Interview with Andrew Hutchinson by Adam Fraser
This is a transcript of this podcast interview with Andrew Hutchinson.
Adam: I’m delighted to welcome Andrew Hutchinson to the EchoJunction podcast. Andrew is an award-winning author, blogger and social media consultant from Melbourne in Australia who has worked for more than 12 years in media and communications, primarily in media monitoring. Andrew has expertise in finding the message among the noise, sorting valuable insight from the data flood.
In addition to his many awards as a writer, Andrew is a well-known social media commentator regularly contributing to a wide range of leading industry publications, including Social Media Today, where he’s one of the site’s best thinkers, The Hootsuite blog, Firebrand Talent’s Idea Ignition and Business 2 Community. Andrew, welcome back to the podcast.
Andrew: Thank you for having me, Adam. It’s always good to come on.
Adam: One of our select few who’s come on twice, so delighted to have you back.
Andrew: Quite the honour to come on twice.
Adam: It is that time of the year. It’s mid December as we record this. I have done one prediction show, and all our listeners are probably reading a flood of various marketing, digital and social media predictions for 2016. So we’re going to jump into a particular blog post, Andrew, you wrote, which was 30 predictions about 2016. Before we do that, like I say, you had been on the podcast before, but for those listeners that maybe haven’t heard your first podcast, do you want to just set the context and give a brief back story and some review of your career today?
Andrew: I worked in media monitoring, as you said in the intro. I worked in media monitoring for 12 years, and then when I finished there I sort of moved into social media, more because it made perfect sense going from media monitoring work to about finding the dimensions and the message. That sort of translated perfectly into social media, and as you can see, the media’s advancing. It sort of was a natural progression to move into that.
From there, I started blogging as much as I could to sort of get my profile up. Since starting that, I also blogged for a lot of different places. Now, I primarily blog for Social Media Today, who I work for. I blog for them five times. I blog for them twice a day pretty much, and write for Social Media Today. So that’s primarily my focus, is working with them. I guess that’s the main things that I’ve done, and then I do some consulting on the side, but mainly writing is what I do.
Adam: In podcast number one, which I’ll link up in the show notes; Andrew and I explored more the art of writing in an increasingly sort of digital video, image-driven world. I’ll link that up in the show notes, but today we are going to focus on the prediction side. As Andrew says, he writes for Social Media Today. I’ll link up bios and articles in the show notes.
He really is prolific, and I recommend if you want to keep up with the news, absolutely start following what Andrew does in social. I certainly do. The blog post that caught my eye, Andrew, was 30 predictions for 2016. I guess my first question is, look, we all read truckloads of I guess listicle articles more generally, and predictions for 2016. I’ve seen lots of 5s, 7s, and 10s but I’ve never seen anyone brave enough to go to 30. So what made you go as big as 30 predictions?
Andrew: It actually wasn’t intended. I just started a blog post writing what I thought was probably going to happen. But I actually started when Hootsuite asked me to be on their HootChat, which is their Twitter chat they run every week. They wanted to do one on predictions, and so I thought, “Well, I can do predictions. I’m obviously writing about it every day, I’ve got a fair idea as to what I think is probably going to happen.” So from there I just started writing a prediction post, and it was only after I’d finished it that I went back and counted, and it was 30.
So it was never intended to be 30. I just wanted to make sure I covered all my bases so if there’s any questions that come up in the HootChat really, I would be able to say, “Yes, this is what I think is happening.” For me, writing is as much about communicating as getting my own thoughts clear. If I’m not sure how I think about something, I start writing about it, and that will help me clarify my view on the subject as well. So it was more in preparation to make sure I had everything covered. I thought, “Well, I just want to make sure I’ve got all the platform there” and it ended up being 30, which wasn’t planned.
Adam: Pretty brave, a stake in the ground. It’s there for history to see. I agree with you, there’s many benefits I get from blogging and podcasting. But you’re right, the act of writing absolutely does make you really crystallize your thoughts in a succinct way on an issue, so I understand your thinking there. I’ll obviously link up your blog post in the show notes.
You very helpfully sort of break it down between the platforms, so as you’d expect, there’s sort of more predictions on Twitter and Facebook, and then you run through Instagram, Pinterest, YouTube and so forth. So let’s start with Twitter, a topic dear at the heart of ourselves, and I’m pretty sure all listeners to this podcast. The marketing and the tech community are certainly long and generally in love with Twitter. But look, it’s had a difficult year. Before we jump into 2016, how would you summarize 2015, I guess the year that was for Twitter?
Andrew: Twitter sort of stuck, to a degree. They’ve got all the market expectation on, and they need to increase growth, Like as I said in the post, there’s a lot of implied pressure on Twitter to boost user numbers, and I think some of that comes from Facebook’s massive growth. That might somewhat make it more difficult for future platforms, because they’re being compared against Facebook, which no one’s going to see the growth that Facebook saw.
So to some degree it’s like you’re being compared to something you can’t possibly match up to. But at the same time, Instagram’s grown very quickly, so it’s like well, Twitter should be able to grow as fast as Instagram. There’s sort of two sides to it, I guess. Twitter’s had a big challenge in trying to get more user. That’s been a big focus.
The CEO search, which went on and on and on, and they couldn’t figure out what they wanted, and then finally settled with Jack Dorsey; which seemed like maybe it might not have been the right decision, because he’s now in charge of two companies, the CEO of Square as well, so that’s going to be challenging. All the CEOs who saw that have said that’s going to be a big challenge, but now they come out and said that’s their man, that’s what they’re going to go with. It’s hard to tell.
Some people have said Twitter’s on the way down. I don’t think they’re on the way down. Their revenue is pretty strong. Their revenue has increased every quarter.
The projections for the next quarter are slightly lower, so that’s a bit of a concern. But as much as user growth hasn’t gone up, revenue generally has, so there’s a lot of potential there, and there’s still a heap of ways they can make money out of Twitter. So in that sense, I don’t think that’s going to be a problem. But the market sees user growth, obviously, as a bigger indicator of future performance because if they can’t keep growing their audience, then eventually it’s going to plateau, and they’re going to start losing money. It’s hard.
