THE FM CHIP IS RADIO’S FOOLS’ GOLD:  Every time a natural disaster strikes radio broadcasters raise the call for “FM Chips” to be activated in iPhones.  The chip is basically a switch inside a phone’s hardware which allows users to pick up local FM stations.  The broadcasters’ argument is that when something bad happens and internet service goes down people look to broadcast radio for emergency information.  So by allowing smartphones to receive FM signals critical information can still get out sans internet.  Most Android phones have the chip enabled, but Apple still does not.  That’s why FCC Commission Ajit Pai and scores of broadcasters are turning up the heat on Apple since the recent rash of hurricanes.  Most people would agree that getting more information out during a disaster is a good thing, so the broadcasters’ FM Chip argument is valid.  But I also believe there’s a back door agenda here, based on the belief that if FM stations are available on iPhones users will naturally listen to more radio during non-disaster times.  This is an incorrect assumption by the broadcasters.  When’s the last time you, or the millennial sitting next to you with earbuds on, got frustrated that they couldn’t tune in WXYZ on a phone?  It never happens because there are about 50 other ways to hear the same songs on your connected device.  So yes, having FM Chips activated in iPhones during times of peril is a good thing.  But Radio shouldn’t be fooled into thinking it will suddenly become relevant in the digital age if Apple activates the FM Chip in it’s phones.

NOT YOUR GRANDFATHER’S SHOPPING EXPERIENCE:  There’s an interesting cause-and-effect occurring in the world of commerce which is effecting both Retailers and the CPG companies who sell products within those retail locations.  First the Cause.  The retail experience is transforming before our eyes.  Not only are B&M footprints shrinking, thanks to eCommerce, but next generation in-store floorplans are much more interactive and experiential than ever before.  Forbes has a great write up of what this looks like in the attached link.  Now for the Effect.  As the in-store experience transforms traditional shelf space is going away.  And when that happens products which rely on share-of-sight for sales will start to feel the pain.  This is already happening in the CPG sector, as noted in the attached CNBC link.  Even the reliable old grocery store is transforming from a grid of aisles to a wandering shopping journey filled with fresh produce and ready-to-eat meals.  With less shelf space comes fewer product SKUs, which hurts CPG manufacturers’ ability to bring their products to market.  Unfortunately for many companies out there, I think we’re just at the beginning of this transformation.

WEEKEND INSPIRATION:  Finally, I’d like to leave you this week with some inspiration from our very first DG Guest Contributor.  This post comes from Pandora VP of Sales Priscilla Valls.  In a recent team meeting she showed the attached video from a TedTalk event conducted by renowned psychologist and best-selling author Shawn Achor.  It’s an uplifting segment that’ll have you challenging yourself on how to be better than just the Cult of Average.  I’ll leave you with Priscilla’s own description . . .

“I shared the TedTalk and not only did it provide a few laughs but it gave the team perspective on the ways we can control our activity. The video is twelve minutes long, but it feels like five.  While some may want to do all of the activities at the end of the video, after watching, the team committed to do two things:  1) Start Your Day With Intention.  We can all be busy with to-do lists. Instead, choose three things that are most important to get done every day. Hold yourself accountable to them (i.e. share with your team/each other/your boss), and celebrate when you accomplish them.  A few critical moves everyday over time make for HUGE accomplishments.  2) Commit To Three Conscious and/or Random Acts of Kindness/Gratitidue.  A small positive gesture to our clients (a thank you note/email, catered lunch when they’re working long hours, etc.), and to each other, as we work to support one another in our goals to be the best we can be as a team and as individual human beings goes a long way. #payitforward”

Inspirational words Priscilla, thank you!

Have a great Friday (and weekend) guys!

