ENGAGEMENT IS EVERYTHING:  As our time spent with media gets increasingly mobile and social a predictable thing is happening – we’re spending less and less time with individual publishers’ sites.  According to the Taboola research noted in the attached eMarketer link and graph below, our average session time spent with publishers is down to 1.9 minutes, compared to 2.1-2.2 minutes in the first half of 2017.  The underlying cause of this decrease is fragmentation.  With more sites offering more content we scroll, flip and swipe faster than ever.  And since time spent on a site is a good proxy for engagement, it’s easy to see how users are less engaged with publishers and their sponsoring brands.  That’s why it’s critical to find platforms where users come and stay.  Music streamers like Pandora, Spotify and SoundCloud are examples of this – each is in comScore’s Top 10 mobile time spent rankers every month.  According to Triton’s latest Webcast Metrics release, Pandora leads time spent with 34 minutes per session, which is 17x the engagement rate of the average publisher.  So could engagement-heavy publishers be the key to marketing success in this crazy digital world?  You know where my head is at.

PAGING DOCTORS BUFFETT, BEZOS AND DIMON:  A few years ago could you ever have imagined a plan, like the one announced yesterday, in which Berkshire Hathaway, Amazon and JP Morgan Chase join forces to create an alternative option healthcare system that isn’t designed to make money?  That’s exactly what occurred, as described in the attached CNBC link.  The embedded video is actually worth the watch as the anchors read the breaking news headline in real time and can’t quite get their minds around it.  Sure there are many more questions than answers at this point.  Will the new system be open to everyone or just employees of those companies?  How will they work with the HC providers and pharmas?  While all of this will take years to work out one thing is certain.  The Healthcare system, with its infinitesimal layers and overcharging bureaucracy, is ripe for disruption.  And now a cross-section of business titans have the industry in their sights.

WHAT McDs EARNINGS SAYS ABOUT OUR SOCIETY:  On yesterday’s earnings call McDonald’s reported same store foot traffic was up for the first time in five years.  Credit for this increase was given to a two part menu strategy.  The first move was McDs’ recommitment to value with its Q4 “McPick 2” and $1 soda LTOs.  That’s fairly standard for a QSR.  But what’s unusual is that McDs simultaneously released higher end menu offerings like Kale & Sriracha burgers and more premium coffee drinks.  This high-low strategy paid off for McDs at the cash register, and also illustrates something far more transformational about our society, as reported in the attached Business Insider link.  The middle is collapsing, as consumers gravitate into either the Value or Premium camps.  In McDs terms, there are simply fewer “quarter pounder combo meal” customers out there, because we either want five sandwiches for five bucks or burger-shaped kale patties.  And it doesn’t end with QSR.  You’re now more likely to shop at either Whole Foods or Aldi instead of Kroger.  We don’t own four-door sedans anymore, because we either drive murdered out trucks/SUVs or don’t own a car at all.  These aren’t random product choices we’re making, it’s just who we are.  A nation of two distinct camps with very different product preferences.  For brands which can figure out how to serve both sides at once, like McDs in this case, there’s money to be made in the bifurcation.

Have a great Wednesday guys!

PUBLISHER PERFORMANCE ROYALTY SPIKE:  Yesterday the Copyright Royalty Board (CRB) announced a steep escalation in the royalties paid on streamed music to songwriters and composers.  Traditionally they’ve been the forgotten group in the streaming royalty ecosystem, with performers and their label masters reaping 4-5x the royalty payments the publishers get.  But the CRB seems bent on correcting this imbalance by mandating a 44% increase in publisher royalties paid with tiered increases over the next four years.  Today audio streamers pay the publishers 11.4% of total revenue, which is then divided among all the publishers based on the percentage of their songs being played.  By 2022 that rate will increase to 15.1% of total rev.  Obviously this decision has the publishers dancing in the streets, as noted in the attached RAIN link.  As much of a boom as this is for the songwriters, you can image the bust feeling the streamers are going through right now.  To date no streamer has been able to maintain profitability, and adding royalty charges will make it that much harder to sustain a business.  Considering the fact that the global music industry now receives over half of its revenue from streaming, you’d think the publishers would be more concerned with the industry’s viability than just short-term upcharges.

