Lab Weekly — 10/12/2018
The latest news in Smart Home and beyond
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Lab Originals
Five Things We Learned From Google’s 2018 Hardware Event
On Tuesday, Google unveiled a series of new hardware products at a “Made by Google” event hosted in NYC. Google’s announcements reveal a number of interesting things about the way the search giant approaches mobile and the smart home. Here is a roundup of the five most interesting things we observed from this event.
In case you missed it…
Digital Disruptions Coming To The Food Industry
How established brands are fighting back in the age of connected kitchens.
How Amazon Will Get Alexa Everywhere
Decoding the “Alexa Avalanche” and what brands need to do in response
Has Your Brand Been Augmented Yet?
A deep dive into the brand opportunities & best practices of augmented reality
News Analysis
Facebook Launches Smart Display Portal For Video Calls [link]
As reports from earlier this year suggested, Facebook was planning to launch Portal back in May at its developer conference, but had to push back the launch date due to the privacy concerns and public scrutiny that followed the Cambridge Analytica scandal. Nevertheless, the product has to launch at a certain point, and Facebook seems to think now is the right time. Looking through the product page Facebook set up for Portal, it’s clear that management is concerned with customer pushback regarding privacy concerns that it even included a camera cover that slips over Portal’s front-facing camera. And perhaps in order to circumvent the prevailing disinformation and fake news issue, Portal will not support either the News Feed or Facebook Messenger, further crippling the value proposition of the product. This also means that there is no advertising opportunity available on the Portal at the moment, although marketers could reach consumers via Alexa (and later, Google Assistant) integration that this device supports.
However, Facebook has not fully recovered from the reputational hit it took in terms of consumer trust, as evidenced by the public reactions to the product. As we pointed out in our 2018 Outlook reports, with more and more connected devices starting to infiltrate our homes, only the brands that consumers trust will be granted access into these intimate, personal spaces. And while privacy measures should not be the only concern in evaluating a tech product, it is a very real hurdle that Facebook will need to climb over if they want Portal to take off. Given the deluge of new hardware this month from Apple, Amazon, Microsoft, and Google, Portal is going to have an even harder time standing out.
Related: Liquor brand Diageo is using Amazon Echo and Google Home to dispatch samples [link]; Roku launches $40 Roku Premiere and $50 Premiere+, the latter supports a remote with voice search [link]; Facebook rolls out 3D photos that use AI to simulate depth [link]
Revamped Alexa App Makes It Easier To Manage Your Smart Home [link]
With the release of Facebook Portal and Google Home Hub, not to mention the updated Echo Show that Amazon announced two weeks ago, smart displays seem to be gathering momentum in the smart home space. New video and display ad opportunities would emerge should such smart display products take off. However, compared to smart speakers, smart displays faces several adoption hurdles, such as higher price and limited placement (that would ensure line of sight) in the room, that smart home device makers will need to overcome first. To that end, smartphone screens could be a nice supplement for the smart home place, and Amazon’s revamped Alexa app is the latest example of bringing mobile into the fold of smart home ecosystem for easy access and better user experience.
Related: Amazon introduces APIs to connect smart cameras and doorbells to Echo devices [link]; Walmart demands smart home vendors support Google Home [link]; Roku will soon let you control its devices and Roku TVs with Google Assistant [link]
AT&T Plans HBO-Fronted Streaming Service Bundled With Turner, Warner Bros. Content [link]
With this announcement, AT&T officially enters the ring as a content owner that will command a sizeable portion of the global streaming market. However, pricing could be an issue for wide adoption, as HBO subscription alone is already charging a premium price. WarnerMedia CEO John Stankey has said it will be more expensive than the current HBO over-the-top subscription plan. Like Disney, WarnerMedia is taking a gamble with the decision to forgo some traditional revenue from licensing TV shows and movies to outside buyers in favor of keeping all of that content in-house to make for a compelling subscription-based offering. And launching this direct-to-consumer service would put AT&T in a leading position in the “telecom-giant-turned-content-owner” group, one of the three emerging groups of content owners that will reshape the U.S. media landscape.
