Kurt Sanders enjoyed the recent episode with Mark Ritson. Thank you for the listen and share, Kurt!
By Adam Fraser
Google’s business model is built on advertising revenue. Lots of it. Almost $80bn in 2016. It dominates, along with Facebook, to the point it is accused regularly of being in a digital duopoly in the online advertising sector.
Stats vary, but $14bn of the $19bn spent on digital advertising in Q1 2017 in the USA went to Google and Facebook, and the two companies alone account for 80+% of the growth in the digital media sector.
So weaned as it is on advertising revenue, a headline reader may be somewhat confused as to why Google would introduce its own ad blocker into its very popular web browser Chrome.
In the ad blocking game, the cat and mouse, cops and robbers battle between publishers trying to show you ads on every inch of digital real estate, and the ad blockers trying to stop them, is an arms race in which it can sometimes be hard to decipher the good guys from the bad. One thing is for sure – consumers are “voting with their feet” and ad blocking is growing at an incredible rate.
Google’s motives could be argued to be pure – insert your own description of “enhancing the customer experience”, “removing annoying and intrusive ads” or “encouraging good quality ads which users want to see”. But there is a small elephant in the room – Google will let its own ads through. Some describe the “Coalition for better ads” which Google has joined (along with Facebook) as a “cartel orchestrated by Google”
Protecting the consumer from bad media experiences or holding other publishers and advertising brands to ransom? Meet the standards that we Google deem acceptable – if not, take your chances on our ad blocker filtering them out. In George Orwell ‘Animal Farm’ terms, all ads are equal, some are just more equal than others.
As the owner of both the most popular access point to the web (Chrome browser) and the largest recipient of digital ad dollars on the web, Google (along with Facebook) wields an enormous amount of power. The jury is out on this move, but a world in which two companies control pretty much everything we see on the web seems to be looming large.
You can listen to the podcast here.
By Adam Fraser
I am a big fan of the research produced by Edison Research and have previously written on their regular Infinite Dial report into media and podcasting trends.
Edison recently released a very interesting piece of research into social media usage on mobile in a new stand-alone report “Social Sharing in the Mobile World”.
The study of 1571 US smartphone owners aged 18-54 revealed some key insights into the mobile use of social media, including:
- 80% of American smartphone owners use social media apps every day
- The average smartphone owner uses 14 types of apps
- 70% of smartphone owners who use social media say they use Facebook every day
- More than six in ten Facebook users say they belong to local Facebook groups or other online local groups
- Nearly a quarter (23%) of Facebook users say they have broadcast a Facebook live video
Some other interesting insights include:
- Android users (59%) eclipsed Apple users (45%)
- 87% use text messaging daily
- 92% of respondents used Facebook on their smartphone, versus 57% Instagram, 43% Twitter and 40% Snapchat
- 80% of users share photos at least once per month, while 54% of users take at least one selfie per month
- The top messenger apps used were (in order of popularity) Facebook Messenger, Skype, WhatsApp and (surprisingly) Google Hangouts
An interesting set of data points, and a useful, credible source for research references. Worth checking out.
(Looking forward to having Tom Webster from Edison on a future EchoJunction podcast)
The team and I are big fans of EchoJunction. Keep up the great work! 👏🏽
— Lee Michael (@leescratchdisco) June 12, 2017
By Adam Fraser
It’s that time of the year again. LinkedIn and Twitter shares come at every angle as one of the tech industry’s most eagerly awaited powerpoint decks – the 2017 Internet trends report from Mary Meeker – is released.
At 355 slides (no typo – three hundred and fifty-five…) it is a deep dive into a number of uber internet trends. It’s not for the faint hearted looking for a quick sound bite and headline – think more encyclopedia than break through analysis – but it truly is a fantastic (free) resource for anyone performing analysis in the tech sector.
I would encourage everyone to take the time to review the detailed deck, but if you don’t have the time here are 10 key takeaways:
- Global internet users continue to grow (now 3.4bn), with the rate of growth flat on prior year at 10%; global internet users have more than doubled since 2009
- Growth in global smartphone shipments slowed significantly to 3%, from 28% growth in 2014 and 10% growth in 2015; this suggests smartphone penetration is approaching maturity (2.8bn users)
- The time spent with digital media per adult in the USA continued its steady consistent growth over recent years, up 4% to 5.6 hours/day (as comparison this was 4.3 hours/day in 2012 and 3.0 hours/day in 2009) with the majority of this time now spent on a mobile device
- Voice was identified as an increasingly important means of communicating with devices, with 20% of mobile searches on Google now made via Voice and Google’s machine learning voice accuracy now exceeding 95%; in addition, the Amazon Echo install base in the USA now exceeds 10m.
