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Thought Starters

Thought Starters: Moore’s Law, Snapchat, questions about online advertising and the perils of Donald Trump

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read, highlighting the more interesting trends, developments and changes in the world you and I live in. This edition looks at Moore’s Law, the ins and outs of Snapchat, some of the questions being raised out online advertising and the threat Donald Trump poses to politics among other things.

Nature recently published an article profiling Moore’s Law and how semiconductor manufacturers are looking at avenues beyond simply adding more  transistors to chips. It’ll be interesting to see how the technology industry adapts given the cornerstone that Moore’s Law and the associated industry roadmap of innovation has provided in enabling the computing infused world we live in today.

One of the challenges the semiconductor industry has had to face is the transition from PC to mobile which can be clearly seen in the following graph from Creative Strategies’ Ben Bajarin with the rapid growth of Android, iOS and AOSP:

Platform installed base

Quartz’s recent release of a mobile app provides an interesting example of publishers adapting to mobile, offering a stripped back feed of notifications and advertising, familiar to anyone using mobile messaging services:

Quartz mobile app

Snapchat can prove baffling for the uninitiated, with a user interface and visual language that sets it apart from the more traditional social networks (I’m looking at you Facebook and Twitter). Ben Rosen provides a handy guide, drawing on sage advice from his 13 year old sister:

Snapchat Filters

Whilst mobile, PCs and tablets are the dominant paradigms, we’re also beginning to see the emergence of a growing array of new devices blurring the boundaries of what a computing device is. The Amazon Echo is one of the more interesting devices to hit the market recently with the Uber integration providing an indication that the world envisioned in Her isn’t as far off as some people would have you believe:

The online advertising industry has been one of the clear winners over the last ten years with Google and Facebook in particular coming out ahead according to analysis from the Be Heard Group:

Net change in global ad spend / revenue

That’s not to say the online advertising industry is away laughing. The sector has come under growing scrutiny for failing to deliver for advertisers with Bloomberg last year pointing to growing click fraud with some advertising networks clearly dominated by bot rather than human traffic.

Another key metric is advertising viewability – there’s no point serving an advert to a human if the creative can’t be seen. Research from Meetrics points to a large proportion of European advertising not meeting IAB and the Media Rating Council (MRC) viewability, food for thought for media buyers:

Number of ads that are viewable (%)

Ben Thompson in a recent posting points to the stranglehold that Facebook and Google have on the online advertising market, offering greater effectiveness, reach, and ROI than their smaller competitors:

Here’s the kicker, though, and the big difference from the era of analog advertising: the Facebook and Google platforms turn TV and radio’s disadvantages on their head:

  • Facebook and Google have the most inventory and are still growing in terms of both users and ad-load; there is no temporal limitation that works to the benefit of other properties (and Facebook in particular is ramping up efforts to advertise using Facebook data on non-Facebook properties)
  • It is cheaper to produce ads for only Facebook and Google instead of making something custom for every potential advertising platform
  • Facebook and Google have the best tracking, extending not only to digital purchases but increasingly to off-line purchases as well

Facebook doesn’t always get its way with the recent judgement by the Indian Government’s blocking the social network’s Free Basics service. A case of neocolonialism by a hungry multinational or an honest attempt to widen internet access to the digitally excluded? I’ll let you be the judge.

Another social network that’s taken a hit recently is Twitter. Whilst the company has been  improving its monetisation of traffic, latest figures point to negative user growth which definitely takes some of the shine off things for investors:

Twitter user growth goes negative

Twitter isn’t the only tech company that’s taken a battering of late with talk of a popping of the tech bubble. A more careful examination of stock performances suggest that investors’ FoMO (Fear of Missing Out) has fueled the valuation of some companies well above what they were worth, whilst the fundamentals of others hold up to closer scrutiny:

Stock Performance Since October 5th 2015

Donald Trump’s run for president has kept many of us well entertained over the last few months but Ezra Klein gives a pointed reminder of why we shouldn’t be taking his candidacy lightly:

Trump answers America’s rage with more rage. As the journalist Molly Ball observed, “All the other candidates say ‘Americans are angry, and I understand.’ Trump says, ‘I’M angry.'” Trump doesn’t offer solutions so much as he offers villains. His message isn’t so much that he’ll help you as he’ll hurt them.

