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Our digital future will be shaped by increasingly mobile technologies coming from China
Since the dawn of the internet, the titans of this industry have fought to win the “starting point” — the place that users start their online experiences. In other words, the place where they begin “browsing.” The advent of the dial-up era had America Online mailing a CD to every home in America, which passed the baton to Yahoo’s categorical listings, which was swallowed by Google’s indexing of the world’s information — winning the “starting point” was everything.
As the mobile revolution continues to explode across the world, the battle for the starting point has intensified. For a period of time, people believed it would be the hardware, then it became clear that the software mattered most. Then conversation shifted to a debate between operating systems (Android or iOS) and moved on to social properties and messaging apps, where people were spending most of their time. Today, my belief is we’re hovering somewhere between apps and operating systems. That being said, the interface layer will always be evolving.
The starting point, just like a rocket’s launchpad, is only important because of what comes after. The battle to win that coveted position, although often disguised as many other things, is really a battle to become the starting point of commerce.
Google’s philosophy includes a commitment to get users “off their page” as quickly as possible…to get that user to form a habit and come back to their starting point. The real (yet somewhat veiled) goal, in my opinion, is to get users to search and find the things they want to buy.
Of course, Google “does no evil” while aggregating the world’s information, but they pay their bills by sending purchases to Priceline, Expedia, Amazon and the rest of the digital economy.
Facebook, on the other hand, has become a starting point through its monopolization of users’ time, attention and data. Through this effort, it’s developed an advertising business that shatters records quarter after quarter.
Google and Facebook, this famed duopoly, represent 89 percent of new advertising spending in 2017. Their dominance is unrivaled… for now.
Change is urgently being demanded by market forces — shifts in consumer habits, intolerable rising costs to advertisers and through a nearly universal dissatisfaction with the advertising models that have dominated (plagued) the U.S. digital economy. All of which is being accelerated by mobile. Terrible experiences for users still persist in our online experiences, deliver low efficacy for advertisers and fraud is rampant. The march away from the glut of advertising excess may be most symbolically seen in the explosion of ad blockers. Further evidence of the “need for a correction of this broken industry” is Oracle’s willingness to pay $850 million for a company that polices ads (probably the best entrepreneurs I know ran this company, so no surprise).
As an entrepreneur, my job is to predict the future. When reflecting on what I’ve learned thus far in my journey, it’s become clear that two truths can guide us in making smarter decisions about our digital future:
Every day, retailers, advertisers, brands and marketers get smarter. This means that every day, they will push the platforms, their partners and the places they rely on for users to be more “performance driven.” More transactional.
Paying for views, bots (Russian or otherwise) or anything other than “dollars” will become less and less popular over time. It’s no secret that Amazon, the world’s most powerful company (imho), relies so heavily on its Associates Program (its home-built partnership and affiliate platform). This channel is the highest performing form of paid acquisition that retailers have, and in fact, it’s rumored that the success of Amazon’s affiliate program led to the development of AWS due to large spikes in partner traffic.
Chinese flag overlooking The Bund, Shanghai, China (Photo: Rolf Bruderer/Getty Images)
When thinking about our digital future, look down and look east. Look down and admire your phone — this will serve as your portal to the digital world for the next decade, and our dependence will only continue to grow. The explosive adoption of this form factor is continuing to outpace any technological trend in history.
Now, look east and recognize that what happens in China will happen here, in the West, eventually. The Chinese market skipped the PC-driven digital revolution — and adopted the digital era via the smartphone. Some really smart investors have built strategies around this thesis and have quietly been reaping rewards due to their clairvoyance.
China has historically been categorized as a market full of knock-offs and copycats — but times have changed. Some of the world’s largest and most innovative companies have come out of China over the past decade. The entrepreneurial work ethic in China (as praised recently by arguably the world’s greatest investor, Michael Moritz), the speed of innovation and the ability to quickly scale and reach meaningful populations have caused Chinese companies to leapfrog the market cap of many of their U.S. counterparts.
The most interesting component of the Chinese digital economy’s growth is that it is fundamentally more “pure” than the U.S. market’s. I say this because the Chinese market is inherently “transactional.” As Andreessen Horowitz writes, WeChat, China’s most valuable company, has become the “starting point” and hub for all user actions. Their revenue diversity is much more “Amazon” than “Google” or “Facebook” — it’s much more pure. They make money off the transactions driven from their platform, and advertising is far less important in their strategy.
The obsession with replicating WeChat took the tech industry by storm two years ago — and for some misplaced reason, everyone thought we needed to build messaging bots to compete.
