PBT Consulting

FACEBOOK FAILS AS AN AD PLATFORM, NEEDS BETTER TARGETING, MORE AD FORMATS, 3RD PARTY DATA ACCESS TO SUCCEED

Facebook fails as an ad company, although it generates the majority of revenue from advertising. The technology has not kept pace with explosive user growth, falling short in ad-targeting options and formats, according to analyses released Tuesday.

WordStream compared the format and ad performance of ads running on Facebook and Google Display Network.  In a report card, Facebook received the following grades:

• Advertisnig Reach/Revenue Growth - A+ and A-, respectively.
• Advertising Performance - B+ for "good effort,"
• Ad-Targeting Options - C
• Ad Formats - D+

Google received the following grades for the same items:  

• Advertisnig Reach/Revenue Growth - A+ and A, respectively.
• Advertising Performance - A 
• Ad-Targeting Options - B
• Ad Formats - A

It cost Facebook more than $1 billion last year to deliver ads, when factoring in engineers, technology and more, according to a Facebook video.

More than half of Facebook users -- 901 million monthly as of March 31 -- access the social site through a mobile device.  The social site estimates more than 500 million mobile monthly active users as of April 20 -- yet no mobile ad-targeting options exist, according to Larry Kim, founder of WordStream, a search engine marketing firm.  He said.  

"The site also lacks engaging ad formats critical to driving relevance, experience and click-through rates, such as animation or video ads." 

The industry average for click-through rates on banner ads stands at one-tenth of a percent. On Facebook, that average stands at half of the industry average, while the Google Display Network generates four times the amount. Larry Kim, founder of WordsStream said.

"CTRs measure relevancy, so if you have good targeting options and engaging ad formats, you would expect more people to click on ads." 

The average Facebook user spends 20 minutes per day on the site, but for the company to flourish as an ad platform to generate revenue it must keep better pace with the growth of technology.  Forrester Research analyst Nate Elliott believes

"Facebook needs to take marketing seriously."

In a U.S. Securities and Exchange Commission filing updated on May 9, Facebook explains that the "substantial majority" of its revenue comes from third parties advertising on Facebook.  

"In 2009, 2010, and 2011 and the first quarter of 2011 and 2012, advertising accounted for 98%, 95%, 85%, 87%, and 82%, respectively."

Worldwide advertising revenue at Facebook should reach $5.06 billion this year -- up from $3.15 billion, according to eMarketer. The research firm said Facebook's share of overall U.S. display ad market revenue grew to 14% in 2011, up from 11.5% in 2010.

Facebook's share of the U.S. display market ad revenue should grow to 16.8%. By comparison, Google's share of U.S. display ad revenue should reach 16.5% in 2012, up from 13.8% last year.

While Facebook generates the majority of its revenue from ads, it lacks the ability to retarget ads on desktops and mobile devices, which would improve return on investments for brands. The open social network also does not provide integration to target ads across the Internet.

Kim believes Facebook has a lot of work to do before it can sustain revenue growth from online advertising. He highlights that work in the following infographic by WordStream. 

It remains to be seen, based on Zuckerberg's comments to shareholders about not initially designing the social network as a company, if they even want to become an advertising company at all, he said.

COMMENTARY:    From the above infographic comparing Facebook vs Google, you can clearly see why Facebook is a failure as an advertising platform.  Facebook's CTR's are scary.  Google's aren't that much better. 

If you are not familiar with how Facebook's advertising works you should read About Facebook Advertising  for general information, including what personal information (if any) Facebook provides advertisers about you, the difference between regular ads and sponsored stories, and Facebooks online ad creation tool. 

Perhaps the biggest change to Facebook ads is the announcement at the end of February 2012, that classic premium ads (including premium like. premium event, video comment and premium poll) would no longer be available, but replaced by new upgraded premium ads.  

Facebook Premium Ads Overview

The new upgraded premium ads will originate from Facebook Pages. In other words, advertising on Facebook will take place in the newsfeed and the line between paid, owned, and earned become virtually unrecognizable.

Why is this a big deal? At least two reasons… As a user, ads will be unavoidable because they will be in the news feed as opposed to exclusively in the sidebar (right margin).  As an advertiser, the new Facebook ads work better… Facebook reports better reach, engagement, etc.

New upgraded premium ads The ad is created by the content that you post Page post.  Anything that you post on your Page, you can turn into an ad.

New upgraded premium ads will allow advertisers to choose from six kinds of page posts:

• Status updates or text 
• Photos 
• Videos 
• Links 
• Questions
• Events

Facebook makes the following claims to advertisers using the new upgraded premium ads:

• Target Anyone - Upgraded premium ads can be targeted to anyone you want.  All available targeting options can be used.
• More Social For Friends of Fans - When the person seeing your had has friends who are fans of your Page, Facebook will automatically expand the ad with enhanced social context about those friends, at no extra cost to you.
• More Engagement Points for Fans - When fans see your ad, they'll see an expanded interface below the ad that lets them like or comment on the post directly from the ad. 

New upgraded premium ads come in the following sizes depending on your news feed content:

• Photos - Up to 90 characters of text, 168 x 128 pixel thumbnail, 43 aspect ratio.
• Videos - Up to 90 characters of text, 185 x 104 pixel thumbnail, 16:9 aspect ratio.
• Questions (Polls) - Will show exactly 4 answers, or 3 plus a "see more" link.
• Status - Up to 150 characters of text, No additional media.
• Event - Up to 90 characters of text, 75 x 75 pixel thumbnail.
• Link - Up to 90 characters of text, 75 x 75 pixel thumbnail.