- Social customer service (“easier access to online support channels”) was identified by 60% of survey respondents to be an area brands could most improve their customer service offering
- Internet advertising in the USA grew to $73bn in 2016 from $60bn in 2015 and $50bn in 2014, driven by mobile and largely Facebook and Google (these two companies comprised 85% of internet advertising growth); mobile advertising now exceeds desktop advertising
- Print spend is overweight and mobile advertising spend underweight vs proportion of consumer time spent on media platforms; Print (4% time spent, 12% ad spend), Radio (9% time spent, 9% ad spend), TV (38% time spent, 38% ad spend), Internet (20% time spent, 20% ad spend), Mobile (28% time spent, 21% ad spend); based on current trends digital advertising spend will exceed TV ad spend in 2017
- Ad blocking is growing at an exponential rate, with almost 250m desktop ad blocking users, and approaching 400m mobile ad blocking users.
- Online retail sales in the USA hit almost $400bn, growing 15% on the prior year. Walmart – the world’s largest retailer – is aggressively growing its online channel and Amazon is now becoming a force in own brand products for basic categories such as batteries (market leading 31% share of market) and baby wipes (16% share of the market)
- The market cap of the top 20 tech companies globally is 3.8 trillion dollars; tech companies represent 40% of the world’s top 20 most valuable companies, and 100% of the top 5 (Apple, Google, Microsoft, Amazon, Facebook)
Other sections of the report covered healthcare, gaming, the Cloud, China, and India in some detail.
There are many more fascinating insights in the report; well worth the time for a full review, and an excellent reference point for reliable and trustworthy data points that may be useful in a range of other content analytics use cases.
By Adam Fraser
Instagram is truly motoring. In stock markets they often say “the trend is your friend” and the momentum is absolutely with Instagram at the moment.
The platform recently announced it had exceeded 700m users. It has almost doubled its user base in only 2 years, and its rate of growth is actually increasing when looking at the time taken to add each incremental 100m users:
- October 6, 2010 – Launch
- February 26, 2013 – 100 million; 28 months
- March 25, 2014 – 200 million; 13 months
- December 10, 2014 – 300 million; 9 months
- September 22, 2015 – 400 million; 9 months
- June 21, 2016 – 500 million; 9 months
- December 15, 2016 – 600 million; 6 months
- April 26, 2017 – 700 million; 4 months
Its importance as a social network continues to grow as it evolves, regularly adds new features and further encroaches on Snapchat’s territory, whilst maintaining its original value proposition as an easy to use and creative, thoughtful, visual environment. Users of Instagram stories alone have surpassed 200m thus exceeding the total user base of Snapchat, whilst its direct messaging platform Instagram Direct has over 375m monthly users.
The growing interest and focus on influencer marketing is closely tied to the world of Instagram. Commercially the benefits are flowing through to Facebook, with Instagram having more than 1m active advertisers.
As a marketer, this is a platform not to be ignored. Always mobile first at its core, it seems to have balanced the focus on its core value proposition, whilst innovating enough to remain fresh and interesting. In the hurly-burly of the fast moving digital world, it has somehow remained a calmer, and higher quality, content environment in stark contrast to the ‘buy now’, neon flashing lights characterised by so many other digital properties,
Whether thinking about social listening, social customer service, building brand equity or executing paid campaigns, Instagram deserves active consideration.
By Adam Fraser
It’s that time of the year again – when Scott Brinker aka chiefmartec.com releases “that infographic”.
The one summarising the martech landscape packed with tiny logos that you see at every marketing conference on the planet.
And it keeps getting larger and more complex. From 2,000 tools in 2015 to 3,500 in 2016 up to an amazing 5000+ in 2017.
To be precise – the landscape shows 5,381 tools from 4,891 vendors. Wow. From social media to newsletter marketing, ecommerce to CRM, all the subsections continue to grow.
I was lucky enough to have Scott as my very first podcast guest back in April 2015. Even back then – in a world of “only” 2,000 tools – we discussed the complexity of the market and whether consolidation was imminent.
There are a number of drivers of this breadth and complexity in the marketing technology landscape – including (at a high level) low barriers to entry, media fragmentation in a post internet world, the rapidly changing consumer buyer journey and constant technology innovation (as just one example think AI and chat bots which weren’t a “thing” 2 years ago and now are very much in play).
If you are feeling utterly overwhelmed by this landscape and what it means for marketing and IT professionals please know you are not alone!
The basic premise remains – strategy first, technology second. Focus on your business objectives and your marketing strategy and execution. Then, and only then, start to think about how technology can enable and potentially turbo charge your business processes.
People, process and technology. A three legged stool. In almost all cases the technology decision should come last not first.
By Adam Fraser
We have seen this before.
“Hot” social network IPOs to great fanfare. “The next big thing” is unleashed to the market and investors price huge amounts of blue sky into the current share price.
Quarter one users come in and disappoint, analysts revise their models, share price gets hammered.
