The Q3 numbers are out and things look good for Facebook. Ad Revenue up by 28% to $17bn - 94% of which is Mobile - and daily average users up by 9% - even showing a little growth in the US. Only surprising thing really was that employees went up by 28% too - that’s nearly 10,000 new people in a year. Google /Alphabet did well too - up 20% to $40bn - though they added nearly 20,000 new people.
Apple was more mixed but still good overall - iPhone revenues down (they talked of a big Holiday season) but revenues from wearables was up 50%and subscriptions up by 40%.
Within the Amazon numbers, on the call they shared that advertising growth exceeded 45% to around $3.5bn. So Amazon is already around 20% of Facebook revenue.
Whilst these companies face all sorts of problems from regulators their customers - people and advertisers - are clearly pretty happy with them.
Staying on the Dollar tip, Shopify surprised analysts with a loss - reflecting their big investment in fulfilment to better take on Amazon. The key rival to Shopify (for bigger businesses) is Magento and along with Isobar they have a good white paper on Headless Commerce - defining it as somewhat an umbrella term for various approaches to a structure that helps integrate multiple backend systems under a single frontend approach
Innovation in the back end systems of DTC is matched by fresh thinking about the frontend too. A start up backed by Macys is designed to help retailers add new brands to their stores without going down the usual wholesale route - so a retailer can rent shelf space to a new brand. This seems like a complementary strategy to our friends at AppearHere.
Delivery is a real issue - the NYTimes talks of 1.5m packages a day in New York and the number of vans traversing London streets evidences the same problem here. People find it a hassle too - the queues at our local Post Office on a Saturday are enormous
So click and collect online orders is growing and this US research shows how customer expectations are high. I noticed quite a few Amazon lockers in Venice stores last week but whilst partnering with other retailers for returns works well, it is hard to make the customer experience good with pick ups.
Uber Eats is adding a pick up service too - sometimes the benefit is avoiding the queue to order and the wait for preparation. And given the success of App ordering for Starbucks it’s no surprise to see this catch on - although I expect the Uber fee is lower, but so too is their workload. Uber has also followed Deliveroo by adding the ability to order groceries from CostCutter stores - so that running out of milk or butter is never a problem again.
At the excellent AdLudio event I spoke at this week, we talked about DTC brands extending beyond social and the strength of Pinterest came up a couple of times. Adweek looks at how keyword targeting is being used and our friends at Spirable are exploring opportunities too.
My thinking on Bonsai Brands informs our views on VC investment in DTC; they need to be handled with care to make sure there is real alignment around growth and ambition. This piece looks at how fashion can be better served with strategic investors.
The head of Google in Europe makes a good case for personalised advertising. I have been learning about the hyper contextual example mentioned from the smart people at Essence. Lots of opportunity for innovation - especially with those businesses skilled at aggregating valuable audiences around quality content
In a useful semantic switch Facebook have changed the names of some of their metrics, replacing the word view or watch with play. I think smart people always understood what was meant by the metric but this makes it crystal clear. It’s like in trad media where people can confuse OTS with reach - all media delivers an Opportunity To See.
GroupM have shared their latest Landscape - a great essay on what’s happening in Media. One thing that leapt out of their ranking on Media owners by GroupM Spend was Disney being at number 2 following their recent M&A.
And the New York Times has a weak piece saying people hate ads. I am convinced that people dislike bad ads - dull ones, annoying ones and irrelevant ones. But we know good ads work and that people find them valuable.
At the IAB Nonference this week I ran a game of $Trilllion Bingo - blending the issues of newTV with the nonsense of a Scarborough style bingo game. But the point of Bingo was that essentially all these people investing $billions in content are gambling - there is not enough subscribers to have half these companies survive.
This is a good summary of the key players and their claimed budgets and this is more on AppleTV and here we look at AT&T's plan to take on Netflix, Apple and Disney with HBO Max. Spending all that money means you need better metrics and Netflix classify success by looking at Starters Watchers and Completers
Oddly few of these wannabes are talking about Sport - the one genre that has proved so valuable for companies like Sky. And the genre that drives live viewing. Disney have ESPN but that is a shadow of its former self - so the main player is DAZN who are looking to raise $500m for expansion.
Lots of action around adtech and newTV. We mentioned Roku last week and this is a good article on why TV companies want to own their own buying platforms - and the problems that may cause. And we talked about Amazon wanting to make Sizmek work for newTV and now Google are positioning their ad products for TV
In the US Amazon have axed the extra charge for their prime Grocery service - so members can get 2 hour delivery free. With stiff competition from Walmart (who now offer curb side pick - including alcohol - up at 2000 stores), Target, Krogers and others they need to step up. No changes to the UK so far.
All of which makes me ask why Amazon doesn’t get back in the phone business
We mentioned the impressive Amazon ad numbers earlier - we are now starting to see people share their take on ad performance - like we see for Facebook from Nanigans for example. These should never be taken as gospel but are useful indicators, especially if you have your own data to sense check against it. With $400m spend across Amazon this data from Tinuiti looks really useful. One key nugget is that a third of Amazon DSP spend is on non Amazon sites - huge opportunity there.
With our first Podcasts now available we are learning more about how the space works. Reading the Spotify numbers we were pleased to see real growth in their podcast hours; up by 39%. This piece goes deeper on the results and gets into their podcast strategy
The relationship between Google and Facebook and news is complicated and has history. A good Monday Note piece looks at how French publishers are trying to get Google to pay for the headlines and snippets it runs - and how Google are firmly saying Non!
The new Facebook plan for news does involve paying but again has split opinion, A smart News CEO tells me he sees it as a worthwhile experiment if he doesn’t need to produce anything new. Others remember their burnt fingers when Facebook turned their traffic off.
Finally - I am out and about again in a couple of weeks talking at an Ezoic event for publishers. If you are on the publishing side let me know and I may be able to get you a place. I spoke at one of their previous events in New York and they had drawn a great audience.
And don’t forget to listen to our Podcast - now on Apple Google Spotify etc. Produced with a lot of help from the smart people at Vida we are quite proud of our first conversation with Rory Sutherland. He is on a few podcasts at the moment but i think i got a bit more from him on the ad business, given we worked together 20 years ago. Please listen, share, subscribe and review. Next week we will share our next Podcast, with another Ad Luminary
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