ImaginativePRO Blog

A PARADIGM SHIFT FROM BRANDS TO CUSTOMERS MEANS BRANDS MUST PROVIDE PERSONALIZED EXPERIENCES OR RISK LOSING THEM

It’s true that you never get a second chance to make a first impression.

The proof? Customers are breaking up with retail brands that can’t deliver on their evolving expectations. The tech-savvy generation and their time-pressured parents are rapidly adapting (and perhaps outpacing) retail brands.  Customers are demanding a shopping experience that is intuitively seamless, fast, authentic and personalized.

So how do you answer the increasing demands of your customers?

The paradigm shift: from brand to customer

The customer experience has become the “final frontier” for retailers. It used to be all about the brand. But a lot has changed. Because of increasing customer expectations and falling store sales, retailers are learning that they have to make a big shift. It’s not about the retailer’s brand any longer.  It’s all about the customer—and how the brand can create a shopping experience built on this new-found focus.

Let’s face it. Most shoppers can find similar or better alternatives online. A large part of why they are coming to the store is for the experience itself.  

"Customers not only want, but expect a personalized experience. They expect retailers to know their preferences and interests. A recent Infosys study reported that 78 percent of consumers are more likely to be a repeat customer if a retailer provides them with targeted, personalized offers.”

But the pendulum swings both ways. The CMO Council reported that more than half of North American consumers would consider breaking ties with retailers that do not provide offers that are relevant and personalized.

So we’ve come to a place in time where retailers are forced to change their ways. The shift of focus must come away from the brand and, instead, highlight the customers’ expectations and needs at an individual level. Brands that succeed in this change will see increased loyalty and profit margins. But those that do not will be faced with a serious decline in sales and brand loyalty.

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Unless you’ve been hiding under a rock, you probably already know all of this. But the real question is:  What do you do about it? How do you create an experience for each and every one of your shoppers that will make them feel that when they enter your brand’s store, they are entering their store?

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Today most retailers realize the power of personalization and the in-store experience. The problem is that they don’t know how to craft an experience that is unique, and they don’t have the information they need to get started.

The materials for change: personas, shopper history and real-time decisioning

To get started along the journey of creating a shopping experience that is built around your
customer, you will find that personas, your compiled shopper history and an organized real-time message engine are your keys to success. However, before you can cross these items off your to-do list, you need one very important thing—data.

Data is the building block for creating shopper personas built in reality. Data that you store of your
shoppers’ past transactions with your brand will provide critical information that will deliver a truly
personal experience for them. And data will help you to make decisions about what message or offer your shopper should receive in any given moment. To be successful, you need to be sure that data is your foundation for all things moving forward and that your decisions are grounded in actionable insights.

Personas: Going beyond segmentation

Retailers have long used customer profiles as a representation of their marketing segments. personas take these profiles beyond the basic demographic makeup of the customers. A well-developed persona incorporates the basic demographics with financial information (e.g., ability to pay, credit worthiness, net worth), interests and—perhaps most importantly—transactional behavior and categorical spend.  True, it does take work (and often money) to create accurate shopper personas. But once this task is done, these can be powerful tools for getting marketers and store employees to understand and obsess about customer needs.

With personas, your brand has a holistic view of who is shopping at your stores. To be successful,
marketers have to use personas consistently.  They should serve as a reference at every step of the design process so that it’s clear who they are designing the experience for.

It’s also important to note, that building personas is not just a one-time job. Once you have created
your personas, they should serve as living, breathing documents that need to be evaluated on a regular basis. If your customer base changes, then so should your personas. Measurement is crucial to ensure that the personas remain an effective guide.

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Shopper history: the more you know

Personas are only one element of the personalized shopping experience.  Shopper history is another. Capturing a customer’s history with your brand empowers you with hugely valuable information. What have they purchased in the past? What are their preferences? What are they buying with your competitors?

Having the answer to these questions can make you a master of the retail universe.  But, knowing them is not enough. You have to ensure that they are easy to access.  How many databases are the answers to these questions stored in currently? Do your store associates have access to them? Are they fueling the messages that are being served on your ecommerce site? If your answer is no, then you have some work to do.

It is one thing to capture this information—but the most important thing you can do is to be sure that it is readily available so you can use it at every step of your customers’ shopping journey.  

Real time: Making it happen in the moment that matters 

Now that you have created your personas and you can access your shopper history at any stage of your customers’ journey, you have one more very important thing to do. You need a real-time decisioning engine.

Sound complicated? Well, in a way, it is. But you already have most of your legwork done with your personas and your shopper history database. Now it’s time to map all of the possible journeys your shoppers may take and think about their experiences.  At every step, what offer would be relevant to them in that moment?

This exploration takes time and a lot of thought. But in this mapping process, you’re actually creating a database of offers and messages for your customers that will make their shopping experience feel personal and relevant. After all, that’s the goal, right?

Bringing it together: Joining the elements of your new shopping experience

Forrester notes,

“Combining the user-archetype information that personas contain with an individual’s history, preferences and current environment can help companies engineer experiences that feel like they were designed for a specific user, even if they were not.”

In essence, this is the secret formula. It’s not possible to make every experience individually and uniquely personal to a single customer.  But if you can combine the persona + shopper history + real-time decisioning engine, you will be delivering on an experience that feels custom fit for your shoppers.

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Your customers don’t have patience for you to figure it out. They just want an intuitive experience that feels as if it was authentically created with them in mind. Shoppers’ expectations of instant gratification aren’t changing. If you can deliver on their expectations, you’ll reap the marketshare of the brands that are not.

It’s a lot to tackle if you haven’t already started. Remember, you don’t have to climb the mountain in one attempt. Focus on one aspect of your customer experience and use it as a beta project. Then build upon your customer experience from there.

According to Forrester,

“Organizations that have failed in personalization initiatives often tried to do too much at once. Instead, successful organizations we spoke to avoided these pitfalls in new contextualization initiatives by starting small and adding a personal touch for certain experiences before ramping up to large personalization initiatives.”

Avoiding the breakup: how to build trust with your customers

Just as in real-life relationships, your consumers are looking for authentic relationships with the brands and products that they buy. The evolving digital landscape has created competition and endless shopping opportunities. With all of these endless options, consumers want to be inspired.

However, through all this evolution, the premise of buying and selling goods hasn’t fundamentally changed. The old adage “Nothing happens until someone decides to purchase something” still applies. The difference is that now shoppers are more equipped to demand an intelligent, transparent, unique and meaningful experience with the brand of their choice. They have more choices than they ever did before when selecting a brand to have a relationship with.

Where the brand used to hold the power, now it is the consumer with all the power of choice. To be successful, you need to be strategically prepared to set your brand apart from the competition. To do this, you need to know your customer in a way that feels unconsciously unique and authentic. In the end, this is what will inspire trust for your shoppers. It’s that trust that will kindle a loyal relationship with your brand.

Conclusion

Today the customer is in control. They decide if, when and how to interact with their favorite retail brands. With all the channels of interaction available to the consumer, retailers need the ability to develop well-grounded engagement strategies to maximize the customer experience every minute of every day.

As a new breed of marketing partner for this customer-empowered world, our approach harnesses the power of rich data, world-leading technologies, engaging creativity and transformative ideas to connect customers to brands and deliver dramatic results.

Customers today have many options. We can help you create meaningful customer connections, resulting in increased revenue, more frequent engagement and more efficient marketing spend.

COMMENTARY:   Improving the customer experience is a strategic priority for 73% of businesses, yet only one percent of companies deliver an excellent customer experience, according to the 2015 Forrester Research Customer Experience Index™., 

Based on a survey of 46,000 consumers, the CX Index measured and ranked 299 large US brands, across 17 industries, on the quality of their customer experience. USAA is ranked number one. Other companies among the top 15 include (in alphabetical order): Ally Bank, Amazon.com, Charles Schwab, Discover, Edward Jones, Etsy, HSN, JetBlue Airways, Lexus, Navy Federal Credit Union, Newegg, PNC, QVC, and Zappos.com.

In the Forrester index for 2015, retailers remain the best at providing a great customer experience, but it is interesting to see that parcel shippers and hotels dropped way down the index – last year they were up there at the top with retailers. And there is an important distinction to make with retailers. Digital-only online retailers are much better at providing a great customer experience than those with a store network.

Megan Burns, Forrester Research principal analyst serving customer experience professionals said.

“The emotion that an experience elicits influenced loyalty in nearly every industry.  And making customers feel valued is the holy grail of CX emotions. Customer experience leaders made customers feel valued almost twice as often as CX laggards did.”

Megan explained that this year's CX rating used different methodology that now incorporates customer loyalty in determing the overall CX rating.    

"The biggest change in our new approach is the way we judge CX excellence. To hit a home run, the 299 brands we studied had to do more than make customers happy. They had to design and deliver a CX that actually helps the business by creating and sustaining customer loyalty.  Our new rules shook up the standings and pulled a bit of a Billy Beane, tipping conventional CX wisdom on its head.  For example:  Customer loyalty is undergoing a rapid change from being the way that you manage a points-based program with plastic cards to a strategy that requires engagement with customers and an ability to improve their experience with your brand."

Megan said that there is a shakeup on the CX leaderboards for 2015. 

"For the first seven years of the CX Index, retailers, hotels, and parcel shippers dominated — but not this year. As industries, hotels and shippers dropped to the middle of the pack. Retailers held on to first place, but there’s an asterisk on that particular stat. We broke the retail industry into two groups in 2015 — those with physical stores and those without. Retailers without stores (we call them digital-only retailers) kept the top spot. Those with stores fell multiple places in the industry standings."

Megan cautions that a high CX rating may not always be worth it and that there maybe a point of diminishing returns that brands may not want to cross.   She says.

