Happy Twitter-versary (for the nth time around this time), Jack Dorsey. Things haven’t been going well, it seems, but there’s a light at the end of the tunnel — Twitter may be acquired by someone somewhere in the tech (or entertainment) industry, perhaps.
To be perfectly fair, the company Dorsey inherited from his predecessor(s), including an array of former product leads as well as CEO Dick Costolo, wasn’t in that great of shape to begin. But Dorsey’s return was heralded as a return to form for Twitter, in the hope that he might come in and shake things up to the point that the company would finally turn around and make Wall Street Happy.
So in the last month or so, a lot has been made as to whether the company should remain independent or whether it makes sense as part of a larger empire that can devote more resources into growing it. There are natural arguments for each — Twitter is one of the go-to sources for news (and also sports!), but a company like Salesforce could pump additional life into it to get that user base growing more broadly. And perhaps the company once again needs new fresh blood.
Dorsey’s tried to make the service less confusing during his tenure, such as shifting around the way tweets are presented and removing some contributions toward the character limit for types of media. But the company still suffers from being confusing, being difficult to get on-boarded, and of course harassment.
So, the turnaround still didn’t really happen. Let’s take a quick look at a few charts of what’s happened at Twitter under Dorsey.
Twitter stock price chart since Jack Dorsey became CEO through today (Click Image To Enlarge)
For some reference, here’s a one-year chart of the S&P 500:
S&P stock price chart during Jack Dorsey's tenure as Twitter CEO (Click Image To Enlarge)
And let’s look at the user base the company reported last quarter, which has been the main sticking point for Wall Street and Twitter:
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So, barely any growth whatsoever (and even a small drop-off at one point). Hmm. What about revenue growth? Under the leadership of Adam Bain this wasn’t a huge problem for a while, though everything still stems back to user growth.
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And Twitter’s still losing money:
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One last quick one, which isn’t exactly a chart — how much it’s paying for stock-based compensation:
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Let’s cap this whole thing off with a some recent headlines:
So, you may be sensing a little bit of a trend: a big shift to live video, some attempts to combat harassment and other problems (though it hasn’t worked), and of course lackluster results under Dorsey.
It’s been a tough run for Dorsey, which may eventually be capped off with a final sale to a company. Anything can change at the last minute, of course, but for the time being it seems like Twitter needs to right itself — whether that’s through increasingly drastic internal changes or bringing in new leadership under new ownership to do just that. And there’s always next year!
Twitter’s third-quarter earnings come out later this month, and it’s kind of hard to believe that this may be the final time we see the guts of the company for the foreseeable future. It may end with a final sign-off like LinkedIn:
“In light of the pending merger, LinkedIn will not be updating its outlook for fiscal 2016 and will not be hosting a conference call for its second quarter 2016 business results.”
COMMENTARY: If you've followed my blog posts about Jack Dorsey and Twitter's performance, you know that I have not been very complimentary towards Jack Dorsey, and have been just as critical about Twitter's performance. Not to be forgotten is the number of key staffers who have chosen to leave the company since Dorsey took over as CEO. In addition to the exits, revenues have failed to meet investor expectations, with the stock price dropping to near lows, and Monthly Active Users (MAU's) stalling just over 300 million users since he took over the helm.
Although Twitter has aggressively moved towards more video content (Vine and Periscope), including live sporting event streams, at its face, the overall Twitter experience has remained about the same. The homepage is still an endless torrent of tweets, without any organization or personalization. It is very time consuming to review this mountainous torrent of tweets. The result is that users are missing out on news and information that is important to them.
Twitter now allows users to attach images and videos to their tweets without affecting the 140 character limit. This is a good thing, but only a superficial improvement that a lot of users don't even notice. This is not enough to improve the overall user experience and serve as an inducement to increase user engagement and attract new users.
Twitter requires radical changes not just superficial improvements. It's a huge product design problem that must be resolved. You literally need to go back to square one and introduce an entirely new Twitter with a user interface (UI) that is unrecognizable from what you see today, and that is simple, user-friendly and intuitive. Here are a few changes that I think are greatly needed.
To combat the avalanche of tweet traffic, users should be required to classify their tweets by type (example: politics, social media, big data, legal, sports, games, fashion, personal, etc.). Users should be able to select a type before they can post it. I follow political tweets a lot, so I should be able to view all political tweets and see what's trending within that type (example: #VPdebate, #presidentialdebate, #potus, #trump, #clinton, etc.).
Live streaming event tweets should be separate from other tweets so that they clearly stand out. They should also be classified by type, and users should be able to see which live streaming events are trending (example: #presdentialdebate, #sundaynightfootball, #spaceXlaunch, #liveearthconcert, etc.).
An idea that I have proposed before includes classified ads. Twitter could be a great classified ad site, but classified ads are lost in the torrent of tweets. Classified ads would appear separate from regular news and information tweets, and would be classified by type (example: rentals, autos, household, garage sales, personals, etc.). Classified ads would be a great way for Twitter to generate additional revenues that could rival those of Craigslist. I don't know why this hasn't been done before. If I don't want to see ads within my tweet stream, I should be offered the option of paying a small fee for that privelege. Another potential revenue stream.
There you have it. If you have other ideas, don't hesitate to post them in the comment section.
Courtesy of an article dated October 5, 2016 appearing in TechCrunch
Rothenberg Ventures management team with Mike Nothenberg (fifth from left) (Click Image To Enlarge)
Rothenberg Ventures, the four-year-old, San Francisco-based seed-stage venture firm, may be on the brink of implosion, say several sources close to the firm.
We reported yesterday that several high-level employees had parted ways with Rothenberg, including:
Messages to Rothenberg have not been returned. According to one source, Rothenberg Ventures founder Mike Rothenberg has told those remaining that “very few people will be left.” In what appears to be a related development, the firm’s site has also been down since last night.
Why the mass exodus? According to one source, Rothenberg Ventures is under investigation by the SEC after a lower-level employee alerted the agency to what this person reported as wire fraud and breach of fiduciary duty. This same source says the employee was subsequently fired and is now suing the firm for retaliation.
All SEC investigations are conducted privately. An investigation does not mean that the agency will file a case in federal court or bring an administrative action.
Either way, a much thornier issue for Rothenberg Ventures, say numerous former employees, is founder Rothenberg himself, who has sometimes seemed to live more like a billionaire than the manager of a modest venture fund — spending lavishly to attract moneyed individuals as investors and, over time, growing increasingly focused on becoming as famous as some of them.
It all began as a minor if inspirational story, proof that the American Dream can still come true.
Rothenberg, an Austin native who says he comes from humble means — “no one in my family has any money,” he once told us — was smart enough to nab an undergraduate, then graduate degree, from Stanford, then bootstrap a real estate fund with his brother before moving on to Harvard to secure an MBA.
Soon afterward, inspired by business leaders he had met while at Stanford, Rothenberg planted himself in San Francisco and got down to the business of trying to shake up the stodgy venture industry. Step one involved raising a $5 million fund from “friends, family, and former roommates,” as reported in a Bloomberg story about Rothenberg last year.
His timing was ideal as these things go. In 2012, the market was in the middle of a three-year upswing, following the financial crisis of late 2008. A number of newer faces was also beginning to gain prominence in the venture industry, along with the trust of so-called limited partners — the individuals and institutions that fund venture firms.
Rothenberg is also a natural salesperson, and as such, quickly evolved his pitch for Rothenberg from yet another seed-stage fund to a thought-leading outfit willing to make big bets on virtual reality before most people in Silicon Valley saw it as a major opportunity.
Indeed, by late 2014, Rothenberg Ventures — whose more garden-variety bets include the clothing company Chubbies and the floral delivery startup BloomThat — announced it was launching a virtual reality startup accelerator, River, and that it planned to provide $100,000 in seed funding to virtual reality companies expressly. Among its bets was Fove, which makes an eye-tracking head-mounted display and went on to raise an $11 million Series A round earlier this year.
Rothenberg Ventures founder Mike Rothenberg durng promotion of RIVER, a virtual reality accelerator (Click Image To Enlarge)
But employees say that as the firm grew, so too did Rothenberg’s spending, and not merely on their paychecks.
Among the expensive ways that Rothenberg found to market the firm to prospective limited partners, he hired race-car driver Collete Davis and spent hundreds of thousands of dollars more to maintain and transport her race car to events. Another $200,000 reportedly went toward a suite at the Super Bowl that was meant to woo investors.
Rothenberg Ventures — which counts many people in tech and finance as backers, including Jeff Seibert, a former head of product at Twitter, and Michael Cronin, founder of the private equity firm Weston Presidio — also inserted itself increasingly into celebrity circles, say employees, including buying tickets to the Golden Globes, co-sponsoring actor Chase Crawford’s 30th birthday party in West Hollywood, and spending unsparingly to executive produce a video for Coldplay.
Says one source, “Mike wants to be famous.”
They say he began to live as if he were, too, with many other examples of seemingly out-of-control spending. Among them, says one source, Rothenberg had hired up to three executive assistants at one point. He also employed a personal assistant for himself and a private driver. Further, employees say he refused to fly coach and instead maintained a $2,000-per-month membership with the young, subscription-only airline service Surf Air.
