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WHY FACEBOOK'S HUGE AUDIENCE AND POWERFUL NETWORK EFFECT CREATED A COMPETITIVE BARRIER THAT KILLED GOOGLE+

Is Google's de-emphasis of its social network proof of Facebook's competitive advantage?

While Facebook (NASDAQ:FB) is worth more than $270 billion today, its business is still a fairly new breed. Founded in 2004, the company quickly grew to become one of the world's first major online social networks. But many questioned whether the company's business was sustainable. After all, online social networks hadn't yet proved to be enduring business models. And even after the company's high-profile initial public offering in 2012, there were still a handful of critics who believed Facebook was lacking a sustainable competitive advantage. Today, however, it's clearer than ever that Facebook's competitive advantage is both powerful and sustainable.

What Is Facebook's Competitive Advantage?

Long-term investors are often searching for potential investments with durable competitive advantages. As famed investor Warren Buffett says, an investment should have a "moat."

Buffett has said. 

"In business, I look for economic castles protected by unbreachable moats." 

After all, without a competitive advantage, how can investors expect their current investment to be around years into the future, let alone appreciate in value?

But what is Facebook's moat? Investors have argued that its competitive advantage is a network effect.  A network effect becomes a competitive advantage when each additional member in the market makes a network stronger for all parties involved, and when, on the flipside, users are in a potentially disadvantageous situation when they aren't a part of the network.

Consider Facebook's network effect. With about one out of seven people in the world using the service on a monthly basis, there is a high probability that users who join the service will have friends and family already actively using the service.  So for every additional user, the network becomes increasingly useful, making it easier for existing members to connect.  On the other hand, if someone chooses to leave Facebook's network and use a similar yet less established social network, that person will have to leave behind many friends and family who use only Facebook. A network effect, therefore, makes it very difficult for new networks to woo users away from leading networks.

Perhaps the best illustration of the strength of Facebook's social network has been Google's failed attempt to compete with Zuckerberg & Co.

Google+: Far From A Threat

Hoping its sheer size and reach through Google search and Google products such as Gmail and YouTube would launch Google Plus into a position to eventually compete head-to-head with Facebook, Google initially required a Google+ account to engage with others on its products.

The idea was that Google+ would be a "platform layer that unified Google's sharing models." Even more, Google+ was aimed at becoming its own "product/stream/app in its own right," said Google executive Bradley Horowitz in a Monday post on Google+ detailing Google's decision to phase out the importance of Google+ as a platform across its products. Horowitz took over Google+ earlier this year.

He continued.

"This was a well-intentioned goal, but as realized it led to some product experiences that users sometimes found confusing. For instance, and perhaps most controversially, integration with YouTube implied that leaving a comment on YouTube (something users had obviously been doing successfully for years) suddenly and unexpectedly required "joining Google+."

Horowitz said Monday in a separate post on Google's official blog. 

"So in the coming months, a Google Account will be all you'll need to share content, communicate with contacts, create a YouTube channel and more, all across Google." 

The de-emphasis of Google+ as a platform across Google's products, as well as the clear lack of traction the platform has had in the past few years, highlights just how difficult it is to compete with Facebook's network effect. And if Google can't compete effectively with Facebook, who can?

Here’s an infographic that nicely illustrates the value of users and their impact on the network effect.

Click Image To Enlarge

COMMENTARY:   

Metcalfe's Law of Network Effects vs Zipf's Law

One of the surprising things about the valuation of Facebook in its IPO back on May 2012 is how the rationalization for the $104 billion valuation seems to have been based on some varient of Metcalfe’s law of network effects.  Anthony Wong Kosner, a contributing editor for Forbes said in an article dated May 31, 2012 said,  

"Surprising, I say, because this law (aka Metcalfe's Law), that states that the value of a network (network effect) is proportional to the square of the number of the nodes on the network, has been refuted quite convincingly as a method of evaluating social networks at least since Andrew Odlyzko and Benjamin Tilly’s groundbreaking paper in 2005 and the more widely cited article with Bob Briscoe in IEEE Spectrum in 2006. Their candidate for modeling value? The less sensationalist Zipf’s law."

Kosner goes on to say in the above referenced article:  

And yet, as recently as the day before the IPO, Tim Beyers of the Motley Fool defended the impending valuation on AOL’s Daily Finance channel on the basis of Metcalfe’s law. Consider that five years ago, Forbes Editor William Baldwin picked up the baton from Odlyzko and wrote in his column,

“Metcalfe’s Law is a very optimistic statement about connectedness. Double the number of nodes in a network—of computers, phones, rail stations or, perhaps, friends—and you quadruple its value. Too optimistic, says a revisionist mathematician, Andrew Odlyzko. His measure of networking value comes from a different law, described 75 years ago by the linguist George Zipf.”

What is Zipf’s law? It is one of a family of related discrete power law probability distributions that describe how in any system of  resources there are a small number of items of very high frequency and value and a “long tail” of many more of decreasing frequency and value. It is, in essence, an empirical description of hierarchical distribution of resources (i.e., rich get richer…). Zipf discovered the law through the observation of the frequency of words in the English language, but the law holds even for randomly generated “languages,” as well. The law states that,

“Given some corpus of natural language utterances, the frequency of any word is inversely proportional to its rank in the frequency table. Thus the most frequent word will occur approximately twice as often as the second most frequent word, three times as often as the third most frequent word, etc.”

Social networks are, in fact, more like languages than they are like the ethernet networks that R0bert Metcalfe based his law on. The difference is that the nodes of hardware networks are fairly homogenous. Each one has an equal relationship to every other one. But social networks are anything but homogenous. Dunbar’s number sets the size of a meaningful social group for humans at about 150. Beyond that size, additional members add diminishing value. But even within that 150 there is considerable range in affinity and sentiment.

Ben Kunz wrote about this recently in Businessweek in terms of the threat to Facebook of the rise of what he calls “unsocial” networks. He points to Path, which limits your network to Dunbar’s 150, and a new app for networks of only two, called Pair. These new micro social networks are bound to get closer to what their users really care about than sprawling sites like Facebook, but will probably be even more impenetrable to advertisers, which will make monetization difficult.

An example of the difference in valuation between Metcalfe’s law (n²) and Zipf’s law (n log (n)) is illustrated in that 2006 IEEE article:

"Imagine a network of 100,000 members that we know brings in $1 million. We have to know this starting point in advance—none of the laws can help here, as they tell us only about growth. So if the network doubles its membership to 200,000, Metcalfe’s Law says its value grows by (200,000²/100,000²) times $1 milion, quadrupling to $4 million, whereas the n log( n ) law says its value grows by 200,000 log(200,000)/100,000 log(100 ,000) times to only $2.1 million.”

To figure out what Facebook is worth based on this rationale would involve having a starting point valuation, and the first public milestone was Microsoft’s October, 2007 purchase of a 1.6% share of the company for $240 million, giving Facebook a total implied value of around $15 billion. This was clearly a wild overvaluation, considering Yahoo and others were offering $1-2 billion to buy Facebook outright at the same time. But just as an illustration of relative value, let’s call it $1 billion in 2007, and take Facebook’s 50 million monthly active users in October 2007 and its 900 million now. Based on the $1 billion valuation in 2007, the Metcalfe method would yield a valuation of a whopping $325 billion. The Zipf method would yield a much more restrained valuation of $21 billion. Further research has suggested that the “actual value” of a social network is somewhere between the Metcalfe and the Zipf numbers, with the growth line tending more linear than exponential.

But the difference in value between these two approaches is not just about market valuation, but, more importantly, about value of the networks to the users. Zipf’s law would suggest that most of what is coming through the Facebook pipe to users is of little value to them. But by another important metric, Facebook is clearly very valuable to its users. In an under-read but extremely valuable story this weekend on Forbes.com, contributor Nir Eyal talked about what he referred to as the most important “hacker metric.” Referring to a post by his friend Andrew Chen, Eyal says that the fact that “Facebook’s historical ratio of daily active users (DAU) to monthly active users (MAU)” has consistently been about 50% is highly significant.

Daily active users are, in Eyal’s terms, the agents of a successful startup. The timeframe is important because of what is called “Viral Cycle time,” or the amount of time it takes to complete a viral loop.

“Having a greater proportion of DAUs dramatically increases Viral Cycle Time for two reasons. First, daily users initiate loops more often—think tagging a photo on Facebook. Second, more daily active users means more people to respond and react to each invitation. The cycle not only perpetuates; with high DAU to MAU, it accelerates.”

Eyal contrasts the micro-engagements of users with the performance of the overall network,

“As opposed to distribution channels, the mechanics driving user engagement do not follow a power law.  In fact, it is the nuances of user behavior that make the competition irrelevant, just as it did in the case of Facebook’s early rivals.”

What Chen and Eyal are talking about are, in effect, quantum effects. But these viral effects do not scale up exponentially into the value of the entire network. The network encounters material resistance that act as a curb on exponential growth.