TWO SIDES OF THE APP WARS:  I usually don’t write about the App Download landscape since it’s sort of tangential to digital media, but there are some interesting trends happening in the sector, as noted in the attached App Annie link (yes, that’s a real site).  In Q4’17 Android and iOS both set app records, but in very different ways.  Let’s start with Android.  In Q4 an astounding 19 billion apps were downloaded on Android devices.  Most of this growth was in developing markets like Indonesia, India, and Brazil.  As you can see on the left side of graph below Android’s download rate was more than 2x iOS’s.  On the other side of the coin Apple is crushing it with download monetization.  On the right side you’ll see iOS’s $10B in consumers’ in-app spending during Q4, which is almost double Android’s Google Play haul.  So what’s to make of these two very different stats?  My read is that Apple is at the high point of its app monetization curve right now – they have a massive footprint in more affluent markets and are milking the cash cow for all its worth.  But as rosy as things look for iOS today, tomorrow belongs to Google’s Android.  As more and more of the world starts using Android phones (86% of the global mobile devices at last count), you can be sure that app-generated revenue will follow onto the Android platform.

DIGITAL VIDEO REIMAGINED:  Over the weekend you may have seen an obscure news tidbit about Meg Whitman (former head of eBay and HP), becoming the first and only employee of a new venture called WndrCo.  While that headline seems inconsequential enough there’s actually quite a bit more to the story, as described in the attached Digiday link.  WndrCo is the brainchild of former Dreamworks CEO Jeffrey Katzenberg.  Mr. Katzenberg’s vision is to create a stand-alone video platform (working titled New TV),  which will specialize in short-to-mid length original video content.  The simplest example of this new video format is the “mini-series”, which will feature a couple dozen 8-10 minute chapters per season.  These segments are more snackable on mobile devices than the typical 30-60 minute broadcast content you see on Hulu, but have more of a story line and character development than the short-form videos you see on Facebook’s Watch and Verizon’s Go90.  So will New TV be that perfect goldie locks fit for a digital video on a mobile platform?  Apparently Jeffrey Katzenberg and Meg Whitman are convinced it will.  And given the pair’s depth in Entertainment and Tech I probably wouldn’t bet against them.

Have a great Tuesday guys!

THE DIVERSIFICATION OF THE GRAMMYS: Did you watch the Grammy Awards last night?  If you did you may have noticed the larger than ever presence of Hip Hop and Hispanic performers, presenters, and award winners.  According to the attached WSJ article, ethnic-based genres have never been more prevalent at the show.  These gains are coming at the expense of traditional white/male dominated genres  – for the first time in fourteen years neither Country or Rock even had a nominee in the four major cross-format award categories.  So why is popular music getting more diverse?  One theory is that the music played by the pure-play streamers is now being factored into Billboard’s chart calculations.  And since the average listener is more likely to find niche or trending artists than “Top 40 radio”, the charts are getting more diverse.  As a proof point consider that an amazing 40% of this week’s Billboard Hot 100 songs are from the Hip Hop genre.  Overall this is a good thing for our industry.  Artist popularity should be driven by what listeners enjoy, and not just what the labels and their broadcaster cohorts tell us to listen to.  I’d expect this trend to accelerate as the diversification of America continues to be reflected in the music we love.

AMAZON (AND VOICE) WILL BE FRONT AND CENTER IN THE BIG GAME:  On Friday Amazon confirmed plans to air a :90 second commercial in the fourth quarter of Sunday’s Super Bowl, as reported in the attached AdWeek link.  While they’ve only released a :30 teaser so far the ad itself seems fairly quippy. The premise is around Alexa getting sick (with a cold?) and losing her voice.  This sends Jeff Bezos and the gang scrambling for a backup plan.  Although the teaser doesn’t show it, the remaining :60 of the ad will feature Alexa’s would-be subs like James Earl Jones, Gilbert Godfrey, etc..  Beyond the branding for Amazon and it’s Alexa platform, the fact that Voice is the key creative ingredient of this ad tells you how important voice-recognition AI will be in the coming year.  At an estimated $7-8M price tag for the commercial time, Amazon is making a big bet on Voice.  I’m guessing other brands and competing tech companies will take notice.

