Form Factor Roulette

This projection from Cisco research confirms the obvious, yet raises some questions.  The obvious is the spectacular flip as internet traffic switches from PCs to smartphones.  That’s a trend we can see in our daily lives.  The questions arise around the lateral projections for TVs and tablets. As connected TVs replace first generation flat screens one would expect an increase in internet usage.  These data show a decline. And with tablets, one would expect them to gain secondary usage from the move to mobile although the study authors may have assumed a decline in the form factor’s sales.  Logic: If you have a big connected TV and little connected phone, you may not see a need for the in-between product.  Source: Cisco

A Chinese Turn About

In an apparent turnaround, Chinese negotiators in the trade talks are not objecting to the US complaints about “IP theft, forced technology transfer and cyber hacking,”  According to Larry Kudlow, US Economic Advisor and lead negotiator in these talks, the Chinese are willing to talk about the issues for the first time.  That’s a major change and it could be the enough to break the stalemate that has mired trade relations between the two countries for many years.

For those of us who want to sell into China, this is a significant turn, one that could lower the competitive tensions between the countries.  Should corrections become part of an agreement, it could have long lasting effects for the exporting future.  As they say, the devil will be in the details.  Source: CNBC

Strap In!

In Malcolm Gladwell’s “Tipping Point” the spread of viruses is used to describe the way in which quiet social trends build below the surface until they either die off or they begin to snowball into massive social shifts. 

Automation has been one of those slowly growing forces that has been changing the world quietly for decades.  Example: the American car industry in the late 1970s produced and sold about 12-13 million cars a year with about 600,000 workers.  Forty years later in 2015-16 about 17 million cars were produced and sold with about 400,000 workers.

It was that slow automation burn that punched through in the US election of 2016.  Worker discontent with disappearing jobs – blamed on migration, but mostly fueled by the inexorable force of automation – changed voting patterns and changed the direction of the US in the world.

What’s the future?  At the World Economic Forum, IBM’s Chair, CEO and President Ginni Rometty said, “I expect AI to change 100 percent of jobs within the next five to 10 years… as analytics and artificial intelligence change job roles at companies in all industries.”  If she’s half right, Rometty is seeing AI and data analytics as the tipping point for what has been described as the Fourth Industrial Revolution.  Strap in, its going to be a bumpy ride unless you’re on the correct side of revolution.  Source: CNBC; Bidwin analysis

Three Mobile Trends for 2019

  1. The move to mobile by consumers is naturally pulling advertisers along.  But the mobile medium is very different from other digital media because of its small screen size.  The first and most obvious, smart phone ads were banners.  As the audience gets more attuned to the medium, banners are losing their appeal, a fact that drives the first trend: more engaging content including short videos.
  • The contrast between revenue sources for casual games verses mid-core & strategy games is clear.  Casual games make money from in-app purchases while the more sophisticated mid-core & strategy games see more revenue from advertising.  There is no indication from the numbers that the 70-30 split in casual games is likely to change, but the trend for the mid-core & strategy games flipped decisively toward more advertising in last year’s second half.  Expect the trend to continue.
  • As the trend toward in-app advertising evolves, app developers are going to need a higher level of support from the ad delivery system.  They are going to require two key things: first, more transparent reporting that provides better audience targeting and market insight and second, better, more integrated creatives that engage their players without putting them off. Source: Adotas

Follow the Money to and from China

Consumer spending on mobile games globally was $109.5 billion in 2018. The three biggest contributors to that huge total were China, the US and Japan.  While Chinese game companies are raking in the money from consumers, giants like Tencent are taking their winnings and investing in Western gamers like Jagex and Outfit7.  As China spreads its presence among the game playing generation across the world, it is making its cultural mark beyond its borders in the same way US movies and music has made its cultural mark globally on an older generation.    Source: Mobile Marketing

Retail Ad Spending Grew 40% in the Second Half of 2018

A breakout from Smaato of ad spending by category for the second half of 2018 shows that 72% of all spending came from two categories: retail and media.  All other categories combined to deliver the final 28% of dollars. 

The big story was the 40% growth in retail spending in the second half of the year compared to the frist half. Total retail went from 35% to 49% fueled by online marketplaces Amazon and Walmart, which together accounted for 28% of all ad spending. A lot of that second half spending in retail was likely related to the holidays.  Source: MarketingLand

The Past is Prologue

The industrial revolution of the 19th century was humming along as titans of steel, energy and railroads staged intramural battles for market supremacy unencumbered by government regulation.  Monopolies developed and workers where stomped.  The response to out-of-control heavy industry was anti-trust and child labor law and unions.

Today we are seeing the end of the laissez faire digital revolution. Pushed by ad fraud and hate speech the IAB and Mark Zuckerberg are calling for a combination of voluntary and government rule-making to bring under control the forces of this generation’s unbound revolution. 

It’s the way it has to work.  New industry has to be left alone to grow in its beginning.  But, after a period of years, it will over step and it will always get ugly before the forces of restraint step in.  Now is the time for our revolution to be reined in. The hope is that we reach a balance between voluntary discipline and government regs without tipping toward over-regulation.  Source: Bidwin analysis

The US isn’t that Mature

We never lose an opportunity to show the data supporting the notion that mobile usage growth hasn’t slowed even a little.  It’s still charging ahead, especially in the US.  Now that’s counter-intuitive because one might think that the emerging markets are adapting at higher rates and that the US, a more mature mobile market, would be slowing.  But 170% increase in ad requests tells a different story – the US isn’t that mature. Source: MarTechAdvisor.com

Retail Ad Spending Grew 40% in the Second Half of 2018

A breakout from Smaato of ad spending by category for the second half of 2018 shows that 72% of all spending came from two categories: retail and media.  All other categories combined to deliver the final 28% of dollars. 

The big story was the 40% growth in retail spending in the second half of the year compared to the frist half. Total retail went from 35% to 49% fueled by online marketplaces Amazon and Walmart, which together accounted for 28% of all ad spending. A lot of that second half spending in retail was likely related to the holidays.  Source: MarketingLand

High-Tier Consumers Pull Back in China

Chinese consumers appear to be pulling back according to a new survey sponsored by Credit Suisse and conducted by Nielsen.  Expectations were 14.3% lower in the 2018 survey as compared to 2017.  Tony Wang, one of the authors commented, “… Chinese consumers [are] less willing to spend across all categories, especially on large-ticket items such as cars and property.”

Interestingly, consumer sentiment in China’s lower-tier cities remains strong.  Even luxury products continue to see high purchase intentions.  These are the cities that have only recently begun to feel the advantages of China’s new economy – in part a result of the Alibaba and JD.com expansion into the hinterland over the last couple years.  Source: South China Morning Post