AMAZON KICKS AD SALES INTO OVERDRIVE: Are we about to have a three-horse race in the top tier of Digital media sales? Based on Amazon’s ad sales surge in its latest earnings call the answer is probably a firm yes. On Friday Amazon reported its “Other” revenue (which is mostly ad sales), grew by 58% to $1.1B. To put that number in perspective the current leaders are Google who raked in $24B in Q3, and Facebook whose latest Q2 tally was $9B. By comparison to the duopoly Amazon is still relatively small, but then again it’s just getting started. Their secret sauce is a mountain of purchase-based data, which they can use to behaviorally retarget today’s purchasers and model out to serve contextually relevant ads to similar users who might be interested in that same product. Combine those assets with a proprietary DSP which features a self-service API, and you can see why their digital ad offerings are being well received in the market. I’d expect more of the same in future quarters.
SHORT FORM “DOUBLE BOX” TV ADS ARE READY FOR PRIME TIME: We’re starting to see an interesting transformation with the standard Network TV ad unit. Instead of just running :15s and :30s the networks have been experimenting with :06 ads which were originally created for OLV. To make things more interesting these ads are being served in a Double Box format (image below) for sports broadcasts, which show a live shot of the game on the left and the ad on the right. The thinking is that viewers won’t tune out if the ad runs concurrent to the game, so they’re more likely to be paid attention to. And since it would be really hard to play an entire :30 ad during live sports the :06 option becomes the perfect solution. As noted in the attached AdAge article, Fox has been the most aggressive network with this new unit. What began as an experiment during this summer’s Teen Choice Awards has expanded to MLB postseason, and is now being planned for Thanksgiving NFL games. I wouldn’t be surprised to see this become a normal ad unit across more of the networks.
THE DEMISE OF SNAPCHAT SPECTACLES: Remember back to early 2016 when rumors of a new wearable tech called Snapchat Spectacles started to surface? These babies were going to succeed in a way Google Glass couldn’t because they’d link Snapchat’s in-app Lens functionality to the real world and open up a whole new augmented reality (AR) universe for its users. Snapchat’s PR machine teed up a ton of pre-launch buzz, and the geekarazzi was foaming at the mouth to get their hands on a pair. Then a little called reality set in, and what happened next wasn’t pretty. As featured in the attached Tech Crunch link, Snapchat Spectacles were plagued by a five month launch delay, poor manufacturing quality, a lack of AR content, and a “shockingly low retention rate” in which three out of four owners stopped using their Spectacles within the first week. So nobody bought these things. And I mean nobody. At last count over 99% of Snapchat Spectacles haven’t been sold and are wasting away on warehouse shelves. This goes to show how a hot new idea doesn’t just sell itself. You have to back up the buzz with a useful product people will actually derive value from.
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