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Apple and Google’s tough new location privacy controls are working

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By Jared Newman.

Spare a thought, if you will, for the digital advertisers who have grown dependent on knowing your exact whereabouts at any instant.

New information shows that the biggest source for all this location data—namely, the smartphones that we carry around everywhere—is drying up as Apple and Google offer stronger, clearer privacy controls on their platforms.

Some recent data points to consider:

  • Since the launch of iOS 13 last fall, the amount of background location data that marketers collect has dropped by 68% according to Location Sciences, a firm that helps marketers analyze location data.
  • Location Sciences also found that foreground data sharing, which occurs only while an app is open, dropped by 24%.
  • A Google spokesman tells Fast Company that when Android users have the option to only share location data when they’re actively using an app, they choose that option about half the time.
  • As Digiday reported last week, apps are now seeing opt-in rates under 50% for collecting location data when they’re not in use, according to Benoit Grouchko, CEO of the ad tech business Teemo.

None of this means that location tracking is going away, but with more people opting out of sharing their precise location with apps, advertisers now have to make do with less accurate information. That in turn could make them rethink overly invasive tracking in the first place.

[Screenshot: Location Sciences]

All about the options

With iOS, users have been able to stop any app from collecting location data in the background since 2017, but Apple gave this feature much more prominence in iOS 13. If an app is gathering location data while it’s not in use, iOS can show a pop-up with an option to cut off access. Apple also added a “just once” option in iOS 13 that requires apps to ask for location permission every time they’re opened.

“As those particular options were made available to users, we do attribute that to the decrease in sharing,” says Jason Smith, Location Sciences’ chief business officer.

[Screenshot: Location Sciences]

Android’s location controls haven’t always been as useful, but the latest Android 10 release plays catchup with a similar “only while in use” setting when apps request location data. Like iOS, Android 10 also alerts users when an existing app collects location data in the background and provides a shortcut to stop the app from doing so.

These tools are becoming available just as we’re becoming more aware of how mobile apps have quietly trafficked users’ location histories. The New York Times, for instance, has reported on how apps like The Weather Channel, GasBuddy, and TheScore have collected detailed location data from users even while their apps aren’t in use, and it has documented how this supposedly anonymous data can pinpoint individuals based on their movements.

How apps will track you next

With Apple and Google providing less ready access to GPS location data, marketers will likely turn to IP addresses for location tracking instead, says Location Sciences’ Smith. Apps and websites can collect this data through the mobile or Wi-Fi network you’re using, and neither iOS nor Android offer any built-in controls to prevent it.

Still, IP addresses are less accurate than the precise GPS coordinates that apps had been collecting previously, which means marketers will have a tougher time tracking your precise whereabouts. In practical terms, that means location-based advertising will probably get a lot dumber in the near term, as marketers lose the ability to determine what store you visited or where you had lunch.

“You have an environment in which advertisers have been paying for—at a premium cost—high-quality, highly accurate GPS data,” Smith says. “They’re now confronted with a phenomenon in which that data is less available.”

[Screenshot: Location Sciences]

Location Sciences’ angle in all of this is to sell tools that help advertisers know what kind of location data they’re purchasing. That way, they don’t waste money on inaccurate information. Other players in the ad tech business, however, are hoping for a more fundamental shift toward privacy.

We’re sort of at the precipice of this educational environment.”

Raman Sidhu, VP of business development for the marketing analytics firm Beemray, says the new tools in iOS and Android—along with new regulations such as Europe’s General Data Protection Regulation and the California Consumer Privacy Act—could be a wake-up call for a complacent industry.

“There are lot of different solutions now that are getting a lot of momentum, which previously wouldn’t have gotten any momentum because there was no reason for the agencies to think about something outside of the box,” Sidhu says.

One of those solutions, of course, could be Beemray, which rejects the idea of following people around and instead uses contextual clues (approximate location data among them) to predict which messages might resonate. As a basic example, someone who’s sitting at a desk in London and reading about travel might see an ad for direct flights to New York. Since the resulting ad wouldn’t be as hyper-targeted as what advertisers are used to, Sidhu expects that brands would have to focus more on production values, or on forging direct relationships with consumers who might provide data more willingly.

“Advertising should get better for consumers, because rather than being followed around with the same ads . . . the ad should be complementary to that user’s moods, moments, mindsets, and emotions,” Sidhu says.

The other possibility is that users will look to further protect their location histories through Virtual Private Networks (VPNs), which can mask the IP addresses on which advertisers are increasingly relying. Google already offers a VPN service for customers of its Google Fi cellular plans, and my colleague Michael Grothaus has called for Apple to build a VPN into iOS. Firefox has been experimenting with VPN service as well, and Amazon’s Eero routers offer VPN service through the Eero Secure+ subscription program. It’s not hard to imagine VPN becoming a standard feature on our phones, computers, and home networks in the future.

Location Sciences’ Smith says that’s one possibility among many as people become more privacy-conscious.

“We’re sort of at the precipice of this educational environment,” he says, “in which people are now becoming aware of what their options are, how those options impact the security that they will receive, and how other third-party companies are being respectful and mindful of those options.”

