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Ecommerce, marketing, media

Clear Digital Digest: Uber, Apple and Ofcom

29/4/2016

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This week saw Ofcom release their always useful and insightful annual UK media review: Adults Media Use and Attributes 2016.  At over 200 pages, there is a huge wealth of detail to take in at once, but this report can prove an invaluable one stop shop over the year for many must have stats.  A good place to start is the report overview which pulls out 4 major trends, with the ever moving shift to smartphone usage unsurprisingly to the fore:
  1. There has been a sizeable increase in the proportion of internet users saying they only use websites or apps that they’ve used before (42% v 31% in 2014).
  2. There has been a considerable rise (from 6% in 2014 to 16% in 2015) in the proportion of adults who only use smartphones or tablets to go online, and not a PC/laptop.
  3. There is an increasing preference for mobile phones above more traditional media devices (with mobile phones now replacing TVs as the device adults say they would miss most, as shown in the table below).
  4. There is increasing polarity between different age groups in terms of communications activity.
Most missed devices
Mobile phones would now be more missed than TV by all age groups up to 55. Source: Ofcom

I spent yesterday at the Internet Retailing Expo and these trends around shifting device usage were resonating loud and clear from some of my discussions there plus presentations attended; I’ll be blogging more thoughts on this next week.  Returning to the Ofcom report, I’d recommend a couple of other interesting summaries:
  • Econsultancy looking at five key findings for marketers from the report.
  • The Drum’s column pointing out that the Ofcom data challenges some current stereotypes used in marketing (for example the often understated importance of over 50s online)

Some diverging results statements from the internet’s big beasts this week.  Although widely trailed before, it was still strangely odd to see Apple report its first fall in sales since 2003 on Tuesday, with sales of quarterly sales of $50.6bn down from $58bn in the same quarter last year.  This was primarily due to a slowdown in iPhone sales (which account for 65% of Apple’s revenue) to 51.2m in the quarter from 61.2m the year before.  This of course led to a wealth of think pieces on what Apple needs to do to turn this decline around (spoiler alert: it is unlikely to be the Apple Watch), while I did enjoy this “brief guide to everything that’s annoying about Apple” – my personal favourites being numbers 5 and 11. 
Apple revenue breakdown
iPhone revenue dwarfs all other Apple divisions. Image source: The Guardian

Meanwhile, Amazon has just posted its fourth straight profitable quarter in a row, and the largest quarterly profit in its history, prompting Wired to exclaim “Whoa, Amazon Isn’t Just Making Money. It’s Making More Than Ever”.  Amazon’s Q1 net profit stood at $513m with global revenue of $29.1bn, up 28% on last year and beating analysts’ expectations, leading to a share price increase of over 12%.   It’s worth stating here that Amazon spent years incurring losses as it built its huge empire (including its increasingly important AWS cloud computing arm which saw revenue up 64% YOY to $2.6bn), but has now posted ever growing profit growth for the 4 quarters of the last year; a development sure to please investors but also demonstrating that Amazon seems to be entering its next phase of maturity. 
​Finally, the Guardian this week published an excellent article on “how Uber conquered London”.  A fairly lengthy read but some really enlightening insights on how Uber launched in London, plus its future plans: a must read for anyone interested in the start-up world, or just catches the odd taxi here and there.
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Clear Digital Digest: Adspend, ecommerce growth and Amazon Prime