New upgraded premium ads come with certain pluses, minuses and limitations:

• Reporting & Metrics - You receive the same Facebook reporting options as you do now with Classic Premium Ads (Ads and Sponsored Stories).  You can see the same metrics for these ads as before.  
• Third Party Tracking - Facebook only allows impression tags for premium.  Facebook does not allow click tags for Premium Page Post Ads at this time.
• Creative Delivery - The Facebook ad team will provide advertisers with specific instructions based on your needs for each campaign.
• Reaching Non-Fans - New premium upgrade ads will allow you to reach non-fans.  Ads and featured stories from Page posts allow you to reach anyone, just like with any ad.  This means you can target any segment of the Facebook user base, including fans, non-fans and any other targeting clusters desired.  Facebook also provides the option to omit your ads from being viewed by your fans within your news feed, but can be viewed only by non-fans in their news feeds. 

Additional information on how to create an ad or sponsored story on Facebook can be found by clicking HERE, but don't bitch if the ads don't produce results.

Facebook has also received recent criticism for failing to produce a social commerce environ-ment. In a blog post dated February 27, 2012, I reported that The Gap, Nordstroms and Penneys had abruptly closed their F-commerce sites after only just a few months due to lack of interest or a quantifiable ROI.  In the commentary section of that blog post, I provide a huge body of evidence (links) that concluded that Facebook stores don’t work.   Furthermore, Facebook’s ad platform is expensive and doesn’t convert.   

Courtesy of an article dated May 15, 2012 appearing in MediaPost Publications Online Media Daily 

GENERAL MOTORS SAYS 'NO MAS' TO FACEBOOK, PULLS ALL FACEBOOK ADS, SAYS ADS WERE INEFFECTIVE, BUT WILL KEEP FAN PAGE

Just as Facebook prepares for its highly anticipated initial public offering of stock, the effectiveness of advertising on the site is under scrutiny, thanks to General Motors' decision to pull its paid advertising.

GM said this week that while it will continue to use Facebook's free social-media services such as fan pages, it is, in its word, "reassessing" the use of paid advertising on the site.

GM spokesman Tom Henderson wouldn't disclose what factors led to that decision. The Wall Street Journal, citing unnamed sources, said GM executives thought Facebook ads had little effect on consumers' car purchases.

Facebook would not comment.

 

GM's decision not only put Facebook's ad effectiveness into the spotlight, it also raised questions about management's ability to service important blue-chip clients.

Technology analyst Rob Enderle of the Enderle Group says.

"They clearly mistreated their customer.  Even Bill Gates had to learn how to kiss people's butts."

The public falling-out could have come from Facebook not producing a strong enough ad formula to meet GM's business goals.

Enderle says.  

"At a lot of these conservative companies, these guys have to show (a return on investment).  You can't just say that 'Facebook ads make us look trendy.' "

Yet proving that social-media advertising works is incredibly difficult to do, says Jed Williams, an analyst at media research firm BIA/Kelsey.

The big problem Facebook and many other social-media sites have, he says, is that they don't have consistent, clear-cut metrics that prove advertising on their sites works.

He says.  

"They need to create a clear set of tools that show return on investment.  They have to demonstrate that, yes, that (ad) performance can be consistent and reliable."

By traditional measures — such as how many people click on an ad — Facebook doesn't look very effective. Nearly 60% of Facebook users say they never click on ads or sponsored content, according to a new poll from the Associated Press and CNBC. Another quarter rarely do.

Debra Williamson of research firm eMarketer says that low click-through rate has to be considered alongside other measures, depending on what the marketer's goal was, such as whether a brand gained more Facebook fans or if a game developer got more people to install a game.

Overall, it is "difficult to know" how effective Facebook advertising is, she says.

Facebook and other social-media sites are trying to address some client concerns by introducing new advertising formats. For instance, Facebook's "social context" feature allows an advertiser to show users which of their friends have already interacted with the brand by "liking" it or posting about it.

As social-media marketing becomes more nuanced, with new features and ad formats, some client fallout is expected, says Clay McDaniel, CEO of social-media agency Spring Creek Group.

McDaniel says.  

"Social-media marketing has gone from sheet cake to layer cake — it's multilayered.  Because social-media marketing is maturing, it's natural that some brands are going to shift their marketing investment mix."

And while some companies are leaving Facebook, many are increasing their ad investment in the site.

In the first quarter of 2012, Facebook had $1.06 billion in revenue. Of that, $872 million was from advertising.

The rest comes from Facebook's share of revenue when people purchase virtual goods for games such as FarmVille. That ad revenue is up 37% from the first quarter of 2011.

Facebook is the largest publisher of online display ads — static or animated banners. It published 28% of all such online ads last year, according to research firm ComScore.

Going forward, the ad landscape looks healthy for social-media providers. BIA/Kelsey forecasts that social-media advertising revenue will swell from $3.8 billion in 2011 to $9.8 billion in 2016.

Ford is one company that has raised its expenditures.

The automaker increased its spending on digital display advertising at the beginning of 2012, says social media head Scott Monty. Those ads are now 25% of its advertising budget.

Facebook is in that mix, but Monty wouldn't break out spending on the site.

Monty says.  

"We can't judge GM's decision. We're just focusing on what's right for us.  When you have 900 million people on Facebook and 500 million log in every day, it's just too big to ignore."

COMMENTARY:    I am not surprised to learn that a Blue Chip company like General Motors decided to pull all its ads from Facebook because the ads were ineffective in generating revenues or a measureable ROI.   I think we will be seeing a lot more of this until Facebook can provide reliable ad measurement metrics and quantifiable ROIs on advertising campaigns.  

In a blog post dated January 4, 2012 titled, "It's Official: Social Media Is A Failure In Generating Sales, Why This Happened, How-To Use Social Media Properly To Increase Sales,"  I built a strong case against social media to ever generate meaningful revenues or an ROI for advertisers.  The body of evidence against social media is just too overwhelming to ignore any longer.  