As Britain’s decision on Brexit looms, President of the European Parliament Martin Schulz provides an impassioned defence of British membership of the European Union:

Dan Fox provides a valuable defence of pretentiousness in The Guardian, suggesting that it typically says more about the accuser than the accused:

Being pretentious is rarely harmful to anyone. Accusing others of it is. You can use the word “pretentious” as a weapon with which to bludgeon other people’s creative efforts, but in shutting them down the accusation will shatter in your hand and out will bleed your own insecurities, prejudices and unquestioned assumptions. And that is why pretentiousness matters. It is a false note of objective judgment, and when it rings we can hear what society values in culture, hear how we perceive our individual selves.

The featured image is a GoddoG mural from LED Thionville in France.

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Thought Starters

Thought Starters: decacorns, the iPad Pro opportunity and the implications of CRISPR

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

CB Insights profiles the growing valuations of the “decacorns” (private companies valued at over $10bn). Fidelity’s recent markdown of investments in Dropbox and Snapchat could be simply related to these companies’ specific circumstances or potential sign of a market correction:

Deals to Top Private Company Unicorns Valued at Over $10bn

Apple’s hoping that the release of the iPad Pro will give its tablet offering a much needed boost and the product’s performance mean that the iPad will be seen increasingly as a device to create as well as consume as John Gruber comments:

“We’ve now reached an inflection point. The new MacBook is slower, gets worse battery life, and even its cheapest configuration costs $200 morethan the top-of-the-line iPad Pro. The iPad Pro is more powerful, cheaper, has a better display, and gets better battery life. It’s not a clear cut-and-dry win — MacBooks still have more RAM (the iPad Pro, in all configurations, has 4 GB of RAM, although Apple still isn’t publishing this information — MacBook Pros have either 8 or 16 GB), are expandable, and offer far more storage. But at a fundamental level — CPU speed, GPU speed, quality of the display, quality of the sound output, and overall responsiveness of interface — the iPad Pro is a better computer than a MacBook or MacBook Air, and a worthy rival to the far more expensive MacBook Pros.”

One of the trends driving growth in a new range of startups is the shift to smartphones which is profiled in these global figures from Creative Strategies:

Percentage of time spent by device

90% of the time consumers spend on smartphones is spent in apps according to Flurry figures with Facebook, Google and Apple dominating in terms of the reach of their apps according to comScore figures:

Top 15 Smartphone Apps

Britney Summit-Gil looks at how the internet has enabled consumers to be better informed on a whole host of issues, but has lagged when it comes to understanding their own communities:

Internet users say digital tech makes them better informed than 5 years ago

Online advertising has been criticised for providing metrics that fail to reflect audience exposure.  Seb Joseph explores The Economist’s move to offer attention metrics which will better reflect consumers’ actual exposure to advertising:

“Working with analytics partners Chartbeat and Moat Analytics, The Economist tracks active time view – only counting a view when an ad is in view and the reader is actively engaged, i.e typing or scrolling up and down the page. Only those impressions that generate over 5 seconds of active view time will count towards the attention buy.”

Before brands throw all their media budget behind these new online advertising opportunities, it’s worth considering GroupM research which points to television’s lead in generating short to medium term sales (bearing in mind the research was commissioned by TV marketing body Thinkbox):

“GroupM found that media account for on average 39% of sales in the short to medium term (within three months of a campaign finishing); 33% of these media-driven sales are from TV advertising, more than any other communication channel. Paid-for online search created 22%, online display 12%, affiliates 10%, print 8%, direct mail 8%, radio 3% and outdoor 1%.”