What shouldn’t be lost is our obsession with the purity and power of the business models being created in China. The fabric that binds the Chinese digital economy and has fostered its seemingly boundless growth is the magic combination of commerce and mobile. Singles Day, the Chinese version of Black Friday, drove $25 billion in sales on Alibaba — 90 percent of which were on mobile.
The lesson we’ve learned thus far in both the U.S. and in China is that “consumers spending money” creates the most durable consumer businesses. Google, putting aside all its moonshots and heroic mission statements, is a “starting point” powered by a shopping engine. If you disagree, look at where their revenue comes from…
Google’s recent announcement of Shopping Actions and their movement to a “pay per transaction model” signals a turning point that could forever change the landscape of the digital economy.
Google’s multi-front battle against Apple, Facebook and Amazon is weighted. Amazon is the most threatening. It’s the most durable business of the four — and its model is unbounded on two fronts that almost everyone I know would bet their future on, 1) people buying more online, where Amazon makes a disproportionate amount of every dollar spent, and 2) companies needing more cloud computing power (more servers), where Amazon makes a disproportionate amount of every dollar spent.
To add insult to injury, Amazon is threatening Google by becoming a starting point itself — 55 percent of product searches now originate at Amazon, up from 30 percent just a year ago.
Google, recognizing consumer behavior was changing in mobile (less searching) and the inferiority of their model when compared to the durability and growth prospects of Amazon, needed to respond. Google needed a model that supported boundless growth and one that created a “win-win” for its advertising partners — one that resembled Amazon’s relationship with its merchants — not one that continued to increase costs to retailers while capitalizing on their monopolization of search traffic.
Google knows that with its position as the starting point — with Google.com, Google Apps and Android — it has to become a part of the transaction to prevail in the long term. With users in mobile demanding fewer ads and more utility (demanding experiences that look and feel a lot more like what has prevailed in China), Google has every reason in the world to look down and to look east — to become a part of the transaction — to take its piece.
A collision course for Google and the retailers it relies upon for revenue was on the horizon. Search activity per user was declining in mobile and user acquisition costs were growing quarter over quarter. Businesses are repeatedly failing to compete with Amazon, and unless Google could create an economically viable growth model for retailers, no one would stand a chance against the commerce juggernaut — not the retailers nor Google itself.
As I’ve believed for a long time, becoming a part of the transaction is the most favorable business model for all parties; sources of traffic make money when retailers sell things, and, most importantly, this only happens when users find the things they want.
Shopping Actions is Google’s first ambitious step to satisfy all three parties — businesses and business models all over the world will feel this impact.
Good work, Sundar.
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Fullscreen acquires influencer marketing startup Reelio
Digital media company Fullscreen announced this morning that it has acquired Reelio .
The startup has described itself as “the Match.com of brands and creators on YouTube,” collecting data about video creators and connecting them with marketers who want to use their skills and reach their audience.
In the announcement, Fullscreen suggests that Reelio’s technology will allow the company to offer a more complete set of services around influencer marketing.
“The integration of Reelio’s platform into our network brings us one step closer to building a complete solution for the future of brand marketing, which we believe will be social-first and content-driven,” said Fullscreen general manager Pete Stein in a statement. “The strength of Reelio’s data, technology, and team will be a huge asset to our company, and we’re excited to work alongside them as we continue to enhance our influencer marketing offerings.”
The financial terms of the acquisition were not disclosed. Variety reports that the entire 50-person Reelio team (including co-founder and CEO Pete Borum) will be joining Fullscreen.
Reelio had raised $8 million in funding from investors including e.ventures, Tremor Video co-founders Jason Glickman and Andrew Reis and former Bertelsmann president Thomas Hesse. Fullscreen, meanwhile, is owned by Otter Media, the joint venture between AT&T and the Chernin Group.
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Facebook restricts APIs, axes old Instagram platform amidst scandals
Facebook is entering a tough transition period where it won’t take chances around data privacy in the wake of the Cambridge Analytica fiasco, CTO Mike Schroepfer tells TechCrunch. That’s why it’s moving up the shut down of part of the Instagram API. It’s significantly limiting data available from or requiring approval for access to Facebook’s Events, Groups, and Pages APIs plus Facebook Login. Facebook is also shutting down search by email or user name and changing its account recovery system after discovering malicious actors were using these to scrape people’s data. “Given the scale and sophistication of the activity we’ve seen, we believe most people on Facebook could have had their public profile scraped in this way” Schroepfer writes.
Instagram will immediately shut down part of its old platform API that was scheduled for deprecation on July 31st. TechCrunch first reported that developers’ Instagram apps were breaking over the weekend due to a sudden reduction in the API call limit. Instagram refused to comment, leading to developer frustration as their apps that analyze people’s followers and help them grow their audiences stopped working.