They also say Rothenberg began to spend an inordinate amount of time managing his reputation, as questions began to surface around how he afforded it all. When Bloomberg last year questioned the firm’s ability to finance itself, Rothenberg sent two employees to SFO, purchasing them airline tickets so they could head to airport newsstands and buy copies of the issue in hopes that it wouldn’t be as widely read.
All the while, Rothenberg was hiring, employing up to 60 people across Rothenberg Ventures at one point. For a firm that manages hundreds of millions of dollars, that wouldn’t be a startling amount of overhead. But Rothenberg Ventures has raised $47 million across four funds dating back to 2013, according to SEC filings. Given that firms typically collect 2 percent of what they raise in management fees, that would leave just $940,000 for Rothenberg’s entire operation. In fact, most funds of a similar size are run by two or three people.
What happens now is anyone’s guess, including whether Rothenberg will be forced to sell any stakes in the company’s 100-plus portfolio companies to a secondaries specialist. When we asked a founder of a top secondaries shop for more information today, the executive declined to provide any information, saying only that Rothenberg Ventures “has been super nice to me.”
Certainly, while employees paint a picture of an overly ambitious founder who paid too little attention to his firm’s finances, many outsiders like Rothenberg and benefited richly from Rothenberg Ventures’ generosity.
Among its most popular events is an annual Founders Field Day at AT&T Park, where the San Francisco Giants play. In April of last year, the outlet Recode likened it to a scene lifted from “Silicon Valley” after the HBO show opened its second season, two weeks earlier, with a scene at the baseball park.
Employees say Rothenberg loved it.
COMMENTARY: I just love it when controversy surrounds a venture capital firm, especially when it involves its founder, and that founder goes crazy spending investor capital. With so many key members of the managment team bailing out, some with just a few months on the job, it is clearly time to "abandon ship." Still no response from Mike Rothenberg. The SEC investigation must be going full speed ahead. There's probably a lot more going on besides the lavish spending. The shutdown of the website is another clear signal that this VC firm is not taking on any new startups. The high flying and party days are over for Rothenberg Ventures.
At the end of 2015, Rothenberg Ventures was the VC leader in the number of investments made in the AR/VR space with a total of 32 startups in which it had invested. These ventures are very early stage, so it remains to beseen whether any of them will pan out or ever reach unicorn status.
CB Insights Infographic of Leading VC firms investing the the AR-VR Space between 2011 and 2015 (Click Image To Enlarge)
It appears the Mike Rothenberg has a preference for founders who graduated from Stanford and Harvard. Mike attended both schools. An intriguing coincidence or preference on the part of Mike.
To be continued.
It's 2:00 am in the dark morning hours of June 28th, Mark Zuckerberg woke up and got on a plane. He was traveling to an aviation testing facility in Yuma, AZ, where a small Facebook team had been working on a secret project. Their mission: to design, build, and launch a high-altitude solar-powered plane, in the hopes that one day a fleet of the aircraft would deliver internet access around the world.
Zuckerberg arrived at the Yuma Proving Ground before dawn. Zuckerberg said in an interview with The Verge.
“A lot of the team was really nervous about me coming.”
A core group of roughly two dozen people work on the drone, named Aquila (uh-KEY-luh), in locations from Southern California to the United Kingdom. For months, they had been working in rotations in Yuma, a small desert city in southwestern Arizona known primarily for its brutal summer temperatures.
On this day, Aquila would have its first functional test flight: the goal consisted of taking off safely, stabilizing in the air, and flying for at least 30 minutes before landing. Zuckerberg says.
“I just felt this is such an important milestone for the company, and for connecting the world, that I have to be there.”
For Facebook, Aquila is more than a proof of concept. It’s a linchpin of the company’s plan to bring the internet to all 7 billion people on Earth, regardless of their income or where they live. Doing so will lift millions of people out of poverty, Zuckerberg says, improving education and health globally along the way. But it will also enable the next generation of Facebook’s services in artificial intelligence, virtual reality, and more. This next era of tech will require higher bandwidth and more reliable connections than we have today, and drones can help deliver both. The road to a VR version of Facebook begins where Aquila leaves the runway.
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As the Sun rose over the desert, a crane lifted Aquila onto the dolly structure that would propel it into the sky. The drone has a tremendous wingspan: 141 feet, compared to a Boeing 737’s 113 feet. And yet Facebook engineered Aquila to be as light as possible to permit ultra-long flights. Built with carbon fiber, the latest iteration of the drone weighs around 900 pounds — about half as much as a Smart car.
A remote control operator activated the dolly, and Aquila began rumbling down the runway. The plane is attached to the dolly with four straps. When it reached sufficient speed, pyrotechnic cable cutters known as “squibs” cut through the straps, and Aquila lifted into the air, where it floated up its test altitude of 2,150 feet and stabilized. On the ground, Facebook’s employees were elated; some wiped away tears. Zuckerberg said.
“It was this incredibly emotional moment for everyone on the team who’s poured their lives into this for two years.”
Watching from below, Zuckerberg was struck by Aquila’s deliberate, unhurried pace. Zuckerberg said two weeks later, at Facebook’s headquarters in Menlo Park, CA.
“It flies really slowly. Most times when people are designing planes, they’re designing them to get people or things from place to place, so there’s no real advantage to moving slowly. But if your goal is to stay in the air for a long period of time, then you want to use as little energy as possible — which means going as slowly as you physically can, while not falling out of the air.”
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Okay, but why a plane? There are lots of ways to bring the internet to people that don’t involve designing your own drone.
There are satellites, which are good at delivering internet access to wide geographical areas. But they’re only effective in areas with low population density — too many users can gobble up the bandwidth in a hurry.
There are cellular towers, which excel at connecting dense urban populations. But building enough cellular towers to cover the entire Earth is considered too expensive and impractical, even for Facebook.
In 2014, Zuckerberg wrote a paper analyzing various methods of internet delivery. High-altitude drones, he said, could serve a huge audience of people who live in medium-sized cities or on the outskirts of urban areas. They fly closer to the ground than satellites, meaning their signals are stronger and more useful to larger populations. And they fly above regulated airspace, making them easier to deploy.
If Facebook could build a drone that gathered most of its power from the Sun, Zuckerberg reasoned, it could fly for 90 days. A laser communications system could deliver high-speed internet to base stations on the ground, connecting everyone within 50 kilometers. The planes would be easier to maneuver than, say, balloons — a method embraced by Google, which has embarked on its own global connectivity crusade with Project Loon. (Last year Google challenged Facebook more directly with Project Titan, a solar-powered internet delivery drone of its own.) If the drones could be built cheaply enough, they would one day dot the skies, and become a critical piece of the global internet infrastructure.
And so 26 months ago, Zuckerberg set an ambitious goal: to release a functional version of Aquila in just a couple years. He personally recruited experts from NASA’s Jet Propulsion Laboratory and MIT’s Media Lab, among other places, to bring his vision to life.
As part of the project, Facebook spent nearly $20 million to acquire the team behind Ascenta, an aviation consultancy led by Andy Cox. Cox is a mechanical engineer who previously worked on a team that kept a solar-powered drone in the sky for two weeks — still a world record. After Facebook acquired his consultancy, Cox became Zuckerberg’s top lieutenant on the Aquila project. The team works out of a warehouse in Bridgewater, 150 miles west of London.
As recounted in Wired earlier this year, building a working model of Aquila put the team in daily battle with the laws of physics. Early on, it attempted to launch Aquila with a hot-air balloon. A planned test flight date of October 2015 was pushed back, and then pushed back again. Attempts to fly a 27-foot scale model of Aquila were hampered by El Niño storms.
But by June 28th of this year, the team had overcome those hurdles. At cruise altitude, Aquila was using just 2,000 watts of energy — the equivalent output of five strong cyclists, Zuckerberg says. The company hoped Aquila would successfully remain aloft for half an hour. But it was so stable that they kept it in the air for 90 minutes before landing it safely.
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THE HARD PART
In it's first flight, Aquila exceeded engineers’ expectations for its energy efficiency. More test flights are planned, aimed at flying Aquila “faster, higher, and longer,” says Jay Parikh, Facebook’s vice president of engineering, in a blog post today. And then Aquila will have its next big test: flying with the “payload,” as Facebook calls the laser communication system that a team is building in Woodland Hills, CA. In July 2015, the team announced that its lasers could deliver data at tens of gigabits per second, about 10 times faster than the previous standard. And the lasers are quite precise, able to target an area the size of a dime from 10 miles away. (The lasers connect with base stations on the ground to supply internet access.) Facebook says the system has performed well in independent tests.
When will a fleet of Aquila drones bring data to the world? Facebook won’t say. There are several technical challenges remaining in getting Aquila to reliably fly 90-day stretches. The team hasn’t yet implemented solar panels on the prototype — the test flight plane ran using batteries only. The team is still working out how to build batteries with a density high enough to sustain lengthy missions. Then there’s the cost — Facebook says Aquila needs to be much cheaper if the world is going to deploy a fleet of them. Cox wrote in a blog post today.
“We need to develop more efficient on-board power and communication systems; ensure the aircraft are resilient to structural damage to reduce maintenance costs and able to stay aloft for long periods of time to keep fleet numbers low; and minimize the amount of human supervision associated with their operation.”