I don’t know that the perks they’ve introduced are necessarily going to help them. A hit like Moments was their big one, which was originally called Project Lightning, which hasn’t come to Australia as yet, but that was their big thing that’s like, “Yes, this is going to help us get more users in, because it’s discovering the best of Twitter content.” The concern is that people can’t find the messages in Twitter because there’s so much noise, so Moments is supposed to make it easier. I don’t know that it sort of meets that goal and I don’t know it’s going to bring in more users.
From what I’ve seen of it, it doesn’t seem overly impressive, but Periscope’s continuing to grow, Vine’s continuing to grow. They’ve got plenty of platforms that are working pretty well. They’ve just extended their influence or outreach program called, “Niche.” That has extended to the UK, and that’s going really well for them. That connects up platform influences, particularly Vine influences with brands.
So there’s a lot of opportunity in Twitter, and I think some people jumped the gun a little bit and sort of said, “Ah, Twitter’s gone. Twitter’s dead. It’s no good. It’s not what it used to be.” To me, I don’t think that’s true. I think Twitter’s got plenty of strength. It’s just you can see the areas where there’s obviously a focus on user growth, and that’s a concern. And if revenue starts to drop, then obviously that’s a bigger concern.
Adam: Now, you make a couple of great points in there, Andrew. I guess one is the comparison to Facebook, which is a pretty unfair comparison, because almost any company in any sector, when compared to what Facebook has done, would seem like a laggard. But implicit in that I think is the listed company thing. Again, you talk quite rightly about market expectations. I think a lot of the negative sentiment comes from the stock exchange, the quarter-by-quarter focus, which is naturally short term, not necessarily focused on long-term.
I often wonder, “If Twitter was a private business announcing it had 320 million active users, and what? Pick a number. Another 500 million see their content on TV and other types of media,” so plenty of people consume Twitter that aren’t actively using it. That sounds like a pretty successful media platform to me, but yet if you read the media, particularly in the second after 2015, you’d rightly say, “Oh, it’s on the down, and it’s not failing.” So how much of this does come back to the public glare of the stock market?
Andrew: That’s right. Those reports definitely influence sentiment. As soon as the stock market says, “Ah, we’re down on Twitter,” then suddenly you get a whole lot of bloggers and things saying, “Oh yeah, Twitter’s not what it used to be” and “I don’t like Twitter as much as I used to.” I don’t think they necessarily do.
For me, the experience of using Twitter, that’s never changed. It’s been fine, it’s been exactly as I’ve used it always. There’s always speculation about how they’re going to change the 140-character limit or things like that. I don’t think any of that’s going to happen.
They’ve shown no indication that they’re going to sacrifice user experience or significantly sacrifice user experience other than looking at the reverse chronological timeline and things like that and testing different ways they could use it. But for me, the experience hasn’t changed. When I see all those zoom-and-gloom type posts saying, “Aw, Twitter’s on the way out,” to me, it’s exactly as it used to be. It’s exactly as it has always has been. The only difference is that there’s reports saying that Twitter’s down. I think those then influence people’s sentiment towards it.
What I think would be an event, like there were speculations earlier in the year that Google might take over Twitter, and I think that would help them in that regard, because they would lose some of the pressure of being a publicly listed company if they became an element of Google or Alphabet; which is what they’d essentially become. Then yeah, they’d lose all that pressure, and they’d be able to innovate as they want to, and they’d be able to build the platform they want to build. I think it would give them a lot more freedom and take away a lot of that pressure. I still think that’s a possibility.
I think that Jack Dorsey will be given a chance to improve and boost it, but if the stock price falls low enough, then I wouldn’t be surprised if Google suddenly takes over. Because that deal makes sense to both sides. Google has always wanted to have a social network to be able to compete with Facebook, particularly with Facebook putting more focus on search, which is going to become more of a concern for Google over time.
If they were able to add their own social element to their own databanks and their own search capacity, then that would at least enable them to compete. They couldn’t do it themselves, because Google+ has failed, a much they have changed in the last couple of weeks to a new photo-sharing platform or whatever it is now. That’s pretty much gone, and so I think that makes perfect sense. I think it would be great for Google if they could get all that data, and it would be great for Twitter because it’d take off some of that pressure. I still think that could happen.
Adam: It’s a big call. I’ve heard a couple of people talk about Google and Twitter. You’re right, there’s a strategic value that Google reaps that maybe a pure financial buyer wouldn’t, because you’ve got the SEO impact and the surfacing of the news, and again, the Google+ project, shall we call it, which keeps evolving. We had Martin Shervington on the podcast this week talking about what Google are trying to do there. It’s an interesting angle. You’re actually putting a stake in the ground. Do you think that could happen in 2016?
Andrew: Yeah, I definitely think it could. At the moment, Twitter’s price is too high, and they won’t do it, but I think there could be a point where once Jack Dorsey’s pushed all the things he can push and he starts getting to the end of these sort of ideas and they start going, “None of these are really boosting the numbers that we need to boost.” If the revenue starts falling, whereas their revenue hasn’t fallen yet for them. But they’ve projected that it might in the next quarter.
If that starts falling and you’ve also got user growth numbers staying stagnant, revenue’s falling, then it’s going to become a real problem, and that’s when Twitter is going to have to really reassess what they’re doing and what the impact of their changes are. Introducing things like emoji and things like that are all aimed at getting younger users on and boosting that user growth. Maybe that will work. It’s sort of hard to tell. It seems like people are going to use it or they’re not. Everyone’s aware of Twitter now. It’s not like you’re introducing it to a whole lot of new people that don’t know what it is.
