We think a major advantage Snap has is their understanding of the young audience. Their ability to translate this understanding into outstanding product is their opportunity; as well as Stories, Bitmoji and fun things like the AR gender swap underline this.
New research from them gets into friendship — the atomic nucleus of social. Back in the day we were experts on top friends on MySpace ( not very lucrative but interesting all the same) Being dropped from someones Top 8 was catastrophic for many. That scarcity of friends diminished with Facebook and weak bonds were almost as important as strong ones. This research is good insight into how people interact and how the new generation are different.
This product innovation is highlighted by this piece on the new Harry Potter game from the people who brought us Pokemon Go. AR is on the cusp of going mainstream and Snap is one of the handful of firms ( along with Niantic) well positioned to make it work as an ad format — with the advantage that a high proportion of their user base is already using AR;
More than 400,000 AR experiences have been created using Snapchat’s Lens Studio since it was launched 18 months ago, which have collectively been viewed by its users 15bn times
Another app that keeps coming up in conversation is TikTok. As they build out the team with more smart hires they are starting to get traction with brands; primarily through organic content and some influencer work. And news brands like Washington Post and NBC are using the platform too.
If you want to go deep on Bytedance this (PDF) report is a good read.
Everyone in Silicon Valley is obsessed with the Chinese super apps and we think you should be too. The Galapagos effect of growing in a world without GAFA has caused new business models and innovation that has real potential in the West. There is lots of good stuff on Super Apps in the new Mary Meeker deck (chart 302 onwards) and this piece from Jing daily on the WeChat ecosystem is good — even though the focus is on luxury
Both Facebook and Snap are talking up the success of their video services. Facebook claim 140m daily viewers for Watch and Snap say they got 28m viewers for the second season of Endless Summer. They have quite different business models — Facebook give the show creators 55% of the ad revenue whereas Snap tend to buy the rights for shows and hence carry the risk. This early success will induce more content creators to get involved.
The big story with this sector is the US version of Norwegian concept Skam, which we have covered in the past. Now part of the Simon Fuller empire, an Austin based version of Skam is running on Facebook. This New Yorker article from last year suggests it was doing well and Wikipedia tells us the second series has just finished.
This new style of Mobile / Social content is really interesting and we can expect more trials and testing to see what drama looks like on Mobile. Remember our theory that we are still waiting for the Wrench moment (which introduced the close up) to define this medium. Jeffrey Katzenberg and Quibi want to define mobile content and this interview with him about ad supported options and subscriptions is a good read.
On the question of subscriptions the Guardian argue that streaming TV is about to get very expensive — which is why we believe the future of TV is ad funded.
The OTT landscape that enables this ad funding is maturing fast. Both agencies and networks are collaborating and new players are exerting influence — for example smart TV manufacturers are active in the ad market.
A big issue is how newTV gets measured — to fulfil the potential it can’t be like broadcast TV and use people meters, but digital measurement of streaming is still quite fragmented, with different people taking different approaches. Things are moving fast with LiveRamp buying Data+Math — for a huge multiple — in an effort to set the standard. As the ‘incumbents’ Comscore and Nielsen struggle the way does seem open for newer players in measurement.
Ups and downs of app downloads
App downloads drive a big proportion of mobile advertising and all the big players are active. Facebook have shared a guide to App bidding for publishers and Snap have done well since focusing on the opportunity.
It’s a complicated space since most apps are free to download and free to use and therefore most customers don’t generate much revenue — if any. But as well as some ad revenue a small number of users do end up paying and these whales pay for everyone else. Predicting lifetime value therefore is fraught with difficulties
But a vibrant market brings bad actors and the new lawsuit from Uber against their former agency and a bunch of ad networks demonstrates the problems.
I have no idea who is right and wrong here, but reading the court papers (PDF) shows all the tricks and scams that go on — click fraud and click injection etc. An hour spent reading this is probably the best education you can get on mobile advertising. And at the end you know what questions you need to ask to make sure you’re not being had.
Audio & Voice
The popularity of podcasts continues to soar. Time Magazine talks of the money flooding in and how not everyone likes that. A lost Alien3 script by sci fi writer William Gibson has been turned into an Audible Original — so technically not a podcast, but do these distribution choices make any difference? I spoke at one of the big Book conferences a few years ago and talked about how the lines between formats were evaporating. Think of a hardback book and the Kindle version — which can now be listened to — and the Audible version. Then the BBC Book at Bedtime and a podcast.
What’s the difference? The customer experience rather than the content.
On Voice we saw a smart Amazon strategy from my former Mindshare colleagues win at Cannes. Giving away Cheerios with every Prime Day purchase built a purchase profile that should drove voice recommendations.
Whilst we talk about the front end of the music biz with Spotify Apple Amazon etc the back end is quite interesting. Kobalt is a tech alternative to labels that focuses on publishing — and their founder makes a good pint that music is undervalued when you think of how integral it is to GAFA etc
My thinking on Bonsai Brands stimulated some fascinating conversations and I will build on it soon. One of the primary drivers of DTC is the way Shopify has removed the friction of opening and running a store -and they keep serving their community with new features — including now fulfilment — taking the fight to Amazon.
The clever people at L2 have shared a neat video which summarises the Amazon customer — lots of good data points. And a report shows that Amazon display ads also drive non Amazon sales- as does search ads on the platform.
As the impact of the new Facebook currency reverberates this Wired back story of Libra is a good read. And one of the questions about Libra is how much it is needed in developed markets where money is well served by many start ups and innovative products and services. For example Alipay is connecting a number of mobile wallets to give them scale to compete with Visa and Mastercard — further evidence of the relentless rise of the QR code.
Chrome continues to get flak over privacy as it gets compared to Firefox. The Washington Post counted over 110000 tracker cookies in one week — and spots that the use of Gmail logs you into Google so Chrome can use your profile for targeting.
Beacons get a negative story too from the NYTImes — In Stores, Secret Surveillance Tracks Your Every Move. None of this coverage point out the advantages of cookies in enhanced service etc. Is it too late for education on how helpful this tech can be if used responsibly?
Unsurprisingly restaurants are fighting back on delivery fees as the competition heats up. I think the ownership of data will also become an issue. And the BBC showed the weakness of the industry by setting up its own dark kitchen with no food hygiene rating.
Outgoing C4 exec Richard Davidson Houston has good advice around broadcast and VOD with 10 Common Mistakes and How to Avoid Them
Andrew Chen shares a guest post from AirBnB on growing supply in a marketplace - lots of inspiration here
GroupM takes issue with the famous Mary Meeker chart on money following eyeballs
If people paid for the internet with cash rather than their data it would cost $35 a year.
Interesting new creative formats from Google — AR in YouTube and 3d for mobile display.
Finally ….a guide on how to spot Deep Fakes. This is going to be a huge problem — already I keep seeing videos that seem to show Boris being gormless
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