By Adam Fraser
I have often discussed (on both this blog and my podcast) the importance of social customer service.
Listening to what your customers are saying, and responding in real time to the queries they have on their channel of choice (whether phone, email, messenger, social, webchat etc), is a somewhat mundane but critically important aspect of a consumer’s overall customer experience.
Forget having relationships with brands, and “brand love”. What a lot of consumers want from a brand is very functional; is my flight delayed, what time do you close, do you have this product, how do I return a faulty good?
Hence, I am always interested in industry studies relating to customer service and customer experience and enjoyed reading Conversocial’s recent Airline Benchmark Report (who’s winning, who’s lagging and who’s exceeding expectations at social care?).
I recommend people checking out the report, however, to summarise, a few of the key findings were:
- Per Gartner, 84% of brands are increasing their investments in customer experience technologies.
- 31% of customers turn to social media to make pre-sales inquiries.
- 43% of airlines cite delivering customer service via social media as their top priority for 2018.
- A resolved negative tweet leads to 3x more revenue potential than a positive tweet (source Twitter).
- The gap between the leaders and laggards in the airline industry is significant:
- Etihad (50%) and Emirates (48%) are the most responsive to Twitter mentions vs Air Canada (10%) and Lufthansa (13%)
- In terms of speed of response Jet Blue (4mins) and Virgin USA (5 mins) are the quickest to respond vs EasyJet (4hrs 17 mins) and Finnair (5 hours and 34 mins).
- In terms of the expected growth in messaging as a medium, Activate predict that by 2018, at least 3.6 billion people will have at least one messaging app on their smartphone, catching up with the total number of internet users, and eclipsing pure social media users.
The report also discusses business processes and best practice in relation to social customer service, providing some useful insights.
Overall, a useful reference point and very interesting report.
By Adam Fraser
In a move that feels parallel with Facebook’s hiring of Sheryl Sandberg pre IPO in March 2008, Pinterest has announced the hiring of Silicon Valley heavyweight, Francoise Brougher, as its COO.
Pinterest is rumoured to be considering an IPO in 2019, and this appointment appears to cement that perspective.
Pinterest is now increasingly describing itself as a visual search tool, rather than a social network. Always a platform where people pondered, dreamed and discovered (and often had buying intent), it is upping its game in terms of advertising products and recently signed a deal with major US retailer Target, in relation to advertising and Target using Pinterest’s visual search tool within its app.
Pinterest seems to punch under its weight given its size, garnering much less press interest than Facebook, Instagram, Twitter and Snapchat (if this blog is any sort of barometer, I last blogged about Pinterest in February 2015). However, it is a platform of significance – passing 200m monthly users in September 2017 (40% growth on the prior year), with 600m monthly visual searches using its lens tool and more than half of its users now coming from outside the USA. It remains the most female skewed social media user base, with 70% of its users being women. The volume of content is mind blowing with over 75 billion pins across 1 billion boards.
In terms of social commerce – buying directly from a social site rather than via the merchant’s website – Pinterest (which offers ‘buyable pins’ as a product) leads the way, along with Facebook.
According to the 2017 Sensis social media report, 10% of Australians use Pinterest (versus 94% for Facebook and 46% for Instagram).
Pinterest is undoubtedly a platform of significance, with a number of interesting, unique aspects – think female skew, buying intent, visual search capability. Whether it is suited to life as a listed company – see challenges faced each quarter by Twitter and Snapchat – is another question.
By Adam Fraser
Snapchat started life as a listed company in a very turbulent fashion, disappointing the market with its first quarter, second quarter and third quarter results, with the share price falling below its much-hyped IPO level.
However, it seems to have somewhat turned a corner with its latest Q4 results, with the share price increasing 26% in after-hours trading after the results release.
If you want to dive into the details, you can check the detailed financials, investor presentation and press release, around the quarterly numbers. If you want a quick summary, here are 10 key takeaways from the Q4 2017 results:
- Daily Active Users (DAUs) grew to 187m from 178m in the prior quarter (a healthy 5.1% growth) and 159m a year ago (18.4% growth).
- Average revenue per user was US$1.53, compared to $1.17 a last quarter and $1.05 a year ago. While this is well below the levels achieved by Facebook of over $6, the rate of growth in the quarter was impressive.
- Revenue for the quarter was US$286m, compared to $208m last quarter (a massive 37.5% increase in a single quarter) and $166m a year ago (72.3% increase).
- The user and revenue growth was above the level expected by the market, leading to the positive response in the share price.