Most people do know what it is, and if they’re still not boosting user numbers with that awareness, then I’d say you really need to sort of change something significant. And if they change something significant, they could lose a whole lot of their current user base. It’s like they’re sort of caught in a really difficult position. I sort of think if they’ll be given the chance to do it. I think maybe midyear they’ll have to really reassess where they are if their revenue numbers drop in particular. If they do start to lose value, then Google can pick it up pretty cheap, and I think that is a strong possibility.
Adam: I think you’re right. I think Jack will get at least a couple more quarters from the street to see what he can do about the user number wise and business model wise, and then the market forces will get into play if people aren’t happy with what they see. I do think Twitter has probably in 2015 suffered a bit from trying to be all things to all people. It’s doing video, it’s trying to do image-based stuff, it’s doing surveys. Some of it is good, I agree.
Periscope has been a success, but it’s just struck me as something like a deer in the headlights, and strategically just trying to be all things to be all people, and quite reactive. I think it’s just got to be what it is, stand for something, and then build on its strength, where the news breaks, live events and so forth. So, we’ll see. Let’s just pick out a couple of specific forecasts at the more detailed platform level entry that you had on Twitter.
You mentioned emojis and I’m interested in that one. If 10 years ago we were having this chat, it would seem like utter madness that emojis would have become as sort of prevalent as they have. And absolutely not just with millennials. I see people of all ages now doing smiley faces and thumbs up and all sorts of emojis. So two questions, more broadly, why do you think emojis have got the traction they have? Secondly, specifically, what are you expecting Twitter to do in this area? Because I actually do think it’s surprisingly quite an important point.
Andrew: It’s almost subliminal, isn’t it? They’ve sort of just sort of crept into how we communicate now without us even knowing. And you’re right, it is spreading across everywhere. I think there was a study done recently where Instagram said that the majority of the posts on Instagram now have an emoji character, and they foresee that all posts on Instagram may at some stage have an emoji. The trend towards it is mostly driven, they think, or the research suggests, by mobile users who can now put a smiley face, which is much quicker than writing happy or whatever. Rather communicating in words, you can communicate a word or a sentence in a character, then why wouldn’t you do it?
I think that’s probably the main driver is that it’s just an easier way to communicate, and it’s seen huge growth. That’s most evident with Facebook testing Reactions, which is giving people more options to be able to respond to stories via using an emoji, which is being tested in Ireland and Spain at the moment. That’s the first sort of mainstream platform that’s acknowledged that “People are using emoji anyway, why don’t we work with that trend and give that to them?” And as much as some people were annoyed that they didn’t actually get a, “dislike” button, which was never going to happen, yeah, it sort of highlights the emoji trend.
What Twitter’s working on is their own sort of thing, which is exactly the same as Reactions, which is going to give you more options to be able to put on emoji rather than the heart or what was the star, changed to the heart. Now they’re testing a new thing where you’ll be able to click on the heart and you’ll be given a set of I think 36 different emoji to choose from, and that can be your response to tweet.
There was a lot of fuss about changing from stars to hearts and what the implied meaning of a heart means as opposed to a star when people use favourites to bookmark something or use favourites to sort of give a virtual high five or thumbs up. A heart has an inherently different meaning, where it’s like, “Well, I love of person?” or “I love this quote.” People still were very passionate about how the heart had a much different meaning and it changed their experience. What they’re working on is probably an extension of that anyway.
That’s why I sort of think Twitter wasn’t too worried about the possible backlash because I think they’ve had in development this emoji thing they’re going to possibly implement anyway. So it doesn’t really matter to them if people are upset about the heart, because soon you’ll be given 36 different options to be able to show what you really think about each tweet. They’re working on that. There’s been some screenshots and things shared around showing that they’re definitely working on it. Now, I expect them to implement that.
Twitter hasn’t said anything about it officially, but I definitely think that’s going to come early in the new year. It’s really working with the emoji trend and trying to get young users onboard. If they can introduce more emoji, which are being used widely on Twitter as it is, if they can work with that trend in an easier way to get people on, then I definitely think they’ll do it. And it’s sort of using the Snapchat style methodology where you’re introducing cool new things that are going to engage users and keep them on.
If Snapchat can keep innovating and bringing on those cool new things, they can keep the audience engaged. And as you said, Twitter’s trying to be everything they can, so they’re looking at what works for other platforms, same as Facebook does. And they’re going, “Well, if that works for them, that keeps them engaged, maybe we can introduce some of these cool new features for our one and get people on.” I think that’s what they’re doing with the emoji option, and yes, I definitely think they’re going to introduce that early in the new year.
One of the most interesting things for emoji though is going to be what those emoji actually mean. I think that’s going to be really interesting from a brand analysis perspective. If someone puts a frowny face emoji, is that a bad thing? If someone puts a happy face emoji, is that a good thing? Is this necessarily reflective of what people are feeling? Are they laughing at you or with you, or how those actually relate to conversion is going to be really fascinating next year, and what the actual background of each one of those emojis and how that reflects on a sentiment is going to be really interesting.
Adam: So interesting. We started by scratching images into cave walls, and here we are in 2015, and emojis are back. As you say, it’s sort of crept into the way we communicate with each other. So yeah, it’ll be interesting to see how Twitter focuses on that. Just a final question on Twitter, then we’ll jump into the other platform. In summary, Andrew, lots happening, new CEO, whole range of product and strategic initiatives. If we’re standing here in 12 months’ time, what are you expecting, Twitter still to be independent? You think the takeout’s going to happen? What’s your final view?
Andrew: It’s really hard to say. It’s hard to know exactly how these things that they’re putting in place are going to actually impact. I don’t see any of them having a significant impact. I don’t see them introducing emoji. People were using emoji anyway, so it’s not really going to change the experience of Twitter, it’s just going to give them an easier way to do it. And Moments, as I said, I don’t think it’s had the impact they would have liked it to have had. But they’ve got a whole lot of new advertising options, new targeting options with their analytics in the ads dashboard, which add to the capacity to be able to use it.