BIG MEDIA, UNRAVELED:  The media industry is getting more interwoven by the day.  What used to be a segmented industry of content producers and distribution platforms is getting blurred into one very interconnected ball.  Recode has made a noble attempt at unravelling this birds nest in the attached link, and image below.  It’s fascinating to see how big in relative scale the major distributors are compared to the content producers.  You can also see how stand-alone content entities like Hulu could be so important for a company like Disney to get its hooks into. I’d love to see this graphic recreated in a few years.  My guess is that we’d see several more blended circles (like Comcast/NBC is today), as the two halves of the media industry become one.

Have a great Monday guys!

IS THE FOURTH SCREEN REALLY A SCREEN AT ALL?:  When you hear the term “Third Screen” you think smartphones and mobile devices, right?  That’s been the standard definition for the past decade.  But what about the next gen “Fourth Screen”?  One thoughtful definition has been put forth by Pandora CRO John Trimble in the attached Recode article.  According to Mr. Trimble the Fourth Screen is the ever-growing array of IoT connected devices which will define tomorrow’s connected homes, connected cars, etc..  One important differentiator between Third and Fourth Screen technology is the growing importance of auditory communication over visual interaction.  Today you don’t use a keyboard to type into a smart speaker, you just give a voice command which the device’s AI interprets.  Tomorrow you won’t even read the instruments on your car’s dashboard as you drive along, you’ll just tell your Cruise AV where you want to go and it will do the rest.  So in an ironic way tomorrow’s Fourth Screen might not be a screen at all.  Worth thinking about . . .

JUST WHEN YOU THOUGHT RIDESHARING COULDN’T GET ANY CREEPIER:  It looks like a God View 2.0 scandal could be breaking at Lyft.  For the uneducated, God View was Uber’s controversial data platform that allowed staffers to match personal data with rideshare usage history.  When the program was exposed in 2014 Uber promptly shut it down.  You’d think Lyft would have learned a valuable lesson from its competitor on the importance of managing sensitive data, but apparently they didn’t.  According to Tech Crunch in the attached link, Lyft has been letting staffers access rideshare data which can easily be “unmasked” to show the riders’ personal data.  Yes, there are legitimate uses for this, like if you lose an item in a Lyft car and need to track down the driver.  But how about something more nefarious, like the disgruntled lover working at Lyft who could track their ex’s pick-ups/drop-offs.  Besides the obvious PR problem for Lyft, this brings up a larger data management concern for our industry.  As tech advances allow us to collect more and more individual-level data, we need to develop safeguards to keep that data secure.  I think Lyft is going to figure that out the hard way.

FACEBOOK AT THE TIPPING POINT:  To send you into the weekend I’d like to share a provocative Vanity Fair article about Mark Zuckerberg and the crossroads Facebook now finds itself at.  It chronicles the rise of FB from a budding social platform to a global tech powerhouse by using a take-no-prisoners approach to business, complete with bullying and idea stealing.  While looking back on FB’s history is interesting, the real guts of the article are in the back half.  The author calls out FB’s pivot from doing what’s right for the user (and even mankind), to doing what’s right for Wall Street.  The emphasis on the latter has created a manipulative algorithm that literally addicts users who devote their time and attention, but only get sponsored blabber, feelings of inadequacy, and even depression in return.  I know that sounds pretty extreme but it’s that poignant of an article.  It’s a longer read so maybe save it for some quiet time this weekend.  And special thanks to Pandora’s Hunter Bradford for digging this one up.

Have a great Friday (and weekend) guys!

CONCERN RISING OVER SPOTIFY’S IPO:  For months I’ve been writing about Spotify’s planned “direct listing” IPO, which is expected to happen around March.  Besides the weirdness of a direct listing, which raises no new capital for the company, there are mounting questions about what the company’s stock will actually trade at once equity holders are allowed to start selling their shares.  Since institutional investors won’t have a chance to pre-price the stock through the usual IPO process the stock price could jump all over the place, taking equity holders and even music labels on a wild ride.  The attached Hypebot article breaks down the various contingencies’ financial arrangements with Spotify.  Fair warning, it reads like a bowl of spaghetti.  The consensus word being used to describe the situation is “frightening”, which is never the adjective you want to hear heading into an IPO.  In the words of sector analyst and Hypebot contributor Chris Castle, “There are some companies that just aren’t supposed to be public, and I think Spotify is one.”  That might be the most straightforward thing being said about Spotify’s eminent IPO right now.