Now an Instagram spokesperson tells TechCrunch that “Effective today, Instagram is speeding up the previously announced deprecation of the Instagram API Platform” as part of Facebook’s work to protect people’s data. The APIs for follower lists, relationships, and commenting on public content will cease to function immediately. The December 11th, 2018 deprecation of public content reading APIs and the 2020 deprecation of basic profile info APIs will happen as scheduled, but it’s implemented rate limit reductions on them now.
The announcements come alongside Facebook’s admission that up to 87 million users had their data improperly attained by Cambridge Analytica, up from early estimates of 50 million. These users will see a warning atop their News Feed about what happened, what they should do, and see surfaced options for removing other apps they gave permissions to. Facebook CEO Mark Zuckerberg plans to take questions about today’s announcements during at 1:00pm Pacific conference call.
Regarding the Facebook APIs, here’s the abbreviated version of the changes and what they mean:
- Events API will require approval for use in the future, and developers will no long be able to pull guest lists or post sto the event wall. This could break some event discovery and ticketing apps.
- Groups API will require approval from Facebook and a Group admin, and developers won’t be able to pull member lists or the names and photos associated with posts. This will limit Group management apps to reputable developers only, and keep a single non-admin member of a closed Group from giving developers access.
- Pages API will only be available to developers providing “useful services”, and all future access will require Facebook approval. This could heavily restrict Page management apps for scheduling posts or moderating comments.
- Facebook Login use will require a stricter review process and apps won’t be able to pull users personal information or activity, plus they’ll lose access if after 3 months of non-use. Most login apps should still work, though, as few actually needed your religious affiliation or video watching activity, though some professional apps might not function without your work history
- Search by phone number or email will no longer work, as Facebook says it discovered malicious actors were using them to pair one piece of information with someone’s identity, and cycling through IP addresses to avoid being blocked by Facebook. This could make it tougher for people in countries where people have similar names find each other. Of all the changes, this may be the most damaging to the user experience.
- Account Recovery will no longer immediately show the identity of a user when someone submits their email or phone number to similarly prevent scraping. The feature will still work, but may be more confusing. Facebook believes all its users’ could have had their data scraped using the search and account recovery tricks.
Schroepfer says that Facebook’s goal is to lock things down, review everything, and then figure out which developers deserve access and whether any of the functionality should be restored. The announcements raise questions about why it took the Cambridge Analytica scandal for Facebook to take data privacy seriously. You can expect the House Energy and Commerce Committee may ask Mark Zuckerberg that when he comes to testify on April 10th.
Facebook CTO Mike Schroepfer
Facebook’s bold action to reform its APIs shows it’s willing to prioritize users above developers — at least once pushed by public backlash and internal strife. The platform whiplash could make developers apprehensive to build on Facebook in the future. But if Facebook didn’t shore up data privacy, it’d have no defense if future privacy abuses by outside developers came to light.
Schroepfer tells me Facebook is taking its responsibility super seriously and that company is upset that it allowed this situation to happen. At least he seems earnest. Last week I wrote that Facebook needd to make a significant act of contrition and humility if it wanted stabilize the sinking morale of its employees. These sweeping changes qualify, and could serve as a rallying call for Facebook’s team. Rather than sit with their heads in their hands, they have a roadmap of things to fix.
Still, given the public’s lack of understanding of APIs and platforms, it may be tough for Facebook to ever regain the trust broken by a month of savage headlines about the social network’s privacy negligence. Long-term, this souring of opinion could make users hesitant to share as much on Facebook. But given its role as a ubiquitous utility for login with your identity across the web, our compulsive desire to scroll its feed and check its notifications, and the lack of viable social networking alternatives, Facebook might see the backlash blow over eventually. Hopefully that won’t lead back to business as usual.
For more on the recent Facebook platform changes, read our other stories:
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AWS adds automated point-in-time recovery to DynamoDB
One of the joys of cloud computing is handing over your data to the cloud vendor and letting them handle the heavy lifting. Up until now that has meant they updated the software or scaled the hardware for you. Today, AWS took that to another level when it announced Amazon DynamoDB Continuous Backups and Point-In-Time Recovery (PITR).
With this new service, the company lets you simply enable the new backup tool, and the backup happens automatically. Amazon takes care of the rest, providing a continuous backup of all the data in your DynamoDB database.
