The new Comscore apps report underlines just how powerful GAFA is. This is US data but there is little to suggest the UK would be that different. Only Snap and Pandora aren’t owned by Google or Facebook. Yet.
And the only reason Amazon doesn’t make the list is because their browser traffic is so high - as the UX pushes digital purchases out of the App to avoid paying the Apple Tax. But Amazon is the most valued App by the key 18 - 34 group.
The report is full of good stuff. although we think the headline story about the huge amount of time spent in app rather than browsers is a little misleading. Much of the time people spend in the big apps is reading web content - just through the Facebook browser.
We are seeing new behaviours go mass market - people gathering their favourite apps on their home screen - arranged by ease of thumb access.
One exercise we like is Same & Different - getting people to share what’s on their home screen. Nearly everyone has the same big apps but then everyone has a set of very different, personal ones - their sports team, favourite magazine, special interests etc. Great insight to be had here.
There is a power law at play here. Just like around 80% of search traffic comes from the first page of Google search and 80% of all TV viewing is from the first page of the Sky EPG, we are convinced that 80% plus of all mobile use comes from this home page.
This home screen is the most valuable real estate in the world - and where all the attention is.
Working out how to get more than your fair share of that attention is all that really matters for brands these days
GDPR; Nuclear Winter for adtech? Or New dawn for premium publishers?
Since mentioning GDPR we have had some interesting conversations. Not many were that reassuring. But we are sticking with our Glass Half Full lens.
The FT have looked at the issue and talked with some of the big tech firms – they see companies scrambling to build teams to prepare. But whilst they highlight the costs of dealing with the new regulations they don’t get into the possible impact on ad focused business models.
Talking with our friends at Pagefair was really interesting – their blog is a good place to get up to speed. One fascinating theory from them is that Agency woes are likely to increase, as brands look to be indemnified from any risks associated with their use of data. The scale of the fines is enough to scare the insurance industry into significantly higher premiums.
Because this regulation applies to anyone who is involved in using EU citizen data – wherever they are in the world - it should be on the radar of US ad tech firms - and their VC. Not sure that’s the case at the moment, although – probably anticipating their IPO - AppNexus are addressing the issue, but little news of how that is going?
Strong brands that can explain a customer benefit should be OK – but for everyone else…
One positive aspect is that this should rebalance the playing fields for legacy media companies, which have generally suffered from the shift to data driven ads. If they can leverage their customer relationships, as well as their context, they have some strong cards to play.
We are seeing German publisher Axel Springer coming together with leading German brands like Lufthansa, Deutsch Telekom and Daimler to offer a single customer log in – with a well thought through initiative to get consumer consent Confusingly it seems German TV companies have a similar - but separate - initiative. A new Dutch firm SNDC8 is behind the latter and, with a very smart former Group M colleague running the show, this has great possibilities.
Unsurprisingly, the day the Amazon Whole Foods deal closed they announced some dramatic changes; Whole Foods product available through Amazon Fresh, their loyalty scheme folded into Prime, Amazon Lockers in stores. Oh and some pretty steep price cuts.
The power of combining bricks and clicks has been clear for a while - Macys know that an in store collection of an online buy will lead to more purchasing in store – as much as 25% more. We saw the same thing with House of Fraser a few yeasr ago.
The luxury fashion sector is also betting big on bricks and clicks. Whilst the jury is still out on the LVMH digital play 24Sevres, the Farfetch founder believes the combination is really powerful - predicting the digital share of luxury will grow from its current 10% but to no more than a quarter or a third.
In our work on Retail we find the tech in stores hasn’t yet made a real impact – as it doesn’t really solve problems. A Business of Fashion OpEd thinks that it can be an important factor – but the key in our view is an irresistible instore experience.
Everyone interested in retail should make the pilgrimage to Colette before it finally closes its doors in December to see how that can be done.
At the other end of the retail business Shopify is often overlooked. Enabling anyone to quickly and cheaply set up an online store, over half a million stores run on the platform. It’s a huge financial success too – share price up 500% since their IPO and it’s worth more than Tech darlings Twitter and Square. At some point they have to become a target for Google to get into ecommerce properly or Amazon to amortize their marketplace skils and services - and pick up the data on all those customers.
Retail and China
We describe China as a Galapagos market as it developed without the influence of Google, Facebook and Amazon. Whilst the desire for control over free speech precludes Google and Facebook even getting a real hold on China, there are less structural issues keeping Amazon out.
They could probably learn a lot from their Seattle neighbours Starbucks, who open a store in China every day. By organising around Family, Community and Status they adapted their business to suit China and it has paid off.
Another example of your Enemies Enemy being a friend; Amazon and Microsoft are collaborating with their Voice assistants. It’s a little clumsy now but enabling Alexa to access the world of Outlook and hence peoples diaries and contacts makes sense. Apple and Google have better control of the distribution of their Voice services through their Mobile operating systems. Amazon doesn’t, so has to be resourceful.
Thinking about the burgeoning world of Voice Assistants for a client project – BAT each have a Chinese version – leads onto the impact on marketing. Google talk of 20% of queries being voice and whilst that seems high now we can see those levels being reached quickly. Factor in Siri, Alexa and Google Home and it makes sense. As this AdAge article points out, the ads need to respond.
Lots of the rumours around the new iPhone - all happening on September 12 - are around Augmented Reality but Google have got their response in first with their new ARCore. Once the Apple play is public we will look into this area in more depth. But everything we see now supports our long held view that AR is going to go mass market on phones - and peripherals like watches, headphones and glasses - rather than specific devices. And whilst Apple has the more affluent user base, Android dominates in sheer numbers - so how well Google get the Android manufacturers to adopt this will shape how AR prospers.
Google are reimbursing brands for Ad Fraud. But they only give back their proportion of the wasted money - the fraudsters have taken the rest and disappeared. Lots of very smart criminals have worked out that ad fraud is a lucrative business and they try and stay ahead of Google etc. The only way to avoid this is being really focused on what you are buying; brand safety and whitelists help.
A new report suggests that UK TV could lose up to £1bn in revenue as GAFA acts as an aggregator. The logic is based on the value aggregators in other sectors have taken, so doesn’t really look at the shifts in behaviour we believe drive this..
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