By Adam Fraser
I read a stat this week which really caught my eye.
I have written before about the increasing dominance of Google and Facebook, who own 8 of the top 10 popular mobile apps in the USA. Further, a recent ComScore study showed the top two most popular websites were Google and Facebook.
However notwithstanding this, a stat I saw in an interesting NY Times article on the media landscape really smashed me between the eyes. The quote was:
“In the first quarter of 2016, 85 cents of every new dollar spent on online advertising will go to Google and Facebook, said Brian Nowak, a Morgan Stanley analyst”
15 percent to the entire rest of the internet. Simply staggering (note, I have reached out to the analyst to try to verify the source of the underlying data).
The internet was meant to democratise publishing and level the playing field. Not so much. Access to a truly scalable online audience now comes down to two main “networks”.
(If Apple and Amazon are thrown into the discussion across different metrics, the concentration level amongst a small number of players gets even higher).
The long term ramifications of such concentration are wide-ranging and significant. Big data analytics, algorithms and consumer privacy are front of mind. Do these networks now know more about consumers than even governments?
By Adam Fraser
A recent report from Comscore highlighted some very interesting trends on the digital landscape and social media market.
The report titled “Cross Platform Future in Focus 2016” is extremely comprehensive including sections on multi-platform, digital media, mobile, social media, TV, advertising and e-commerce.
I encourage you to dive into the detail but if you done have the time or inclination, here are 10 key highlights:
- Total digital media usage has tripled since 2010 with smartphone usage contributing 92% of this growth; mobile now represents 2 out of every 3 digital minutes
- Google sites remain the number 1 web property with almost 250m visitors per month; Facebook comes in second at just under 220m
- Smartphone penetration in the USA is just under 80%, with Millennials at 94%. Surprisingly (to the marketing community) Android is the number 1 operating system
- Social networking accounts for 1 in every 5 minutes spent on the internet; the smartphone app has taken over as by far the most popular access point with desktop on the decline
- Facebook continues to lead in both audience size and engagement across all age groups, with Snapchat running second in terms of engagement with Millenials (just ahead of Instagram)
- Facebook is the number one digital media property by time; Facebook usage accounts for more than 1 in 5 minutes spent on mobile devices
- Facebook users broadly mirror the Internet as a whole, where-as Instagram, Tuimblr, Vine and especially Snapchat skew younger (a majority of college age adults use Snapchat every month)
- Total time watching TV (both live and DVR) is down 2% (excluding video on demand services); the majority of video on-demand revenue ($8.7bn) comes from subscription services such as Netflix, Hulu and Amazon Prime
- Time spent on digital media (mobile plus desktop) now eclipses Live TV for Millennials
- 10% of US desktop users use ad blockers and of the ads that do get served, more than 50% are not viewable as they are not delivered to a human
While many of the macro trends (steady decline in TV, growth in digital driven by mobile) may not come as a surprise, the very marked growth in Snapchat, especially amongst younger consumers, was a real standout. The theory that younger people are leaving Facebook was not borne out in these numbers.
Deep analysis, well worth a read.
By Adam Fraser
The annual marketing technology landscape infographic from Scott Brinker (aka ChiefMartec) has been released.
When I interviewed Scott for Episode Number 1 of the EchoJunction podcast we discussed the 2015 landscape (circa 2,000 vendors) and hypothesised that some form of consolidation must be inevitable.
Alas the size of the market has actually expanded significantly – now hitting approximately 3,500 vendors with 3,874 solutions (some vendors have more than one product which features).
So much complexity and choice for marketers to deal with. With waves of disruption impacting across the landscape, it’s an extremely dynamic and rapidly changing field.
In the 2016 landscape, the largest categories by number of solutions are:
1. Sales automation, enablement and intelligence (220)
2. Social media marketing and monitoring (186)
3. Display and pragmatic advertising (180)
4. Marketing automation and campaign/lead management (161)
5. Content marketing (160)
There are 49 categories structured around 6 marketing technology capability clusters:
1. Advertising and promotion
2. Content and experience
3. Social and relationships
4. Commerce and sales
The cluster representation rather than the “stack” presentation in previous years reflects Scott’s updated thinking that rather than a single vendor owning the end to end stack, companies are more likely to stitch together best of breed solutions from specialist vendors across the marketing value chain.
