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Mobile Fix – October 6

Google Cornucopia

With jet lag from a quick trip to New York I planned to drop in the Google launch event on Wednesday for an hour. 90 minutes later the live stream was still going and they had even more new products to show. Then there was the demos and the party…

No-one has ever really been convinced of Google as a hardware company but this week they made it clear that this is a big part of their future. And seeing the range of devices explains why they bought a chunk of HTC – those 2000 engineers are going to be really useful.

I am not gong to get into the product but my overall impression was good. I will probably get a Pixel 2 when my Pixel 1 gives up the ghost. I could see the Pixel book as a replacement for my tired Macbook air. The Google Home Mini and the M look – and sound - great. And I think the Buds headphones are a must have if the translation works as well as the demo suggests.

AI is a key part of the play and they managed to get over how that translates into features people will enjoy, so hopefully they can capture that in the marketing.

Those of us with long memories recognise some of the ‘new’ products. Lens is essentially Google Goggles, which promised so much in 2009 but now AI can deliver. And the first promise of Translate for conversation was in 2011.

But just look at this picture of the full range – its more like a fashion shoot than a tech one. We have argued for a while that the phone market is now a fashion market and maybe Google have done enough with their design to shake up the market. If you buy any of this range, no one is going to mistake it for a Samsung or an Apple.

On the way to the event I saw the outdoor ads for the iPhone X – which you cannot even order until October 27. So Google have 3 weeks to suck all the oxygen out of the market and make the idea of paying £1150 for a phone seem stupid.

I think they will have an impact but to really take the battle to Apple they need to get the supply chain right – they made a joke about how difficult it has been to buy a pixel at times – and get better at Retail. The Apple Brand Cathedrals have been a superb marketing strategy and they have got the rest of retail sewn up – Google launch with a more limited distribution.

Amazon

Amazon haven’t really got to grips with continental Europe yet and Zalander is the bigger player in many markets. But it’s inevitable that will change and the news Amazon are seeking a logistics partnership with French retail giant Leclerc suggests it won’t be that long.

Their shopping spree continues with a 3D body modeling start up, which should be helpful for their clothes business. The smart people at Redef go deep into Amazon and Fashion

Retail

The fight back continues with Walmart buying Parcel, a same day home delivery service.

New research suggests that in the UK 62000 retail jobs have been lost because of technology. But with 2.9 million jobs in the retail sector and just 15% of shopping happening online we think the gloom is exaggerated. There is a huge opportunity to make in store shopping better, but we believe the focus needs to be on tech the customers own rather than instore tech.

Whilst in New York I went to see the Mastercard and Marie Claire pop up Shop of the Future in Soho and it was really underwhelming. People have accepted grocery stores outsourcing the checkout work to customers but I cant see this taking off in other stores. With each product having an iPad next to it, clicking around to get product info seems a chore – much easier to search the product on my own phone and read the Amazon reviews and check other retailers prices.

In our Retail Workshop we go into this more deeply and see the real prize as data helping store staff improve their service.

The one area where tech is really impacting retail is Instagram. Shopify is integrating Instagram with all their online stores and this look at how the make up market is changing looks at how vital Instagram is. The piece also goes into what modern retail is all about, These new brands are transforming the sector and my other half (@DebKhan) tells me all her friends are shifting from the established brands towards these new ones.

Flat Earth Society

But Byron Sharp and colleagues argue that the rise of small brands at the expense of bigger ones is a myth.

Grudgingly they admit ecommerce has helped some small brands get started and they say small brands need mass reach in advertising and routes to market.

So, same as it ever was?

Not sure. The make up market is certainly changing. And as retail evolves this can have a big impact on brands. As supermarkets shift their focus from huge out of town stores to smaller local ones, they trim down their product list. And within the product categories they do stock, they limit the number of brands –as there is just not enough shelf space. So the market leader gets prominence and usually the second brand. And increasingly we see the third brand being one that’s a bit more interesting. So a new brand like Method gets lots of shelf space. Never seen an ad for them but their packaging works really well.

In New York I saw a fascinating case study for a new FMCG brand where they did all the smart work with IRI studies and McKinsey data on brand share and favourability.