What Wall Street and Investors Are Saying About Facebook

Institutional investors might be sold on the Facebook (FB) IPO, but most consumers think the social networking company's stock is doomed to fall after its debut.   

• A survey of 1,500 individual investors and traders conducted on Tuesday and Wednesday, and released Wednesday by WhisperNumber.com, raised some eyebrows with these findings:  
  • 49% think Facebook is a passing "fad."
  • 32% rate Facebook a buy after its IPO.  
  • 68% said Facebook is not a buy.
  • 35% said yes to whether Facebook is a long-term investment.  
  • 65% said no to whether Facebook is a long-term investment.  
• An AP-CNBC poll found that investors have mixed opinions on both investing in Facebook and its leader, Mark Zuckerberg, and strong opinions when it comes to trust, purchasing and advertising on the site. Key findings include: 
  • About 8 in 10 Facebook users surveyed say they hardly ever (26%) or never (57%) click on online advertising or sponsored content when using the site.  
  • Most (54%) say they would not feel safe purchasing goods and services on Facebook. Among the site's most frequent users, half say they would not feel safe making purchases through the site.
  • About half (51 percent) say Facebook stock would be a good investment to makewhile 31 percent say it would not be so good and 17 percent just aren't sure. 
  • Among those who own stocks, bonds or mutual funds, 54 percent say Facebook would be a good investment, 34 percent say it would not. Active investors (38%) are more likely than other investors (30%) to say it wouldn't be a good investment.
  • Half of Americans (50 percent) say a Facebook valuation of nearly one hundred billion dollars - larger than Ford and Kraft but smaller than Google and Coca-Cola - would be too high. Among active investors, 62 percent say they think Facebook will be overvalued, 27 percent think it will be fairly priced and 5 percent believe it will be undervalued. 
  • A majority (59%) of Facebook users do not trust the site with their personal information and have little or no faith in the company to protect their privacy.  A slight minority (13%) trust the company completely or a lot. 

General Motors is no patsy, they are the third largest advertiser in the U.S., and the $10 million that they expected to spend on Facebook is a serious blow to Facebook.  The fact that Facebook refused to comment on the GM ad cancellation is probably a good strategy coming on the eve of their IPO scheduled on Friday, May 18, 2012, but the social giant cannot afford to lose major Blue Chip accounts like GM.

In spite of the bad news from the surveys and loss of the GM account, the Facebook IPO will probably be very successful.   Investors can't get enough Facebook shares, which is why Zuck agreed to increase the number of shares to be floated in tomorrow's IPO from 337 million to 422 million.     

Courtesty of an article dated May 16, 2012 appearing in USA Today

BIA/KELSEY FORECAST: SOCIAL MEDIA ADVERTISING WILL DOUBLE FROM $4.8 BIL IN 2012 TO $9.8 BIL IN 2016

While GM may be disappointed with Facebook, plenty of other advertisers are still interested in social media, judging by the latest forecast from BIA/Kelsey, which predicts total social media advertising revenues will more than double over the next four years, jumping from $4.8 billion in 2012 to $9.8 billion this year. This includes both display advertising, which is predicted to grow from $4.6 billion to $9.2 billion, and non-display, on track to increase from $230 million to $630 million over the same period.

That represents a sizeable chunk of all online ad spending -- but not necessarily a big increase proportionally speaking. In a separate forecast, eMarketer sees total online ad spending growing from $32 billion this year to $62 billion in 2016. If both predictions turn out to be right, that means social media’s share will increase from 15% to 15.8% over the same period -- a marginal increase for what is supposed to be a hot new sector in a burgeoning medium (it’s worth noting that the eMarketer forecast is also lower than some others, with Forrester predicting $76.6 billion in overall ad spending by 2016).

Meanwhile, eMarketer predicts total U.S. ad spending will increase from $169.5 billion in 2012 to $196.7 billion in 2016. Thus online’s share of total ad spending will grow from 18.9% to 31.5% over this period, while social’s share of total ad spending will grow from 2.8% to 4.9%. In other words, despite its apparently impressive growth rate, according to these forecasts social media will not capture a larger share of online ad spending, and will be a fairly minor contributor to online’s proportional growth relative to other media; rather, it is just sort of “along for the ride.”

All this makes interesting reading following a fairly steep downward revision in growth projections for Facebook, which dominates social media ad spending: as noted in yesterday’s column, eMarketer recently revised its forecast for Facebook’s 2012 advertising revenues down from $6.1 billion to $5.06 billion -- a 17% reduction, suggesting advertisers may not be signing up for Facebook in quite the numbers you might expect based on all the buzz.

Courtesy of an article dated May 16, 2012 appearing in The Social Graf and an article January 19, 2012 appearing in Marketing Land

FACEBOOK REACHES 488 MILLION MOBILE USERS, 901 MILLION USERS, WITH THE STATS ABOUT FACEBOOK'S MOBILE APP USERS

Click image to view Facebook for Mobile page for iOS and Android devices 

With the Facebook IPO coming, you asked for more numbers on Facebook and its mobile usage.   

Facebook hit 488 million mobile users which is absolutely amazing! There is no other app in the world that would have that many mobile users. Facebook has 50% of all its users on mobile phones and the reach is even bigger in countries such as South Africa, Nigeria and Japan with 70 – 80% (!!!) This number makes them really intense Facebook mobile countries.

Facebook Mobile Infographic

Check out, Share and Like the infographic below on your profiles! Aren't these stats gorgeous? If that´s not enough, stay tuned for the launch of an entire product with more advanced data like this, coming soon!