"In most of the industries, we saw a strong positive link between CX quality, loyalty, and loyalty-driven revenue. But that wasn’t always the case. Our models for one industry showed a very clear and compelling point of diminishing return. Taking CX from poor to okay is more profitable for brands in this space than going from okay to excellent. That doesn’t mean that anyone can afford to ignore CX. Many aren’t even hitting the okay mark right now. But it gives executives something to think about as they refine their company’s overarching CX strategy."

Courtesy of the Epsilon's "It's Not You, It's Me" , an article dated April 20, 2015 appearing in MarketWatch, and an article dated April 20, 2015 appearing in Forrester Blog

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TWITTER'S TOP SECRET "PROJECT LIGHTNING" USES EVENT TWEETS TO BRING CURATED AND VISUALLY IMMERSIVE CONTENT TO USERS

Twitter is developing a new major feature called "Project Lightning" that will use the concept of “events” to bring a curated and immersive experience to users, BuzzFeed's Mat Honan reports.

Dick Costolo is bouncing in his chair. He’s just vibrating. It’s a Tuesday afternoon, less than 48 hours before he will make public his resignation as Twitter’s CEO. And right now, he’s ebullient.

Costolo asks, excitedly, spinning side to side in his chair a bit.

“So, What did you think?”

Costolo is asking about Project Lightning, a major new feature for Twitter — and a new direction for the company that will launch later this year. Project Lightning will bring event-based curated content to the Twitter platform, complete with immersive and instant-load photos and videos and the ability to embed those experiences across the Web — and even in other apps.

Kevin Weil, who runs product for the company, says. 

“It’s a brand-new way to look at tweets.  This is a bold change, not evolutionary.”

It is also still a few months out, and things could change. But here’s how it will work.

On Twitter’s mobile app, there will be a new button in the center of the home row. Press it and you’ll be taken to a screen that will show various events taking place that people are tweeting about. These could be based on prescheduled events like Coachella, the Grammys, or the NBA Finals. But they might also focus on breaking news and ongoing events, like the Nepalese earthquake or Ferguson, Missouri. Essentially, if it’s an event that a lot of people are tweeting about, Twitter could create an experience around it.

Weil explains. 

“It’s around anything that’s interesting.  It could be current events. It could be breaking news. It could be awards shows or sports. But also cultural events and moments — things around your location and where you are. There’s amazing content, for example, posted to Throwback Thursday every single Thursday. But it’s hard to discover it; you have to work as a user to go and find the best stuff, but [we] can do it easily and can package it richly.”

Launch one of these events and you’ll see a visually driven, curated collection of tweets. A team of editors, working under Katie Jacobs Stanton, who runs Twitter’s global media operations, will select what it thinks are the best and most relevant tweets and package them into a collection.

These collections are designed to take advantage of images and videos associated with a particular event, and to bring them to life. None of that media is presented in the standard Twitter timeline — each tweet, picture, or video will take up the entire screen of your phone. You’ll view them one at a time by swiping. Importantly, collections will include — and thus promote — not only pictures and videos posted to Twitter, but Vines and Periscope videos as well.

All of these videos play automatically — and they load almost instantly. They just fire as you swipe over to them — that’s the idea, anyway.

You can click in and simply scroll through a curated event, and as you do a scrub bar along the bottom of the Twitter client tracks your progress until you either reach its end or catch up with tweets being posted in real time. So, for example, as you scrolled through tweets about the Super Bowl during the third quarter, the bar might start an hour or two before kickoff, and as you progressed through all of the curated videos and photos you’d eventually hit the most current, identified by a lightning bolt icon.

This BuzzFeed-created artist rendering showing how a final version of Project Lightning might look. Images and videos appear full screen as you swipe through them.  A timeline across the bottom shows you where you are in an event as it progresses over time. MIchelle Rial/BuzzFeed (Click Image To Enlarge)

What’s more, you can also opt to follow an event and have curated tweets blended into your timeline. And that doesn’t mean you follow accounts where those tweets originate. So, for example, while you might see Ellen DeGeneres’ tweets from the Grammys in a curated Grammys event, you would not actually begin following her if you were not already. When the Grammys end, so do the tweets. In other words, you automatically unfollow an event at its conclusion. And you can still experience curated events without following anything just by going to that center tab.

Finally, you can access these Lightning events on or off Twitter — whether you’re logged in, active, or not. You’ll be able to view them on:

• Desktop computers via Twitter.com.
• Mobile devices via its mobile apps.
• Even as embeds on other webpages.

If they are embedded off-site, the events will continue to update as more curated tweets are added.

Weil says.  

“There’s a beautiful connection to our strategy of reaching users on every platform.  It’s not just logged-in Twitter, it’s logged-out, and it’s syndicated on other websites and mobile apps. This reaches all of them. The collections are a core part of our logged-in experience — that’s the point of being in the center tab. But you can easily imagine them as logged-out experiences telling about something happening now out in the world. And you can imagine them — and this is new — as collections and syndicating them across any website or mobile app.”

That last bit is important because it’s a play to get Twitter in front of a lot more eyeballs. For the past year, as Wall Street has demanded user growth, Twitter has promoted the notion that what matters is not how many people use its service, but how many see tweets. Project Lightning is not just a way to reach more eyeballs; it’s also a gateway drug that Twitter hopes will convert those eyeballs into active users. More to the point, it’s a way to help people who might find Twitter confusing connect with events that are important to them and are also driving discussion on Twitter.

Stanton explains.

“We’ve seen in the past that we have so much conversation around events.  The Oscars, or the NBA Finals. Breaking news events like Ferguson. Memes like Alex From Target. … But the challenge we’ve had over the years is, although we have the world’s greatest content, it’s like having a television without a channel guide or even a remote control. There’s no way to really find it or contextualize that content. So [Project Lightning] is this beautiful vessel for us to surface great content and make it more delightful.”

To put them together, Stanton is building out a new media team of people in its major markets throughout the world, all of whom, she says, have newsroom backgrounds. They’ll use data tools to comb through events and understand emerging trends, and pluck the best content from the ocean of updates flowing across Twitter’s servers. But human beings will decide which tweets to include. That could put Twitter in an editorial position — deciding what to include and from whom — in a way it hasn’t really been before.

Stanton says.  

“We’re developing an editorial policy around those judgement calls.  We’re making sure that there’s fairness and integrity, and that we have a set of guidelines we can review before saying yes to that particular tweet or video and including it in Project Lightning.”

Twitter anticipates posting seven to ten of these events a day. But Costolo tells BuzzFeed News that the company intends to eventually open up the tool that it uses to build curated events to other organizations. So someday a publication focused on a niche interest like, say, sailing could create a collection around an event that might not be big enough to broadcast to Twitter’s entire audience, but would still be appealing to a niche demographic.

The idea for Project Lightning has been around for some time now. It began as a hack day project in January, and has been presented at multiple board meetings. BuzzFeed News learned about parts of the project and approached Twitter for more details, which were provided last week.

All of that seemed to be thrown into flux just a few days after the demo, when Costolo announced he was stepping down. But both Costolo and incoming interim CEO Jack Dorsey, the burly-bearded iCEO, insist Twitter remains committed to Project Lightning.

Dorsey said in response to a question about his commitment to the Project Lightning initiative.  

“Yes.  Yes, period. We’ve seen this at a few board meetings now, and I’m super excited about it, because it’s extremely engaging.”

The concept of Project Lightning is one for which critics have long clamored: an experience that lets people who aren’t hardcore Twitter users — or Twitter users at all — suck up the flow of real-time information without needing a deep understanding of Twitter’s product. It’s a way to show highlights of the news in real time as flows and crests. While that might be a feature that was many months in the making, it’s also, conceptually at least, something that should have happened years ago.

After all, Twitter has experimented with surfacing event-related content before, starting with its elections.twitter.com subsite in 2008 and continuing through this past week when it prompted users to check out the NBA Finals. But the company never managed to really nail a way for people who weren’t already invested in Twitter to get much out of its real time nature, and that certainly contributed to the drumbeat of critics calling for Costolo’s head. Could that be why Twitter is only now getting around to it?

Costolo, however, says Project Lightning is not a response to critics. He explains.  

“It’s been in the works for a long, long time.  I have no doubt that when it launches people will create a narrative that it was the result of something critical. People think I read something and then two months later we launched something — but that’s not the way this works. This has been in the works for months and months.”

And there are still months more left, too. While its videos may load and play in an instant, Project Lightning itself will have been a long time coming.

COMMENTARY:   Twitter management has known about Project Lightning since the end of 2014, and it is now almost July.  The Board of Directors loves the idea, so why isn't it alreay part of Twitter?  This is a great new enhancement to increase the user experience, and that could increase enagement and new users because of the ability to embed events outside of Twitter.  Embeded videos throughout the Web has greatly increased traffic and engagement on YouTube, and I think Project Lightning could have a similar effect.  However, Twitter should not wait until "later this year." to add this new feature.  It should be part of Twitter much sooner than this.    `

Courtesy of an article dated June 18, 2015 appearing in BuzzFeed

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6 TIPS FOR COMMUNICATING CONTENT MARKETING ROI TO YOUR EXECUTIVE TEAM; PLUS THE FUNDAMENTAL PILLARS OF CONTENT MARKETING

Marketing teams persuade and captivate audiences every day. They convince people to buy everything from $160 pens to coffee beans that pass through elephants. But a CMO’s toughest sell is always his own boss — especially when it comes to content marketing.

Executives want to know a marketing strategy’s expected ROI before they commit money and resources to it. But content is a different animal than other marketing initiatives. It doesn’t produce impressive short-term results; it bolsters long-term profits. Once a content marketing strategy proves its worth, executives feel more confident investing in it. The challenge is convincing them to take the initial plunge.

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Here are six selling points you can use to persuade your company leaders that content marketing will go the distance for your brand:

1. Leads generated from content: Anything that requires visitors to submit their contact information — whether that’s subscribing to your newsletter, downloading a piece of content, or signing up for webinars and other offers — will ultimately capture leads. Use tools such as Google Analytics to track and document engagement with internal and external content. Then, take this data to your boss to demonstrate how different types of content generate new leads. Analytics also give you clear, actionable information on how to improve your ROI and pivot from poorly performing strategies.