Aquila is also likely to face regulatory obstacles, which could rival the laws of physics in terms of the challenges they present. Facebook and Google have teamed up to work with authorities, such as the Federal Aviation Administration, to get permission for test flights and obtain access to the spectrum they need to serve data.
Facebook says it doesn’t plan to use Aquila to build its own cellular network. Instead, Zuckerberg says, it wants to license the technology — or even give it away to telecommunications companies, governments, and nonprofits. In emergency situations, he says, Facebook could direct its fleet to troubled regions to bolster internet access for hospitals and nonprofit centers.
But it remains unclear how governments will receive Facebook’s latest idea for connecting the world. The company’s efforts at diplomacy have sometimes been clumsy; Indian regulators banned Free Basics, Facebook’s effort to provide some internet services for free, on the grounds that giving the company control over the included services violates net neutrality. Bringing more people onto the internet, after all, is a way of bringing more people onto Facebook — and regulators have worried that the company’s end goal is to simply replace the open web for most users, while reaping the rewards in advertising dollars.
Zuckerberg says the company has learned from its failure in India — one he hopes is temporary. Solar-powered planes will raise additional regulatory issues, he says.
“We’ve learned a lot about how we need to interact with governments and the political system and regulators, and build support in order to have these things work. And I think we’ll take those lessons forward. But when I meet world leaders, a lot folks are really excited about this, because you want your people to be online, and you want more opportunities. And connectivity is one of the biggest ways that people get access to opportunities.”
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The path forward for Aquila isn’t totally clear, and it’s bound to encounter more bumps along the way. But Zuckerberg is resolute: billions of people who can’t access the internet deserve it. And for Facebook to achieve his long-term vision, everyone is going to need access to more bandwidth than they have today. A single test flight represents a tiny step toward getting there. But it also gives Facebook a dramatic success to rally around.
“I think the future is going to be thousands of solar-powered planes on the outskirts of cities and places where people live, and that’s gonna make connectivity both available and cheaper. And, I think, can help play an important role in closing this gap of getting more than a billion people online. This is an early milestone, but it’s a big one.”
Zuckerberg smiled and said.
“It’s not something you necessarily expect Facebook to do — because we’re not an aerospace company. But I guess we’re becoming one.”
COMMENTARY: Zuck's strategy to fly internet drones over poverty stricken geographical areas, like those in Africa, where the internet penetration is only 9.8%, or the cost of WIFI connectivity is prohibitably high, is really a ploy to get more Facebook users. At its core, it sounds like a noble and philanthropic mission of helping those in need, but it is solely about getting more eyeballs to connect through Facebook and sell them things through online ads. If Zuck really wanted to help needy African's he should take some of those billions he has and give it to charitable organizations which are fighting to eradicate hunger, AIDS, Ebola, malaria and other diseases.
Courtesy of an article dated July 28, 2016 apparing in The Verge
Digitally savvy consumers know there’s an abundance of choices when it comes to purchases. With high expectations, most will seek out appealing items with little regard to brand loyalty. Churn and attrition are at an all-time high.
The response for organizations sounds simple enough: Provide a consistently good, engaging customer experience, optimize it on a variety of devices and deliver it when customers want it. Why has it been so hard for organizations to do this?
The answer starts with the way companies operate on the back end. With multiple organizational silos, no online/offline data synthesis, rigid customer databases and other inflexible legacy systems, organizations only have a piecemeal view of the customer. It’s hard to take advantage of all the existing corporate customer data that’s available, much less the rich variety of external data. As a result, marketing efforts are fragmented. Communications are inconsistent and ineffective. And revenue growth is hindered.
By taking a technological approach that synchronizes marketing processes with the customer journey across multiple channels, organizations can achieve great results – in terms of revenue, customer advocacy and loyalty. First, they need to get a panoramic view of each customer. Then they can understand and anticipate customer behavior; orchestrate the next best action across any channel; and accurately measure results to inform future actions.
SAS recommends that you connect your marketing efforts with all the relevant data from customer interactions as well as back-end operations. Then, through advanced customer and marketing analytics, you can deliver an integrated, omnichannel experience and truly compelling content. By responding to your customers on their terms – right content, right time, right device – you can keep them coming back for more and raise their value to your business.
Step 1: Synchronize Marketing Processes Based on a Comprehensive Understanding of the Customer
When marketing departments, call centers, service operations and merchandisers operate independently based on their own distinct views of the customer, both customer engagement and marketing efforts suffer.
Consider a scenario where a customer’s browsing history (showing his preferences or inferred interests) is in one database while offline point-of-sale data about the customer is in another database. If these databases are not connected, there’s a good chance you will have less relevant interactions with that customer than what the customer expects. Or you may see the “echo effect,” where you reach the customer through one channel but he responds through a different one – leaving you unsure how to attribute the response or plan your next offer.
Many organizations don’t use their existing corporate data to the fullest extent. They overlook opportunities to enrich customer data with information from service records, operations or contact centers. Many also fail to use external data sufficiently, missing chances to broaden their understanding of the customer with data from social media, open data, third-party data, etc. In an ad sales scenario, these proprietary data sets can present a unique differentiator in the marketplace and enable you to create highly targeted campaigns for your advertisers.
SAS Customer Intelligence solutions provide a panoramic view of the customer by consolidating all first-, second- and third-party data. From digital data to CRM information and call center records, SAS captures, integrates and transforms disparate data sources, breaking down multiple customer data silos. Built-in data management capabilities ensure that you can use your data effectively to engage customers, and boost ad sales. Use SAS to:
Step 2: Understand Customer Behavior and Fuel Content Engagement
Content is core to enticing and keeping consumers. You can attract the right customers by optimizing your content. But it’s just as important to optimize the customer’s overall experience. Using advanced techniques like text and predictive analytics, you can improve search engine optimization (SEO) for digital content, quickly categorizing content and text mining words, phrases and topics for customers.
Beyond SEO, you can profile and segment customers based on their historical behavior, profitability and lifetime value. Through a range of predictive analytic models, including affinity analysis, response modeling and churn analysis, you’ll know whether it’s a good move to combine digital and print subscriptions. You’ll recognize which content merits a fee versus which content you can monetize without a paywall.
To keep your marketing efforts fresh, you’ll need to continually supply models with updated data as you interact with customers and prospects. For example, your models should include purchase transaction data, online data from website users, direct marketing response data and more.
Figure 1 - Decision Tree to quickly idenify variables that can best predict iPad usage and high versus low user populations (Click Image To Enlarge)
Through advanced analytics, you can use these models to predict behavior and:
Step 3: Automate and Synchronize Customer Engagement Across Channels
Once you’ve determined which analytics approach is best, you’ll need to automate your engagement activities with customers. SAS Marketing Automation helps you to quickly define target segments, prioritize selection rules, choose appropriate communication channels, schedule and execute campaigns, analyze results, and make adjustments to improve future campaign performance.
Use SAS to orchestrate data-driven marketing activities across all of your channels. So you’ll be able to present customers with the best, most profitable offers to keep them engaged or to win them back from competitors. Analyze – in real time – how people get to your site and what they do while there. Then present them with engaging content at precisely the right moment. Use SAS to:
With a complete view of the customer, a deep understanding of behavior and automated engagement efforts, you’ll be able to make decisions that resonate for customers and invigorate your marketing efforts. For example, if you know a customer checks email every Friday, you’ll send her an email on Friday – because you’ll know that’s the best way to reach her. You’ll also be able to decipher between premium content versus content that should be free. You’ll know what will hook your customers, whether they’re using your services for the second time or the hundredth time.
Today’s customers demand value and expect a consistent experience regardless of the channel or device they’re using. SAS positions you to meet these ultra-high customer expectations at every touch point.
Figure 2 - A marketing campaign response measurement dashboard (Click Image To Enlarge)
Step 4: Effectively Measure Campaign Performance and Attribution
It’s hard to understate the importance of accurate, useful measurement. Combining SAS Reporting capabilities with SAS Visual Analytics – a visualization and exploration suite built to handle big data – it’s easy to examine the effectiveness of your marketing campaigns and tactics based on your budget and success metrics. Use response attribution modeling to understand the customer’s conversion path, and to know where to assign marketing credit. Then you can create future marketing mix optimization models, test/control strategies, predictive models and marketing campaigns.
With adaptive, agile marketing, you can test your offers and content quickly, on a small scale, and nurture continually richer customer interactions. Then get rapid feedback to show you when and how to modify the customer’s experience to get the most impact. Plus, you’ll have easy access to campaign reports and dashboards so you can track and manage campaigns across all of your channels.
Figure 3 - Campaign and offer performance reports are integrated with revenue metrics and demographic indicators (Click Image To Enlarge)
What is data-driven marketing, how can event marketers effectively use it to drive conversions, and why does it matter? For decades marketers were forced to launch campaigns while blindly relying on gut instinct and hoping for the best. That all changed with the digitization of business and an increasingly demanding and digitally connected consumer. Now more than ever, there is a greater urgency to develop data-driven marketing campaigns as organizations have come under increasing pressure to deliver results or ROI for their marketing spend. To be successful in this landscape, a modern marketing campaign must integrate a range of intelligent approaches to identify customers, segment, measure results, analyze data and build upon feedback in real time.