Perhaps Facebook and its evaluators have been so enthralled by the levels of user engagement that they have overlooked the way the value to individual users diminishes beyond their core network. This may explain why Facebook’s vast numbers do not translate into call-to-action advertising success. On Facebook we are actively engaged with what we most care about and we tune out the rest. The rest may be more than half of the content, and the vast majority of the marketing messages, but we are so in need of the wheat that it takes a lot of chaff to diminish our satisfaction. Beyond a certain point, though, the growth of the size of ones personal or Facebook’s global network does not increase a user’s happiness. It’s like the studies that have determined that over a certain threshold more money does not make people substantively happier.

Once you accept the fact of how differentiated the different members of a user’s network are in terms of their value and relationship to the user, the economies of scale of Facebook kind of break down. It is not a matter of general social clout (or Klout as the case may be) but of the specific user’s value overlay on their own network. If an advertiser really wants to target a specific type of user, given this complexity, wouldn’t it be easier to take out a quill pen and inscribe a missive on a piece of letterpress stationary and hand deliver it by horse-drawn carriage? At least that would get their attention!

Reverse Network Effects

NETWORK EFFECTS ARE the holy grail for Internet startups looking for venture-scale returns. On a platform with network effects, the value to a user increases as more users use it. Facebook, Twitter, LinkedIn, YouTube, Skype, WhatsApp and many others benefit from this dynamic.

In an age when more than a billion people connect over a network and new networks reach multi-billion dollar valuations with a handful of employees, one is tempted to believe that online networks are almost fail-proof. But as online networks grow to a size never seen before, many question their sustainability and believe that they are becoming too large to be useful.

To explore the future of online networks, it’s important to note how network effects correlate with value and the factors that make these network effects work in reverse.

Network Effects and Value

There is a strong correlation between scale and value in businesses with network effects.Greater scale leads to greater value for users, which in turn attracts other users and further increases scale. This rich-becomes-richer dynamic allows networks to scale rapidly once network effects set in.

There are three sources of value created on networks: Connection, Content and Clout.

Connection: Networks allow users to discover and/or connect with other users. As more users join the network, there is greater value for every individual user. Skype and WhatsApp become more useful as a user’s connections increase. Match.com and LinkedIn become more useful as more users come on board.

Content: Users discover and consume content created by other users on the network. As more users come on board, the corpus of content scales, leading to greater value for the user base. Content platforms like YouTube, Flickr and Quora, as well as marketplaces like AirBnB and Etsy becomes more useful as the number of creators and the volume of content increase.

Clout: Some networks have power users, who enjoy influence and clout on the network. Follower counts (Twitter), leaderboards (Foursquare) and reputation platforms (Yahoo Answers) are used to separate power users from the rest. On networks like Twitter, the larger the network, the larger is the following that a power user can develop.

Across these three drivers, a network with greater scale provides greater value in the form of:

1. More prospective connections for the user
2. A larger corpus of potentially relevant content
3. Access to a larger base of potential followers (greater clout), for power users

On most networks, value for users is created through more than one of these three sources. Facebook, for example, started with a value proposition centered around connection, but the introduction of the news feed has made content a central driver of value. In recent times, the addition of the subscribers feature has added clout for some Facebook users as well.

Why Network Effects Work in Reverse

One would expect that the bigger the network, the more value users derive from it.

However, as networks scale, the value for users may drop for several reasons:

1. Connection: New users joining the online community may lower the quality of interactions and increase noise/spam through unsolicited connection requests.
2. Content: The network may fail to manage the abundance of content created on it and may fail to scale the curation of content created and the personalization of the content served to users.
3. Clout: The network may get inadvertently biased towards early users and promote them over users who join later.

Just as network effects create a rich-becomes-richer cycle leading to rapid growth of the network, reverse network effects can work in the opposite direction, leading to users quitting the network in droves. Friendster, MySpace and Orkut bear testimony to the destructive power that reverse network effects wield.

Reverse Network Effects: Connection

Connection-first networks (dating websites like Match.com and networking communities like LinkedIn) build value by connecting people.

These networks may suffer from reverse network effects as they scale if new users joining the network lower the value for existing users. To prevent this, an appropriate level of friction needs to be created, either at the point of access or when users try to connect with other users.

On dating sites, women often complain of online stalking, as the community grows, and abandon the site. Sites like CupidCurated have tried to solve this problem by curating the men that enter the system, in a manner similar to restricted access at a singles bar.

LinkedIn creates friction by preventing users from communicating with distant connections. This ensures that users do not receive unsolicited messages. This also allows LinkedIn to offer frictionless access (OpenMail) as a premium value proposition.

ChatRoulette, in contrast, anonymously connects users over a video chat without needing to login. This lack of friction led to ChatRoulette’s stellar growth but also led to reverse network effects as anonymous naked hairy men took to the network, thus increasing noise and driving genuine users away from it.

Dating sites, as well as social networks like Orkut, have imploded in a similar manner after reaching scale, owing to noise created by fake profiles.

In general, networks of connection scale well when they create appropriate barriers to access on the network.

Reverse Network Effects: Content

On content networks like YouTube or Flickr, a larger network is likely to have more content creators, leading to more content for the user to consume. Networks like Facebook and Twitter, in addition to being networks of connections, are also networks of content.

Most networks of content have low friction in content creation to encourage activity from users and reach critical mass faster. To ensure that the content is relevant and valuable, the network needs strong content curation and personalization of the user experience.

Reverse network effects set in if the content curation systems don’t scale well. As more producers create more content, the relevance of the content served to consumers on the network shouldn’t decrease.

Curation

Content networks create a curation mechanism through a combination of moderation, algorithms and community-driven tools (voting, rating, reporting etc. ). Voting on YouTube, flagging a post on Facebook and rating on Yelp are examples of curation tools.

Curation mechanisms often break down as the volume of content increases. When curation algorithms and moderation processes do not scale, noise on the system increases. This leads to reverse network effects and users abandoning the system.

Quora has a very strong curation mechanism in place and benefits from a tech-savvy early user base. As Quora scales, many worry that less sophisticated users, entering the system, may increase noise leading to a rapid depletion of value for existing users. It remains to be seen whether its curation can scale as the network opens up to a broader user base.

Personalization

Content networks need a personalized consumption experience for users, that serves them relevant content.

An example is the news feed on Facebook or Quora or the recommendation system on YouTube.

Inability to maintain relevance of the consumption experience, with scale, may create reverse network effects.

The user experience on Facebook is centered around the News Feed.  However, Facebook’s frictionless sharing and cluttered news feed may lead to lower relevance for users as the network scales. Several factors contribute to this:

1. When a user adds friends indiscriminately, her news feed becomes cluttered with irrelevant posts.
2. Noise is further increased when marketers and app developers get access to the news feed.
3. When networks like Facebook and Twitter implement monetization models like Promoted Posts/Tweets, the signal to noise ratio suffers further as promoted content is less relevant than organic content.

Networks of content are constantly faced with the risk of reverse network effects as they scale. The poor signal-to-noise ratio in the news feed, not the size of the overall network, is Facebook’s weakest link as the network scales.

Reverse Network Effects: Clout

Networks of clout have a system of differentiating power users from the rest. Twitter, Quora and Quibb have baked in clout through the one-sided follower model. Active users vie for greater glory while using the network.

Networks of clout tend to be biased against users joining in late. Clout is a consequence of content that the user creates and early users get more time to create content and develop a following.

This is, ironically, aggravated by focusing on a high signal-to-noise ratio. Twitter recommends super users to prospective followers as these users are likely to create better content. Hence, the platform itself helps separate the power users from the rest.

Users who join later find it more difficult to develop a following and may stop using the network. These networks need a mechanism to ensure new users have equal access and exposure to the community to develop network clout. 500px, for example, differentiates Top creations from Upcoming creations to expose recent activity (often from undiscovered users) to the community.

Reverse network effects often cause a large and thriving network to implode. As a network scales, it’s ability to maintain a high signal-to-noise ratio is the leading indicator of its usefulness. Networks can, in fact, scale very well and prevent reverse network effects from setting in if they have

1. Appropriate level of friction in network access and usage, that prevents abuse
2. A strong curation system that scales well with the size of the network
3. A highly relevant and personalized user experience
4. A democratic model for users to build influence

Networks that have excelled in the above have scaled well. In a world where networks are reaching unprecedented scale, a keen focus on maintaining a high signal-to-noise ratio will enable them to remain valuable and effective as they grow.

Courtesy of an article dated July 28, 2015 appearing in MotleyFool.com, an article dated June 8, 2013 appearing in Pamorama.net, an article appearing in the March 2014 issue of WIRED, and an article dated May 31, 2012 appearing in Forbes Tech

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INSTAGRAM MOBILE AD REVENUES TO HIT $2.81 BIL WORLDWIDE IN 2017, WILL SURPASS GOOGLE AND TWITTER IN MOBILE ADS BY 2017

Instagram will surpass Google, Twitter in US mobile display ad revenues by 2017

Instagram will bring in $595 million in mobile ad revenues worldwide this year, according to eMarketer’s first-ever forecast of how much advertisers will spend on the social network.

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We expect to see rapid growth in Instagram’s ad revenues this year and throughout the forecast period—driven by high demand for the social network’s new ad products, which will expand beyond branding to include direct response, the ability to buy ads via an API, and enhanced measurement and targeting features.

