Fix insider- Sept 29
Creativity & Effectiveness
I get accused of banging on about creativity but it still feels like the missing ingredient in the multi billion dollar digital ad market.
We know it’s a huge factor in the effectiveness of any ad – circa 70% – yet most of the energy is devoted to tweaking the elements of the ad, to improve performance on walled garden metrics.
Everywhere I look I see great content from smart publishers besmirched by mean little programmatic banners floating in the middle of the page – when we all know they could easily be replaced by big rich powerful creative. The economics get changed as well as the aesthetics – people will pay more for bigger rich ads.
A new study from effectiveness czar Peter Field looks at how dull ads are less effective. He compares rational ads with fame ads ( emotional ads that successfully inspire people to share or talk about them). He blames this on performance ads, which seems a little unfair.
To me this is about the dearth of creativity in digital – can you think of many digital ads that are emotional ads that successfully inspire people to share or talk about them? No? Me neither.
The Big Idea in Advertising Isn’t Dead. It’s Just Better Informed say Adweek. But the tyranny of the big idea led to digital being the place for matching luggage – with cut downs cut and pasted into IAB banners and buttons.
Why do we put up with dull digital ads? Who is going to change this? Why not you and me?
What’s that old quote? All it takes for evil to prosper is good men to do nothing.
Tiktok
Whilst TikTok is forecast to pass Facebook in terms of user minutes by 2025, it has a way to go on ad revenue
By 2025, Facebook will bring in $1.02 per person per hour while TikTok will bring in $0.19.
Watching the BBC interview with Elon he mentioned the concept of unregretted minutes and that does seem a possible achilles heel for TikTok
“I’ve heard like a lot of people say, ‘Hey, I spent two hours on TikTok but I regret those two hours,’ ” Mr. Musk told users in December. “The thing we’d want to optimize for is unregretted true human user minutes.”
Whether X can achieve that objective is questionable but it does seem a noble aim for any content platform.
Within the hosepipe of content we see more TV clips being shown and the Drum go deep on this emerging behaviour – as Rolling Stone looks at how TikTok brought back Ugly Betty
The appetite for short form content was a big topic at last weeks Royal Television Society event;
“In Britain, consumers feel anxious about video overload,” said Alex Mahon, chief executive of Channel 4, in a speech at the event in Cambridge on Wednesday. “We are in a global-versus-local fight, as YouTube and [US streaming services] are able to deploy so much content.
Mahon said that while older viewers turn to short-form video for a quarter of viewing, among younger viewers such services account for 45% of all consumption.
“We must urgently recognise that those of us who are UK public service broadcasters (PSB) are sitting on a generational timebomb,” she said. “Young people have a weaker affinity for – and recognition of – the PSB brands. We can’t expect them to happen upon [our content] when there is simply too much to watch. We are fighting for our business lives.”
But is there a clue to fighting back here? Can clips on social drive audience for the real (full) thing on TV?
Could TV content enjoy a similar effect to #BookTok? The Economist cover how TikTok is changing how books are discovered, recommended and sold. And Bytedance see a way to profit from this by launching a publishing division.
The FT have an insightful look at Why Linda Yaccarino took on the wildest job in Silicon Valley
And in the latest Good TikTok Creative we looked at Uber ads.
NewTV
We speculated that Amazon is hungry for more inventory and we have seen deals announced with Pinterest, Buzzfeed and others. Now they are making the logical step of adding ads to Prime Video – with the option of paying $2.99 more to avoid them.
To continue investing in compelling content and keep increasing that investment over a long period of time, starting in early 2024, Prime Video shows and movies will include limited advertisements. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers.
It’s logical because most competitors have introduced ad supported packages, but Prime is different. Millions of people pay £95 a year for lots of benefits other than media and entertainment.
Brian Weiser makes the good point that many Amazon Prime customers may choose to pay to avoid ads
In other words, perhaps by the end of 2024 only a quarter of Prime Video subscribers might pay up for the ad-free upgrade, but I bet these will be the heaviest consumers of the service, such that substantially more than a quarter of viewing will be ad-free.
So Amazon won’t benefit from a big increase in inventory – but their hunger could lead to more investment in Sports rights – do they go bigger with the Premier League? And the Freevee offer could do with some attention – can they become a significant player in FAST?
Amazon is causing some intrigue in French football – the boss of Vivendi-owned Canal+ ( who showed top level French football for years) accuses the French equivalent of the Premier League of a lack of transparency. He says their “sole objective” of the French governing body for major league football “was to sideline Canal+ in favour of Amazon”
The next big challenge for Bob Iger is negotiating the right price for Hulu; the uncomfortable partnership with Comcast is coming to an end and Disney wants to take full ownership. The deal specifies either side could initiate a sale or purchase of all of Hulu from January 2024 at a minimum equity valuation of $27.5bn
So Iger is looking at $9bn to take full ownership of the channel delivering hits like Bear and Only Murders in the Building. But this run of successes has emboldened Comcast who see that value as significantly more;
How much could Hulu be worth? Disney’s streaming services could bring in around $22bn in revenue this year. Hulu probably accounts for about a third of that amount. Its average monthly revenue per paid subscriber is about twice that for Disney+. Using Netflix’s current sales multiple of around 5 times that implies a $33bn valuation for Hulu.