While almost every area in marketing has been folded into the digital marketing ecosystem, in-person events have remained elusive to today’s modern marketer. In fact, when it comes to tracking your marketing efforts and determining which channels provide the best return on investment (ROI), most marketers will agree that results from in-person events are still difficult to track:
Indeed, events often lag behind other marketing methods by a significant gap, with the success or failure of many events based solely on anecdotal evidence instead of quantitative measurement and logic.
Furthermore, because data-driven marketing produces highly personalized, engagement-focused campaigns for everything from enterprise servers to event apps, consumers are now beginning to expect a high level of personalization with each transaction.
What is data-driven marketing?
Let’s start out by trying to develop a simple definition for a relatively complex concept and practice. Data-driven marketing captures insights and data from a prospect, analyzes and scores the prospect’s data and behavior, and then subsequently triggers marketing actions and campaigns based upon marketing analysis. An appropriate analogy is to think of data-driven marketing from the consumer side in the average online shopping experience. When you purchase an item online, data-driven marketing strategies provide recommendations of complementary products to provide a better overall experience. If you’re looking at airfare rates for your next vacation to Hawaii, a data-driven marketing approach will focus on restaurants around the island with cuisine you regularly Google, potential places to stay based on positive reviews on Facebook, visitor’s guides that reflect your online budget-hunting practices and local activities such as scuba diving, listed on your LinkedIn profile.
By comparison, when you look at data-driven marketing from the marketer’s side, you’ll find a much more complex process. As you are able to obtain and update information on the customer from secondary sources, such as social media sites and web search data, you can create an approach that is customized to their buying behavior, interests, past purchases, web searches, social media posts and similar information. In other words, this approach allows you to optimize your funnel and customize your buyer journey to that particular prospect’s needs. You can also survey prospects to obtain primary sources of data, but be aware that there is often a bias between what individuals or groups claim versus their actual behavior. For example, an event attendee who was ranting about poor service at the luncheon one day may be raving about the closing keynote, leaving you with plenty of praise on the keynote but failing to mention the luncheon on the exit survey. Once you’ve obtained the data you need to make a comprehensive group, you can divide your prospects up into the personas they fit into best. This allows you to customize and personalize your approach, timing, channel and subject matter to optimize the results for each persona group.
The problem many marketers run into at in-person events is that they often don’t have the information they need to determine how to best engage each prospect. The closest option currently available are scans that provide contact information and basic registration information. But scans don’t provide the data you need to track that prospect’s engagement before, during, and after the event to prove the event ROI that particular group of prospects has generated for your company. As an example, at a recent conference, my badge was scanned by a gentleman from a company that prints promotional items. I was looking through the items in his booth to determine if there was anything I could use for our company’s next event. Though the exhibitor could have collected further data from me at the time, it would have been at the cost of other prospects that he could not help while gathering my information. When I returned home from the event, I had several recommendations for items that didn’t meet our needs because the minimum quantity was much too high, the quality wasn’t good enough and the prices were too expensive. The company had my contact information, but didn’t know enough about me or my organization to make appropriate recommendations. A data-driven marketing approach to this in-person event would have drastically improved my experience while increasing the marketer’s Event ROI.
How does data-driven marketing improve your ROI?
If you’re still wondering how data-driven marketing can make a difference to your company, you’re not alone. Though there was a 14% increase in confidence in putting big data to work in marketing departments from 2013 to 2014, with expectations for additional growth, many marketers still don’t know how the additional data provides a solid improvement in ROI or how to use the data to their company’s best advantage. In fact, companies that have implemented data-driven marketing into their marketing toolbox and recorded the results have often seen a 10-20% improvement on their ROI. Like any tool, it must be used correctly and implemented with other tools in your kit, such as using social media data, search analytics, SEO, content targeting and developing better buyer personas.
Why does data-driven marketing make such a big difference? Using the marketing convention example above, if the company had used data-driven marketing techniques to track my information, they would have known my organization was operating on a modest budget. All these factors made their special offer on a tri-fold brochure with a minimum order of 5,000 a very bad fit. Instead of learning more about the client, the company made a suggestion based on what was popular with their clients in general, few of whom had the needs of our organization, and lost a prospective sale. A targeted campaign based on data-driven marketing would have recommended a small-minimum product order that was inexpensive, while offering additional items that would have fit well with our company’s mission.
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Posted at 05:57 PM in Advertising and Promotions, Business Analytics, Business Intelligence and Predictive Analytics, Business Planning and Strategy, Data Mining and Predictive Analytics, Demographics and Lifestyle Segmentation, Market Intelligence and Data Analytics, Marketing and Promotions | Permalink | Comments (0)
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Founded in 1998, Lululemon is a yoga and sports apparel company from Canada.
Although its first store was opened in 2000, the company sold $350 million worth of products in their 113 retail stores 8 years later.
In 2012, Lululemon was reported to have the third most productive retail stores in the US, only behind Apple and Tiffany & Co..
According to Nina Gardner, Lululemon’s community relations manager, the company achieved all this almost entirely via word-of-mouth, and with ads in only two publications:
We don’t do ads. All of our marketing is done word-of-mouth and grassroots Gardner said. The only place you’ll see ads is in ‘Yoga Journal’ and ‘Runner’s World,’ two national publications.
Let’s take a look at how a company that started off selling yoga pants managed to grow so big from leveraging on word-of-mouth:
Lululemon is all about living an active life, evidenced by their goal to “sweat every day”, and other activities like breathing deeply, drinking plenty of water and going outdoors.
These values promote a very positive and healthy image, something that customers can relate to and aspire towards. And customers who shop at Lululemon are given tote bags that have the company’s manifesto emblazoned all over them:
The feel-good quotes on the bags serve as a form of “social snack“: something we look at to make ourselves feel better throughout the day.
By associating the brand with these values, customers would feel as if they’re “connecting with her best self” as they buy their yoga pants.
Word-of-mouth action tip: Make something about your product worth showing off to others.
Lululemon store staffers wear yoga pants so they feel more like yoga or gym buddies (Click Image To Enlarge)
Lululemon’s store employees “are encouraged to discuss exercise goals with customers and take into account their feedback written on chalkboards in the fitting rooms.” This ensures the staff are better equipped with more information to give personalized recommendations to every customer.
They are also instructed to dress like they were going for a workout, so customers would see them more as people you see in a gym or yoga class, rather than a store employee.
Plus, most people who work at Lululemon are athletic and fit individuals, so they have a lot in common with their customers. This relatibility and similarity makes them a lot more likeable, and customers are more comfortable trusting them.
And this building of relationships is exactly what Nina Gardner is trying to achieve:
"Making sure we’re really building those relationships (with customers) — that’s what really sets us apart from being just another retail store that’s opening up to sell clothes. Absolutely we sell clothes, but we are building relationships. We are supporting communities.”
Word-of-mouth action tip: Don’t rush into selling your products – connect with your customers like a friend, so they’ll like you more, and open up to you.
For one of their stores in Burlingame, California hosts free yoga classes on Saturday mornings and Sundays, as well as a weekday run club. This practice originated from Lululemon founder Chip Wilson, who used his office space as a yoga studio at night to help pay for rent back in the day.
This, according to former CEO Christine Day, positions Lululemon stores as a “fitness and conversation hub”. It also increases customer engagement, encourages regular visits to the store, and keeps the brand constantly top-of-mind.
What having similar-minded individuals for store employees and free fitness classes in-store does is – it evolves customers’ perception of the brand from being an apparel company to an entity that embodies your ideals, and a community to find like-minded people.
Christian Buss, a Wall Street analyst described Lululemon’s brand identity to a fitness partner:
"They’re selling a brand identity…the model that Lululemon is trying to build is, you’re pretty cool, we’ll be your partner in being your best possible self. And that kind of turns retail on its head."
Word-of-mouth action tip: Leverage your existing assets to contribute to your community.
Nicole Katz from Yoga 216 is one of the many brand ambassadors of Lululemon (Click Image To Enlarge)
So if Lululemon organizes free yoga and fitness classes regularly all throughout the world, who exactly leads all those classes?
They are Lululemon’s brand ambassadors; yoga teachers and fitness trainers that have chosen embody the brand’s values and lifestyle.
These 1,500+ ambassadors host classes in Lululemon stores within their communities, and according to a yoga teacher from Australian fitness group OzSquad, get support from the brand to pursue any events and initiatives they desire.
Of course, they’re also outfitted with the Lululemon products, so they get to wear free gear while promoting their own yoga schools and the Lululemon brand.
Word-of-mouth action tip: Celebrate and promote individuals who embody your brand values, so customers will think of you when they look at them.
Lululemon has always been a brand that connects their products with values that inspire their customers. People buy Lululemon pants because they agree with the values that Lululemon embodies and expresses.
And that can be a powerful thing, as branding expert and author Karen Post explains,
"They’re selling emotion and happiness and joy and feeling good about yourself, … and when companies keep their eye on that in a more focused way, and less on the features of the product, their chances of being a successful brand just go through the roof."