By Adam Fraser
The recent announcement from Instagram follows a familiar pattern.
Social network launches with simple rules. Users see a simple time based feed of what is posted. Popularity grows and the stream gets cluttered (“marketers spoil everything”). Social network announces we will henceforth see what they believe we most want to see. Translation: algorithms will define your feed and marketers now have to pay to ensure their messages are seen.
Or in PR speak this is what Instagram actually said:
“To improve your experience, your feed will soon be ordered to show the moments we believe you will care about the most.”
No more simple chronological based stream. Instagram just got less “insta”. Updates from friends and family likely move to the top of the pile, and branded content most likely disappears from view.
The writing was on the wall for organic reach for brands when Facebook lead the way down this path in mid 2014. Twitter wrestled with this issue for some time but it too is now introducing more algorithm determined content in your view.
Money talks. With Instagram owned by Facebook the changes over the past 12 months (introduction of new ad products, algorithm driven feed) were not unexpected. As a social network, if you can change the game and drive significant quantities of revenue, as a private enterprise it becomes somwhat inevitable. Currently pure, Snapchat sponsored stories seem inevitable at some point.
The delicate balance the social networks have to play is of course the unavoidable (whilst advertising is the business model) inverse relationship between revenue generation and user experience. Smash people too hard with advertising (native or otherwise) or over complicate the stream too much and users will eventually flee for the next “new thing” (until it too gets cluttered and spoiled). Engagement on Instagram has already declined by 40% according to reports based on the introduction of various ad products. Facebook has to date has seemingly navigated this balancing act reasonably well although consumer distaste for ads more generally is clear.
The message remains the same for marketers. Building your house on rented land comes with risks. Pay to play is the reality for brands on social networks but advertising efficacy is an ongoing question and the ad blockers loom large on the horizon.
We should never lose sight of the primary reason users are on social media – to connect with people they care about (hence why algorithms prioriotise such content ahead of brand publishing). It is not to be peppered with interruptive advertising messages. When users do want to speak to a brand on social media they will let you know. It needs be on a channel of their choice and on their terms. Customer service and customer experience is key. Accordingly active social listening and social customer service should be a foundation element of any social media strategy.
John Smibert from Strategic Selling Group interviewed our very own Adam Fraser.
For full transcript click here
— Simon Kemp (@skemp) March 30, 2016
— Nick Ogle (@NickOgleNV) March 29, 2016
By Adam Fraser
I am clearly not alone. New research from Edison Research from the USA confirms podcasting’s journey towards mainstream acceptance continues. 36% of Americans have listened to a podcast (compared to 25% 5 year’s ago) and 21% have done so in the past month (compared to 12% 5 years ago).
I am not aware of Australian specific stats but would guess trend is similar albeit the absolute percentages perhaps lower.
The “Infinite Dial’ report from Edison – based on telephone based market research with 2001 people – is well worth a browse as it contains some great stats across a range of digital areas. Some key nuggets were:
- 76% own a smartphone including a massive 93% of 12-24 year olds
- 60% own an internet connected TV and 51% have subscribed to a subscription streaming video service (eg Netflix, Hulu)
- Total media consumption has increased from an average of 7.2 hours in 2001 to 8.5 hours in 2016
- 57% have listened to online radio in the past month (79% of 12-24 year olds) whilst 21% do no own a radio in their house
- 37% have connected their internet radio to a car audio system in the past month
- Top audio brand awareness is with Pandora, Apple Music, iHeartRadio and Spotify
- 13% have listened to a podcast in the past week, listening to an average of 5 podcasts that week
- 64% of podcast consumers listen on a mobile appliance with 34% using a deskstop
- 78% currently use some form of social media
- Interestingly in social media brand awareness, Twitter (87%) follows Facebook (93%) ahead of Instagram (83%), Snapchat (71%) and Pinterest (63%)
- Re usage, Facebook leads across the total audience (64%) but Snapchat leads amongst 12-24 year olds (72%), compared to Facebook (68%) and Instagram (66%)
In a report packed with so many facts my 3 key take-aways were:
- Pandora leads by some distance in streaming audio
- Podcasts have hit the mainstream
- Teenagers are using Snapchat more than Facebook
A very useful report.
