TOUGH DAY FOR SNAPCHAT:  On the anniversary of arch-rival Instagram’s Stories launch, Snapchat received a 1-2 punch of bad headlines.  First, Snapchat is officially getting trounced by Instagram in the usage department.  As noted in the attached TechCrunch link, Instagram now has 250M average daily users compared to Snapchat’s 166M.  If that wasn’t enough Standard & Poors also gave Snapchat some unwelcome news yesterday, by rejecting its application to be included in the S&P 500.  Apparently the way Snapchat’s stock is organized by classes doesn’t comply with S&P’s standards.  This news sent Snapchat’s stock to an all-time low yesterday, because the S&P denial will lock Snapchat out of index-based stock buying from institutional investors.  Industry experts are calling for even more bad news later in the month as Snapchat ends it lockup period for employees – so they can sell vested equity for the first time since the IPO.  All of these issues paint an ever-darkening picture for the once-promising tech darling.

WHEN QUALITY KILLS:  So answer me this . . . the big three economic indicators which predicate auto purchases (gas prices/unemployment rate/interest rate) look pretty good right now, and the US is adding 2M new licensed drivers every year, why are automobile sales declining?  The answer can be summed up in one word – Quality.  According to Bloomberg the average car on the roads is 12 years old right now, with some lasting even 20 years or more.  That’s because they’re made better than ever, so the cost of repairs/upkeep is lower relative to purchasing a new car.  The graph below explains it well.  The bigger the delta between the black bars (new cars purchased) and red bars (old cars scrapped), the more total cars are on the road.  And if that old car is still in your driveway you’re less likely to go buy a new one.

WHAT PIZZA CAN TEACH US ABOUT aaS:  Over the past decade you’ve probably heard the term SaaS (Software as a Service) numerous times – it’s how Oracle built its business services empire.  More recently we’re starting to see many other aaS applications – like TaaS (Transportation), DaaS (Data), etc..  But what does this all mean, and how can the aaS trend by actualized for specific industries?  The simplest and best example I’ve come across is the image below.  It compares an industry we all know very well (pizza), breaks down the components of manufacturing and serving/delivering a piping hot pie to the hungry consumer, and shows how each element can be farmed out to 3^rd parties in a hypothetical PaaS (Pizza) industry.  If you take this example to the extreme imagine Pizza Hut as just a brand you order from, while some anonymous pizza making factory creates the pie and then Uber Eats delivers it to you.  So much for two slices and a Coke from your favorite corner pizza joint.

Have a great Thursday guys!

IS GOOGLE TAKING ATTRIBUTION DATA TOO FAR?:  In the world of location-based attribution tracking the hardest thing to do is measure that last 10 feet from stores’ aisles to the register.  Using cell-based Lat/Long data it’s pretty easy to determine if someone visits a store after seeing an ad.  But how can you tell if that person actually purchased the advertised item?  In May Google attempted to answer that question by introducing a new Store Sales Measurement tool, which matches a users’ Search and Location data (which Google already has) to 3^rd party credit card transaction data.  But this Frankensteined approach to attribution via mixed-source data is catching some blow back in the form of an FCC complaint by a consumer watchdog group called EPIC.  EPIC’s contention is that Google is invading consumers’ privacy by tracking purchases without consent.  Google has responded by saying it anonymizes the data in a way that protects individuals’ privacy.  So is this a creative and legal way for Google to tie existing data points together, or have they crossed the line into Big Brother territory?  Give the attached NPR link a read and decide for yourself.

MISERY . . . SOUNDCLOUD BE THY NAME:  Over the past month I’ve highlighted some major problems at SoundCloud which culminated in the laying off of 40% of their workforce in June.  So what happened to this once-promising albeit semi-legal music file sharing service?  The attached Buzzfeed article chronicles each agonizing mistake in marathon of missteps.  Beyond the obvious errors in personal conduct and a vacancy of leadership, I’d say SoundCloud’s primary mistake is that they lost focus on the original vision of being a file-sharing community where artists and music lovers could share their passion, and instead tried to become a me-too streamer.  It would be like Firestone waking up one day and deciding it should start producing and selling cars – it’s just a leap too far.  Granted the dirt hasn’t being shoveled on SoundCloud’s grave just yet, but it feels like the funeral home has been called.  (Editor’s warning on this article – it’s long, like NSFW long.  Save it for your personal time and stay focused on your day job!)