2. Sales generated from content: Executives are especially interested in these numbers. Use your analytics systems to track how many people sign contracts or purchase your products after downloading content from your website.

Encourage your salespeople to ask prospects and clients how they found your company. They may have read an article you posted but didn’t click through to a download or sign-up page. It’s useful to know which articles compel prospects to get in touch.

Ask your sales staff how often content comes up organically in customer conversations or how frequently they use it to educate leads. All of these insights will demonstrate how content indirectly influences the sales process.

3. The performance of referral traffic: By tracking your content’s referral traffic over time, you can make fairly accurate assumptions about how it’s impacting your business. My company saw a151% increase in conversions in the first quarter of 2015. Thanks to our analytics system, we can attribute that jump to the guest contributions, blog posts, and gated content we developed and executed this year.

Lead generation and referral traffic numbers help you set benchmarks for your content. Build a strategy using Google Analytics and marketing automation software to tie a definitive ROI to your content. By showing a favorable comparison between content production costs and the value of sales generated, you can make a strong case for a content strategy to your CEO.

4. Non-quantitative metrics: Analytics don’t tell the full story. Great content creates ripples in your industry, which can’t always be measured by social media shares or lead generation numbers.

For example, I often reference American Express’ OPEN Forum content marketing strategy during keynote speeches. Amex doesn’t track those types of mentions, but small wins for brand visibility like these can add a powerful punch to its ROI. Hard data is important, but don’t overlook content’s role in brand storytelling and positioning.

5. Budget opportunities: Content marketing isn’t cheap. Getting it right requires a substantial financial investment that might not show a visible ROI for a while, which can make it a hard sell to budget-conscious executives. Anticipate your boss’s reservations, and suggest ways to make the numbers work.

Make the case for pulling funds from the sales, recruitment, and research and development budgets. Content serves as a great asset in social media campaigns, recruiting efforts, public relations strategies, and sales, so marketing shouldn’t be the only department shouldering the financial burden.

But that doesn’t mean marketing is off the hook. Revise your own budget to see where you can redirect funds to more productive channels, such as content marketing. Too many companies throw money at outdated or ineffective SEO strategies like link building and keyword stuffing rather than content creation.

But creating valuable, engaging articles and guest posts is the surest way to rise in the SEO rankings. Plus, good content yields a number of other benefits: lead generation, sales conversions, thought leadership, great customer relationships — the list goes on.

The money for a great content strategy is already there. You just need your boss to rethink how she’s using it.

6. Competitors’ content: With 78% of CMOs saying custom content is the future of marketing, you know your competitors are hard at work crafting industry-leading content. And the more powerful and compelling their content strategies become, the harder it will be for your company to catch up. Your boss doesn’t want competitors controlling the conversation, so she’ll come around quickly when she realizes what’s at stake.

Once you’ve sold your company leaders on the value of content marketing, you can get the ball rolling with implementation. Your leadership team is an invaluable asset to your marketing game plan, but time constraints often prevent top-level executives from contributing their insights. Create a custom knowledge management process that allows you to leverage their experience without eating up their time.

Content marketing is a no-brainer when you consider all the ways it supports your bottom line. Solid content drives traffic and positions your brand as a hub for information. As a marketing professional, you already know this. You just need to help your boss see the light, too.

COMMENTARY:  According to a marketing survey, 43 percent of respondents said “blatantly promotional and self-serving content” is the characteristic they dislike most in B2B content.  Another survey found that ending a blog post or newsletter with a product pitch reduced the content’s credibility by 29 percent.  Julie Fleischer from Kraft stated that 90 percent of data is “crap.” So keep in mind your own unique situation when considering how this information relates to your content efforts.)

To create effective content that builds trust, breaks down sales barriers, and keeps your company top of mind, you need to focus on providing value to your audience. The best way to do this is by educating them. The information you provide will hopefully lead customers to do business with your company, but if it doesn’t, the problem likely is your product or service — not your content.

Here are a few ways to sell without being promotional or compromising credibility:

1. Choose a medium that aligns with your goals. Every content medium serves a specific purpose, and choosing one that fits your goals is the first step in effective content creation. Third-party publications generate visibility and boost credibility, whereas blog posts, whitepapers, and case studies create hyper-targeted engagement.

If you want to take an in-depth look at a confusing aspect of your industry for people further along in the buying journey, you can create a whitepaper that’s available for download from your website. For example, we created “The Insider’s Guide to Tackling Content Marketing Like a Pro,” which offers a step-by-step guide to creating and implementing a successful content strategy. It serves as a great resource, shares our company’s tried-and-true methods, and even includes concrete examples of how our clients find success using our process. If you want people to know how great your product or service is, ask your customers to sing your praises in a case study or testimonial.

2. Eliminate company mentions that don’t enhance understanding.The company name drop, the “backdoor brag,” the shameless product plug — we’ve all seen content creators commit these promotional sins. Even “subtle” brand mentions can make a bad impression when they’re simply there for promotion and don’t serve to help educate the reader. In general, you should avoid all mentions of your company that don’t enhance the reader’s understanding of the message you’re trying to convey.

3. Don’t try to sneak in links. Nothing destroys credibility faster than populating an article with dozens of links to your company’s product or service. Even if you don’t mention your product or service outright, you’re violating the social contract with your readers by trying to push them to your offering when they’re seeking information.

It’s fine to link back to one of your blog posts or whitepapers that builds on the information you provided in the article, but it must be extremely relevant and further understanding of the topic. Otherwise, readers will feel betrayed and click away.

4. Share unique experiences, but avoid irrelevant rambling. Writing about your company’s challenges humanizes your brand and offers your readers valuable learning experiences. It can also be an excellent way to subtly draw attention to your company’s unique differentiator without creating an article that reads like website copy. Organize your expertise and key experiences, and house them in a company knowledge bank using this custom template to streamline the process. My team relies on this tool to help supplement my articles and keep the content flowing.

However, there’s a big difference between sharing a helpful experience and bragging. Your company might have the world’s largest in-office bar, or you might be a world Judo champion. But unless you’re using those experiences to teach readers something or to provide a little entertainment, you’re the digital equivalent of the guy who corners people at the company Christmas party to show them pictures of his cat.

5. Focus on information that’s most valuable to your audience. Don’t tackle content from the standpoint of “What can I write about to position my product or service best?” Instead, tailor your content to the topics your audience wants to read about.

What are your readers’ burning questions? What are their biggest pain points? What obstacles do you encounter most often on sales calls? All these questions should naturally lead you to an information vacuum that you can help fill with educational content. You can also write about important industry trends, timely events that impact your audience, or a product/service category (hint: not just your product) to help customers along the buying journey.

If you’re creating content with clear business goals in mind, it can be difficult to walk the line between sharing helpful information that builds credibility and being promotional. But it’s important to shift from the “me” marketing mentality to considering what’s best for your audience. When in doubt, go with what will deliver the most value to your readers. After all, the best ways to build credibility are by sharing generously and demonstrating true expertise.

Here's an excellent infographic that outlines the key elements of how to measure content marketing ROI:

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Courtesy of an article dated June 14, 2015 appearing in Forbes an an article dated June 14 2015 appearing in Forbes

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THE QUALITY OF LIFE AROUND THE WORLD IN ONE NEAT INFOGRAPHIC

Came upon this infographic designed by Movehub for Business Insider.  Its quite revealting.  The USA is not No 1 in quality of life.  We rank No 10.  Switzerland, Denmark, Germany, Finland and Sweden are the Top 5.  These are followed by Saudi Arabia, Oman, Australia, Norway and the USA.  Hope you find the information useful.  

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Courtesy of an article dated June 15, 2015 appearing in Business Insider

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OCULUS UNVEILS NEW CONSUMER RIFT VIRTUAL REALITY HEADSET WITH XBOX ONE CONTROLLER, ON SALE Q1 2016

Oculus today gave the world the first look at its Rift consumer virtual reality headset which will ship with a wireless Xbox One controller. It also comes with a small, table-top camera on a stand that watches a constellation of LED markers on the Rift to track your head movement.

The partnership with Microsoft will also see the Rift work “natively” with Windows 10, plus play Xbox One games in the headset.

 

Oculus VR's new consumer Rift VR headset will be on display at the E3 2015 Electronic Entertainment Expo running between June 16-18 at the Los Angeles Convention Center in Los Angeles.  People attending the E3 Expo will be able to try out Oculus Rift.   

Oculus also made the announcement in its blog:

Step into the Rift

Today, we’re thrilled to introduce you to the Oculus Rift!

The Rift delivers on the promise of consumer virtual reality and next-generation VR gaming.

The consumer Rift virtual reality headset up close (Click Image To Enlarge)

Custom Display and Tracking System

The Rift uses custom display and optics technology designed specifically for VR featuring two AMOLED displays with low-persistence. The technology enables incredible visual clarity as you explore virtual worlds with the Rift.

The consumer Rift virtual reality headset is tracked by a Infra-Red LED constellation tracking system for precise, low latency 360-degree orientation and position tracking (Click Image To Enlarge)

The headset is tracked by our IR LED constellation tracking system for precise, low latency 360-degree orientation and position tracking.

Integrated VR Audio

Audio is a critical component to achieving and amplifying presence.

The consumer Rift features an integrated VR audio system with adjustable headphones (Click Image To Enlarge)

The Rift features an integrated VR audio system designed to convince your ears that you’re truly there. The integrated headphones are also removable in case you want to use your own.

It also incorporates a high quality internal microphone for social experiences.

Ergonomics and Design

We’re incredibly excited for you to try the Rift’s new design — we’ve been refining it over the last few years.