Related: Apple reportedly plans to give away original content for free to device owners as part of new digital TV strategy [link]; Walmart’s Vudu plans new shoppable video ad format [link]; Walmart taps MGM to create original shows for its Vudu service [link]; Amazon’s IMDB to announce a new free video service to compete for TV ad dollars [link]; Netflix to buy an eight sound stage production studio in Albuquerque [link]
Snapchat CEO Outlines Priorities For Company In Leaked Memo [link]
Snapchat’s leaked memo shows that CEO Evan Spiegel is looking to change the perceptions of the app being a social media network into “the fastest way to communicate” with friends and family. In recent months, Snapchat’s user growth has been hindered by a poorly received redesign, which Spiegel admitted it being a rush job, as well as competitors like Facebook and Instagram that have copied some of its signature features like Stories.
The biggest takeaway coming out this memo is that Snapchat wants to make it easier for users to communicate with their best friends, implying that Snapchat wants to focus on fostering intimate personal relationships instead of the kind of large networks that include everyone you might know a la Facebook. Whether this approach would work remains to be seen, but it will no doubt impact how brands use the platform as it would cement Snapchat more as an advertiser platform vs a brand-driven community engagement platform.
To that end, Snapchat also launched 12 original series this week. All vertically shot, the dozen of scripted and reality shows will have 6-second-long ad breaks peppered in each episode that average five minutes in length. Spiegel revealed that the 18 existing shows on Snapchat (12 of those are original productions) reach more than 10 million unique viewers per month. However, this content play is equally about Snapchat trying to recreate TV on mobile to capture ad spending as it is about using exclusive content to maintain user engagement, as new episodes will be released daily.
Related: Snapchat announces a slate of original programming for Discover [link]; NBCU launches WatchBack app, which offers users who sample new shows a chance to win rewards [link]; Plex announces Plex Web Shows in beta, which offer unlimited on-demand streaming shows from brands for free [link]
Target Doubles Down Private Labels With $2 Toiletries [link]
As brick-and-mortar retailers look to defend their market share against an aggressive Amazon and rising direct-to-consumer (D2C) brands like Brandless, some are now looking to unique product curations as a key differentiation point to lure customers into their stores, both online or offline. (The fact that Target’s Smartly branded products are priced on the cheaper end also provides a competitive edge.) It’s a strategy that Walmart is also pursuing by acquiring Bonobos last year and building out its own collection of brands. Amazon is also hoping to get more third-party manufacturers to create private label products for its site with a new Accelerator program. Judging by the way the retail renaissance is playing out, we expect to see more retailers investing in private labels as a differentiator to stand out.
Related: How Walmart is building a defense against Amazon with a network of exclusive brands [link]; Walmart plans to acquire plus-sized fashion startup Eloquii for $100 million [link]; Target launch 4th business accelerator Target Incubator aimed at Gen Z entrepreneurs and socially conscious ideas [link]
Stats To Know:
- OTT streaming services have a big churn rate, with an average retention rate of only 41.8% for users after seven days. 67% of OTT app users ‘churn’ in the first two weeks, according to a new report from mobile marketing platform CleverTap provided to Marketing Dive.
- 53% of consumers believe brands can do more to solve social problems than governments, and 64%, of consumers worldwide now purchase from — or boycott — a brand due to its stances on social or political issues, according to findings from the 2018 Edelman Earned Brand study.
- According to eMarketer’s newest forecast, online video ad spending in the U.S. will reach $27.8 billion, taking up one quarter of all U.S. digital advertising in 2018. The forecast predicts that Facebook (and Instagram) will have 24.5% of all US video ad spending this year.
- Alphabet’s self-driving technology division, Waymo, announced that its autonomous vehicles have now driven 10 million miles on public roads. This represents a 100 percent increase on the 5 million-mile milestone it reached back in February.