AUTOMATION RISK ACROSS THE PROFESSIONS:  Finally today, here’s a chart which will get you thinking.  Jed Kolko, Chief Economist at the job site Indeed, has painstakingly graphed hundreds of common jobs along the continuums of Service vs. Manufacturing work, and Communication/Critical Thinking vs. Manual Labor.  Then he color coded each job by likelihood of it being automated.  The results are fascinating.  I think it’s safe to start calling the upper right quadrant “robot corner”, with many human jobs already succumbing to automation. It’s also easy to understand why surgeons and airline pilots will still be humans for the foreseeable future.  But what about all those maybe-automated jobs in the middle?  What about all those dots with no labels?  And most importantly, will the job of Digital Media Blogger be automated any time soon?!?  Talk to me Jed!

Have a great Wednesday guys!

TOP DIGITAL STATS AND THE LAW OF GRAVITY:  AdWeek was a little late on the past week’s Top Digital Stats, so it missed yesterday’s DG print deadline.  But under the category of better late than never, it’s worth sharing today.  While most of the news, like FB’s and Google’s earnings, have already been combed through, it’s worth noting the first point about P&G.  The headline that P&G reduced digital ad spending in Q2 by over $100M makes good on CMO Marc Pritchard’s challenge for digital publishers to either clean up their acts or get cut from the buy.  So no big shock there.  But there was an interesting footnote making the rounds yesterday about P&G’s sales being flat, despite the 9-figure drop in digital ad spending.  The assertion is that P&G was able to improve its bottom line by cutting digital marketing while still maintaining existing sales levels.  But this stat is a mistake to believe in.  Unless you’re doing eCommerce most digital advertising is upper to mid-funnel, since consumers view the ad and then make a purchase in-store days later.  So by reducing its Share of Voice, P&G’s brands will eventually suffer market share erosion.  This cause and effect may not occur immediately, which is why Q2 held up for P&G.  But brand-building advertising is like the law of gravity – if it goes down you’ll eventually go down too.

RADIO CAT FIGHT:  You may remember the Op-Ed article I posted a few weeks ago from RadioInk’s Publisher Eric Rhodes about the demise of the Radio industry.  It was a sobering yet honest assessment about what’s happening to a once great legacy media.  Well now there’s a rebuttal piece (also published in RadioInk) from Thom Callahan, the Chairman of the Southern Cal Broadcasters Association.  While I can’t blame Mr. Callahan for doing his duty to stick up for his industry, the stats sited about Radio’s purported health don’t tell the full story.  To selectively pull out YoY growth stats for a single market, off of some horrible comp years, is the statistical equivalent to polishing a turd.  To get to the bottom of this disagreement on the health of Radio compared to Digital, the DG research team has team dug up the eMarketer chart below.  From 2013 to 2017 Radio’s share of US Ad Revenue dropped -19% from 9.3% to 7.5%.  During that same period Digital revenue grew by 58%, and Mobile grew by 769%.  So to me it’s pretty clear that Mr. Rhodes is correct with his assertion that Radio is on a sad steady decline, and Mr. Callahan is swimming in a fishbowl that’s glass is so thick he can’t see outside of it.  (Quick note on the date of the eMarketer chart below – it’s from 2014.  Since the Radio industry stopped reporting annual revenue in 2015 there are no actuals, so eMarketer’s estimates are the best we can do.)

WORKING YOUR PASSION = BEING PASSIONATE ABOUT YOUR WORK:  To end the day I’d like to give a fun little shout out.  Every good salesperson knows it’s helpful to be passionate about what they’re selling.  Pandora’s Taylor Harris takes this theory to the extreme by not only selling ads on the music streamer, but also by creating music herself.  You see, Taylor’s day job is that of a mild mannered digital sales rep.  But at night her alter ego comes out as the Lady in the alternative group Lady Lark.  Taylor and her band mates have committed to 100% original music live shows – so no filler covers here.  It’s pretty easy to see the passion Taylor/Ms. Lark brings to her music, which also carries over to her day job.  So here’s the chicken-and-egg question – did working at Pandora unlock the inner singer in Taylor, or did she gravitate to Pandora because of an existing passion for music?  Either way, it’s a hell of a synergy between profession and passion!

Have a great Tuesday guys!