- While the net loss reduced on the prior quarter, it remained a staggering $350m for the quarter versus $443m in the prior quarter.
- Instagram Stories and WhatsApp Status now have 300m users, illustrating the impact competitors have had in imitating key aspects of Snapchat’s originally unique offering.
- USA DAUs were 80m, representing 43% of global users – a ratio that has been broadly consistent for the past 12 months. Snapchat will have been encouraged that absolute user numbers grew in all regions; USA, Europe and Rest of World.
- USA however drove 77% 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 $21m, a decrease from $26m in the prior quarter.
- Adjusted EBITDA (removing the impact of stock based compensation) was a loss of US$159m for the quarter, slightly lower than the prior quarter.
“Our work during 2017 is proof that we aren’t afraid to make big changes for the long-term success of our business,” CEO Evan Spiegel said during the investor conference call on Tuesday.
Snapchat has recently shifted from a direct advertising sales model to an auction-based bidding system (a la Google) for selling advertising. The benefits of this are starting to flow, boosting the number of ads featured in its app by four times the amount from the same time last year, with 90 percent of ads now coming from programmatic systems, according to the company.
Snap’s user growth was driven partly by users of its Android app, which it has been increasingly emphasising. The company noted the retention rate of new Android users grew by nearly 20% compared to the prior year, meaning that Android users who tried Snapchat were generally more likely to become DAUs.
Management credibility improved somewhat, despite last quarters debacle with the $40m loss on unsold Spectacles.
The results were encouraging, however, Snapchat is by no means out of the woods. Its loyal, engaged millennial audience remains highly attractive to marketers, while it is attempting to broaden its appeal to the older demographic. However, competition from Facebook and Instagram is fierce, its IP is easily imitated, and the financial losses remain astounding for a company with a market cap of $22bn. Only time will tell if it can remain a viable and independent listed company.
By Adam Fraser
Twitter has delivered its Q4 2017 results and, for the first time in its history, has delivered a profit.
As ever with Twitter, it remains a patchy set of numbers with the most obvious negative the flat user numbers at 330m. Despite getting unprecedented levels of earned media via the President of the USA, the numbers continue to indicate that anyone on the planet who wants to be on Twitter is already there. The continuing growth in users at Facebook, Instagram and WhatsApp must be a source of huge frustration to the board and management of Twitter.
The headline profit clearly impressed the market, with the share price rallying 25% on the day of the announcement.
If you want to dive into all of the detail, you can check the financials, investor presentation, shareholder letter and investor conference call. If you want the key highlights here are 10 key takeaways:
- Monthly active user (MAU) numbers were 330m, flat from the prior quarter and an increase from 318m a year ago (3.8% growth).
- 21% of Twitter’s MAUs (68m) are based in the USA, down 1m on the prior quarter, with small user growth coming internationally (262m v 261m in the prior quarter).
- Attempts to drive greater engagement and more regular usage on the platform continue to work, with Daily Active Users (DAU) growing at 12% on prior year v 14% last quarter and 11% a year ago. Interestingly, the company does not reveal the absolute number of DAUs and actively refused again to release this in the face of formal queries.
- Ad metrics were encouraging – in Q4, the Twitter ads platform team made optimisations to ad serving logic that resulted in a 26% increase in ad engagement rates and an 18% increase in return for advertisers.
- Video remained Twitter’s largest ad format and grew as a percent of total revenue in Q4, reflecting strength in Video Website Cards, Video App Cards, InStream Sponsorships, and In-Stream Video Ads.
- Revenue was up significantly at $730m v $590m in the prior quarter and, $717m a year ago. The revenue trends were clearly the highlight of the quarter.
- The breakdown of revenue for the quarter showed 88% of revenue coming from advertising and 12% coming from data licensing/other.
- Twitter made a GAAP profit of $91m vs a loss of US$21m for the quarter; it also discloses “adjusted EBITDA which showed a profit of US$308m after adjusting for stock-based compensation, depreciation and amortisation. Twitter ended the quarter with US$4.4bn in cash so despite the frequent “Twitter is dying” headlines, the business is solidly funded.
- Live video remains a key focus. During Q4, Twitter announced approximately 22 new live-streaming, highlight, and VOD partnerships, including nine international deals. In total, the platform streamed approximately 1,140 live events throughout the quarter, with 60% of those reaching a global audience. In addition, 28 million live user-generated streams were broadcast in Q4 across both Twitter and Periscope.
