TL/DR If you are pushed for time this week don't miss the earnings call (transcript) for TradeDesk where their CEO Jeff Green talks about advertising, data and privacy and connected TV. And a bit on China and Amazon too. They are a remarkable company and I am delighted their UK lead is taking part in our event in April.
These are a few quotes that capture the breadth of content covered;
...we're at a point where we no longer have to make the case for data-driven advertising. Advertisers get it. They understand it and they want to apply it. It's no longer a question of what the hell is this thing, but it's more a question of, how can I do more with you.
What advertisers are squarely focused on is how to drive better and more relevant ads that help fund the great Internet experience that we all enjoy while simultaneously protecting consumer privacy. Outside our industry, these motivations are often misunderstood.
And I focus so much on CTV, because as we discussed advertisers view CTV as a way to break their dependence on walled gardens.
What I think is far more likely than the scenario that I just described, is that Google will find a way to do a better job of threading the needle between privacy and relevance than what Apple did.
The Trade Desk view on the Storm seems to be they will be OK wherever we end up, and emphasising we have 2 years. As this interview with a German site shows Triplelift are pretty comfortable too - we share this sentiment;
The industry has to therefore rethink advertising, and the foreseeable end of third-party cookies is an excellent opportunity to force this change. We now need to focus on providing a more transparent and efficient ad tech experience by focusing on offering ads that are informative, respectful, non-intrusive, and that fit within the flow of a publisher’s environment.
But the industry suspects many companies will struggle and this AdExchanger piece looks at Liveramp with a number of commentators pointing out their reliance on cookies. Their VP of Strategy refutes this and points to their work on a LIverampID. Again I am delighted to announce he will be joining our event too.
The mechanics of data and how it’s used in a privacy focused world is rightly a hot topic and XandR have announced an investment in UK firm InfoSum to improve their capabilities here - so pleased that we have someone from Infosum joining our event as well.
But the desire to hack the current system remains. A Criteo practice around CNAME, designed to improve their access to publishers 1st party data, has caused some controversy and this Linkedin post about the issue has some good debate in the comments. The issue the industry faces is that smart White Hat hacks are fine, except they highlight opportunities for bad actors to take advantage. As we saw with ads.txt bogus sites exploit these opportunities and consequently Apple will probably update ITP to stamp this out. More on the CNAME issue here.
The heat is on Criteo - despite many believing Macron would protect one of its digital powerhouses the French privacy regulator is now investigating them. The issue seems to be around their ShopperGraph and whether Legitimate Interest is appropriate here.
On our AdTechPerfectStorm event, our plan has not changed. It is still on for April 22. Obviously, we will keep reviewing this and comply with government advice. Should we have to postpone, tickets will remain valid. If the new date doesn't work for you, we will refund. But as we are planning for 100 people, it's likely to fill up quickly and ticket holders clearly have priority if we do end up with a new date. Don’t miss out.
Is the gloss coming off DTC? Fortune talk about how hard it is to find new success stories and this piece goes deeper - looking at a fashion DTC start up losing $2m a month which only happens when you take VC money;
Perhaps the original mistake of the DTCs wasn’t in their vision, but in their decision to take the venture capital in the first place. Now under pressure to grow even faster and at greater scale than they otherwise would have had to naturally, they are being confronted with what happens when growth slows down, the cash starts running out, and investors are expecting their returns
I keep pointing back to my Bonsai Brands thinking - there is a natural size for DTC brands, as the conditions that enabled dominant brands are largely gone. But running a profitable $50m business is a great achievement - as long as you don't have an investor looking for a bonanza
The new figures from StitchFix support this, where expectations were missed and shares tanked. Sales were up - just not by enough. But a key factor was rising customer acquisition costs - as this extract from their shareholder letter shows;
...while we expect our customer acquisition cost in the second half of FY’20 to be approximately flat year over year, we’ve seen costs rise in some key digital channels. We’re working on both product innovation as well as experimenting into new and emerging channels to offset this, but we are applying more conservatism in the way we are thinking
about our marketing spend in the second half of the year.