But it doesn’t stop there, it lets the backup system act as a recording of sorts. You can rewind your data set to any point in time in the backup to any time with “per second granularity” up to 35 days in the past. What’s more, you can access the tool from the AWS Management Console, an API call or via the AWS Command Line Interface (CLI).
Screenshot: Amazon
“We built this feature to protect against accidental writes or deletes. If a developer runs a script against production instead of staging or if someone fat-fingers a DeleteItem call, PITR has you covered. We also built it for the scenarios you can’t normally predict,” Amazon’s Randall Hunt wrote in the blog post announcing the new feature.
If you’re concerned about the 35 day limit, you needn’t be as the system is an adjunct to your regular on-demand backups, which you can keep for as long as you need.
Amazon’s Chief Technology Officer, Werner Vogels, who introduced the new service at the Amazon Summit in San Francisco today, said it doesn’t matter how much data you have. Even with a terabyte of data, you can make use of this service. “This is a truly powerful mechanism here,” Vogels said.
The new service is available in various regions today. You can learn about regional availability and pricing options here.
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Burst breaks you out of your filter bubble on Reddit
One of the many accusations about the trouble with Facebook – amid its data privacy concerns and enabling of Russian trolls – is that it keeps people locked into echo chambers where access to other viewpoints are limited. This is a common problem across social media, people are beginning to realize. A new app called Burst is experimenting with how to break people out of their bubbles. But its focus is not on Facebook, as it turns out – it’s on Reddit.
In a way, Reddit has a problem with filter bubbles too, given that users choose which subreddits (communities) to subscribe to. That means than in addition to subscribing to something like r/politics, you may also subscribe to r/liberal or r/conservative, where you’ll hear your own viewpoints echoed and reinforced.
What Burst does is combine everyone’s comments and insights into one place. It works by finding everywhere a post has been re-shared across Reddit, then merges all the comments together.
The app is organized like Reddit itself with sections for Hot, Top, Rising, New and Controversial as well as access to your own subreddits when you sign in. To view the comments on a post, you swipe to the left. And to upvote or downvote, you use Force Touch.
Explains the app creator Alex Duckmanton, currently a product designer in Sydney, Burst has exposed him to different ideas.
“In my own use of Burst while testing, I’ve found that even though I see a lot more stuff I don’t agree with, seeing it helps me empathise with other perspectives. It’s my hope that this will help tone down some of the more toxic aspects of political discussion online,” he says.
While political discussions are often a hotbed for trolling and the general social media-induced lack of empathy, an app like Burst can help in other areas, too. For example, notes Duckmanton, a post about the new iPhone might appear in both r/iphone and r/android, in addition to r/apple or r/technology. This allows you to see a wider array of discussions about the iPhone news, than if you only read the comments from one community.
Duckmanton says he began to build Burst when he had some time off from work in the second-half of last year because he’s been concerned about the impact of filter bubbles on social media platforms.
“Filter bubbles aren’t being addressed in a meaningful way by any of the major social platforms,” he says. “The typical response of banning problem users or removing content is a brute-force approach and isn’t long-term or scalable. Outside of that, users are expected to self-manage the content they consume in order to have a more balanced view. It’s not reasonable to expect that of people, and it certainly won’t happen for people who aren’t already engaged in news and politics,” Duckmanton continues.
“We need to create products in such a way that filter bubbles cannot exist because their design fundamentally prevents them,”he adds.
The project is entirely self-funded and is currently supported by ads with the option to remove them via an in-app purchase.
Now that the app is out in the wild, Duckmanton says he’ll see how the community reacts before deciding if he will transition to working on Burst full-time. If it were to take off, however, he imagines a future where a Burst-like app could be built for other platforms – like Twitter. But in the immediate-term, nothing like that is in the works.
Burst is a free download for iOS. A link to sign up for an Android beta is here.
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Facebook rewrites Terms of Service, clarifying device data collection
Facebook is spelling out in plain English how it collects and uses your data in rewritten versions of its Terms of Service and Data Use Policy, though it’s not asking for new rights to collect and use your data or changing any of your old privacy settings.The public has seven days to comment on the changes (though Facebook doesn’t promise to adapt or even respond to the feedback) before Facebook will ask all users to consent to the first set of new rules in three years.
Unfortunately, because the changes to the language and structure of the terms are so wide-reaching and the new versions are so much longer, it’s difficult to do a direct comparison of the differences between the old TOS and DUP and the new versions embedded below.
Perhaps the most interesting part of the expanded, plain-language terms are the specifics of how Facebook collects data from your devices. Conspiracy theories about it snooping on people through its microphone, and confusion about it collecting SMS and call log history likely pushed Facebook to give people details about what data it’s slurping up.
