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 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
Continued from the blog: Facebook needs to change the game
- 500 out of 900 million Facebook users are using Facebook through mobile devices
- In March, the average Facebook mobile user engaged with the social network for more than 7 hours, according to comScore
Going forward Facebook is expected to capitalize on mobility through advertising as it prepares for its IPO. That’s stats provided above give a lot of head-down time to which Facebook has to respond. Mark Zuckerberg’s, top priorities going forward is to transform Facebook’s mobile and advertising experiences and further integrate online apps into the platform
The big question is how the company can make more money with advertising on mobile. You can bet Facebook will figure it out considering advertising is the reason Zuckerberg and other insiders are about to become extremely rich.
For users, more advertising on mobile is somewhat of a drag, but there’s utility involved as well. A lot of what we’re doing on and with our mobile devices is being tracked by scads of application developers and device makers who aim to improve their products and marketing activities because they know what we like, where we go and how we spend our money. Needless to add, Facebook wants that data, too.
The ads we’ll be seeing on mobile will increasingly be highly relevant and the time is coming when we’ll get offers and ads pushed to our phones the minute we step over a retailer’s threshold at the mall.
Facebook is “just getting started” with its mobile app. As Facebook collects more data, such as location and which friends “like” certain products mobile ads will be better targeted to users.
Facebook’s initial public offering is set for this week and media outlets are stirring up a frenzy, reporting on everything from whether the company is overvalued at $96 billion to which character traits propel Zuckerberg to give speeches to groups of big-shot investors wearing a hoodie sweatshirt. Facebook’s mobile future is also getting a lot of attention.
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.
The Jury is divided on G+. However G+ is adding up numbers very very impressively.
My opinion about G+ is that it really mashes features from Facebook, Twitter, Skype, Stumbleupon,Tumblr well currently. What adds glory to the effort is the slick UI and UX. Interestingly most of the properties on G+ are Products from Google that are already available. So for now, it is old wine in revised packaging.
Going forward a lot of product developments are expected in G+ is expected in quick time. Surely LinkedIn type Professional networking is sometime soon. Gaming is yet another big piece. LBS would be yet another. Collective Buying is yet another.
Given all these features,G+ has good reason for traffic: Features and enhancements, engagements and experience layer over the basic layers of social networking, feeds, groups, chats, recommendations and discussions. There would be some missing pieces like social games which will also get integrated at some level. That will deliver the “stickiness” piece.
And then… Where there is traffic, Brands will have to be. The features in G+ support Brand conversations and other brand integrations possibly to higher known levels than that which is happening currently. Brands fancy that kind of experience, engagement and involvement with consumers.\
Thus G+ is Google’s best effort in terms of extending its competency of monetizing things from the search domain to the social domain. Prior to G+, Google had search results but no means of profiling who had done the search. With G+, Google leaps that lack of understanding in terms of profiles. End of the day its all about targeting users and profiling better, to monetize the effort.And no one monetizes better than Google does. With Google’s strength in native properties such as Search, Location, Mobile, Content, Media and Video; integration of chatter, conversation and networking will make this a huge next gen tool… possibly Google’s next Billion Dollar babe.
Contd from earlier post
After a decade of playing with social communities, the Google+ plus interface is possibly the best. From a design perspective, it’s very squeaky clean, making Facebook’s interface look a little dated. However, it packs all the features that people like on their Networking space. The Circles with its drag and drop feature, cute aligning of friends, easy categorization and intuitive use is the best. While other social networks attempt to categorise contacts into different groups, Google+ has nailed it.
The content piece or Sparks as it is called, allows the user to follow items of interest quite like Twitter where one may follow content creators and their links. This might be the earliest avatar of the Web 3.0 where the Sparks could throw up recommendations based upon an individual choices and profiles. Sparks would learn from Google products (e.g. Google Search) as well as what is being shared via Google+ and through +1.The videocam chat is called the Hangout.
Google+ also allows for some degrees of privacy protection. The privacy link displays useful tips about how to protect what is being shared. Even better, each time the user posts content, he gets to choose what circle he would be sharing information with. While there has been criticism about Google+ revealing that they plan to retire private profiles at the end of July. Privacy — deciding whom the user shares different posts with — seems to be top of mind on Google+. That’s a relief after Google’s earlier debacle with Google Buzz, which had arrived unsolicited and initially created circles of friends automatically based on whom they’ve corresponded with on Gmail. Unlike Facebook, which allows users to maintain a private account that won’t show up in searches, Google+ will keep some basic information, such as user name and gender, public.
