This is the second of a two part post that explores the scope of Social Media Analytics as a tool for the new age marketing paradigm. In Part I i have laid out the key benefits of Social media Analytics
A few quick Examples where SMA is being used effectively
1. Comcast looks at negative feedbacks and outbursts of anger, to detect and respond to service outages and product problems
2. London Hedge Fund, Derwent capital mkes trades basis the financial calm or anxiety from social media data
3. China manages citizen outrage through measured responses to specific online complaints about matters such as Police corruption
As with all other business systems, the demand for specialist service providers has engendered host of specialized SMA service providers – Many of these companies started out with basic services such as creating social media accounts and pages, and have now graduated to playing the role of social media consultants. They developed a software platform that can sift through billions of bits of data on social media and analyse it through selflearning algorithms. Combining SMA with Semantics and other media (TV being the largest), associations, patterns and trends – provides a whole new dimension to brands and marketers. By 2016, large corporations are expected to spend around $9.8 billion (Rs 55,000 crore) on social-media advertising and social media programs, from $3.8 billion in 2011, according to research firm BIA/Kelsey.
Covering 1 out of every 7 person on this planet, Social media and Analytics is the world’s largest focus group, the largest town hall. Companies that figure this out and manage things will thrive in the next 10-15 years. Companies that don’t will fail.
Facebook reports 1.11 Bn users, Twitter subs top .55 Bn , Google+ has over .34 Bn users. The Social Media Juggernaut is becoming impossible to miss in terms of planning and executing Marketing strategies. Companies are using conversations on social media platforms to shape entry strategies in new markets, address consumer grievances and communicate directly with target groups. This post (First of a two part series) explores the scope of Social Media Analytics as a tool for the new age marketing paradigm.
Social Media Analytics
While the social media is now a matured platform, it is still early days for social media analytics. Social media analytics roughly imply the set of tools and metrics that Social media in terms of experience, engagement, click thrus and others. In the right term Social media analytics is to this decade what SEO was to the 2000-10.
Social media analytics helps brands and marketers converse in the proper context with the right audience and close business with customers. Brands are using analytics to understand who they are interacting with, what users like and how to create communication to reach out to the right audience. Markets are truly all about conversations. Thus, Brands need a new suite of analytics solutions to keep them on top of competitive campaign activity and to mine actionable insights. Although at this point of time, brands have mainly focused on changing communication according to the analytics it is expected that in times to come Brands will reach maturity in terms of a stage of creating products and services based on analytics. Consumer instead of being the last point of the marketing channel will be aptly present across the full value chain.
Key benefits of Social media Analytics (SMA)
1. Status Versus Dynamic: Provides a continuous monitor of conversation about any marketing program. Compare this with Surveys and research programs that are intermittent and snapshot based.
2. Scale: While numbers in surveys are limited, and the social media is all about the exponential movement of a conversation through the population
3. The Various shades of consumer response: While Ads are carefully constructed and completely vetted by brands, consumer response to these ads was only on overall aggregate level. SMA however can space out the nuances in the way.
4. Putting Context in the equation: Context affects the extent to which an ad/program generates buzz. Historically, context was held as a constant – whereas SMA determines that context plays a fundamental role in the interaction of the brand and the consumer.
5. Monologue versus Dialogue: Also SMA signals an effective shift in power from one way communication (traditional media) to dialogue between the brand and consumers of mass media.
6. Responsiveness: An early feedback from the first adopters could also provide clues on potential wider impacts and the brand marketer may tweak the message to suit his TG.
What started at Facebook as a phone idea has now materialized as a mobile platform. That would not surprise many out there especially with Mark Zuckerberg ranting on about his ambitions to become a mobile company. With a billion and more users on Facebook – it was about time, Facebook would try and engage its audiences in a more controlled environment to be able to make better revenues. Facebook wanted to be the central entity in the mobile users life and thus the Facebook home.
Facebook Home is an alternative launcher on Android. This wraps the Facebook services around the home screen for the user – networking, chatheads, messaging, likes, follow, sharing, messaging, feeds, chatheads and more. However, Facebook Home hasn’t done any deep modifications to Android, like Amazon did with its Kindle Fire tablets. That allows Facebook Home to run on existing phones, in addition to new phones with Home pre-installed – a layer that runs on top of your existing Android software.
Eventually, Facebook plans to show advertisements somewhere within Home, and the company may also open up certain features of Home to other apps. Thus Facebook Home is to become to mobile & social what Google is to search; Question is – do I really need it? There’s so much of Facebook overload anyways that the evolved & matured users are moving away from Facebook. And FB is trying to put its wrapper around my mobile yet again?