SPOTIFY’S PRIVATE VALUATION IS UP . . . AGAIN:  No, that’s not a typo.  Yesterday news broke that some pre-IPO private trading of Spotify’s equity was valued in the $16B range, which is up $3B from just a few months ago.  RAIN has the details in the attached link.  As you let that number sink in let me give you two opposing thoughts.  First of all this seems crazy, right?  How could a company which loses $600M annually and isn’t expected to raise any new capital because of a direct listing IPO stay afloat?  What about the outstanding royalty lawsuits which are currently in the nine-figures?  And how can the market justify Spotify’s market cap at 8x Pandora’s current $2B valuation?  But on the other hand, if Spotify is valued anywhere near $16B wouldn’t that be a huge benefit to the entire streaming sector?  We all know audio streaming is a grinder of a business thanks to the high royalty payments made to artists and songwriters.  Because of this streamers’ margins are breakeven (at best), which keeps stock prices low, and inhibits the ability to raise new capital.  But suddenly if the market does value Spotify at $16B that could buoy the entire sector and create more working capital.  I don’t think anyone truly knows Spotify’s real value.  But if you subscribe to the Wall Street adage of “buy low, sell high”, then buying in at a $16B valuation might not be the best deal you could make.

COULD VERIZON CHALLENGE THE DUOPOLY?:  Over the past year I’ve written dozens of blog posts on the unhealthy state of digital media, which is currently dominated by the Goo-FBoo duopoly.  Everyone from me to Sir Martin Sorrell thinks a more competitive playing field will benefit the entire industry.  And recently the most common guess for a third horse entering the race has been Amazon, with its vast user base and rapidly developing media business.  But what if the third horseman wasn’t Amazon, and instead was a Telco like Verizon?  In the attached AdExchanger link their guest author puts forth the theory about how a Telco could become a formidable digital media competitor.  The key to the entire argument is the Telcos start with the one thing everyone wants – mobile device IDs connected to specific users and their billing data.  Even with that treasure trove of data the Telcos’ challenge becomes how to serve digital ads, since their typical customer isn’t exactly spending a ton of time on home sites like Verizon.com.  That’s where Verizon’s strategy to acquire Yahoo and AOL, and combine them into one platform called Oath, makes things interesting.  If Verizon can successfully integrate its cellular customers’ data with time spent on its publisher sites they would have a powerful DMP with end to end data and a way to site-serve ads.  Not sure if they’ll be able to run this play successfully and actually go toe-to-toe with Goo-FBoo, but it’s an interesting idea to ponder.

WHAT YOU DON’T KNOW COULD KILL YOU:  Quick, can you name companies behind the two logos in the image below? Would it surprise you to know that these are from two of the largest tech companies in the world – Tencent on left and Alibaba on the right.  Both companies dominate Chinese/SE Asian Social, Data Aggregation and eCommerce the way Facebook and Google do in the Western World.  Yet we don’t seem to pay much attention, or even know much about them, relative to the competitors in our own fishbowl.  But that needs to change, according to Sir Martin Sorrell in the attached Digiday link.   Tencent’s messenger app WeChat has 940M MAUs – only slightly behind Facebook.  And Alibiba’s annual Boxing Day one-day online sale does several times more revenue than Amazon Prime Day.  Experts predict that it’s only a “when” not “if” these Asian tech titans turn their attention outward towards Western markets.  For consumers this could be good because more tech equals more choice.  But the US Digital Mediascape could be in for a major disruption of any of these guys gain traction over here.

Have a great Thursday guys!

SMART TARGETING MEETS BIG PHARMA:  For decades pharmaceutical advertising was sequestered only to print mediums, because the FDA mandated a certain amount of legalese be printed within the ad.  Then in 1997 regulations were loosened enough to make pharma advertising feasible on television.  Now fast forward to 2017, when Big Pharma is expected to spend over $6B on advertising in the US.  Yet digital media’s pharma revenue is still relegated to the proverbial kids’ table.  That is, until now.  Digital publishers such as Facebook and Pandora are now aggressively pushing into pharma with a compelling new combination of reach plus precision targeting.  As noted in the attached STAT News article, Digital’s newfound success is based on its ability to create audience segments of consumers who are more likely suffer from particular ailments, and then overlay HIPPA compliant “mirco-neighborhoods” using 3^rd party data from companies like Crossix.  The result is a potent new breed of precision drug advertising which is sure to give Digital a more prominent seat at the table.

TRITON’S JULY RATINGS:  Yesterday Triton released its July’17 Webcast Metrics Ratings.  Overall consumption of streaming (AAS) was down 4% compared to June, which is in line with the normal summertime seasonal slump.  But the YoY growth picture still looks strong, with the industry going +14% over June’16.  The pureplays continue to dominate with Pandora and Spotify in their usual top spots.  In a carryover from a trend I touched on during Monday’s blog, the broadcasters’ collective stream listening was actually down 3.6% vs. July’16 – another sign that they’re not keeping up with the migration towards streaming.  RAIN has a summary in the attached link and the usual historical graphic is below.

