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Fix / Friday - May 8

AdTech Perfect Storm

So the trials and tribulations of digital advertising continue. Isba (the trade body for the UKs biggest advertisers) commissioned PWC to get to the bottom of Supply Chain transparency in Programmatic. And they couldn’t. Well they could - but found 15% of the money in a $100bn global market to be unattributable. And only half the spend reaches the publisher.

The FT noted that these publishers are really varied;

These problems ultimately stem from the switch from buying context to buying audience which coincided with the automation of buying; most digital ads are now bought programmatically. It's quite feasible to only buy from an agreed set of sites - but the long tale can dramatically reduce costs. Here price can get confused with value. And the long tale can be really long.

It’s quite simple to reach most of your audience in places you have heard of, where you know how the ads appear and you have a good idea of the frame of mind of the user. So you can decide if it’s a good place to tell them about your Car, Computer or Coke. When you add 150,000 more sites you have no idea of the context or how the ad appears.

I’d advise everyone to read the paper and follow the recommendations. And best practice is to have direct contracts with every element of your tech stack - so you know what each vendor brings to the party and how much they cost. #CheckYourTech

One obvious thing to say here though - if this was easy it would be sorted now. It’s a complicated field and changes the whole time. Having a smart team is the key issue.

More evidence of things changing is this look at emails being shared in urls.


Following the set of Q1 earning results last week the FT point out that direct response ads are helping GAFA survive the ads crisis. In a great piece Digiday looked at Earning Calls to see how the biggest advertisers are responding - and it’s a mixed bag. Coke have pulled back - as their sales have dropped by 25% - and P&G are increasing spend. Others are in between but a desire for ROI and an emphasis on digital keeps coming up.

This look from the platform side emphasises the positive impact of DR on Google Facebook and Snap. The most powerful DR opportunity is arguably Amazon where the ads on the platform are geared to drive sales but the volatility of product availability and the Amazon policy decisions means they didn't do that well with ads for a while. But given their ad sales grew by 44% in Q1 they should bounce back.

These four seem well positioned to come out of the crisis strongly but there is one sleeping giant. This is good thinking on why Apple is getting back into ads and this piece looks at the opportunity for in app ads - which has largely been ignored by Programmatic. With a lot of DR being around driving app downloads Apple has a natural interest in improving the ad ecology and capturing another slice of revenue from app developers.

This is worth repeating from this weeks Merchant Fix. A long post from US Agency Common Thread is an impassioned plea to keep spending - but backed up by good data from their own clients.

Now it’s not a big surprise that people who make money from advertising would like you to keep spending. But there are new potential customers with time on their hands and money to spend. You should be testing whether your product might resonate with this audience. This is good advice on how to run experiments at scale.


One of the best things about the DR world is that many have recognised that creative is a huge factor in success and are experimenting with how ads get made and how they get paid for. Both these are changing fast and it’s a space most traditional agencies are not close to.

I am impressed with West Coast agency Common Thread and have shared some of their content over recent weeks. So when I found their ‘lesson’ on ad creative for Shopify I thought it a must share. They have taken the old AIDA model (crediting Ogilvy, Bernbach and more in the process) and matched Facebook metrics with this so they can constantly optimise ads. Knowing that improving the 3 metrics drives improved Return On Ad Spend. So simple but so smart. The whole thing is an hour and it’s time well spent - or you can jump to the key issues here. (You will need to create a Shopify profile)

We see the opportunity in this space is to combine great experience around creative with expertise on how technology can be used to help. For example our friends at Spirable have had great success building very detailed Localisation campaigns on Facebook with as many as 30,000 localised ads for Guinness to drive footfall into 2000 bars to watch the Rugby. Clients have seen increases of 5x ROI and 9.5x CTR when using personalisation - but it’s time consuming. A new product from Facebook (Segment Asset Customisation) makes this process much quicker and even more flexible. So huge opportunities if you have the imagination and know how to use the tech. But that still seems a rare combination.

One group that does get the modern world and understands how this blend of skills can create real value is You&MrJones and this talk between their founder Davd Jones and Luma’s Terry Kawaja is great.

We now have a good network of friends and family across creative and tech, so if you want help making your ads more successful, let's talk.


