Mobile Fix / September 27

SimonBigPicture
Sep 27 · 8 min read

Hardware

We talked last week about hardware being back in fashion in light of the Portal launch from Facebook. The major change came with Amazon needing distribution for Alexa — and lacking the advantages of ‘controlling’ IoS and Android smartphones. Over 800m smart home devices will ship this year with Video devices (Amazon Fire and Chromecast ect) and Smart speakers the majority.

This week we see a lot more hardware action; much around Smart Glasses. Amazon are selling (invitation only for now) Alexa enabled glasses — similar to the Bose glasses we covered recently. And they are developing Earbuds that feature Alexa but also have some fitness tracking capabilities (This is a try out of the Alexa frames — worth a look)

It was reported that Facebook are working with sunglasses giant Luxxotica but our contacts there have told us that everyone with plans for Glasses talks with them. But as part of their AR announcements Facebook made it clear that they will launch Glasses — at some point. First they want to map the world in 3D so the glasses have AR content to work with. And at the same event they announced the acquisition of CRTL Labs — a wristband that converts your hand movements into ways to control your devices. Here is more on the firm and rumours the price was between $500m and $1bn. And a Canadian firm North has a smart glass product on sale already

For Facebook and Amazon not owning a smartphone OS — though both have tried in the past — is a significant disadvantage versus Apple and Google, so to see them pioneering hardware is no surprise. These devices will all need a smartphone app to make them work. But Google and Apple are not going to give ground here; Chromecast and Google Home have been big successes for Google and their Glasses are in (niche) market already. New patents from Apple support the longstanding rumours that they plan Glasses too — and mentions of a device called Garta in IoS 13 code suggests it may be imminent.

AR

The building block of these hardware experiences is augmented reality. It’s been around for a while but now it’s accepted that the smartphone is the engine for this — rather than a games console like oculus

And we are starting to see clever use cases — Pokemon Go and Snap have the highest profile (BCG estimate 80m people in the US use AR each month) but Facebook plan to bring AR ads to the news feed soon

A new outdoor campaign for Trainline captures the potential — scan a QR code and your smartphone turns the 48 sheet into a live departures board — shrinking the customer journey. Advertising that is innovative, useful and, I would imagine, highly effective

Isobar have a good playbook on AR, VR and MR

Snap

Snap are making lots of noise about their Content. If you watched Dead of the Night — their new show that I linked to last week — you will have a sense of their approach. At New York Advertising Week they announced new shows — that I guess will be a key part of their upfront in London next week. Though making claims about a Game of Thrones size audience defines creativity with numbers

The success of their content has been a factor in driving better ad sales, particularly video. But a new RBC study shows three quarters of advertisers doesn’t use Snap and CEO Evan Spiegel admits the young audience profile works against them as Ad Decision makers are unfamiliar with the platform.

Their big challenge is that much of their innovation is available on platforms with bigger reach and the argument for reaching Light IG viewers on Snap hasn’t been supported by much data,But Snap could be getting even with their nemesis as it seems they have been helping regulators investigating Facebook. A journal of the ‘anticompetitive practices’ of Facebook were collected by Snap into a document called Voldemort

DTC

As the DTC space grows exponentially, fortunes are being made selling picks and shovels to the modern day goldminers. Shopify, and to a lesser extent Woo, have exploded in value as their customer base soars — Motley Fool considers how they would fare in a recession and Microsoft are entering the space with a Commerce platform. Press has talked this up as a challenge to Amazon but it feels more likely to compete with Shopify.

Once you have your store up and running there is lots to do to optimise it and this (long) video from CX guru Luke Wroblewski highlights how easy it is to clutter up the shopping experience. Too many people prioritise promos over product, yet the evidence shows real improvement when product is the hero.

These fixes can be like doubling the effectiveness of your ad spend — suddenly a whole bunch of people don’t drop out on your site — and some may even go on to buy. Because the range of skills and knowledge is so wide, increasingly DTC brands don’t go for a classic CMO — and instead hire for digital and data knowledge.

Our friends at the IAB in the UK have a wonderful new initiative looking at DTC from a UK viewpoint. Lots of good research and some very interesting case studies. A must read.