ADWEEK’S READERS’ CHOICE AWARDS:  Finally, if you’re looking to kill a few minutes today AdWeek has opened up voting for its annual Readers’ Choice Awards in the attached link.  Although this survey is far from scientific, it’s a great way to vote for your digital favs in a format that many industry insiders will see.  Of course, I’m biased to one particular audio streamer (beginning with a P) for the Hottest Music App in question #18.  I also got a kick out of #17 (the Hottest Romance App) because Tinder is so romantic, right?  The best part of this survey is that you can vote as often as you like.  So in true Chicago spirit please vote early and vote often.  Time to run up the score DG Nation!

Have a great Wednesday guys!

HOW’S YOUR PROXIMITY GAME?:  Proximity is hot in digital media right now.  The ability to track consumers’ whereabouts, serve ads when they’re at/near a specific location, and determine whether or not a mobile ad actually drove a consumer into a store is fast becoming table stakes in the mobile-first world we’re now living in.  But the MarTech landscape for proximity still looks a bit like the Wild West.  This demands fluency around the concept of triangulation instead of just lat/long geofencing to improve tracking accuracy.  Or how about matching ads served on an individual mobile device to which stores that phone visited via its MAID?  And don’t forget about beacons, which are like proximity tracking in reverse, because they start with an in-store visit and then use device data to map back to the shopper.  Confused yet?!?  To help sort this out AdWeek had published an insightful Slack panel in the attached link.  Since the panelists come from a wide array of clients, agencies, publishers you really get a sense of how each stakeholder is approaching the opportunity (and challenge) of proximity.  It’s a somewhat confusing but important conversation we all need to get versed in sooner than later.

ADWEEK’S TOP DIGITAL STATS:  This week’s top digital stats in the attached AdWeek link run the gamut.  It’s not surprising that Facebook and Google continue to dominate digital ad sales (#1) – the duopoly now commands 63% of US digital ad revenue.  It is surprising that the foodie search site Yelp is actually out billing Snapchat this year (#2) – goes to show you how the “shiny new toy syndrome” can influence our perceptions.  And least surprising of all is the disclosure that FB has turned over log files to Federal investigators pertaining to Russian groups who bought political ads during the Presidential election (#7) – hmmm . . . I wonder what those ads were trying to accomplish?  Enjoy the list!

FACEBOOK’S VIDEO AMBITIONS:  Today’s final article from AdAge starts as a story about Facebook’s new video platform called Watch, but ends up becoming so much more.  It’s a meandering journey through FB’s corporate culture, the market dynamics around video content, and the paradox of trying to build a video content platform while still incentivizing 3^rd party publishers to put their content on the very same platform.  The market position FB commands with its partnership-level clients (aka Advertisers With Benefits) is enviable to say the least.  But it comes with some baggage.  It creates a corporate expectation that they can simply dominate any market they invest in.  That attitude of prioritize-to-conquest has definitely proven itself out with Mobile and Social, but TV might be a whole different ballgame.  For starters, producing long-form episodic TV content is easier said than done.  So do you just outbid the networks, Netflix, Hulu and every other OTT service out there for the good stuff?  And how do you get the movie studios and production houses to put their content on your site when you demand a 45% rev share of all ads sold within their content?  Not an easy equation to solve, to be sure.  But there’s a huge prize waiting in the form of $85B in combined US TV/Cable/OLV annual ad revenue.  The only question is whether or not FB can run the right play to grab that money.

Have a great Tuesday guys!