Click Image To Enlarge

COMMENTARY:  According to digital research firm comScore, the average amount of time spent accessing Facebook (applicable in the US) using a smartphone device was 441 minutes in March 2012, while a computer during the corresponding period of time is numbered at 391 minutes. This goes to underline the fact that there are more and more folks accessing social networks as well as other websites using a mobile device instead of the traditional desktop computer.  comScore’s most recent Mobile Metrix 2.0 report pointed out this fascinating figure, and according to Facebook,

“If users increasingly access mobile products as a substitute for access through personal computers and if we are unable to successfully implement monetization strategies for our mobile users. Our financial performance and ability to grow revenue would be negatively affected.”

Facebook said the same thing in their S-1 IPO filing with the SEC.   Facebook does not advertise to mobile users yet, but having 488 million users accessing its site each month is pretty impressive, and represents a captured audience.  

Just by coincidence, Facebook today (May 9, 2012) amended its S-1 filing with the SEC to emphasize how the shift of its users to mobile devices is hurting what it can charge for ads, threatening its long-term revenue.

Facebook has already highlighted that it so far has no way to monetize its growing number of mobile users, and today's additions to the document emphasize that issue.

It added the following to the "risk factors" section of the document:

"We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected."

The company had 488 million monthly average unique users to its mobile products in March. That same month, Facebook started adding its Sponsored Stories to mobile News Feeds as a way to make money from mobile users.

It's too early too tell if that will work, and Facebook is forthcoming about its desire to favor "user engagement over short-term financial results." In other words, it's going to be careful when it comes to pushing certain features onto people's phones and tablets.

Facebook writes in one of today's S-1 filing amendments,  

"As an example, we believe that the recent trend of our DAUs increasing more rapidly than the increase in the number of ads delivered has been due in part to certain pages having fewer ads per page as a result of these kinds of product decisions."

This trend has continued to date in the second quarter.

For those of you not accessing Facebook on a mobile device like an Apple iPhone or iPad or Android-based smartphone, here are some screenshots for the applicable apps.

Facebook Mobile App for iPhone, iPad and Android Phones

View more documents from turk5555.

Courtesy of an article dated May 8, 2012 appearing in Socialbakers.com and an article dated May 9, 2012 appearing in C|NET

 

FACEBOOK LAUNCHES 'SOCIAL DEALS' GEARED TOWARDS SOCIAL EVENTS, FACEBOOK CREDITS TO BE USED FOR PAYMENT

While Facebook local deals have been in the works for some time, Facebook social deals are brand new. There is already a huge buzz surrounding this new feature release. Imagine all the power of Facebook, all the interconnectivity, all the viral components working together to create unheard of group deal potential! That is what we are talking about here folks.

So let’s talk a little bit about how this works because there are some distinctions between what Facebook is trying to accomplish and what companies like Groupon and Living Social are doing. You may want to consider this as a viable local social media advertising platform.

Facebook Deals

Check-In Deals Stay the Same

Right now you can check in to a Facebook Places location through Facebook and unlock certain deals. This is really similar to how foursquare deals work. Basically, when you go to your favorite restaurant you log on to your phone, check in and if they have a deal set up you can unlock it and use it. This part will not really be effected.

Social Deals are Different

The new social deals work differently than the check-in deals. Social deals are really more geared towards events and experiences.  So for instance, a good social deal would be a concert or beer festival.

The most interesting part about these social deals is that you cannot pay for them with your normal credit card, you need to use Facebook Credits. Yep, Facebook Credits   Here is a quote on this from our friends at Mashable:

“By contrast Facebook’s new Social Deals, like Groupon or LivingSocial, must be purchased up front using money or Facebook Credits (the first use for real-world products/services). You actually buy a voucher that is then redeemed offline.”

As of right now this new feature is only available in a few select areas, to a few select companies. Before we go to much further, feel free to watch a video on Facebook social deals. Then you can read the rest of the commentary and important points below.

 

Areas Where Facebook Social Deals are now Being Offered:

• Atlanta
• Austin
• Dallas
• San Diego
• San Francisco

Companies Allowed to Run the First Facebook Social Deals

• Gilt City
• Home Run
• FreshGuide
• PoweredByTippr
• KGB
• Plumdistrict
• Zozi
• OpenTable
• ReachLocal/DealOn
• Viagogo
• aDealio

Why Could this be Better Than Groupon?

Let’s get one thing straight. Facebook has stated clearly that they are not focusing on group deals for things like dental work, laser surgery, etc. They are focused on group deals for inherently social events. This allows the new feature to play into the social nature of the site. We’ve heard time and time again that high school and college parties get way out of hand with Facebook invites. Imagine this happening for your business!

The best part about these group deals is that they can support future residual marketing. What do I mean by that? Basically, you run a social deal. But a large focus of the social deal is the information offered on your Facebook page. So, when you run this social deal you are directing people towards your page and then people turn into fans of your page. Now next time you run a deal or an online promotion you can reach out to this new community for free to promote it. Pretty cool right?

COMMENTARY:   The daily deals space was crowded before, but with daily deals leaders Groupon and LivingSocial, Google Offers, regular Facebook Check-in Deals and now Facebook social deals, the deals market is getting outrageously crowded.   There are already signs of a shakeout in the daily deals segment, 

With Facebook Deals, users can also subscribe to emails, but the social deals can also appear in the news feed. That’s one area where Facebook should have a huge leg up on Google and daily deals giants Groupon and LivingSocial

Businesses are still getting used to Facebook marketing. Getting seen in the news feed is perhaps the most important part of that. This week, Facebook marketing firm Buddy Media released a report, giving brands tips for capitalizing on Facebook’s EdgeRank algorithm (the basis for what Facebook shows users in their news feed).

Deals will present a whole new option, and deals in general have already proven to be massively popular among consumers. Many Facebook users check their news feed multiple times throughout the day, which should ensure conversions, as long as the deals are attractive. 