From the user perspective, an agregator service has held the most promise but has delivered in the least. Classic example – iGoogle. Thus FB home is as Fab a concept as it gets- but FB fatigue may be a key impediment from mass usage. I am not sure but i am not exactly comfortable looking at my Facebook timeline every time i look at my home screen. And then there is alsways the privacy bug around the Facebooks and Googles of the world!
Bottomeline there – Facebook Home is worth a visit, but it isn’t yet a place I want to live. The way i see it Facebook home will induce a lot of trials but sooner users will get fatigued and turn it off! Zuckerberg needs to be smarter than this to make Facebook the centre of mobile experiences!
Till some time back, i had a belief that there was a bit of Google in everyone’s internet. Such was Google’s dominance – which then was challenged by the emergence of Facebook and Twitter which took on the identity of a user on the internet. So Facebook and Twitter sign ins became the key to web browsing and discovery. Google which delivers its internet revenue model on recording and using user breadcrumbs on the internet started loosing which is where Google+ came in.
The recent introduction of Google+ based sign ins to websites and apps now enable Google to be woven into the internet habit of users. Google thus re-discovers its user data goldmine. Prior to this Google Calendar and Google Drive already have permitted developers full access. Mobile and Web developers will be able to accept Google sign-ins and — depending on the permissions that the app requests and the user chooses to authorize — gain access to Google+ social sharing.
Even though Google+ as a social platform is approaching its two-year anniversary, Google+ has lagged behind its competitors when offering third-party sign-ins: Facebook Connect is a little over four years old, and Twitter has permitted sign-ins since 2009. LinkedIn offers a similar sign-in option. This aannouncement from Google puts it at par – and extends Google’s view of the user to more than mail, search, video and more.
Whats really cool about this is the way this service integrates cross platform linkages – across mobile and across web apps. Google+ will be able to leverage its Android strengths hugely to establish the lead over Twitter and Facebook.
Imagine now, the kind of leverage Google+ has with this service and the Google Glass or Android TV or Driverless Car! You get it?
What Could Go Wrong with Facebook? Everything! (No this isn’t paranoia)
Once hailed as the most valuable technology company to hit Wall Street, Facebook is now worth just over half what it was three months ago, with shares closing at $19.87. The company is suffering from a classic disease — it went public at too high a value. In an earlier post I had argued that FB will find the going very difficult in terms of managing expectations because of the stretch in valuations that it had opted for in the IPO. The challenge for Facebook, is to persuade the market that it is not a fad and that its managers have a blueprint for making money. Analysts have pointed out that Facebook has been slow to figure out ways to make money from mobile devices; half of its users log in on phones and tablets. Given its exceptionally high valuation in its initial offering, FB is under intense pressure to show that its advertising model can deliver the lucre that Wall Street expects.
From a $100bn blockbuster debut to a $42bn valuation in 3 months, Faceboook’s twist of fate, in many ways, reflects the tension between two moneymaking cultures in America: Silicon Valley and Wall Street. They are as symbiotic as they are dismissive of each other. They are equally focused on making money, but their approaches are different. Wall Street wants to see swift growth in revenue, given Facebook’s still high valuation of around $50 billion. Facebook says that it is building tools that will forever change the world — but have yet to reveal any details about how they plan to quickly increase profits.
Quoting Doug Purdy, the director of developer products on FB’s future- One day soon, the Facebook newsfeed on your mobile phone would deliver to you everything you want to know: what news to digest, what movies to watch, where to eat and honeymoon, what kind of crib to buy for your first born. It would all be based on what you and your Facebook friends liked. In effect it moves from the search or pull economics to push economics which is purely analytics based. (In fine lines- Facebook’s future would be built on Google’s grave).
In the technology business, few companies can keep the fairy tale alive forever- Facebook has had a run like no other in the present – but sustaining the momentum and managing expectations is a balancing game that Zuckerberg and Co. need to master fast.
Facebook’s shares continue to tumble under the weight of its own expectations. Facebook’s mid May 2012 IPO was pegged at $100bn and with growth stalling, the m-cap is a downward spiral. I had written about the extremely stretched multiples which make Facebook’s share price unsustainable.
Facebook’s share price is down 47% in 3 months after the IPO. In its earnings call for the quarter, Facebook Inc reported a drastic slowdown in revenue growth and offered no financial forecasts to ease worries over the prospects for boosting advertising in its first earnings report as a public company, sending its shares to a record low.
While Facebook has pointed to early signs of success in new advertising services, but the lack of a detailed financial outlook went over poorly with investors hoping for evidence that the company could soon reverse the continuing slowdown in its business. Facebook posted a net loss of $157 million, or 8 cents a share, in the second quarter after taking hefty stock compensation charges related to its IPO. That compared to net income of $240 million, or 11 cents, in the year-ago quarter.
