A special thank you to Dan Gingiss for mentioning EchoJunction, in his latest article.
By Adam Fraser
Jeff Bezos, the founder of Amazon, once said, “Your brand is what other people say about you when you aren’t in the room.”
I am fascinated by the concept of branding, and the emotional drivers which make consumers pay premium pricing for a product or service and have explored branding, brand valuation, and brand strategy on my podcast.
Hence the annual Forbes Top 100 Brand Survey (alongside others) always piques my interest. Forbes values brands (with a US presence) on their financial merits instead of consumer surveys (more details on their precise methodology here). The Top 10 brands were:
Apple topped the list for the 8th year in a row and remains the primary example of brand strength via its ability to generate massive profits through premium pricing and seemingly insatiable demand for its products around the globe.
Some interesting trends within the survey:
For those that argue “brands are dying” – the cumulative value for the top 100 brands was $2.15 trillion, up 10% on the prior year
Six out of the Top 10 were technology businesses and it was the most featured industry sector (20 of the top 100)
Bigger Gainers: Netflix (35%), PayPal (33%), Amazon (31%), Google (30%), Facebook (29%)
Biggest Declines: Gillette (-11%), H&M (-8%), ESPN (-8%), HP (-6%), American Express (-6%)
New Entries In Top 100 vs. 2017: Volkswagen (#90), RBC (#94), Uniqlo (#96), PayPal (#98), Dell (#99), KFC (#100)
Whilst the concept of brand value (an emotionally driven concept) is always subject to debate and varying methodologies, and the Forbes survey focuses on pure financials as opposed to consumer-based input, an interesting and useful reference point for monitoring trends in major brands’ strength and relative valuation.
By Adam Fraser
Never a dull moment in the fast-moving media landscape of 2018.
Any sense of having media providers and technology companies pigeonholed in a certain slot is repeatedly rendered outdated as the clean boundaries of previous decades continually evaporate.
One minute Disney is partnering with Netflix, then it is bypassing it. Snapchat began as a messaging platform before effectively bolting on a pure media offering with its Discovery module. Pinterest has evolved from social network to a discovery-focused pseudo search engine. Foxtel launched an SVOD offering to mimic Netflix. The list goes on.
So Instagram’s (rumoured) plans for long-form video shouldn’t really come as too much of a surprise.
Is this Instagram taking on YouTube or Snapchat? Or both? A platform just for influencers or will this evolve to long form, high production quality Netflix style content? Time will tell.
Whilst Instagram has historically been arguably the most skilful of the social networks in evolving its offering without alienating its core user base, there are no guarantees this will be a successful move. But clearly the scale and loyalty of its user base give it a reasonable shot.
Time will tell but this is yet another reminder of just how fragmented and dynamic the media landscape remains.
By Adam Fraser
The time is upon us again. LinkedIn and Twitter go into something of a meltdown as one of the tech industry’s most eagerly awaited powerpoint decks – the 2018 Internet trends report from Mary Meeker – is released.
At 294 slides it is a truly deep dive into a number of uber internet trends. Not for the faint-hearted or those looking for a quick sound bite and headline – think more encyclopedia than breakthrough insight – it remains a fantastic (free) resource for anyone performing analysis in the tech sector.
I would encourage everyone to take the time to review the detailed deck, but if you (understandably) don’t have the time to browse 294 slides, here are 10 key takeaways:
- Global internet users continue to grow (now 3.6bn), although the rate of growth is slowing (7% vs 12% on the prior year); internet users will reach half the global population in 2018.
- Global smartphone shipments were flat year on year, appearing to have hit maturity. Interesting to compare this to 2014’s growth of 28% and 2015’s 10% growth.
- The time spent with digital media per adult in the USA continued its steady consistent growth over recent years, up 5% to 5.9 hours/day (as a comparison this was 4.3 hours/day in 2012 and 3.0 hours/day in 2009), with the majority of this time now spent on a mobile device.
- Google’s machine learning voice accuracy now exceeds 95%, which is basically in line with the equivalent human accuracy. Amazon Echo’s install base now exceeds 30m, representing rapid growth on the prior year.
- Technology companies now represent 25% of the US stock market’s collective market cap, approaching the previous peak level of 33% experienced during the dot combook of 2000.
- E-commerce revenues continue to grow, but still represent only 13% of total retail revenue (a surprisingly low number, two decades into the internet revolution), with Amazon’s growth leading the way.
- Social media is increasingly driving product discovery. 78% of Facebook users (Instagram 59%, Pinterest 59%) discovered products on that platform, 55% of the consumers who discovered a product on social media then made their purchase online, while 6% of all referrals to e-commerce sites came via social media.