Online media also needs to contend with declines in referral traffic from Facebook according to a report from Matthew Ingram. It’s far from clear  whether this is a result of a content glut or Facebook dialing back traffic but it does highlight how vulnerable mainstream content providers are to changes by Facebook and other intermediaries:

“The other nagging fear for media companies is that Facebook is essentially engaging in a large-scale bait and switch, by encouraging them to host all of their output on its platform, but then gradually turning off the traffic tap so that their reach declines. At that point, the social network can recommend a number of ways to boost the reach again—including by paying for promoted posts and other forms of advertising. Facebook would no doubt protest that it is doing nothing of the kind, but the fear remains.”

Michael Specter profiles the growing opportunities to manipulate our DNA with CRISPR/Cas system whilst Erik Parens chooses to explore the ethical implications of gene editing:

‘That seemingly simple question takes us to the heart of a deep tension that decent parents have felt for a very long time, but that will become ever more intense if a technology such as CRISPR-Cas9 is in fact safe and effective. I refer here to the tension between the ethical obligation of parents to accept their children as they are, and their ethical obligation to shape them.”

Rising wages in China mean that the country is facing growing competition for the title of factory to the world with Mexico also benefiting from its close proximity to the US according to a report from Ana Campoy:

Productivity Adjusted Labour Rates

UNHCR figures put the sheer scale of Europe’s refugee crisis in perspective, with the problem unlikely to abate given conflict in Syria and Afghanistan:

Migrant arrivals via the Mediterranean

If you find yourself in London over the next month, I’d strongly recommend checking out Ragnar Kjartansson’s The Visitors exhibition at the Brewer Street Car Park. A wonderful respite from the increasingly frenetic activity of central London in Christmas shopping mode.

The featured image is a Jessie and Katey mural on Ahui Street in Hawaii for the POW WOW festival.

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Thought Starters

Thought Starters: Chinese digital media, iPhone’s dominance, Holacracy and Europe’s lagging digital innovation

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

We are seeing Chinese businesses increasingly innovate and excel, providing business models that set themselves apart from businesses in the West. Digital media and communications have been a particularly fertile ground illustrated by the following table which illustrates how diversified the revenue streams of Tencent and YY are compared to their American counterparts:

Tencent Facebook YY and Youtube Monetisation

Apple is carving an increasingly dominant place in the world’s smartphone marketplace in terms of market share and profit. Some critics have questioned whether Apple can continue this growth trajectory, but Ben Thompson provides a strong defence for why we’re not likely to see this train derailing in the near future:

Smartphone Marketshare

Closely tied to the issue of smartphone ownership is the penetration of different mobile browsers. Here again Akamai’s figures point to Apple’s Mobile Safari browser dominating globally:

Global Mobile Browser Share

Roger D. Hodge looks at the ups and downs of Zappos’ introduction of the Holacracy system for self-organisation. It’s a long article but provides a valuable window into the challenges (and some of the opportunities) of introducing radical organisational change:

Zappos' Models of Organisation

As we embed the internet in an more aspects of  our lives, countries’ digital readiness provides an increasingly important measure of future economic health. Tufts University created the Digital Evolution Index to measure the building of digital capacity and many European countries don’t come out particularly well according to Bhaskar Chakravorti and Ravi Shankar Chaturvedi:

Digital Evolution Index

One digital innovation with its roots in Europe is the blockchain platform Ethereum (although there’s definitely an argument for it being a global project). Vinay Gupta provides a valuable look at the development of blockchain and smart contracts within the wider context of the evolution of databases and the internet.

Christina Farr looks at the rise and fall of the home cleaning service Homejoy, providing important lessons for startups aiming for growth at all costs.

A lot of media attention has focused on the rapid rise in San Francisco property prices, so it’s interesting to see UBS’ comparison of how overvalued the city’s real estate is compared to other leading cities:

Global Real Estate Bubble Index

Eric Jaffe’s analysis of trends in working hours over the last 130 years points to a downward trend – lets hope that we see this trend continue without leaving us all unemployed:

Annual Hours of Work

The featured image is a mural in Covilhã, Portugal by Pantonio and published in StreetArtNews.