Volume 007: Airpods is a bigger story than CES this year.
1. Hell yes, after selling 110m pairs you open AirPods to developers.
Tl;dr: AirPods is Apple’s next platform. Growth is mind-boggling.
When AirPods were launched, I thought they were distinctive (good for the brand) and daft-looking (bad for me) and vowed never to buy them. The fact that I don’t use an iPhone made this much easier. But after buying a pair for my mother, I now find myself joining approximately 110 million other people.
This is a number that’s positively mind-boggling. AirPods has estimated 2019 revenue of $12bn, triple-digit yearly growth, and a valuation estimate as a separate company of around $60bn. Just to put this into perspective, AirPods' revenue is almost the same as Uber's, and it got there in just three years.
So it is no surprise to hear rumors that Apple is contemplating an AirPods operating system, which would create a platform for developers. An audio app and services ecosystem makes complete sense in terms of differentiation, new revenue streams, deepening the competitive moat, and spiking services-based growth. They might even choose to play nice with Android, as they did with iPod and Windows.
So far, all the conversation in this space has centered around Alexa and Google Home, with Siri in the next room and Bixby digging it’s own grave. Look for that to change. AirPods is Apple’s next platform and that’s a really big deal.
2. I’m going to need a bigger mancave.
Tl;dr: If you can’t make it better, make it bigger is in full force at CES.
With CES in its entirety being a smaller story than AirPods this year, I almost couldn’t bring myself to write about it. But quite literally standing head and shoulders above Alexa enabled shower-heads and Lamborghinis, awarded/banned/not-banned/awarded and now returning sexual wellness devices, digital photo-frames and 5G absolutely-everything, Samsung rocked up with a 292” TV.
Why 292 and not 300? I have no idea. Either way, it’s rather large as far as televisions go. And with the Super Bowl just around the corner, I’d be willing to bet at least one well-heeled individual is asking Samsung if they can borrow or buy one in time for the big game.
Joking aside, having just been on the hunt for a new television, it’s pretty clear this is a category where it’s becoming really hard to stand out with a better product. The discernible gap between the high-end and the low is smaller than ever in both picture and design. Which I guess is why, if you can’t make it better, you just have to make it bigger. Unless, of course, you happen to be Sony.
3. Blind iteration is a fool’s errand, so why are we so addicted to it?
Tl;dr: Agile isn’t a strategy. Marketers need to stop confusing activity for progress.
Years ago, I worked with a client who told me their business strategy was to test and learn based on a new digital infrastructure enabling continuous agile development. Once I made sense of what they were saying, my immediate response was one of confusion: This wasn’t a strategy, it was how you’d operationalize one.
Fast forward to today, and it’s clear that modern marketing lives with this same tactic-first confusion daily. We talk the language of data, agile, sprint, scrum, iteration, A/B testing etc, but scratch the surface and we find a set of cascading issues: Strategy replaced by guesswork, rapid iteration of tactics without direction, A/B testing of bad options creating bad solutions, with very little critical thinking of what we are really doing and why that inevitably leads to the assumption that the answer for every problem is to speed up rather than re-think.
In a fast world, strategic clarity becomes more important, not less. Only through this clarity can we allocate operational resources effectively to move quickly and with clear direction. When managing multiple channel relationships, shockingly complex and expensive tech-stacks, and seeking to appeal to an increasingly demanding and skeptical consumer, you cannot afford to spin your wheels. Strategy is not an agile process delivered through a sprint. It’s the clarity of direction that guides your agile processes and sprints. It tells you which of the myriad of things you could be doing that you should be doing. And while learnings from your activities should absolutely inform your strategy, it should never be wholly replaced by them.
4. News of my death has been greatly exaggerated.
Tl;dr: Not only isn’t it dead, advertising isn’t at all dying ¯\_(ツ)_/¯
Every year we hear the prediction that advertising is either dead or dying, and every year the prediction proves to be flat wrong. If it weren’t flat wrong, Google and Facebook would most likely be losing money rather than making it hand over fist. In his latest newsletter (highly recommend you sign-up), ad-contrarian Bob Hoffman breaks this down. Far from being dead, US advertising is up 2.5%.
Most interestingly, big-tech has grown their advertising expenditures by 26%. I think there are three basic reasons for this:
Their businesses are broadening and there are some big new markets they’re duking each other out in (think Alexa vs Google Home)
They have huge amounts of capital at their disposal and realize that using a portion of this capital for brand advertising helps deepen their competitive moats.
They’re using advertising as a tool to manage people’s perceptions of them as the techlash over anti-competitive behavior, privacy and non-payment of taxes emerges. It should come as no surprise at all that Amazon and Google both portray themselves as being so very, very friendly.
Of course, the most absent brand is the most interesting. While Facebook is a major advertising platform in its own right, it hasn’t yet thrown massive amounts of advertising money at re-shaping people’s perceptions. Almost certainly, that’s going to change pretty drastically this year. I just hope they can do better than the whole Teen Vogue debacle this time.