 

Feature Image Credit: [Photos: Tyler Lastovich; Lorenzo/Pexels]

By Jared Newman

Jared Newman covers apps and technology from his remote Cincinnati outpost. He also writes two newsletters, Cord Cutter Weekly and Advisorator. More

Sourced from Fast Company

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Steve Jobs Used the 30 Percent Rule to Bring Apple Back From the Dead (It’ll Work for You, Too)

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By Justin Bariso

By focusing on the best of the best, Jobs transformed Apple into one of the most valuable companies in the world.

When Steve Jobs returned to Apple in 1997, the company was in dire straits. Once known as a major innovator, it was suffering from severe mismanagement and lack of focus. Apple had built its reputation on simplicity and quality, but it was now working on a plethora of products, many of which were lackluster at best.

Jobs immediately began working to change this. Within a decade, the company would be transformed.

I recently discovered an interview Jobs gave over 20 years ago, just shortly after he’d been rehired by Apple. In it, he reveals one of the secrets that would lead to Apple’s future success:

We examined the future product roadmap … and what we found was that 30 percent of them were incredibly good. And about 70 percent of them were either pretty good, or things that we didn’t really need to be doing. Businesses we didn’t really need to be in. And so, we’ve pared a lot of that back, so we could focus the same amount of original resource even more on what was remaining–and add a few new things in.

So, the resources that we’re investing are equal or greater than we have been, but it’s on fewer things so we’re going to do a better job at them I think.

Jobs’s advice is about more than simple focus–it’s a simple way to apply emotional intelligence into your everyday life.

I like to call it the 30 percent rule.

Why you need the 30 percent rule

We live in an age of distraction. Never-ending notifications, instantaneous communication, and easy access to endless information. Fear of missing out moves us motivates us to try to do everything that our minds and hearts desire.

But as you move from one shiny object to another, you’ll slowly discover a fundamental truth:

You can’t do everything.

And if you try, you won’t do anything well.

Jobs knew this. He walked into Apple in 1997, the company he’d co-founded and was ousted from over a decade earlier, and he saw chaos. He saw disunity. He saw lack of direction.

The total had become less than the sum of its parts.

To combat this, Jobs made priority number one the shrinking of Apple’s product line–and ensuring that whatever the company made, it made extremely well.

The result was one of the most remarkable turnarounds in business history. The iPod. The iPhone. The iPad. New and improved computer design. Retail stores that looked like something out of the future.

By focusing on the 30 percent, the best of the best, Apple rebuilt its reputation for creating simple, clean, beautiful products that are a joy to use. The company continues to excel today based on the philosophy it developed under Jobs’s leadership.

How to make the 30 percent rule work for you

It’s easy to find things that are fun and interesting to work on. But don’t forget that every task, every project, takes a specific amount of resources. Whether you’re a solopreneur or a CEO, those resources are limited.

So, you have to ask yourself:

  • Am I making the best use of my resources?
  • Am I focused on the 30 percent–that is, making the best of the best?
  • Or am I wasting time on distractions?

It takes deep thinking to answer these questions properly. So make sure you schedule time throughout the week, month, and year to take a step back and analyze your situation as objectively as possible. Don’t leave this up to chance; make an appointment in your calendar and mark it with high priority.

Then, once you answer those questions, make the necessary adjustments. It will probably mean giving up things you’re kind of interested in, or things you’re kind of doing well.

It may mean turning down meetings.

Missing out on opportunities.

And making tough choices.

Because remember, no one can do it all.

But if you think things through, choose wisely, and work hard–you can do it right.

Feature Image Credit: Getty Images. Steve Jobs.

By Justin Bariso

Sourced from Inc.

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Google Dominated This Product for a Decade. Apple Just Unveiled Its Plan to Make It Obsolete

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By Jason Aten

With iOS 13 comes a major update that might just convince you to stop using Google for this important task.

It’s one of the most fundamental things people do on their smartphone every day, and for years, even if you were using an iPhone, there’s a pretty good chance you were using Google to do it. Specifically, Google Maps.

Headed to an appointment, pull up directions in Google Maps. Going on vacation? Google Maps. Looking for a store or restaurant in town? Google Maps. Ordering lunch to be delivered? Google Maps does that, too.

Sure, you can do most of those things using Apple’s native Maps app, but for much of the first five years of its existence, you were just as likely to end up being told to turn down a road that doesn’t exist. That’s a big problem for an app whose job is to provide accurate directions from point A to point B.

That’s because Apple Maps was really bad. Apple even admitted it. Not only that, but in addition to apologizing for how bad the app was, it actually recommended using Google Maps instead. So most people did.

So, Apple started rebuilding its app the hard way. Instead of purchasing maps from third-party vendors, which caused problems with updates and data, the company started its own mapping initiative. Like Google, it sent out vehicles to take photographs for street level views of buildings and locations.

And, over time, Apple Maps got better. It still had a long way to go before people were willing to trust it for directions to an important meeting, but it was clear Apple was serious about making Apple Maps the navigation choice for iOS users.

Now that iOS 13 has been released, Apple has started rolling out major improvements it previewed at the company’s Worldwide Developer Conference this summer. That includes a range of features, but the one that users will notice right away is simple–it just looks better. Like, a lot better. Apple has updated the overall interface and added substantially more detail to a wide area of the country, including most of the Northeast and California.

That detail includes far more topographical detail along with new, higher-res images in the “Look Around” feature (think: Google Street View). It also includes greater detail of green space, as well as water features. New integrations with third-party apps like Uber make it easier to book a rideshare, though it still lacks the food ordering capability of Google Maps.

