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.

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.

Thought Starters: Content that has got me thinking 18

This edition of Thought Starters includes a few pieces that take a more critical view of our interactions with the internet and technology as well as the usual analysis of recent developments in media, technology and society in general.

Ex mobile junkie Jeremy Vandehey gives his advice on how to live more of your life without your smartphone, arguing that this will enrich your relationships and personal experiences .

This is your brain on mobile

In a similar mode, Kathleen Davis gives her account of how she survives and thrives in the tech sector despite never having owned a smartphone.

Mike Feibus looks at the growing success of Chromebook within the PC sector which he attributes to strategic mistakes on Microsoft’s part and points to future success as again being closely tied to the latter’s strategy.

Beacon location based services have been getting a lot of attention lately in the media, particularly in terms of what they can do for the retail sector. Bobby Gill looks at alternative use cases for beacons in the education, dating, home electronics, events and sports sectors.

David Hariri provides a spirited defence of the web application, pointing to the benefits of more open based models of development when compared to the more closed mobile app approach. I am definitely all for a more open web but any judgement on the appropriate strategy needs to be weighed against a range of factors including functionality, audience and budget.

A report in the Financial Times points to Apple looking to launch an offering in the connected home sector at the Worldwide Developer Conference on June 2. Roger Kay takes a critical look at Apple’s attempts to operate in the Internet of Things sector, pointing to the company’s controlling tendencies in an environment that is typically based on a more collaborative approach between different players.  Benedict Evans in contrast, takes a broader view of the Internet of Things sector and looks at the contrasting strategies of Apple and Google.

Maciej Cegłowski’s talk, The Internet With A Human Face provides a valuable critique of the centralisation of the web, the growth of Big Data and the inability of the internet to forget.

The Internet with a Human Face

The centralisation of the web has gained a spike in coverage over the course of the last week due in large part to a trio of issues. Matthew Ingram has a look at the three talking points, Amazon’s negotiations with publisher Hatchette, Google’s search algorithm’s impact on metafilter and Facebook’s impact on what news journalism is being brought to consumers’ attention.

Ben Thompson looks more closely at Amazon’s relationship with the publishing industry,  characterising the former as nasty and the latter as incompetent.

Amazon hasn’t exactly been quick in coming out in defending itself in its dispute with Hatchette, but it has been interesting to see them use News Genius as a means of publicising their position. I reckon we’re going to see more of this going forward.

Programmatic buying is making a big impact in the online advertising sector, so its interesting to hear John Battelle warning of the loss of context when media is simply bought on the basis of audience.

Advertisers Continue Rapid Adoption of Programmatic Buying

On a less critical note is Mary Meeker’s Internet Trends report which reports on key statistics and trends in the digital sector. Coverage includes growth in mobile, online advertising, mobile messaging and a look at emerging business models online and the digital sector in China. A great way of quickly getting up to speed with what is going on online.

Cycling is a subject close to my heart so I was intrigued by Felix Salmon’s analysis of New York City’s Citi Bike scheme. Well worth a read, even if you aren’t a pedaler. 

Richard Florida takes a fascinating look at the relationship between the popularity of heavy metal and a countries’ economic health.

Though metal may be the music of choice for some alienated working-class males, it enjoys its greatest popularity in the most advanced, most tolerant, and knowledge-based places in the world.  Strange as it may seem, heavy metal springs not from the poisoned slag of alienation and despair but the loamy soil of post-industrial prosperity.

The featured image is a piece by  Maya Hayuk for the Asphalte Festival in Charleroi, Belgium and found on StreetArtNews.

Ad blockers: Consumers friends or foe?

The media sector is going through a period of transition as it moves increasingly from print to online. A potential complication in this move is the increasing growth of adblocking software by consumers.

Adblocking software typically acts as an extension on browsers, allowing users to block a range of advertising formats including banners, pop-ups and video ads including content on Facebook and YouTube.

Adblock Plus is the most well known of the extension providers and has argued that it aims to promote advertising that is more user friendly — although their position is somewhat undermined by their unblocking of advertising from some sites for a share of their revenues.

For internet users faced with an increasingly disruptive array of online advertising formats (driven by falling response rates), this provides a welcome relief and is reflected in the growth of these services. A recent report from PageFair estimated 22.7% of internet users are employing adblocking software with an annual growth rate of 43% per year.

Media outlets do have the option of blocking viewers using adblocking services but many appear reluctant so far as seen by Ars Technica’s approach. As the use of adblockers becomes the norm rather than simply an edge case, this is likely to be revisited.

Reductions in online advertising revenues are also likely to bring forward the introduction of paywalls and the move towards native advertising where the line between content and advertising is blurred. Neither solution present particularly attractive solutions for consumers looking for a free ride.

As for me, I am going to continue to use Adblock Plus, but I am adding those sites I care about to the list of manually whitelisted domains. This way I can hopefully see this sites continue to offer advertising sponsored content well into the future.

What’s happening to our newspapers…A look at the changing position of newspapers in our media landscape.

The newspaper sector is facing something of a cross roads with a general decline in readership and advertising revenues for print publications. The internet is providing a valuable alternative distribution channel to print, particularly as smartphones and tablets find themselves increasingly in the hands of UK consumers. Media Consumer Survey 2013: Love in a cold climate, Deloitte, 2013 The web though provides a mixed story on whether online advertising revenues will fill the hole. News outlets can no longer rely on their role as curator of users view on the world as consumers turn to social media and an array of services such as Flipboard and Zite to navigate around what might be important to them. This change has the potential to lead to a decrease in web traffic for the newspaper websites and also arguably increases the leverage of high profile journalists who have less need for the prestige of a newspaper byline (see the recent departure of Walter Mossberg and David Pogue as a litmus test of sorts). But all is far from lost for our traditional providers of news who aren’t simply standing still. The Daily Mail and The Guardian are both interesting examples of news organisations that are adapting to the digital age. Both organisations are embracing audiences beyond those reachable by their printing presses and have adapted their newsrooms to the always on news cycle. Results from Guardian News and Media (the Guardian and Observer’s publisher) point to an increase in online revenues that counterbalances the decline in print revenues, providing some vindication of the organisation’s digital-first strategy announced in 2011. Reassuring news, given the important role the Guardian and other newspapers have played in raising the profile of important societal to the society we live in.