- Uber retail trend: consumers are increasingly renting/subscribing and not buying – examples of growth were Netflix, Spotify, Dropbox, NY Times, LegalZoom and Peloton.
- The macro growth in internet advertising continued (up 21% versus 22% last year), noting mobile advertising spend is still “underweight” versus its share of time spent across media types (representing a $7bn opportunity).
- Key technology disruption drivers noted were cheaper computer storage and processing power, plus rising and cheaper connectivity, facilitating easier data sharing.
Other sections of the report covered healthcare, population density, the future of work, data gathering, personalisation, AI and China, in some detail.
Well worth the time for a detailed review, and an excellent reference point for reliable and trustworthy data points that may be useful in a range of other content analytics use cases.
By Adam Fraser
Twitter has delivered its Q1 2018 results, producing another profitable quarter that has built on its first-ever quarterly profit from 2017. Whilst Twitter results announcements are always something of a mixed bag, growing monthly users and encouraging revenue trends were key positive aspects.
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 336m, up6m from the prior quarter and an increase of 3% from 326m a year ago.
- 21% of Twitter’s MAUs (69m) are based in the USA, up1m on the prior quarter. Most of the user growth came internationally (267m v 262m in the prior quarter).
- Attempts to drive greater engagement and more regular usage on the platform continue to be effective. Daily Active Users grew at 10% on the prior year (interestingly the company still does not reveal the absolute number of DAUs).
- Total ad engagements increased 69% year-over-year, resulting from increased aggregate demand, continuing mix shift toward video ad impressions, and improved CTR, which grew on a year-over-year basis across the majority of ad types based on improving ad relevance.
- Video now accounts for more than half of Twitter’s ad revenue, and was the fastest growing ad format in Q1, with strength across in-stream pre-roll and mid-roll ads, FirstView, Video Website Cards and Video App Cards.
- Revenue at $665m exceeded market expectations and was up 21% on the same quarter of $548m a year ago.
- The breakdown of revenue for the quarter showed 86% of revenue coming from advertising and 14% coming from data licensing/other.
- Twitter made a GAAP profit of $61m for the quarter (vs $91m profit in the prior quarter); it also discloses “adjusted EBITDA which showed a profit of US$244m after adjusting for stock-based compensation, depreciation and amortisation Twitter ended the quarter with US$4.5bn in cash so the “Twitter is Dying” narrative isn’t backed by balance sheet evidence.
- Live video remains a key focus. During Q1, Twitter announced approximately 30 new live-streaming, highlight, and VOD partnerships, including a deal with Fox Sports for a unique live FIFA World Cup recap show and highlights of every FIFA World Cup goal, MLB for live games and highlights, MLS for live games and highlights, and People TV for a new nightly interactive live series called “Chatter”. In total, the platform streamed approximately 1,300 live events throughout the quarter, with 68% of those reaching a global audience.
- In Q1 Twitter continued to make it easier for people to follow topics, interests, and events on Twitter, via curated timelines of Tweets around breaking news events in different parts of the app, including the Home timeline and search results.
“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter CEO. “We grew our audience and engagement, marking another quarter of double-digit year-over-year DAU growth, and continued our work to make it easier to follow topics, interests, and events on Twitter. We also introduced a new framework to think more cohesively about the issues affecting our service, including information quality and safety. This holistic approach will help us more effectively address these challenges by viewing them through the broader lens of the health of the public conversation, and we’re encouraged by our initial progress in this area.”
The market cap of Twitter has now bounced back to around $25bn (as a proxy, Snapchat is now down to $13bn), and there seems to be a broader optimism around its strategy and focus since Jack returned as CEO.
Never a dull moment with Twitter, will continue to watch the business with great interest.
My recent meander through media with @adamf2014 for @EchoJunction podcast.
Loads covered & as always; presented more intersections to ponder. Fun!
Adam's a natural; great industry knowledge & awesome host. Worthwhile for media/marketing industry members https://t.co/oP73WJvGbq https://t.co/gG3BOqe3rL
— Gabbi Stubbs (@gabbistubbs) May 14, 2018
By Adam Fraser
As widely reported and discussed, in mid-April the major UK pub group Wetherspoon’s closed all of its social media accounts, covering its Facebook, Twitter and Instagram handles.
As a high profile business, making a controversial, somewhat contrarian move, the strategy invoked wide-ranging discussion.