Hard to recall, but this happened to Facebook as well as Twitter. Of course Facebook recovered to quadruple its IPO value to a current market cap of over US$400bn while Twitter still languishes today at a value of $US14bn, around 20% below its value when it listed in 2013.
Two very divergent paths. So which road will Snap Inc (owner of Snapchat) follow?
One thing is for sure – it also disappointed the market with its first quarterly results as a listed company. Users grew, but at a lower rate than the analysts were expecting, and the headline loss of US$2.2bn for a single quarter was somewhat alarming. The share price fell 24% in a single hour.
If you want to dive into the details, you can check the detailed financials , investor presentation and press release around the quarterly numbers. The 10 key take-aways from the Q1 2017 results are below:
- Daily Active Users (DAUs) grew to 166m from 122m a year earlier
- The quarterly growth rate in DAUs was lower than it has been in every preceding quarter (this was the trend which most spooked the market)
- Average revenue per user was US$0.90 compared to $0.32 a year ago, but a higher $1.04 in Q4 2016.
- Revenue was US$149m compared to $38m a year ago
- Net loss was US$2.2bn compared to $104m a year ago – note this figure was inflated by the expense associated with stock issues related to the IPO
- 3 billion daily snaps were created in the quarter compared to 2.5bn per day 2 quarters previously
- USA DAUs were 71m, representing 43% of global users, a ratio that has been broadly consistent for the past 12 months
- USA however drove 86% of global revenues, showing the more rapid advertiser adoption in the company’s home location compared to the rest of the globe
- Capital expenditure for the quarter was $18m, broadly consistent with the past 12m when the quarterly amount has varied between $16m and $20m.
- Adjusted EBITDA (removing the impact of stock based compensation) was a loss of US$188m for the quarter, the highest quarterly loss in the period reported (which went back to Q1 2016)
A tough start to life as a listed company for the newest social media kid on the block. As Twitter in particular has found, analysts will focus obsessively on short term user growth almost to the exclusion of every other metric, making long term strategic planning a challenge to execute in the public glare of the listed markets,
Still valued at US$26bn whilst significantly loss making, Snap Inc is learning that when investors price perfection, even the smallest disappointment will lead to the harshest of share price responses.
With Facebook continuing to openly copy and imitate many of Snapchat’s features, and Instagram in particular starting to eat its lunch as its version of Stories grows rapidly, the outlook is unquestionably challenging for Snap Inc.
Snapchat remains the cool nightclub to hang out in, and its loyal, engaged millennial audience is highly attractive to marketers. A pivot into camera products, retail products or AR may be coming, but right now Snapchat is looking more Twitter than Facebook as an investment opportunity.
By Adam Fraser
A surprising headline, I admit, from the founder of a marketing technology business!
Of course I believe in the power of data insights, automation (where it makes sense) and technology facilitated process improvement.
I would like to share 2 recent personal stories which will chill the bones of every marketer:
Story one. Approximately 8 months ago, I switched internet providers. Since that date,I have had repeated email offers for me to switch to that same internet provider and receive 2 months free.
So, having already acquired me as a customer, said telco is spending money promoting a service I already have at great expense! And telling me very clearly they don’t know who I am.
Aha! I hear you say – you must have used a different email address to purchase? Nope.
Different name, spelling, mobile? Nope.
I did most of my procurement to switch via social. Clearly the vision of social integrating to CRM, or any semblance of “one view of the customer” is some way off.
Story 2. My wife has just switched mobile providers as she wished to upgrade to an iPhone 7 plus. Her previous 2 year contract expired a few months ago and I had procrastinated about renewing.
So obviously we heard from the incumbent mobile provider in the weeks before the contract was about to expire? Nope.
Oh, so they reached out and made an upgrade offer just after contract expiry? Nope.
Checked you were happy to stay on the current plan and explained options? Nope.
Thanked you for your 8 years of loyal service? Nada.
Allow me to labour this point for one more paragraph – there is a 1-2 week period every 24-30 months when I want to hear from mobile phone providers. The rest of the time it goes in one ear and out the other. The incumbent provider has an incredible advantage to tailor a personalised message and make a targeted offer at the right time, factoring in loyalty, spending patterns and usage data.
This mobile provider in parallel is happy to spend millions advertising to “the world” to bring new customers into the funnel. Err what about the ones you already have?
Of course during this period I have had hundreds of marketing automation generated emails offering me services I have neither heard of nor have any interest in. And been chased around the web with cookie enabled banner ads (almost always wasteful and inappropriately targeted) based on historical searches performed.
So you can understand my skepticism when I hear about the amazing powers of big data and AI, VR and the internet of things.
When building a house you should focus on solid foundations before you worry about the style of the taps and the sheen of the paint.
Isn’t it time for marketers to focus less on shiny new toys and more on the somewhat boring but critically important business process of looking after their actual existing customers?