- New ad products continue to be developed – in Q4, Twitter launched a new Promoted Tweet composer that simplifies the process of creating new Promoted Tweets. Also in Q4, Twitter entered into public betas in the US, UK, and Japan with a new subscription advertising product, Twitter Promote Mode (TPM), which helps small businesses reach more people without the work of having to create ads or manage campaigns.
By Adam Fraser
Another strong set of quarterly results from Facebook. The 800lb gorilla of the social media sector powers on based on almost any operating metric you can look at. However, with privacy and data stoushes increasingly evident, coupled with daily users actually dropping in the USA, it’s clearly not all plain sailing at the top.
If you want to dive into the details, here are the detailed financials, investor presentation and management conference call. For those without the time to review all of the details, here are 10 key sound bites from the results:
- Monthly active users reached 2.13bn from 2.07bn last quarter (2.4% growth) and 1.86bn a year earlier (14.5% growth).
- Daily active users hit 1.40bn from 1.37bn last quarter (2.4% growth – the slowest rate since Facebook listed) and 1.23bn a year earlier (14.2% growth).
- A fascinating quote from Mark Zuckerberg on a change in the algorithm: “Already last quarter, we made changes to show fewer viral videos to make sure people’s time is well spent. In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term.”
- Consistent with its commitment announced last quarter, Facebook now has over 14,000 people working across community ops, online ops, and security efforts – almost double where they were a year ago.
- Facebook expect ‘Stories’ to eventually overtake ‘posts’ in feeds, as the most common way that people share across all social apps. Noting WhatsApp and Instagram are the #1 and #2 most-used Stories products in the world (Snapchat take note).
- Total revenue was $12.9bn (exceeding market expectations) versus $10.3bn in the prior quarter (a massive 25.6% quarterly increase) and $8.8bn a year earlier (47.3% growth) – generating a net profit of $4.3bn (reminder – in a single quarter!).
- Facebook has reasonably balanced global spread with just under 50% of revenue coming from USA and Canada, a ratio that has remained reasonably consistent over the past 4 quarters.
- Average revenue per user increased by over 20% in one quarter, hitting $6.18 from $5.07 last quarter and $4.83 a year ago; note revenue per user is significantly higher in the USA/Canada ($26.76) compared to Europe ($8.86) and the Rest of World ($1.86).
- Facebook ended the quarter with a cool $42bn in cash – almost enough to buy Twitter and Snapchat!
- Some interesting random stats: WhatsApp now has over 1.5 billion users, Instagram has over 2m advertisers and 25m businesses active on the platform, 6m advertisers and 70m businesses use Facebook, mobile-first video was 50% of Facebook’s video ad revenue this quarter, compared to 41% last quarter.
Note, mobile usage of Facebook has now become so prevalent Facebook no longer separately discloses mobile users – whilst it did, the number of users accessing via a mobile device was consistently over 90%.
With revenue growth, user growth, strong margins and consistent cashflow, this is another powerful set of quarterly results.
Possible clouds on the horizon? Ad revenue remains over 98% of total revenue, hence there is no diversity in income types. If ad blocking technology ever penetrated Facebook’s walled garden this clearly would be a massive threat to Facebook’s earnings, and despite its size, Facebook remains a one trick pony in terms of types of income.
Fake accounts, political interference and privacy stoushes reuse of consumer data always loom large but never seem to bite (despite the best efforts of some famous people).
The rate of growth inevitably slows at the scale Facebook finds itself, but for now, the cash cow continues to produce.
By Adam Fraser
The annual Global Digital Trends report authored by Simon Kemp, delivered by We Are Social and Hootsuite, has become one of the must read reports into global digital activity.
And rightly so. It’s an incredibly comprehensive, professional, and well researched document – truly the go-to resource and reference point for research, blogs, business cases, sales decks and conference presentations for the year to come!
(If you are interested in the history of the report and how it is prepared, I chatted to Simon about the 2017 report on the podcast last year).
The 2018 report has just been released and as expected it’s another high quality, insight rich, document. The summary document alone is 153 slides, and there are country specific reports, with an overall total of an incredible 5,000 charts covering 239 countries. It really is an amazing resource.
The breadth of the research is what makes it so valuable, covering internet usage, mobile usage, messaging, social media, ecommerce and media consumption.
I highly recommend people browse the full slide deck. For those looking for the major headlines, here are 10 key trends:
- Global internet users have now surpassed 4 billion people (up 7% on the prior year) – over half of the world’s population is now online.
- People are spending more time online, with the average user spending 6 hours per day on the internet – this equates to a billion years spent online across the globe in 2018!
