinvented the Movie business and is in the process of defining what mobile content looks like, isn’t quite as deserving as some WPP meeja exec. But for me, he’ll do.

Especially as he has now raised £100m in ad sales — for the 2020 launch of Quibi. If you didn’t read it last week take a few minutes to understand the economics of the new business

The Amazon ad supported service is being rebranded — FreeDive was a terrible name — and IMDB TV will come to Europe later this year. Incidentally Amazon are quite active on Twitter now with Sports content promoting their Tennis programming and the odd bit of Premier League. And Twitch has bought bebo to add a social element to their esports coverage. Remember AOL paid $850m for bebo in 2008 — Amazon just paid $20m.

The Matthew Ball interview we shared last week really is a must listen. One point he makes has really stayed with me; he talks of how each platform shift in gaming saw a change in which gaming companies dominated. So the big arcade game firms never made a success of Consoles. And the dominant console games struggled with Mobile. Because each new tech platform meant you needed to rethink what gaming was on the new platform.

Do we have a similar problem with advertising? Despite the changes in tech platform we still have ad formats that were designed for Press (Display — with some animation added) and for TV. So when someone tries to evolve formats that actually suit the tech and the user experience — like these Hulu ideas — we should be supportive

Finally, the industry is coming round to our view that ads on Netflix are inevitable

Voice

Talking with Fix friends at Acast last week reminded us how much action there is in podcasts — not just in the tsunami of new content, but also improvements in how ads get inserted and how audiences are measured. The IAB/ PWC study captures some of the velocity with good numbers on ad revenue growth and this agency viewpoint is interesting too.

The other side of the audio coin is voice and we worry that many people still treat this as a low priority. So it’s good to see our friends at the WFA taking the initiative with a Voice coalition

Quick Reads

An interesting interview with the Deliveroo CEO — not sure of provenance as I followed a Twitter link

A former Facebook ( and Mindshare) friend reminded me of this great study demonstrating that Creativity is the key to ad effectiveness. Is so self evident is seems odd to have to mention it — but it’s the missing element in so much marketing today and that’s why we used the chart to open todays Fix.

The man behind Fortnite

Big brands have come together with Facebook Google Twitter and some of the holding companies to form an alliance to fight unsafe content online. Which is great but reminded me of the Coalition for Better Ads — who share lots of the same members. Another laudable initiative but have you noticed the ads getting better yet? Let’s hope they are more successful at eliminating hate speech.

Buzzfeed finds that Amazons Choice product recommendations are often bad

In the least surprising news story this week we learn that Amazon is to buy the Sizmek tech, as the little French start up dropped out.

Driverless Cars Are 90% Here. Another 90% Is Left to Go

We have long thought that Amazon would have another pop at the smartphone. The Fire was a dismal failure but actually a pretty good set of features and technology. Now they are rumoured to be interested in buying US MVNO Boost from Sprint. It’s hard to see a big advantage to Amazon here as what they need is devices that will free Alexa from being housebound. So buying a smartphone brand yes. A bandwidth brand? Why?

(We used to be more enthusiastic about MVNOs — we suggested Google do one back in 2006 to accelerate their push into mobile.)

Finallya long read on just how powerful WeChat is in China. And remember this is what Zuck wans Facebook to become.

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