WHICH VERSION OF TV’S FUTURE DO YOU BELIEVE?:  I know I’m a few days late on this, but a couple of interesting things happened in TV land on Monday which are worth dissecting.  First came a series of predictions about the future of traditional and digital TV from executives at NBC and CBS.  The comments were made during a series of fireside chats/panels at an AdExchanger Industry Preview – a summary can be found in the attached link.  The boldest predictions were that subscription OTT services like Netflix couldn’t sustain their growth and will eventually need to offer a free/lower cost ad supported tier, and that the TV Upfronts will shift from buying shows to buying data.  All of this seemed pretty convincing until 5:00p est rolled around.  That’s when Netflix exploded a Q4 earnings bomb that blew away The Street’s expectations, as noted in the attached CNBC link.  The biggest coup for Netflix was the announcement of 8.3M new subscribers in Q4 alone, which is an all-time high for a three month period and 2M more than was forecasted.  So whose “future of TV” predictions should we believe?  The traditional networks who are peddling a coexistence narrative as they cling to their legacy business, or Netflix who keeps putting points on the scoreboard?

BK PULLS A WHOPPER ON NET NEUTRALITY:  I’ve gotta hand it to Burger King and their creative agency DAVID Miami for their latest PR stunt.  In a parody of the FCC’s Net Neutrality repeal, Burger King set up a fictional cash register scene where they told unsuspecting customers their Whopper would take longer to make since they paid for the “Slow MBPS” option.  In their stunt MBPS stands for Making Burgers Per Second, which could be sped up or slowed down depending on how much a customer is willing to pay for a Whopper.  If you think this sounds funny check out the video mid-way through the attached AdWeek link – you’ll be laughing all day.  Besides the clip’s sheer comedic genius, there’s an important lesson in seeing the moment consumers make the connection between the Whopper MBPS delivery system and what’s actually about to occur with internet data delivery in the US.  It’s simply brilliant.  I just hope FCC Chair Ajit Pai isn’t a big BK fan, because he’s officially persona non grata with the King these day!

Have a great Thursday guys!

CUMULUS STARTS GNAWING ITS ARM OFF:  The liquidation has quietly started.  In an effort to reduce its debt and improve immediate cash flow Cumulus is attempting to sunset several high-dollar contracts.  Inside Radio is reporting examples of this, including Don Imus’s contract termination, and even the cancellation of station LMA agreements like the one with Merlin Broadcasting’s former FMs in Chicago.  Cumulus is pushing the contract terminations through the bankruptcy courts, which gives them more latitude to make these moves than the normal contract litigation process.  So there’s a high likelihood that these exits will happen.  That’s good news for Cumulus’s long-term survival since they get to jettison their costliest contracts.  The only problem is they’re also killing their content and listenership footprint, which is their whole product.  So how much of your arm can eat to stay alive before the cannibalization kills you?  I think we’ll get radio’s answer to that question sooner than later.

AGENCIES GETTING ON THE VOICE BANDWAGON:  We know digital audio ads and audio-based search are becoming more important in the voice-first, screenless world of tomorrow.  Accordingly marketers are itching for expertise in this new frontier.  So it shouldn’t be a surprise to see agencies and their parent holding companies develop thought leadership in this area.  A latest example of this is Publicis partnering with the language researcher Quid to study the usage habits of voice assistant users in the US and UK.  Highlights from the study can be found in the attached Media Village link.  Notable findings include the role of parents as the heaviest users of voice assistants in the shared listening in-home environment (fyi – start marketing to Mom!)  It’s also interesting to see the efficacy of audio ads, with a 2x lead in unaided brand recall vs. visual-based ads.  And perhaps the biggest no-brainer finding of all . . . voice assistants suck at reading long-form stories since they don’t bring human context to their voice inflections.  Maybe one day AI advances will lead to better robot story tellers.  But in the meantime, let’s leave it to Mom to read us our bedtime stories.