Facebook now explains that (emphasis mine):
Information we obtain from these devices includes:
• Device attributes: information such as the operating system, hardware and software versions, battery level, signal strength, available storage space, browser type, app and file names and types, and plugins.
• Device operations: information about operations and behaviors performed on the device, such as whether a window is foregrounded or backgrounded, or mouse movements (which can help distinguish humans from bots).
• Identifiers: unique identifiers, device IDs, and other identifiers, such as from games, apps or accounts you use, and Family Device IDs (or other identifiers unique to associated with the same device or account).
• Device signals: Bluetooth signals, and information about nearby Wi-Fi access points, beacons, and cell towers.
• Data from device settings: information you allow us to receive through device settings you turn on, such as access to your GPS location, camera or photos.
• Network and connections: information such as the name of your mobile operator or ISP, language, time zone, mobile phone number, IP address, connection speed and, in some cases, information about other devices that are nearby or on your network, so we can do things like help you stream a video from your phone to your TV.
• Cookie data: data from cookies stored on your device, including cookie IDs and settings. Learn more about how we use cookies in the Facebook Cookies Policy and Instagram Cookies Policy.
Specifically regarding SMS history and call logs, Facebook writes, “We also collect contact information if you choose to upload, sync or import it (such as an address book or call log or SMS log history), which we use for things like helping you and others find people you may know.” Though Facebook asked users’ permission for this data, nothing about SMS and call logs wasn’t in the terms of service.
Disappointingly, the new explanation of helping you find friends doesn’t necessarily justify it collecting this data. Meanwhile, just today Facebook confirmed to Bloomberg that it does automatically scan all the text and image content of Messenger conversations to prevent violations of its Community Standards and the spread of spam or abuse. While other tech products like Google’s Gmail scan the contents of your messages for advertising and other purposes, the revelation could scare some privacy-focused users away from Messenger.
Facebook has also clarified how new products it’s launched since the last TOS update — like Marketplace, fundraisers, Live, 360 and camera effects — work. It explains how every user’s experience is personalized. A new Music Use Policy has been added as Facebook strikes deals with the major record labels.
Finally, Facebook makes it clear that it, WhatsApp and Oculus (as well as Instagram) are all part of one company that it refers to as “The Facebook Companies.” Instagram is now repeatedly mentioned in the TOS and DUP, whereas before it wasn’t even mentioned. The recent #DeleteFacebook movement that missed Instagram indicated that many users don’t quite realize they’re part of the same corporation.
As Facebook deals with a disgruntled public and awoken regulatory bodies, the rewriting of these policies might be perceived as the company trying to cover itself after neglecting to detail how it pulls and uses people’s data. CEO Mark Zuckerberg might face questions about the changes and why they weren’t in place before when he testifies before the House Energy and Commerce Committee on April 11th regarding protections of users’ data privacy.
But today’s revamp could also give Facebook stronger documents to point to as it tries to prove it doesn’t need heavy-handed government regulation. Switching from a more “legalese” document full of jargon to a more layman’s version could also help it dispel myths or give people more transparency.
If Facebook can give users a better understanding of how it works, it might be able to diffuse privacy scandals and backlashes before they happen.
Facebook updated Terms Of Service – 4/4/18 by Josh TechCrunch on Scribd
Facebook updated Data Use Policy – 4/4/18 by Josh TechCrunch on Scribd
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Tinder begins testing its first video feature, Tinder Loops
Tinder is getting into video. On Wednesday, the popular dating app will begin testing its first video-based feature, Tinder Loops, with iOS users in Canada and Sweden. The company says it will evaluate how users respond to Loops before making a decision to roll it out to other markets.
As you may have guessed by the name – “Loops” – the feature isn’t focused on traditional video, but rather on a shorter, almost GIF-like looping video format that’s been popularized by apps like Instagram’s Boomerang and, before that, Twitter’s Vine. In Tinder’s case, Loops will be just two seconds long, and can be added to users’ profiles alongside their photos.
The company says it decided to test videos because it believes videos can show more of users’ personalities, and that can increase people’s chances of getting right-swiped (liked, that is). It suggests the videos could be used for showing off your favorite activities – like shooting hoops or cliff jumping. But it’s likely that Tinder users will find other use cases for looping videos beyond that.
Loops represents the next step in the evolution of our classic profile,” said Brian Norgard, Chief Product Officer at Tinder. “With the addition of video, users have a new way to express themselves while also gaining key insights into the lives of potential matches. Whether it’s dancing at a concert, doing cartwheels on the beach, or clinking glasses with friends, Loops makes profiles come alive. We anticipate Tinder Loops will lead to even more matches and conversations and look forward to seeing how our users creatively adopt the feature,” he added.