After the phenomenal maturation of the daily deal industry seen in 2011, a new paradigm will usher in programs that merge content with a seamless deal delivery experience. The industry focus will evolve from deal sites and daily emails to other messaging formats, providing relevant deals where, when and how consumers want them. The year 2011 was just Phase One of group buying. Phase Two begins in 2012. Here are some predictions for what portends to be another technologically eventful year in group buying, and reasons why publisher may stand to gain the most.

200 “Groupon Clones” Will Bite The Dust As Consolidation Mode Takes Off

With more than 600 companies currently operating in the group buying space, industry consolidation is going to become a very real threat to many daily deal sites. According to Yipit.com, over 170 deal sites failed in 2011. Next year the trend will continue as large companies purchase smaller rivals and other generic deal brands go belly up. Over 200 of the ‘me-too’ deal sites may close their doors within the first six months of the New Year. Meanwhile, publishers and niche sites that have found a way to integrate daily deals into their existing content, rather than just photocopying Groupon’s model, will not only survive but thrive.

2012 Is The Year of the White Label

White-label providers (e.g. Groupon, LivingSocial, Analog Analytics, Group Commerce, Nimble Commerce) will reign supreme in 2012. According to Yipit research, in 2011 white labels exhibited a transaction volume of 5-10 percent, but it may double in 2012 as much as 20 percent. Media companies, niche bloggers and digital content creators have credible brands, local sales forces and engaged audiences–critical components that large horizontal sites spend hundreds of millions to grow. The only piece these companies are missing is the technology on which to build a deal site. In 2012, white label technologies will allow publishers to prevail after the Groupons of the world have exhausted their resources acquiring new customers and finding new merchants.

Big Branded Sites’ Futures Lies In Instant Contextualized Deals 

2012 will be the year big brand sites (e.g. Groupon and LivingSocial), which source hundreds of deals to large audiences with diverse interests, establish a profitable business model. But profits will only follow the ability to tailor content, matching the right customer with the right merchant. Simply put, the daily space will be dominated by the players who understand how to effectively merge content and commerce into a seamless experience, allowing consumers access to relevant deals anywhere and at any time. In 2012, Groupon and LivingSocial will make massive investments in their mobile capabilities, while Google, Facebook and other major audience aggregators will extend their commitment to the integration of location, advertorial, mobile and contextual commerce.

The future group buying landscape will be marked by consolidation, significant developments in offer targeting and the introduction of new deal delivery technology.  2011’s success, marked by the highly successful IPO of Groupon, sets the stage for other daily deal players to be taken seriously and carve out a niche of the market for their own.  2011 was not the ending for daily deal industry; rather, it’s merely the beginning.

Courtesy of an article dated April 26, 2012 appearing in WebProNews and an article dated December 20, 2011 appearing in Folio Magazine

 

IS PINTEREST A GOOD SOCIAL MEDIA MARKETING INVESTMENT?

But, is all the hype warranted? I scoured the web looking for statistics on Pinterest, and I came up with some pretty interesting stuff, which I have pinned right here.

Recently, Pinterest has seen its growth skyrocket. There is no shortage of stats showing that it is not just one of the fastest growing Social Networks, but one of the fastest growing sites on the internet. There is also analyses showing that the majority of users (at least in the US) are women, aged 25-34, that they spend more time on Pinterest then other sites, and that are very loyal. All interesting, especially for a site that is still in beta.

But, I wanted to zoom in on 2 interesting data points:

1 – A study by Shareaholic.com states that, for Q1 2012, Pinterest was responsible for 0.9% of referal traffic to sites, greater than Twitter’s 0.85% and 1/7 of Facebook’s 6.46%

2 - Publicly released information says that number of active users for each site is as follows:

• Facebook – 901 million*
• Twitter – 140 million
• Pinterest – 10 million

* No of registered users as of March 31, 2012.  Daily active users were 483 million at the end of January 2012. On page 44 of Facebook’s recent prospectus for sale of stock to the public (the first step in an initial public offering, or IPO), the company defines an ‘active user’ as not only people who visit facebook.com or its mobile version (which would be the standard definition of ‘active user’ in most Web marketing circles), but also as anyone who actively engages with the site through one of Facebook’s APIs (application protocol interfaces) through a third party site or tool.  I don't have to tell you how I much I disagree with Facebook's definition of active users.

In essence, Pinterest user count is only 7% that of Twitter, but sends more absolute referral traffic than Twitter. Also, with only 1% of Facebook’s user count, Pinterest sends 13% of the traffic that Facebook does.

So, why does Pinterest drive so much traffic per user? On other social networks, people might read the headline that is shared, and move to the next. On Pinterest, the “Pin” really acts as a visual bookmark. As a user, if you want the context behind the image, you often need to click on it. As well (and this is just conjecture), Facebook and Twitter content is shared in a linear fashion; and once shared it slowly expires. On Pinterest, content is discoverable for a longer time. For example, I have never looked backwards and read all of someone’s tweets.  On the other hand, when I find an interesting Pinterest page, I usually devour all the content they share.

On another note, in the UK, Pinterest is used mostly by men. I expect the shape of the network to change as they move out of private beta and into general availability. I do expect there will still be a female bias though it will probably be less extreme.

I expect to see a lot of interesting things happen with Pinterest over the next several months. Many brands already have a presence on the site, and many more will start. Do you have a plan for Pinterest?

COMMENTARY:   In a blog post dated February 1, 2012, I first reported on this incredible up and coming social network called Pinterest.  Its lightning quick popularity and 7.2 million users at the end of December 2011 was quite impressive.  Pinterest is a private, by invitation-only social network, but I was quickly accepted shortly thereafter.  What I didn't know at the time that nearly 90% of users are female between the ages of 25-34.   

In a blog post dated February 14, 2012, I reported that AppData had estimated that Pinterest had 10.4 million users, and 9 million monthly-connected Facebook users, and that 97% were female.   Even more impressive.