By 2017, Instagram’s global mobile ad revenues will reach $2.81 billion, accounting for over 10% of parent company Facebook’s global ad revenues. The forecast will be featured in an upcoming eMarketer report, “Instagram Advertising: What Marketers Need to Know.” This report features eMarketer’s first forecast for Instagram revenues, as well as an analysis of what marketers should know about Instagram’s user base and its new ad products, including best practices for getting the most out of them.

“Now that Instagram is opening up, there is a lot of pent-up demand. The rollout of new features over the next several months means that by the end of 2015, Instagram will have a host of new ad products for advertisers large and small. In particular, Instagram advertisers will be able to use a full slate of Facebook targeting tools, including the popular Custom Audiences feature. That will be a key drawing card,” said Debra Aho Williamson, eMarketer principal analyst.

Instagram does not currently have a desktop-based ad product; eMarketer’s estimates for Instagram ad revenues are mobile-only. Instagram’s ad revenues will make up 5.0% of Facebook’s mobile ad revenues this year, and that share will increase to 14.0% in 2017, eMarketer forecasts. In the US, respective figures will come in at 10.7% and 28.0% in 2017.

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Throughout the three-year forecast period, Instagram will make the vast majority of its ad dollars in the US, though non-US revenues will comprise a growing share of the pie. eMarketer forecasts that Instagram will have just $30 million in ad revenues outside the US this year, or 5.0% of the total. Meanwhile, the US will account for 92.0% of the total in 2016 and 85.0% in 2017. As of July this year, Instagram advertising is available in only seven international markets: Australia, Brazil, Canada, France, Germany, Japan and the UK. Instagram’s monthly US user base increased nearly 60% in 2014 to 64.2 million people, eMarketer estimates. By 2019, over one-third of the country’s population is expected to use the social network, amounting to 111.6 million consumers.

In a sign of just how quickly Instagram is expected to grow in the US, eMarketer forecasts that it will have higher net mobile display ad revenues than both Google and Twitter in 2017. Last year, Instagram surpassed Twitter to become the second-largest social network in the US. Twitter’s US user base grew 12.1% in 2014 to reach 48.4 million users.

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Internationally, Instagram’s growth hasn’t been as strong, and other mobile social apps will continue to challenge it. So far, however, brand engagement on the platform has been high, and coupled with a solidly growing user base and new ad offerings, the mobile ad revenue picture looks bright.

COMMENTARY:    On March 4, 2015, Instagram introduced a new type of ad product that lets readers swipe left to learn more about the brand or product:  carousel ads. 

 

Advertisers can now place multiple photos in one sponsored post for consumers to flip through. At the end of the carousel, users have options to click on additional content or visit a website to learn more.

The new ad feature will let brands post multiple images, which users can scroll through by swiping their finger across the phone’s screen, just like users do with Tinder.

Until now, brands have mostly used the app as billboard space to flash ads as users scroll by.  The carousel allows for sequential storytelling, developing a narrative over the course of multiple images. The carousel will only be offered on sponsored posts, not to everyday users or non-paying brands.

The links are not a move to attract direct-response, click-driven advertisers, according to a source close to Instagram.  This is just the next iteration of brand ads, this source said.

The platform's post-campaign insights will still focus on brand-centric data, like sentiment lift and the affinity that users have for advertisers after seeing their paid posts. Instagram won't measure click-through rates, which would show how many people actually took additional action.

Instagram started selling ads in late October 2013, and its clients have included top brands like Levi's, Ben and Jerry's, Disney and Banana Republic. It started with sponsored images and evolved to offer sponsored videos.

 

However, there have been limits to Instagram's growth because of how hands-on the company is with its advertisers. The company works closely with brands to make sure their content fits the platform, which is known for its stylishly filtered photos and videos.

Also, there was no way to link ads to websites where brands would like to drive traffic. One digital ad executive said the limitations have kept ad dollars from migrating more quickly to the popular photo app.

A source who saw a preview of today's new features but was not authorized to speak publicly said.

"Why not just keep spending on Facebook until Instagram was ready?"  

Today's steps could persuade more brands that Instagram is ready, this person said.

There are signs Instagram is revving up its ad team, according to another agency executive. This source said Instagram now has a more dedicated sales team, instead of one closely tethered to its parent company, Facebook.

The agency executive said Instagram had been very difficult to approach because it had few liaisons to the marketing world, but in recent months that has begun to change.

Instagram also is starting to excite brands because it is clearly attracting consumers. The app topped 300 million users this year. Just today, eMarketer put out a report saying the Instagram would have more than 100 million U.S. users by 2018.

More Brands Are Considerng Instagram

Instagram isn’t showing any signs of slowing down. The online mobile photo-sharing service currently boasts 300 million active users.

It has become the social network for image-based social media marketing.

Forty-five percent of marketers are planning to increase their use of Instagram in 2015. In fact, marketers who spend 40 or more hours per week on social media platforms plan to increase their use of Instagram by as much as 49 percent in 2015.

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A study by Forrester found that Instagram posts achieved a per-follower engagement rate of 4.21 percent. In other words, Instagram posts generate 120 times more engagement per follower than Twitter and 58 times more than Facebook!  It's no wonder that brand marketers are taking more interest in Instagram as an advertising platform

Instagram, Pinterest, Vine, Tumblr, and Snapchat, all of these networks foresaw the importance of visual content and they grasped the opportunity. The social advertising trend is expected to help these networks expand even further.

Instagram Has Corraled the 18-34 Year Old Market

Instagram also appeals to an increasing number brand marketers because it has become the preferred visual social network of choice for the much coveted 18-34 year old market.  This is clearly demonstrated in the following chart released by eMarketer:

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Courtesy of an article dated July 27, 2015 appearing in eMarketer, an article dated March 4, 2015 appearing in Adweek, and an article dated January 21, 2015 appearing in Business2Community

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PANDORA DOMINATES INTERNET RADIO WITH MOST OF ITS USERS LISTENING VIA MOBILE DEVICES

Nearly all time spent with digital radio, Pandora takes place on mobile

Music listeners are a mobile bunch, based on recent research by Triton Digital. The firm, which provides digital services to traditional and online radio companies, monitored clients’ weekday streaming activity from 6am to 8pm through the month of May 2015 and found that mobile accounted for 75.8% of US digital audio listening during the analysis, vs. a 24.2% share for desktop. 

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Triton conducts this analysis on a monthly basis, and past figures indicate that mobile isn’t stopping expansion any time soon. For example, in January 2015, it accounted for 72.4% of digital audio listening, vs. 27.6% for desktop.

eMarketer expects US adults to spend an average of 43 minutes daily with digital radio in 2015, or 11.9% of total digital time each day, and nearly all of that will be on mobile (38 minutes). Leading digital radio service Pandora will account for 27 minutes of daily radio time, or 7.5% of total time spent with digital, with mobile taking in 23 minutes.

Other research points to Pandora’s huge mobile presence. When February 2015 polling by Triton Digital and Edison Research asked US smartphone owners which digital radio apps they had downloaded, Pandora led by a long shot, at 50% of respondents.

Pandora also shines among mobile apps as a whole. According to May 2015 research by comScore, Pandora was the seventh most popular smartphone app among US smartphone app users, with a 44.0% reach. And March 2015 research by Sandvine Incorporated found that Pandora accounted for 3.33% of downstream mobile internet traffic in North America during the peak period (when bandwidth utilization is heaviest).

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Advertisers on Pandora are following the earbuds. eMarketer estimates from March 2015 forecast that Pandora net mobile ad revenues worldwide would total $752.0 million this year—up 31.7% and representing nearly 80% of the services’ total ad revenues. Most of that spending will come from the US, where Pandora mobile ad revenues will total $737.0 million.

Pandora recently reported second quarter 2015 revenues of $285.6 million, a 30% year-over-year increase. Advertising revenue was $230.9 million, a 30% year-over-year increase.  Subscription and other revenue was $54.6 million, a 31% year-over-year increase.  Total revenues for the trailing 12-month period exceeded $1 billion.  Revenue is expected to be in the range of $1.175 billion to $1.185 billion for the year ending 2015.   If the latter guidance total holds, Pandora will represent nearly one-third of total forecasted internet radio ad revenues for the year 2015.

COMMENTARY:   In January 2015, XAPP Media prepared "The Internet Radio Trends Report," showing how popular internet radio has become among users and its importance as an interest ad medium.  Here are a few exerpts from that report. 

User Growth: Up and to the Right

The first consideration for advertisers or anyone assessing the industry will no doubt be audience size. eMarketer reported in 2014 that U.S. monthly digital radio listeners had grown to 160 million. That is over 50% of all U.S. citizens and 63% of Internet users. The audience is expected to grow to 183 million by 2018, significantly outpacing population growth. Nielsen reported in January 2015 that 67% of all music listeners access streaming services in a typical week.

The conclusion for marketers is simple. Internet radio now reaches a large audience and can be an important channel for reaching consumers. However, the story doesn’t end here.

Time Spent Listening Growth

The more important trend may be the growth in time spent listening. Consumer audio listening habits are changing. On a per-user basis of weekly listeners, the growth has been impressive. Edison Research’s 2014 Infinite Dial report showed that listening time more than doubled over the past five years, exhibiting a 13.5% compound annual growth rate.