It also lags behind Google in one other important way–it only offers transit directions in 10 major cities, compared to the virtually universal offerings from Google. I’ve used it in New York City, and it works great. In fact, I found it more helpful than Google’s version. I especially liked the real-time arrival information. But in most cities, you’re on your own for now.

Of course, Apple says it’s just starting, with the rest of the U.S. to be updated by the end of the year. That fast pace shows just how seriously Apple wants you to stop using Google Maps.

Apple’s motivation is simple–besides the fact that Maps was a major embarrassment, the company is committed to reducing the ways Google monetizes iOS users. With over one billion devices running iOS, that’s no small amount of money for either company.
And with these updates, Apple Maps is now at least a worthy contender, one the company hopes will finally convince you to tell Google Maps to “get lost.”

Feature Image Credit: Getty Images

By Jason Aten

Sourced from Inc.

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Amazon, Apple and Nike Just Got Some Truly Amazing Good News. (Millennials Especially Will Be Very Happy)

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By Bill Murphy Jr.

Good news all around.

Imagine you run a company, and I say I have some good news. Which would you be happier to hear?

  • Learning that customers think you have a valuable brand.
  • Learning that Millennial customers particuarly love your brand.

If you’re Amazon, Apple or Nike, it’s actually a trick question. Because recently, all three brands got some fantastic news on both fronts. Here’s the background.

Earlier this year, WPP research agency Kanta revealed the latest update to its annual “BrandZ Global Top 100” list of the world’s brands, ranked by monetary value.

I find this fascinating — the idea you could break out the brand value, and assign it a value as if it were any other asset. This year, Amazon got the best news, as the agency thinks has a brand worth $315.5 billion.

That was enough for it to leapfrog over Apple and Google, whose brands were valued at $309.5 billion and $309 billion respectively.

But now, these companies have some encouraging news about a subset of their customers from another source: a marketing firm that asks Millennials about their favorite brands each year.

And while the brand value might provide a snapshot in time, I think the affinity younger customers have for a brand might be better news — a promise of greater value in the future.

Here are the top 10 brands for millennials according to Moosylvania, and what they might mean for the companies involved:

1.    Amazon

Amazon is just the big winner across the board. It was at the top of the BrandZ list, and now it’s jumped form number 3 on last year’s Moosylvania list to the top slot. In fact, its grocery brand, Whole Foods, separately tied for 82nd on the list as far as Millennial affinity is concerned.

2.    Apple

Apple was number 2 on both the brand value survey and the Moosylvania list. The difference was slight, relatively speaking, on the overall brand survey — $6 billion, but that’s less than 2 percent below Amazon given that the brands are are so valuable to begin with.

3.    Nike

Interesting and promising jump for Nike, which was the 21st most-valuable brand on WPP’s list (with an estimated brand value of $47.360 billion). It corresponds with Nike’s all-in backing of controversial ex-NFL quarterback Colin Kaepernick.

4.    Walmart

Another positive sign for the future for Walmart, which ranked #32 on the overall brand value list earlier this year. It would seem any brand that ranks higher on preference lists for younger consumers than overall should take that as a good thing.

5.    Target

Target doesn’t even seem to listed in the BrandZ Global Top 100, which might be explainable by the fact that it’s a worldwide ranking, while Target at this point is basically an American brand. But good news for the future: it’s number 5 on this Millennials list.

6.    Samsung

Samsung was only ranked 38 in terms of value on the BrandZ Global list and 10th among technology companies. But it comes in at number-6 here. The big difference, one would think, is higher Millennial adoption of Samsung’s phones.

7.    Google

If I were a brand, and I were to worry, I would be Google. It’s still a gargantuan company, of course, and it has some interesting plans to take over more parts of the world. But setting aside Target, it has the biggest negative difference between overall brand value according to Brand Z, and ranking on this list of younger customers.

8.    Adidas

Another brand with an amazing sign for the future if these rankings have value: Adidas ranked the 100th most-valuable brand according to Brand Z, but here it is at number eight among younger customers’ favorites.

9 and 10.    Coke and Pepsi

Rather than write the same observations about similar brands Coke and Pepsi twice, we’ll combine them here. These brands ranked 9th and 10th as Millennial favorites from this survey. (Coca-Cola was also number 14 on the Brand Z survey.)

It’s even that even as younger consumers eschew sugar water and sodas, the brands behind those products retain affinity from this cohort.

You can see the entire list here. (opens as .pdf). Let us know in the comments what brands surprised you on the list.

Feature Image Credit: Getty Images

By Bill Murphy Jr.

Sourced from Inc.

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If Apple is serious about becoming a services company, it should truly go for it

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By Mike Murphy

Apple’s plans for a future beyond iPhone sales are slowly beginning to take shape.

At an event at its headquarters in California March 25, the company unveiled a range of new services intended to provide it with more stable, recurring revenue sources, including a credit card, a magazine subscription service called News+, a video-game subscription called Arcade, and original video programming debuting in the fall under the banner of Apple TV+.

Details are still thin on how these services will be priced—News+ will be $10 per month but Apple didn’t offer information on the others—but they seem to be building on the recent successes the company’s services division has had.