The consumer Rift virtual reality headset has an advanced ergonomic design improves the headset’s overall balance and stability. This strap architecture offloads the overall weight, allowing the Rift to rest comfortably (Click Image To Enlarge)

The Rift has an advanced ergonomic design improves the headset’s overall balance and stability. This strap architecture offloads the overall weight, allowing the Rift to rest comfortably.

It’s as easy to put as slipping on a baseball cap. Once you’re in, simply adjust the straps to fit you.

The consumer Rift virtual reality headset includes a mechanism that allows you to adjust the distance between the lenses for the most comfortable visual experience (Click Image To Enlarge)

Further, we’ve included a mechanism that allows you to adjust the distance between the lenses for the most comfortable visual experience. You can also remove the facial interface to replace the soft foam, and we’ve improved the form factor to better accommodate glasses.

Wireless Xbox One Controller included with every Rift

We’ve been working closely with developers to understand what they need from the Rift since the earliest days at Oculus.

Developers wanted an input device that was robust and versatile enough to enable next-generation games and experiences in this first generation of VR. As a result of that collaboration, we’ve decided to incorporate one of the best gamepads available, a wireless Xbox One controller, with every Rift.

The consumer Rift virtual reality headset incorporates one of the best gamepads available, a wireless Xbox One controller, with every Rift (Click Image To Enlarge)

The Xbox controller is a key part of the broader VR input puzzle. For example, it’s the absolute best way to play games like Lucky’s Tale, EVE: Valkyrie, and Edge of Nowhere.

…but what about new genres and categories of games that require a different set of inputs?

Introducing Oculus Touch

We see VR input evolving and coming in different forms depending on the experience you want to have in virtual reality.

While the Xbox controller is great for many games and genres, we want an input device that lets you to reach out and interact with objects in VR naturally.

We’re excited to introduce Oculus Touch!

The Oculus Touch prototype is a pair of  tracked controllers called 'Half Moon" that deliver hand presence – the sensation of feeling as though your virtual hands are actually your own (Click Image To Enlarge)

Oculus Touch is a pair of tracked controllers that deliver hand presence – the sensation of feeling as though your virtual hands are actually your own. Touch will let people take their virtual reality experiences further than ever before by unlocking new interactions.

Today, we’re showing off a feature prototype for Oculus Touch at E3 called ‘Half Moon’. There are two controllers, one for each hand. They’re mirror images of each other, like your own hands.

Each Half Moon controller has a traditional analog thumbstick, two buttons, and an analog trigger. There’s also an input mechanism that we call the ‘hand trigger’. Imagine using this trigger to pick up a virtual gun, then using your index finger to fire it.

Each Oculus Touch VR sensor is held in each hand and delivers the sensation of feeling as though your virtual hands are actually your own (Click Image To Enlarge)

They’re wireless so that you can move and interact with the virtual world freely, and they use the same IR LED constellation tracking system we use in the Rift for precise, low-latency, 6-DOF tracking.

The Half Moon prototype includes haptics that developers can use to deliver feedback when interacting with objects in the virtual world.

Finally, Half Moon can detect a set of finger poses using a matrix of sensors mounted throughout the device, which allows the controller to recognize a set of communicative hand poses like pointing, waving, and giving a thumbs-up.

Close-up view of the Oculus Touch showing touch controls located on top for the thumb and belowthe ring  for the index finger (Click Image To Enlarge)

Oculus Touch will ship to gamers, developers, and enthusiasts in the first half of 2016, and will be available for pre-order around the same time as the Rift.

Gaming in the Rift

At today’s event, we showcased a few of the upcoming made-for-VR games for the Rift including EVE: Valkyrie from CCP Games, Chronos from Gunfire Games and Edge of Nowhere from Insomniac Games.

All of these games will be playable on the Rift at E3, along with new VR demos including:

• Damaged Core by High Voltage
• VR Sports: Challenge by Sanzaru
• Esper from Coatsink
• AirMech by Carbon
• Lucky’s Tale from Playful

We’ll have more details on all of these games next week at E3. If you’re at the show, come by the booth and experience them for yourself on the consumer Rift. You can also schedule a demo for the Rift using our Oculus Live app.

Stay tuned for more made-for-VR game announcements as we head toward the launch!

$10,000,000 to accelerate Independent Developers

We know that virtual reality is going to inspire a new generation of game developers, driven by emerging independent teams and individuals.

In order to bring these innovative, one-of-kind independent games to the Rift, we announced today that we will be investing more than $10,000,000 in accelerating and supporting them.

Not only will these folks bring more and better games for launch and beyond, but we’re looking forward to their inventiveness and creativity in VR.

The Future of VR Gaming

Virtual reality is going to transform gaming forever. Thank you for being a part of this journey with us.

Gamer using the consumer Oculus Rift headset and Oculus Touch sensors to play an Xbox game (Click Image To Enlarge)

COMMENTARY:  It's been just a little over a year since I informed my blog fans about Facebook's acquisition of Oculus VR back on March 25, 2014 and the inside story about how Facebook's Mark Zuckerberg met with the founders of Oculus and convinced them to join Facebook on June 27, 2014.  At that time, I thought it would take two or three years before Oculus VR would have a commercially viable product that would be ready for consumer marketplace.  The problem was developing VR games for Rift.  Well, the miracle has happened.  Not only do they have a consumer version of the Rift headset but also Oculus Touch a pair of hand sensors to play around in the virtual world, a partnership with Microsoft that will include an XBox controller and half a dozen VR games available for Oculus customers.    

The projected price for the Oculus Rift headset and Touch sensors will be $1,500.00.  This puts it out of the range of most gamers, but early adopters will have no problem coming up with the doe. I haven't read any reviews of the new consumer Oculus Rift headset, but as soon as these these are available, will be bring to you here on my blog.

Courtesy of Oculus VR's blog announcement of June 11, 2015  

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TOP 10 BRANDS THAT MILLENNIALS LOVE FOR 2015 -- NIKE, APPLE, SAMSUNG, SONY AND WHAT?!! WALMART

 

Walmart, Target, Coca-Cola and Pepsi are among the top 10 most beloved brands of Millennials, according to the 2015 Top 50 Millennial Brand Ranking Report released this week by Moosylvania, an independent digital advertising agency. The brand comparison study was conducted with Millennials in two separate surveys over the course of nine months.

The latest rankings, based on panel studies of 1,500 Millennials—defined as age 14 to 35—not only ranks which Top 50 brands continue to earn Millennial love, but why these brands are connecting so strongly with them. Participants in each survey were asked to rank their top three brands unaided—32 of the 50 brands mentioned were repeats. Eighteen new brands edged their way into the latest list.

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The 2015 top five “most beloved” brands are Nike, Apple, Samsung, Sony and Walmart. A few of the newcomers to the list included Pizza Hut (21), Chevrolet (23), Honda (31), Oreo (33), Sprint (42) and Chanel (43), among others. In spite of last holiday season’s security breach, Target rose from 27th to sixth in the 2015 rankings. Facebook, PlayStation and Old Navy were among 11 brands that lost favor with Millennials and dropped from the Top 50 list. Absent from either list were alcohol and spirit brands.

In addition to their favorite brands, Millennials participating in the latest study identified key media traits that transform a high-awareness brand into a beloved brand. Important brand characteristics that matter most to Millennials include High-Quality Products (75 percent), Would Recommend This Brand (61 percent), Fits Their Personality (53 percent), Social Responsibility (40 percent), Shares Similar Interests (39 percent) and Says Important Things (31 percent).

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Norty Cohen, founder and CEO of Moosylvania said. 

“What these two back-to-back studies reveal is that a form of personalized communication has to be involved before a brand can get recognized. Make me look good, make me feel good and entertain me—mass communication has been supplanted with friendship marketing, 'Millennials’ curation skills allow them to consider new entities. Consider that in one year’s time 18 brands went from not one mention to placing in the Top 50, proving that Millennials will adopt brands that get into their zone.”

Cohen describes Millennial consumers as their own brand managers.

“This generation is looking for brands that help them become something more than their regular selves. Provide a high-quality product or service that helps them look cool, and Millennials will return the favor with their recommendations and purchasing power.  They care about what’s happening on their street, in their neighborhood and beyond—and so should marketers. Brands that market with a strong, positive message and display a sense of social responsibility show they care about what Millennials care about.”

For example, Ralph Lauren, who went from 104th to 30th in the rankings, and Wendy’s (47), a newcomer to the 2015 Top 50 list, both created campaigns that included participatory TV commercials and music videos. The companies then micro-targeted consumers by speaking directly to them through their various social media platforms, Cohen says.

“Millennials are not just consumers—they’re friends. They trust friends who listen to them, are open and honest, remember their names, are consistent and stay true to who they are. Marketers who connect with them as friends on that level have an opportunity to break into the favorites list.”

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COMMENTARY:   Wal-Mart's popularity among young people may come as a surprise to many marketing analysts who say millennials prefer convenient, smaller-format stores and online shopping over the big-box retailers where their parents shopped.

Even Wal-Mart executives have admitted they were surprised by the data. 

Matt Kistler, Walmart senior VP-consumer insights and analytics, told Ad Age.

"Millennials now, as a generation, like Walmart the best, more so than Generation X, more so than boomers," 

Wal-mart Chief Marketing Officer Stephen Quinn said to Ad Age.

"That kind of shocks a lot of people, including inside the company." 

But Wal-Mart's cheap prices are a big draw for cash-strapped millennials, many of whom are underemployed and working multiple jobs to pay off student loan debt.   NOTE: Millennials also happen to be biggest users of discount coupons, even more than their parents.

The class of 2015 has the highest level of college debt in US history, according to CNBC. On average, students graduating this year will owe $35,051 in student loans, CNBC reports based on data from Mark Kantrowitz, a student financial aid policy expert and publisher of Edvisors.com.

Millennials are also spending more on technology and food than previous generations, leaving them with less discretionary income.

Kistler told Ad Age. 

"The millennial customer grew up with a lot of hardship.  They see Walmart as a place where they can save money."