COMMENTARY: Based in Vancouver BC, lululemon is known for their athletic apparel, including clothing for yoga, running and any other “sweaty pursuits.” Customers can not only buy clothing and merchandise but they can also sign up for in-store events ranging from workshops, runs and yoga classes, offered on a weekly basis and tailored to the local surroundings. To personalize the in-store experience, lululemon educators and community ambassadors can be found in every store to talk to customers about healthy living, yoga, exercise etc. The ambassadors program is composed of individuals who adhere to the same lifestyle and cultural ideals oflululemon, and can share their expertise with the local community.
Lululemon Athletica retail stores have taken the store and shopping experience to a new level. Julia Brunzell, Manager of Store Design at lululemon atheletica discusses the unique in-store experience that the brand provides.
“We are constantly listening to feedback about how guests experience our stores and how they function for our educators. Every store designer works in the stores to experience firsthand how the space is used, what works best for flow, product visibility and efficiency. In addition, we want every store to feel like a part of its community from the first day it opens; we invite our guests to hang out, chat with our educators and learn about local yoga/fitness studios. Every week, our stores push aside their product fixtures and open the store up to the community for a complimentary yoga class.
Our stores are designed to be conversation starters, while also being fundamentally warm, inviting, eclectic and accessible to everyone. Over the years our fixtures have become more streamlined, modern and modular which allows for flexibility and creativity with visual displays. We are known for our unique, creative and locally relevant storefront designs which range from making a big design statement to a fun reflection of the community we are joining. For example, our Burlington, VT location is a strong ski community so we used two gondolas as benches outside to create an eye-catching and locally relevant storefront. At our Houston Galleria mall location, we designed our storefront using glass windows that look like those from a space shuttle, a nod to the nearby Houston Space Centre.”
There have also been many changes within the lululemon brand. Recently, the brand has launched a new fast fashion clothing line, &Go. With apparel ranging from dresses to pants and tank tops, the line is set to be offered online and storewide. With this change comes another in the men’s clothing division. Lululemon is set to open a standalone men’s store by 2016. The brand offers a range of men’s clothing on its website, including jackets, hoodies, pants, socks and underwear. Finally, with lululemon’s latest expansion into the European market, it will be interesting to see how these developments continue to affect the stores and brands initiatives worldwide.
When Julie Brunzell was asked how these changes and expansions affect the store design concepts and whether consumers will begin to see larger stores, pop up shops etc. to showcase the new clothing lines, she said.
“As a company focused on innovation, we are always evaluating how we design our stores and with that comes continuous examination of layout principles, space planning, size and location. We aim to create community and shopping experiences that speak to our guests and settings which vary from city to city. Entrepreneurship is one of our core business values and as a business that is grounded in community, we enable and support store managers to have a hand in creating spaces that resonate with their guests and their community.”
Lululemon Store Of The Future
Lululemon just opened a new flagship store in New York City's Flatiron District. At 11,500 square feet, it's the brand's largest flagship location. Its Union Square location closed its doors.
The Flatiron District is home to many other stores that specialize in athleisure — Sweaty Betty and Athleta, to name a few. But that makes sense: The area has many of the most popular boutique fitness studios — Flywheel Sports, Exhale, SLT, Pure Barre, and two SoulCycle studios that are mere blocks apart.
And Lululemon is capitalizing on that. One of the new store's features, The Concierge, will dedicate floor space to helping shoppers beyond the sales floor.
The Concierge at Lululemon's Flatiron District store in Manhattan (Click Image To Enlarge)
The Concierge will recommend nearby classes and locations, so that the exercise-obsessed shoppers can don their new pants in class. To top that off, shoppers can book classes while they're shopping.
The Concierge will be a hangout spot — there will be a "community board" to help shoppers discover new places to run, new classes, and even new places to eat.
The Community Center located inside Lululemon's flagship store in the Flatiron District of Manhattan (Click Image To Enlarge)
Lululemon will make shopping a luxurious experience, with a coat check, water, a coffee bar, snacks, and a phone-charging station. You can also have your purchases delivered to your home, office, or hotel, so no need for lugging big Lululemon bags around during the day.
The company is focusing on expanding its already-strong community with a new space called Hub Seventeen. Hub Seventeen will be above the store's retail floor.
Carla Anderson, Lululemon's general manager of US retail, said in emailed comments.
"Our stores are inspired by community, from the design aesthetic and in-store guest experiences and classes to our ambassador and studio partnerships."
Chairs hang from the ceiling inside the Community Events Center of Lululemon's flagship store in the Flatiron District of Manhattan (Click Image To Enlarge)
The 5,000-square-foot space will be used for fitness classes, monthly dinners, concerts, art shows, and more.
Lululemon's stores already have yoga classes, but Hub 17 will take it up a notch.
"While all of our stores offer in-store yoga and fitness class and events, Hub Seventeen is the first time we created a dedicated community space separate from the retail experience."
The Community Events Center inside Lululemon's flagship Flatiron District store includes an area for yoga exercise demonstrations (Click Image To Enlarge)
Don't worry, Lululemon acolytes — there's a vast retail floor.
The retail floor located inside Lululemon's flagship Flatiron District store (Click Image To Enlarge)
There's a great chance that many other forthcoming Lululemon stores will follow suit.
"Our flagship stores in particular are designed to elevate the community in new and unique ways, often serving as a testing ground for new guest experiences and retail innovations."
The new model comes in both gloss and matte finishes (Click Image To Enlarge)
Just over a week after its LM GTE Pro category win at Le Mans 2016, Ford is taking a trip back in time to an even bigger win. The all-new 2017 Ford GT '66 Heritage Edition pays homage to Ford's historic 1966 Le Mans victory. This special edition Ford GT brings a race-inspired look to the streets.
Ford made its historic come-back to the most mythical endurance race in the world, the 24 Hours of Le Mans. After more than 50 years, and its last victory in 1966 with the Ford GT40, they came back, and snatched 1st place, 3rd & 4th. That's a pretty awesome come-back.
Inspired by the GT40 Mark II driven to victory by Bruce McLaren and Chris Amon in 1966, the 'No. 2' 2017 Ford GT wears "shadow black" paint (in a choice of gloss or matte finish) with silver stripes, "frozen white" #2 graphics on the hood and sides, and an exposed carbon fiber package. The car rides on 20-in one-piece forged aluminum wheels in a gold satin clear coat.
The Heritage interior has ebony leather around its carbon fiber seats, instrument panel, pillars and headliner; debossed Ford GT logos on the headrests and leather-wrapped steering wheel; exposed matte carbon fiber on the center console, door sills and air register pods; gold appliqués; and blue-webbed seat belts. The "2" appears inside the door, as well as outside, and an identification plate lends authenticity to the unique limited edition.
Garen Nicoghosian, the exterior design manager says.
"While the looks are distinctly based on the GT40 Mark II race car, we've accentuated new styling cues to provide a modern interpretation."
Ford will offer a limited number of Heritage packages exclusively for the GT's 2017 model year.
COMMENTARY: On the outside, the Ford GT has been painted to resemble the No. 2 GT40 MkII race car that won the 24 Hours of Le Mans in 1966. If you’re not a big fan of vintage racing, the car driven by Bruce McLaren and Chris Among was painted black with a pair of silver stripes running from the nose toward the deck lid. Ford used the same livery for the modern GT, but offers its familiar Shadow Black in either gloss or matte, so customers can choose between something similar to the original car or a more modern matte finish that goes well with the exposed carbon-fiber package that comes with this limited-edition model. The black paint is complemented by silver stripes and Frozen White No. 2 graphics on the hood and the doors. Rounding off the exterior is a set of 20-inch, one-piece forged aluminum wheel in gold satin clearcoat and with black lug nuts. Although the twin-five-spoke design has nothing in common with the racing rims of the original GT40, the gold color is true to the car that won the iconic 24 Hours of Le Mans race.
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The interior of the ’66 Heritage Edition also received special features, starting with the carbon-fiber seats wrapped in Ebony leather and equipped with pillowed inserts and plow-through stitching. It would have been nice for Ford to replicate the GT40’s famous brass eyelets into the upholstery – as it did with the previous GT – but the pillowed inserts are enough to give the interior a vintage-style appearance. The instrument panel, pillars, and headliner also features an Ebony-leather wrap, while the trim on the instrument panel, the seat’s X-brace and shift paddles are finished in gold. The seats’ head and restraints and steering wheel are debossed with the "GT" logo. Like the 1966 race car, the steering wheel and the seat belts have a unique blue webbing. Rounding off the cockpit is a serialized identification plate, "#2" door panel graphics, and exposed matte carbon fiber door sills and center console.
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Not surprisingly, the ’66 Heritage Edition is a standard GT under the hood, meaning it uses Ford’s race-derived 3.5-liter EcoBoost (twin turbo) V-6, which generates in excess of 600 horsepower. All that power travels to the rear wheels through a seven-speed, dual-clutch transaxle, making it the first GT ever to not use a manual gearbox.
No word on pricing yet, but with the standard GT said to fetch around $400,000 before options, the ’66 Heritage Edition could cost in excess of $450,000. Ford said it will be built in "limited quantities," but gave no actual figures. I expect a production run of 66 unit in order to match the company’s most important year in motorsport.