In its latest earnings report in January, there were legitimate concerns about the future of its cash cow, the iPhone, which has struggled to expand into burgeoning markets like China and India. But its services business had another banner quarter.

Over the last four quarters, its sales of apps, movies, games, Apple Music, AppleCare, iCloud subscriptions, and Apple Pay fees have generated roughly $39.6 billion for the company, with a 62% margin in the most recent quarter. To put that into perspective, that would land that division on its own at number 79 on the Fortune 500 list, a few spots below Facebook, and above the likes of American Express, Nike, Coca-Cola, McDonald’s, Time Warner, and 21st Century Fox. Without much fanfare, Apple has become one of the largest media and services companies in the world, and there’s likely far more ahead.

Apple has been signing deals with producers, filmmakers, and actors, many of whom were onstage with CEO Tim Cook today, with the goal of launching its TV+ streaming service with exclusive content to compete with the likes of Hulu, Netflix, and Amazon Prime.

Given that Apple has been supremely successful with relatively mediocre services offerings to date—it has essentially the same film, TV, and music offerings all its competitors have; iCloud is overpriced; and Apple Music, even with its reportedly 50 million subscribers, is generally a poor experience—it should be able to leverage whatever content it plans to launch to build a services package that consumers would be excited to subscribe to.

Right now, people buy iCloud because their phones run out of storage space, they buy AppleCare because it seems like a sensible thing to do, and they buy Apple Music for early access to music and forget to cancel (or they’re one of the few people who own a HomePod). But if Apple is serious about shifting its business model away from individual hardware sales (it stopped reporting unit sales this past quarter) and toward more consistent, expected streams of revenue, it should truly go all in on services. It should take a page out of Amazon’s playbook and launch Apple Prime.

Apple launched the iPhone Upgrade Program in 2015 in a move to capture some of its hardware sales away from third parties like cellular carriers. It’s a payment plan though Apple, underwritten by Citizens Bank, where customers pay a monthly fee to get the latest smartphone each year, along with AppleCare. It’s a decent deal if you’re sort of person who needs the newest phone each year. Given that it also offers subscriptions for iCloud storage and Apple Music, and will soon have ones for video and news, it’s not wildly unreasonable to think that Apple would consider selling a single subscription package for everything it owns, including its new content.

Amazon Prime started out as an annual subscription for discounted expedited shipping, but has since grown into a massive program that gives customers deals at Whole Foods, free streaming on Amazon Prime Video and Prime Music, free e-books and magazines, free photo storage, as well as free shipping. The shipping may have been why many people signed up for the now $119-a-year service, but it’s likely the award-winning programs and other benefits are what keep them coming back. Prime has a renewal rate of over 90%, better even than discount retailer Costco’s member program, Bloomberg reports.

 

Apple could offer something similar, bundling together its new shows and news subscription with access to music, games, storage, AppleCare, and even phones, in one monthly package. A service like this likely wouldn’t come cheap (Apple is a luxury brand after all). Apple’s iPhone upgrade program ranges from about $37 to over $60 a month; Apple Music costs $10, and iCloud can cost from $1 up to $10. Lump on top of that AppleCare, and a video service (most of its competitors’ are around $10), and the new subscriptions in the pipeline, and Apple Prime could easily run anywhere from $75 to $100 per month. (But perhaps if it’s purchased with Apple’s new credit card, there could be some additional cash-back benefits.)

Even so, Apple has the brand loyalty to pull something like this off. Instead of worrying about holiday sales, down quarters, and having a massive supply of phones ready each September, Apple could shift more of its customers to a monthly subscription that will give it reliable revenue, and offer customers a discount on paying for services and devices separately. It’s working for Amazon, which has over 100 million Prime subscribers, and others have pushed similar ideas for other companies, like Disney. It’s a model that’s worked in IT sales as well—companies like HP, Microsoft, IBM, and even Apple itself all offer managed services for massive corporate customers.

If Apple wants to get serious about generating a nice flow of recurring revenue, and deepening the ties between its customers and its ecosystem, it should definitely consider offering all of its services bundled together. Today it laid further groundwork for doing that.

By Mike Murphy

Sourced from Quartz

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Steven Spielberg, JJ Abrams and other film stars take us behind the scenes for Apple TV+

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By Kyle O’Brien

 

As part of its big rollout of its new content services, Apple debuted a new short film for Apple TV+ featuring some of the most creative minds in film taking us inside their respective worlds on the anxieties and triumphs of their craft.

‘Storytellers’ was shot by Academy Award-winning cinematographer/filmmaker Emmanuel “Chivo” Lubezki. The film features iconic storytellers – Steven Spielberg, JJ Abrams, Sofia Coppola, Ron Howard, Octavia Spencer, Reese Witherspoon, Jennifer Aniston, Damien Chazelle, M. Night Shyamalan and Hailee Steinfeld – who take us through the creative journey of telling stories that matter.

Sourced from The Drum

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Apple’s rumored subscription news service will reportedly be announced at a March 25 event

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By Lisa Eadicicco

  • Apple will reportedly host a March 25th event at The Steve Jobs Theater in its Apple Park campus where it’s expected to unveil its rumored subscription news service.

  • Apple has previously hinted that it will launch new services this year, but hasn’t revealed any details yet or confirmed the March 25th event.

  • The news comes shortly after The Wall Street Journal reported that Apple has run into resistance from news publishers over a proposed revenue split that would see Apple pocket 50%.