Courtesy of Moosylvania.com's A Labor of Like: Millennials 2015 - Favorite Brands Ranking Report and an article dated June 16, 2015 appearing in Business Insider

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CONTENT MARKETING TIPS: IMAGE RULES FOR THE TOP 7 SOCIAL NETWORKS AND DIGITAL MARKETING CONTENT TRENDS FOR 2015

Great example of digital marketing content:  Alibaba Group's corporate headquarters located in Hangzhou, People's Republic of China (Click Image To Enlarge)

In the 80′s a revolution happened

But when it started no-one knew it was going to change the world forever.

The IBM personal computer had just hit the streets. The computer manufacturers didn’t take much thought on this small blip on the computer event horizon. 10 years later many of them were going out of business or gone. The survivors had to reinvent their business models.

But the first PC was very boring.

What colour did you want on your screen? It was black and white or nothing.

Then things got very exciting a year or two later. You were able to have orange and green text on a black background.

Today the choices are infinite in vibrant HD color.

But it’s not just about color….. it is now a multi-media smorgasbord on a very visual web. High definition images. video and even live streaming.

Why visuals are important

Research shows that images and visuals have huge impact on sharing and even web traffic.

If you just look at Facebook. 87% of total interactions (sharing, clicks and comments) can be attributed to just photos. On Twitter you get 150% more retweets, 89% more favorites and 18% more clicks.

What are your visual content plans?

It is predicted that 70% of marketers this year are planning to increase their use of visuals to maximize their marketing effectiveness.

What are the optimal image sizes on social networks?

There are two things you need to consider. Optimal size and acceptable. Let’s have a quick look at the key images for the top social networks and the optimum image requirements.

The infographic below will provide more detailed instructions for each of the 7 platforms. These include file size, file type and pro tips.

Twitter

For your in-stream photos the optimum is 1024 x 512 pixels.

Facebook

With the shared images on Facebook the optimum size is 2048 x 2048 pixels.

Google+

The shared images on Google+ need 2048 x 2048 pixels.

Tumblr

The shared images on Tumblr requires 1280 x 1920 pixels.

Instagram

The images in the feed on Instagram need 640 x 640 pixel visuals.

Pinterest

The Pin image standard needed on Pinterest is 736 pixels wide and you don’t need to worry about height as it is scaled for you.

LinkedIn

The shared image requirement on LinkedIn needs a 531 x 399 pixel visual.

So for a top content marketing tips on visual content standards. Check out the infographic below for more detailed requirements on the visual standards you need to follow for obtaining the best results.

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COMMENTARY:   If you haven't already done so, please check my blog posts about digital content marketing.  Here's a convenient link:  http://tommytoy.typepad.com/tommy-toy-pbt-consultin/digital-content/

There is a lot of truth that "Content is King," so take the time to embellish your blog postings and newsfeed updates on social networks with visually engaging digital content that will make you standout from the rest.   Also, please take note of the following digital content stats and trends for 2015.

A new year means new possibilities, and as the digital marketplace continues to grow each and every year, the physical customer experience of brick-and-mortar stores is changing to accommodate more digital tools, as well. In this infographic, take a look at how the digital customer experience will evolve in the year 2015.

  Click Image To Enlarge

Mobile has been in limelight as the next big thing for the past few years. And to a certain extend, it more or less has. Fact is, the mobile marketing umbrella is huge! From geo-targeting to in-app advertisements, responsive designs and the list goes on. So will 2015 be yet another year for mobile? See the full 2015 Digital Marketing Trends infographic by Syndacast here to see how Mobile Marketing will play out, as well as other notable trends.

In 2015, Mobile Optimization will continue to be big. That is, responsive websites will become even more critical and potentially take a huge leap with multiple websites switching to responsive design.

Content Marketing would also make a great impact in 2015 and we can expect to see more budget allocated to the preparation and distribution of quality content. In 2014, we already saw that 93% of B2B marketers engage in some sort of content marketing.

Click Image To Enlarge

Courtesy of an article dated June 16, 2015 appearing in NewsCred Blog, an article dated December 9, 2014 appearing in Syndacast and an article appearing in 1to1 Media for TeleTech

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TWITTER'S CEO DICK COSTOLO RESIGNS, JACK DORSEY NAMED INTERIM CEO, SO WHAT WENT SO WRONG? WHAT NEEDS TO BE DONE NOW?

Twitter CEO Dick Costolo (far right) with Twitter co-founders Jack Dorsey, Biz Stone and Evan Williams (left-to-right) during happier times during its successful IPO on November 7, 2013 (Click Image To Enlarge)

After years of user-growth struggles, Twitter announced that its CEO Dick Costolo has chosen to step down effective July 1, though he’ll remain on the board. Twitter co-founder and Square CEO Jack Dorsey will be the interim CEO. 

The stock market initially responded favorably to the change, with Twitter’s share price up 7 percent in after-hours trading, but it now declined to just 3 percent up. That’s after its stock plummeted 18 percent six weeks ago following an earnings miss in Q1. User growth was up just 4.86 percent since the previous quarter to bring Twitter to 302 million users.

Twitter (TWTR|NYSE) shares rose 7% on Friday, June 12 the day after Twitter CEO Dick Costolo announced his resignation effective July 1 (Click Image To Enlarge)

Twitter held a conference call after close of the market with stock analysts right after Costolo's resignation announcement and said he initiated internal conversations about leaving at the end of last year, and that following discussions in Feburary and his decision to step down, Twitter decided to begin the CEO search. Costolo said he chose to leave now because he thought staying on through the CEO search would cause scrutiny to intensify. During the Q&A, Twitter execs said that since Costolo voluntarily stepped down, there will be no severance package.

Dick Costolo the outgoing CEO and Jack Dorsey the interim CEO held an exclusive interview with CNBC on June 12th 2015.

 

And on the topic of whether Twitter would consider being acquired, an exec said it wouldn’t rule that out, but that “we see no reason why we can’t [succeed] as an independent company." However, legally it can’t rule out acquisition offers and must review them, so that’s not really news.

Jack Dorsey, Square CEO, and Twitter Chairman and co-founder, will serve as interim CEO at Twitter until a permanent replacement can be found (Click Image To Enlarge)

Costolo, a former standup comedian, sent a tongue in cheek tweet “Welcome back, Jack.”  Jack Dorsey, meanwhile, tweeted “Calling my parents.” Twitter hired notorious crisis PR management firm Sard Verbinnen to handle the transition.

Dorsey will continue to be Square’s CEO, but will fill in for Costolo until Twitter finds a replacement. Dorsey was previously Twitter’s CEO before being forced out and replaced by co-founder Ev Williams in 2008.  Dorsey became Twitter’s executive chairman in 2011 when Costolo became CEO.

The CEO search committee is being chaired by the Twitter Board’s Lead Independent Director, Peter Currie, and includes early investor Peter Fenton and Williams.  Earlier this year, there was speculation that Twitter’s head of revenue and partnerships, Adam Bain, would take over if Costolo left the position. Others belive CFO Anthony Noto might make a good big bird.

In a statement to investors (in its entirety below), Costolo said:

“I am tremendously proud of the Twitter team and all that the team has accomplished together during my six years with the Company. We have great leaders who work well together and a clear strategy that informs our objectives and priorities. There is no one better than Jack Dorsey to lead Twitter during this transition. He has a profound understanding of the product and Twitter’s mission in the world as well as a great relationship with Twitter’s leadership team. I am deeply appreciative of the confidence the Board, the management team and the employees have placed in me over the years, and I look forward to supporting Twitter however I can going forward.”

Pressure on Twitter to get its product and leadership straightened out has intensified lately. That culminated last week in an 8,000 word essay by Chris Sacca @sacca, one of Twitter’s biggest investors, which detailed potential improvements that could boost growth and recover users who ditched the service due to poor onboarding.

Costolo will be remembered for many things, including a wildly successful time for Twitter’s monetization. However, last-quarter performance doesn’t a future cashflow make.  But unable to ensure user growth, investors worried about its long-term potential to offer the scale advertisers want.

Product innovation was considered painfully slow until Costolo recently promoted Kevin Weil to SVP of Product. He’s helped build fixes for some of the company’s biggest problems, including an easier onboarding flow and Highlights, which shows the best tweets you missed. But those changes could take time to produce real growth improvements.

Twitter CEO Dick Costolo tendered his resignation on Thursday, June 11, 2015, and will stay on board until June 30, 2015 when he will join the Twitter Board of Directors (Click Image To Enlarge)

Thursday’s announcement may have materialized recently, considering two weeks ago at the Code conference, when asked if he was worried about keeping his job, Costolo said

“I don’t worry about that at all. The board and I are completely in sync. Believe me, I don’t worry about that at all.”

That was a sly way to word it, because he knew he planned to step down.

Internally, sources say many employees loved Costolo. He brought order to Twitter when it was still in its chaotic adolescence, and turned it into a serious business.  Whoever comes next will have to transition Twitter from something for news junkies and public figures to a service the average person can love. At its best, Twitter can make anyone as smart as everyone, and that shouldn’t be a niche product.

You can see the full statement to investors below:

Twitter Initiates CEO Transition

 

Dan Niles from Alpha One Capital discussed the resignation of CEO Dick Costolo with CNBC:

 

Aljazeera discussed the resignation of Twitter CEO Dick Costolo, its failure to meet stockholder expectations, the turmoil within the company, comparisons to Facebook, and prospects of Twitter becoming an acquisition target:

 

COMMENTARY:   I would've lied if I told you that Dick Costolo's resignation took me by surprise.  In fact, I could've predicted this outcome.  If you followed my previous posts about Twitter, you know I was very "Twitter-unfriendly," to put it mildly.  I could give you my reasons why the resignation was good news to me, but then I would've gotten into one of my crazy rants. Having said this, numbers don't lie, and here are four good reasons illustrated in charts as to why Costolo's days were numbered.

