John Smibert from Strategic Selling Group interviewed our very own Adam Fraser.
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:
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.
By Adam Fraser
Facebook recently announced an important change by opening up its Instant Articles publishing platform to all publishers.
Instant articles are content published directly on the Facebook site as opposed to linking to the same story on an owned media asset outside of Facebook. The nuance may seem subtle but is very important. By using Instant Articles, the publishers’ IP rests within Facebook’s walled garden and thus under its control. Facebook is understandably trying to keep its users within the platform (more attention for longer time = more ad dollars). Publishers want the eyeballs but sacrifice control of their media assets and lose direct control of the audience. Users get a faster loading experience from a mobile device and some added functionality.
Instant articles was launched in May 2015 to a test group of 9 major publishers. The platform had since been expanded to a few hundred publishers but the current announcement opened the doors to anyone and everyone from April 2016. A one man blog will now have the same access as the NY Times, Guardian and Discovery Channel. Commercially, publishers can sell their own ads or take a revenue share (30% to Facebook) by allowing Facebook to sell ads via its Facebook Audience Network. With 1.6 billion users, publishers of all sizes (but especially smaller publishers who cannot monetise via their own platform) will be incredibly tempted by this offer.
As LinkedIn did with its publishing platform (initial test with major influencers, then rolled out to anyone), Facebook tested the ground with high profile media entities before eventually opening up the platform to anyone.
With the floodgates opened it will be interesting to see how Facebook attempt to maintain quality control over the type of content being uploaded – will we see quality, original work or lots of cut and paste copycat content already published elsewhere? Will we now see the same article on LinkedIn, Medium AND Facebook Instant Articles?
For publishers of all sizes, the issue remains balancing the need for short term eyeballs and income whilst maintaining owned media assets which house your IP and over which you have complete control. The rented land is getting easier to access and is available on ever more-tempting terms, but introducing a middle man and losing control of your IP and audience comes at an inevitable cost to the risk/return trade off of your long term media and marketing strategy.
By Adam Fraser
A recent study from Trackmaven showed some interesting trends around brand publishing and the associated engagement on social media platforms.
The study looked at the activity of almost 23,000 brands in 2015 across B2B. B2C and non-profit. The analysis was comprehensive, covering almost 50m pieces of content and a hefty 75billion interactions across Facebook, Twitter, LinkedIn, Pinterest, Instagram and blogs.
In an era where many talk about “content shock”, the headline may be no surprise. Volumes of content being generated are up an average of 35% yet engagement is down by 17%. Basic supply and demand theory is in play here – as more and more content is pushed out, people can absorb and engage less and less with each piece of content. “There is ceiling to how much content can be consumed, liked and shared” says the report.
At its peak in October 2015, brands were creating an average of 87.5 social media posts per channel, with the average engagement per 1000 users of just 2.2 interactions per post.
The platform by platform analysis is interesting:
A few key take-outs:
I have previously written about brands talking in places where they have no right to be in the conversation. This research arguably re-affirms the key underlying point. Don’t generate content for the sake of generating content. Listen more and talk less. Tailor your content to answering the questions your customers and potential customers have around your product or service.
By Adam Fraser.
LinkedIn, like its distant cousin Twitter, is learning about the harsh realities of life as a listed company.
On the face of it, it’s Q4 results were very strong – with growth in revenue, profit and users. Yet Wall Street didn’t like the guidance it heard for FY2016 growth and smashed the stock down by 44%. Yep – almost half the value of the company lost in a single day. Listed company life may look glamorous but it’s a wild ride. And as Twitter is finding, negative sentiment around a stock price over a long enough period of time can seep into sentiment around the platform as a whole.
It is important to distinguish between weakness in true operating activity versus delivering a lower outcome than the stock market had forecasted. A 44% stock price correction in one day seems perhaps overdone, but there were enough worrying items in a mixed bag of results to justify a sell decision if that’s what you wanted to see. The market in its current mood is selling first and asking questions later.
By Adam Fraser
Another quarter, another powerful set of results from the world’s biggest social network.
As the user numbers get higher the % growth rate inevitably plateaus. While absolute users continue to grow at a healthy rate, with 1.6 billion users and counting, at some point the world population actually becomes a constraint to growth!