Apple is planning to hold a special event on March 25 during which it’s expected to share details on its rumored subscription news service, according to a new report from BuzzFeed.

The event would mark Apple’s first major product announcement for 2019. Although the company has unveiled new iPads during events held in March in years past, the report indicates a subscription news service will be the focus of the event. Other rumored products like a new iPad mini and second generation Air Pods are not expected to make an appearance at this event.

The report comes hours after The Wall Street Journal reported that Apple has run into resistance during negotiations with top news publishers over the terms of its subscription news service. Apple is looking to partner with publishers on a subscription news service that would allow readers to pay around $10 per month to read content that is usually paywalled, but Apple’s proposed 50% revenue split with publishers has not gone over well, according to the Journal.

Apple CEO Tim Cook recently teased that “new services” from Apple are coming in 2019 during an interview with CNBC’s Jim Cramer. “On services, you will see us announce new services this year,” Cook said. “There will be more things coming, I don’t want to tell you what they are.”

The launch would be Apple’s latest push to grow its services revenue with a goal of hitting $50 billion by 2020. Services revenue will be an important metric for Apple moving forward as it grapples with slowing iPhone sales in China. Since Apple announced in November that it would no longer break out iPhone sales in its quarterly earnings reports, investors will likely be looking to the growth of its services business moving forward, which reached an all-time high of $10 billion during the holiday quarter.

Apple declined to comment on or confirm a March 25 event.

Feature Image Credit: Getty Images News

By Lisa Eadicicco

Sourced from Business Insider

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The ‘super alliances’ that could help media owners fight back against the tech giants

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By Graeme Finneberg

As we start to think about our predictions for the year ahead, I’m anticipating that 2019 will be the year of collaboration. With the Google, Amazon, Facebook and Apple (GAFA) quadropoly continuing to dominate the ad market, more publishers are realising there will be strength in numbers when it comes to fighting back.

In 2018 dozens of new media alliances were created among publishers and broadcasters. Of particular note in the UK was the launch of the Ozone Project in June, with The Guardian, News UK and Telegraph pooling their resources to create their own digital ad network, serving up a monthly audience of over 42 million unique users. Facebook has 40 million monthly active users in the UK. So, when it comes to scale, these media alliances are positioning themselves as credible alternatives to the walled gardens.

However, when it comes to offering the same richness of data as the quadropoly they are falling short. For instance, the Ozone Project only uses navigational data. Compare that to the GAFA brands which offer gender data, interests, friends’ interests and transactions etc as well as navigational data and you can see why advertisers may still not feel brave enough to wean themselves of what many in the industry call the GAFA ‘crack’. Without this depth of data, for some advertisers the argument to shift budget is just not compelling enough.

This is why 2019 is not just going to see greater collaboration in the form of more media alliances, but the creation of a new breed of ‘super alliances’.

A good example of what I mean can be seen with the Gravity Alliance in France. It doesn’t only have large publishers like Le Parisien and Lagardere Active as members, but also two telecom companies (SFR and Orange) and also search businesses, content providers and sizeable retailers (eg Fnac-Darty).

Et voilà! By adding non-media brands to the publishers in the alliance, the Gravity Alliance has been able to build not only scale, but a unique picture of consumers. It provides a real depth and richness that goes beyond the GAFA offering, including contextual, search, geographic, transactional and purchase intention data. The alliance is in control of its own eco system and the members are able to monetise all of their first party data across all of their sites. With over 150 campaigns already executed via the platform and revenues of €5m in its first year, the Gravity Alliance is starting to knock down those garden walls.

This is likely to inspire UK publishers to think beyond straightforward media alliances and explore the super alliance route – either with existing media alliances expanding their membership or with totally new super alliances being launched. We are already in conversation with a number of potential new collaborations around the world.

Super alliances are likely to still be driven by publishers and broadcasters as they have such a wealth of knowledge and expertise in online advertising – and with declining print revenues and traditional TV audiences, the benefits of collaborating to fight the GAFA threat will be high on their agenda. However, bringing in partners from outside the media world is likely to be relatively easy as the impact of GAFA is being seen across so many markets, from telecoms and retail to travel. If a super alliance is a way to compete and also potentially open up an untapped revenue stream, then what’s not to love?

I suspect we won’t just see broad alliances setting up, but also more niche companies coming together to pool their inventory and data to allow heightened targeting. A great example would be the travel sector with travel publications and broadcasters collaborating with travel comparison sites, airlines, online travel agents etc. For the right brands, the kind of data that a ‘vertical’ alliance would create would be extremely powerful.

The biggest sticking points in creating a super alliance has always been the complexity of setting one up and also the issue of traditionally competitive firms having to get in the same room as their rivals.

It’s true that setting up a super alliance will always be an involved process, so bringing in non-media ‘newbies’ will create its own challenges, but the advancements in technology will make it somewhat easier. For a start, the new generation of universal data marketing platforms are built to sophisticated standards to ensure that any worries about data safety and security are met. Plus, just as importantly, they have safeguards in place to make sure that each brand’s data is kept separate at all times so it’s totally safe and GDPR compliant – an absolute prerequisite when competitive brands collaborate.

