Privacy & Signals
Seeing these Apple ads in lots of places online - upping the ante in their fight with the rest of GAFA. Clicking through takes you to this page on their site where they go into more detail on how they protect their customers privacy. But we all know that they get $billions from Google to keep them as the default search engine in Safari. Does the ITP2 restriction on tracking (now subtly updated) in Safari ‘declaw’ Google search enough for Apple to live with it? Remarketing is much harder as RLSAs don’t work.
And a significant new statement from Zuck that focuses on privacy isn’t being received that well. He confirms that the back end for Messenger, Instagram and WhatsApp are to ‘merge’, enabling encryption across the company. And wants to use this to change to more of a private service.Quite what this means for the news feed and for their core business model of well targeted ads remains to be seen. As ever reading Strachery on this topic will give you a good perspective.
Bringing all the platforms together is probably going to fuel the conspiracy theory that WhatsApp etc are spying on people to target ads. The latest piece is in the Mail and focuses on phones listening in - and then targeting ads.
Some really smart people have told me similar stories and it’s getting traction. Clearly not true, but once the company connects everything will that always be the case? When Google forget to tell people Nest devices have a microphone suspicion grows. And when Facebook doesn’t let you remove your phone number from your profile ..
German newspaper giant Axel Springer has managed the transition to digital better than most, investing in digital editions of their traditional titles as well as acquiring online properties like Business Insider. In their latest results their online classified business is doing well but fears over Google entering the space caused shares to slide
The challenge for legacy news brands is that their inherent quality isn’t well recognised - or well rewarded - versus the flood of news from other sources. Monday Note have a fascinating project designing an AI tool that can judge news quality. Imagine a future programmatic buy where you set a minimum quality score for the environment your ads will appear in. A huge improvement on the current blunt tool of including and excluding titles and sites.
But we keep hearing of Amazon plans for retail but not much has actually happened. It’s only a few months since it was rumoured they were to launch 3000 Go cashierless stores by 2021. To open 3000 stores in 3 years mean you need to open 20 a week. Does that really sound feasible?
We have all heard the story of the Amazon product technique of writing the launch press release before you start building the product; a way of working backwards. I think Amazon have developed this into a technique to demoralise the competition; announce (or leak) grandiose plans and watch the press get excited and the competition stock prices get depressed.
I have no doubt Amazon are going to go after grocery in a big way but I can’t see they will build hundreds of new stores, let alone thousands. It’s much more likely they buy an existing chain - with all the leases and staff in place - and convert that. And if the targets stock price is in the doldrums because of all these press releases, so much the better.
Here is a quick test though - what sort of penetration do you think Amazon has in the UK? It’s clearly high but how high?
86% of the UK population shop with or use Amazon in the last year and 70% claim to every month. And a fifth of Amazon shoppers have increased their spend in the last year versus just 13% who have spent less.
With that sort of reach and the positive sentiment, they are in great place to launch new products and services. But will they be online or IRL stores?
Some Australian research - using UK data - shows that loyalty to online grocery firms is quite high. But the switch of Ocado from Waitrose to M&S is likely to be a defining point in online grocery, if significant amounts of customers switch to Waitrose delivery service. Is this the time for Amazon to really go for online grocery rather than just open stores?
We talk about these Dash buttons a lot as they are an attempt by Amazon to fundamentally change shopping - with huge implications for advertising. Imagine the billions of dollars spent on washing powder ads over the last 50 years, all trying to get you to pick up their brand over your usual one when you are next in the Tesco aisle.
The Dash button - and it’s voice equivalent - seeks to make your usual brand the permanent choice. What could make you decide to override your default and switch from Ariel to Persil?
One more thing on Amazon - one of their few achilles heels has been the amount of fakes sold by third parties; Amazon are now empowering brands to remove fakes from the site and exercise much more control
It’s not quite a one way street in retail - the vast majority of sales still happen in real life and some retailers are doing well. Best Buy in the US struggled for a while but now have a smart approach which seems to be working for them. They understand that people are their best asset.
In our Retail workshops one piece of advice we always give is to make sure you have the best shop staff in your category; go round the competition and poach the best people. Paying them a bit more is almost certainly your best investment. Then you can think about how tech can help.
At Shoptalk last week in Las Vegas it seems the retail innovation lab is on the way out - too much focus on gimmicky tech. The only tech retailers need is their app on their customers smartphone; as we saw in our NY Retail Safari brands like Nike and Uniqlo are working hard in store to get their app installed. Walmart owned Sams Club has improved their Scan&Go service on their app to recognise products using vision and machine learning.
The pace of change in the US TV industry continues. AT&T are changing the TimeWarner management around with a key HBO exec leaving. Richard Pepler has done an amazing job building HBO but many take his departure as a sign that the business is changing. As I talked about at Vidcon the centre of the business has moved from Hollywood & Vine to Lenoir and Council Bluffs and all the others place GAFA have data centres.
It’s revenue that drives these deals and the news Roku made $1billion last year underlines the potential. The team at ReDef are on top of this space and their report on how Netflix is so well positioned is a great read. And this video interview with the Redef founder and Hollywood legend Ron Howard is a good insight into what is changing and what isn’t.
The furore over podcasts continues with VC backed firms emerging all the time. Luminary seek to be the Netflix of podcasts and are investing in talent (Lena Dunham, Malcolm Gladwell and Russell Brand) and embracing a subscription model and eschewing ads. As regular readers know we are bullish on ad funded content and i can’t see that any podcast platform - other than maybe Spotify - can win with monthly fees. Apple and Google play hard here and while investing in IP makes sense, it will be hard to gather enough exclusive content to make Luminary a must have.
We think every brand needs an audio strategy - from how you optimise for Voice through to what your brand sounds like. One element of this is having a Spotify playlist; when my wife advises luxury brands on positioning agreeing a brand playlist is a wonderful tool for getting the positioning right on point. Danone are embracing this and curating music that they share through Spotify QR codes on their packaging. What modern marketing looks - and sounds - like.
The Data ads from Apple show you can do good mobile advertising. But the placement did highlight one of the most irritating facets of online ads - frequency. During a few minutes on the Guardian mobile site I saw the banner ad every time I went back to the home page. A client makes this point in Admap. Managing frequency across platforms is a huge problem but on one site it’s easy - ironically you just need the cookies to work. It’s a huge issue on traditional media too - especially commercial radio.
Lots of comments about the AI voice translation tool we shared last week. This is even more magical; Take a photo of any data table with your Excel app and AI converts it into a fully editable excel worksheet in the app.
Finally…. lots of questions over the viability and future of agencies and media - so I liked this piece arguing that the media model is in better shape than people think. This gets to the heart of the opportunity;
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