The IAB report defines DTC brands well; Born online and digitally native. But all our conversations with DTC founders soon gets to the question of when and how to go beyond digital marketing. It’s the smart thing to do if done well but too many forget their digital roots and go native. By that I mean they run underground ads yet forget most stations have wifi, so adding a QR code can boost response and give you good tracking. Has anyone ever typed nameofbrand.com/tube into a browser? In the US TV is getting a boost from DTC — hopefully some remember that everyone watching that ad has a smartphone to hand.

newTV

A new report from Barclays — which has a new model for assessing the value of high growth companies — finds Netflix overvalued. To justify the current valuation they need higher revenue per user and lower churn. Both somewhat unlikely given the tsunami of competitors coming their way

New research from Parks Associates shows US consumer spending more on video than a few years ago — largely through subscriptions. Is this really going to increase still more to accommodate the wider choice and the balkanisation of streaming, with popular shows disappearing off to new SVOD services?

And an FT piece argues that many prefer premium content on YouTube Snap and TikTok — that is free.

I am convinced that we will see ad driven business models come back into fashion before too long. Amazon have seen the light and the only way for Netflix to make their numbers add up is an additional, ad funded channel with some of their already paid for content.

Ad revenue is seductive to all players. The original newTV player was Tivo and they are introducing pre roll ads on DVR recordings.

We know that advertising can be better and Sky Adsmart has given us the proof. Their rumoured deal with Channel 4 has now been confirmed and the partnership is wider than just the adtech. Formula One will continue on both channels and C4 box sets will be available to Sky customers. It does beg the question of how C4 plans to work with BritBox if their best content is with Sky?

Fans

If subscriptions have a natural ceiling and advertising is out of favour how can media brands make money? New models of monetising fandom are being imported from China and other Asian markets. Instagram allows some influencers to have Close Friends with a monthly charge paid through Patreon.

YouTube channel the Lion Whisperer has developed deeper connections with some its 1.4m subscribers — by using the new Join button they can get exclusive content loyalty badges next to their name in comments. All for a recurring monthly fee of £4.99.

These experiments will keep growing

AdTech & Privacy

Building on our coverage last week of key news players fighting back, this is more on how the Washington Post plan to use their data and their Zeus adtech to take revenue from Facebook. And the Daily Mail is using IDs to monetise Safari users where 3rd party cookies no longer work

A good event organised by our friends at Rezonence saw the ICO continue their road show warning the industry to take GDPR more seriously because the industry’s initial attempts to comply have come up short. Some concrete suggestions on precisely what needs fixing would be welcome, but everyone is having to work out for themselves what the issues are.

Johnny Ryan and Brave think the whole idea of RTB is — essentially — over. The IAB keep developing their thinking but it’s hard to get a clear idea of what a brand should do.

It could be that with the Browsers stopping cookies from working and the new focus on Privacy from GAFA, the impact of GDPR is muted — the tech now sort of precludes the privacy ‘violations’ that GDPR seeks to stamp out.

Is this behind the significant reorg of the Google ad business, with new Privacy roles at its centre? And does GAFA really care about privacy? A Fix reader shared his detailed analysis asking if Facebook is really concerned about privacy- he is not convinced;

By embracing end-to-end encryption among its increasingly popular messaging apps on the one hand and combining the entire messaging infrastructure of all Facebook Inc. products into a single identity layer, Facebook Inc. would be able to make its break-up less desirable to regulators and apparently address privacy concerns without hurting its ad business and in a way that might stave off secular declines in its market share

Quick reads

Is the iPhone11 launch suffering because people are waiting for 5G?

The history of Flash — the tech that enabled great experiences on the web and a lot of terrible stuff too.

The secret A16Z summit on Crypto

When Netflix tried to sell themselves to Blockbuster — for $50m

Why Amazon Is About to Upend the $70 Billion TV Ad Market

And ads on Amazon work — 11% of product views now come from ads

Amazon hiring retail experts in the UK — new stores coming?

We mentioned Descript last week — the new set of tools for making podcasts and this is someone trying it out. TLDR — it’s very good

LVMH are getting into gaming. As well as creating Virtual items for League of Legends they are making a real world fashion collection.

Why Teens Are Creating Their Own News Outlets on Instagram

A good Twitter thread on Megvil the Chinese AI firm pioneering facial recognition

It’s not just Facial Recognition; how you walk, your heartbeat and even the shape of your bum can be used to track you

A great New Yorker piece on how TikTok holds our attention

But the Guardian reveals TikTonk censors videos that Beijing doesn’t like

Great look at the tech that enables AR — Ultra Wideband and more

Nintendo finally comes to mobile — Mario kart available for a subscription

Tech groups push ‘chat commerce’ to western shoppers

Nike boost earnings through a great digital strategy — digital up 42%

Finally ….James Lovelock on Cyborgs saving the world and other ways to beat climate change

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Thoughts, opinions and pontification from Simon Andrews — newly with MediaKitchen, my latest chapter