Unlike Twitter, which forces a 140 character limit, Google+ Stream posts comments allow for more space and more content being shared and allows for a threaded view on topics, comments, recommendations and others.
The Huddle allows a clique kind of environment for specific larger group conversations without other eavesdropping. Thats new considering that FB doesnot incorporate a multi user chat and Twitter allows group, but the chat is visible to public.
The Picassa integration into Photos is another feature which emphasizes sharing. Fortunately and to many people’s relief it has a level of provacy setting where it asks permissions group wise.
From the looks of it Google had actively and simultneously planned for the Android App based integration and the services runs very intutively on the Android devices. The key feature as with the web version is that it has a brilliant interface and great user experience for the users.
Facebook has 750 million users with about half of them logging into the social network on every given day. Google+, is 2 weeks old and looks to be in a hurry to break the 10 million mark. It could also break the 20 million user number if Google keeps the invitation button active. The numbers do provide evidence that there’s demand for another sizable social network–and that Google isn’t necessarily forever doomed to fail in trying to launch it. Google+ is already expected to cross the 100 million user base the fastest in history. So torrential was the response to Google+, that it ran out of disc space. Even Google had not anticipated that kind of response.
So then, Why is Google+ the new “big boy” in the “social” block?
Firstly, Google+ is extremely well executed and users are already smitten. Personally, I see Google’s attempt at Google+ not as anything ground breaking except the neat manner in which it has been packaged.+1 recommendations, Gmail, Chat, Calendar, Documents, Photos, Reader, YouTube, Books, Videos, and all other Google properties successful or otherwise re-packaged in an extremely fluidic user experience which leverages the social context between groups of people enabling sharing, creating, discussing and more. For sometime now, Facebook has been snubbing Google’s nose for the laters inability to claim the social space. Google’s answer takes learnings from Facebook, Twitter and even Linkedin (Something about Google+ Business). Its seamless integration with other Google services, from search to online documents, makes it easier to share things online.
The whole console which features best of social networking, friends circles, social circles, social buzz, videos, photos and others makes for a heady cocktail and the User experience adds the special something. An interesting move this, Google+ could be Google’s definitive move into things social.
Over more than a decade Google had the most impressive dataset the world had ever seen; the most sophisticated algorithm to make sense of it; an audience of a billion users expressing their interest; and more than a million advertisers bidding furiously to reach those consumers at just the right moment.But is its crucial search feature vulnerable to Facebook?
Google is vulnerable precisely because its dataset is, as it stands is “dead.” Its search algorithm analyzes the pages and links that users have left behind, but it has almost no first-hand knowledge of any of the users who created this content. The users are all anonymous. Facebook, on the other hand, has created a platform that knows more than 600 million people, complete with identity, interests, and activities online.
If Google’s business has been built on choosing which Web pages, out of all those in the universe, are most likely to appeal to any given (but anonymous) query string, think about this: Facebook already knows, for the most part, which pages appeal to whom—specifically and directly.
And, even more powerfully, Facebook knows each of our individual and collective behavior patterns well enough to predict what we’ll like even without us expressing our intent.
This key difference could give Facebook a tremendous advantage in search when it eventually decides to move in that direction.
And that’s the real threat of Facebook and other social companies to Google. Eventually, users will realize they can get a lot of the information they need — particularly shopping recommendations — without ever conducting a search.
Google is the past, rooted firmly in AltaVista.com-type methods. Google is anchored in brute force solutions, and Facebook operates on a membership basis. Facebook is, like it or not, the future of information access: gated, incomplete, social, and essentially cut loose from precision and recall unless intermediated through friends.
In a future where search and discovery is intermediated by social, Google looks to be off guard. Even Eric Schmidt agrees!
Read earlier posts on the same subject:
Facebook and Google on collision course (Part II)
Traffic, Stickiness and Engagement: Facebook steals the march over Google
The debate on Searchability versus Sociability of the Net: Facebook versus Google
Facebook and Google on Collision course