If you want the gory detail, you can find the detailed financials, investor presentation and management conference call. For those without the time to digest all of this, here are 10 key soundbites from the results:
Wall Street liked what they saw driving the shares up by 14% on the day the results were released.
“2015 was a great year for Facebook. Our community continued to grow and our business is thriving,” Mark Zuckerberg, Facebook founder and CEO, said in the company’s earnings release. Hard to disagree.
In the investor conference call, Zuckerberg confirmed he was happy with early sales of the Oculus Rift product which bodes well for future growth in an important area.
Strong user growth in Facebook, Instagram, WhatsApp and Messenger. Investment in long term initiatives. Growing revenue per user. Increased dominance in mobile ad spend. The scorecard continues to tick all boxes. Absent an unpredictable privacy related shock, its hard to see anything other than continued strength in 2016.
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Tumblr this week announced it was adding direct messaging to its platform.
This follows a trend of social platforms adding direct messaging capability. Instagram added direct messages in December 2013 via its Instagram Direct product, Pinterest added direct message capability in August 2014 while Facebook demonstrated its focus on the messenger side of its platform when it forced its users to download a separate Facebook Messenger app in August 2014 (something they were criticised for at the time). Twitter of course has long had direct message capability but it made a major decision to abandon the 140 character limit in DMs in August 2014.
The strategies of the social media networks demonstrates the growing importance of mobile messaging.
In parallel of course the stand along messenger apps such as Apple imessage, WhatsApp and Wechat have continued to show significant growth.
The following 5 stats indicate just how significant the mobile messenger market has become:
The overall market seems to be segmenting along 3 basic lines
The use cases are very different. Marketers need to understand the trend but tread with caution – they may be less welcome in the more private and intimate settings.
By Adam Fraser
In the good old days of traditional media, with tightly controlled distribution across capital intensive media platforms, there was a reasonably predictable relationship between audience and profit.
Grow readership of the NY Times and the front page display ad sold for more. Boost viewers for the soap opera and the 30 second slot increased in price.
The stability and predictability seems almost comforting and like a glimpse into calmer and simpler times. The old days.
Fast forward to 2015. The internet revolution is approximately 20 years old. Social media has changed the way we communicate with each other (and increasingly with businesses) forever. A new infrastructure and medium of connection is in play.
So the concept of audience, and how it is potentially monetised in the media world has changed. As Twitter is discovering, circa 350m users does not necessarily translate into a profitable business. Does advertising naturally work in these platforms? Who will pay and how much? Does the user experience get impacted to the point of no return? Would a subscription model actually be more appropriate?
Facebook seems to have been by far the most successful – to date – at navigating that delicate relationship between native advertising in the stream and maintaining a large, loyal audience. Not an easy balance. For media buyers, the sheer granularity of Facebook’s targeting reins supreme (want to target 21-25 year old males with an interest in surfing in the Bondi region – you can….).
So to Snapchat. No real issues on the “audience” front – user numbers and engagement amongst the younger demographic (60% of its 100m users are aged 13-24) remain extremely strong. The attention is certainly there and there are encouraging signs in terms of the videos it is publishing on its Discovery channel, recently adding new content. But how to monetise? A valuation of $16bn demands some pretty serious revenue and profitability and Snapchat is yet to demonstrate a sustainable profitable business model. One investor Fidelity has already written down its book value.
Like all the social networks Snapchat has instinctively jumped to advertising as the first port of call, business model wise. As with Twitter, it is not clear this will ever be enough. Snapchat went for a premium pricing model – a limited number of partners asked to pay up to $500k per package.
Not cheap. However cool it is to put your brand on Snapchat, ultimately an ROI is required. Approximately 100 companies have tried Snapchat to date with a lukewarm response. The jury remains out on effectiveness. The targeting available on Snapchat is nowhere near the capability of Facebook.
The growth in ad blockers shows an unavoidable truth – consumers don’t like ads. Wherever possible they will avoid ads. Snapchat has a pretty unique offering and is admittedly trying some create ways to distribute its ads but it is still putting all of its eggs into a basket which is declining in efficacy.
Snapchat is entering a post honeymoon period – the glamour of its $16bn valuation is turning into a sober look in the mirror as to how it can ever justify such a sum. Whilst clearly successful in building a highly engaged, targeted audience, being priced to perfection comes with inevitable pressures.