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eMarketer also reported Accustream data that illustrates how user growth and time spent listening have dramatically increased the number of listening hours on Internet radio. Between 2009 and 2014, the data show that listening hours on Shoutcast, Napster, Rhapsody and Pandora have grown from 0.86 billion monthly listening hours to 4.22 billion in 2014 – a five-fold increase. This growth is impressive and only represents a portion of the Internet radio listening market. Accustream also forecasts listening hour growth rates to range from 20-30% over the next two years. Nielsen data reported in January 2015 showed an even faster growth rate of 60.5% for audio streams in 2014. Nielsen’s conclusion: “streaming music is surging.”

More Listening, More Ad Exposure

If we consider data from Edison Research’s 2014 Share of Ear study we can estimate that Internet radio listening now averages about 14 hours and 12 minutes per month across the listening population. Listening hours are critical. They represent opportunities to reach real people with advertising messages.

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A review of four leading Internet radio pure plays in November 2014 revealed an average of 2.68 minutes of ads per hour. At 14:12 hours of listening per month, that reflects about 38 minutes of ads. Recent analysis shows the average Internet radio spot length is 25.88 seconds, which translates into about 88 ad impressions per month, per listener.

Revenue Growth

Not surprisingly, growth of industry revenue has accompanied the rise in audience size and listening hours. There are two sources of revenue that most Internet Radio streamers draw from: subscriptions and advertising. There is no public information on subscriber revenue other than Pandora and some estimates on Spotify’s model. However, there is now attention focused on advertising revenue.

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An analysis by BIA/Kelsey suggests the 2014 U.S. ad revenue of $2.09 billion will grow to $4.01 billion by 2017. That is a compound annual growth rate exceeding 24%. BIA/Kelsey and eMarketer estimate that Internet radio ad revenue will grow from about 11.7% to 20% of overall radio industry revenue during the period. Additionally, SNL Kagan reports that music represents nearly 20% of all mobile entertainment revenue.

Courtesy of an article dated July 23, 2015 appearing in eMarketer, the January 15, 2015 "Internet Radio Trends Report 2015",  and an article dated February 12, 2014 appearing in Hyperbot.com

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APPLE REPORTS RECORD Q2 2015 RESULTS, BUT APPLE SHARES TANK ON WEAKER THAN FORECASTED iPHONE SALES

Apple's Spaceship headquarters now under construction (Click Image To Enlarge) 

Apple shares fell hard after reporting earnings Tuesday, July 21, 2015.

While the company beat expectations for revenue and earnings, iPhone sales were softer than expected, leading to stock falling over 7% in after hours trading.

Here are all the big numbers:

• Revenue: $49.6 billion, up 33% annually, versus analyst expectations of $49.4 billion
• EPS: $1.85, up 45% versus analyst expectations of $1.81
• iPhone units: 47.5 million, up 35%, versus analyst expectations of 48.8 million (the whisper number was 50 million)
• iPad units: 10.9 million, down 18%, versus analyst expectations of 10.9 million
• Mac units: 4.8 million versus 4.9 million
• Cash: $203 billion
• Revenue guidance: $49 billion-$51 billion versus $51.06 billion

Overall, the numbers are good. But, analysts were getting all geeked up for a monster iPhone number, which didn't happen. 

On the call, CEO Tim Cook explained, in part, why iPhone sales were below analyst expectations.

He said the company had 600,000 fewer iPhones in channel inventory. If those phones had been in the channel, then Apple would not have missed on iPhone units as badly. It would have also led to an extra $396 million in revenue, since the average selling price of the iPhone is $660.

Why did Apple have lower channel inventory? Just because. Cook said the company tries to avoid having unnecessary inventory when possible. If he wanted to smash expectations, he would have shipped the extra 600,000 units, but he doesn't run the company to the 90-day drumbeat of earnings expectations, he said on the call.

Even with 600,000 extra iPhone sales, Apple would have missed expectations. 

Despite iPhone sales coming in short of expectations, it was still a strong quarter, with sales up 35% year over year.

On the call, Cook was optimistic about the future of the iPhone. He said Apple had its highest switcher rate from Android ever.  He also said that only 27% of the people that owned iPhones before the iPhone 6 launched had upgraded to the iPhone 6 or iPhone 6+. The iPhone has loyalty rates above 86%, which means there's lots of room for growth from upgraders.  

Also, sales in China were up 87%, CFO Luca Maestri said on the call. 

The other thing of note from the call was information on the Apple Watch. Apple didn't provide any specific numbers, but it did say that sales were above internal expectations.  It said the watch sold better in its first 9 weeks than the iPad sold in its first 9 weeks. 

The watch was reported as part of the "other" category, but it says the watch was more than 100% of the annual growth in the "other" category. It says iPod, and other accessories dragged down growth in that category. 

Overall, it was another good quarter from Apple, despite the fact that investors decided to sell.

Below are tables, charts, and our live blog of the call.

FINANCIAL STATEMENTS

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PRODUCT UNIT SALES

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TOTAL REVENUES

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REVENUES FROM SERVICES

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OTHER PRODUCT REVENUES

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COMMENTARY:   

Notes from the Call

Tim Cook said.  

"It's been a busy and exciting quarter."

Apple achieved record results despite reducing channel inventory.

iPhone unit sales grew over 35% and gained share in all geographical segments. Apple saw highest Android switcher rate ever as well.

Tim Cook said.  

"Tremendous record quarter for Mac."

App Store revenue grew 24% in the quarter, reporting highest results ever.

Apple Watch demand immediately exceeded supply and Apple delayed the availability in their own retail stores until mid June. Apple has now caught up with demand and Apple Watch is now available in 19 countries. Apple is very happy with customer satisfaction and usage statistics. Apple's own market research shows that 94% of Watch owners wear it and use it every day.

Tim Cook said.  

"It's a rare and special privilege to launch a new platform with such promise and potential."

25 leading publishers have been signed for Apple News, including CNN, Bloomberg Business, The Daily Telegraph, and ESPN.

"Millions and millions" of customers are already using Apple Music. 15,000 artists have signed up for Connect. Millions of listeners are enjoying Beats 1.

American Express will add Apple Pay support for corporate cards next month. 700 universities in the US will soon accept Apple Pay. Apple is on track for Apple Pay acceptance in 1.5 million locations in the US by the end of 2015.

Apple doesn't participate in the low end of the tablet market, saying CFO Luca Maestri.

Services revenue has increased 12% over the past year. Services growth was strong in China where App Store revenue doubled year over year.

Apple Watch revenue accounted for over 100% growth in the Other category for the quarter.

Tim Cook is very bullish on iPhone growth in the future given the headroom for Android switchers.

The iPhone 6 Plus is doing well in Greater China and other Asian markets.

The Apple Watch sell-through was higher than the same period for the original iPhone and iPad launches.

Tim Cook said.  

"We're convinced that the Watch is going to be one of the top gifts of the holiday season." 

Tim Cook talked about the iPad.  

"It's not like people have forgotten iPad or anything. It's a fantastic product."

Tim Cood had this to say about China.  

"China will be Apple's largest market at some point in the future."

Apple Watch sales have been higher in June than April or May.

If you would like to review the entire Apple earnings conference call with analysts click HERE. 

CONCLUSIONS

What stands out clear as mud in the Unit Sales - 4 Quarter Moving Average (5th chart in the Product Unit Sales section) is that Apple is too dependent on sales of the iPhone.  iPad and iPod sales are declining as they approach the end of their product life cyles.  Although Mac sales were up, growth has been relativelyy flat for the last five quarters.  

In my opinion, Apple must have a new hit product because sales of the Apple Watch are not sizzling. The Apple Watch is supposed to be that new hit product, but many forecasters are already saying that the watch will be a flop, in spite of what Tim Cook claims.  My gut tells me that the watch is not going to be the runaway must-have product that Apple customers will lust after.  

With over $200 billion in cash or convertible investments, you would think Apple would dedicate Manhattan Project resources to developing new products.  We keep reading about an Apple TV, and the latest rumor to surface is an Apple electric vehicle.  We have designed bigger and faster, more feature-packed smartphones, and a nearly endless parade of mobile apps, but I haven't seen that blockbuster product.  Apple Music could become a major revenue contributor, not on the same level as hardware.  So Apple better start innovating like crazy or their shares will really nose-dive if there is any hint of a slowdown in iPhone sales.

On a positive note, with only 27% of the iPhone installed base having upgraded to the iPhone 6/6 Plus at the end of Q3 2015, I have a strong feeling that Apple iPhone replacement sales will rebound strongly in the second half of 2015.  Most of the future iPhone growth will be from China which represented 26% of Apple's revenues during the quarter.  

Courtesy of an article dated July 21, 2015 appearing in The Wall Street Journal, an article dated July 21, 2015 appearing in MacStories, and a press release dated July 21, 2015 issued by Apple, 

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SEVEN DO-IT-YOURSELF TOOLS FOR CREATING AWESOME INFOGRAPHICS WITHOUT USING PHOTOSHOP OR LEARNING CODE

How can you create beautiful infographics without using Photoshop?

I'm not a Photoshop expert, so I take days to create a basic infographic. I'm a Paint ninja, but I can't create nice infographics by using Paint. So I was searching for fast, easy, and cheap (even free) alternatives.