More realistically, looping videos may better show people as they are – not hidden behind a soft photo filter or snapped from a classic MySpace angle. And that could lead to less surprise on first dates, as people will have already gotten a better sense of who they’re meeting, as well as how they like to have fun.
But at only two-seconds long, Loops are not as intimidating as posting a “real” video for users who are more shy.
To try the new feature, iOS users in the supported markets will be able to go to their profile, then tap the “Add Media” button to upload a video. Once the video is selected, you can drag the time strip to select the part you want to loop, preview it, and post it to your profile.
Tinder Loops currently supports only videos or Live Photos imported from your iOS Camera Roll. It doesn’t allow users to capture Loops directly from the app.
Alongside the option to add Loops, a subset of users in the test markets will also be given the ability to upload nine photos (or Loops), instead of just six. That could encourage more uploads of Loops as users won’t have to remove their existing photos to give the feature a try.
Tinder would not be the first dating app to dabble with video.
Starting last year, a number of its rivals began to support video in various contexts, as well. Hinge started allowing users to add videos up to 30 seconds long to their profiles; Match and Bumble announced Stories-like features involving video (BumbleVID didn’t pan out); and Zoosk tried video in a separate app, Lively, which has since pivoted to trivia. Integrating video, it appears, is not that easy.
The feature’s launch comes at a time when the competition between modern dating apps has been heating up. Specifically, Tinder and Bumble’s battles have gotten nasty, with Tinder parent Match Group suing Bumble over patents, and Bumble suing Match Group back for fraudulently obtaining trade secrets. Tinder also recently said it would roll out a ladies-first option in its app, which is the thing Bumble is best known for.
Now, with Loops, Tinder is differentiating itself further from the rest of the pack. Whether or not users will respond, however, remains to be seen.
Loops is rolling out today to the supported test markets.
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Spotify’s missing money-maker is artist-to-fan messaging
Streaming royalties are too expensive for Spotify to thrive as a public company just playing us songs. Spotify’s shares closed down 10 percent today during its NYSE trading debut. Luckily it controls much of the relationship between musicians and their fans on its app, poising it to build a powerful revenue and artist loyalty generator by connecting the two through native advertising and messaging that doesn’t stop the music.
Spotify already has a wide range of ad experiences built for traditional brands, from audio ads to display units to sponsored sessions where users get ad-free playback in exchange for watching a commercial. But none of these ad units are designed to help musicians grow their audience within Spotify, even if they can be bent to that purpose.
Spotify could win big by following Facebook’s roadmap.
Back in 2007, Facebook already had ads that led offsite. Think of these as Spotify’s existing audio and display ads. But when Facebook built Pages that let businesses reach you through the News Feed, it also launched ads that let them promote and grow their Pages within Facebook. Unlike the stock banner ads you see all over the web, these ads were native to Facebook, targeted with its profile data, and that used social referrals about Pages your friends interacted with to rope you in. They gave entities within Facebook a paid way to grow their popularity inside the platform.
This is Spotify’s opportunity.
Spotify’s existing ad units are designed for brands, not musicians
A few years ago, Spotify’s user base was too small for artists to focus on spending money there to get popular. But Spotify has grown to the size where it’s replacing top 40 radio, and over 30 percent of listening now comes from its recommendations and algorithmic playlists like Discover Weekly. The record labels now need Spotify to have a hit. Between that influence and it’s stature as the biggest on-demand music streaming service, Spotify has the leverage to offer artists the best tool to boost their fan base.
Spotify has already built the groundwork for this with the launch of its Spotify For Artists analytics dashboard app last year that shows a musician’s top songs, and the demographics of their fans including their location, gender, age, and what else they listen to. Spotify’s proven the power of this data with its Fans First email campaigns that let artists reach their most frequent listeners with access to concert ticket pre-sales and exclusive merchandise. It claims the emails see a 40 percent open rate, and 17 percent click-through rate — way higher than the industry standard.
But if Spotify built new surfaces for artists to reach out directly to fans within its apps, it could become the destination for record label marketing money. Since these artist ads and messages would all drive users deeper into the app rather than away from it like brand, Spotify could charge less than traditional ads and make them affordable to labels on a budget or musicians paying out-of-pocket.