- He had always thought the idea that social media was essential for advertising was untrue
- The increasing amount of time spent by staff dealing with social media messages
- Concerns about the security of data
- The unhealthy social media “compulsion” of many customers
- He was not convinced that being on social media sites brought any commercial benefit to the business
In summary, as headlined in this article in the UK Standard, “We’re quitting social media as its a waste of time”.
The company’s PR advisor chimed in that he wasn’t a fan of Twitter – “Give me a 200-word story in The Sun or The Times any day over a tweet.”
Instinctively the focus was on the megaphone – shouting at customers, reach and frequency. Brand-centric – what can social media do for ME? How can WE drive more sales?
The customer-centric view was largely forgotten. What do our customers need from us? How can we enhance the customer experience? The value of social listening to understand customer feedback and broader attitudes and sentiment. Answering customer queries on social media in real time on a channel of their choice. Listen and respond. Two ears and one mouth.
The overall commentary around the Wetherspoon’s decision was largely positive. I wonder how it would have differed from the lens of “Wetherspoons drops all focus groups and stops answering the phone”.
By Adam Fraser
The quarterly blogger routine. Facebook announces results. Change the headline from last quarter’s blog post. Look for new ways to describe the strength of financial and operating numbers without it looking like a copy paste job from three months earlier. Publish.
Suffice to say it was another extremely solid set of quarterly results from Facebook.
However, unless you have been living under a rock, you would know the context is very, very different this time. Facebook is in the midst of a privacy/data sharing crisis in relation to Cambridge Analytica, third-party access to its user data and its overall vetting model relating to both content and ads. The rearview mirror reflects the undoubted strength of its market-leading operating position, but will it be plain sailing from here? For the first time in a long time, the jury is out on this one. Some say nothing much will change, others predict an awakening of consumer consciousness to all things privacy and a material decline in user numbers and engagement (as well as possible impacts on margins, based on increased costs from higher manual content review processes). And of course, the threat of regulation looms large from a number of angles, following Mark Zuckerberg’s recent testimony to Congress.
Firstly, to the numbers. If you want to dive into detail, you can find the detailed financials, investor presentation and management conference call. For those without the time to review all of the detail, here are 10 key sound bites from the results:
- Monthly active users reached 2.20bn from 2.13bn last quarter (2.8% growth) and 1.94bn a year earlier (13.4% growth).
- Daily active users hit 1.45bn from 1.40bn last quarter (3.4% growth) and 1.28bn a year earlier (12.9% growth).
- A fascinating quote from Mark Zuckerberg on the changes coming in the future: “We are going through every part of our relationship with people and making sure we’re taking a broad enough view of our responsibility – not just to build tools, but to make sure those tools are used for good. This means continuing to invest heavily in safety, security and privacy.”
- Consistent with its commitments announced in recent quarters, Facebook is doubling their team on security and content review to more than 20,000 by the end of the year. This includes content reviewers with specific language skills to detect hate speech.
- Between WhatsApp and Facebook Messenger, people now send almost 100 billion messages every day. They also do more than 3 billion minutes of video and voice calling every day, making the Facebook group by far the largest network for video calling.
- Total revenue was $12.0bn (exceeding market expectations) versus $12.9bn in the prior quarter (a 7.8% decline, noting the seasonal factor) and $8.0bn a year earlier (a massive 49.0% growth) – generating a net profit of $5.0bn (reminder – in a single quarter!).
- Facebook has a reasonably balanced global spread with just under 50% of revenue coming from the USA and Canada. While a ratio that has remained reasonably consistent over the past 4 quarters, the share from the USA is showing early signs of decline.
- Average revenue per user was $5.53 vs $6.18 last quarter and $4.23 a year ago. Note, revenue per user is significantly higher in the USA/Canada ($23.59) compared to Europe ($8.12) and the Rest of World ($1.68).
- Facebook ended the quarter with a cool $44bn in cash, enough to buy both Twitter and Snapchat!
- Some interesting random stats: 200 million people are now members of meaningful groups on Facebook. More than 80 million small businesses around the world are using Facebook Pages. Mobile Ad revenue was $10.7 billion (up 60% from last year), contributing approximately 91% of total ad revenue. Over 18 million businesses are now communicating with their customers through Messenger.
Note, mobile usage of Facebook has now become so prevalent that Facebook no longer separately discloses mobile users. While it did, the number of users accessing via a mobile device was consistently over 90%
With revenue growth, user growth, strong margins and consistent cash flow, this is another powerful set of quarterly results. The rate of growth inevitably slows at the scale Facebook finds itself, but for now, the cash cow continues to produce.
