Good Morning….I’m Simon Andrews, it’s first thing Friday Feb28 – a sixth of the year gone already
This my newsletter with news and my views on Mobile, Digital, Social and more. Lots of interesting subscribers in the last few days so your sharing is working well — can we keep that up?
And let’s continue the conversation on Twitter — I’m @SimonBigPicture
TLDR - if you read/ watch just one thing this interview of Martin Sorrell by a Fix friend at Google is the one. His articulation of the challenges and opportunities of modem marketing is excellent. His focus on Personalisation @ Scale really resonates too. Every big CPG firm is focused on this as are GAFA. And our friends at Spirable make it happen and will share more at their Summit in a few weeks - if you are a brand and want to learn more, hit reply and I will see if we can get you a ticket.
The headlines this week went to the surprising news that Disney CEO Bob Iger has stepped down, replaced by the guy who runs the Theme Parks. It feels like there is more to come on this but Iger will continue to run creative as Chairman until the end of next year - with the new CEO reporting to him. Iger must be seen as one of the best businessmen of all time; the deals to buy Pixar, Marvel, Lucasfilms and Fox transformed the company. But the guy who orchestrated these deals - and now runs Disney+ - was expected to get the top job - eventually.
One overlooked aspect of the streaming wars is distribution on smart TVs. Lots of content will be watched on laptops tablets and smart devices, but being on the big screen is still really important -and the incumbents like Netflix Amazon and Sky have advantages here. I am sure Disney are spending heavily with people like Samsung Ads to drive signups and app installs.
Comscore made a smart move this week with the acquisition of Xumo who have distribution by being pre-installed on the home screens of LG and other smart TVs. It’s a bit like small airlines being acquired for the landing slots they have at Heathrow. Maybe RakutenTV are the next M&A targets? I have to admit I have no idea how I would add Disney+ on my Samsung - at least until they add it to their appstore.
Distribution and customer acquisition is just one axis in this war - the other is all about ad revenue and GAFA is getting involved. Google has a new deal with French TV service Bouygues to build a service targeting ads on their set top box using the data they hold on customers. Clearly such a system could work for other TV services - especially those that are owned by Telecoms companies.
This approach will inevitably draw upon Google knowledge of the digital ad world and other adtech firms are moving to newTV; Beeswax and Liveramp are working on taking their ID product into TV with Beachfront.
No surprise that it’s getting very competitive - Roku is upsetting some of the media companies it distributes over its large set top box base. The dispute is about ads and the article describes Roku as the Facebook of TV - which is ironic as some think acquisition of Roku could be the way Facebook enters the TV market. Remember they have no way of getting on the big screen; no Chromecast, no Firestick and no AppleTV set top box.
Sleeves rolled up
In a conversation last week with a major CPG firm we discussed the problems we might help them solve. It was interesting as the two examples were quite different - one very macro about doubing sales of a DTC start up and the other very micro about halving basket abandonment.
One solution is a high level strategy with a focus on product, distribution and partnerships. The second is much more sleeve rolled up, working through the analytics and testing improvements to the customer experience. But both deliver the same value.
I see the ability to think through both macro and micro issues as key. And being able to bring in the right talent is vital too.
There is so much happening in the micro area. Google will apply Mobile First indexing to all sites within the next 12 months. We keep seeing poor responsive sites that disappoint on every device. The smart thing to do for most people is develop a great mobile experience - and then optimise that for PCs and tablets. Advice is widely available - see these 6 ways to reduce cart abandonment - although it misses my favourite; take out the voucher code box - it triggers people to go hunting for a code and many don't come back. And this is smart thinking on building a Facebook strategy for mobile traffic.
Rolling your sleeves up and thinking about micro issues is always worthwhile.
When the FT leads with a story on how the ‘Cookie apocalypse’ forces profound changes in online advertising you know the issue is mainstream. Their quote about Google from a Wall Street firm reflects the concerns of some;
“While Google depends on online advertising for the vast majority of its revenue, it seems naive to say Google’s initiatives are designed to ensure a healthy online ad ecosystem for all parties. Google increasingly holds the cards and, barring antitrust regulation, Google can refashion the industry to help serve its needs.”
So our event seems well timed. It’s on April 22 at the IAB space on Covent Garden and we have a great selection of speakers confirmed and some more conversations going on. Details and a provisional agenda here. If you would like to be involved, let me know and we are open to Commercial Partnerships with the right people too. Just hit reply.
