Mobile Fix: Google groceries?

In this week’s round-up of all things mobile, Simon Andrews, founder of Addictive!, looks at how Google is taking on Amazon in the grocery race, and the growing threat from China.

One of the many things that came out of Google I/O the other week was Material Design which – just like Swift from the Apple WWDC – didn’t seem that big a deal at the time. But on reflection these are significant changes to how digital experiences are designed and built. This is a deep dive into the implications of Material Design.

Just as the web is evolving from a text medium to a visual one, so will apps move from flat pages to something more like motion graphics.

And if you want more on where Google is going, watch this long interview with Larry & Sergey. Lots about the benefits of long-term thinking versus the short horizon most companies have and some thoughts on how society will have to change as robots take over more and more jobs.

In one of our talks on GAFA & Vertical Stacks this week we had a great new example of the intense competition in GAFA – Google are taking on Amazon in the grocery home delivery market.

Why would Google get into that space? Simple. Ads and delivery.

On the ads they know many people go directly to Amazon when looking for a product, which impacts their search sales. So the more product they sell, the more search revenue they are likely to get.

But more importantly, grocery brands are amongst the biggest spenders on TV and if Google can link advertising with actual sales – measured by their grocery deliveries – they open up that market. Imagine how powerful the sales case for YouTube is when you can show the effect on sales through people seeing different frequency or sequence of ads.

And delivery is going to be key in e-commerce. Having vans driving around making grocery deliveries is a convenient tool for Google to deliver other goods – as is Uber – and we can expect driverless cars to be an ingredient too.

But Google isn’t neglecting the day job and Jason Spero talks here about their latest mobile ad innovations.

Samsung & China

Talking about GAFA, we were asked if we think anyone can threaten their dominance. We have always felt the answer was probably no, as the other big players (Microsoft, eBay, Twitter, etc) tend to have a narrower focus.

But we are rethinking this as we watch the Chinese BAT (Baidu, Alibaba & Tencent) grow. They are only really active in China right now, but as the latest Samsung financial results show, China is a big enough market to impact global performance.

One of the biggest factors in Samsung troubles is Xiaomi – the Chinese device manufacturer. New data from Flurry shows that their user base is very mobile savvy – spending 8% more time using apps than iPhone users in China.

Xiaomi are spreading out across Asia – with a launch in India imminent – and if they continue to attract the most mobile savvy users they represent a significant threat to Apple as well as Samsung.

As and when BAT follow and start to look outside China they could threaten the GAFA dominance – especially in emerging markets. The size of BAT is already impressive – but bear in mind that vast majority of their revenue is from China where only around an third of the population have internet access. When the whole country catches up with big cities and has levels similar to the West these three companies could be two or three times bigger.

newTV – the 7% switch

The Sunday Times chose a new TV show called Extant for its pick of the day yesterday. And if you have been watching the World Cup you will have seen lots of ads for it. A SciFi thriller; it looks like the latest attempt to capture viewers who liked Lost and X-Files.

The unusual thing is that it isn’t on ITV or the BBC. Or one of the SKY channels. It’s on Amazon Prime.

Most people accept our premise that TV is changing and the newTV ecology is being watched by most, but with the traditional TV industry in good health, many feel there is little to worry about.

This deck (by the guy behind those scary LUMA charts that some just how complicated the digital world is) should be a must read for anyone involved in TV or advertising.

If you don’t have the time to read the whole thing look at chart 65. This makes the point any media planner knows – the last few points of a TV spend are inefficient as they just deliver frequency rather than extra reach. Smart planners are always looking for the elusive light viewer and already that is driving much of the investment in online video.

But this deck makes the point that taking the ‘inefficient’ 7% and switching it to digital would double the digital market. And it wouldn’t be that good for traditional TV businesses margins.

Of course the digital experience needs to improve – right now there are too many ads and the balance needs to be improved – this research says there is one minute of advertising for every two minutes of content.

There is a lot of money in flux – and those that make the moves quicker and smarter than the other brands in their sector can get real competitive advantage.

This is an edited and abridged version of Mobile Fix – click here to read the full article on Addictive!’s website

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