However, there are some troubling lead indicators abound. A respected survey showed a declining use of Facebook in the USA for the first time. Some sort of regulation seems inevitable. The overall impact of GDPR on the business remains uncertain. Relationships with the developer community are also in flux in the current climate.
For a business of this scale and might, it would be a brave man to “call the top” and predict material declines from here. Yet, with the privacy genie finally out of the bottle, and regulatory headwinds, the waters seem choppier from here than they have done for some time.
By Adam Fraser
Scott Brinker, aka chiefmartec.com, has released his annual infographic into the marketing technology landscape (the one you see at almost every marketing conference on the planet with the tiny logos jammed in, that tends to get a “that’s insane” reaction).
Incredibly, it keeps getting larger and more complex. From 2,000 tools in 2015 to 3,500 in 2016, up to an amazing 5000+ in 2017 when the “Martech5000” was born. However, 2018 has gone up a notch again with an incredible 6,826 tools from 6,242 unique vendors. Wow!
From social media to newsletter marketing, e-commerce to CRM, all the subsections continue to grow. As one stark data point – the size of the 2018 landscape is equivalent to adding all of the martech landscapes assembled from 2011 to 2016 together.
I was lucky enough to have Scott as my very first podcast guest back in April 2015. Even back then – in a world of “only” 2,000 tools – we discussed the complexity of the market and whether consolidation was imminent. We discussed this again on the podcast in 2017 as we hit 5,000+ tools, exploring why consolidation was still seemingly not on the horizon.
It should be noted that the raw landscape doesn’t accurately reflect the sizes of the different martech companies. If they were to be organised by valuation, it would illustrate a classic long tail; a handful of multi-billion dollar giants in the “head,” quickly tapering out across a very long “tail” of thousands of smaller firms.
There are a number of drivers of this breadth and complexity in the marketing technology landscape – including (at a high level) low barriers to entry in a cloud-driven world, media fragmentation in a post-internet world, the rapidly changing consumer buyer journey, constant technology innovation and increasing private equity interest (2017 was a record year with over $14 billion invested in the sector).
The landscape is divided into subcategories. The largest category — the category with the greatest number of vendors — this year was Sales Automation, Enablement & Intelligence, with 490 solutions. Salestech is a big thing!
One final (also mindblowing) data point – the average enterprise uses over 1,000 cloud services, led by 91 in the marketing function. The world of the API – and stitching together best of breed solutions – is alive and well.
If you are feeling utterly overwhelmed by this landscape and what it means for marketing and IT professionals please know you are not alone! The basic premise remains – strategy first, technology second. Focus on your business objectives and your marketing strategy and execution. Then, and only then, start to think about how technology can enable and potentially turbocharge your business processes.
People, process and technology. A three-legged stool. In almost all cases the technology decision should come last not first.
By Adam Fraser
With an ongoing focus on shiny new toys and the “next big thing”, discussion on good old-fashioned search/SEO doesn’t seem to garner the share of voice and attention I always suspected it warranted within the marketing community.
Some new research from Shareaholic provides a fascinating and somewhat stark data point – Search has now overtaken Social (again) as the leading inbound traffic generator for websites.
The Shareaholic Traffic Report looks at externally referred traffic from 400+ million users to over 250,000 mobile and desktop sites. The data reveals “share of visits,” a percentage of overall traffic via direct traffic, social referrals, organic search, paid search, etc. The size of websites in the study varies from less than 1,000 monthly unique visitors to over one million.
Since 2014, Search had been behind Social in the share of visits but retook the lead in 2017, with the top 6 search engines driving 34.8% of site visits in 2017, compared to 25.6% from the top 13 social media sites.
Some key takeaways from the report were:
- The key driver of the declining social referral traffic was Facebook’s algorithm changes which led to a massive 12.7% decline in Facebook referral traffic from the same period a year ago.
- Users are spending less time on Facebook in general, and, when on there, more time on video and live streaming content which is less likely to link out to other pages.
- Within the overall decline of social referral traffic, Pinterest and Instagram increased their traffic generation, with Twitter and YouTube broadly flat (note search within Pinterest is becoming increasingly important).
- Google, in particular, benefited from the changes in social traffic; their dominant market share within search allowed them to reclaim their spot as the number 1 overall traffic referrer.
US thought leader Jay Baer wrote an interesting blog post on the four key reasons driving the decline in social referral traffic versus search, with the algorithm changes – particularly at Facebook – very much key.
This is an important data point and a reminder that Search should not be forgotten when assessing the marketing mix.