The most important aspects of each tool are outlined for each product.

• Free version: Is a free version or free trial available?
• Restrictions: What are the restrictions of the free version?
• Price and pro functions: What are the new features if you pay?
• Usability and design: What does the interface look like? Is it easy to use
• Templates: How many templates are available in the free version?
• Objects: How many objects are available in the free version?
• Charts: How many charts are available in the free version?
• Customizability: the extent of customizability
• Downloading: Are you allowed to download infographics in the free version?
• Help: Are blog posts, tutorials, and/or guides available?

Here's a look at the different tools and comparisons to help you easily find the most appropriate tool for your needs.

1. Easel.ly  

• Free version: free basic version, no trial
• Restrictions: fewer objects, fewer templates
• Price and pro functions: $36/year, more templates, access to thousands of images
• Usability and design: easy-to-use, simple interface
• Templates: 13 templates
• Objects: small amount
• Charts: five different charts
• Customizability: good
• Downloading: allowed in free (high-quality and PDF)
• Help: blog posts, guides and tutorials to get started and to make infographics

 

2. Piktochart  

• Free version: free basic version
• Restrictions: watermark, picture size, maximum 20 photos, no export to PDF
• Price and pro functions: $29/month, $290/ year, more templates, high-resolution images, export to PDF
• Usability and design: easy-to-use simple interface
• Templates: 11 templates
• Objects: huge amount of objects
• Charts: 14 different ones
• Customizability: awesome
• Downloading: allowed with watermark but not high resolution
• Help: blog posts, guides and tutorials to get started and to make infographics

 

3. Infogr.am  

• Free version: 30-day free trial 
• Restrictions: 10 images maximum are allowed to upload to each infographic, watermark added
• Price and pro functions:
• Pro: $15/month, downloading allowed, real-time data, private infographic sharing, co-creation with team members, more than 100 icons, detailed infographic analytics, rich text editor, new themes
• Whitelabel: $42/month, no watermark, custom logo, removed share buttons
• Usability and design: simple interface
• Templates: 13 free, very similar templates
• Objects: no objects in the free version
• Charts: 18 different ones
• Customizability: restricted
• Downloading: not allowed in the free version
• Help: blog posts, guides, and tutorials to get started and to make infographics

 

4. Venngage  

• Free version: free basic version, no trial
• Restrictions: downloading not allowed in free version
• Price and pro functions:
• Premium: $19/month, $49/quarter, $190/year, more themes, charts, objects, downloading as PDF or PNG, and other infographic features
• Team and Education plans
• Usability and design: simple minimalist interface, easy to use
• Templates: 10+ templates
• Objects: huge amount of icons
• Charts: six different charts
• Customizability: very good, lot of options
• Downloading: not allowed in free version
• Help: huge knowledge base, solution for any problem

 

5. Canva  

• Free version: You can register for free full functionality, no trial needed.
• Restrictions: None. You pay after each item used. You can create infographics for free or very cheap.
• Price and pro functions: You pay after each infographic created, and the price depends on the items you added.
• Usability and design: nice design, easy-to-use interface
• Templates: huge amount of templates
• Objects: lot of objects and shapes (Most are free.)
• Charts: lot of charts but without the option of adding data and tables
• Customizability: good
• Downloading: allowed
• Help: blog posts, guides, and tutorials to get started and to make infographics

 

Also, checkout this YouTube video:  https://youtu.be/nShmwzh879g

6. Visme  

• Free version: free basic plan, no trial
• Restrictions: up to three projects, watermark added to the infographic, max. 100MB storage space, all projects are public
• Price and pro functions:
• Visme Standard: $6/month, billed yearly (otherwise $10/month), up to 15 projects, no Visme brand on infographics, 250MB storage, download as PDF and HTML, more charts, premium support, but projects are public
• Visme Complete: $16/month, billed yearly (otherwise $28/month), unlimited projects, no Visme brand on infographics, 1GB storage, download as PDF, HTML5, more charts, private and public projects, collaboration, premium support
• Educational and nonprofit:  YES, discounts offered
• Usability and design: easy to use, simple
• Templates: five templates
• Objects: huge amount of objects and shapes
• Charts: 10 different charts, editing and adding data is limited (just five charts)
• Customizability: good
• Downloading: allowed only as JPEGs
• Help: huge knowledge base, solution for any questions

 

7. Infoactive 

• Free version: You can start using it for free.
• Restrictions: Infoactive logo added, infographics are public
• Price and pro functions:
• Starter: $12/month, static image exports, interactive data exploration, unlimited graphics
• Standard: $29/month, all Starter plan features, set passwords on infographics, remove Infoactive's logo, live data via Google Sheets
• Premium: $49/month, all Standard plan features, direct phone support, custom data integrations, custom themes, team accounts
• Discount for students, teachers, and nonprofit organizations: YES, discounts offered
• Usability and design: simple minimalist design, easy to use
• Templates: two templates
• Objects: no objects
• Charts: 14 different charts
• Customizability: very limited
• Downloading: not available, just embed code or link to share
• Help: FAQs and tutorial videos

 

Don't like these tools? Try PowerPoint to create infographics.  

HubSpot has created 10 customizable templates in PowerPoint. It is an easy way to get started. You just put the necessary information pieces into the shapes, change the colors, and fonts—and it is done.  

If HubSpot's templates are not enough, you can find more here.

COMMENTARY:   An awesome infographic can add sparkle and pizzazz to your digital content.  I love them and use them all the time to make a point without having to write a lot of text.  It helps open up vistas that you did not know existed.  I hope you enjoyed using some of these infographic design tools.  

Courtesy of an article dated July 24, 2015 appearing in MarketingProfs

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TABLET FACEOFF: A COMPARISON OF THE SAMSUNG GALAXY TAB S2 VS APPLE iPAD AIR 2, SAMSUNG HAS FINALLY CAUGHT APPLE

Without much fanfare, Samsung on Monday unveiled the Galaxy Tab S2, its new flagship tablet and successor to last year’s excellent Tab S. The Tab S2 will hit stores worldwide in August, but before it does so, we thought we’d stack it up against Apple’s iPad Air 2 and see exactly what Samsung has wrought this time around. Does the Tab S2 have what it takes to unseat the current reigning champion of tablets? Let’s find out.

Samsung Galaxy Tab S2 vs Apple iPad Air 2  - Front View (Click Image To Enlarge)

Samsung Galaxy Tab S2 vs Apple iPad Air 2  - Rear View (Click Image To Enlarge)

First and foremost, we’re not expecting Android users to switch to the iPad, or vice versa, based on the hardware and software design. So let’s not look at this from an OS perspective, at least not too closely.

Design

Hardware-wise, it seems Samsung is taking a page out of its playbook for the Galaxy S6 — which in turn was influenced by the iPhone. For the first time, Samsung has adopted the iPad’s 4:3 aspect ratio for one of its Android tablets. “By recreating the same viewing experience of browsing through traditional print media, the Galaxy Tab S2 also makes it comfortable to read digital content, including e-books, magazines, webpages and newsfeeds. This reading-optimized ratio allows the user to enjoy a seamless reading experience without unnecessary scrolling.” So what happened to Samsung’s dedication to the theatrical 16:9 aspect ratio?

Quality of materials also gets a bump here. The Tab S2 has rounded silver metal edges that again call out to Apple’s design. It’s a little disappointing to see Samsung hew so closely to Apple’s products from last year like this; part of what made Samsung phones special were the differences, and at this point it’s starting to look a little desperate on Samsung’s part. That said, I can’t tell yet if the back of the Tab S2 is plastic, unlike Apple’s all-metal rear panel, or if it’s all metal; I’ll update this post when I get an answer.

The larger version of the Tab S2 measures 9.3 x 6.7 x 0.22 inches (HWD) and weighs 13.7 ounces. Compare that with the iPad Air 2: 9.4 x 6.6 x 0.24 inches and 15.4 ounces. Samsung made the Tab S2 thinner and lighter than Apple — if by a hair, thickness-wise — which is an impressive achievement indeed, given how featherweight the iPad Air 2 is to begin with.

Display

Both tablets have ultra-sharp displays, with the same 2048×1536 resolution and 264 PPI. The displays themselves are quite different, though, with Samsung using its excellent Super AMOLED technology, and Apple taking the more traditional IPS route with its own Retina Display. If the Tab S2 is anything like the excellent Galaxy S6 and Galaxy Note 4, it’s going to look stunning in person. I love the Galaxy Note 4’s display. And here, Samsung’s Adaptive Display auto-adjusts saturation, sharpness, and gamma levels based on the environment you’re using the Tab S2 in — it’s more than just an ambient light sensor, which mobile devices have had for years.

Performance

Underneath the hood, the S2 sports an Exynos 5433 octa-core (1.9GHz + 1.3GHz) processor, 3GB RAM, and a 5,870mAh battery. Apple has always played it fairly coy with its own lineup, saying just 64-bit A8X for the current model’s CPU; a teardown reveals 2GB RAM and a larger 7,340mAh battery. Samsung’s eight-core-chip sounds promising, and it’s certainly fast, but having so many cores isn’t always what it’s cracked up to be. Both models offer current-gen 802.11ac Wi-Fi on both the 2.4GHz and 5GHz bands, and the Tab S2 will also have an LTE model like Apple, although details and pricing remain unclear.