They’ve introduced new ways to monetize the five hundred plus million users who aren’t logged in by showing ads. How effective that’s going to be is questionable, I guess. I think it’s going to benefit Twitter more than it’s going to benefit advertisers, because people are clicking on the link, and it suddenly got a…You click on a link on Google Search to a tweet, and it’s going to have a promoted tweet beneath it. It’s like, is that really going to be that effective? It’s hard to say. I think Twitter’s got plenty of potential to make money.
I don’t think there’s much concern that Twitter’s going to continue to produce strong revenue. Whether that’s strong enough for the market, I don’t know, whether that’s going to see sustained growth in revenue. As I said, that’s the biggest concern for Twitter is if revenue starts to drop, then you’ve got both your key indicators dropping, and that’s when you’ve got a real real problem. At the moment, they’ve been able to go through and say, “Well, revenue is continuing to rise.” They’ve been able to invest and developed products like Vine and Periscope through that investment, and that’s sort of keeping them in good stead.
Periscope could be in trouble when Face book’s livestreaming takes over. I think Vine is in a really good spot and could be positioned to see more growth next year. But I saw stats the other day showing that as Periscope users are going up, Vine users are going down. But considering all the different Vine celebrities that have gone on to become more mainstream celebrities and the trend towards video, I sort of see Vine as having a lot of potential. But it really just depends on how it all plays out.
If Twitter can boost user numbers somehow, I think they’d be better off focusing outside the U.S. and trying to boost user numbers in other regions; which they’re not really doing at the moment. If they did that and they’re able to boost user numbers, then I think that’ll be okay. But if they see user numbers stagnate for another two quarters, then I think they’re probably in real trouble. If that was the case in 12 months’ time, I would expect that Twitter will be either taken over or they’ll be locked into speculation about when they’re going to be taken over.
Adam: Agree. It’s a pivotal year for Twitter because being on the stock market, there’s no place to hide. Either the performance improves, both user numbers and financial profitability; in which case all good, and it’s marching on, and if it doesn’t, the share prices will reflect that, and then it becomes a takeover target, and almost comes into play. So big year for Twitter, big year for Jack; two CEO roles. I don’t envy him. So look, Andrew, let’s move on to Facebook and look what a year Facebook’s had in 2015.
I do summary blog posts each time the big listed networks announce financial results with all the investor packs that come with those. Facebook’s results for the last Q3, 2015 were just strength across the board. User numbers, cash, financial performance, and its product development pipeline just is as strong as ever. Literally, a week or a month doesn’t go by with some pretty major development on Facebook. But unlike Twitter, it doesn’t seem haphazard. It just seems to pick a sector and execute pretty effectively. Before we get into your forecast, again, what’s your view on Facebook’s performance in 2015?
Andrew: I think Facebook’s mastered that, haven’t they? They’ve worked out how to make it happen. They’ve got the development, they’ve got the stars, they’ve got the money, and they’re able to slowly and methodically sort of build things. It used to be that they threw out a lot of products and a lot of changes very quickly to see how they go, but they’ve obviously learned over time how to integrate them better.
I think the biggest impact for Facebook was the change to news feed, or the introduction to the news feed algorithm. That hurt them a lot, because all the businesses who they’ve been telling for years to build up your page likes in order to get reach suddenly felt like they’ve been duped because they changed the rules on them when Facebook didn’t mean to do it that way. They were stuck because they had so much content coming into the system.
They couldn’t have projected the massive growth that they were going to see, which is obviously unheard of growth that Facebook’s seen over the years. Because of that, they had to restrict the reach of posts, because they just couldn’t serve everything to everyone. I don’t think it was ever their intention to suddenly try and monetize it, but it looks like they’re trying to force people into paying for reach.
So I think that hurt them a lot, and I think since then they’ve been a lot more calculated and measured about how they roll out products and trying to make sure they don’t hurt user experience and trying to make sure they keep people happy. They sort of test a lot, and they move things very slowly. It’s become like asking for the old Facebook ethos, who would just move fast and break things, which they’ve changed now to move…I can’t remember what it is, but it’s something like developed properly and make sure we do all the background work. And I think you can see that in their approach.
I think they’ve just become the mature social platform. They’ve become the one that knows exactly what’s going on, knows exactly where they’re at; what they can do, what they can’t do. They just slowly but surely integrate things into the experience. They’ve sort of learned how to get it right really. I think that’s shown with their live-streaming product that they initially rolled out just to celebrities. When they did just roll it out to celebrities, Periscope’s just starting to get a bit of coverage, Meerkat was still sort of getting rid of attention.
I remember a lot of live streaming as wrapping arms, saying, “Oh, this is ridiculous. They’re not letting us in, they’re just giving it to celebrities. We should be allowed in, we’re the ones who use live streaming,” and all that sort of stuff.” I thought at that time, “If Facebook does these, what they’re doing is they’re going to test it, they’re going to get a lot of content from celebrities, which is going to boost the audience reach and the viewership of their live-streaming content.
Then if they do roll it out to everyone else, if they were to make their own platform, you’re going to have your content in between content from The Rock or content from whoever else is broadcasting on there, and the viewership is going to way, way higher than any other platform. You could just say that they were methodically doing it. When they said a couple of weeks ago they’re releasing it to all users, it’s like that’d be absolutely no surprise. But rather than just chuck it out there and see what happens, they’re slowly but surely building expectation and building the platform before it becomes a platform really.
I think that’s pretty reflective of what they’ve done with everything. Yeah, that’s exactly as you said, they’ve gone from strength to strength this year. They’ve become the dominant social platform to the point where it’s like they’re becoming the Internet. A lot of people just use Facebook these days. They’ve done some studies in other nations which show that some people don’t differentiate between the Internet and Facebook because their connectivity only lets them connect to Messenger or whatever, and that’s what they use. That’s the only thing they use.
And Facebook’s got so much potential on so many fronts as well. They’re not even tapping into the full potential of what they can do. I think that maybe in years past they might have pushed things a bit faster in order to get as much as they could as quick as they could. But they sort of know now that they’re in for the long haul, they know that they’ve got plenty of opportunity and plenty of time to do what they need to do and to get it right.
