Monday, April 30, 2018

The Full Monty: Weathering the Storm – April 30, 2018


The duopoly has us right where they want us; the cost savings of AI; hooking kids early on voice technology; bitcoin is the greatest scam in history; the future of content marketing and where customer experience is headed; why influencer marketing fails; what's behind flagging corporate reputations; Amazon's Prime directive; earnings for the tech giants are all rosy; Netflix wants to get into the theater business; MoviePass may not survive; streaming music companies like the revenue streams; don't get too personal with personalization efforts; what you need to know about GDPR; books, books and more books; the podcast of the week  and more in Weathering the Storm edition of The Full Monty from Brain+Trust Partners for the week of April 30, 2018.



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Top Stories

Amid all of the recent uproar of data privacy issues among a number of companies, the outrage did nothing to stop the forward motion of Big Tech. Timing, incentives, and lack of competition all play a part in explaining this unstoppable force.

When Facebook and Alphabet (among others) reported their Q1 earnings last week, investors cheered. Facebook beat Wall Street estimates of $11.41 billion by reporting $11.97 billion in revenue, and $1.69 earnings-per-share, compared to the $1.35 estimate. Google's parent company Alphabet also outperformed with revenue of $31.15 billion versus the expected $30.29 billion, and an EPS of $13.33, compared to the estimate of $9.28. Solid performance for an industry that was under fire for privacy and data issues.

Why is that?

Timing may be a factor. With Facebook getting called out more than halfway through the quarter, and Mark Zuckerberg making his appearance before Congress in the final weeks of the quarter, there was little time for advertisers to make any drastic changes to their advertising spend. We should keep an eye on how they perform in the next quarter, as we'll be able to see if there's truly been an impact. We anticipate a very small blip in Q2 as things begin to normalize, but it won't stop these juggernauts.

One of the other reasons is that financial markets have given Facebook no incentive to care about users’ privacy. As we saw this quarter and have witnessed in many previous quarters, investors continue to reward Big Tech companies whose business models rely on targeted advertising. To investors, these companies are seen as innovators in what is becoming known as surveillance capitalism. In the ad tech business model, it's business first, users second.

Not to mention that there really aren't any alternatives to advertising on Facebook and Google (although Amazon is making a go of it). The duopoly accounts for 63 percent of US digital advertising revenue, and given than they control so much traffic and attention, it's difficult for advertisers to go elsewhere. Combine that with the coming GDPR regulations in Europe that will require brands to ask for permission for users' data, and Facebook and Google may even strengthen their positions.



The 2018 Corporate Accountability Index evaluated the 22 most powerful tech companies on their disclosed commitments and policies affecting freedom of expression and privacy. Many are falling short, having made meager progress over last year. That may change with GDPR, but there doesn't seem to be a solid push for this across the industry.

So it's clear that brands need to step up and own and control their own data, which of course means that they'll have a more direct relationship with customers. There's only one issue with that: brands have spent the last decade or more outsourcing their digital and social efforts to platforms and agencies to do the work on their behalf. The results? Brands simply aren't ready for modern-day marketing.

And so here we are...




Artificial Intelligence / Autonomous

The latest in AI, machine learning, bots, and blockchain, mobility, and autonomous everything.

Aʀᴛɪꜰɪᴄɪᴀʟ Iɴᴛᴇʟʟɪɢᴇɴᴄᴇ / Mᴀᴄʜɪɴᴇ Lᴇᴀʀɴɪɴɢ


Bʟᴏᴄᴋᴄʜᴀɪɴ

Aᴜᴛᴏɴᴏᴍᴏᴜs / Mᴏʙɪʟɪᴛʏ

 


Communications / Marketing / Business Strategy

Industry developments and trends, including advertising & marketing, journalism, customer experience, content, and influencer relations.

Sᴛʀᴀᴛᴇɢʏ / Mᴀʀᴋᴇᴛɪɴɢ / Cᴏɴᴛᴇɴᴛ

Jᴏᴜʀɴᴀʟɪsᴍ / Cᴏᴍᴍᴜɴɪᴄᴀᴛɪᴏɴs / Rᴇᴘᴜᴛᴀᴛɪᴏɴ

  • US corporate reputations are in decline. The Reputation Institute attributes these declines to a growing belief that companies focus on profits over people. In other words, lack of authenticity. Or perhaps they're simply being transparent about their priorities.
  • We're in an age of information overload. That doesn't mean that we can't be more well-informed about our messaging. One way to forge ahead is to simply look at human behavior as a guide.
  • Having a creative brand personality can boost your PR efforts


Retail Apocalypse

Humans are a transactional species, and the practice — if not the very notion of what retail is  is undergoing a historical metamorphosis. 


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Platforms 

News to know about relevant social, virtual, and augmented reality platforms that may affect your business.

Tᴡɪᴛᴛᴇʀ

Fᴀᴄᴇʙᴏᴏᴋ / Iɴsᴛᴀɢʀᴀᴍ / WʜᴀᴛsAᴘᴘ

Aʟᴘʜᴀʙᴇᴛ / Gᴏᴏɢʟᴇ / YᴏᴜTᴜʙᴇ

Sɴᴀᴘ / Sɴᴀᴘᴄʜᴀᴛ

Oᴛʜᴇʀ

  • Digg was bought by a company called BuySellAds. Goodbye, Digg. It was nice knowing you.
  • Flipboard launched a new Technology section. It should appeal to you if you read this newsletter regularly.



Media

The latest in the world of streaming video, audio, and the advertising, pricing and bundling models related to them.

Vɪᴅᴇᴏ

Aᴜᴅɪᴏ

  • Spotify announced a new version of its free app, reflecting the company’s belief that creating a better user experience for unpaid subscribers will result in more paid subscribers.
  • Google Play Music will be replaced by YouTube's upcoming music streaming service, with Play Music users forced to use the new service by the end of 2018.
  • Apple Podcasts topped 50 billion all-time downloads and streams. What's more impressive is that in 2017, it notched 13.7 billion episode downloads and streams. That's quite a jump.
  • Revenues are surging for streaming music providers.
  • Program of the Week: Our pick this week is The Moment with Brian Koppelman.  Interviews about the pivotal moments that fueled fascinating creative careers. I've every interview to be fascinating, and I think you will too. Thanks to Collin Kromke for the suggestion. Do you have a program to recommend? Add yours to our Google Sheet: smonty.co/yourpodcasts.  
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Privacy / Security / Regulatory 

Business disruptions in the legal, regulatory, and computer security fields, from hacking to the on-demand economy and more.

Pʀɪᴠᴀᴄʏ / Sᴇᴄᴜʀɪᴛʏ / Hᴀᴄᴋɪɴɢ

    Rᴇɢᴜʟᴀᴛᴏʀʏ / Oɴ-Dᴇᴍᴀɴᴅ Eᴄᴏɴᴏᴍʏ



    Measurement / Analytics / Data

    The future is not in plastics, but in data. Those who know how to measure and analyze it will rule the world.



    Mental Nourishment

    Other links to help you reflect, improve, or simply learn something new.




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    Top image credit: Bell Rock Light House by JMW Turner, 1819 (public domain)

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