Nine years after it discontinued the first-gen GT, the spiritual successor of the iconic GT40 race car, Ford introduced the second-generation GT at the 2015 Detroit Auto Show. Initially just a non-running prototype, the GT began hitting public roads months later, as Ford began testing the production car. Although the first GTs won’t reach their customers until late 2016, the supercar has already spawned a full-fledged race car that has been battling for glory in GT classes in North America in Europe. Its most important achievement as of 2016 is a class win at the 2016 24 Hours of Le Mans, where just like in 1966, it crossed the finished line ahead of arch-rival Ferrari.
NOTE: The entire production of 250 vehicles have been sold and Ford Motor Company is no longer taking orders
Microsoft Chief Executive Satya Nadella (bald dude) together with CEO Jeff Weiner (bearded dude) and Chairman Reid Hoffman (the fat dude) has said LinkedIn will be allowed significant autonomy after the acquisition. (Click Image To Enlarge)
The companies jointly announced the deal: Microsoft will pay $196 a share in cash for LinkedIn, which will retain its brand, culture and independence under the new structure. CEO Jeff Weiner will remain at the helm, reporting to Microsoft CEO Satya Nadella.
Both Weiner and Reid Hoffman -- LinkedIn chairman and controlling shareholder -- fully support the deal, and the both companies' boards have agreed to the acquisition. Microsoft will report LinkedIn as part of its Productivity and Business Process segment.
The companies share a mission to empower the global workforce, Nadella said in a Monday morning conference call.
"When we talk about Microsoft's mission, we talk about empowering every person and every organization on the planet to achieve more. There is no better way to really realize that mission than to connect the world's professionals to make them more productive and successful."
LinkedIn has grown its membership about 19 percent year-over-year to 433 million members worldwide. The network has 105 million unique members on the site per month, and 45 billion quarterly page views.
However, the company has seen its stock price falter in recent months in response to its warnings of shortfalls in projected revenue.
Mike Jude, a program manager at Stratecast/Frost & Sullivan, said.
"By combining professional social media with their Web-based business offerings, they have the potential to develop an extremely powerful collaborative environment that crosses business lines."
Microsoft can benefit by adding new business features to LinkedIn, but it could alienate LinkedIn members if it should push too hard to leverage their data for marketing and sales opportunities, he told the E-Commerce Times.
Many professionals use LinkedIn as their homepage -- similar to the way hardcore Facebook users begin and end their days, noted Jeff Kaplan, managing director of ThinkStrategies.
Salespeople often use LinkedIn as the default application for pursuing new business -- even more than they use CRM or other sales or marketing automation tools, he told the E-Commerce Times.
"Creating tighter linkages between LinkedIn's capabilities and Microsoft's Office 365 productivity/collaboration and its Dynamics CRM will [demonstrate] immediate benefits of the acquisition. In addition, it will encourage more developers to build applications on Azure PaaS that leverage the LinkedIn and Microsoft functionality, and store the data in the Azure IaaS."
Despite the potential benefits of combining LinkedIn's social network with Microsoft's cloud infrastructure, it's questionable whether Microsoft can pull off a successful integration. The company has fallen short with some recent acquisitions.
Kevin Krewell, principal analyst at Tirias Research, told the E-Commerce Times.
"I'm usually skeptical of big deals like this. The last huge acquisition by Microsoft was Nokia, and that didn't end well, with Microsoft eventually writing down most of the value of the deal."
However, Nadella may avoid some of the mistakes of previous executives, Krewell suggested, adding that there are synergies between the Office 365 cloud base and LinkedIn that can be exploited.
In addition, Linkedin has in-app messaging capabilities that could be integrated into Microsoft's Skype video, phone and messaging application, Tirias Principal Analyst Paul Teich told the E-Commerce Times. The deal also provides Microsoft with a network of business influencers to analyze with its deep learning tools.
There are lots of reasons for skepticism. The price tag, for one. At $26.2 billion, it is by far Microsoft’s largest acquisition ever. The size alone is a reason for caution, given the sorry history of such large deals.
Then, there is Microsoft’s own checkered history with acquisitions. It has recorded write-downs exceeding the $9.4 billion it paid for the handset unit of Nokia Corp. in 2014. Earlier deals for Skype Technologies and Yammer Inc., designed to bolster Microsoft’s digital and social credentials, did little of either.
But this deal can succeed where the others failed.
There is real synergy between the companies and their products, particularly Microsoft’s Office productivity suite—now delivered primarily online—and LinkedIn’s core database of more than 400 million mostly professional profiles.
“It’s really the coming together of the professional cloud and the professional network.”
In other words, we now work by toggling between our productivity software and our social networks. But why should the two be separate?
Microsoft CEO Satya Nadella and LinkedIn CEO Jeff Weiner discuss Microsoft's acquisition of LinkedIn. Learn more at: http://news.microsoft.com/?p=298414
Mr. Nadella is betting that were these two concepts reconceived today, they would be one.
LinkedIn Demographics Match Those of Microsoft
LinkedIn’s users are, arguably, Microsoft’s core demographic. They also offer Microsoft something it has long sought but never had—a network with which users identify. Microsoft needs to persuade LinkedIn users to adopt that identity, and use it across as many Microsoft products as possible.
Access to those users, as well as the enormous amounts of data they throw off, could yield insights and products within Microsoft that allow it to monetize its investment in LinkedIn in ways that the professional networking site might not be able to. Mr. Nadella already has mentioned a few of these, including going into a sales meeting armed with the bios of participants, and getting a feed of potential experts from LinkedIn whenever Office notices you’re working on a relevant task.
Microsoft's CRM Software Could Get Revenue Boost
LinkedIn also could supercharge Microsoft’s Customer Relationship Management (CRM) software, used to identify and track sales leads. Microsoft is in fourth place in market share among the large CRM players, including Salesforce.com Inc., SAP SE and Oracle Corp.
Enterprise Resource Planning (ERP) Software Market Shares Year 2015 (Click Image To Enlarge)
Top Six Enterprise Resource Planning (ERP) Software Vendors in Millinos Revenus For The Year Ending 2015 (Click Image To Enlarge)
Top 10 Enterprise Resource Planning Software Vendors by Revenues in Millions, Year 2015 vs 2014 (Click Image To Enlarge)
Salesforce is the market leader, but it holds a minority of the complex and sometimes ill-defined market.
LinkedIn already has its own CRM-type product, LinkedIn Sales Navigator, but more important, it has the data and reach that any CRM company would covet.
If CRM is ultimately about managing relationships, what better vehicle for that than an existing social network with its built-in insight about who is connected to whom?
LinkedIn shares fell by nearly half in a single day in February when the company issued a gloomy sales outlook. Michael Wade, professor of innovation and strategy at Switzerland-based business school IMD, says the company hasn’t lived up to its potential for a while.
Mr. Wade says LinkedIn hasn’t evolved quickly enough beyond its roots as a recruiting tool and job-search site. Most of its users aren’t looking for a job, and LinkedIn has so far done a poor job of getting them to come back to the site regularly to connect with and expand their professional networks. Only about one quarter of LinkedIn’s 400 million “cumulative” users return to the site every month.
That brings us to perhaps the biggest reason why the deal may succeed: Mr. Nadella. Put bluntly, Microsoft today is a very different company than the one that acquired Nokia, Skype or Yammer. Under Mr. Nadella’s predecessor, Steve Ballmer, Microsoft sought to drive users to its platforms, primarily Windows.
As a corollary, that meant that acquisitions were quickly integrated with other Microsoft products and development of new features slowed.
Mr. Nadella has shown a willingness to meet users where they are, even if that is devices running Apple Inc.’s iOS or Alphabet Inc.’s Android mobile operating systems. On Monday, Mr. Nadella said LinkedIn will be allowed significant autonomy, similar to Microsoft’s handling of Minecraft maker Mojang.
That would mean walking a fine line between autonomy and synergy. The longer the rope that Mr. Nadella gives LinkedIn CEO Jeff Weiner, the less benefit there may be to Microsoft’s products.
But don’t bet against him. If Mr. Nadella can re-energize an organization as big and legacy-bound as Microsoft, who is to say he can’t do the same for 13-year-old LinkedIn.
COMMENTARY: For Microsoft CEO Satya Nadella, the culture created inside the walls of any company isn't just important, "it's everything."
Nadella, who spoke with USA TODAY in anticipation of his keynote address Tuesday at Salesforce's annual Dreamforce customer event, says "ultimately what any company does when it is successful is merely a lagging indicator of its existing culture. He says.
"At Microsoft, we're aspiring to have a living, learning culture with a growth mindset that allows us to learn from ourselves and our customers. These are the key attributes of the new culture at Microsoft, and I feel great about how it seems to be resonating and how it's seen as empowering."
Microsoft has been in the throes of a small cultural revolution, one largely guided by longtime employee Nadella. Where Microsoft's ethos under predecessors such as Steve Ballmer and co-founder Bill Gates had autocratic and anti-Silicon Valley overtones, the company has made concerted efforts in the past few years to both promote internal dialog as well as forge external relationships.