APPLE’S HOMEPOD READY FOR ITS DEBUT . . . FINALLY:  After delaying the launch past the critical holiday period, Apple is set to start selling its HomePod smart speakers on February 9^th.  According to RAIN in the attached link, it’s priced at $350 which is the very upper end of the spectrum.  By comparison, Amazon Echo and Google Home devices are in the $100 range.  Apple is justifying the premium price based on HomePod’s superior audio quality.  But there are other mid-level competitors like Sonos in the $200-250 range which can give you all the sound quality you’ll ever need.  Besides the price, the other big question mark is HomePod’s brains.  Will Siri’s AI be able to keep up with Alexa and Google?  We won’t know for sure until these things get into market, but tech experts generally say Google has the best voice-recognition AI and Apple lags in this department.  There’s a theory that Apple’s not-ready-for-prime-time AI was what caused the HomePod holiday delay in the first place.  I guess we’ll see if that’s been fixed soon enough.  (And yes, since we’re on the topic I can’t resist reposting my all-time favorite HomePod tweet!)

Have a great Wednesday guys!

THE FUTURE OF RETAIL HAS FINALLY ARRIVED . . . SORT OF:  After a year of over-hyped testing the first cashierless Amazon Go store opened to the public yesterday.  The shopping experienced describe in the attached Geek Wire link is pretty straightforward.  First you set up an Amazon Prime or Amazon Go account.  Then as you walk into the store a reader scans a QR code on your mobile device, and you start shopping.  When you’re finished you just walk out of the store with your purchases and Amazon will bill you for what you took.  While that sounds simple enough, the back end tech to make this happen is nuts.  The floor of the Amazon Go store is filled with sensors to follow you around once you’ve checked in, and then there are more weight sensors for each SKU on the shelves.  So when you pick up that bottle of salad dressing Amazon knows what you specifically took from the shelves.  It’s sort of like a way advanced version of those honor bars in Las Vegas hotel rooms which charge you $11 for a Fiji water the minute you lift it from the case.  Obviously this is a game-changer for Retailers who could eliminate 2/3 of the humans needed to run a store.  But I think it will take years (decades) before this much store-level technology becomes mainstream.

FLUIDITY IS THE NEW CREATIVE:  For most of the last century ad agencies won and lost accounts based on the strength of their Creative departments.  Creative Directors were the true game changers who landed accounts with magic ideas, and became the primary profit centers for Madison Avenue.  Wow, how times have changed.  As described in the attached WSJ link, today agencies are winning/losing accounts not because of their creative, but based on their ability to combine all marketing disciplines into a cogent 360 approach.  The McDonald’s AOR change is the clearest example to date.  When the account went into review Publicis tried to run a legacy play of bringing new creative ideas, while Omnicom presented a holistic data/insights/strategy/creative/investment/attribution journey.  You know how the story ended.  Omnicom won the business and became the primary AOR for McDs in 2016.  And that’s just one very high profile example.  For every McDs win there are 20 smaller brands who are choosing agencies which can provide a front-to-back approach.  Not surprisingly, Creative departments are finding this change tough to deal with – imagine going from being the QB of a football team to the punter.  But that’s what it takes for agencies to compete these days.  Quoting Omnicom’s Terri Hickey, today’s approach needs to be “fast, fluid and flexible.”  I think that’s an understatement.

EIGHT YEARS (AND A LIFETIME) AGO:  Yesterday I was sent a little Easter egg from one of my cohorts in Detroit.  It’s a New Yorker magazine article about the state of audio streaming from June, 2010.  This thing is fascinating because it looks old (someone literally made a photocopy), and it just feels old – the state of music eight years ago might as well have been from the 1980s.  Streaming services like Pandora and Spotify were just starting to commercialize, MOG (who?!?) seemed like a good alternative to Napster, Apple was just selling iTunes downloads for 99 cents each, and Google was thinking about getting into music and videos.  It’s simply amazing to see how far we’ve come in less than a decade.  If you’ve been in this space for a while you’ll smile along with me as you read this article.  Then take a moment to think about what the next decade of digital audio will hold if we’ve come this far in just the last eight years.  You, The DJ

Have a great Tuesday guys!