In a blog post dated February 12, 2012, comScore and Medi Metrix reported that Pinterest users spent an average of 80 minutes on the new social network during the month of February.  This ranked Pinterest third behind Facebook (423 minutes per month) and Tumblr.com (151 minutes per month).  

Click Image To Enlarge

Pinterest continues to experience steady growth and probably well over 12 million users, but I have a feeling that pinning things has a short shelf life and the number of users will eventually peak. When 90% of users are female, its obvious that as a marketing platform for advertisers, Pinterest may not be a great investment.  How do you tell the difference between an ad and a cute image?

Courtesy of an article dated April 29, 2012 appearing in Eloqua The Power To Succeed

 http://mashable.com/2012/02/28/pinterest-user-engagement/

ADVERTISING AGENCIES ARE STEADILY MOVING INTO THE INTERNET AGE, SPENDING MORE ON ONLINE ADVERTISING

The cast of "Mad Men" looking sharp in their 1960's outfits (Click Image To Enlarge) 

Long criticized for hanging onto the Mad Men era of advertising for far too long, ad agencies are steadily moving into the Internet age, according to data released today by Advertising Age.

The weekly magazine said a little over 30% of agencies’ revenue last year, or $10.1 billion, came from “digital,” up from 28% in 2010. The data is drawn from about 1,000 agencies and holding companies.

Advertising agencies are going digital.  In 2011, 28.0% of advertising agency revenues were from online ads, projectred to grow to 30.3% in 2012 (Click Image To Enlarge)

Overall, digital revenues rose more than 16% last year, with digital-focused agencies such as those focused on search, social, and mobile taking nearly $6 billion of the total.

Still, large agency holding companies have reported similar percentages, says Ad Age. Publicis Groupe has said digital comprised nearly 31% of last year’s revenues, up from 28.0% in 2010. WPP said “direct, digital and interactive” revenue was nearly 30% of revenues last year, up about a percentage point.

Of course, you’ll know ad agencies have really embraced digital when they stop using that dated word, which conjures up not so much Google and Facebook but a defunct Massachusetts computer maker swallowed up long ago by two other tech companies.

COMMENTARY:   In a blog post dated April 21, 2012, I reported that online advertising for the year 2011 reached $31.7 billion.   

Search advertising continues to dominate growth in online ads, even gaining a little market share over other types of advertising in 2011, according to a biannual report released April 18, 2012 by the Interactive Advertising Bureau (IAB). But the biggest growth story is mobile ads, which saw triple-digit gains last year.

According to the IAB report, available in full here along with accompanying presentations, overall online ad revenues rose 22% over 2010, to $31.7 billion. That catapulted online advertising past cable TV advertising for the first time.

Click Image To Enlarge

Highlights of the report:

• Mobile experienced the fastest growth of all categories – triple-digit growth year-over-year – up 149 percent to $1.6 billion in full-year 2011 from $0.6 billion in 2010.
• Digital video, a component of display-related advertising, saw a significant uptick of 29 percent year-over-year, bringing in $1.8 billion in revenue in 2011 compared to $1.4 billion in 2010.
• Search revenues in 2011 totaled $14.8 billion, up almost 27 percent from $11.7 billion in 2010.
• Display-related advertising revenues in 2011 totaled $11.1 billion or 35 percent of 2011 revenues, up 15 percent from $9.6 billion in 2010.
• Retail advertisers continue to represent the largest category of internet ad spending, accounting for 22 percent in 2011, or $7.1 billion, up from 21 percent ($5.5 billion) reported in 2010.

Also interesting: Despite lots of talk lately about brands looking to move dollars from TV to online, performance-based, usually direct-response ads–those measured by overt actions such as clicks–are still gaining online vs. impression-based ads usually aiming at branding. For the time being, broadcast and cable TV still rules for brands.

Courtesy of an article dated April 30, 2012 appearing in Forbes

 

PETER SHANKMAN ON FACEBOOK MARKETING, "LESS IS BETTER" AND "SHARING FOR THE SAKE OF JUST HEARING YOURSELF TALK IS POINTLESS"

So, what’s the best way to market your brand on Facebook? According to Peter Shankman, an entrepreneur and venture capitalist with a hearty background of marketing and consulting under his belt, the answer is actually pretty easy:

“Sharing for the sake of just hearing yourself talk is pointless.”

Yes, the key to doing more is doing it with less. With all of the changes that have been implemented among Facebook Brand Pages within the last year, from the end of Facebook Discussions and Reviews in October to the roll-out of Timeline for Brands this spring, it’s hard to keep track of what’s actually working for brands on Facebook. The most recent numbers actually indicate fan growth slowed with the Brand Timeline switch. But thinking smart transcends those changes — and never goes out of style.

Peter Shankman

Shankman explains.

“You want to engage your audience and make sure that they feel like they’re apart of something — not just being marketed to.  Then they will do your PR for you.”

Shankman’s experience with brands runs deep. The former journalist and founder of Help A Reporter Out has written two books on marketing and customer service in the social media world — Customer Service: New Rules for a Social Media World and Can We Do That?! Outrageous PR Stunts That Work — and Why Your Company Needs Them. He’s also frequently globetrotting to consult and speak on PR and social media, and has worked with major companies, such as American Express and Disney. through his company, The Geek Factory.

Mashable spoke with Shankman about the inner workings of Facebook marketing and what users really want to see on your brand page.

Want to Lose Followers? Be Repetitive

It’s really true that in life, one size does not fit all. The same can be said about your social media networks, too. Shankman says that nothing bothers him more than seeing brands post repetitive content on every social platform available — including their Facebook Brand Timeline.

He says.  

“If you’re pushing the same crap onto your Facebook, you deserve to get your ass kicked.”