By Adam Fraser.
Organic reach on social media platforms has been declining for some time – the original tipping point being Facebook’s algorithm change in mid 2014 which significantly choked reach. This story continues to the present day with even major publishers like BuzzFeed reporting a 40% decline in their traffic from Facebook.
This is not going to be another post about the building your house on rented land issue – a trend brought further to the fore by YouTube’s recent launch of YouTube Red.
If marketers have to accept the new reality that any form of meaningful organic reach is at best unreliable and at worst statistically irrelevant, then what to do in social? Well of course there are numerous use cases for social across an enterprise beyond marketing including sales, customer retention, customer service, PR, market research, competitive analysis and HR to name a few.
But on the marketing front, “pay to play” is an inevitable and necessary part of the play book today if you want your message to be seen more broadly (a trend confirmed in this podcast interview with the head of social at a major brand). Hence it was with interest that I reviewed a recent report from Emarketer “Social Advertising Effectiveness Scorecard: Industry Execs Grade the Leading Platforms”.
Based on in depth interviews with 29 companies who were asked to grade the effectiveness of their social advertising, the key findings were:
Overall scorecard seems to be “shows good potential but could do better in some areas” with Facebook the best regarded platform by some margin.
LinkedIn announced a strong financial performance in its Q3 results, with revenue of $780m for the quarter, up a healthy 37% on the prior year. Unlike Twiiter, LinkedIn is profitable with EBITDA of $208m for the quarter.
If you simply want the key take-outs, here are 10 summary insights:
All in all a very solid set of results for the worlds largest professional network. The stock market applauded the return to strong revenue growth with shares up 9% on the release of results.
The one possible weak spot was the “stable” marketing revenue division – the attempt to decrease reliance on LinkedIn as a pure recruiter platform probably still has further to run.
By Adam Fraser.
Another quarter, another sensational quarterly result for Facebook.
As a blogger, a key challenge is becoming crafting a different headline about another exceptional Facebook result every 3 months.
Whatever concerns any of us may have about Facebook’s market power and its attitude to privacy, there is no denying the strength (and depth) of its results. User numbers. Advertising metrics. Mobile. Video. Profitability. Cash. It’s all there.
For those that font have the time and simply want the 10 key soundbites, here you go:
“We think we have the best mobile ad product in the market. We’re able to target, we’re able to measure. We have broad scale,” Sheryl Sandberg, Chief Operating Officer at Facebook, told CNBC.
Mark Zuckerberg noted the platform now has 8bn daily video views.
By Adam Fraser
The recent announcement from YouTube in relation to its launch of YouTube Red has multi faceted implications.
YouTube Red offers ad free access to all of YouTube’s video content with the option to save videos to watch offline on any device, as well as access to a new YouTube music service, all for US$9.99 per month. The subscription based business model represents a strategically significant move away from an advertising only revenue model. The rapid growth of ad blockers has shown how most consumers feel about ads so it will be interesting to see how many feel this aspect alone justifies the subscription amount.
Given the growing pervasiveness of ad blockers on top of questions around the overall efficacy of pre-roll video ads, some would say this is a necessary move for YouTube. It may take time to “train” users to pay for something they have historically had for free, but over time this represents an important shift in the YouTube business model. Eggs in more than one basket revenue wise.
Content wise things just got more interesting. In addition to the existing backlog of videos, YouTube has announced many of its “YouTube stars” will be distributing exclusive content on the Red channel. Original and premium content. Is there a budding Netflix here perhaps?
However the sting in the tale of this story is the terms and conditions YouTube is imposing on content creators here. Content creators are being asked to sign up to the new YouTube Red revenue sharing arrangements or their content simply won’t be shown. Yep it’s that black and white. Play by our rules or your (possibly millions of) existing followers won’t be seeing your videos any more.
I have talked previously about the social networks being “rented land” when it comes to your media distribution. Not since Facebook “reachgate” has this been so clearly illustrated in a policy change from a major social network. Yes the Godfather is used as a visual in this summary of the issue from TechCrunch! YouTube has every right to change the rules on its own platform but the lesson still hits hard to content creators who have built audience on a third party’s platform and now realise their lack of underlying control.