The Galaxy Tab S2 looks a lot like the Apple iPad Air 2.

Operating System

The Tab s2 runs Android 5.0 Lollipop. For security, the company added a fingerprint sensor to the Tab S2, and it also has preloaded malware protection. Expect fairly heavy customizations typical of Samsung, though the company has shown a bit more restraint in recent generations. The peak (or perhaps nadir) of its software customizations was probably the Galaxy S4; the S5 and now S6 are both a bit lighter and easier to use on the software front, and I’d expect that to continue with the Tab S2. The Tab S2 has a dual-app Pop-Up Window, letting you multitask in ways that you can’t yet with an iPad — at least not until iOS 9 comes out in October.

Software

The Tab S2 comes preloaded with Microsoft Office Solutions, including Word, Excel, PowerPoint, and OneNote. That said, you can get Microsoft Office for free on the iPad, as well as Apple’s own suite of office apps. All of these are plenty enough for real work, though you’ll want to add a physical Bluetooth keyboard or case to both of them for serious writing and spreadsheet hacking.

Cameras

The two cameras on the Galaxy Tab S2 are standard fare, with an 8-megapixel sensor around back and a 2.1-megapixel front-facing sensor for selfies. On paper, that’s the same as the iPad’s rear camera and more detailed than its front camera, but Apple always puts a ton of work into its cameras to ensure they’re better than they look from the specs. For example, the iPad Air 2’s rear camera sports an f/2.4 aperture five-element lens and a hybrid IR filter, whereas the front camera has a wide f/2.2 aperature. Samsung has so far said not much of anything about the Tab S2’s cameras, which is a little worrisome.

Storage

Samsung is actually selling the Tab S2 in two flavors: a 9.7-inch model (the same size display as the iPad Air 2) and an 8-inch model (with a display that’s a tenth of an inch larger than the iPad mini 3’s). Both start at 32GB, which is double the base iPad Air 2 storage, and unlike with the iPad, you can add a microSD card to either Tab S2 for up to 128GB of additional media (if not application) storage. The Tab S2 maxes out at 64GB internally, whereas you can get a 128GB iPad Air 2.

Conclusion

The Galaxy Tab S2 looks like a nice tablet, but somewhat disappointingly, it looks a bit like the company gave up and just copied the design of the iPad Air 2 a little bit too closely. Obviously using it will be very different — Android is just a very different OS than iOS, and has its plusses and minuses, and Samsung’s own customizations differentiate the Tab S2 from its Android brethren even further. But I feel Google’s own Nexus lineup — the Nexus 6 in particular — as well as some of what Motorola and now Asus are doing advances the Android cause more than Samsung is, and are more unique as a result.

Samsung’s latest tablet looks like a very high quality product. The company may not always make original hardware (with the Galaxy S6 Edge being a recent and awesome exception), but it pretty consistently makes great hardware. As is often the case, the pricing will make or break the Tab S2. If the base model Tab S2 matches the iPad’s $499, then you’ll get twice the storage and a slightly thinner and lighter tablet, with a more vibrant AMOLED display, for the same price by going with Samsung. That could be enough to sway some buyers, especially existing Android fans that have been waiting for a tablet that’s easier to browse the Web and read books on.

COMMENTARY:    Having test driven both the Samsung Galaxy Tab A8 (16GB) and A10 (32GB), I came away very impressed with both tablets.  In my opinion the price-to-value propositions of these two Samsung tablets when compared to the Apple iPad Air cannot be beat.  This time around the Samsung Galaxy Tab S2 leaves no stone unturned.  I think it beats out the iPad Air 2 when you compare their specs side-by-side (see chart below).  

I've always been critical of Apple because they box-in their evangelist users into deciding between buying a 16, 32, 64 or 128 GB storage device.  There is no upgrade path, and they end up paying more.  Apple historically does not offer MicroSD slots whereas Samsung does.  I have always considered this a win-win for the Samsung consumer, and do so again in this case.

The camera's of the Samsung Galaxy Tab A8 and A10 were without any doubt inferior to the Apple Air, but with the introduction of the Galaxy Tab S2, this is no longer appears to be an issue.  The S2 camera is more than a match to the Air 2.  I have not seen any reviews about picture quality comparisons, so I say this tongue-and-cheek.   

I honestly don't give a damn that the Galaxy Tab S2 back is made of plastic, while the Air 2 is aluminum.  It's simply not a deal breaker for me.  The Galaxy Tab S2 still beat out the Air 2 in thickness and weight.  So there.  Be aware that aluminum does ding much easier than plastic.  Let's not forget that the iPhone 6 phone had a bending problem.  Having a very stiff and sturdy plastic frame is a big plus in my opinion.  

In the opinion of several hardware testers, the Galaxy Tab S2's super AMOLED display is as good as the IPS LCD display of the Air 2.  The IPS LCD does burn more power, and this probably accounts for the bigger storage battery on the Air 2.  Unfortunately this added to the weight.   I think it's a draw, but we have yet to see comparisons of battery usage times.  I guess we will have to wait.    

The Air 2 beats out the Galaxy Tab S2 when it comes to power.  However, Apple has had problems delivering efficient power consumption.  This was the case with the iPad Mini and iPad 4.  The bigger power storage of the Air 2 is a plus, but the IPS LCD display will eat into that storage, so we will just have to wait and see if this additional storage was worth it in the end.           

 

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Again, I think Samsung has caught or passed Apple when it comes to tablets with the unveiling of the Galaxy Tab S2.  I really don't care if they are accused of copying Apple on specs as Jamie Lendino has said in the above article.  Samsung has not released prices for their new tablet, but I don't mind paying a bit more for the the lower weight and thinness and storage flexibility offered with the microSD slot.  It's a win-win for Samsung consumers.

Courtesy of an article dated July 22, 2015 appearing in Extreme Tech

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MOBILE AD SPEND TO TOP $100 BILLION WORLDWIDE IN 2016, 51% OF DIGITAL MARKETING

US and China will account for nearly 62% of global mobile ad spending next year

The global mobile advertising market will hit two significant milestones in 2016, according to new figures from eMarketer, surpassing $100 billion in spending and accounting for more than 50% of all digital ad expenditure for the first time.

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The $101.37 billion to be spent on ads served to mobile phones and tablets worldwide next year represents a nearly 430% increase from 2013. Between 2016 and 2019, the last year in our forecast period, mobile ad spending will nearly double, hitting $195.55 billion to account for 70.1% of digital ad spend as well as over one-quarter of total media ad spending globally.

Not surprisingly, growth in mobile ad spending is being driven by consumer adoption of mobile devices. Next year, eMarketer estimates, there will be more than 2 billion smartphone users worldwide, over one-quarter of whom will live in China alone. Especially there and in other emerging and developing markets, many consumers are accessing the internet mobile-first and mobile-only, so leading advertisers allocate their digital expenditure to mobile accordingly.

The number of tablet users worldwide, while growing more slowly than the smartphone audience, is still expected to eclipse 1 billion in 2015. The proliferation of these mobile devices across the world is driving the shift in advertising from the desktop to reach these untethered, always-on consumers.

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In the short term, the leading global markets, particularly the US and China, will drive mobile ad spending growth. In 2016, US advertisers will spend $40.24 billion to reach consumers on tablets and mobile phones, more than doubling the total from 2014, while those in China will invest $22.14 billion—nearly triple the amount they spent in 2014. Both of these countries will see mobile become a majority of digital ad spending next year.

Rounding out the top five countries, the UK, Japan and Germany also will see significant increases in mobile ad spending next year, but in all three markets, a majority of digital ad spending will be on mobile devices in 2017 for the first time.

While the top five countries will maintain their positions throughout our forecast, there are other markets on the move. Next year, Canada and Australia will surpass South Korea to become the sixth- and seventh-largest mobile ad markets globally, respectively.

By 2018, several of the top growth markets will have made significant gains. That year, Brazil will jump three spots from 2015 to become the ninth-largest mobile ad market globally, and Indonesia will make the largest gain, rising from No. 21 this year to No. 12. Notably, however, despite India’s massive mobile audience, the market will continue to lag in mobile ad spending, failing to eclipse $1 billion by 2018.

eMarketer’s latest worldwide ad spending forecast is accompanied by an interactive tool that provides data on traditional, digital and mobile ad spending in 22 countries. Explore the dynamics of the global advertising landscape and compare and contrast which countries are projected to make the fastest switch to digital, and which are staying the course with traditional outlets. 

Courtesy of an article dated April 2, 2015 appearing in eMarketer

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GLOBAL AD SPENDING FOR THE YEAR 2015 TO REACH $531 BILLION, UP 4.2% OVER 2014 SAYS ZENITHOPTIMEDIA

Global ad expenditure is expected to grow 4.2% globally in 2015, reaching $531 billion by the end of the year, according to a June forecast from ZenithOptimedia.

Global Ad Spend By Region

"Fast-track Asia" (China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand, and Vietnam) is expected to see the biggest increase in ad spend growth this year of any region (9.4%), followed by Latin America (8.2%).