SOME HONEST TALK ABOUT RADIO’S STREAMING PROBLEM:  First up today is a searing LinkedIn post from a Radio industry consultant named Mark Ramsey.  The basis for the story centers around the graphic below, which compares Triton’s ratings of the pureplay streamers to the broadcasters’ streaming services.  YoY the pureplays are up 16%, but in contrast listening to broadcast streaming is down slightly.  Mr. Ramsey bluntly calls out what’s going on when he says “Radio is not getting more important on digital platforms. It’s actually getting less important. The growth rate is not just well behind the growth in pureplay listening, consumption of broadcast radio brands online is actually shrinking.”  So why is this happening?  Mr. Ramsey’s opinion that Radio’s end goal of making its broadcast product (say the Kiss station in Tulsa, as an example) available online just isn’t good enough to win audience.  He follows by saying “. . . just because a platform distributes audio doesn’t mean consumers want your audio on it.”  Bottom line, Radio isn’t just getting beat by the technological innovation of internet streaming.  It’s also losing the content game to streamers who deliver more customized listening experiences, podcasts, playlists, etc..  This post is written by a radio insider and is meant to be a rallying cry for his industry.  To me it’s a dose of reality that the broadcasters’ attempts to go digital via streaming just aren’t good enough.

NYC GETS ITS ADVERTISING WEEK ON:  Are you ready for Adweek?  It’s Manhattan’s annual confab of marketing thinkers and media trendsetters, all coming together in an unusually steamy late-September setting.  Digiday provides a preview of what to expect in the attached link.  Not surprisingly, trust and transparency in digital media will be center stage.  And let’s not forget about the elimination of waste – expect to hear more than a few references to Restoration Hardware CEO Gary Friedman’s quickly-becoming-famous 22 Words pronouncement on the topic.  Whether you’re an Adweek newbie or a grizzled subway-hopping veteran, the event will keep you on your toes.  To get you prepped here’s a handy What’s In/Out guide for this week’s gathering.  Enjoy!

THE 40 MOST POWERFUL WOMEN:  Finally today, Fortune Magazine is out with its annual list of the 40 Most Powerful Women in business.  Despite an overall lack of diversity in the white-male geekdom of tech, there are a solid number of women from the digital sector on this list.  Led by Facebook’s Sheryl Sandberg, 5 of the top 10, and 8 of the top 40 women on this list come from a tech company.  Having female leadership in our industry is good for two reasons.  First, it provides more diversified C-suites filled with the absolute best leaders within their respective companies.  And second, today’s women in leadership positions become role models and mentors for other up and coming female managers who have the same aspirations.  I know some of you will say that true gender equality in the workplace will only happen when we stop even tracking women on a separate list from men, and that’s a fair point.  But until that day comes, the women on this list provide an inspiring and powerful set of role models for all of us!

Have a great Monday guys!

GOOGLE MAKES ITS HARDWARE PLAY:  Last Friday I reported about the possibility of Google making a full commitment to the smartphone game by acquiring Asian hardware maker HTC.  It looks like those rumors were true with yesterday’s announcement of a cooperation agreement between the two companies.  Instead of buying all of HTC, Google will be cherry picking the line by purchasing HTC’s engineering unit which worked on the original Pixel as well as their smartphone-related patent suite.  The price tag is estimated to be in the $1.1B range, which isn’t too shabby for a struggling HTC which now only claims 2% of the smartphone market.  The real loser in this transaction might end up being Apple.  With a resurgent Samsung and a potential data+device gorilla in the form of Google, Tim Cook and the gang will need to be more innovative than ever to stay at the top of the hardware space.

WHAT MAKES A LOGO MEMORABLE?:  So what goes into a good brand logo?  It should be easily recognizable, represent the intrinsic nature of the brand, and be memorable, right?  Well it turns out that third memorability aspect is easier said than done.  In a really interesting study a research company called Signs.com asked 150 people to draw 10 common brand logos from memory.  The story, and resulting artwork, are featured in the attached AdWeek link.  As you can see, the drawings are a hot mess.  We can generally recall colors and basic shapes, but the details usually escape us.  The table below summarizes the recall results from each brand – the green boxes (Ikea, Target) win on memorability, while the red boxes (Burger King, Footlocker, Starbucks) have some work to do.  If you really want to geek out on this go to the bottom of the article and roll your cursor over the company pictures.  As you’ll see, there are some really bad logo artists out there.  Enjoy!