“In the early days of Stitch Fix,” recalls Mike Duboe, “Katrina [Lake, Stitch Fix founder] had a hard time raising capital, so, she was like, ‘F*** this. We’re gonna become profitable and control our destiny.’”
This document is a must read - just one section on how messaging ( SMS and Facebook ) are driving commerce will teach you so much. And the thinking on CAC and LTV - as per the equation we opened with - is great too.
Because customer acquisition is so hard, people are looking at ways to better connect with customers - lots happening with different flavours of membership for example - and here a new start up wants to turn customers into partners.
As Fast Company hail them as the Worlds most innovative company Snap roll out a new Lens Builder as proof. This DIY tool lets Brands build Augmented Reality lens and has been well received by top agencies.
In what seems like financial engineering NBC have sold their $500m stake in Snap - but remain committed through production deals. Comcast - owned by NBC - have been on an acquisition spree - Sky at $39bn and more recently Xumo - so this deal is probably to help fund that. But no news on who bought the stake - that would be interesting to know.
While Snap drive large scale adoption of AR, the golden child of the space, Magic Leap has yet to ship significant quantities of its’ headset, despite raising over $2bn. They now seem to be interested in a sale but quite who would buy is a mystery - especially as their last raise was on a valuation of $6.3bn.
I shared this article on MSCHF a few weeks ago - hard to describe, but they are a ecommerce business that really gets social and modern digital. Look at their products to date; a Chrome extension that lets you watch Netflix whilst it appears you are on a conference call, NIke shoes with Holy Water in the sole - yours for $3k and many more. Now their latest Pirate Radio let you flick from Netflix to Hulu to Amazon for free. Or it did for a few days before it seems to have been banned. More on it here but it did solve a big problem for newTV - discovery.
More nostalgia for Vine and hype for its new version Byte but does the potential audience care? TikTok is so dominant - with people getting paid for sleeping on TikTok live. And this look at the Ad opportunity by a Fix friend highlights the commercial opportunity.
Techcrunch has a good piece arguing TV advertising didn't die, it just moved online. Now nothing is really dying - but it’s all evolving and I use the term newTV because that's what social video and streaming is. And so too is addressable and OTT. Smart brands use the combination that best reaches their audience and makes creative that is bespoke to each platform.
The craft of making creative for TV is changing just as fast as the media side. A new app from Vimeo lets SMEs build their own video ads from templates and stock footage - and publish to the major platforms. Lots of people play in this space, with different use cases, but the key is getting the media element to be truly connected to the creative. Which is why we are so keen on Spirable as Personalisation at Scale requires the data to act as the connective tissue.
Following the launch of the first Amazon Go Grocery - their large cashierless store - in Seattle , this is a good first hand review. After all the PR about their plans to roll out thousands of these stores, Amazon surprised everyone by announcing they would licence the technology so anyone can open one of these stores. Is JustWalkOut the next Amazon Web Services? The killer line in their FAQs is;
We only collect the data needed to provide shoppers with an accurate receipt.
To put this in perspective my favourite Amazon expert pointed me back to this old article which we shared last year; What is Amazon? It’s a long piece but looks at how Amazon has developed - starting with a deep dive on Walmart - and essentially argues that Amazon keep solving the problems in growing their business by outsourcing tasks to others. For example the challenge in expanding their stock range fast enough is solved by Marketplace, where thousands of merchants add millions of SKUs, incentivised by the opportunity to sell to all those Amazon visitors. So, is JustWalkOut the way that Amazon better understand shopping baskets and what gets bought together, without them having to build lots of stores?
The one thing the article is critical of is Amazon ads. He thinks that ads distort the market place; everything else is geared to making the customer happy, but ads let someone with a big budget and a poor product potentially lead to customer dissatisfaction. He thinks the potential profit from ads has turned Amazons head.
Not sure I agree with the argument but the size and importance of ads to Amazon is undoubted. In fact the head of Advertising now reports directly to Jeff Bezos. And these are the top execs running the Ad business.
Amazon keep improving their logistics business and now have more mini fulfilment centres in the US allowing more regions to have same day delivery. One of the best at this type of logistics is Argos who use a sophisticated hub and spoke model to maximise the range each store can offer - either from that store or one near by.
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