Mobile Fix: Google’s Nest acquisition and getting creative

In his latest Mobile Fix, Simon Andrews, founder of Addictive!, takes a look at recent developments at tech-giant Google, and considers how brands might use creative to make ad budgets go that little bit further…

In our piece on CES last week we talked about the Internet of Things (IoT) as a big theme – but were a little scathing about connected fridges, connected toothbrushes and connected coffee cups.

Google then paid $3.2 billion in cash for a connected thermometer company, so what do we know?

But with the Nest acquisition Google gets so much more than a business that has sold maybe just over a million devices.

It is getting some phenomenal talent. One of the founders designed the iPod and has been able to lure many people from Apple to Nest. Whilst Google has got a lot better at design and user experience recently, this injection of talent should have a big effect.

It now has a successful foothold in the connected home – which means it can revive some of the thinking behind the Android@Home debacle.

Abandoned before launch a couple of years back, the idea of using Android as the infrastructure behind the connected home still makes lots of sense.

A connected fridge makes a lot more sense if Tesco or Ocado can use a common infrastructure – like Android – to connect. And a wide range of original equipments manufacturers already use Android in consumer technology.

The other thing Google gets from this deal is data. It will know when people are in their houses and which rooms they are in. It will know when people are cold and when they are too hot. And expanding the Nest range gives it lots of other data points in the future; maybe even knowing what that connected fridge is running short of.

Google feeds off data like this to make its ad products better. Having this simple business model gives Google a clear advantage over the other IoT players. Cisco wants to be the glue, but it needs to sell the hardware and software to make money. Wolfram has a play in connected devices but again it is unclear how it would make money.

Sorry for harping on about our futurology project yet again, but in there we talked about Tesco sponsoring the connected fridge so it handled the restocking of the groceries.

Could Google afford to subsidise connected home appliances because of the data and the marketing opportunity it gives the company? Amazon does that with the Kindle. And Google does it a little in its WiFi and Fiber projects.

Given Google has around $50 billion in its cash reserves and its stock is at an all time high – and has just about doubled from June 2012 – this isn’t that big a buy for the company. But we think it’s really significant and worth watching.

One thing we are pretty sure about: Nest won’t stay on sale in the Apple store.

Mobile & Money

Whilst O2 shelved plans for a mobile wallet, there is still huge momentum in the space.

Weve is pushing ahead with its plans and recognise that initiating the transaction through an offer makes more sense than just launching a wallet app. It is also looking to use loyalty cards as a core component, which makes sense. Paypal continues to innovate but a new player has grabbed the headlines this week.

Zapp is backed by a number of leading banks in the UK and promises to spend millions building its brand. There isn’t a lot of detail about yet, but digging around we see a slightly convoluted user experience; you find something you want to buy using your smartphone browser and hit the pay by Zapp button. Your bank app is opened and you sign in, then you see the Zapp transaction. You choose which account you want to pay from, confirm with a click and you are taken back to the retail site to see a receipt for the payment. The goods have to be sent to the address your bank has in record.

For launch, Zapp will just work with online purchasing – with in-store promised later.

We’re not convinced this is the next big thing. Is this really that much easier than paying by debit card – or Paypal? Anyone wanting to use a credit card can’t use this option. Anyone wanting the parcel delivered to work can’t use this option.

And the task of persuading retailers to add this option isn’t going to be easy – we suspect the millions on marketing are designed to get retailers signed up. Maybe then people will follow – but there will be more compelling options available.

In this good look at how eBay is fighting Amazon for the future of retail, the PayPal mobile payments app sounds impressive – lots of personalisation and a blend of offline and online whilst in store. And Square is now valued at $5 billion. The bar is being set very high in this space.

And some think banks haven’t got their act fully together on mobile and security yet, which could hold the whole sector back. This report suggests 90% of mobile banking apps have security issues.

Creative & Social

Talk with anyone about Facebook and the subject of too many ads comes up. We suspect the problem is less about quantity and more about quality.

With all that targeting capability, brands can target people precisely. But without creative that is tailored to that group, the potential of additional targeting is diminished.

Facebook is retiring Sponsored Stories and extending the social actions to all formats. With the erosion in organic reach for posted content, the logic for creating better brand messaging is obvious; good free posts will go further through sharing and good paid for content is more likely to work – justifying the media spend. When we spoke at Facebook in the summer this was a hot topic and continues to be so.

But for agencies this remains a problem – industrialising the creation and production of content at scale needs lots of people and lots of time. So the cost is high; but given that great creative can have a huge effect on performance, this effort can be the best way to make your ad budget go further.

Google has shared some good examples of work that goes the extra mile and how it has paid off for Burberry, VW and others.

newTV

Sky Adsmart is finally here, with a good selection of brands using the opportunity to target their TV spend based on geography and household profile. It will be interesting to see how these brands get on.

Addressable TV is a big focus for Google and this report looks at its strategy and options. It’s clear that sport would be a good place to start and watching BT take on Sky shows how to do this.

But rather than going for the big expensive deals, could Google find a smarter cheaper way in? The NBA game at the O2 this week sold out quickly and it’s clear that basketball has a big following in the UK, yet it gets little or no TV coverage.

Sky showed some playoff games last season and BT shows some games now. But could YouTube make a deal with the NBA to show its games in countries where it doesn’t have a TV deal? And could it do a similar deal to show Premier League football in the US.

Dreamworks has partnered with YouTube to produce YouTubeNation – a show that curates the best YouTube content and provides playlists. Is there an opportunity to do the same thing with a more local flavour here in Europe?

This is an edited and abridged version of Mobile Fix – click here to read the full article on Addictive!’s website