What went wrong at Twitter in four charts

Twitter’s share price proved to be the most reliable indicator of what investors want from Jack Dorsey as he returns to the top spot at Twitter, following the news that Dick Costolo, CEO, is going to step down from his post on July 1.

Shares jumped between 6 and 7 per cent following the announcement of Costolo’s departure, but moderated to just 2 per cent higher after Dorsey stated that there would be no change in strategy.

Ever since Twitter went public in November 2013, investors want reassurance that Twitter can grow its $23.5 billion market cap.

They’re looking for the next Facebook – but up to now, it’s not been clear that Twitter will take that mantle.

The pressure is on for Twitter to build products that will snag more sign-ups.

Facebook, Twitter and Instagram Comparison by Monthly Active Users (MAUs) as of May 2015 (Click Image To Enlarge)

Twitter has 300 million monthly active users – around the same number as Instagram, but both are dwarfed by Facebook, which has 1.4 billion active users. It still has more active users than Google+, Instagram and LinkedIn – but only just.

Investors also want users that are engaged.

Facebook leads YouTube, Twitter and Instagram in Engagement (Active Users) As A Percentage of Total Internet Users (Click Image To Enlarge)

Over half of all internet users are signed up to Twitter – though less than half that amount are active users. Over 80 per cent of internet users are signed up to Facebook, by contrast, and about half of these are engaged.

Twitter still generated user growth for the year ending 2014, but they are less engaged than Pinterest, Tumblr, Instagram, LinkedIn and YouTube (Click Image To Enlarge)

Over the last year, Twitter’s growth has been far outpaced by smaller sites like Pinterest and Tumblr – leading some to believe that if it doesn’t get its act together, it may yet be overtaken by its fast-growing competitors.

However it’s possible to be too focussed on user-growth as a key measure of Twitter’s worth.

Richard Windsor, a technology analyst at Edison Investment Research, said the biggest problem for Twitter is that it only serves a limited function for internet users. Edison research suggests that users can spend just 9% of their time with Twitter because Twitter has no service for many of the other activities that users carry out on their smartphones.

Windsor said.  

“For Twitter, the monetisation opportunity is fundamentally limited unless it can spread its wings wider and encourage users to spend more time in its services.”

Twitter seems to agree with this view. In his last quarterly earnings call, Dick Costolo said Twitter’s objective is to “build new applications and services in order to increase Twitter's utility around the world”.

Twitter missed revenue expectations for the Quarter ending March 31, 2015 and its shares tumbled by 18% following its earnings conference call with analysts (Click Image To Enlarge)

What Twitter Needs To Do Next

Having closely followed and blogged about Twitter before it went public, then analyzed Twitter's earnings and profitability since its IPO, and having been in the corporate world as a former CFO, it's not easy to produce a quick turnaround.  Having said this, Twitter needs to ask some hard questions about itself and implement strategies to increase user growth, user engagement, advertising revenues, and profitability.  Here are a few of those hard questions and some ideas.

Why haven't big advertisers taken Twitter seriously as an advertising platform?  

Twitter's problem all along as has been convincing advertisers that it is a viable advertising platform.  Twitter is not a pure-play social network like Facebook.  It's a newsfeed site.  Advertisers have continually compared Twitter to Facebook, and this is a mistake.  Twitter also has difficulty demonstrating to advertisers that they can generate a positive ROI from their marketing.  Marketers want proof that an ad on Twitter can drive the results they need -- whether it's having someone visit a website or go to a local store to place an order.

The engagement problem:  Twitter users are not very engaged.  At the end of 2014, Twitter had an estimated 950 million registered users, but only about one-third or 302 million are active monthly users (tweet at least once per month) as of Q1 2015.  There were 65 million monthly active users living in the US, its largest ad market.  The U.S. market generated 66% or $241 million in ad revenues in Q1 2015, yet Americans represented only 21.5% of worldwide monthly active users.  In another key Twitter metric, the US leads in average revenue per 1,000 timeline views at $5.85 compared to only $1.16 for international monthly active users in Q4 2014 (See Charts below).  

            Click Image To Enlarge

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In a study released in November 2013, it was found that only about 13% of monthly active users tweet at least once per month.  This means that in the U.S. alone only about 8.5 million of US and 39.3 million of worldwide monthly active users actually tweet. Those are terrible numbers for a social network that had about 950 million registered users and 302 million monthly active users worldwide at the end of Q1 2015.  Big advertisers have done the math and clearly see there are not enough eyeballs watching their ads on Twitter.  No wonder big advertisers avoid Twitter.  In a nutshell, Twitter is a terrible advertising platform.

In August 2014, Twitter openly admitted that up to 23 million of its monthly active users are automated tweeters.  In otherwords, tweets, responses and retweets have been automated using social media management software like TweekDeck and Twitter For Mac, and many others. Since a real person is not reading tweets in the newsfeed, this creates a monumental problem for Twitter, and advertisers have to factor this out of Twitter's monthly active user stats.  

Twitter Has A Content Relevance Problem

The vast majority of people using Twitter read posts by others. Unfortunately, according to some analyses, much of what flashes by is a waste, as the Washington Post has reported. Sorting through all the material to find what might be of interest can be a time-consuming challenge unless you have a feed open all the time, a time investment many aren't willing to make. Because it's in real time and voluminous, looking later at your leisure is difficult at best.  

If Twitter is to improve user engagement, keep existing users and attract new ones, it must provide filters that users can set to display tweets that are the most relevant to users.  Some users use the Twitter List feature to gather tweets from specific users, but this can also be a time consuming activity.  I read somewhere that a user had over 1,000 lists.  Unless you have a lot of time on your hands, scrowling through hundreds or thousands of tweets and reviewing lists are not the solution.  Filters are a better solution.  

Where are the ads?

I have just shown you that Twitter is a terrible advertising platform, so it should come as no surprise why you don't see that many ads on Twitter.  Compounding this problem are Twitter's advertising products which to say the least are a bit confusing. They are not called ads, but promoted tweets, promoted trends and promoted accounts.  In my opinion, if you are going to run ads in a users newsfeed, you should have ADS, not something called "promoted....."   Ads should be unmistakeable and clear as mud.   Cutout the "promoted..." ad bullshit.  Twitteer should stick with banners (static or rich media), display, classified or video ads. This is the language and ad formats that are familiar with advertisers.  In my opinion, Twitter tried being a bit too cutesy with this "promoted..." ad bullshit so as not to irritate users and this has added to advertiser confusion.

Although Twitter has 237 million international monthly active users at the end of Q1 2015, the social site continues to have an international advertising problem.  Twitter has been slow to monetize its international userbase, selling ads in only about 28 countries to date. This may help explain why its average revenue per 1,000 timeline views was only $1.16 for international monthly active users compared to $5.85 for the U.S. in Q4 2014.  It should be obvious that Twitter needs to sell more ads in its international markets.

Why doesn't Twitter offer classified ads?    

Everybody is advertising something on Twitter, many of these ads are in the form of tweets selling followers or other useless crap you don't need.  These ad tweets clutter up the newsfeed and are quite irritating. These are CLASSIFIED ADS, and Twitter should begin making money from these ads.  It should ban ads in the newsfeed and setup a separate classified ad section with product categories by major geographic location like those offered on Craigslist.  Classified ads should stay within the 140 character limit of regular tweets.  With 302 million monthly active users, I think Twitter can give Craigslist, with 60 million monthly active users, a run for its money.      

Why can't Twitter generate a profit?

Twitter began selling ads about five years ago when it launched promoted tweets in November 1, 2010.  Twitter lowered its estimate for 2015, but says that it can generate $2.1 to $2.2 billion in revenues for the full year 2015.  This is serious money.  Any company that can generate billions in revenues should be profitable or at least breakeven.  In 2011, five months before Facebook had its IPO, it generated $3.7 billion in revenues and net income of $1 billion.  Twitter's CFO should take a long hard look at its operating expenses bring them more in line with revenues.  

The CFO should be asking these questions:  Why do I need to spend this?  Can we afford to spend less?   Should I spend more on advertising and promotions to increase Twitter brand awareness and increase registered users?  Do we need to cut staff?  How can I generate more revenues from existing users? No where in the press release that Twitter issued on Friday, June 12 following Costolo's resignation did I read about its strategy to turn the company around and make it profitable or at least breakeven.  Jack Dorsey, agreed with the current strategy left by Costolo.  The current strategy is NOT working Jack.  This is time for strong decisive action.  Jack needs to start cleaning up this mess.  Lay out a plan to stop the red ink.  Don't wait to hire that new CEO.  Okay, you don't want to do it?  Give me a month, and I will do it.  Call me now.  

The New CEO Must Change The Corporate Culture and Have Free Hand At Making Changes

As I pointed out earlier, I don't think that Jack Dorsey is a good interim solution for the reasons previously earlier.  He already has his hands full as the CEO at Square.  He's no Elon Musk.  The existing Board of Directors were all brought in by Dick Costolo, and the culture that now exists must be changed. There is only one female (Marjorie Scardino) on the BOD.  The new permanent CEO must have a free hand at making needed policy and strategy changes, bring in new management as needed, and replace members of the Board of Directors with trustworthy indiviuals with successful track records building companies and getting them through difficult and challenging times.

It may be that Twitter will never have the inherent mass appeal of Facebook, as Vox notes. The design of the service is wrapped around power users and celebrities and doesn't seem to appeal to the average person the way a number of other social networks do. Twitter's decling market value may make it an attractive takeover candidate.  The new CEO must take off the rose colored glasses and understand this coming in.       