ARE YOU READY FOR SOME FOOTBALL TV ADS?:  There’s one thing you can set your watch by in marketing.  The second the confetti stops falling after the NFL’s Conference Championship Game celebrations (congrats Boston and Philly!), the hype around the Super Bowl ads begins.  According to NBC, who’s carrying the big game, this year’s revenue total will be a record.  In-game :30 commercials are going for as high as $5M (what?), and NBC will even throw in a few Winter Olympics ads for that price.  With fewer than 10 unsold ad slots still available we have a pretty good idea of who’s doing what this year.  AdWeek is keeping a running tally of which brands are in and which are staying on the sidelines in the attached link.  The usual car/beer/soda suspects will be there.  Interestingly, Groupon is the only digital publisher who’s bought ad time so far, with Google/YouTube pulling out after last year’s blitz.  A few more CPGs are also coming back, which is a nod to the power of the Super Bowl’s brand-safe, mass-reach platform.  As we get closer to the game expect to see creative “reveals”, as advertisers try to milk every last ounce of PR hype out of their ads.  Hopefully we can actually watch a football game on February 4^th, too. 🙂

TV’S FIRST WALLED GARDEN?:  Sure, AT&T is stuck in a dogfight with the FCC over its planned purchase of Timer Warner.  But that doesn’t appear to be slowing down their creation of the first Google/FB-style walled garden for Addressable TV.  The attached AdExchanger link describes the Telco’s plan to merge AT&T’s cellular customer data with its DirectTV customer data to create a proprietary audience platform.  This data could be used to deliver deterministic ads down to the individual level on DirectTV, and also on Time Warner’s massive TV audience (if that deal ever goes through).  This is similar to the strategy Verizon is running to combine cellular data with its Oath properties (Yahoo and AOL), but that data will be used for digital ad delivery.  What sets AT&T apart from Verizon, and Google/FB for that matter, is the ability to project this data onto traditional TV delivery.  If successful, this will set up a have-your-cake-and-eat-it-too benefit for marketers who will get the targeted delivery of digital in the safe harbor of traditional TV.  I’m thinking this will go over well with data-hungry brands who still use TV as their default media.

DIGITAL AUDIO MEASUREMENT GETS REAL:  There was a ton of buzz in the digital audio space on Friday thanks to the MRC’s release of it’s first-ever Digital Audience Measurement Standards.  This is an important step towards standardizing (and legitimizing) digital audio ratings, which up until now have been a patchwork of Triton ratings, comScore data, and publisher self-reporting.  RAIN has a summary of MRC’s release in the attached link.  The most important rulings involve how audio ads are heard – they must be unmuted and listened to for two seconds to count.  There’s also a strong emphasis on what the MRC calls client-side measurement instead of server-side.  This means ratings will be derived from ads received by listeners and not what is sent out by the publishers’ servers.  This will eventually open the door for something called “audibility” (yes, viewability for audio ads), which will be a game changer for the entire industry.  You can imagine how interested brands will be in buying digital audio ads which are proven to be listened to.  This will eventually spell trouble for broadcast radio, since it’s not possible to prove an ad is heard by individual listeners sent over a radio transmitter.  I say bring on the change!

Have a great Monday guys!

For today’s DG I’m going to stray from the usual format.  Instead of a handful of different articles I’d like to focus on one comprehensive Magna Global research study about the State of Audio. (MAGNA State of Audio)  It’s an amazingly in-depth piece which covers all aspects of Audio supply, demand, and new value drivers for the sector.  I’m featuring this on a Friday so you can curl up with it over the weekend. 😉  In all seriousness, if you work in audio-based media this is a must read!

It’s a fairly complex piece, so here are a few notables:

FROM AM TO AMAZON:  For starters check out the timeline of the history of Audio below.  From the invention of Amplitude Modulation (AM Radio) around 1900 to Amazon’s first AI-driven Echo connected speakers in 2014, we’ve come a long way.  It’s interesting to see how the rate of technological change is starting to accelerate in what had been a mature industry for decades.  It would be fascinating to jump in a time machine and check out this updated timeline 50 years from now.  I’m guessing Audio will be as ubiquitous as the air we breathe by then.