But all the advertising was Modern Television; Facebook video ads.

Targeted around the cities and regions where distribution was good and the local market had the best profit potential. Focused on the type of people who shop at WholeFoods and buy premium priced goods. And the suite of research tools Facebook offer had proven the activity was working – as did the McKinsey data.

I do think much of the Ehrenberg works makes sense but it seems perverse they always manage to disparage digital.

A fellow traveler (and fellow Australian) Mark Ritson makes some good points this week about the problems with Media Agencies but again focuses almost exclusively on digital. The issue of transparency and deals that benefit the Agency through volume discounts that clients never see, was around long before programmatic came along. And many agency people see the main problem with adtech is that the money evaporates between the agency and the media owner. The yachts at Cannes tend to be adtech rather than Agencies

Snap & Ads

Announcing a clever new AR collaboration with art superstar Jeff Koons, Evan Spiegel made light of the way Wall Street has discounted Snap.

The Koons idea – where you can see one of his sculptures in Snap if you get within 300 yards of its location in Hyde Park and other great cities –shows that Snap really get their audience and can keep conjuring up good ideas.

(If any of our friends at Snap want to do a Hackney version, bringing Rachel Whitereads iconic House back to life in this way would be so cool)

Their ad products continue to develop, with shorter ads being favoured – down to 5 seconds in some cases. (Facebook have research from Oracle suggesting 2 second ads can be effective). As we move to shorter ads the formats can and will change and Giphy see a big future for Gifs

Snap have done a neat deal with our friends at Adludio, so their compelling haptic ad formats now work on Snap. In this video from last weeks Advertising Week you can see them – and others - demo their Snap ads.

And Snap are looking at what I see as possibly their biggest opportunity – brand integrations; once better known as product placement.

GAFA & Content

Interestingly this veteran of the music business doesn’t think Streaming is quite done yet and sees the business model developing.

Data & GDPR

After all the hype about Cambridge Analytics and how they use Facebook data to get Trump elected, a UK lawsuit may give us a better understanding of just what they do

This all might be academic once GDPR kicks in but still no one really knows what is going to happen. Smart VC Fred Wilson is taking it seriously and we think the US is (finally) waking up to the possible impact.

Our best advice is to keep watching what’s happening and in the meantime concentrate on improving your first party data.

Quick Reads

The Mobile Marketing Association has some good thinking on multi touch attribution. Moving from last click attribution to Fractional Attribution is crucial.

A provocative piece on the Consultancies says they need to buy one of the best Programmatic specialists. Good to see our friends at Infectious and Affectv getting a mention

Traditional ads in Daily Mail properties dropped by 11% in the last year losing £15m = but digital ads went up by 22% making £19m. We find that traditional publishers are getting better at monetizing their business and - post GDPR - we think the smart ones have a healthy future.

Chinese giant Tencent have nailed mobile gaming. 80m people play just one of their games every day. Martin Sorrell worries about Alibaba and Tencent

Ever inventive, one Chinese business is designed to mine for Bitcoin. Flying back from NY I found the inflight service had the excellent documentary Banking on Bitcoin. I had watched it on Netflix, but it is worth watching again. Especially as the head of the IMF sees Cryptocurrencies as the future of the financial system

Modern media company Cycle have a new partnership with ESPN. A Fix friend has launched a business helping Modern Media businesses grow – I think of it like a Record label for Media entrepreneurs.

Whilst the new legislation everyone obsesses about is GDPR, PSD2 is going to really shape up the financial marketplace. As well as changing how payments work, it enables people to allow third parties to aggregate their financial data – bank statements, credit cards bills etc. This will drive new services analysing your money habits and making suggestions on how to do better. It’s an obvious new product for the comparison engines but one of the first movers is HSBC, with a new app.

As AdTech matures and GDPR (and transparency) change the landscape, smart companies will evolve. Moat is a great example of a pivot.

Listening to the Google sell and their collaboration with Nest etc we see that the Internet of Things is sprouting around us. This FT piece is a good summary of where we are.

Finally… Influencers are becoming a huge part of the industry. Is this a legitimate marketing strategy or a Bubble? How do you measure the effect of your investment?

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