newTV
 
I finally finished the deck for my keynote at Vidcon today - with more news, facts and figures and rumours emerging all the time. More support for my theory Netflix will offer an ad funded version of their service. They don’t have quite the incentive that Amazon do (of the double dip - ad revenue and the commission when something is bought as a result of the ad) but they have the content and a free service will drive revenues and help prospective customers sample their service. And, as the IAB research shared above shows people don’t mind ads. As long as they are relevant, useful or enjoyable.

The free Amazon service Freedive on IMDB seems to be getting good reaction. Has anyone tried it? Or bought ads? And the new business models we predict are starting to emerge - NBC are selling ads for the movie Upside and being paid on the basis of tickets bought. Trading on Outcomes is the future of connected TV
 
Apple have set the date for announcing their plans for their streaming service, inviting a set of Hollywood A listers. They will also announce their play in News. Things are speeding up.
 
This is good background on the Vidcon event I am speaking at today. Fortunately I am in the industry track rather than with the YouTubers. If you are there, do come and say hello.
 
News and Context
 
More conversations this week with smart people about context. To me it seems like the best tool for the News business to save itself. Two former colleagues talk good sense about this. Rob Norman explains the issue eloquently - essentially the desire for brand safety means some agencies expressly avoid news. Norm from (News Corp owned) Unruly rehearses some of the strong evidence in favour of a news environment. And we know that context makes ads work harder.
 
But the problem is a little deeper than this. If you pick up any of todays newspapers they are full of ads for brands we all know and love. But go to that papers website and they are unlikely to be there. And on mobile it’s almost certain they are not.
 
So which Media genius decides its right to invest in reaching readers of the Guardian or the Telegraph, but only the ones who buy the paper. And ignores all those readers with expensive iPhones?
 
A lot of this comes down to the siren call of audience based buying - or programmatic. That Telegraph reader can be reached much more cheaply on eBay or Yahoo Mail, so why pay top dollar on the news site? The justification from this approach is explained well here  - cookie bombing is rife.
 
We are convinced that mobile banners are the main culprits here. No one clicks on them, other than by mistake, with fat fingers. You can’t actually read most of them. But with a 30 day view through conversion window any action you take can be attributed to that banner.
 
So that banner you didn’t notice when you were flicking through Yahoo Mail gets the credit and the newspaper funding gap widens. When we have this debate we keep being told that taking mobile banners off the plan can dramatically reduce reach. But it’s not effective reach. If no-one can or does read them, then it’s a poor use of money. And only Voodoo media metrics justify it.
 
As 3rd party cookies get squeezed out we will see smarter media planning and buying, that measures what real people do. Still employing the benefits of automation, but with ways of valuing context. That’s our approach..
 
There are lots of smart people in news trying to find new models. Patch in the US is an interesting hyper local approach and the Cairncross review is well worth reading. And the fact the Government plan to look at the ad business suggests change may be in the air.
 
(one more thing - when looking for the link to the Cairncross Review I found this long and detailed report into the online ad market commissioned by The Department of Digital, Culture, Media & Sport (PDF) to provide an independent analysis of the structure of the online advertising sector; the movement of data, content and money through the online advertising value chain; and potential harms that can arise from online advertising It is 70 pages plus so i have yet to read it, but surprised there has been no coverage  - or have I missed it?)
 
China
 
The Wall Street Journal gets into the internet divide between the US and China. It might now be all about Huawai, ZTE and infrastructure, but i think when someone notices that most US teens are spending all their time on Chinese apps like TikTok and Fortnite, there may be a fuss.
 
As they don’t operate in China, Facebook have a third party selling ads to Chinese businesses.
 
And Chinese payment app Alipay is now accepted in 7000 Walgreen stores across the US. Same thing happened in the UK - most Boots stores employ someone who speaks Mandarin because Chinese tourists buy huge amounts of baby products, as they are fearful of fakes in China. And, like all the smart luxury brands, they take Union Pay; the other big Chinese payments firm.
 
Amazon
 
Acquiring eero gives Amazon more control within a customers home through their Mesh WiFI, furthering their smart home ambitions. Controlling the connectivity and the way people command their devices (through Alexa) gives them a lot of power.
 
And another new vertical for Amazon - private label cosmetics. The burgeoning DTC market in this space ( The Ordinary, Beauty Pie etc) makes a new entrant seem more credible.
 
As well as Private labels and all the big brands that Amazon work with, there is a third leg to the retail business - the mom and pop, side hustlers who use Amazon as a marketplace for whatever they think will sell. This Retail Arbitrage is growing in popularity
 
Delivery
 
We think that Uber and Amazon are best positioned to win the battle for food delivery as they can better maximise utilisation of their workforce, compared to their more focused rivals. This piece looks at the Uber play in food delivery in some detail.
 
Early players like Just Eat are still keen competitors but investors are pushing for consolidation. As delivery becomes normalised - the streets of London are full of delivery riders - people know more about the downsides of the industry. This week we heard people talk about squalid Dark Kitchens in run down locations, surrounded by waiting riders and the ways shops get around poor hygiene ratings. To really win, someone needs to own food quality.
 
Vision
 
Whilst Voice gets all the attention the ability of the smartphone camera is developing fast. Benedict Evans has a good piece on how Vision is progressing. And the head of Google Lens talks about their latest innovations. This is really interesting space but just wait until it  gets to glasses.
 
Quick Reads
 
Finishing up a deck on Voice and Audio for a Swedish trip and this video interview with Daniel Ek from Spotify is very interesting. So too is Stratechery going deep on the advantages of podcasts for Spotify  - it’s about owning IP
 
Finally had time to pull together a brief Retail Safari on New York. All about Brand Cathedrals and First Party data.
 
This is an interesting but pretty techy look at how 1st party data can be used as 2nd party data.
 
Building on the Fortnite story from last week, take a look at the World Championship of League of Legends opening ceremony - and the crowds at the live event in South Korea This video has almost 4 million views - and a big brand is getting involved, No word on whether Mastercard used their new sonic branding. Gaming is much bigger than most people imagine and a huge opportunity for smart brands.
 
Instagram extend their shopability to charities with a donation sticker.
 
As part of the Fox acquisition Disney get an interesting adtech firm
 
Reddit is a much misunderstood part of digital - it has a huge audience (330m Monthly Active Users) but little traction with advertisers. This is a good summary. They are raising more money (with a lot coming from Tencent) so an enhanced ad offering is likely
 
A great article from another former colleague Rory Sutherland and his cri de cœur for Advertising is a must read. Combining great ad thinking with the reach, engagement and versatility of digital is such a great opportunity. What’s everyone waiting for?
 
Finally..  In our Retail Safari we saw a couple of Amazon retail concepts but there is no Go in New York so we haven’t yet experienced check out free shopping. But Walmart are cancelling their experiment as they saw too much theft. Their system doesn’t seem quite as advanced as Amazon but smart West Coast ideas can founder when they meet real people. None of the Chinese bike firms expected Mancs to throw their bikes in the Canal. And if the British public is defrauding supermarkets by pretending Avocados are carrots on self service checkouts they can probably hack a cashier less store.
 
Much of the tech world depends on outsourcing the work to us, the customer. Banks use to employ cashiers to sort your banking, now we do it. Travel used to be done by travel agents. And supermarkets used to have nice old ladies working the tills. Now we do it and they have shed these redundant workers. When it is easier and better, we are happy with this, but if it seems like we are just helping a firm boost their profits, maybe we are less interested?