22/4/2016

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Firstly, some recent stats that caught my eye.  The IAB have released their latest annual figures on digital adspend with 2015 revenue of £8.6bn, up by 16.4% YOY.  With digital spend always growing year on year as it takes an ever increasing slice of the marketing budget, this is not in itself surprising; what is of note however is the fact that this is the fastest such growth seen for 7 years.  This has been driven in the main by mobile spend, which was responsible for 78% of this growth, with mobile now worth £2.6bn (up 60% YOY), accounting for 30% of all digital spend.
2015 Digital ad spend growth
Across all devices, search remains the largest digital advertising category, with £4.5bn spent in 2015, a 51% share of digital spend.  Display is the next largest category, accounting for 35% (£3bn), with a majority (60%) of this now traded programmatically.  As well as mobile (and social) helping to drive display spend, content and native advertising grew by 50% YOY, rising to £776m.  In addition, digital spend is actually even larger when factoring in an additional £953m spent on “online performance marketing” – i.e. advertiser spend on “shopper websites” such as voucher, cashback/loyalty and price comparison sites.
IAB Ad Spend 2015
Total digital ad spend in 2015 of £8.6bn was up 16% YOY, its highest rate of growth for 7 years (source: IAB)
Even larger mobile growth was seen in the ecommerce sector, courtesy of the latest IMRG Capgemini eRetail Sales Index.  Monthly figures for March recently released show overall online sales growing by 11%, within which smartphone transactions grew by a huge 101%.  This meant that Q1 ecommerce sales increased by 15% YOY, nearly double the annual growth rate seen in Q1 2015.  Larger mobile screen sizes coupled with much improved mobile shopping experiences from a variety of retailers are no doubt hoping to drive this upturn.
Staying with ecommerce, but from across the pond, Amazon have recently announced that US customers can now choose to pay for Amazon Prime (their well established premium delivery service with added bonuses such as streaming service Amazon Prime Video) on a monthly basis.  Although it still works out cheaper overall to pay for 12 months upfront at $100 rather than $10.99 per month, it will be interesting to see how this helps to convert customers who are tempted but not willing to commit to a year’s subscription all at once.  Should this launch in the UK soon (at perhaps £8.99 per month rather than the annual £79) we can probably be fairly sure it's been a success. 
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Clear Digital Digest: Pinterest, Periscope and pizza

8/4/2016

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After launching in the US last year, Pinterest introduced its Promoted Pins ad solution in the UK this week, with brands such as John Lewis, Made.com and B&Q involved from day one.  Pinterest’s visual nature makes it well suited to product categories such as furniture, where it should help retailers at the top of the purchase funnel, something that Hannah Pipel from Made.com highlighted thus: “I think potentially the planning stage is a really interesting one especially for home decor and higher ticket price items”.  Of course, this will then entail efficient tracking and analysis to understand the value of Pinterest in the consideration phase, as it’s much less likely to gain the still often most visible last click.
Pinterest ad examples
Pinterest ad examples. Image source: Marketing Week

Having been around a fair while in the ever changing social media world, it is in fact perhaps surprising that it is only now that Pinterest are seeking to actively monetise their user base via advertising.  With that in mind, Facebook’s announcement this week of a partnership with Tesco owned Dunnhumby to give greater visibility to FMCG brands on the effectiveness of their Facebook campaigns also shows that the job on proving digital marketing success is still far from done.  According to The Drum this is in response to the fact that top FMCG brands “were being forced to put more budget than they might like to TV advertising, rather than digital, because the buyers at supermarkets – the people who decide if a product will go on shelves – believe that mass marketing is still the only way to shift stock at scale”.  Therefore, this reality check helps to demonstrate the ongoing need for digital to still prove its worth compared to more established media, an education process that ecommerce teams still generally need to make a priority.

Some unexpected news in the intersection between social media and sport this week too, with Twitter swiping the rights to live stream NFL Thursday night games worldwide.  As previously reported, there had been a fair amount of speculation about this, with Facebook widely considered to be the front runner to help further boost its Facebook Live offering.  Instead, Twitter will be benefitting from the live rights which will also help visibility and user growth for Periscope, its live streaming service which will be central to this.
Finally, Amazon are of course famous for “one click ordering” but Domino’s Pizza have now gone one better and introduced “zero click ordering” for pizza delivery, albeit in the US only at present.  After registering and setting up your details (e.g. favourite pizza, local store), simply opening the “Zero Click” app will generate an order for you unless you choose not to before the 10 second countdown cut-off.  Perhaps a tad gimmicky – and also probably not always user friendly as is sometimes the case with Amazon’s one click which can be inflexible when it comes to delivery options etc – but still preferable to some of the complex phone conversations that used to be the only way to order pizza delivery back in the day. 
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    Jim Clear

    Lead blogger and founder of Clear Digital: talking about ecommerce, digital, marketing and media.   

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