SHARES GETTING SQUEEZED:  The next graph shows the different media types’ percent of ad revenue over the years.  Not surprisingly the legacy medias (TV/Print/Radio) are in a period of decline as ad dollars migrate to digital.  Of the three traditional media types Radio has held its share the best over the last 10 years, but that’s beginning to change.  Broadcast Radio’s slice of the ad pie, which once stood in the low teens, is now at 7%, and is projected to decrease to 5% within the next five years.

AD REVENUE ALWAYS FOLLOWS USAGE:  So where’s the Audio revenue going?  For the answer check out the next graph.  Audio streaming dollars from pureplay publishers (Pandora, Spotify, etc.) are beginning to cannibalize Radio’s revenue base.  According to Magna’s forecast, by 2022 streamed audio ads will generate over $3.3B of ad revenue in the US, which will comprise 30% of the total Audio spend.

SO WHAT’S NEXT?:  Towards the end of Magna’s report they highlight the key growth drivers for the future of Audio.  It comes down to three things . . . Connected Home, Connected Car, and Voice-based Search.  Each of these platforms have two things in common.  They increase overall Audio consumption and allow for digital ad delivery.  The perfect combination to grow an industry!  There are too many charts in this section to highlight, so check out pages 21-22 of the report for details.

I know this is a big read, but it’s important stuff.  Hopefully you found it as enlightening as I did.

Have a great Friday (and weekend) guys!

SOMETIMES THE CURE IS WORSE THAN THE ILLNESS:  That headline might be appropriate for Snapchat right now, who according to Tech Crunch, is getting mauled by users in online reviews of its newly redesigned interface.  According to the research group Sensor Tower, 83% percent of user reviews have been negative since the redesign.  The biggest cause of complaints is that Snapchat’s Stories content is now auto-populating user inboxes in between personal messages.  Snapchat is probably doing this to bring brands’ sponsored content to the forefront, but it appears to be annoying the hell out of their core users.  This pivot seems to be the reverse of other publishers’ strategies, like Facebook who recently announced it would deliver less branded content in the Newsfeed, and Pandora who’s rewarding listeners with enhanced functionality when they voluntarily engage with brands.  These latter examples seem to be the way forward in digital media – on the thinking that if you make the experience good for users first, brands will also benefit.  That feels like a better play than Snapchat’s new kitchen sink approach.

“WATCH” OUT FOR THOSE UNINTENDED CONSEQUENCES:  Speaking of Facebook’s Newsfeed pivot, there’s some industry speculation about what could happen to their Watch video platform, as reported in the attached Digiday link.  Since FB relaunched Watch in Aug’17 with original show content they’ve heavily relied on Newsfeed posts to drive views.  So with the decision to trim back the amount of promoted content on Newsfeed users will be less likely to see Watch video content.  While this won’t completely kill Watch, traffic is expected to decrease.  This might force FB to transform Watch into a truly separate site users could go to for video content, like Google has with YouTube, instead of just a content section within FB proper.  Regardless of how this plays out, it’s an example of how one strategic change could have down-the-line consequences on another part of their biz.

APPLE’S ABOUT TO GO ON A SPENDING SPREE:  One of the most touted features of the newly passed Federal tax legislation is the ability for companies to repatriate profits which are currently parked in foreign subsidiaries.  In the case of Apple they’ve amassed $256B (with a B!) in profits in a wholly-owned subsidiary in Ireland (is Tim Cook really Irish?!?), as a way to avoid paying US corporate taxes.  But now, thanks to a one-time reduction in the corporate tax rate designed to encourage companies to onshore their profits, Apple and others are bringing the cash home.  Apple still expects to pay taxes – an estimated $38B, which is an effective corporate tax rate of 15%.  So what will they do with their newly-liquid cash?  According to the attached Tech Crunch link, quite a bit.  The centerpiece of Apple’s ambitious growth plan is to build a second corporate campus and data center – I guess all the cool kids are doing HQ2s these days.  There’s also speculation that Apple will start manufacturing hardware in the US, which could help solve their mounting Asian production issues.  All in Apple expects to invest $350B in US-based buildouts and create 20,000 tech jobs over the next decade.  Obviously they have to actually walk the walk, but at least the talk sounds pretty good right now.

Have a great Thursday guys!