Eastern Europe/Central Asia is the only region where ad spend is expected to decline in 2015 (-8.5%), in large part because of a drop in oil prices and sanctions against Russia.

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Below, additional key insights from the report. 

Share of Spend

Television remains the biggest the advertising medium, garnering 39% of global spend in 2014; TV ad spend is forecast to grow an average of 2% a year through to 2017.

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Contributors to Growth

Mobile is expected to be the main driver of global ad spend growth over the next few years; ZenithOptimedia forecasts mobile to contribute 70% of all the extra ad spend between 2014 and 2017 (excluding markets where the company does not have a breakdown by medium).

Television and desktop Internet are expected to be be the second- and third-largest contributors, respectively, accounting for 20% of new ad expenditure each.

Newspapers and magazines ad spending is expected to to shrink a combined $12 billion between 2014 and 2017.

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About the research: ZenithOptimedia's Advertising Expenditure Forecasts report contains forecasts of advertising expenditure by medium for 80 countries. It has been published continually since 1987.

COMMENTARY:    Around the world, advertisers will spend $592.43 billion in 2015, according to new figures from eMarketer, an increase of 6.0% over 2014.

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Currently, the top five spenders in each advertising category—total paid media, digital and mobile—are the US, China, Japan, Germany and the UK. While the UK lags Japan and Germany in total media spending, its digital ad market outpaces both, with digital and mobile ads representing significantly higher shares of overall advertising than its two predecessors in the overall market. Otherwise, the rankings are consistent across all media markets.

The US remains the dominant advertising market worldwide. Next year, marketers will spend $189.06 billion on ads in the US, an amount that represents 31.9% of the global ad market. That figure is also higher than the aggregated total for China, Japan, Germany and the UK. Through 2018, the US will essentially maintain that share, dipping to only 31.1%, and will continue to account for more in total media ad spending than the rest of the top five combined.

Mobile advertising is the key driver of growth around the world, and advertisers will spend $64.25 billion worldwide on mobile in 2015, an increase of nearly 60% over 2014. That figure will reach $158.55 billion by 2018, when mobile ads will account for 22.3% of all advertising spending worldwide.

Our latest figures for worldwide mobile ad spending are higher than our previous forecasts, due chiefly to faster-than-expected growth in China’s mobile ad market. According to our new data, marketers will spend $6.39 billion on mobile ads in China in 2014, up 600.0% from just $913 million last year; this total will increase another 90.0% to $12.14 billion in 2015. By way of this year’s gain, China will surpass both the UK and Japan to become the second-largest mobile ad market in the world.

There are countless stories to be told accounting for a dynamic and expanding global advertising market. Explore these and others using eMarketer’s Interactive Guide to Worldwide Ad Spending, launched today:

• Mobile’s share of worldwide digital advertising will surpass 50% in 2017.
• Meanwhile, digital’s share of total advertising will reach 33.5% that same year.
• Brazil will become the fourth-largest global advertising market by 2018, surpassing the UK and Germany.
• Indonesia will have the largest digital ad spending growth rate of any country in each year throughout the forecast.
• Combined, Canada and Mexico will be the fifth-largest ad market worldwide by 2018.

eMarketer bases all of our forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviors. We analyze quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.

Courtesy of an article dated July 8, 2015 appearing in MarketingProfs and an article dated December 10, 2014 appearing in eMarketer

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VENTURE CAPITAL INVESTMENTS HIT $19.2 BIL IN Q2 2015, AIRBNB AND SNAPCHAT SCORE $1.5 BIL AND $500 MIL SERIES E ROUNDS RESPECTIVELY

Key Startup Funding Statistics

Although Q2 2015 Venture Capital deal volume is less than Q2 2014, total capital invested has increased significantly. Both deal volume and total capital invested increased from Q1 to Q2 2015.

Q2 2015 Venture Capital deal volume was up 18% from Q1 2015, but the number of deals is down 39% from Q2 2014. Number of deals in Q2 2015 peaked in mid May with a high of 34 deals in a day.

Total capital invested was up 9% from Q1 2015 and reached an all time high for the year at $17.1 billion. This is a 14% increase in total venture dollars invested compared to Q2 2014.

There were three startups that raised multiple rounds in Q2. For example, SimplyInsuredraised their Seed on April 20thand went on to raise their Series A on June 30th. Weeks after closing funding, DocuSignreceived a $45 million infusionwhich increased their Series F funding round to $278 million. Lastly, Tracxnraised $10 million in fundingin June, after raising their $3.5 million Series Ain April.

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U.S. Regional VC Funding Statistics

Startup funding for Q2 2015 was geographically diffuse and capital invested was strikingly different by region.

Bay Area startups received the most venture capital and deals compared to other top funded regions. Deal volume for the Bay Area is up 32% from last quarter.

New York startups received the 2ndmost venture dollars. Startups in this region experienced the greatest compounding employee growth after funding (18%).

Our analysis suggests that New York startups have the resources to sustain company growth after fundraising, despite lower average deal sizes relative to other regions.

Startups receiving funding in Austin and Washington D.C. are smaller in size, on average, when compared to startups in other regions.

Austin and D.C. received a sizable amount of capital at $420 million in total venture funding, despite the early stage of these startup ecosystems.

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U.S. Deal Volume By Series

Q2 2015 Late round (Series E-H) deal volume was the highest it has been all year. Although Late stage deals occurred less frequently than other series in Q2 2015, they occurred 43% more frequently than last quarter, and 100% more frequently than Q2 2014.

Pre Series A deals occurred most frequently in Q2 2015 and represented 30% of all funding events. Early stage funding rounds (Pre Series A and Series A) comprised the majority of all venture capital deployed (58%). The number of early stage rounds is up 18% from last quarter.

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What Are The Most Notable U.S. Funding Deals In Q2 2015?

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Venture Capital Funding Trends

Total capital invested, after taking a slight dip in Q3 2014, has shown a strong upward trend with an increase of 15% over the past year.

Q2 2015 venture capital deployed is up9% from last quarter. If this upward trend continues into Q3 2015, we expect the US startup ecosystem to bring in well over 18 billion in venture dollars.

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Deal volume has decreased by 39 % in the past year. It appears that this trend may not be sustained since there was a 18% increase in number of venturedeals from Q1 to Q2 2015.

Interestingly, there is a negative correlation between deal volume and total venture capital deployed in the past year. This relationship suggests that investors are favoring less frequent, but larger investments. This investment style is further supported by average funding amount trends.

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Average deal size has increased 93% in the past year.

Venture deals from Q1 to Q2 2015 experienced a 6% decline in average deal size.

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Average deals and total venture funding increases over the past year is due, in part, to changes in distribution of investments at each stage.

Earlier stage investments accounted for 72% of all investments in Q2 2014. In comparison, only 60% of investments in Q2 2015 were Pre Series A or Series A. Pre Series A funding events were 99% more common than any other series deal in Q2 2014. This is a 41% greater deal volume frequency than Pre Series A deals observed in Q2 2015.

Interestingly, all series later than Pre Series A occurred more frequently in Q2 2015 vs Q2 2014. Q2 2015 Series B and later round investments were 12% more common than last years investments at these stages.

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Courtesy of an article dated July 15, 2015 appearing in The Wall Street Journal

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WHY DEVELOPING BUYER PERSONAS IS CRUCIAL TO YOUR MARKETING AND BUSINESS SUCCESS

Buyer personas (sometimes referred to as marketing personas) are fictional, generalized representations of your ideal customers. Personas help us all -- in marketing, sales, product, and services -- internalize the ideal customer we're trying to attract, and relate to our customers as real humans. Having a deep understanding of your buyer persona(s) is critical to driving content creation, product development, sales follow up, and really anything that relates to customer acquisition and retention.

"Okay, so personas are really important to my business. But ... how do I actually make one?"

Ahh ... the million dollar question. The good news is, they aren't that difficult to create. You just need to ask the right questions to the right people, and present that information in a helpful way so the people in your business can get to know your persona(s) better than the backs of their hands.

Now for the even better news: Hubspot put together an interview guide and a free template for creating buyer personas, so it's easy as pie to do your persona research and compile it all into a beautiful, presentable, palatable format. So follow along with this interview guide, and download the persona template so you can start plugging in your research. Before you know it, you'll have complete, well thought-out buyer personas to show off to your entire company!

Why Exactly Are Buyer Personas So Important To Your Business?

Buyer personas help you understand your customers (and prospective customers) better. This makes it easier for you to tailor your content, messaging, product development, and services to the specific needs, behaviors, and concerns of different groups. In other words, you may know your target buyers are caregivers, but do you know what their specific needs and interests are? What is the typical background of your ideal buyer? In order to get a full understanding of what makes your best customers tick, it's critical to develop detailed personas for your business.

The strongest buyer personas are based on market research as well as insights you gather from your actual customer base (through surveys, interviews, etc.). Depending on your business, you could have as few as one or two personas, or as many as 10 or 20. But if you’re new to personas, start small! You can always develop more personas later if needed.

What About "Negative" Personas?

Whereas a buyer persona is a representation of your ideal customer, a negative -- or “exclusionary” -- persona is a representation of who you don’t want as a customer.