When it comes to long-held rivalries, potential alliance members are becoming increasingly confident that issues are manageable and far outweighed by the benefits. The vital thing is for them to get terms agreed up front and also for an independent company to be set up to run and market the alliance. This ensures that all members’ interests are equal and no one’s data gets priority. Also, given that what differentiates a super alliance from a traditional alliance is the greater variety of members involved, this will mean fewer direct rivalries.

What will be particularly important in driving this trend in 2019, will be the statistics that prove the worth of the super alliance. When it comes to demonstrating the value to potential alliance members, our own analysis shows that this kind of collaboration grows revenue overall, so any worries about cannibalisation are unfounded. Plus, advertisers should note that agencies like Dentsu Aegis who are using the Gravity Alliance are now going public in saying that the results are particularly good with regard to the visibility rate and also scale, suggesting that campaigns targeted via a super alliance are a viable GAFA alternative.

With this kind of evidence available to create a compelling argument to steal budget, super alliances will provide a real alternative to the big four for advertisers. ‘Super alliances’ in more ways than one.

Feature Image Credit: Photo by rawpixel on Unsplash

By Graeme Finneberg

Graeme Finneberg is country manager, UK at mediarithmics

Sourced from The Drum

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The Battle for the Home

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By Ben Thompson

If the first stage of competition in consumer technology was the race to be the computer users went to (won by Microsoft and the PC), and the second was to be the computer users carried with them (won by Apple in terms of profits, and Google in terms of marketshare), the outlines of the current battle came sharply into focus over the last month: what company will win the race to be the computer within which users live?

The Announcements

The first announcement came from Amazon three weeks ago: a new high-end Echo Plus, Echo Dots, several Echo devices for use with 3rd party stereos and speakers (or other Echoes), and an updated Echo Show (i.e. an Echo with a screen). All standard fare, and then things got wacky: the company also announced a microwave, a wall clock, smart plugs, a device for the car, and a TV Tuner/DVR, all with Alexa built-in.

Next up was Facebook: earlier this week the company launched the Portal, a video chat device that can track faces, has Alexa integration, and a smattering of 3rd-party apps likes Spotify. The device was reportedly delayed last spring as the company grappled with the fallout of the Cambridge Analytica scandal, and was instead launched in the midst of a data exposure scandal.

Third was Google: yesterday the company announced the Google Home Hub — a Google Home with a screen attached, a la the Echo Show — as well as the Pixel 3 phone and the Pixel Slate tablet, along with far deeper integration between Nest home automation products and the Google Home ecosystem.

And, of course, there is Apple, which launched the HomePod earlier this year, and added a few new capabilities with a software update last month.

Each of these companies brings different strengths, weaknesses, go-to-market strategies, and business models to the fight for the home; a question that is just as important of who will win, though, is to what degree it matters.

Strengths

Each of these companies’ strengths in the home is closely connected to their success elsewhere.

Amazon: Amazon deserves to go first, in large part because they were first: while Google acquired Nest in 2014, Nest itself was predicated on the smartphone being the center of the connected home. Amazon, though, thanks to its phone failure, had the freedom to imagine what a connected home might look like as its own independent entity, leading the company to launch the Echo speaker and Alexa assistant in late 2014.

I was immediately optimistic, in part because the Echo was everything the failed Fire phone was not: its success depended not on the integration of hardware and software, the refinement of which a service company like Amazon is fundamentally unsuited for, but rather the integration of hardware and service. It also helped that Amazon had a business model that made sense: on one hand, the investments in Alexa would pay off with services for AWS, and on the other, Amazon’s goal of taking a slice of all economic activity was by definition centered around capturing an ever-increasing share of purchases made for and consumed in the home, and Alexa could make that easier.

That led to an early lead in the development of the Alexa ecosystem, both in terms of “Skills” and also in devices that incorporated Alexa. As I noted in 2016, this made Alexa Amazon’s operating system for the home, and today Alexa has over 30,000 skills and is built into 20,000 devices.

That, though, makes Amazon’s recent announcements that much more interesting: Amazon isn’t simply content with being the voice assistant for 3rd-party devices, it also is making those devices directly. This, by extension, perhaps points to Amazon’s biggest strength: because Amazon.com is so dominant, the company can have its cake and eat it too. That is, just as Amazon.com is both a marketplace and a channel for Amazon to sell its own products, Alexa is both a necessary component of 3rd-party devices and also a driver of Amazon’s own devices; the company faces no strategy taxes in its drive to win.

Google: Google was very late to respond to Alexa; the original Google Home wasn’t announced until May 2016, and didn’t ship until November 2016, a full two years after the Echo. The company was, as I noted above — and as you would expect for a market leader — locked into the smartphone paradigm; an app plus Nest was its answer, until Alexa made it clear this was wrong.

Google, though, has started to catch up, and the reason is obvious: if a home device is about the integration of hardware and services, it follows that the company that is best at services — consumer services, anyways — would be very well-placed to succeed. The company still trails Alexa by a lot in actions/skills (around 2,000) and 3rd-party devices (over 5,000), but Google’s core functionality is plenty strong enough to sell devices on its own. There are still more Echoes being sold, but Google Home is catching up.

To that end, one of the more interesting takeaways from yesterday’s Google event was the extent to which Google is leaning on its own services to sell its devices: not only did the company tout the helpfulness of Google Assistant, it also prominently featured YouTube, particularly in the context of the Google Home Hub. This is particularly noteworthy because Google handicapped the YouTube functionality of the Echo Show, clearly with this product in mind. Google is also including six months of YouTube Premium with a Google Home Hub; indeed, every Google product included some sort of YouTube subscription product.