You can see that, I guess the best example, using Messenger, which they’re slowly developing and slowly moving towards monetization, and over the next year you’re going to see different little monetization things coming in, but they’re going to be so sort of amazing and interesting. But they’re just slowly coming in, rather than go, “Yeah, now Messenger’s being monetized.” It’s going to slowly come in, creep in, and it’s going to not impede on user experience, and yet still allow them to make a heap of money without hurting the current users.
Adam: It’s just the breadth of areas they’re sort of focusing on. Again, I’ve blogged about native video and the impact they’ve now had on YouTube and people uploading video native to Facebook rather than linking across to videos on YouTube. We talked about Twitter earlier, and Twitter’s core strength has always been where the news breaks and live events, and Facebook doing more in terms of breaking news and even search functionality, Livestream again, Periscope Makeup [SP] Lab sort of battling it out, and suddenly Facebook’s in the game and looking like it’s got a pretty impressive proposition.
I even saw something this week, and let’s not get too side-tracked, that podcasting, audio streaming may become a factor on Facebook. They’re attacking on all fronts, and pretty effectively. One of your forecasts that really caught my eye, Andrew, was to do with conversion lift. I’ll ask you to explain what that is, but I think the one thing people all would acknowledge, and certainly media buyers, is the targeting capability on Facebook is second to none.
You want to get a message to 21- to 24-year-olds in the Bondi area of Sydney that have expressed some interest in ice cream, “Bang” you can do it on Facebook. You can go hyper, hyper niche. I think the ROI equation is already pretty effective on Facebook, but what caught my eye is you’re saying Facebook doing even further work to sort of demonstrate tangible ROIs. So what is conversion lift and what is Facebook doing help marketers demonstrate ads spent on the platform?
Andrew: It’s really interesting. I think that’s going to be a big bonus in 2016. Obviously, ROI is always the big question in social, so what are we actually making out of this and how much money we’re going to get out of this? Facebook’s obviously well aware of that, and they’re working to give advertisers more options to be able to quantify what their ads are actually doing. I just wrote a report this morning actually on the same sort of thing, which is showing how Facebook ads indirectly contribute to people searching for your terms.
Like if someone’s seen your Facebook ad, they’re more likely to search for those terms, which then lead to conversion through that path, which is not direct from Facebook ads, so they can’t measure that in the insides, but they can measure it through these conversion lift site metrics. So conversion lifts is essentially they take data from your point of sale. So if you’re collecting phone numbers or addresses, like supermarkets when you use the new supermarket cards and things like that which identifies you as the person who’s buying it.
Facebook’s taken that data from businesses, mashing that up for their database, which shows those people on Facebook, so they can find the people who are your customers on Facebook, and then they’re seeing if those people have seen Facebook ads. They then compare that to another control group which hasn’t seen Facebook ads, and they can show them that there’s actually a direct correlation between that person seeing a Facebook ad and that person then spending more.
So their stats show generally that people who’ve seen Facebook ads obviously have got a higher…Well, the numbers will show whether you’re seeing a higher return from your actual ads in terms of sales as opposed to just people seeing your ads, and you don’t know whether they’ve converted or not. So that I think is going to become a bigger focus for Facebook, is really sort of connecting up the two; connecting the real world to the online world, which is great, which is what we really need to see. I think Facebook will kind of lead the pack on that front. Yeah, it is a really powerful metric.
It’s actually numbers, it’s actually what you’re saying. And it’s as much, as I said, with search….that’s an indirect…You can’t quantify that any other way. But if they can show you that these people saw a Facebook ad and they’ve then gone on to buy, and here’s the path they’ve taken to it, that’s invaluable data. You could work out so much. You could focus your ads a lot better, you could focus everything a lot better, and you’d have direct results showing what you’ve done and how you’ve done it. So I think that’s going to be a really big focus for Facebook, and really really valuable stuff.
Conversion lift was introduced I think a year ago, and they’ve sort of developed it through the year. I think that’s going to get a bit more of a push in the new year, and I think that’s great. I think that we should see more of that. I think all the platforms are going to follow them eventually. Like Twitter’s already introduced a similar thing, a similar conversion lift type metric where it’s connecting up who’s seen your ads to who’s actually bought. So you’re probably going to see a lot more shops introducing those loyalty card type schemes to try and connect you up.
I think Facebook’s got agreements with a whole lot of those loyalty card providers already that could connect them up. So you won’t necessarily even know that that data is going direct to Facebook. But that’s how they do it is they mash it all up and then they can connect you directly to your ads, and so you’re going to get more and more targeted ads, more and more specific sort of to you. When I explain it to people, I always say like, “One day your phone’s going to say, ‘You need to get milk,’ because it’s going to know that you buy milk every couple of days or whatever.”
Things like that where it knows from your supermarket shopping what you buy and when you buy it, and you’re going to get very targeted ads based on behaviours and what you’ve always done. It’s going to know what you’ll want before you even know yourself that you want it. That’s the sort of reality we’re moving into, and that’s where conversion lift is really sort of playing a part is connecting the offline and online world.
Adam: Facebook just building from a position of strength, but not resting on its laurels and continuing to evolve and improve its offering, both to users and to ultimately its customers being the advertisers, and that mix of social data, predictive analytic, big data science, etc., all coming together with what Facebook is doing. So, very interesting. Final summary, quick question on Facebook then. It sounds like you’re expecting a strong year in 2016, and just briefly in terms of the longer term initiative such as Oculus Rift being their virtual reality, M, Internet.org, do you expect to continue to see progress on the longer term things as well?
Andrew: Yeah. Virtual reality is going to be massive. There’s a lot of talk about virtual reality at the moment. I don’t think it’s going to take hold in 2016. I think the next year, 2017, is going to be the year of virtual reality when it’s just going to overtake everyone. But, 360 video is going to be massive this year. That’s going to be the stepping stone to virtual reality. The first Oculus Rift becomes available in Q1 next year, so you’re going to see some of them come into the home.
