Lab Weekly - 11/03/2023
Emerging brand opportunities in gaming, plus, the latest news about immersive domes, paid subscription for Instagram, Robotaxi setback
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The State of Gaming: What Brands Need to Know in 2023
While it’s hard to argue with the effectiveness of a fifteen-second spot or display banner that reaches hundreds of millions of Candy Crushers, ad experiences in the mobile games have garnered a bit of notoriety due to their perceived non-premium nature. Fortunately, in 2023, brands can aim higher than those turnkey mobile game solutions and escape the non-premium perception of direct-response ads to explore the full spectrum of brand opportunities that gaming has to offer.
In case you missed it…
Meta Connect 2023 Recap: Everything Brand Marketers Need To Know
During its annual Connect conference, Meta offered crucial updates regarding its AI and metaverse strategies, signaling another attempt at consumer attention land-grabbing
The End of the Anti-Amazon Alliance
Three key takeaways from the surprising Amazon-Shopify deal last week: While logistics continues to be Amazon’s biggest competitive moat, and ease of payment still matters a lot to online shoppers, in the end, scales always win out.
The AI-Fueled Evolution of Search
In 2023, every media sector has been impacted, to varying degrees, by the commercialization and rapid adoption of new AI models, and search, arguably one of the most stable and reliable media channels, is no exception. Here are the three key trends we are keeping an eye on to track this round of AI-fueled evolution of search, and what it means for brand marketers.
In case you missed it — Last week, we released a new Floor 9 episode tackling the hottest innovation territory of the year, generative AI, and its impact on the ad industry with the help of two brilliant UM thought leaders: James Fox, Global Chief Strategy Officer, and Andrew Littlewood, Global Chief Product Officer.
Together with the Lab’s managing director Adam Simon, the trio discussed the state of generative AI, especially in terms of where it is in the Gartner hype cycle, the industry leaders in consumer-facing AI, what marketers can do with the new AI tools, and what’s next for generative AI.
If you enjoyed the episode, please consider giving us a five-star review on Apple Podcast. Follow the Lab on Twitter @ipglab and on Medium for our latest insights. Thanks for listening!
NBA & NHL Broadcasts Are Coming To Immersive “Shared Reality” Domes [CNBC]
Immersive video domes are becoming increasingly popular, as evidenced by the opening of the Sphere in Las Vegas and the upcoming launch of Cosm's two new venues in 2024. Cosm's venues will be unique in that they will allow sports fans to watch live games in giant domes filled with 8K screens. The company has secured the rights to select NBA and NHL games through a revenue-sharing agreement with TNT Sports (a subsidiary of Warner Bros. Discovery), which, as the CNBC reports noted, “could eventually extend to other non-scripted entertainment content, such as concerts.”
Given how much out-of-home entertainment events like sports games and concerts are driving the “funflation” phenomenon this year, it makes sense that an immersive entertainment company like Cosm is trying to seize the moment and event-ize a new live viewing option that immerses you in a crowd to create shared experiences, but without the premium price tag attached to in-person attendance. If this new format takes off, expect it to be built inside malls or shopping districts to boost ancillary spending.
Related: “Silent Hill: Ascension” brings hybrid approach to interactive content [The Verge]; 'Funflation' is here to stay as live events fuel economy [Yahoo Finance]
Meta Offers European Users Ad-Free Subscriptions On Facebook & Instagram [Bloomberg]
After the EU courts cracked down on Meta’s ad targeting and data collection practices, the social media giant is now offering an ad-free subscription for Facebook and Instagram for €9.99 per month on the web, or €12.99 a month on iOS and Android (to account for additional fees for mobile platforms). While this is clearly a concession to the regulators, I’m curious to see how many European consumers would actually pay to escape social media ads and Meta’s cross-platform tracking. My guess is that most people have gotten so used to accessing social media for free that few would consider it a worthy subscription if the only perk is “not seeing ads.”
Also, it’s important to note that the ad-free versions of Facebook and Instagram are not going away for European users, so this move likely won’t significantly diminish Meta’s addressable audiences in Europe, nor its ad revenues thereof. It may cut off, however, some luxury brands aiming to reach high-income audiences, who may be more likely to pay to use social media in order to protect their privacy. But that’s still a niche audience at the end of the day.
Related: Meta pauses ads for users under 18 in Europe as it rolls out subscriptions [WSJ]; X introduced two paid subscription tiers [The Verge]
California DMV Suspends Cruise’s Robotaxi Permits [The Verge]
The California DMV has suspended Cruise’s driverless testing permits due to safety concerns following several road incidents, including involvement in a hit-and-run in early October. Needless to say, this suspension marks a major setback for the development of self-driving cars, as this suspension may set a precedent for other states and cities to follow. Cruise, a GM subsidiary, and its main competitor Waymo (part of Alphabet) were approved to operate their driverless taxi services 24/7 in San Francisco less than 3 months ago in early August. Waymo just expanded its service area last month and, at the time of writing, does not seem to be affected by the suspension. Overall, this is a reminder that autonomous vehicle technology is still in its early stages of development, and there are still many challenges that need to be addressed before self-driving cars can be safely deployed on public roads.
Related: Honda and GM have ambitious plans to launch robotaxis in Tokyo [AutoWeek]; GM reaches tentative deal with auto workers, would end UAW strike [Axios]
In the U.S., time spent with television ads, including streaming and linear TV, could fall by 24% over the next four years, according to a new forecast from Brian Wieser, a former GroupM executive who is now an industry analyst and author of the Substack Madison and Wall.
There are about 12 minutes of ads per hour on linear television, Wieser wrote, while Netflix, Max, and Disney+ have about four minutes of ads per hour.
FAST streaming channels, which largely mimic linear television, could provide an opportunity for advertisers, but still represent a small slice of the viewing pie.
Wieser relied on viewership data from Nielsen and penetration data from research firm Antenna, in addition to his own models, for the forecast.
Some Gen Zers can name a brand based on sound alone, according to a new report from sonic branding agency Amp. The agency had 75 Gen Zers listen to a handful of brand sounds, several of which have gone viral, like the old Windows XP startup sound and Burger King’s “Whopper Whopper.” More than three-quarters of the respondents (81%) said they recognized viral or meme sounds, compared to 41% who said the same of the non-meme sounds.
In a shareholder letter, Netflix says its ad tier has 15 million monthly active users globally, accounting for about 30% of new sign-ups where it's available, and plans new ad formats for 2024.
If you find our insights valuable and would like to have a deeper conversation on technology and media innovations, or need to sound smarter in a client meeting or a pitch, please feel free to reach out to our Group Director Josh Mallalieu!
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