YouTube claims 99% of video creators (this only impacts those currently collecting revenue share from advertising on their YouTube channels) have signed up to this (literally) take it or leave it deal. But some high profile names have already had content removed from YouTube (eg ESPN).
The dilemma here for video content producers is similar to that faced by publishers considering whether to distribute via Facebook and lose control of their media IP. Rented vs owned. Generally large audience versus smaller.
Short term deal with the 800lb gorilla who controls much of the worlds video watching audience (but lose direct control of that audience and your own content)? Or try to build owned media and drive audience to your own site/app/video playing service? If you are Disney or ESPN or BBC or Red Bull this may be a practical dilemma to even think about. To the average marketer or business – hard to even think you could practically invest in building your own video distribution platform.
No easy answers here. The landscape is changing. And the potential for a small number of powerful platforms to control the vast percentage of media consumption grows.
The world of the media gatekeeper my somewhat ironically be returning in the Internet age.
By Adam Fraser
The storm clouds above Twitter show no sign of abating. Third quarter 2015 results just announced showed tepid performance in both user growth and financial returns.
Another large quarterly loss of over US$100m. Monthly active users grew by only 4m to 320m. A rounding error to Facebook.
The Street is losing patience as the share price falls (down another 13% when the results were released).
A new CEO is making decisions – no question – but are they still missing the wood for the trees? Cutting costs, bringing in a new chairman, adding new features but still almost exclusively looking to advertising as the monetisation business model.
Will Twitter ever be a pure advertising, media buying play? When Twitter listed that is what the Street wanted as it was a business model which it was familiar with. Sell media, sell attention.
But given the nature of the Twitter platform – it cannot just be assumed to behave like TV, radio and magazines. Twitter is a medium of connection at its heart. It’s data is exceptionally valuable. It is more an infrastructure than a media platform into why you sell “space”.
Of course if Twitter hadn’t floated and was able to grow at its own natural pace and make long term decisions without extensive external pressure, we wouldn’t be having this discussion. But that horse has bolted.
It’s hard to see a particularly happy ending here with Twitter as an independent public company.
Facebook is directly attacking Twitter’s USP as “the place where news breaks”. User growth shows no sign of breaking out. New features are being added but will they disenfranchise the power user base?
A takeover or a buy out to take Twitter private is not out of the realms of possibility.
When Facebook launched Instant Articles in May 2015 a number of major publishers including the NY Times, the Guardian and National Geographic jumped on board.
Reminder: Instant Articles means publishers publish content directly on Facebook (hence the content is controlled and effectively owned by Facebook) as opposed to linking to an article from Facebook. When you are a media company this is not an insignificant subtly: your crown jewels (ie your content/media IP) are being handed to Facebook in exchange for a share of revenue.
The dilemma is obvious. Facebook has the audience. Almost a billion people log in daily and close to 1.5 billion log in monthly. Publishers are left with an almost impossible choice – hold their IP on owned media with dwindling audiences (and thus revenue bases) or deal with the new kid on the block who controls the largest audience. I argued previously that publishing directly on Facebook would likely be revenue lucrative in the short term, but was strategically risky in the long term. As a media company, once you lose control of your content and the direct relationship with the audience, you no longer control your own destiny. In this case, Facebook does. Algorithm and all – they will decide who sees what content (and of course can re-negotiate revenue shares etc). It’s their house and their audience. They make the rules.
Thus it was with some surprise to see the announcement from the Washington Post that it will post all of its content on Facebook. 100%. Thats as “all in” as you can get; circa 1200 articles a day.
The upsides to the Washington Post are obvious. Distribution of its content to the largest audience there is. Access to a digital demographic it may normally not reach, in particular on mobile. Facebook dominates mobile usage (and hence mobile ad dollars). Assuming (as reported) the Post will get 70% of ads sold against its content, this is likely to be highly lucrative in the short term.
Long term, the jury is out as to what this could mean. Can Facebook change the rules, tweak the algorithm, determine what content is seen by whom? Of course. Will it? Noone knows, but its track record in this area is not unblemished.
It’s an indicator of the seismic shift that social media has had on the media landscape, that a newspaper as rich in history and as well regarded as the Washington Post is willing to make that bet, and put a large element of its future prosperity in the hands of Facebook.
It will be interesting to see if other major publishers follow suit.
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