Apple: The HomePod is exactly what you would expect from Apple: the best hardware at the highest price. The sound is excellent and, naturally, even better if you buy two. The HomePod is also — again, as you would expect from Apple — locked into the Apple ecosystem; this is from one perspective a weakness, but this is the Strength section, and the reality is that people are more committed to their iPhones — and thus Apple’s ecosystem — than they are to home speakers, meaning that for many customers this limitation is a strength.

Along those lines, Apple is clearly the most attractive option from a privacy perspective: the company doesn’t sell ads, has made privacy a public priority, and is thus the only choice for those nervous about having an Internet-connected microphone in their house.

Facebook: Perhaps the most compelling case for Portal is historical. In the introduction I framed the battle for the home as following the battle for the desk and the battle for the pocket. There were, though, intervening battles that were enabled by those fights for physical spaces. Specifically, the PC created the conditions for the Internet, which in turn made smartphones that could access the Internet so compelling. Smartphones, then, created the conditions for social networking (including messaging) to infiltrate all aspects of life.

Might it be the case, then, that just as the Internet was the key to unlocking the potential of mobile, so might social networking be the key to unlocking the potential of the home? That appears to be Facebook’s bet: sure, the device has some neat hardware features, particularly the ability to follow you around the room or zoom out during a call, but neat hardware features can and will be copied. If Portal is to be a successful venture for Facebook, it will be because the tie-in to Facebook’s social network makes this device compelling.

Weaknesses

As is so often the case, each companies’ weakness is the inverse of their strength:

Amazon: Amazon simply isn’t that good at making consumer products. In my experience its devices are worse than the competition both aesthetically and in terms of hardware capabilities like sound quality. In addition, Amazon’s brute force skills approach — it is on the user to speak correctly, not on the service to figure it out — lends itself to more skills initially but a potentially more frustrating user experience.

Amazon also has less of a view into an individual user’s life; sure, it knows what kind of toothpaste you prefer, but it doesn’t know when your first meeting is, or what appointments you have. That is the province of Google in particular, and also Apple. What is more valuable: being able to buy things by voice, or being told that you best be leaving for that early meeting STAT?

Google: As a product Google’s offering is remarkably strong (there are other weaknesses, which I will get into below). The company is the best at the core functionality of a home device, and it knows enough about you to genuinely add usefulness. Its products are also more attractive and better-performing than Amazon’s (in my estimation).

Google does face questions about privacy: the company collects data obsessively — right up to the creepy line, as former CEO Eric Schmidt has said — and that could be a hindrance to the company’s ability to penetrate the home. That said, Google has so far escaped Facebook-level scrutiny, and wisely excluded a camera from the Google Home Hub. Google knows its advantage is in providing information; it has sufficient other avenues to collect it, without putting a camera in your bedroom.

Apple: Apple, even more than Google, seemed blinded by its smartphone success. This isn’t a surprise: the ultimate point of Android was to be a conduit to Google’s services; it follows, then, that if home devices are about services, that Google would be more attuned to the opportunity (and the threat). Apple, on the other hand, is and always will be a product company; the company offers services to help sell its hardware, not the other way around, and it follows that the company would be heavily incentivized to insist that the iPhone and Apple Watch, which both offered attractive hardware margins and were differentiated by the integration of hardware and software, were better home devices.

That, furthermore, explains Apple’s biggest weakness: the relative performance of Siri as compared to Alexa or Google Assistant. The problem isn’t a matter of trivia, but rather speed and reliability. Siri is consistently slower and more likely to make mistakes in transcription than either Alexa or Google Assistant (and, for the record, more likely to fail trivia questions as well). As always, Apple is the most potent example of how strengths equal weaknesses: just as it was inevitable that a services company like Amazon would be poor at product, a truly extraordinary product company like Apple will face fundamental challenges in services.

Facebook: If the strengths of Facebook Portal were largely theoretical, the weaknesses are extremely real: it is, frankly, mind-boggling that the company would launch Portal given the current public mood around the company. And, to be clear, that mood is largely deserved; I wrote last week about the company as a Data Factory, and one of the telling examples was how Facebook lets advertisers use numbers provided for two-factor authentication for targeting. This strongly suggests that, from Facebook’s perspective, data is data: everything is an input, and while the company may promise that Portal is private, one wonders why anyone would believe them.

That notes, I actually suspect Portal data is private; this seems like more of an attempt to enhance the value of the Facebook graph, and thus the app’s stickiness, than to collect more data. The problem, though, is that Facebook is not in the position to expect nuance, and that this product was launched anyways supports the argument that the company’s executives are indeed out of touch.

Go-to-Market

The various go-to-market possibilities for these four companies could very well have been folded into strengths-and-weaknesses, but it’s worth highlighting on its own, given how important an effective go-to-market strategy is in consumer products.

Amazon: This is arguably Amazon’s biggest strength: not only does the company have direct access to the top e-commerce site in the world and one of the largest retailers period — and, because it is them, can skip a retailer mark-up — it also gets access to prime real estate:

 

 

There is not only no question in a consumer’s mind about where to buy an Echo, it is also nearly impossible that they not know about it. Moreover, Amazon has a second trick up its sleeve: it doesn’t stock any of its competitors products, making acquiring them that much more of a hassle.