Streaming will transform video games just like Netflix changed TV, says Ubisoft – FT
Germany’s ProSieben deepens ties with Berlusconi media empire | Financial Times
Lachlan Murdoch: now the leading man in a long-running family drama – FT
Merchant
Ecommerce manager quick commerce budweiser
I saw this chart from the Grocery Shop event – Estimating the full value of digital influence for CPGs – showing online penetration is typically in the mid to high teens
A while back we mentioned how our friends at ASOS were suffering huge losses due to a relatively small number of delinquent customers overusing returns and taking advantage of offers. In their latest results they talk of reduced marketing and limited BNPL for the least profitable customers – which seems to have been very effective.
DeepFake ecommerce influencers in China are quite frightening – but seem to be quite effective.
The news that Aldi are launching a pizza delivery business confirms the possibilities around fast last mile. When does the divide between takeaway food delivery and grocery dissolve? Being able to add drinks and sweets to a Pizza delivery feels like the obvious next step.
Cynics question the importance of this new avenue but smart brands get it – Budweisr is hiring an eCommerce Manager for Quick Commerce
Shopify Audiences Adds Criteo, Its First Open Web Ads Partner | AdExchanger
Underage gig workers in Brazil outsmart facial recognition – Rest of World
AI
The tectonic plates of AI are still shifting. Essentially the power of AI is dependent on the amount of compute – so making this a game for GAFA. In the short term we do see other firms making progress but most are looking for partnerships with a big player. See Microsoft and OpenAI
The investment by Amazon in AI start up Anthropic makes this point Amazon will invest up to $4bn and Anthropic will use the Amazon Cloud – and prioritise Amazon chips, helping position them as credible alternatives to NVidia. As ChatGPT now allows chatting aloud as an input and output I see Amazon expertise in voice with Alexa as a key part of the jigsaw.
If voice is key does that hand an advantage to those with hardware – Apple, Google and Android and Amazon with Alexa? Could that explain why OpenAI is talking to Jony Ive about a hardware device – surely some kind of phone.
News that ChatGPT can now browse the internet and hence access more up to date info – means the previous cut off date of September 2021 is no longer a limit.
Around the big moves we see more use cases – Microsoft working with Snap on sponsored links on the MyAI chatbot, YouTube launching AI tools that help creators and Meta is launching artificial intelligence-driven persona chatbots across Instagram, Facebook and WhatsApp
NVidia have hired someone to sell to global agencies – though it sounds more likely they are targeting brands the agencies work with.
An FT journalist has an elegant illustration of how AI acts like predictive text
And as the writers strike ends they have made concessions on AI – Hollywood Studios Can Train AI Models on Writers’ Work Under Tentative Deal. I think actors are less likely to entertain such ideas.
Web3
When one of the top VCs loses dozens of his favourite NFTs in an heist, we need to improve the customer experience and protect users more.
Whilst NFTs may have gone out of fashion in the marketing world they are still interesting fashion brands – Louis Vuitton are on Discord and a metaverse insights startup has raised $8m
Plus+
Since Amazon critic Lina Khan was put in charge of the Federal Trade Commission we have expected a move against Amazon – now they are charged with using monopoly power to hurt consumers, rivals and sellers
The Sisyphean Struggle Of Being An Explainer In 2023 Is Causing Burn-out | The Drum
The Digital Dividend | IAB UK – The Digital Ad industry contributed a total of £129 billion in gross value added (GVA) to the UK economy in 2022 and supported 2 million jobs.
DON’T LET THE KIDS DOWNLOAD TEMU. – is it spyware?
Damon’s Brain – how creative people use tech to deliver big ideas
Co-creating culture: How viewers influence the content they love – YouTube have research showing users are reconsidering discovery as curation – searching for good video can be a pleasure rather than a chore
Meta pays £149m to break lease on central London office building
Return-to-Office Is a $1.3 Trillion Problem Few Have Figured Out
‘Capitalism is dead. Now we have something much worse’: Yanis Varoufakis on extremism, Starmer, and the tyranny of big tech
Lapse – interesting new social camera app
NME: The high-end magazines making a vinyl-style comeback – BBC News
DuckDuckGo founder says Google’s phone and manufacturing partnerships thwart competition – well he would say that wouldn’t he
Snapchat+ hits 5 million subscribers just over a year after launch