But generally, with those sort of new technology, it takes a while for them to come into place, because there’s not that many options for things to watch on them, and they’re expensive. There’s a whole lot of barriers that sort of take a while to sort of come down. I think over the year we’ll see more and more people talking about it. You’re going to see more and more different opportunities, but I think in 2017 you’re going to see things like the first virtual reality movie and things like that, which I’ve read that they’re already working on.
Things like that which are really going to take it to the next level are going to come in a year or so. In the next year, 360 video is going to be huge. M is going to be very hard for Facebook to scale. M, if anyone doesn’t know, is the virtual assistant they’re building into Messenger, which is trained by a group of people, so when you send a request by Messenger, you can say, “I want to buy flowers,” and an artificial intelligence system will detect that message and then try and give you a response.
But if the response isn’t good enough, then it’s got people listening in who will also refine it and make sure that you’re getting the right response. So it’s going to be very hard for them to scale because there’s a lot of human intervention. But they’ve already said that the AI’s getting very smart and they’re not intervening anywhere near as much as they used to. I think it would be very interesting to see where M goes. I sort of think it’s going to get rolled into something else in the future and it’s not going to be a standalone thing, but it’s too early to sort of predict.
There’s heaps of opportunities in Facebook. There’s heaps of fronts they’re working on that probably we don’t even know about. Like Internet.org will continue to bring more users to Facebook. It’s sort of the same, as you were saying, with News Deed where, they had to put in a system which wasn’t necessarily to benefit them. Same with Internet.org. They’re connecting people up, and that benefits the people, but it also benefits Facebook, so it’s a very smart business play. There’s so many things that Facebook’s got going on that they are well ahead of everyone else. Their ROI and their image recognition and things like that.
I definitely think you’re going to see image recognition on Instagram in the next year. You’re going to be able to search by image. That sort of stuff is going to be the next level. And Facebook’s ad targeting, as you’ve already said, is so beyond anything that’s near it. If you haven’t looked into it, then you’re missing out, and if you’re just using generic sort of like targeting people in this region, it’s like you can target way, way more than that.
Like you can target down to specific behaviours, everything. The amount of options available to the customization are pretty huge. You can detect people who are going to be interested based on other interests. So people who have bought from you, what pages do they like? Then you can target those people. There’s so many different options of Facebook ads that it’s like, “Yeah, you really need to be looking into it to make the most of it.”
Adam: Barring some sort of X factor, unpredictable privacy-related crisis almost, it’s hard to see anything other than another strong year for Facebook, so we will see how the juggernaut powers on into 2016. So look Andrew, in the last maybe 10, 12 minutes of the interview, if we can go sort of quick fire, because I just want to pick your brains on four or five of the other platforms, so we won’t dive into the depth we did for Facebook and Twitter.
Briefly on Instagram, as you said, user growth has overtaken Twitter in 2015. I think the last user numbers they announced in the quarterly results they’ve hit four hundred million. But as Gary Vaynerchuk says, “Marketers eventually spoil everything. Here come the ads.” So do you expect the ad congestion to start to impact the user experience and therefore slow user growth? What are you thinking about Instagram?
Andrew: Yes, I definitely do. I think that the ads are going to interrupt Instagram a little bit. I don’t know if they’re going to derail it, but they’re definitely going to slow it down. I think the introduction of ads is just going to change the experience to some degree. It’s inevitable that it’s going to. They’re putting a lot of controls to make sure the ads are of high quality, and they keep putting out different tutorials and guides to say, “This is what works on Instagram.”
So they’re trying to educate advertisers and they’re trying to sort of slowly let them in rather than let them flood through. But people have already said some poor quality ads are coming through and those poor quality ads are going to hurt the experience. I think it’ll just slow down. I don’t think you’re going to see a huge migration away from Instagram, but I think you’re going to see it slow down over the next year or so, because there’s going to be more and more ads. It’ll just sort of take a little more time to grow. It won’t be growing as quickly. .
Adam: But still a solid…Instagram probably the place with the most engagement right now. I agree, it’s not going to fall off the rails completely, but inevitably people don’t like ads. Look at the growth on ad blockers. And it’s not going to help the user experience. Pinterest Andrew, couple of sub-questions. Seems to fly on the radar more generally, but particularly in Australia Pinterest seems to sort of punch under its weight and has a relatively lower traction than it does certainly in the U.S.A. Why do you think Pinterest doesn’t seem to have got traction, and what are you expecting I guess globally and in Australia for Pinterest in 2016?
Andrew: It’s hard to say why it hasn’t sort of resonated with Australian audience. Australian audiences tend to sort of I don’t think pick up on trends as quickly, and I think Pinterest isn’t really like a fresh new type thing. Their demographic is more over 35s even or between 25 and 35. So it’s not like the young kids are sort of jumping on it like where you see Snapchat catches on pretty quickly. I think Pinterest is more of a slow burn. Pinterest has never sort of tried to be overly innovative either. It’s never sort of come out with flashy features.
It’s just, it is what it is, and they’ve developed what they’ve got. I think that’s their strength, and that’s what they’ve had to build on. They’ve got a whole lot of cool new features on Pinterest that have really enhanced user experience, which started with Guided Search. Guided Search has different levels of usability, but it generally helps. But they introduced recently the ability to search for products within a pin. So you go to a Pinterest image and you can select any part of it, and it will show you similar images to that selection, which is really interesting.
I looked at the way they built it. It’s a really interesting sort of development process, which is sort of ahead of…As I said, Instagram has worked on their own image recognition type stuff, and Pinterest has sort of gone about it in their own sort of makeshift way and have done it quicker, which is really interesting, and I think they’ve added a whole lot of things like that. Like by now pins are obviously a big deal. But they’ve continued their user growth.