The complexity of this space keeps being emphasised - Mozilla are changing the way they handle DNS at least partly to counter moves by the big US Telecoms firms to monitor what websites people visit. A vulnerability in ad.txt seems to have been exploited by fraudsters who remain vigilant on finding ways to thwart efforts to clean up our ecology.
This is one of the problems with moaning about Google - if they can deliver a safe space for digital advertising it's likely that everyone will benefit as Google fees etc are probably dwarfed by the money lost by brands to endemic and persistent ad fraud.
People are looking for solutions now - this makes the point that making Safari work now is good practice for when Chrome turns cookies off. And Adweek have a good summary of the US IAB research event from last week -hoping to have someone to talk about this at our Salon.
“The Times is a subscription-first publisher,” Thompson declared. Woe betide the newspaper that isn’t.
As SMS says in his interview, people are quite happy to share data if there is a value exchange and I am convinced that the combination of 1st party data and context will improve the prospects of these content creators post the AdTechPerfectStorm. As long as we can get the media buyers to recognise the value they have ignored for years. Again we have a super smart Agency panel lined up to discuss this.
One other issue for publishers is the experience they deliver. Right now the digital ads and pop ups make the web a tough place to read as this VC eloquently points out. The mobile web is probably the worst. Has anyone ever said yes to pops ups offering notifications or being added to the home screen?
Some more good thinking on DTC. Ana Andjelic has another good piece, this time on how GMO brands - fueled by Steroid VC money - grow too big and eventually implode. It’s a good build on my Bonsai Brands - which now has over 10k views.
Ning Li was a pioneer Merchant, starting one of the earliest and most interesting ecommerce brands Made back in 2010 (along with super smart entrepreneur and VC Brent Hoberman). He is now running a DTC brand and his thoughts a year in are fascinating. His emphasis on product is particularly illuminating - two many DTC brands look like a drop shipping business, with a me too product sourced from China.
Another DTC exec makes the point that the sector is over hyped
Fundamentally, DTC is just a sales channel, and it should be treated as such. It’s been in vogue to treat it differently because it’s e-commerce and novel and consumer-touching. And it's true that it is different... and it is more valuable... but not as dramatically so as has been treated in recent years.
Which is why we now favour the term Merchant - every smart retailer will try various models and use the blend that works for them.
Stratechery has some good thinking on Harrys and how customer acquisition (digital advertising) is the defining element for DTC - but making the point that Google and Facebook take a big chunk of the value chain through being indispensable.
The much anticipated Amazon cashierless store has opened in Seattle. At 10200 sq ft (about the same as a Tesco Metro and 5 times bigger than a typical Tesco Express) it's their first proper Grocery store. The Amazon Go Grocery store carries 5000 items - most whole Food brands and lots of well known brands.
BARB data suggest that the Amazon investment in Premier League paid off - The UK saw 7.14m subscribers in Q4 - up 35% year on year. That's around £150m in Prime membership fees, let alone the increased spending that usually accompanies Prime Membership.
They plan to combine two key areas of focus - an Apprentice style TV show on fashion designers competing where the winning clothes can be bought online as soon as the show ends. This builds on the new Amazon Live service which looks like a QVC clone but doesn't quite get there.
A survey of Amazon advertisers shows 81% intend to spend more with them and 41% of these said they plan to spend as much as 25% more than the previous six to 12 months. And Amazon keep helping advertisers with tips on how to make the most of the platform; here how to increase clickthroughs and with an enhanced set of analytics for free.
Facebook insistence on allowing political ads looks to be misfiring as the Bloomberg strategy of paying influencers to spread memes is taking off and Facebook doesn't seem able to control it - or even monitor it.
In an unfortunate coincidence OMD shared this good thinking on The impact of Coronavirus on consumer behaviours & market conditions. Then the next day they had to close their London office - our best to all our OMD Subscribers working from home.
Finally - always been interested in product placement so amused to see that Apple prevent bad guys in Movies from using an iPhone. The best story on this topic is when Coke owned Columbia studios and were making Missing - a film about the disappearance in Pinochet's Chile. The prisoners were held in football stadiums and the guards were a nasty bunch. So Coke had the film show them drinking Pepsi from a well branded fridge.
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