Facebook has raced through eight years of break-neck growth that was to have culminated with its May initial public offering. Instead, its share price has headed south as investors questioned its valuation of more than 100 times earnings and its longer-term ability to sustain growth as users migrate to mobile devices.
Monthly active users grew to 955 million at the end of the second quarter, up from 901 million at the end of March. But mobile monthly active users surged 67 percent year-on-year to 543 million users, adding further pressure on Facebook’s business, which only recently began to offer limited forms of mobile advertising.
While advertising “impressions” lagged user growth during the second quarter but that new social ads, which appear directly in Facebook users’ “newsfeeds”, were driving up ad rates. The average price of a Facebook ad increased 9 percent during the quarter, driven primarily by the United States where rates jumped 20 percent with the company’s newly released social ads.
In effect, facebook’s slow down is a study of failing under the high growth expectation set by the blistering pace of growth registered earlier. However what seems to pinch the investors is a stretched valuation of $100billion when the new advertising avenues have not fully driving the revenue growth engines
Social Media may be a recent enough phenomenon, but it is making the elephants in enterprise dance.
The global enterprise software market which is currently valued at $280 bln is going through a full scale renaissance. Gone are the clunky, licensed business products once churned out by the likes of Microsoft, Oracle and SAP. Up and coming are cloud-based, intuitive, software-as-a-service applications with social components created by a host of young, disruptive companies. And the big guys are now beginning to play game. In a spate of recent acquisitions, monies worth $2.25 bln have been spent by Enterprise majors to acquire start-ups providing a social platform.
The five factors driving this trend are as under
- Easy to use and intuitive UI to drive the next generation of business software. Anyone who is aware of the Oracle enterprise systems would agree on how geeky it was and the man hours of training required to master Oracle. Deep down that trend is changing
- Software by definition has become a cloud based service piece as against a legacy thing that was bought, installed, integrated and resourced at enterprise. Licensing model led to build up of very heavy upfront costs and the need to maintain security and privacy at premises. Software-as-a-service (SaaS) instead treats software as a pay-as-you-go subscription, much like cable or phone service. Hardware and software is all centrally managed by the provider on cloud-based servers, including upgrades, backups and security
- The payment mechanisms are changing. As against a CAPEX led purchase earlier, SaaS solutions like Dropbox and LastPass percolate through the workplace organically, introduced casually by employees. If these apps indeed fill a niche, eventually CIOs take notice, opting into buying the enterprise versions. That’s the magic of the Freemium models.
- The Facebook approach in Enterprise is promising and delivering. The enterprise of today works across departmental silos with a lot of co-working and co-creation at hand. Collaborative project execution represents one of the most profound – and widely overlooked – advantages of new-generation enterprise software.
- Business computing goes mobile as BYOD soars. Availability of business critical data and information systems are hall-marks of new age mobility enterprises. The BYOD (Bring Your Own Device) phenomenon lets employees circumvent and subvert clunky, legacy PCs bloated with yesterday’s enterprise software.
So even if the Facebook IPO bust plateau-ed out on Social, the integration of Social and enterprise has great promise. It promises to phase out a $600 billion legacy behemoth- on-premises software, data centers and PCs.
Zuckerberg and the FB gang have been great aat connecting 900 million dots. Its time they take the game to a different level- monetizing the dots.
A $95bn IPO may not be top of the mind for Mark Zuckerberg who is intent and focused on getting the social strategy for Facebook right. However, to many analysts and investors, the valuation is stretched and raises a spec of concern and doubt on the ability of the FB network to make money that is commensurate with the expectations.
Interestingly enough, a positive indicator that can provide FB the fillip is that Premium “Social” ads such as sponsored stories, “likes”, comments and other endorsement of brands’ activity have increased 26% y-o-y. Typically Premium ads make up for 25% of FBs ads. The concern area is a drop in CPC (Cost per Click) for the standard ads by an equivalent 26%. Overall CPC rates have gone up 23% across both categories. Another cause of concern is that Click thru rates have also gone down by 6%.
1. The dichotomy between standard and premium ad pricing trends reflects FB’s attempt to move away from keyword targeted “direct response” advertising – the so called plain vanilla marketplace ads towards getting big brands to buy “social” campaigns. The company’s re-orientation around large brands and away from the smaller ones may the driver of the difference and a definitive forward move to justify the stretched valuations in terms of revenues.
