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Mobile Fix - September 25

Anyone seen any good news on Digital ads?
This week the FT reported that Google seemed to be charging for ads they ‘knew’ were seen by Robots. Martin Sorrell was quick to condemn this;
Which is fair but given AppNexus (in which WPP last year took a significant stake) only recently applied filters designed to weed out fraud and saw the volume of transactions drop by 65%, it is clearly a problem for everyone.
As this was playing out we saw ads for game company King on TV – and it seems start ups are repeating the excesses of the dotcom boom when the ad industry happily shovelled VC money into the TV companies. In the US two sports predictions companies – sophisticated versions of Fantasy Football – have spent $150m on TV and web ads over the past few months.
Why? Given how hard the industry is working on attribution and measurement – see below – surely using TV is really hard to measure? King are pretty good at customer acquisition so there mist be some logic. We found an interesting source of data on pricing in social and it seems the cost of some Facebook ads is rocketing. Salesforce data for Q1 of this year shows that in the UK, categories such as Auto, Tech and Telecoms saw CPMs dramatically increase  - although others were flat or even declined.
As the AppNexus presentation showed, removing fraud makes ad performance better and as brands are happy to pay for quality, the cost of ads actually went up. And clearly the money is going to legitimate publishers rather than scammers.
If we can’t find some good news around digital ads – and we know they can and do work for many brands– there is a siren chorus tempting brands back to old media.
Data, Software & Consumer Trust
It’s becoming relatively common that big businesses are using data and software in a way that could undermine their customers trust. And not just in ad tracking and tedious interruptive ads.
When a hugely trusted brand like VW fiddles a system using tech – as a friend so elegantly puts it they are the Lance Armstrong of car brands - it undermines consumer trust. When companies exploit the inertia of their ‘loyal’ customers by charging them more than charge new customers they undermine trust.
When brands retarget their customers with that pair of shoes they looked at, or that flight they searched, they undermine trust.(In our research consumers are horrified when they have retargeting explained to them) And many consumers think airlines gouge prices by monitoring your IP address – which seems not to be true)
The point of this, is our belief in the Missing Metric – if there was a simple way to measure how much you had pissed off customers many of these tactics would cease – business would see the ROI wasn’t quite as good as they thought.
And the reason this is so important to Fix readers is that people do now have a simple tool to express their distaste on digital ads – AdBlockers.
Whilst in the short term we can see the logic of refusing to show content to people with AdBlockers, in the longer term we need to step up and make advertising better.
We need to make ads that people find useful and even entertaining. A big part of that is using data in smarter ways – so people see ads that are relevant to them; advertising has always treated people as strangers and shouted general messages at them. We don’t need to do that any longer, so we should start talking to the right people about the right things.
And we need to do it faster. We have pointed out how Turn show the adtech process takes around a third of a second – but Nasdaq makes a trade 200 times faster. What do we need to do to make our processes so fast they don’t disrupt the user experience?
With new possibilities like Apples Peeking and Popping and Facebooks 360 degree video we can imagine new engaging formats that get our message across. So lets stop buying ridiculously small mobile banners and annoying pop ups. Lets use the new tools to make magic again.
ITV is 60 years old this week and research showed peoples favorite TV ads – whilst it’s hard to image in a top 10 banner ads there are some great digital campaigns; who is going to produce the next Hire?
We’ll get into some of these issues at our Programmatic Salon on October 19 – if you want to see tech employed to make advertising better and more effective, come along and join the debate.
Facebook ads
Last week we talked about a key manifestation of the Facebook Walled garden as being a reluctance to let their users data be used by third parties. Essentially they are avoiding exploiting the trust we talk about above. This is a good look at how this policy is being extended to lots of third party apps. Whilst all of this data sharing has been approved by users when linking apps with Facebook, we wonder how many people really understand that app x can see all your likes and comments?
Protecting your users data  - and experience  - seems a smart move to protect the trust of your user. And if you can better monetise by doing the right thing, that’s a good business model.
Facebook have been active this week telling the story of how their ad product has evolved with Boz – the man behind much of their product development  - explaining the journey behind their ad product. And this article looks at the Vickrey-Clarke-Groves auctionwhich is the system behind the ads and how it reduces the amount of money Facebook could make, by prioritizing the user experience.
And Boz also spoke at a US event this week on their plans to monetise Messenger by enabling users to talk with brands. At a Financial Services breakfast this week there was lots of talk about which startups are disrupting Banks, but we feel the big changes will come when Facebook ramp up payments. Being a conduit between businesses and their customers is a great context for payments.
The latest stats on Instagram show they now have 400m users  - up from the 300m they announced just 9 months ago.
Deterministic & Probablistic. Optimistic?
For those outside the walled garden the question is how to recognise people – especially across devices – as this allows for targeted and hopefully relevant ads as well as the ability to cap frequency and avoid annoying people. There are two options for tracking;
Deterministic is where someone is signed in – essentially GAFA & the Mobile operators
Probabilistic is all about aggregating info on ads served across devices and using statistical models to infer who is using which device. In this good explanation we see that Tapad collects 250 billion data points each month.
Now obviously probabilistic is less accurate but it’s the only option for most sites and publishers, as Facebook and Google are determined to keep their deterministic data to themselves. This article looks at the main players and their take on the industry. Given the importance of this data, we are probably going to see some consolidation and adserving pioneer FlashTalking bought one of the smaller players Device9
But these tools are part of the ad tracking that slows down the user experience and as they may well be vulnerable to adblockers which block tracking scripts as well as ads, how secure is their future? Given that many brands  - and certainly most agencies - don’t like a world where they have little alternative to Facebook and Google, they will find some traction.
But have GAFA already won?
The new Mobile App report from Comscore shows mobile is now 2 out of every 3 minutes spent on digital and this time is dominated by mobile apps; 87% of mobile time is in apps and just 13% in browser. It also shows that most people have moved apps to their homescreen, and the vast majority of people have their most used apps on their homescreen. And 80% of time spent on apps are spent with their top 3 apps. Given how Facebook and Google dominate the most used apps you could argue that spending time advertising on anything else in mobile isn’t a good use of your time.
We’re not there yet – and we can still see value in using smart formats to reach discreet audiences across both the mobile web and apps. Especially as we see app usage sitting in two buckets – Same & Different. Whist we all use a handful of the same GAFA apps we all have another set that is different to everyone else and pretty unique to us – the apps that define our interests and life. So ours are football, music and design – someone else’s may be about kids or cars. This is fertile territory for well executed advertising campaigns.
But if we don’t sort ad fraud and ad blocking it looks like a bleak future for those that choose to stay out of the GAFA orbit. Washington Post have announced that all of their stories will be published to Facebook Instant Articles and we can expect them to do the same with Apple News.
Quick Reads
Starbucks are a great example of how to really embrace digital. In the US you can now order and pay for your coffee with mobile. If a coffee shop with minimum wage staff can use digital to reengineer their business why can't you?
Early Bird tickets for our Programmatic Salon end this weekend. The discussions with speakers about the topics they will cover has been fascinating and I think we will have a really stimulating session. If your business is interested in how brands can profit from the amazing possibilities of Programmatic you really have to be there.
Finally – thanks to everyone who shared Fix last week and those who connected on LinkedIn. Even though this did make me smile .
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