Mobile Fix: How the tech giants are impacting the market
As Google, Apple, Facebook and Amazon all report earnings, Simon Andrews, founder of Addictive!, takes a look at how the tech giants are shaping the market – and what marketers need to watch out for.
It’s that time again. The financial results for Q1 are out for Google, Apple and Facebook. Google was a few days ago and despite a 19% year in year increase in revenue the results were seen as a disappointment. Why? Because whilst paid clicks were up by 26%, the average cost per click fell by 9%. This is clearly a mobile factor and until brands can see mobile conversions are as good as desktop, the value of a mobile click remains in question.
Better attribution of transactions that cross multiple screens is a focus for the whole industry. But until brands have sites that work as well on mobile as they do on desktop, the potential of search is reduced.
It is worth listening to Nikesh Arora talk about the four sectors of Google’s business on the earnings call. One topic pulled out was how Super Bowl advertisers nearly all used YouTube to extend the reach and life of their TV ads.
But when asked about mobile pricing, Nikesh reiterates his view that in the medium to long term mobile pricing will be better – and talks through the reasons why.
Facebook had no such problems – their success with mobile continues. The two issues that plagued them at the IPO – where would revenue growth come from and how would they deal with mobile – are both now non-issues.
With revenue up by 72% and user numbers growing in all regions – and mobile grew to be 59% of all ad revenue – they are being lauded as a big success story.
They look likely to maintain growth – and the pressure on Google – with their own ad network seemingly imminent.
An interview with Zuckerberg a few days before the results is worth reading to get an idea of the issues he is focusing on; innovation and privacy feature heavily.
And this interview with the WhatsApp CEO is worth a look too – 500 million active users each day and 700 million photos shared each day.
Apple
Whilst Google and Facebook both talked up their plans for the future, Apple did nothing more than share their latest figures. The figures were good enough though.
Increased iPhone sales surprised everyone – and success in China and Japan seems to have been a big factor. More worrying was a 16% fall in iPad sales, which no one seems to understand. We are going to look at this more next week.
Couple of bits of speculation that relate to Apple;
As we have been saying for ages we expect Apple to switch the default search in Safari from Google at some point – they can’t be happy at giving that amount of data and insight to their key competitor. Seemingly Yahoo want the deal and are pitching hard. Given that the Yahoo search product is essentially Bing we don’t expect Bing to let this go. Danny Sullivan doesn’t think a Yahoo deal is likely either.
But we now advise all our clients to pay more attention to BING SEO – especially on mobile.
And Nike this week downsized their Fuelband team, whilst denying they were closing the programme down. They never did do an Android app so we stopped using the Fuelband as without the app it’s just not that useful.
We also found that apps like Moves (just bought by Facebook) do the job of the wearable/peripheral equally well. Should we expect Nike to have their fitness app baked in to the new Apple Health everyone expects with the next iPhone?
Amazon
The Amazon results are out and they are pretty much right on the estimates – so no real news. But this pre-results speculation from an analyst shows the scale of the change Amazon is going through;
Though desktop page views at Amazon.com declined by about 9% in the first quarter compared to a year earlier, mobile page views increased by more than 50%, RBC Capital said.
Mobile Advertising
We see the digital advertising world separating into two states; those players that have rich data on their users (GAFA plus Twitter are clearly in the lead here) and those who have rich data they can apply to raw inventory bought from media owners (The Agency RTBs and some of the ad networks).
Mobile network operators have long been considered as possible players but despite lots of talk there has not been much action. It is changing; Weve have got some good traction on the UK and now Telefonica have made an aggressive statement of intent with the launch of Axonix.
This new company is jointly funded by Telefonica and Private Equity firm Blackstone and is built around the tech from Mobclix – a fast growing mobile ad firm that ran out of money after Velti bought them.
With the cream of the Telefonica Digital ad team running the business and a tech platform that enjoyed a good reputation, this looks like the first credible ad play from a MNO. If they can leverage the rich data they hold on over 300 million customers, they could have an impact on GAFA et al.
This move by Telefonica highlights the various false starts by US Operators – and most of the others – although AT&T are investing in an interesting deal around ad supported video, working with a former head of News Corp. This sort of deal demonstrates the issues around net neutrality – will AT&T customers who want to watch YouTube or Netflix get as good a service as those who want to watch the AT&T service?
The Home Screen battle
If you want to be a player on mobile advertising you need rich data. One way to get that is through knowing what’s on someone’s home-screen. Flurry have evolved their research business into a good ad network and become probably the only non GAFA firm with insight into the apps people have.
But with the new crop of home-screen apps, this data is becoming more widely available. We mentioned Yahoo buying Aviate a few weeks back and then Twitter bought Cover – and Facebook arguably kicked off the trend with Home. Newer players like EverythingMe are now emerging.
All these apps – and their Chinese equivalents – take over the home screen and intend to serve up the right apps at the right time. The ambition is to emulate the Google Now type contextual service and these apps want access to all the data on the phone – diary, contacts and email. So privacy is an issue. The FT have a good round up here.
This is an edited and abridged version of Mobile Fix – click here to read the full article on Addictive!’s website