Instead, Shankman advises to place special content onto your Timeline that can engage users in a unique way — not just spamming the same information over every platform available. That way, when fans know what kind of content to expect from your page, they will know to return to your brand site for specific engagement instead of clicking the back button.

Shankman explains.  

“Let it be something your audience wants to see, that they’re excited about.   When you have those kinds of things, that’s when you want to share.”

Nothing Smart to Say? Don’t Say It at All

Shankman says that the best way to produce smart content is to engage in a conversation with your fans. Asking questions about the quality of the brand or polling users about what they want to see from a service are always more engaging than just pumping out promotional material.

Shankman says.

“You have to engage and you have to respond.  It can’t just be about posting ‘Hey! 10% off for the next five minutes!’”

But even a careful and thoughtful dialogue on a Brand Page won’t yield rainbows and sunshine all the time.   Shankman admits that every brand will have its haters or vocal fans who have had a bad experience with a service or product. But, don’t just ignore and delete the complaints of your naysayers just because your Timeline is a finite medium. He says that mistakes are often best received by fans when they’re approached head-on — and with transparency.

He advises.  

“Work with them.  Be honest and say, ‘Hey! We didn’t do this right and we’re trying to make it better.’”

Keep it Simple, Stupid

So what content actually works for brands? Shankman advises that content should be tailored to your audience, not just the things that you find interesting about your own brand. He adds that it’s also unwise to attempt to treat your Brand Page simply as a satellite to your company’s blog or website.

He says.

“Facebook is an entirely different animal.  You can’t just repopulate your entire website onto it.”

So if promotional material can fail and the copy you already have can fail, what do you have left? Shankman says that no two brands are alike, so there’s no panacea for every Brand Page on Facebook. In fact, the easiest way to find out what does work on your company’s Brand Page is to ask the fans that frequent it.

Shankman says.

“The best way to give information to your audience is to find out how your audience wants it.  You’ll never go wrong with that.”

Conclusion

Shankman says that, in short: It’s not about you, it’s about your audience. Shankman says the biggest mistake that brands make is self-absorption — if you make your content for yourself and not for your fans, you’re going to motivate them to click the back button and maybe remove you from their feed entirely. Instead, treating Facebook like the unique medium it is can help your brand’s social media reputation in the long run — and perhaps motivate your fans to evangelize your product and influence their own circles. As Shankman says, “Give them reasons to want to be there and to want to talk to other people.”

COMMENTARY:  If I were to add anything to what Peter Shankman said, it is that Facebook is the wrong platform for selling anything.  If you've followed my blog posts, I have been pretty vocal about about social media platforms and their failure in generating sales, and very critical of the ad-supported revenue model utilized by Facebook and other social networks.  The viability of Facebook commerce or F-commerce is also being questioned with several large retailers closing down their Facebook stores abruptly.  However, for engaging and sharing with your fans, creating brand awareness, conducting promotions, contests and sweepstakes, creating buzz and word-of-mouth, providing customer service feedback, conducting marketing research, and offering social games (Zynga has built its entire business on Facebook), then Facebook is pretty good.

Courtesy of an article dated April 26, 2012 appearing in Mashable    

9 PRINCIPLES FOR GREAT BRANDING BY THREE OF THE WORLD'S BEST PRODUCT DESIGNERS

We all know great design has a critical role to play in building a great brand. But how do we go about making that happen? I recently had the opportunity to speak to three top designers about that very question: Robert Brunner, founder of the design shop Ammunition and author of Do You Matter: How Great Design Will Make People Love Your Company; Joe Doucet, founder of Joe Doucet Studio and David Hill, vice president of design at Lenovo and author of the Design Matters blog.

Through these conversations, it became clear that the link between design and branding is important, and that having a top design team is to crucial to having a winning brand.

Here's what I learned:

1. Branding and design are, to a large extent, inseparable.  Brunner says.  "A brand is not your logo or ID system.  It's a gut feeling people have about you. When two or more people have the same feeling, you have a brand. You get that feeling via smart design, which creates the experiences people have with the brand. Everything you do creates the brand experience, ergo design IS your brand."
2. If design is the brand, stop thinking of branding and design as distinct disciplines.  Doucet says.  "It's all about integrating design and brand.  We need to cease thinking of them as different disciplines. The essence of the Apple brand comes through its design. Take the logo off a BMW and you still know it's a BMW."
3. Brands need to create an emotional relationship with people.  Brunner says.  "We are all emotional beings and we have emotional relationships with brands we trust. Designers need to make that happen. A designer must take the values and assets of a company and transform them in a special way that connects with people emotionally."
4. Designers need to "get" the essence of the brand.   Hill points out.  "For designers to build a great brand, they have to understand it.  You need to understand its history, its values, and what it means to people. Can you imagine designing the latent Jeep without understanding the brand archetype of what it means for a product to be a Jeep?"
5. Design needs to be strategic from the outset.   Hill said.  "For design to have a major impact, it's got to get involved at the strategic level.  It can't be an afterthought or superficial trappings to be put on post product creation. Samsung's brand became powerful only after they put a Chief Design Officer in place and made it a priority for the company."
6. Integrate design early in the process to drive innovation and create solutions. Doucet says.  "Good designers approach design as an opportunity to ask questions.  Solution generation starts by questioning initial assumptions. Rather than ask myself 'How should I design Widget X?' I need to be asking 'Do we really need Widget X or is there a better solution to this customer problem? So a designer needs be there at the beginning and be connected to the decision-makers. For example, at Braun, Dieter Rams sat across from the owner of the company."
7. Don't overdesign.   Hill says.  "With the increasing emphasis on design in the world today, it's important to avoid the 'over-designed syndrome.  A simple, well-thought-through, authentic design is often the best. Everything doesn't need to be redesigned; sometimes what we have in hand is better than what we seek. It's not all about being different; it's about being better. If Levi Strauss wanted me to redesign the patch on the back of their jeans, I would look in their archives for the original."
8. Use design to continually reinvent the brand.  Doucet says.  "Some folks think they know branding.  Figured it out long ago. 'Hi. I'm someone you'll like. You'll know it's me because I always wear a red polo shirt (pantone 185 to be exact) with blue pants and a yellow belt.' You can't think that way today. Brands need to allow themselves to constantly update, and be much more fluid. Look at Google; they morph their logo for special occasions. Constant change is a big part of who they are."
9. Use design to make a difference.  Brunner says.  "Design can make a difference in how we live.  Take sustainability. A lot of what is done in that area is 'making bad, better.' We're taking wasteful things and seeing how we can make them not so bad. We need to start thinking about how we can use our design tools to encourage people to change. You do that by making 'doing better' also be fun, interesting and (importantly) the path of least resistance. And you do it in an encouraging, not controlling, way. Design needs to do that in order to reach a larger audience than just the small group that is socially driven."