Google: I highlighted this as a major Google weakness when it launched its #MadeByGoogle line two years ago, but to the company’s credit, it has worked hard to build out its channel. Today Google products are available on most non-Amazon e-commerce sites and in retailers like Best Buy, Target, and Walmart. The company has also invested in advertising to build awareness; there is still a long ways to go, to be sure, and go-to-market remains a Google weakness, but the company has impressed me with its work in this area.

Apple: This is a huge area of strength of Apple as well. The company obviously has a very strong channel, both online and through its retail stores. Both reflect Apple’s biggest strength, which is its brand: there is no company that has more loyal customers, and those customers are tremendously biased to buy an Apple product over a competitors; they are also more likely to be receptive to Apple’s privacy message, perhaps because they care, or perhaps because that is the message that plays to Apple’s strengths.

Facebook: It appears the company learned nothing from the Facebook First flop. The Facebook First, if you don’t recall, was Facebook’s ill-fated phone; it was manufactured by HTC and was discontinued within weeks of launch. There simply was no evidence that customers wanted to pay for a product that was predicated on Facebook integration, and there was certainly no effective go-to-market strategy.

It is hard to see how the Portal will be different: again, the defining feature is that the camera follows you around, a feature that is cool in theory but bizarrely out-of-touch with Facebook’s current perception in the market. Is the company really going to spend the millions necessary to market this thing? And if so, where is it going to be available to purchase? I can see why this product was designed; I see little understanding of how it might be sold.

Business Models

This too ties into strengths-and-weaknesses, but like the go-to-market strategies, is worth calling out in its own right:

Amazon: I explained the company’s business model above: Amazon wants to own the home, because it sells a huge number of items that are used in the home. This is why the company is willing to press its advantage as both a platform and retailer when it comes to Alexa devices: winning has a very direct connection to the company’s ultimate upside.

Google: The business model is a bit fuzzier here: Google makes money through ads sold in an auction where the winner is chosen by the user. That is a model that doesn’t work for voice in particular; affiliate fees are less profitable given that they foreclose the possibility of an advertiser forming a direct relationship with the end user. That noted, the introduction of a visual interface does also offer the possibility of ads.

More noteworthy is the incorporation of YouTube: YouTube has seen the addition of more and more subscription services, including YouTube Premium, YouTube TV, and YouTube Music. All of these work in conjunction with Google’s designs on to the home.

The most compelling business case for Google, though, is the same as it ever was: maintaining a dominant presence in all aspects of a user’s life, not just on the go (in the case of Android) but also in the home provides the data for more effective advertising in the places where it makes sense. No, Google may not sell that many voice ads, but voice interaction will affect what ads are shown in Search, and that is worth an awful lot.

Apple: Apple’s business model is the most straightforward: HomePod is clearly sold at a profit, part of Apple’s strategy of increasing its monetization of its current userbase. This is also a limitation: as noted above, the HomePod is significantly more expensive than any of its competitors.

Facebook: The social network company has the weakest business model story of all: there are no add-on services to sell, and the company has promised not to use the Portal for advertising, for now anyways. The best argument is similar to Google: more data and more engagement means more opportunities to show better-targeted ads on the company’s other products.

Winners and Losers

There are compelling cases to be made for at least three of the four companies:

Amazon: Amazon’s head start is meaningful, and its widespread integration with other products mean it is likely that more people have a device with Alexa integration than not. The company is also highly motivated to win and has the business model to justify it.

Google: I find Google’s case the most compelling. Product is not the only thing that matters, but it is awfully important, and Google is the best placed to deliver the best product. Its services are superior, its knowledge of users the most comprehensive, and its overall product chops have improved considerably. Yes, its go-to-market is worse than Amazon’s and it has a late start, it is still early.

Apple: The loyalty of Apple’s userbase cannot be overstated, particularly when you remember that the company’s userbase are the most affluent customers of all. This makes it difficult to ever count Apple out, even if their product is late and tied to the worst services.

Facebook: It is hard to envision how Portal won’t be a loser: the company has no natural userbase, has a terrible reputation for privacy, and has no obvious business model or go-to-market strategy.

Does It Matter?

There is one final question that overshadows all-of-this: while the home may be the current battleground in consumer technology, is it actually a distinct product area — a new epoch if you will? When it came to mobile, it didn’t matter who had won in PCs; Microsoft ended up being an also-ran.

The fortunes of Apple, in particular, depend on whether or not this is the case. If it is a truly new paradigm, then it is hard to see Apple succeeding. It has a very nice speaker, but everything else about its product is worse. On the other hand, the HomePod’s close connection to the iPhone and Apple’s overall ecosystem may be its saving grace: perhaps the smartphone is still what matters.

More broadly, it may be the case that we are entering an era where there are new battles, the scale of which are closer to skirmishes than all-out wars a la smartphones. What made the smartphone more important than the PC was the fact they were with you all the time. Sure, we spend a lot of time at home, but we also spend time outside (AR?), entertaining ourselves (TV and VR), or on the go (self-driving cars); the one constant is the smartphone, and we may never see anything the scale of the smartphone wars again.

By Ben Thompson

Sourced from STRATECHERY

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