- An amazing 2/3 of the world’s population now have a smartphone – incredible penetration over a relatively short time span
- Social media usage has continued to grow over the past 12 months, with over 3 billion global users (3.2 billion, up 13% on prior year), most accessing via a mobile device (2.9bn). Growth in the USA was 7% and in Australia was 6%.
- Facebook’s data affirms this trend, with 95% of its global users accessing the platform via a mobile device.
- WhatsApp and Facebook Messenger both grew twice as fast as the core Facebook platform in the last year, with the number of people using each messenger app up by 30 percent year on year. Both now have 1.3bn monthly active users.
- Three of the top 10 most trafficked websites in the world are social networks, being YouTube (2nd), Facebook (3rd) and Reddit (6th). Many may be surprised to see Reddit featuring so high, but this is an increasingly important community.
- The ad blocking stats by country were highly notable and significant – the percentage of users accessing an adblocker exceeding 40% in countries such as China (54%), India (52%), USA (45%), NZ (42%) and UK (41%). Australia’s ratio was still a highly material 36%.
- As expected, organic reach and engagement have both dropped over the past year, with average reach down by more than 10 percent year-on-year. The country by country Facebook organic reach stats was fascinating – while the global average reach was 8% (a number still surprisingly high) the deviation was significant between countries (e.g Netherlands 22%, Australia 14%, USA 7%, Japan 1%).
- In terms of ecommerce, total annual spend in 2017 reached almost US$1.5 trillion for consumer goods, a growth of 16 percent over the past year. Fashion products represent the largest single category.
It was an incredibly hard task to only extract 10 key insights from such a data rich document! Bookmark this one for the year ahead…
.@adamf2014 does a great job here interviewing @RishiPDave the CMO of @DnBUS on marketing integration and customer experience and leveraging data, metrics and marketing tech to drive customer experience: https://t.co/gPbKWhBdcj via @EchoJunction (DNB is a client) pic.twitter.com/vK7V4Eo9DY
— Lee Odden (@leeodden) January 22, 2018
Organisational psychologist and founder of Balkin Coaching is a fan of the podcast! Read about her podcast and book recommendations here.
By Adam Fraser
Snapchat has just announced a major overhaul of its user experience.
As Evan Spiegel stated in a 60-second video to mark the launch; “the new Snapchat separates the social from the media. This means that the Chats and Stories from your friends are on the left side of Snapchat, and the Stories from publishers, creators, and the community are on the right.”
Beyond the utility benefits in terms of a cleaner look and feel, and simpler user experience, Snapchat is acknowledging a key universal truth around consumers use of social media – that it’s primarily to connect to friends and family they care about. As Ad Age summarised, with this change “Brands are being kicked out of the friend zone”.
Facebook – in its own frustrating, meandering way – is ultimately getting to the same conclusion, where organic reach dies, peer to peer messages are given priority in the stream and brands and publishers have to pay to be seen. In a similar vein, this is why Google moved all business newsletters and offers to the “promotions” tab in your Gmail and out of your main email feed.
Connecting to a brand is rarely – if ever – the primary reason to jump on Facebook, Snapchat, Instagram or Twitter. However, there are times when you absolutely will want to talk to a brand on social media – often related to a customer service query or issue – and it is at this precise moment it is critical a brand is listening and available. It may be three times in a week then nothing for 6 months. It could be monthly. It could be when you are flying/buying/renewing/choosing/pondering. It is unpredictable, but your behaviour – announcing a problem, discussing an unmet need, asking a question – will make clear that this is the time a brand should join a conversation.
This is the more mundane, yet absolutely critical, stuff which can materially impact the customer experience. When is the shop open? Do you have that in size 12? What ingredients are in this food item? How long will delivery take? Where is my delivery? Was this made in Australia?
Consumers don’t want irrelevant interruption from brands (the growth in ad blockers and Netflix are two illustrations of this), but they do want brands to be there – on a medium of their choice, at a time of their choosing – when they need to speak to them. It’s reversing the mindset from “shouting out” to “listening and helping”.
Think of a helpful brand as the butler available at your service when you call him (but silent in the corner when you don’t) rather than the annoying uncle who joins in every single conversation you are having.
Do you really want a “relationship” with your fast food, shampoo, toilet paper or laundry detergent brand? Highly likely no. But do you want those same brands to be available to answer questions and receive feedback in the most convenient manner possible? A resounding yes.
The changes made over time by the major social networks are finally putting the ‘brand as friend’ concept to bed.