Ronnie05's Blog

Facebook needs to now change its game

Posted in Social context, media and advertising by Manas Ganguly on May 7, 2012

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.

Indian Telecom Industry: A picture in numbers!

Posted in Industry updates by Manas Ganguly on July 28, 2011

Data courtesy: Voice & Data magazine

The Indian Telecom industry grew around 15% during FY11 to post a satisfactory revenue of `166,168 crore compared to the `144,600 crore in FY10. In light of the fact that the environment was not conducive for telecom growth in the country, Revenue as well as growth rate made it all the more satisfying.

In terms of numbers, the industry sold 227 mn new SIM cards (not added that many subscribers), taking the total SIM card base to 812 mn and showing a growth of 39% over the year and monthly average additions of over 20 mn. Interestingly, 800 mn was the target set by the government, to be achieved by 2015, but the industry did it in 2011, four years before the deadline, albeit, in terms of SIM cards and not subscribers.

Other significant segments of the telecom business like NLD, ILD, VSAT and broadband also performed better than expected last fiscal. The total NLD market stood at `22,812 crore in terms of revenue compared to `17,118 crore in FY10 showing a promising growth of 33%.

The ILD market has shown steady growth of 10% with total revenue of `22,607 crore in FY11.

On fixed line, service providers are bundling broadband and IPTV to retain and attract customers but it is not helping; the industry showed a negative growth of 15.6%. Both BSNL and MTNL, which had a monopoly in fixed line services, have been badly affected. In terms of numbers, the fixed line market is estimated to be around `11,206 crore.

In terms of revenue numbers, broadband services was pegged at `6,846 crore in FY11 vis-a-vis `5,591 crore in FY10. Broadband has shown excellent growth of 22.4% thanks to large operators, especially BSNL, which has increased its coverage. The company is present in 100% districts and 98% block headquarters. So, in toto, the broadband coverage is available in more than 5,000 cities and 170,000 villages.

VSAT services industry accounted to `467 crore, thanks to government, education, R-APDRP and RRB.

It is expected that the industry will build upon the growth maintained in FY11 and use BWA and 3G as levers for increased growth in the coming fiscal. 3G will play a bigger role and so will data services as they will have to go hand in hand.

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