Courtesy of an article dated June 12, 2015 appering in Fortune, an article dated June 12, 2015 appearing in The Independent, an article dated June 11, 2014 appearing in MarketingLand, an article dated February 18, 2015 appearing in Heidi Cohen blog, an article dated June 15, 2015 appearing in Inc., an article dated June 15, 2015 appearing in CBS News, an article dated April 14, 2014 appearing in CBS News, an article dated April 30, 2015 appearing in The Wall Street Journal, an article dated November 14, 2013 appearing in Digital Trends, an article dated June 5, 2015 appearing in DMR, an article dated June 10, 2015 appearing in The Motley Fool, and an article dated August 11, 2014 appearing in Quartz   

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AMAZON'S PLAN TO DELIVER ITS OWN PRIVATE-LABEL GROCERY PACKAGED GOODS AND FRESH PRODUCE

Following the playbook of countless retailers, Amazon.com Inc. is preparing to broadly expand its fledgling lineup of private-label brands to include an array of grocery items such as milk, cereal, and baby food as well as household cleaners, people familiar with the matter said.

Amazon’s planned expansion in the private-label business mirrors a more traditional retail model where name-brand products are sold beside store-owned goods. Private labels have become a vital business for mass-market retailers, generating stronger margins and building loyalty with consumers who no longer view generic products as lower quality.

In early May 2015, Amazon sought trademark protection for more than two dozen categories under its Element brand, including coffee, soup, pasta, water, vitamins, dog food and household items like razors and cleaning products. Diapers and baby wipes—the latter of which is still on the market—were Amazon’s first line of Elements, available to customers who pay $99 a year for a Prime unlimited shipping membership.

Amazon Element private-label brandname (Click Image To Enlarge)

Amazon has approached some private-label food manufacturers seeking a partner, according to people familiar with the matter. Those discussions included TreeHouse Foods Inc. of Oak Brook, Ill., one of the larger private-label producers, with $3 billion in sales last year, said one of the people.

Amazon declined to comment. A spokesman for TreeHouse declined to comment on any talks with Amazon but noted the company does “business with all of the nation’s top retailers and operates in 15 grocery categories.” 

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The business isn’t without challenges. Amazon must rely on outside manufacturers to design the products and then vouch for the quality, as it did when it launched its Elements brand of diapers last December.  The next month, Amazon pulled the diapers from its site, citing a flawed design—customers had complained about quality issues.

Many of Amazon’s coming private-label products will be ingested, making quality-control a critical issue.

The Seattle retailer has long dabbled in private labels. Besides diapers and wipes, it has offered all customers batteries, USB cables, backpacks and even ceramic plates under the Basics label, noted for its spartan black-and-white color scheme. And Amazon sells patio furniture and linens under its Strathwood and Pinzon brands.

Not all of Amazon’s private-label ventures have been winners. It discontinued a line of cookware endorsed by a Seattle chef in 2012 and a tool line, in addition to the diaper snafu.

Never before has Amazon ventured into perishable goods. By rolling out a broad portfolio of private-label products, Amazon could yield higher profit margins, while also gaining leverage with its largest suppliers to pare prices—though many of Amazon’s vendors also produce private-label goods.

Rivals ranging from Costco Wholesale Corp. to Target Corp. to Walgreens Boots Alliance  Inc.offer an array of store-brand products with names including Kirkland, Archer Farms and Nice, respectively. Private labels made up about a third of Target’s $73 billion in sales last year.

Eddie Yoon, a principal at brand consultancy The Cambridge Group, says.  

“It makes a lot of sense for any retailer to get into private label.  Private label has a lot of room to grow in terms of sales and can attract a new value-focused customer.”

Mr. Yoon said that despite their lower price tags, private label merchandise tends to have higher margins than name-brand goods for both retailers and manufacturers because of savings on marketing and brand development.

Market researcher Information Resources Inc. estimates private-label packaged goods was a $120 billion market in the U.S. in 2014, up 2.1% from a year earlier. Private-label merchandise represented about 18% of money spent on all packaged goods in the U.S. last year.   

For the year ending 2014, Amazon reported a $241 million loss on $89 billion in sales, has been pushing to expand sales of food online, including through its Fresh grocery delivery. And last year it rolled out Prime Pantry, which allows customers to order small items that the company generally only offered in bulk, such as a single shampoo bottle or bag of potato chips.

Private-label goods also could bolster Amazon’s reputation as a lower-cost retailer. IRI estimates that private-label products are, on average, 28% less expensive than their name-brand equivalents.

Amazon’s diapers were about 10% less per diaper than the priciest offerings from Procter & Gamble Co. or Kimberly-Clark Corp.—makers of Pampers and Huggies—but 25% more expensive than P&G’s Luvs and Target Corp.’s Up & Up brand, according to an analysis in December by Sanford C. Bernstein & Co.

It couldn’t be learned how Amazon may price its private-label food goods, when they may be released or whether they will be sold exclusively to Prime members, as the baby wipes are.

But it seems likely Amazon would sell them through its  Amazon Fresh grocery delivery service, available today in a handful of U.S. cities.

It also appears Amazon will be transparent about where its Elements products come from, as it has done with the diapers and wipes. The trademark filing mentions the slogan, “Every pack has a story.” Amazon’s page for its wipes details how they are produced by manufacturer Nice-Pak Products Inc., starting with the process of moistening them with purified water from the White Lick Creek Aquifier in Mooresville, Ind.

COMMENTARY:   A huge market opportunity awaits online retailer Amazon as it plans to launch its own private-label brands of perishable groceries including milk, cereal and baby food. However, the e-commerce giant must overcome challenges in quality, the distribution logistics of perishables and customer preferences that the firm hasn’t previously faced.

According to Amanda Nicholson, professor of retail practice at Syracuse University’s Whitman School of Management,  “There’s plenty of room for growth [in online grocery deliveries] … in a time-pressured society Twitter ,”   She noted that upscale supermarket chains like Wegmans have built that reputation over time, but her optimism came with a crucial rider:

"With food items, especially private-label brands, consumers need a sense of faith that this is going to be a good product, and that takes some time to build,” she said,“I don’t think Amazon has that automatic advantage at all.”

According to Wharton management professor Daniel Raff, Amazon will benefit from the refinement over the years in the business model for home deliveries of online grocery orders. He pointed to two critical factors for success — warehouse locations that can guarantee freshness of produce; and sophisticated routing and planning of transit schedules to ensure timely deliveries. He noted that Amazon has been building warehouses on the outskirts of major U.S. cities.

Nicholson and Raff discussed the opportunity Amazon faces in private-label food deliveries on the Knowledge@Wharton show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.) Amazon’s plans were first reported by The Wall Street Journal in late May.

Amazon already offers private-label brands in products including cables and batteries, but this is the company’s first attempt to extend that to perishables. As part of its plans for private-label food items, Amazon sought trademark protection in early May under its Element brand for products like coffee, soup and pasta, according to the Wall Street Journal report.  The U.S. market for private-label packaged goods was worth $120 billion in 2014, the story said, citing research firm Information Resources.

“There is plenty of room for growth [in online grocery deliveries]… in a time-pressured society.” – Amanda Nicholson

The Quality Threshold

Ensuring quality will be the biggest challenge Amazon will face in food deliveries, said Nicholson. She recalled Amazon’s abortive launch last December of a brand of diapers under its Elements brand. Amazon had to withdraw the product from its site a month later after customers complained of quality problems.

Unlike with delivering books or music, the quality bar is set much higher for food items, said Nicholson.   

“When we are talking about melons or fruit or private-label yogurt, most of us have very specific likes and perhaps dislikes.”

Also, in certain food categories like melons, avocados and other fruits that can easily become bruised, most customers may want to see what they are buying, said Raff.

He explained.  

“The secular change over the last dozen years or so in grocery merchandizing, and in the investments grocery store operators are making, has to do with the general shift in consumer preferences toward higher-quality fresh produce.  Vendors would be aware that customers who experiment with online grocery shopping would be very sensitive to the quality that is delivered. So it is probably worth it for the stores investing in the quality of such products in the beginning in order to generate consumer loyalty.”

Learning from Mistakes

Raff recalled the rise and fall of Webvan, an online grocery business based in Foster City, Calif. Launched in the thick of the dot-com boom in 1996, it went bankrupt five years later. Webvan became a part of Amazon in 2009 and focuses non-perishable groceries.

Webvan was “a great idea,” but it failed because of distribution problems, said Nicholson. Nevertheless, Raff said.  

"Its experience inspired entrepreneurial minded people.  It strongly suggested tha1t once people figured out how to do the infrastructure properly, something like [Amazon’s latest move] might be coming. We know now that this sort of service is commercially feasible.”

Nicholson pointed to FreshDirect, an online grocer based in Long Island City, New York, that was founded in 2002 and serves markets in New York, New Jersey and Pennsylvania and appears to have gotten its business model right. “FreshDirect keeps its edge by focusing on its food route,” she said. She noted that the firm’s founders have experience in the supermarket and grocery businesses, “which is helpful.”

“Vendors would be aware that customers who experiment with online grocery shopping would be very sensitive to the quality that is delivered.”–Daniel Raff

Follow the Money

Customer satisfaction is key to online grocery deliveries — but the business also has to make money. Nicholson said.  

“The crucial thing in home deliveries is [to ask]: Is it worth delivering?”

Clearly, each customer’s order has to cross a value threshold before it becomes worthwhile to the retailer, she added.

The arithmetic gets more complex with same-day delivery. Raff said that while “same-day delivery was cheap, prices [of products] were higher than they would otherwise be,” citing research by some stock analysts.

Raff also wondered how Amazon might use the customer data it collects. He recalled a controversy Amazon faced some years ago where it supposedly experimented with data on customer search behavior to adjust prices of goods “in a way that is [more] favorable to Amazon than … to the consumer.” He said that in the ensuing negative publicity, some found this to be “a somewhat more sinister side” of the company.

In any event, Amazon could be a winner with its grocery delivery business if it scores on two fronts, according to Raff. One is about persuading customers of the convenience, reliability and quality of its offerings, he said. The second aspect is about getting consumers “habituated with their orders arriving in hours rather than days later,” made possible with Amazon’s warehousing network and transportation infrastructure.

Raff said.  