IS AMAZON YOUR BABY’S DADDY?:  So when does the use of behavioral data cross the line into creepy?  I think a safe answer to that question might be found in the attached AdAge article.  Over the past few weeks Amazon has been erroneously sending customers alerts about purchases made within their non-existent baby registries.  As you can see by the tweet reactions, customers who weren’t expecting didn’t exactly enjoy the mistake.  So how could this  happen?  Beyond just Amazon’s predictable “tech glitch” excuse, there’s a real business in combining purchase data with algorithms to predict life stages, all the way down to an expecting mom’s due date.  Obviously Amazon was running some type of analysis here and it just went awry.  What’s even crazier is that this isn’t a new mistake.  All the way back in 2012 Target got into a mess by shipping a high-school aged girl a mom-to-be coupon pack even before her family knew she was with child.  Target figured this out based on the girl’s online purchases of unscented lotion and cotton balls which (believe or not) usually spikes during the fourth month of a pregnancy.  See, I told you this stuff was creepy!

Have a great Friday (and weekend) guys!

STREAMING CONTINUES ITS SURGE:  If there was ever any doubt about Streaming’s importance to the musical ecosystem, the following stats will seal the deal for you.  According to the RIAA, an astounding 62% of the US Music Industry’s revenue came from streaming in the first half of 2017.  What makes this number even more amazing is just one year ago streaming comprised 42% of the revenue pie – so that’s a 15% swing in just 12 months!  In the attached article RAIN gets inside the numbers.  Paid subscription revenue is driving the growth with $1.7B in revenue for the first half of the year compared to $1B in 2016.  This comports with the fact that all streaming platforms besides Pandora are focused on subs as their primary revenue driver instead of ad-supported free listening.  On the other side of the aisle ad-supported and blended paid products (like the mid-tier Pandora Plus) kicked off another $770M in rev.  Regardless of which flavor of Streaming you choose, the importance of Streaming as a revenue source to the music industry cannot be overstated.  Simply put, as Streaming goes so goes the entire US Music Industry.

STREAMING’S GAIN IS RADIO’S LOSS:  The one thing you can count on in marketing is this fact – advertising dollars will inevitably follow time spent.  So as listening migrates from AM/FM Radio to Streaming ad revenue is sure to follow.  And predictably enough, it’s happening.  According to Kagan Research in the attached Radio Ink link, Broadcast Radio will see a slight decrease (-.3%) in total revenue.  But when you dig in a little deeper you’ll see a larger structural revenue problem for Radio.  The majority of Radio’s rev is derived from on-air ads.  But according to Kagan’s forecast, broadcasters will see a $100M decrease in on-air advertising from 2016 to 2017.  To the broadcasters’ credit, they’re going the extra mile to make up the decrease with incremental digital and off-air sales.  However these efforts don’t really make up the entire gap left by the on-air decrease.  And to the question of where is Radio’s spot revenue fleeing to?  Maybe reread the previous article for your answer.

RADIO.COM’S RELAUNCH IS A YAWN:  Based on the numbers I’ve just shared, it should be no surprise that broadcasters are looking for ways to reclaim lost audience and revenue from the Streamers.  To do this they’re trying to emulate the pureplays with their own streaming apps.  The biggest of these, iHeart Radio, has been around for years.  Now in the “also ran” department comes CBS Radio’s effort with the relaunch of Radio.com.  As noted in the attached Radio Ink article, Radio.com will include a combination of on-demand music and podcast content as well as the live streams from CBS’s radio stations. (insert snore here) Besides that there’s not much innovation with this relaunch, making it a fairly blah copycat of existing streaming platforms.  I’m guessing if you’re already listening to a CBS station you might shift over to this app.  But I’m not seeing how this will draw new listeners to CBS.

Have a great Thursday guys!

A BETTER WAY TO OLV:  We all know online video is a mess right now.  Brands want their video ads viewed by a real human (crazy idea, right?), while publishers and networks alike can’t get their audiences to watch a video ad for more than a few seconds.  Then there’s the little issue of brand safety, with estimates that 30% of OLV ads are running adjacent to controversial and outright violent content.  With that as the backdrop, wouldn’t it be refreshing to be able to buy OLV from a premium publisher who guarantees your ad will be viewed and only be charged after at least 15 seconds of the ad has been seen?   This is exactly what Pandora is delivering with the debut of its new Video Plus ad unit.  As reported in the attached AdWeek exclusive, V+ provides brands the perfect vehicle to deliver their video unit in a brand-safe environment, and is priced on an enforced (aka non-backgrounded) cost per completed view basis.  Feels like the perfect solutions for brands looking for a lighted path through the murky world of OLV.