By Adam Fraser
On the web, pop-ups and the other hyper intrusive methods are adversely impacting the customer experience. The effectiveness of banner ads is declining to levels of almost statistical insignificance.
Then came growth in ad blockers at the consumer level. Apple added an ad blocking app to its offering and made it easier to embed within IoS. Statistics vary but some studies show levels of up to 25% of smartphone users now having ad blockers. Other estimates show 200m global users of ad blocking technology.
This is all of huge concern to both media platforms and advertisers alike. Now ad blocking at the carrier level has become a reality – perhaps an even more worrying turn of events for advertising. Three became the first carrier to introduce ad blocking at the network level across its UK and Italian networks with plans to roll this out globally.
Throwing salt into the wounds for advertisers Three UK chief marketing officer Tom Malleschitz said “Irrelevant and excessive mobile ads annoy customers and affect their overall network experience,”
Malleschitz said that the company has three core reasons for introducing the technology:
- Customers shouldn’t have to pay data charges to receive ads they don’t necessarily want
- Some advertising aims to elicit customer data and information without them knowing.
- Customers should only receive relevant advertising and not have their mobile experience “degraded by excessive, intrusive, unwanted or irrelevant ads”
We have all become accustomed to free content on the internet. But someone has to pay for independent journalism, and as the ad model slowly disintegrates it is not completely clear what this model will be (a topic I recently discussed in depth with leading thinker Bob Garfield).
The Internet Advertising Bureau (IAB) said blocking ads could lead to consumers “having to pay for content they currently get for free”. In the coding game of cat and mouse, many publishers are now trying to block users who have ad blocking software installed.
The social networks can breathe easy for now as current technology does not block native ads embedded in the steams of Facebook and Twitter.
The interruptive experience that is advertising is being rejected on mass by consumers. Content marketing, native advertising, influencer marketing, sponsored content, community building, customer experience and product placement are being touted as the antidotes. It’s not 100% clear where we are heading and what the consequences will be, but consumers are delivering a clear message about how they feel about advertising today and the industry needs to lift its game or continue its long term decline towards irrelevancy.
— SEMrush (@semrush) March 9, 2016
— Nick Ogle (@NickOgleNV) March 2, 2016
By Adam Fraser
The growth of messaging apps in parallel with (and arguably, in some cases, at the expense of) social networks has been pronounced in recent years.
Whatsapp has hit a billion users and Facebook Messenger has surpassed 800m. Wechat has over 650m members and is growing rapidly in Asia. If you count Snapchat as a messaging app at its core, the trend to private messaging is undeniable.
I have previously written that marketers need to tread carefully in this more intimate setting. Chatting 1:1 or 1:a few is a very different experience to publicly discussing something on Twitter or publicly publishing on Facebook or LinkedIn. The user psychology and mindset is significantly different.
The private messaging setting feels closer to a private phone call or private text message than a public media arena.
Hence it was extremely interesting (albeit not hugely surprising) to see Facebook’s plans to allow direct messaging ads on its Facebook messenger platform. At this stage it is only a leaked story but the details revealed indicate that brands will be able to advertise only to individuals who have previously messaged them.
Big toe in the bath…but we can all see where this could lead. Many users may feel advertising within messaging apps is spammy, irrespective of whether they have previously contacted a brand (how the regulatory environment – such as the Spam act – deals with this area will also be very interesting to see). Knowing that messaging a brand open the doors to future “promotional messages of interest” could even act as a deterrent to users reaching out to a brand via Messenger in the first place. This would be a hugely unfortunate consequence, given the strategic importance of social media as a customer service channel.
The strength of any user pushback when first launched will have a big influence on the extent to which Facebook continues down this path. WhatsApp could also be in the medium term thinking. How any advertising strategy fits with Mark Zuckerberg’s quote around the time of the WhatsApp acquisition “I don’t personally think ads are the way to monetise messaging” will be interesting to see.
When we turn on the TV, open a newspaper or switch on the radio we have been accustomed to expect the interruptive experience that is advertising. However the growth in ad blockers makes it pretty clear how the typical consumer feels about these.
If you picked up the phone and were forced to listen to a 15 second ad before being allowed to call how would you feel? Not quite the same thing, but brands need to be extremely careful in the privacy and intimacy of private messaging apps.