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Mobile Fix – November 27


Are we getting better at finding unicorns or are mere mortals getting better at masquerading as unicorns? This chart plots the funding events that valued companies at $1bn and shows the accelerating pace. UK VC Saul Klein makes the point London is one of the best places for Unicorns and he believes the ecology in Europe is pretty healthy.


Despite all the hype and conjecture adblocking hasn’t had much real effect. Yet. The parent company of one of the biggest online media players MailOnline reported their figures this week and noted that AdBlocking ‘hasn’t had much impact’. Yet

The MailOnline team have been very careful how they integrate ads and compared to many (most) have erred on the side of caution.

But we still argue that we’re in a hole and we need to stop digging.

So quite soon we could be in a situation where around half of UK mobile users don’t see ads. Or at least don’t see ads from businesses that haven’t reached some sort of agreement with the operator

MNOs have long complained that their investment in bandwidth is subsidizing GAFA – or alternatively their customers are paying the MNO for the bandwidth that GAFA use. Whichever way you look at it, MNOs don’t like that and have long lusted after a share of the GAFA ad revenue that they facilitate.

Back in 2005 our early involvement in mobile advertising found us negotiating with operators to zero rate the bandwidth customers needed to view a video ad.

Zero Rating is back in emerging markets where Twitter and Facebook have done this type of deal to increase usage. We think it’s this type of deal that MNOs will want with GAFA and advertisers, so their ads are allowed through the adblocking.

But whilst this tactic gets MNOs back in the advertising game, it doesn’t help with the key issue – many users don’t like the ads they are being bombarded with.

That interstitial that’s hard to close, the media buy with no frequency cap, the irrelevant ad they see because it’s cheaper to spam everyone that invest in smart targeting. All drive someone to download an ad blocker today.

A US commentator wants to encourage people to get adblockers – but with the ability to opt in - or whitelist - quality publishers. And transparency over when your data is being mined. Sounds like the Ad Regulator tool we keep talking about.

His company has an interesting model where video viewers interact with one ad and then get to avoid the other standard ads – and was bought by Fox last year.

This rebooting of the system is – in our opinion –where the opportunity lies.

What does good digital advertising look like? How can we wean ourselves off models imported from old media – the pre roll and even the banner? Our devices can do so much more than the first browsers, yet we’re still using formats defined when Netscape 2 was the hottest thing in town.

Fix friend and Balderton VC Suranga Chandratillake gets to the heart of the issue in this well reasoned retort to that FT ad piece that caused so much debate a couple of weeks ago;

And the head of Fox, James Murdoch echoes this thinking when he says

We should be thinking about how some of the latest technologies might improve advertising. How could Peeking and Popping impact an ad format? What can we learn from Slacks unfurling? Even the new app streaming that Google is pioneering feel like it could be useful.

Most of the innovation has been around ad tech focused on the plumbing of digital advertising. We now need to focus on the user experience of the advertising - how to deliver useful entertaining relevant messages that invite people to engage.

If we don’t sort this out we are probably going to see the web move to more of a subscription model – this piece argues that Amazon Prime is a model GAFA may follows and we will all end up in one ecosystem.


The rapid growth of messaging can pass people by – if you are not an active user, it’s easy to see it as a bit player versus GAFA and the rest of tech. In fact it’s bigger than social globally and continues to grow rapidly. This piece unpacks the messaging section of that stellar deck from Activate that we shared a couple of weeks ago.

One fascinating area that it gets into is revenue – pointing out that WeChat has an ARPU of $7 – made almost exclusively from services rather than advertising. For comparison the global ARPU figure for Facebook is $2.97 (US $10.49) with the vast majority coming from ads.

So the opportunity for brands is to integrate into Messaging with utility or as service – but who is there to help them do that? Doesn’t seem like a natural role for an agency.

One of the challenges of messaging is that there isn’t really an interface – its just chat. Which is why AI and bots hold so much promise – even if we are a way away just yet. This piece goes into some depth on the invisible interface.


Benedict Evans has another good blog post – this time looking at how tech is impacting on TV. We agree with his arguments over the increasing dominance of mobile but we would go further and argue that GAFA have to compete for the bigger screen, as none of them can risk conceding it to their rivals. Building on the subscription point above, content becomes a key factor in driving adoption. Just ask Sky. So this piece about how the Champions League is growing in popularity in the US is very interesting – we are convinced that one of GAFA will invest in sports rights before long, and if you want global reach then Champions League is the best game in town

Digital Transformation

There has been some elevated discussion over whether Uber etc are truly disruptive and the initiator of the theory Clayton Christensen doesn’t think they are. It is all a little Angels on Pinheads, but we would also argue that they aren’t really digital businesses. They are businesses with a model that digital enables.

So we agree with Fix friend Tom Goodwin when he says companies don’t need a digital strategy – they need a digital transformation. Even when we have done transformation workshops the most value is in looking at how other businesses have reorganized. And at how changes to business models can be tested – and as a new McKinsey study shows, it is in customer journeys where there is most potential.

Quick Reads

We are doing a lot around retail at the moment and came across Philips push into LiFi a while ago – now it’s being trialled and is much faster than WiFi

The local opportunity excites a lot of people – but no one has cracked it yet. The way Google seems to be disintermediating review sites like Yelp and TripAdvisor shows how competitive it is

The knives seem to be out for Marissa Mayer at Yahoo. But is she can’t take all their great assets and make it a contender, who can? A Private Equity driven break up seems increasingly likely.

One potential savior for Yahoo is Softbank. Now run by ex Googler Nikesh Arora they are close through the JV in Yahoo Japan. This is a good profile of Nikesh

The two big issues in Programmatic are fraud and creative. If they can be resolved there is huge promise. Xaxis make the point that fraud is avoidable – if you make it a priority. And more and more people are convinced that a focus on creative is the right thing to do – but as this article points out the silos between media and creative don’t help. More opportunity for our Route55 project.

Seeing what the kids are doing is always useful in digital. First they often predict behaviors that will be adopted by older groups – texting, sharing photos, social etc. Second shifts to (and from) media types tend not to get reversed as they grow older – so the dominance of TV looks in some jeaproday as they grow up. Piper Jaffray do a very comprehensive look at US teens each year and this infographic of the latest results is interesting - as is the full study.

And in the UK Ofcom have released their latest study on children and parents. Lots to dig into – but few real surprises – it’s all about mobile

The smart people at Redef have a good long piece on the things media people debate at dinner. Some smart thinking in here.

(and whist we are on futurology did you see that Will Smith may enter politics? – another prediction from our Futurology video coming true)

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