TELCO MERGER IN THE WORKS?:  About a decade ago the US Telco industry went through a phase of consolidation which took the competitive playing field from several smaller competitors down to the current Big Four – Verizon, AT&T, T-Mobile, and Sprint.  But all four were not created equal.  For a while Verizon and AT&T commanded most of the market share, while T-Mo and Sprint wrestled with one another for the scraps.  Then something interesting happened at T-Mo.  In 2013 they rebranded themselves as the “Uncarrier” under the leadership of their new CEO John Legere.  Over the last four years this strategy has inspired T-Mo to zig while the other guys zagged, with innovative features like no-charge streaming, unlimited data, and all-you-can-eat-for-one-price plans.  The results have been impressive.  In 2016 T-Mo surpassed Verizon as the #1 handset seller in the US (which correlates to in-store foot traffic and new account sign ups), and is starting to threaten for overall market share.  Now rumors are circulating that T-Mo might be in acquisition mode with the potential purchase of Sprint.  With Sprint trailing the other three, this might be a smart move for both companies.  So will Telco turn into a three horse race sooner than later?  We shall see.

UBER LAWYERS UP:  Well, you knew it was just a matter of time before something like this happened.  According to the WSJ in the attached link, a client (Uber) is now suing one of its digital agencies (Fetch Media) for breach of conduct, negligence and fraud.  Specifically, Uber alleges that Fetch deliberately misrepresented the effectiveness of the mobile ads it purchased, failed to prevent ad fraud by serving impressions to non-humans, and pocketed rebates owed to Uber.  It’s important to note that these are just allegations – there’s really no way to tell who’s right in this argument until this works itself out in court.  But the allegations themselves play like a greatest hits album of all the problems in digital media today.  The real spine shiver for all the other agencies out there is what happens if Uber prevails and gets a big settlement from Fetch?  Would that mean open season for any other disgruntled client to sue their agency over performance?  Feels like we’re about to discover a new low the already tense client-agency relationship paradigm.

Have a great Wednesday guys!

ANTI-SEMITIC AUDIENCE SEGS?!?:  Just when it looked like digital media’s controversial content woes were starting to die down comes news of some worst-case-scenario targeting capabilities on Facebook’s Audience Network.  In the attached link ProPublica explains in excruciating detail how it was able to create three different anti-Semitic audience segments using Facebook’s self-service API, run ads against these segments, even optimize within the segments, and then receive back-end performance metrics.  What makes this even worse is that FB’s system actually accelerated the process by auto-populating controversial segment names and suggested ways to expand the target audience by adding other correlating segments.  To give you an idea of how vulgar this is, ProPublica typed in something as simple as “jew h” and started getting suggestions for Hitler-related audience segments.  Then they were told they could reach more individuals by adding “second amendment” as an additional segment, because apparently there’s a strong correlation between the two groups.  Are you mildly nauseas yet?  In fairness to FB no human was involved in creating and selling these segments.  But FB needs to take responsibility for the fact that an algorithm they’ve created to monetize searches on their platform could produce something like this.  Considering that FB is one of the two biggest players in our industry, is it any wonder brands are getting fed up with digital media?

VAN HIT HELL:  If you’ve ever worked at a radio station this next article is for you.  It’s a sad yet accurate depiction of what goes on at a typical radio “remote” these days, as explained in the attached Radio Ink link.  The on-site appearance side of broadcast radio started with legitimate intentions.  Bring the DJ and the entire broadcast out of the studio to connect live with listeners.  Throw in a van, prize wheel, concert tickets and t-shirts, and you’ve got yourself a mini-attraction which could create a legitimate amount of on-site buzz.  Broadcasters understood clients would pay for these remotes as part of ad deals, so they became a core part of Radio’s sales offering.  But then the stations started doing too many appearances, so they became less special and more expensive.  To help save money live broadcasts became DJ appearances, and then DJ appearances became van hits.  Today’s van hits are about as fun as an STD test (not that I know what that’s like).  Picture a couple of disinterested millennials sitting at a table under a tent trying hard not to make eye contact with passers by.  Put this setup in front of a grocery store or bank, and you have the most boring scene in the history of entertainment.  Listeners don’t feel the excitement when they walk by, much less get in their cars and drive to one of these appearances.  What’s even worse is that local clients still feel compelled to purchase ad buys with appearances attached.  Maybe it’s just force of habit, or maybe they (like most of us), haven’t been to a station appearance lately to see how lame they really are.