2. Facebook also needs to prep up its mobile presence. With 55% of Facebook users accessing the site from their mobile phones, the Facebook mobile become a key access point which FB cannot miss. The FB app on mobile today is just about a decent experience for sociaal networking. How Zuck can add the “brands” angle to this is the key challenge for FB. FB has been acquiring small time smart-ups expectedly to build on the mobile presence. But acquiring is one thing, executing is quite another. We havent seen much from FB in terms of exploring mobile for brands.
3. The other interesting rumour doing rounds is Facebook search. Fundamentally different from Google in terms of generation of leads through social network anchors – likes, location, friends. That indeed is aa very interesting angle to search given that word of mouth and social networks are big influencers.
Facebook’s success ride has beeen phenomenal. Thats got it this far… a $95 bn IPO vaaluation. However, FB will have to change a few things around fundamentally if it were to justify a $100bn valuation and how it wants to poistion itself in the future. The ingredients are all there… how they mix them around and create the dish out of it.. is worth watching out for.
Presenting a two post series on the future of search as Google and Facebook are evolving it each from its core sterngth perspective. This has been reproduced from an article by Drew Olanoff: Facebook versus Google- Who can win Search?
It’s a well-known fact that most people don’t get past page one of Google’s search results. This is why Google is doubling down on integrating a social layer into everything that it does. While algorithms can crawl the entire web to find relevant information, could the things that we share on Facebook become a better and more reliable data-set?
Searching the social network could get a lot better in the near future. Facebook is rumoured to be working on an improved search engine which will help users better sift through the volume of content that members create on the site, such as status updates, and the articles, videos, and other information across the Web that people “like”. Facebook and Google have one thing in common, they absolutely love data. The only difference between the companies may soon be the way that the data is shown to us.
Google’s approach to search
Even if you’re really good at using Google, it’s hard to find exactly what you’re looking for sometimes. As it appears now, even with the launch of Google+, Google scours the web for content and then churns it through an algorithm that decides which content is more relevant. The social layer that it has instituted allows its users to validate what the machines have already decided. That’s placing Search before social, algorithm over recommendations. This works really well because people view information differently, and there really is no such thing as natural language search. If the Internet was “flat”, meaning it wasn’t indexed at all, relying on people to find the content that might be relevant to you is like pissing in the wind. Basically, the experience is going to suck big time.
On the other hand, when you want to ask people for recommendations, you don’t even know where to start. For example, if you want to eat dinner but are`n’t sure what type of food you want, Google doesn’t really help other than to give you a list of sites that have lists of restaurants in your area.
Basically, Google has an extra step if you want recommendations.
Presenting a two post series on the future of search as Google and Facebook are evolving it each from its core sterngth perspective. This has been reproduced from an article by Drew Olanoff: Facebook versus Google- Who can win Search?
Facebook’s (potential) approach to search
By cropdusting the web with “Like” buttons, Facebook has a huge set of data and information curated by all of us, without the fluff that Google scrapes daily. Think of it as a super-fine set of information that has already been pre-screened by humans. Now if Facebook wanted to “improve” its search, it wouldn’t be as simple as making an algorithm that mimics the experience that we have today on Google.
With lists, subscriptions, likes, and location data, Facebook could let us perform a very direct query with a finite group of people. Basically, a set of our friends or colleagues would be our “search engine”. What would that experience look like? Well, I imagine that you’d type a natural language query and then drill down to whose data you’d like to use to perform the search.
For example, I wanted a taco, I wouldn’t necessarily type taco into an open search box like I would on Google. I’d choose a location or a group of friends and then search for “taco”. Based on where they’ve checked in on foursquare or Facebook, or things that they’ve liked, I could be given results to check out.
It’s not perfect, but it’s not bad either.
First, you have to remember to stop referring to these companies as one “thing” or another. Google isn’t a “search company” and Facebook isn’t a “social network”. They are both companies who want to change the world and make money. We all know that there’s big money in big data. These companies have different approaches to how they’re collecting and displaying the data, but at the end of the day, they’re kind of doing the same thing.
We’re watching a potential clash of the titans where two things are extremely obvious: Google is late to social, and Facebook is late to search. Sure, Facebook has Microsoft in its corner which could help them out a great deal, but as Bing stands, it’s extremely similar to the experience we have on Google today.
The next big step for search is outside of the box completely, with less data and more relevant results. The question is, do you trust regular people like you and I to decide what’s best, or do you prefer to let a bunch of machines try to figure it out for you. The answer is a mix of both, but who will do it better?
At the end of the day, we’re going to use what works best for us. Until Facebook makes a move, it’s still a Google world. However, Mark Zuckerberg and company aren’t going to sit back and watch the stream of data and dollar signs pass them by. It’s going to be an epic battle and it could be anyone’s game.