Where Microsoft employees once received mandates from the C-suite, today they share ideas at company-wide hackathons. And where Microsoft once had combative relationships with rivals such as Apple, today the company has forged a variety of new partnerships with Salesforce, Box, as well as Apple. These moves are seen by many analysts as make-or-break plays to try and position Microsoft for growth in a competitive cloud- and mobile-first world.
Another big tech issue of the day is finding talent, due to a small pool of engineers being chased by a growing number of tech enterprises. In Silicon Valley, new hires are often wooed by six-figure salaries and promises of perks ranging from in-house chefs to flexible work schedules. Given such lavish overtures, a recent report in The New York Times that described a toxic work environment at Amazon caused a stir in social media circles.
Nadella doesn't hesitate when asked about the Amazon workplace debate, though he doesn't mention the cross-town company by name. Nadella says.
"The notion of having work-life harmony in a highly competitive economy is a first-class topic. I think the key is to make sure you're engaging in a dialog with your employees. There also needs to be flexibility in all the (workplace) policies that someone like me sets and propagates. You cannot have people burn out. It's bad for your company, and it's bad for society."
Whether LinkedIn's more casual, entrepreneurial, and innovative culture under CEO Jeff Weiner and Chairman Reid Hoffman will mesh with the corporate style of Microsoft under CEO Nadella will meh remains to be seen. Some hints may be found in what Jeff Weiner said as a reason why he sold LinkedIn to Microsoft.
“The Microsoft that has evolved under Satya’s leadership is a more agile, innovative, open and purpose-driven company,” Weiner wrote. “It was the latter point that first had me thinking we could make this work, but it was his thoughts on how we’d do it that got me truly excited about the prospect.”
Inside LinkedIn's Numbers
On April 28, 2016, LinkedIn reported their financial results for first quarter 2016.
Jeff Weiner said.
"We are off to a good start in 2016 with strength in our core and emerging businesses, and we continue to invest heavily in innovation and in our core products, while at the same time driving focus and scale to enable growth and leverage across the business.
Total revenue increased 35% year-over-year to $861 million.
Talent Solutions revenue increased 41% year-over-year to $558 million.
Marketing Solutions revenue increased 29% year-over-year to $154 million.
Premium Subscriptions revenue increased 22% year-over-year to $149 million.
Adjusted EBITDA was $222 million, or 26% of revenue.
GAAP net loss attributable to common stockholders was $46 million and non-GAAP net income was $99 million.
GAAP diluted EPS was $(0.35), compared to last year's performance of $(0.34). Non-GAAP diluted EPS was $0.74, compared to $0.57 last year.
I highly encourage you to review associated materials, including our GAAP and non-GAAP reconciliation. 
See slides below.
Courtesy of an article dated June 16, 2016 appearing in The Wall Street Journal and an article dated June 13, 2016 appearing in eCommerce Times and an article dated April 6, 2016 appearing in Apps Run The World and an article dated June 13, 2016 appearing in Time and an article dated September 15, 2015 appearing in USA Today
According to the 8th annual Social Media Marketing Industry Report from Social Media Examiner, summarized by Marketing Charts, 9 in 10 marketers say that social media is important to their business, with the most commonly cited benefits being increased exposure and traffic. Based on a survey of more than 5,000 marketers, the study offers insights into the directions social media marketing will take in the near future.
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Social media does present some difficulties for respondents. For example, respondents were more likely to agree (40%) than disagree (33%) that social media marketing has become more difficult in the past year. While two-thirds analyze their social media activities, just 41% agree that they’re able to measure the ROI of those activities, a figure that hasn’t improved in recent years. But, only 46% agree that their Facebook marketing is effective, with more than one-third unsure.
A quick summary of primary findings from the Social Media Examiner Industry Report, shows that:
Social channel use and importance varies among B2C and B2B marketers. B2B marketers continue to favor LinkedIn to a greater degree than B2C marketers (86% and 58% using, respectively), with B2B marketers also much more likely to be using Slideshare (21% vs. 6%), says the report. B2C marketers are more apt to be using Facebook (96% vs. 88%), Instagram (51% vs. 33%), and Pinterest (45% vs. 34%).
Those differences show up in marketers’ most important platforms, also. About 2 in 3 B2C marketers name Facebook their most important platform, with Twitter trailing distantly in second (11% share). Among B2B marketers, 40% cite LinkedIn as their most important platform, narrowly ahead of Facebook (37%), with Twitter third.
Despite already being the platform with the broadest adoption among marketers, Facebook (67%) emerges as the one for which the largest share will increase their efforts, says the report. Likely a reflection of its status as the most important platform overall, with B2C marketers (70%) being more likely than their B2B counterparts (61%) to see increased Facebook efforts on the horizon.
Beyond Facebook, 63% of respondents plan to increase their use of YouTube, with Twitter (61%) and LinkedIn (61%) close behind in terms of planned increases. Meanwhile, B2B marketers are more likely to be upping their LinkedIn efforts than B2C marketers (76% and 52%, respectively).
Results for other platforms likewise reveal differences in B2C and B2B marketers’ plans:
While only 5% of respondents say they’re currently using Snapchat, 16% expect to grow their activities, more than double the proportion in last year’s survey. Also, 28% want to learn more about Snapchat this year, up from 19% last year, evidence of some growth but marketers are not adopting the platform at quite the same rate as youth. When asked how they respond to new social networks, 51% said they are skeptical and wait and see what happens, says the report.
Currently, there is one and only one leader in paid social media: Facebook. In fact, almost 9 in 10 respondents said they regularly use Facebook ads. Only 39%, are using Google ads, then:
Signs point to Facebook maintaining its dominance in social advertising, says the report. However, it is the only platform in which a majority of respondents expect to increase their paid social media use. By comparison, fewer than 4 in 10 plan to make more use of Google ads.
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Turning to social media content types, 74% of marketers identified visual content as their most commonly used, followed by blogging (68%) and videos (60%). Blogging and visual content were essentially tied in terms of the most important content types, though with differences by target audience. Those marketing to businesses name blogging their most important content type, while for B2C marketers visual content is the most important.
When it comes to the near future, though, video gains ground. Almost 3 in 4 plan to increase their use of video content in the near future, just ahead of the 71% planning the same for visual content and leading all content types.
Finally, says the report, while only about 1 in 7 marketers are currently using live video, 39% plan to soon increase their live video efforts, and only 49% say they have no plans to utilize live video.
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For additional information about the Social Media Marketing Industry Report, please visit here.
Courtesy of an article dated June 16, 2016 appearing in MediaPost Publications Research Brief
Twitter reported its Q1 earnings today, and they’re not great. On the back of 310 monthly active users, the company posted revenues of $595 million, with Q1 GAAP diluted earnings per share of ($0.12) and non-GAAP diluted EPS of $0.15. This is a big miss on revenues but a beat on EPS.
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On top of this, the company issued very weak guidance for Q2, and currently Twitter’s stock is trading more than 13% down in the immediate aftermath of the results coming out. We’ll update this as it moves.
Twitter (NYSE:TWTR) shares declined 16.2% between the close of trading on April 26 (the day it announced its Q1 2016 earnings the price was $17.71 per share) and April 27 ($14.86 price end of trading) (Click Image To Enlarge)
Analysts’ expectations for non-GAAP EPS averaged out at $0.10, while the average estimate for revenues was $608 million. The company remains unprofitable with the net loss it reported this quarter coming in at negative $79.7 million. GAAP EPS was expected at negative $0.17. Twitter itself provided revenue guidance of $595 million to $610 million.
The company also issued new guidance on Q2 that spells bad news for the quarter ahead (or at least much lowered expectations). Twitter expects revenues between $590 million and $610 million, but this is a huge step down from $678 million, which is what analysts had estimated before today’s release. Ebitda is also taking a big hit: with Twitter estimating between $145 and $155 for Q2, while analysts had expected $173 million.
Twitter’s 310 million MAUs is not great user growth, although it is up a bit. But this graphic with nearly-identically sized bars, from Twitter itself, sort of says it all when it comes to the topic of stagnating growth.
Monthly Active Users (MAU's) Comparison Twitter vs Facebook, Instagram and Snapchat (Click Image To Enlarge)
As a recap, last quarter (Q4), Twitter disappointed on revenues of $710 million and adjusted EPS of $0.16 per share, with monthly active users 305 million, essentially flat on a year ago and notably a decline from the previous quarter. And a year ago, the company’s stock dropped 18% on poor revenue and user growth.
A year ago, monthly active users were 302 million, with 80 percent of them using Twitter on mobile.
The thing about Twitter is that it is growing in some of the key areas where it hopes to as a business, but just not enough, at least not right now. The company said that advertising revenues were up 37% over a year ago, representing sales of $530 million. But that number was down by quite some way on last quarter, when ads brought in $640 million in revenues.
Part of this is because Twitter is still not pulling in as many big ad dollars as they expected or hoped to. The company noted.
“Year-over-year revenue growth from large brand advertisers was softer than expected,although brand advertising remains our largest overall contributor to revenue.”
The company in the last quarter has made some waves to try to extend out its position as a media engagement platform, such as its deal to stream NFL games earlier this month, tapping both into its ambition to do more in video as well as sports content. Its early move with Periscope, however, is now facing competition from the likes of Facebook with its new Live product, and potentially Google, which reportedly is also building a live video service.