IN THE YEAR 2037 . . . :  Are you ready to get your future mind blow?  Yesterday at TechCrunch’s Disrupt Conference, Russian tech mogul and futurist Yuri Milner used the pattern of the previous 10 years in tech to predict where we will be 20 years from now.  His prognostication, as reported in the attached TechCrunch link, is jaw-dropping.  As a base line consider the consumer-facing internet in 2007.  The rough valuation of the industry was $350B then, and 70% of that value was controlled by five players.  Today the industry’s value has jumped 10-fold to $3.5T (that’s “t” for trillion), with 70% of the assets still locked up by the top five industry players.  Interestingly, the actual five have changed a bit – now it’s Facebook, Google, Amazon, Alibaba and Tencent.  (And no, he didn’t forget Apple on this list, which he classifies as a device company and not an internet company.)  According to Mr. Milner in 20 years consumer facing internet companies will experience another 10x increase in value, up to $35T.  This estimate is based on the value of all goods and services we consume through the internet, which is around 6% today.  Within the next 20 years that total will jump to over 20% with some tech-nascent industries, like Healthcare for example, growing much faster.  If this forecast is even close to accurate we’ll be all be living in a digital-first economy by 2037.

Have a great Tuesday guys!

ADWEEK’S TOP DIGITAL TRENDS:  It’s been a few weeks since AdWeek gave us a Top Digital Trends summary, but they’ve more than made up for it with this week’s list.  Among the highlights are the surge in Messenger apps (#3), the growing power of Social platforms (#5), and an increase in cord cutting as consumers shift to OTT content delivery (#6).  But there were also lowlights, including digital ads being viewed for less than 2 seconds on average (#1), and an estimated 30% of online content being classified as outright violent (#7).  All of these stats paint the picture of a digital media industry in a state of constant flux as users get more savvy about what content they consume, and brands demand greater accountability about how their digital dollars are spent.

SLACKER FINALLY GETS A DANCE PARTNER:  The pureplay streamer Slacker finally has a buyer, after months of speculation about the company’s ability to stay afloat.  An LA-based company called LiveXLive has purchased Slacker for a relative pittance at $50M.  As you might remember, back in April Slacker laid off almost 50% of its workforce as rising royalties costs and a lack of revenue put them in a squeeze.  So why did LiveXLive make the investment?  According to company sources LiveXLive will utilize Slacker’s audio streaming tech to compliment its video platform to create a multi-media system for content distribution.  From a wider industry perspective the Slacker move is part of a trend towards the consolidation of stand-alone second tier streamers, as was the case with the SoundCloud acquisition by a pair of Asian investment firms back in August.  Changes like this are proving that audio streaming is a tough business with room for only a handful of top-tiered players to succeed.

APPLE IS ABOUT TO KILL THE COOKIE:  Tomorrow could go down as an inflection point in the history of digital advertising.  It’s the day Apple pushes out its new Safari browser update, which limits users’ cookie-based retargeting to just 24 hours through a new policy called Intelligent Tracking Prevention.  Why is this such a big problem?  Because the vast majority of 3^rd party publishers, ad networks and programmatic trading desks are still dependent of cookies to provide behavioral data in order to deliver ads.  So without this data Safari users become non-targetable, which isn’t very useful in today’s data-driven world.  The industry, as you might expect, is freaking out about this change.  As noted in the attached AdWeek link, six major trade organizations have published an open letter blasting Apple’s move for setting “opaque and arbitrary standards of cookie handling”.  The industry’s greatest fear is that Apple’s move could be mimicked by other browsers, which would pretty much kill cookie-based retargeting altogether.  On the other side of the coin, this would make mobile retargeting using MAIDs (Mobile Ad IDs) even more important, since cookies are non-existent in the mobile environment.  The stakes are high on all sides of this issue, so be ready to watch the ripple effects occur after tomorrow’s Safari switch over.

Have a great Monday guys!