“[Eventually], all categories of consumer goods will fit into this general mindset — not just music or clothing or food.  Amazon is really trying to be ‘the everything store.’”

Flat Growth 

According to private research firm IRI, private-label market penetration rates in dollars and units sold have not changed since 2011.    

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According to IRI, private-label market shares vary considerably by channel.   The grocery channel leads with a 22% market share, followed by Club chains (18.1%), Drug chains (16.3%) and Mass Supermarket chains (15.2%).

While pure-play private-label grocers like Trader Joe's and Aldi have made strong gains, and mass supermarket chains like Kroger's and Safeway are selling more private-label premium grocery products, not all grocers have faired well.  

According to IRI, more than half of package foods major categories have had flat private-label share growth since 2011.  This reflects the trend of overall flat consumer dollar and unit sales since 2011. 

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Amazon has to truly standout not only in price and quality, but in uniqueness as well.  It will be competing against some well established firms with loyal customers.  Amazon will have to provide a strong magnet to get these consumers to switch to its private-label consumer packaged goods and fresh foods.  Amazon will need to differentiate itself in other ways besides price, quality, freshness and delivery.  It needs to expand the market for private-label products, by offering products that are not presently sold under a private-label, otherwise it will have to rely on marketing wizardry to steal market share from existing venors of private-label products.  Some possiblities include gourmet frozen meals, fresh organic foods and organic packaged products.  The company needs to start promoting its Element private-label brand.  This means spending on advertising and promotions, and positioning its private-label products as "right-now" products that appeal to busy consumers who don't have time to shop or hate to shop.         

Courtesy of an article dated May 28, 2015 appearing in The Wall Street Journal, an article dated June 9, 2015 appearing in Knowledge@Wharton, and an article dated June 11, 2015 appearing in Market Realist

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APPLE UNVEILS APPLE MUSIC AT WWDC15; SPOTIFY AND PANDORA BRACE THEMSELVES FOR INTENSE COMPETITION

Apple has finally jumped into the music streaming race, unveiling Apple Music at WWDC this afternoon. The company revolutionized digital music with the iPod and iTunes, but is now playing catch up, trying to align itself with the current era of subscription offerings.  Apple CEO Tim Cook saud,  

"We’ve had a long relationship with music.  And music has had a rich history of change, some of which we’ve played a part in."

The service will bring music downloads, streaming radio, and a streaming music service into a single app. Like most digital services, it promises to learn your tastes and recommend great new songs accordingly.

 

The service will cost $9.99 a month, or $14.99 for a family plan of up to six individuals, with a three-month free trial. In order to use the family plan, you'll need to have iCloud Family Sharing active. By contrast, Spotify offers a two-person subscription package for $14.99. Apple says its new music service will be available June 30th, with Android coming in the fall. Apple had hoped to shake things up by offering a tier priced between $5 and $8, but unfortunately couldn’t get the music industry on board. The end result is a product that has little to differentiate it from what is already in the market in terms of price and selection. The 30 million tracks on Apple Music are also going to be found on Spotify or Rdio. Apple is hoping features and exclusive content will be enough.

What Apple Offers With and Without Paid Membership (Click Image To Enlarge)

Paid Apple Music users will be able to download albums and playlists to play offline, while free users will only be able to listen to Apple Music radio stations with limited skipping. The company has rebuilt iTunes Radio and reportedly staffed it with big-name artists like Dr. Dre, will.i.am, Pharrell, and Drake acting as DJs. It is also bringing on experienced talent like BBC’s Zane Lowe to help curate stations. Jimmy Iovine, who has been heading up Apple’s renewed push into music, reportedly tried to sign other big names like Kanye West and Beyoncé to exclusive deals, but lost out to Tidal, a rival service recently launched by Jay Z and a consortium of high-profile musicians.

 

The first station is called BeatsOne and will be available in 100 countries. It's going to be playing tunes around the clock and will be anchored by three DJs: Zane Lowe, Ebro Darden, and Julie Adenuga.  Subscribers can skip as many tracks as they like. Apple's Eddie Cue says,  

"The music it recommends to you isn't just algorithms, it's recommendations made by our team of experts."

Apple Music provides regular streaming, music radio stations with DJ's and Connect, a social network for music artists, which gives you direct insights of what artists are doing right now (Click Image To Enlarge)

This is pretty much the same pitch that Beats made when it launched. Users who signed up for that service will find their accounts transferred automatically to Apple Music when the latter launches on June 30th.

 

Apple also showed off a feature called Connect that lets artists upload music, photos, and messages which are shared with their fans. It's basically a blog fans can subscribe to, then comment and like individual posts. This is similar to the exclusive behind-the-scenes material that Tidal has been sharing from its cadre of artists.

Drake came onstage to show off Connect. He said as a child he wondered if he or anyone from Canada could make it big in the world of rap. Luckily technology was there to help.

"The dream of being a new artist like myself five years ago and connecting directly with an audience has never been more close or reachable."

He will be releasing his next album, obviously, on Connect.

There is some cool Siri integration. You can ask it to play a particular artist or track. You can also give it a more general query, like "play the top track from the summer of 1982," or whatever year you happened to have graduated from high school. But Apple says you don't need your iPhone present — you'll be able to sync songs to your Apple Watch without it.

 

The big question is whether Apple needs to differentiate to succeed. It is entering a market dominated by Spotify, which has racked up over 60 million users, with 20 million paid subscribers. Spotify has had the run of the land since it came to the US from Europe in 2011, but with over 800 million credit cards on file, Apple has a chance to quickly assemble a large user base and give Spotify its first true challenger. If it can get people who purchase a new Apple device to sign up for a free trial, it may end up bringing a large number of new users into the streaming music market that up until this point were not convinced to give a paid service a try.

COMMENTARY:  Apple's announcement of Apple Music and integration with SIRI, the iOS personal assistant, is probably sending shockwaves throughout the music streaming landscape, particularly with industry leaders Spotify and Pandora.  Daniel Ek, CEO of Spotify, one of the leaders in the music streaming space, reacted to the Apple Music announcement with a flippant tweet:   "Oh, OK"  The smug reaction by Spotify's CEO comes after his company closed a $526 million funding round.   Ek can afford to react smugly given that Apple Beat, the predecessor to Apple Music, really wasn't much competition (See below).  However, that smugness may be shortlived.

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Spotify is building its defenses against the oncoming Apple Music onslaught, turning to international investors to strengthen its financial position.  The Swedish streaming service latest funding round, gives it an influx of cash that The Wall Street Journal says brings Spotify to a valuation of $8.4 billion, up from $5 billion last September.

Spotify began this latest funding round in early April, and was originally seeking $400 million to reach a valuation worth double that of competitor Pandora.  The successful round means that Spotify has now pulled in more than $1 billion from investors, but even with that influx of money and 20 million paying subscribers,  Spotify's future is not entirely secure. The company's business model means it still operates at a loss — the Swedish firm has to pay almost 70 percent of its revenue to label owners and musicians for rights and royalties.

The half-billion dollars taken during during this funding round show that the business world still believes in Spotify, but it will need to either renegotiate how it pays labels, or start convincing more of its 60 million users to part with their money if it wants to stay on top in an increasingly crowded marketplace. The company is already attempting to diversify by adding videos and podcasts but its competition is growing too.  Established competitors such as Rdio and Pandora are still fighting for users, while new entrants backed by big names, such as Jay Z's Tidal, enter the fray.  

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For all its fanfare, Apple Music is not fundamentally all that much different from what Spotify has been doing for the past nine years.  Casey Rae, the CEO of the Future of Music Coalition, says. 

“If Apple is serious about 100 million subscribers, the product will need to be an awful lot more compelling than what is already on the market.” 

The Apple Music announcement is good news for Spotify too—millions of people are paying for its service.  And millions more are using its free, ad-supported option, an alternative that Apple doesn’t appear to be offering. Even if those 20 million paid subscribers ditch the Swedish service, Spotify will still have millions of fans—and the revenue that comes from advertising to them.

Longtime music analyst Bob Lefsetz in a blog post says Apple is not going to be a Spotify killer.  

“Turns out to win, or at least play the game in a meaningful way, you’ve got to have a freemium offering.  And Apple Music does not.  Those already desirous of paying for streaming already do, and getting someone to switch is difficult.”

So, yeah, Spotify is unimpressed, and it wants you to know that. On Monday, after Apple announced Music, the company’s CEO Daniel Ek tweeted, “Oh ok,”according to reports, though the tweet has since been taken down.

What Apple has going for it are its well over 200 million (as of November 2014) paying iTunes users.  The big question now is: How many of these loyal iTunes users will convert into music streamers?  Apple iTunes users were buying/renting single songs or albums, not streaming tunes like users at Spotify or Pandora.  If iTunes users convert into music streamers, will they be willing to pay for that service?  It is quite possible that they are already getting their music streams from Spotify or Pandora, so it gets interesting trying to predict whether they will dump Spotify or Pandora, and move to Apple Music to get their daily music streaming fix.  

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Unlike Apple Music, Spotify and Pandora have been offering FREE music streaming (albeit it with some limitations).  I have never known Apple to offer FREE anything, except for apps (which are usually crammed with ads).  Will Apple offer freemium music streaming like Spotify and Pandora? I have a feeling that they might be forced to do just that, in order to pull away users from Spotify and Pandora.  This maybe in a limited form like "Three Free Months" or "Buy One Music Album, Get 10 Free Music Streams."       

However this all turns out, we should know rather quickly, perhaps within 3 to 6 months, whether Apple Music will become a "Spotify or Pandora Killer."  Stay tuned for more on this topic.

Courtesy of an article dated June 8, 2015 appearing in The Verge, an article dated June 2, 2015 appearing in Digital Music News, an article dated June 8, 2015 appearing in The Verge, an article dated June 8, 2015 appearing in Gizmodo, an article dated June 10, 2015 appearing in The Verge, an article dated June 10, 2015 appearing in Wired

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