Lab Weekly — 10/25/2019
Deep-dive into the vice economy; plus a roundup of the latest news and stats
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Lab Originals
The Future of Vice Economy
The transgressive escapism of vices provides a great draw, and anything that can be considered a “vice” inevitably creates economic opportunities. Recently, capitalizing on the turning tide of marijuana legalization across the States, a new value chain has sprung up around weed and weed-adjacent products. With weed products becoming more accessible than ever, how are other leading sectors of the vice economy trending? In this piece, we will examine the two major categories of vices to get a better sense of the major forces at play and how they may shape the future of vice economy.
In case you missed it…
Four highlights from hardware event in New York City that truly matter for brands — and one thing that Google quietly canceled
The Unfulfilled Potential of the Sharing Economy
The challenges that WeWork and Uber are facing, and what they mean for the future of the sharing economy
Social Gaming and The Future of VR
How Facebook and Fortnite are building the “metaverses” of tomorrow, and what their efforts say about the future of VR and social networks
News Analysis
Verizon To Offer Free Disney+ As Streaming Wars Heat Up [WSJ]
Verizon is giving away Disney+ for free for one year to all of its wireless customers on unlimited data plans and to FiOS and 5G home internet customers, therefore ensuring that Disney+ will secure millions of users at launch. This offer calls to mind the year-long free-trial that Apple is doing with their new upcoming streaming service, which will launch shortly before the official launch of Disney+. So naturally, both companies are making competitive moves to grab consumer attention. Another interesting aspect of this offer is that Verizon currently includes Apple Music as part of some of its Unlimited plans. Adding Disney+ to the mix inadvertently makes Verizon’s unlimited plans a super bundle of sorts, which makes sense strategically for Verizon, as it doesn’t have the kind of content ownership that its main competitors AT&T and Comcast have.
Related: Quibi has partnered with T-Mobile as it prepares for April launch [LA Times]; Twitch starts testing co-viewing feature to allow Prime members to watch Amazon Prime content in sync [Polygon]; Spotify offers a free Google Home Mini to all US Premium subscribers [Engadget]
Snapchat Begins Testing Dynamic Ads That Work Off Brands’ Product Catalogs [AdWeek]
This new dynamic ads product allows Snapchat to tap into the direct-response advertising spending from retailers and D2C brands, the latter of which have been growing their ad spending outside owned social channels but still focus on ad products that allow them to drive direct purchases. According to the latest data from eMarketer, 35% of U.S. internet users said they were most likely to hear about the first D2C brand they purchased from via social media ads. With this move, Snapchat is clearly hoping to match Instagram in terms of conversion-driven ad products and lure some brand advertisers to its own platform.
Related: Snapchat beats earnings expectations in Q3, adding 7M million new users & revenue up 50% [TechCrunch]; NBC extends deal to be the exclusive seller of ads in Apple Stocks and Apple News [Axios]; D2C brands eyes physical retail after establishing online presence [eMarketer]; Facebook starts testing ads in Groups tab [Marketing Land]
Builders Ditch Nest After Google Ties Devices To Digital Assistant [Bloomberg]
Given the long and asynchronous upgrade cycles for major home appliances, pre-build integration remains the best path for smart home platform owners to grab market share. Google Nest was a popular choice with home builders as it used to support a wide range of third-party products, thus allowing for the flexibility and room for customizations. Google’s decision to change Nest’s compatibility and cut off its support for third-party gadgets presumably stems from a desire for deeper Google Assistant integrations and greater control of the overall user experience, but now the plan has clearly backfired, as the company neglected that the open compatibility of Nest products was something that many business customers (the home builders) valued the most.
Related: Food Network’s cooking classes begin on Echo Show and Alexa devices [Engadget]; Google begins testing Assistant movie ticket reservations in Chrome [Engadget]; Netflix show “3%” gets its own voice game on Alexa and Google Assistant [Engadget]; Smart homes are the new real estate upsell [Fox Business]
Square’s New Chatbot Focuses Solely On Reservation Booking [Fast Company]
When chatbots were all the rage a few years back, people expected chatbots to be supercharged by AI and deliver a fully conversational experience. Most of them did not come to be, for the depth of machine learning is far from being able to support the kind of all-purpose chatbot assistants that many wished for. In some ways, this new chatbot from Square is a refreshingly realistic take on chatbots, in that it also serves on function and aims to do it well. It identifies a major pain point in business operations ripe for automated solutions and advances the case for consumer-facing chatbots by scaling back. Until the underlying AI technologies get smart enough, chatbots with limited capabilities are the best bets for brands looking to leverage chatbots to deliver a more convenient user experience.
Related: Square launches stock trading on its popular Cash App [CNBC]; Chatbots can make as many sales as humans [AdWeek]; Study: chatbots lead to 80% sales decline, satisfied customers and fewer employees [Forbes]
Stats To Know:
- Google dominates the search ad market today, but Amazon’s growing ad business is about to take a bite off Google’s revenue share, according to the latest estimates from eMarketer. Overall, the U.S. search ad market will grow nearly 18% to $55.17 billion in 2019, of which Google will take 73.1% share. By 2021, however, Google’s share will drop to 70.5% while Amazon’s share will rise from 12.9% this year to 15.9% in 2021.
- In 2019, Apple Pay will have 30.3 million users in the US, representing 47.3% of proximity mobile payment user, according to the latest data from eMarketer, Following closely behind, the Starbucks app will have 25.2 million users this year, representing 39.4% of proximity mobile payment users.
- U.S. online ad spending reached $57.9 billion, representing a YoY growth of 16.9%, in the first half of 2019, the IAB reported on Monday. However, that was lower than the 23.1% growth reported a year ago.
- Digital music sales are undergoing a sustained revival, which have grown from $14.3B in 2014 to $18.1B in 2018, mainly thanks to paid music streaming services like Spotify and Apple Music, according to data from IFPI. Today, paid and ad-supported streaming together represent almost half of all global recorded music revenue.