They hit I think 100 million users this year, which is way higher than what most analysts have predicted. I think most analyst have predicted they might get to about 75 million, and they hit 100 million a couple of months ago. They’re still growing, they’re still moving. I think they’re looking to an IPO in the next year.
In terms of whether we’re going to see more users in Australia, it’s hard to say. You can’t sort of predict exactly how it’s going to go. I think Pinterest is a good platform. I think it’s very good for what it is, and it has very high buying intents, like people who use Pinterest end up buying lots of stuff, and they use it for buying stuff, they use it for researching stuff. Pinterest has a lot of potential, and I don’t think it should be ignored.
I think you should be paying attention to what’s happening at Pinterest, because I think they’re coming out with some really cool little things that will just…It’s not going to blow anyone away, it’s not going to suddenly become the network to be on, but it’ll just continue to be relevant, and increasingly relevant in e-commerce and selling retail products and things like that. I think if you can use it then you’ll see continued good return from it, but it’s never going to be like the next, “Boom” platform. It’s just going to be that one that will constantly deliver for you.
Adam: I agree. It’s a great sort of demonstration that raw user numbers aren’t always what it’s all about. Pinterest may be smaller than the other platforms, but propensity to drive traffic and drive actual e-commerce outcomes and buying intent, as you say, particularly with the skew to the female demographic, is something marketers absolutely should be aware of. Let’s move on to LinkedIn.
You had a really interesting prediction on LinkedIn, and again, I touched on the theme earlier with Facebook, big data analytics, predictive analytics, and so forth. In some way, LinkedIn seems to be moving in that direction. In terms of its Recruiter platform, whilst it’s trying to build broader income streams. A lot of LinkedIn’s revenue is still driven by sort of HR- and recruitment-related activities. So talk us through, what are they doing in terms of predictive algorithms and allowing people to search in an even smarter way to identify candidates?
Andrew: LinkedIn moves slowly generally, like Linkedin updates don’t come very often, and they don’t sort of change the user experience. It’s generally very solid, and they stay with what they’re doing; which makes sense. They’re the professional network and they like to keep things professional, keep them as they should be. What they’re working on with their Recruiter platform is the ability to use your own employees as the templates for future employees. LinkedIn has more professional-experience data than anyone in the history of the world.
They’ve got 380 million members now. They’ve got so much data in there they can use to be able to find people and identify career paths and things like that. In the past, they’ve sort of tinkered with that and sort of looked at what they could do. But what they’re working on in the Recruiter platform is the ability to add in…If you’ve got an ideal employee, say John is an ideal employee; this is what his traits are, you can then put his LinkedIn profile into your job or your recruitment ad or recruitment search, and it will take his traits, his educations, his background, and it will find you candidates who match that.
I think that is the first step in a much much wider recruitment type thing that LinkedIn will eventually do where they will be able to find the best employees based on all those different traits. I think it’s too early to see how it’s fully going to work. So if you match up one employee and if you say, “Well, I like this guy and I just want to replicate him,” you don’t replicate him like seven times. Because if you end up with all the same personality type and the same experiences and the same whatever, you might end up with theoretically really efficient employees, but that’s not how teams work. You need different people in different things.
So I think what they’re really going to do in the future is they’re going to say, “Add in your entire team,” like “Here’s our best team, and we’ve got seven employees on this team who are the national sales team.” You add all those profiles in, and LinkedIn will be able to match them all up and figure out when someone leaves, what was what they brought to the table, what was the education, what was the background, what was all the stuff that they added to that team that made them most efficient? Then when you’ve got your candidates coming through we’ll match them against that template and we’ll show you the best matches based on that, which they’ve already shown that algorithms are much better at detecting your best employee or best future hires than people, because people are obviously flawed in their own judgments.
You’re subconsciously biased. You can’t help it. You look at certain things that a computer doesn’t. It just looks at the data and goes, “This is going to the best match.”
There’s been different studies conducted that have shown that, that algorithms are really good at predicting better employees, possibly better than humans. And I think that’s where LinkedIn has a heap of opportunity. I think like the comparison of Futurama when he first goes into the future. You have to get tags with a sort of barcode in your hand, and that’s your job. That’s sort of what we’re moving towards with LinkedIn. It’s going to be like you put in your data, and you say, “This is my experience, this is what I’m interested in, these are my social profiles.”
It’ll be able to take all of that in and then it’ll be able to say, “You are best matched to these jobs because they’ve got billions and billions and billions of data points which suggest this is what you’re going to be most productive in and happiest in.” Because they know based on experience people have stayed in jobs for this long. They’ve got all that data all there already, and they’re going to work out a way to use it that’s going to be like yeah, they’ll be able to tell you exactly what you’re going to be best at based on your traits, which is kind of scary, but could be really good. There’s probably some essential downside as well.
Adam: There’s a theme coming through each of these platforms, Andrew. Big data, predictive analytics, machine learning, AI. I can hear an author, Andrew, I can feel the sci-fi screenplay right in your head of where this is all going but yeah, look, very interesting what LinkedIn are doing. Big point that you say that the algorithm and the brain in the box is a better selector of people than people.
So be again interesting to see how that plays out, and yeah, the big data theme absolute the fore again. Andrew, final two platforms. We’ll go at extra quick five for these two. Snapchat, you talked about possibly a tough year for 2016 in Snapchat, and even the emergence of another platform targeting the millennial, the youth market. Talk us quickly through that one.
Andrew: Snapchat’s obviously seen massive growth, but I think they are most susceptible to a challenge because they’re still the cool platform. They’re still introducing all the cool features, and that’s what keeps them front of mind. But that cool factor also is potentially the one that can be disrupted, because someone can come in with a cooler factor that could then take them over. Whereas the other platform is a bit more embedded, I think Snapchat’s still a bit susceptible to that.
I think they’re going to have it tough just because they’ve been valued so high. They can’t match that $16 billion evaluation. That is really, really tough for them to be able to match the expectation for that. I don’t think they’re necessarily going to have any difference in their business model, but I think it’s just going to be tougher for them to match up to the expectation.