Here are some ways Spotify could create native artist-to-fan marketing channels:
Sponsored songs on its algorithmic playlists could expose fans to artists in the most natural way possible. Wherever there’s recommendations, there’s room for paid discovery. Listeners could easily skip the track or switch to a different playlist, but might end up falling in love with the band, and diving into their catalogue. It’s the equivalent of Facebook’s in-News Feed native ads, but with a musician promoted instead of a business’ Page. Spotify was actually spotted testing what was effectively a sponsored song in mid-2017 above the start of some playlists. There was an opt-out option within the app’s Settings, though that’s since disappeared, so Spotify has at least considered this idea.
Spotify was spotted testing what was effectively a Sponsored Song back in mid-2017
Promoted Artists could use a similar model to Google’s AdWords sponsored search results. When users search for an artist, they could be shown similar artists who’ve paid to be promoted in the search typeahead or results page. Spotify could also insert a box within the profile of another artist you’re browsing below their top tracks. Spotify already lists a slew of related artists in text, but could highlight one that pays, perhaps showing one of their songs that could be instantly played.
Featured Artists could give artists that pay a special slot on Spotify’s browse page. With so many recommendations here, it’d be easy to slot in a sponsored section without feeling interruptive.
Sponsored Visualizations could make better use of your screen while you listen. Rather than just staring at the album art and playback controls, Spotify could let artists pitch fans their other music, tickets, gear, or social media channels. Spotify could also fill this space with entertaining silent video clips, photo slideshows, and biographical info as I suggested as a differentiator in 2016, and similar to how lyrics site Genius started doing with its Stories this week. Given users are currently listening to the artist, they might be primed for these experiences. Spotify has already tested letting artists show GIFs during playback, and has partnered with Genius to show Behind The Music factoids, but this is real estate that could help artists earn more money as well as entertain fans.
Direct Messaging
The most ambitious and audacious way to let artists reach fans would be a special artist-to-fan messaging channel. Spotify got rid of its in-app inbox and messaging feature a few years ago, instead pushing users to share music via their chat app of choice. But similar to the Fans First email campaigns, Spotify could create a special artist-to-fan messaging section in its app that could alert users to new releases and playlists as brand advertising, or even push tours and merchandise as more direct performance advertising.
Spotify could give all artists a certain volume of messages they could send for free or let them reach out just to the top 1% of fans a certain number of times per month or year. Then artists could pay to send more messages beyond the limits. Alternative, it could just charge for any use of messaging.
Done wrong, any of the above options could feel like Spotify gauging artists to reach their own fans. But done right, users might actually enjoy it while. They wouldn’t be too far off from following an artist on other social media, but where people are already listening. Finding out about one of your favorite band’s new albums, tours, or t-shirts might feel less like an ad and more like an inside tip from the fan club.
Spotify might be able to get away with showing some of these different experiences to users who’ve subscribed if they don’t get in the way of music listening. Swinging to the other end of the opportunity spectrum, the company could just give away all these experiences to artists, boosting their loyalty to Spotify and getting them to promote their presence there instead of on competing streaming services like Apple Music.
If Spotify doesn’t figure out a way to improve its margins with additional revenue drivers, it may have a tough time surviving as a public company. If it becomes too profitable from just music streaming, the labels can always try to increase their royalty rates. Spotify might hope that more artists work with it directly, cutting out the middlemen, but the record labels still provide some important marketing, radio promotion, and distribution services that artists need. Meanwhile, startups including United Masters (which raised a $70 million Series A from Google parent Alphabet and Andreessen Horowitz) want to usurp the record labels and become the way artists earn more before Spotify can.
This New York Times’ chart shows why musicians feel screwed, even though it’s labels keeping their money not Spotify
These features also offer Spotify a way to combat the enduring narrative that it’s screwing over musicians. If Spotify can prove these artist-to-fan messaging options earn them more than they cost, it could be seen as the streaming service that’s actually trying to help musicians make a living.
Recorded music has always been a promotional tool for all of a musician’s other revenue streams. Streaming’s on-demand structure and no-extra-cost-per-play nature turns the curious listener who’s only heard of an artist or just likes one single into a diehard fan who shells out the big bucks every time they’re favorite act is in town.
As we shift to an experiential culture where our possessions are digitized and its our interests that define us, people want to connect to the creators they love. Artist-to-fan messaging could bring the whole life-cycle from discovery to affinity to real monetization beyond the music all within one green and black app.
For more on Spotify going public, read our feature stories:
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Higher Ground Labs backs 13 startups to help Democrats win in 2018 and beyond
With 2018 midterms around the corner, the Democrats are looking for their answer to Cambridge Analytica, the Robert Mercer-backed political data firm that either won the 2016 election or tricked everyone into believing that it did, depending on who’s talking.