The company said in its report.
“As we outlined last quarter, we’re focused on what Twitter does best: live. Twitter is live: live commentary, live connections, live conversations. Whether it’s breaking news, entertainment, sports, or everyday topics, hearing about and watching a live event unfold is the fastest way to understand the power of Twitter. Twitter has always been the place to see what’s happening now and our continued investment in live will strengthen this position. By doing so, we believe we can build the planet’s best daily connected audience. A connected audience is one that watches together, and can talk with one another in real time.”
Earlier in the quarter, there was a lot of commotion around the company’s move to play around with the algorithm that serves Tweets to surface them non-chronologically, although we’re hearing a lot less about this more recently both from Twitter and users.
Internationally, it’s made some moves to potentially monetise its audiences outside the U.S. a bit better. In the UK, Germany and Japan (and soon France), Twitter is now working with Yelp to power location services (similar to the deal it has with Foursquare in the U.S.), although a recently appointed a new head of China has been spotted with controversy.
COMMENTARY: It's become increasingly apparent that Twitter (NYSE:TWTR) is in trouble. Its user base is stagnant, its management is leaving in droves and its financials, as compounded by the company's most recent release, continue to miss the mark. Twitter's current market capitalization is a little over $10.2 billion - 60% down on its 2013 IPO cap. A number of analyses have addressed each of these points individually, but none have as yet put forward the real issue. That is, Twitter is essentially valueless. This conclusion may come as a shock, but it shouldn't be. Twitter's HQ is on fire, and key members of its management team, have bailed out. That is the most important evidence. Why Twitter is valueless will be discussed in more detail shortly, but first, let's note some of the arguments put forward by proponents of the company and its long shareholder base.
There are more arguments in support of Twitter, but these seem to be the primary reasons behind an investment in Twitter as things stand - aside from the fact that optimists might regard its current price (78% cheaper than its 2013 highs) as a discount entry. We hope, however, that the debasing of the three mentioned support points will, by proxy, debase this latter fourth.
We can debunk the above three arguments why Twitter is a worthwhile investment below:
Data - We will look at the data Twitter holds on its users as individuals first, as this is far more relevant to its ability to generate revenues (as things stand). This is the data Twitter uses to target its advertisements - its sales pitch to potential ad clients, if you will. Fake profile data aside, it also knows how old we are, where we live and - in many cases - what we do for a living. Aggregate this data and any company worth its salt should be able to offer up a pretty targeted campaign for a client. Not Twitter, apparently. We know this through two primary pieces of information. The first, through a statement made by the company's head of U.S. ad sales back in February. In an interview with Digiday, Twitter's Matt Derella discussed the company's new strategy of serving advertisements to users that aren't logged into the platform. To quickly explain this, in previous incarnations, Twitter would only display advertisements to a user that was logged in. If a non registered, or non-logged in user, was browsing the Twitter feeds of other users, it would be an ad free experience.
It's reasonable to assume that Twitter should be able to serve far more effective advertisements to users that are logged in than it can to users that aren't (read: anonymous browsers). Not so. Here's what Derella said:
"We can provide the same level of deliverable results that we can with logged-in users."
This means that the data Twitter holds on its users doesn't actually translate to any deliverable benefit to its advertisers. How this can be the case is anyone's guess. The most logical assumption, however, is that Twitter's advertising is equally ineffective for both logged in users and for anonymous browsers, and that the former simply aren't responding to the ads being served across the platform. The second piece of information relates to a shift of ad clients away from Twitter, and is something we'll address in the second part of this piece - the part that relates to Twitter's ability to monetize its userbase.
Let's move on now to the real time data. Back in October, Twitter's said that the hashtag, and the text-based communication, made for far easier aggregation than, say, Instagram or Snapchat's images. At the time, Twitter had just closed deals with IBM and Bloomberg - deals that looked to mark a shift in focus toward the data side of the business that, for so long, analysts had been screaming at Twitter to take advantage of. Fast forward to the present day, however, and neither of these supposedly pivotal deals look to have progressed into anything game changing and if latest management-investor communications are to be believed, the company has once again shifted towards trying to redesign its ad offerings (vertical video load, DoubleClick integration, etc.) rather than package and sell its data. The latest news in this arena is that Twitter is targeting Japan as a data customer. There are only 35 million MAUs in Japan (about half the US equivalent figure). If the company struggles to sell its data to US businesses to the extent that advertising still accounts for the vast majority of its revenues, chances are it won't do a whole lot better in Japan. Another example, in this author's opinion, of a Hail Mary from Twitter. To put it another way, another example of the company talking big, but when it comes down to it, not being able to deliver.
Large User Base - let us now address the second argument in favor of a bullish twitter thesis - the company's user base and its monetization. 310 million MAUs, as mentioned, is a good number. When compared to Facebook (1.59 billion MAUs), it obviously falls considerably short, but to say that a company should be able to effectively monetize 310 million active individuals is not being too hard on Twitter. For some reason, however, it hasn't been able to. Most reading will already be aware that the company generated $595 million revenues during the first quarter of 2016. Of this number, $530 million came from advertising. Although now we are hearing that the big-ticket advertisers are shifting away from Twitter and toward fresher alternatives such as Snapchat. This isn't a surprise. Twitter has far surpassed the point where it can be considered an experimental advertising platform for the big-name brands.
It's now at the point where advertising agencies and their clients have data on the efficacy of a Twitter campaign and are able to weigh this up against reallocating their dollars toward expanding campaigns on the other established platforms or initiating experimental campaigns on platforms that are at the stage Twitter was half a decade ago. In other words, Twitter has attempted to monetize its user base and to some extent has done so. But as advertisers shift from the platform, chances are we will look back and see the current circa $600 million - or around two dollars per monthly active user - as a peak.
Utility As Advertising Platform - Following on from Dorsey's quote above, and this time with reference not just to Twitter's fast paced, information breaking nature but also its shift into live streaming with Periscope, here's another quote (from the latest report):
"As we outlined last quarter, we're focused on what Twitter does best: live. Twitter is live: live commentary, live connections, live conversations. Whether it's breaking news, entertainment, sports, or everyday topics, hearing about and watching a live event unfold is the fastest way to understand the power of Twitter. Twitter has always been the place to see what's happening now and our continued investment in live will strengthen this position. By doing so, we believe we can build the planet's best daily connected audience. A connected audience is one that watches together, and can talk with one another in real time."
To offer up some credit, this statement is partially correct. Twitter's allure (for some) is that it offers a resource through which individuals looking for access to the latest breaking information can see what's happening. Twitter offers users a list of "what's trending" on a geographgic basis. There are a number of issues with this, however. First and foremost, credibility. There have been numerous studies undertaken (here are three examples, but a quick search reveals plenty more) that totally debase the credibility of Twitter users' response to any crisis or breaking news event. Yes, factual information will generally publish through Twitter before mainstream media channels publish it, but there is a reason for the delay in the latter, and the reason is credibility. With some exceptions, reputable media channels fact check, cite sources and hold accountability for what they publish. The average Twitter user does not, and this unreliability undermines Twitter as a go to news source altogether. How can a user determine what is fact and what is fiction? Further, even if individuals did go to Twitter to glean the latest information before it breaks anywhere else, the chances of Twitter being able to serve them effective advertisements in the sort of environment that requires instant and first look access to a crisis or breaking news event are minimal.
It's important to note that this is not some sort of bias-driven rant intended to discredit Twitter as an investment opportunity. The platform has its uses. I also have an admittedly small, personal and professional following, with whom I'm able to share my blog posts via my Twitter account: @turk5555 Twitter broke the recent Prince passing and I happened to see it there first as I was (likely) performing one of the two already mentioned Twitter related activities. Others no doubt, will have similar experiences with the platform. Some will use it far more.
When all is said and done, Twitter's advertising model has failed to generate an ROI for investors. Twitter has shown it is unable to deliver any (it has failed to generate a profit since it was founed in nearly 10 years ago) ROI, and any turnaround looks highly unlikely given current conditions.
As a mainstream information sharing platform, or as a forum through which individuals are able to keep tabs on the people that pique their interest, Twitter will probably be around for years to come. It's just not an investment opportunity, and it's not going to be long before even the most ardent Twitter bulls are forced to come to this realization and unload.
When Jack Dorsey returned to the helm as CEO in August 2015, he promised big changes would come, but with the exception of its Moments app, I have not seen any game-changing changes that would spark a turnaround in the number of monthly active users (MAUs) or advertising revenues. Revenues are up year-to-year, but the increase in video ads has come at the expense of promoted tweets. Advertisers have merely shifted ad dollars from promoted tweets to video ads.
The biggest problem that I see with Twitter is that it has become a "one trick pony" in the sense that people view it as a place to post your tweets and not much else. In my opinin, Jack Dorsey must make a huge pivot to redesign Twitter into a social network with features that existing users will fall in love with to increase engagement and new user signups. I have not seen evidence of either.
Twitter's failure to provide advertisers, especially large brands, with ad targeting tools based on demographic and online behavior attributes, has created an endless parade of promoted tweets and video ads that are irrelevant to users. I hope that the recent hiring of a full-time head of marketing, will correct this huge weakness and bring back big ad spenders.