Adam: Again, touching on the theme of Twitter, there’s two different issues. Have you engaged users and a successful platform, question one. Question two, do you have a business model to monetize to the level that your investors expect? Again, with Snapchat I think question one is, “Yes” and question two is, “Probably no.” Sixteen billion is astonishing for a business that only recently launched its ad product. In fact, I blogged on that very topic this week.
Again, some of the pressure will come from the investor side rather than just a typical private company allowed to sort of grow at its own pace and find its feet. Yeah, interesting prediction on Snapchat Andrew. Last one, just quickly. YouTube, you feel that YouTube Red is likely to be a success. Big early call, glad to see that. So what’s your thinking there?
Andrew: I think Red will work just because…YouTube’s moving more towards a Netflix-style system. Rather than trying to compete with Facebook and trying to make sure they’re getting all the views that way, I think they’re going to move more towards a Netflix-style arrangement. Recently there was a report that YouTube’s already trying to buy the rights to different TV shows and things like that. YouTube Red is going to work if they can provide quality content or enough quality content that people are going to be happy to pay for it.
One of the best additions of YouTube Red that no one really sort of noted was the ability to watch in offline mode. For people with kids, that is massive. As you know Adam, especially when we’re going away somewhere, if I can just load up a couple of videos on the iPad and give that to kids, that’s like a really big selling point that sort of at a lesser note that’s not really being discussed. Yet there was a lot of outrage about how it was going to work and things like that, but there are some little features like that that I think are much more valuable than people realize.
If they start to introduce TV shows and more premium content and people starts to go, “You know what?” Like I watch Netflix through my Xbox. I’ve got a subscription through my Xbox, and I can watch YouTube through my Xbox. If they start doing subscription TV and it’s quality stuff through YouTube, then for 10 bucks, same as Netflix, there’s no doubt that I would buy it up, because it’s a great option. I think they will work out a way that it’s going to work, but I think they’re going to put a real focus on the content, like putting new shows and things.
Andrew: There’s the offline feature. There’s also YouTube Music rolled in, which I think people haven’t focused on, and I think that’s also a big part of the playbook. Such an interesting sector, Andrew. Just think about the changes we’ve seen in 2015. So thank you very very much for joining me to explore a bit of a review of the year that’s gone and some forecast for the future. I’ll obviously link up in the show notes the blog post and encourage people to check it out. Andrew, as a returning guest, I’ve adapted and updated the quick fire round, so you’re set again.
Adam: Here we go. Andrew Hutchinson, returning guest to the EchoJunction podcast. Question one, Meerkat, Periscope or Blab? Which is your personal favourite, and which do you think will have the most users in 12 months’ time?
Andrew: Blab is my personal favourite. Periscope will have the most users in 12 months’ time, but all of them will be gone as soon as Facebook takes over.
Adam: Great answer. The 800-pound gorilla is going to eat them all up. You really think Facebook Live will kind of wipe out the opposition there?
Andrew: I think if Facebook wants to, they will. And if there’s enough audience demand for it, then they’ll just take it over. It’s sort of like they’re using those ones at their own testing ground. They can just go, “Ah, Periscope’s doing this well. Let’s just take that over here.” Then if Blab continues to get traction they’ll just go, “You know what, that looks like it’s doing pretty well,” and they’ll just put four-person livestreaming on their own platform. I just think Facebook could if they wanted to take it over. It just depends on how much revenue or how much money they see in it.
Adam: Sure. Good answer. Question two, something a bit different. Andrew, if you could give your 21-year-old self one piece of advice, what would it be?
Andrew: I think it would just be, “Trust yourself.” Trust in your own ability, what you know. I think you question yourself a lot, and to me it’s just like, “You just need to do what you want to do. Do what you love doing and trust that you’re going to have the ability to make it work.”
Adam: Great answer. And final question number three Andrew. If you could only follow three people on Twitter, who would they be?
Andrew: It’s always hard when you’re trying to choose specific people on Twitter. At the moment, one guy who I really like is Chris Barrows. He runs the why I social podcast, and he’s really good. I really align with his sort of perspective. He’s got a lot more realistic type perspective on how things are. I really like Rachel Miller [SP], who now works for Bryan Kramer’s company. What was it Bryan Kramer Company? I can’t remember what the name is now. But she’s very prominent.
Andrew: Yeah, PureMatter. She is very prominent in social media circles and very no-nonsense, very much sort of stays on point. And the third one be…Narrowing it down to one i’s very difficult.
Adam: iSocialFanz you’ve been previously a fan of?
Andrew: Yeah, I have friends that are still good. He’s talking about live streaming. He’s moved obviously a lot more towards live streaming these days and live streaming evangelizing, and still a very great source of knowledge. The best think about Bryan is he’s just so enthusiastic, he’s just so sort of alive. His stream is so alive, so it’s always great to follow him. Yeah, I’d say Fanzo is always a good one to follow, and I definitely recommend people check him out.
Adam: Great stuff. Andrew, thanks so much. It’s been a really interesting and insightful chat. Before I let you go, where would you like to send people if they want to learn a little bit more about you and your activities online?
Andrew: I write for Social Media Today, so SocialMedia.com. I post there two to three times every day and that’s where I do most of my stuff now. I sort of haven’t had as much time to blog on my own blog these days because I’m doing it on Social Media Today. But that’s where you can find my stuff.
Adam: Andrew, thanks so much for being with me. It’s been great.
Andrew: Thanks for having me again.
Adam: There we go ladies and gents Mr. Andrew Hutchinson. Hope you enjoyed the conversation, I certainly did and took a lot out of it. Always good to bounce around with an industry thinker about where things are going with the various social platforms. So very much appreciative of Andrew to come on the podcast and elaborate on his 30 predictions for 2016, which I absolutely suggest you check out the link in the show notes.
Here are the show notes for this interview with Andrew Hutchinson.