To that end, a prominent left-leaning accelerator is out with a new graduating class, just in time to gear up for November. Higher Ground Labs seeks to “supercharge” political startups with progressive causes at heart. The incubator and accelerator’s main cause is notching Democratic wins, from local to federal elections.
The group just announced a class of 13 politics-minded companies offering “innovative solutions” to get Democrats elected. The 13 new companies join 10 companies from Higher Ground’s 2017 class. The chosen startups will each receive around $100,000 each in seed funding, an invitation to Higher Ground’s accelerator bootcamp and proximity to the group’s star-studded advisory board, which boasts a former COO of the Obama Foundation, a former Clinton campaign CTO and current Strava chief product officer, a former FCC chairman, the guys at Crooked Media and the chief technology officer of the DNC, among many other high-profile names. The political accelerator’s investor list features notable names like LinkedIn co-founder Reid Hoffman and Silicon Valley super angel investor Ron Conway.
“Last year, Higher Ground Labs invested in companies and entrepreneurs that provided game-changing technologies in Virginia’s state elections and the Alabama Senate race,” said Ron Klain, chair of the Higher Ground board and former White House aide. “Now, we are more than doubling the size of our portfolio, and will be backing two dozen companies that aim to have a major impact on the 2018 election, up and down the ballot.”
The 2018 class startups include:
5 Calls, an affordable phone-banking platform for everything from school board elections to federal campaigns.
Avalanche, a cognitive science-driven communications company.
CallTime, which aggregates data into comprehensive donor profiles using AI to optimize donor outreach.
Change Research, quick, accurate public opinion polling that cuts costs by as much as 90 percent.
Civic Eagle, a SaaS platform for policy advocacy campaigns.
Factba.se, a “transparency engine” that collects “every word spoken” by a political opponent to allow for discrepancies and shifts to be identified quickly.
GiveMini, a micro-donation tool that lets donors round up to the nearest dollar.
GrowProgress, a tool that predicts audience personality for message targeting.
Humanize, “a platform that democratizes the tools of advertising” to give regular people access to ad strategies that would normally be price prohibitive.
New Mode, engagement tools that highlight supporters’ stories.
Same Side, a platform to activate supporters who are “already doing cool things” in music, art and culture.
Swayable, a data science platform that enables rapid-response digital campaigns and examines “which kinds of people respond to which content.”
Voter Protection Partners, a group that works with campaigns to “manage voter protection teams and track, analyze, and respond to voting incidents and election administration problems.”
Projects like Higher Ground are fueling the kind of political technology operations that Democrats hope can translate into wins in 2018 and beyond. While national post-mortems on the 2016 election remain obsessed with the right’s deep pocketed big data mythos, plenty of folks in tech’s left-leaning epicenters believe that Democrats can do better with the right tools.
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Snapchat brings back GIPHY after removal due to racist GIF
After a racial slur GIF caused Snapchat to remove its GIPHY sticker feature, Snapchat confirms to TechCrunch it’s reinstated its integration. GIPHY has apologized, fixed the bug that let the objectionable GIF slip through, and reviewed its GIF sticker library four times in an effort to guarantee that offensive content won’t end up in apps that embed it. Instagram had also removed GIPHY, but reinstated it last week with Snapchat saying it had nothing to share yet.
A Snap spokesperson told TechCrunch that over the past several weeks, the Snap team worked with GIPHY to revamp its moderation systems. Now Snap is confident that the fresh approach will protect users, so its brought the GIF stickers back. They let people embellish their photos and videos with overlaid animated illustrations and video clips.
So ends a month-long ordeal that started when a U.K. user spotted a GIF containing a racial slur for people of color. Snapchat removed the GIPHY feature as press backlash in the U.K. mounted. Instagram wasn’t aware of the issue until informed by TechCrunch, leading it to remove the GIPHY feature within an hour.
Warning: We’ve shared a censored version of the GIF below, but it still includes graphic content that may be offensive to some users.
The situation highlights the risks of working with outside developers that aren’t entirely under a platform’s control. Piping in external utilities lets apps quickly expand their offering to users. But if developers misuse people’s data, deliver broken functionality, or let objectionable content through, it can reflect poorly on the app hosting them. Facebook is currently dealing with this backlash surrounding Cambridge Analytica. Meanwhile, Instagram just severely restricted its APIs without warning, breaking many developers’ apps in what’s believed to be part of Facebook’s push to shore up data privacy.
Favoring news publishers, Snapchat historically never actively embraced developers, banning use of outside apps that require your Snapchat credentials. It’s more recently started letting devs build and promote their own augmented reality lenses. But after this set-back, we’ll have to see if Snapchat becomes any more reluctant to work with partners.
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