Our Deep Dive this week was Merchant and you can catch up here - lots of good stuff on Food / Drink / Delivery / Shopify and more.

The Shopify results for Q1 are out and growth was stellar. Revenue was up by 47% and GMV and Profits up by a similar amount. Earnings per share were up by over 200% so the stock price spiked too. Their Investor Deck is a good read.

Their Shop app is getting a lot of attention - we covered it in Wednesdays Fix - and this WSJ piece compares it to the Amazon experience, with a Shopify exec saying;

Merchants need to evaluate a range of options to build their brand and drive sales. Pinterest now has a verified merchant program - it’s free and you just connect your catalogue and you get a Shop badge. TikTok are moving into commerce too - Levis partnered with influencers on the platform and you could buy items through the Shop Now buttons.

This talk between the founder of Haus and Web from 2Pm is a good take on how DTC will fare post Virus - I agree with the increasing importance of loyalty but think experimentation with high street stores will come back. How Amazon are dealing with the crisis is good learning - here they are talking about how they are changing grocery - both instore and deliveries. Quite similar to the UK situation we covered on Wednesday.

I mentioned last week that GaryV was getting into Commerce and had bought a Shopify site builder. This is the deck he is using to pitch Vayner Commerce – it’s pretty good.


And a good article on the Chinese Digital Yuan - their virtual currency


In their mixed Q1 earnings Disney announced 54m subscribers but concerns over the impact of the crisis on their Parks business may slow the international spread of Hulu.

All the plans for Streaming were drawn up pre Crisis, when Disney presumed they would fund their content and customer acquisition with the piles of cash their Parks throw off . Now that's not the case do plans need to change? This Bloomberg article suggests they do and looks at advertising as an option.

Ads are not a panacea as ITV know - their ad revenue was down 42% in April and they have furloughed 800 staff. They have also had to halt production on some shows and that will impact their schedules across the rest of the year. Wired looks at how broadcasters are dealing with production problems and this is an interesting look at a Zoom version of Bachelorette.

I wrote an article on Quibi for Contagious; spoiler alert - I think it will be a success - eventually. They are now sharing some shows on YouTube which is probably a smart sampling tactic.

Sports content is so important to the TV business as we see now it’s unavailable. But we haven't seen too much innovation around how sport is presented. Former Microsoft CEO Steve Balmer - who now owns an NBA team - plans to change that.

One piece of good news in newTV -- Sky are offering to help 100 SMEs get on TV for the first time with their AdSmart technology. This is a great opportunity to use a highly effective medium and the £10k package is well worth applying for.


Darren Herman builds on his thinking on the modern brand marketing framework I shared last week, with a focus on Yeezy, Supreme and scarcity. Just as we have talked about Drops and Depop there is a different way of doing business - and post crisis things will change.

Following the intro to David Dobrik last week here is his Vlog Squad. Popular culture is now being developed on social apps instead of prime time TV. Even the music charts are now driven by TikTok memes rather than DJs. And superstar DJs like Diplo are now playing gigs on Twitch and Instagram rather than Vegas pool parties. This is partly Virus driven but as the NYT pieces covers; things are not going to go back to how they were.


Games are related - huge numbers; Fortnite how has 350m registered players - up 100m over the last 12 months. But gaming is not that well understood outside the industry. Amazon see the potential and will launch their first big budget game later this month. Crucible is a free to play Multiplayer game, and given Amazon own Twitch, we can expect a big presence on there.

If you want to understand more about Gaming this twitter thread is a good summary of Tencents hugely influential role in gaming - and great general advice from a A16Z VC who used to work at Tencent.

Matthew Ball is the go to guy on Games ( and on TV) but his articles can be daunting with their length and depth - like his latest on “MILEs,” or “Massive Interactive Live Events.” This podcast with him talking with Peter Kafka - on the pandemic and TV - is more accessible.


This is a great example of Augmented reality - cut and paste from the real world. More examples in the developers twitter feed


Why Morning Brew is hot - email as a medium

It seems every time a Mobile Operator gets into digital and content, it’s the whim of the CEO - and likely to be canned when they move on. AT&T Merging Xandr Into WarnerMedia

COVID and cascading collapses - good new Benedict Evans essay

Finally….. a good piece from Om Malick - The Inevitable has happened.

What are you going to do to seize the opportunity?

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