While these steps may require a new way of thinking about design for some, they're key steps to the path for those who want to build a great brand and make life better for those who experience them.

COMMENTARY:   In order for a brand to be successful, it must make a powerful emotional connection with the consumer.  When branding is executed to perfection, the brand and the product become one and the same.  In commodity industries some brands have developed such strong emotional ties that they become brand loyalists or evangelists.  They live and breath that brand.  If you say tablets, an Apple brand loyalist will say 'iPad'.  If you say smartphone, an Apple brand loyalist will say "iPhone."  When emotional connection with a brand has become that strong, you have a landmark.   A lovemark is the brand that comes to mind immediately and foremost when you mention a product.  Whether its a tablet soft drink, those brand loyalists will almost universally say, "iPad" and "Coke."  If you are No 2 or No 3, it no longer matters how much you spend on branding.   I think this is what you are seeing with Apple products.  All of them have become lovemarks.  They have become inseparable from the brand and the product. To the consumer they are one and the same, and that is the strongest type of branding that can be attained.  

Courtesy of an article dated Aprilo 16, 2012 appearing in Fast Company

AMERICANS SET RECORD WATCHING 8.3 BIL VIDEO ADS IN MARCH, HULU & YOUTUBE WERE 1 & 2 WITH 1.7 BIL AND 1.2 BIL ADS RESPECTIVELY

Whetting the appetites of marketers, consumers are watching more online video advertising than ever. Breaking all previous records, Americans viewed more than 8.3 billion video ads in March, according to new data from comScore.

Delivering another record month. The leaders were:  

• No 1 - Hulu recorded more than 1.7 billion video ad views in March 
• No 2 - YouTube, ranked second with more than 1.2 billion video ads. 
• No 3 - The BrightRoll video network came in third with 953 million. 
• No 4 - Adap.tv came in with 892 million. 
• No 5 - Specific Media came in with more than 775 million.

Time spent watching video ads totaled 3.5 billion minutes, with Hulu delivering the highest duration of video ads at 690 million minutes, according to comScore.

Video ads reached 51% of the total U.S. population, an average of 53 times during the month, while Hulu delivered the highest frequency of video ads to its viewers with an average of 51, followed by ESPN, which delivered an average of 26 ads per viewer.

Overall, 181 million U.S. Internet users watched nearly 37 billion online content videos in March, while video ads topped 8 billion for the first time on record.

Ranked by number of viewers:  

• No 1 - Google Sites, driven by YouTube.com, ranked as the top online video content property in March with 146.1 million unique viewers. 
• No 2 - Yahoo Sites with 60.6 million unique viewers. 
• No 3 - VEVO with 51.3 million unique viewers.  
• No 4 - Facebook.com with 45.1 million unique viewers.
• No 5 - Viacom Digital with 44.3 million unique viewers.

Nearly 37 billion video views occurred during the month, with Google Sites generating the highest number at 15.7 billion, followed by Hulu with 1 billion and Yahoo Sites with 815 million.

The top drawing video channels were:

• No 1 - VEVO -- 49.1 million viewers. 
• No 2 - Warner Music -- 30.3 million viewers.
• No 3 - Gaming channel Machinima ranked third with 22.9 million viewers. 
• No 4 - Maker Studios with 14.6 million viewers. 
• No 5 - FullScreen with 12 million viewers.
• No 6 - BroadbandTV with 8.5 million viewers.

Among the top 10 YouTube partners, Machinima demonstrated the highest engagement -- 69 minutes per viewer -- followed by VEVO at 62.5 minutes per viewer. VEVO streamed the most videos -- 670 million -- followed by Machinima at 379 million.

Also of note during March, 83.5 percent of the U.S. Internet audience viewed online video, while the duration of the average online content video was 6.4 minutes, and the average online video ad was 0.4 minutes.

Video ads accounted for 18.5% of all videos viewed, and 1.5% of all minutes spent viewing video online.

COMMENTARY:    In my blog post of April 21, 2012, I reported that online advertising for the year ending 2011 was $31.7 billion, and that according to the Interactive Advertising Bureau, digital video advertising increased 29% from $1.4 billion in 2010 to $1.8 billion in 2011. 

Break Media partnered with market research leader Advertiser Perceptions, and just completed "Digital Video Advertising Trends 2012."  The study explores where the growth opportunities are for marketers and their agencies.  Which video ad formats are advertisers and agencies seeking out?  What models do they prefer to use when allocating budgets to digital video?  Find out the answers to these among many other insights in our annual study. Download the study HERE!   Checkout the video:

Digital Video Advertising Trends 2012 - Watch More Funny Videos 

Courtesy of an article dated April 20, 2012 appearing in MediaPost Publications Online Media Daily