For example, this could include professionals who are too advanced for your product or service, students who are only engaging with your content for research/knowledge, or potential customers who are just too expensive to acquire (because of a low average sale price, their propensity to churn, or their unlikeliness to purchase again from your company).

How Can Personas Be Used in Marketing?

At the most basic level, developing personas allows you to create content and messaging that appeals to your target audience. It also enables you to target or personalize your marketing for different segments of your audience. For example, instead of sending the same lead nurturing emails to everyone in your database, you can segment by buyer persona and tailor your messaging according to what you know about those different personas.

Furthermore, when combined with lifecycle stage (i.e. how far along someone is in your sales cycle), buyer personas also allow you to map out and create highly targeted content. You can learn more about how to do that by downloading our Content Mapping Template. 

And if you take the time to also create negative personas, you’ll have the added advantage of being able to segment out the “bad apples” from the rest of your contacts, which can help you achieve a lower cost-per-lead and cost-per-customer -- and see higher sales productivity.

Now, are you ready to start creating your buyer personas?

How To Create Buyer Personas

Buyer personas can be created through research, surveys, and interviews of your target audience. That includes a mix of customers, prospects, and those outside your contacts database who might align with your target audience.

Here are some practical methods for gathering the information you need to develop personas:

• Look through your contacts database to uncover trends about how certain leads or customers find and consume your content. 
• When creating forms to use on your website, use form fields that capture important persona information. For example, if all of your personas vary based on company size, ask each lead for information about company size on your forms.
• Take into consideration your sales team's feedback on the leads they're interacting with most. What generalizations can they make about the different types of customers you serve best?
• Interview customers and prospects, either in person or over the phone, to discover what they like about your product or service. This is one of the most important steps, so let's discuss it in greater detail ...

How To Find Interviewees For Researching Buyer Personas

One of the most critical steps to establishing your buyer persona(s) is finding some people to speak with to suss out, well, who your buyer persona is. That means you'll have to conduct some interviews to get to know what drives your target audience. But how do you find those interviewees? There are a few sources you should tap into:

1) Customers

Your existing customer base is the perfect place to start with your interviews, because they've already purchased your product and engaged with your company. At least some of them are likely to exemplify your target persona(s).

Reach out to both "good" and "bad" customers. You don't just want to talk to people who love your product and want to spend an hour gushing about you (as good as that feels). Customers who are unhappy with your product will show other patterns that will help you form a solid understanding of your personas. For example, you might find that some of these "bad" customers have bigger teams and thus need a collaboration element to the product. Or you may find that "bad" customers find your product too technical and difficult to use. In both cases, you learn something about your product and what your customers' challenges are.

Another benefit to interviewing customers is that you may not need to offer them an incentive like a gift card (a typical incentive for participating in surveys or interviews). Customers usually like being heard, and interviewing them gives them a chance to tell you about their world, their challenges, and what they think of your product. Customers also like to have an impact on the products they use, so you may find that, as you involve them in interviews like this, they become even more loyal to your company. When you reach out to customers, be clear that your goal is to get their feedback and that it's highly valued by your team.

2) Prospects

Be sure to balance out your interviews with people who have not purchased your product or know much about your company. Your current prospects and leads are a great option here because you already have their contact information. Use the data you do have about them (i.e. anything you've collected through lead generation forms or website analytics) to figure out who might fit into your target personas.

3) Referrals

You'll probably also need to rely on some referrals to talk to people who may fit into your target personas, particularly if you're heading into new markets or don't have any leads or customers yet. Reach out to your network -- co-workers, existing customers, social media contacts -- to find people you'd like to interview and get introduced to. It may be tough to get a large volume of people this way, but you'll likely get some very high-quality interviews out of it. If you don't know where to start, try searching on LinkedIn for people who may fit into your target personas and see which results have any connections in common with you. Then reach out to your common connections for introductions.

4) Third-Party Networks

For interviewees who are completely removed from your company, there are a few third-party networks you can recruit from. Craigslist allows you to post ads for people interested in any kind of job, and UserTesting.com allows you to run remote user testing (with some follow-up questions). You'll have less control over sessions run through UserTesting.com, but it's a great resource for quick user testing recruiting.

Tips For Recruiting Interviewees

As you reach out to potential interviewees, here are a few tips for getting a better response rate:

1) Use incentives. While you may not need them in all scenarios (e.g. customers who already want to talk to you), incentives give people a reason to participate in an interview if they don't have a relationship with you. A simple gift card (like an Amazon or Visa credit card) is an easy option.

2) Be clear this isn't a sales call. This is especially important when dealing with non-customers. Be clear that you're doing research and that you just want to learn from them. You are not getting them to commit to a one-hour sales call; you're getting them to commit to telling you about their lives, jobs, and challenges.

3) Make it easy to say yes. Take care of everything for your potential interviewee. Suggest times, but be flexible; allow them to pick a time right off the bat; and send a calendar invitation with a reminder to block off their time.

How Many People Do You Need To Interview?

Unfortunately the answer is, it depends. Start with at least 3-5 interviews for each persona you're creating. If you already know a lot about your persona, then that may be enough. You may need to do 3-5 interviews in each category of interviewees (customers, prospects, people who don't know your company).

The rule of thumb is, when you start accurately predicting what your interviewee is going to say, it's probably time to stop. Through these interviews, you'll naturally start to notice patterns. Once you start expecting and predicting what your interviewee is going to say, that means you've interviewed enough people to find and internalize these patterns.

20 Questions to Ask in Persona Interviews

It's time to conduct the interview! After the normal small talk and thank-you's, it's time to jump into your questions. There are several different categories of questions you'll want to ask in order to create a complete persona profile. The following questions are organized into those categories, but feel free to customize this list and remove or add more questions that may be appropriate for your target customers.

Role

• What is your job role? Your title?
• How is your job measured?
• What does a typical day look like?
• What skills are required to do your job?
• What knowledge and tools do you use in your job?
• Who do you report to? Who reports to you?

Company

• In which industry or industries does your company work?
• What is the size of your company (revenue, employees)?

Goals

• What are you responsible for?
• What does it mean to be successful in your role?

Challenges

• What are your biggest challenges?

Watering Holes

• How do you learn about new information for your job?
• What publications or blogs do you read?
• What associations and social networks do you participate in?

Personal Background

• Describe your personal demographics (if appropriate, ask their age, whether they're married, if they have children).
• Describe your educational background. What level of education did you complete, which schools did you attend, and what did you study?
• Describe your career path. How did you end up where you are today?

Shopping Preferences

• How do you prefer to interact with vendors (e.g. email, phone, in person)?
• Do you use the internet to research vendors or products? If yes, how do you search for information?
• Describe a recent purchase. Why did you consider a purchase, what was the evaluation process, and how did you decide to purchase that product or service?

The #1 Tip for a Successful Persona Interview: Ask "Why"

The follow up question to pretty much every question in the above list should be "why?"

Through these interviews, you're trying to understand your customers' or potential customers' goals, behaviors, and what drives them. But keep in mind that people are not always great at reflecting on their own behaviors to tell you what drives them at their core. You don't care that they measure the number of visits to their website, for example. What you care about is that they measure that because they need a number they control to show their boss they're doing a good job.

Start with a simple question -- one of our favorites is, "What is your biggest challenge?" Then spend a good amount of time diving deeper into that one question to learn more about that person. You learn more by asking "why?" than by asking more superficial questions.

How To Use Your Research To Create Your Persona

Once you've gone through the research process, you'll have a lot of meaty, raw data about your potential and current customers. But what do you do with it? How do you distill all of that so it's easy for everyone to understand all the information you've gathered?

The next step is to use your research to identify patterns and commonalities from the answers to your interview questions, develop at least one primary persona, and share that persona with the rest of the company.

Use Hubspots free, downloadable persona template to organize the information you've gathered about your persona(s). Then share these slides with the rest of your company so everyone can benefit from the research you've done and develop an in-depth understanding of the person (or people) they're targeting every day at work.

Here's how to use the template to do it ...

Fill In Your Persona's Basic Demographic Information

If you didn't feel comfortable asking some of these demographic-based questions on the phone or in person, you can also conduct online surveys to gather this information. Some people are more comfortable disclosing things like this through a survey rather than verbal communication.

It's also helpful to include some descriptive buzzwords and mannerisms of your persona that you may have picked up on during your conversations to make it easier for people in your sales department to identify certain personas when they're talking to prospects.

Here's an example of how you might complete Section 1 in your template for one of your personas:

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Share What You've Learned About Your Persona's Motivations

This is where you'll distill the information you learned from asking "Why" so much during those interviews. What keeps your persona up at night? Who do they want to be? Most importantly, tie that all together by telling people how your company can help them.

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Help Your Sales Team Prepare for Conversations With Your Persona

Include some real quotes from your interviews that exemplify what your personas are concerned about, who they are, and what they want. Then create a list of the objections they might raise so your sales team is prepared to address those during their conversations with prospects.

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Help Craft Messaging For Your Persona

Tell people how to talk about your products/services with your persona. This includes the nitty gritty vernacular you should use, as well as a more general elevator pitch that positions your solution in a way that resonates with your persona. This will help you ensure everyone in your company is speaking the same language when they're having conversations with leads and customers.

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Finally, make sure you give your persona a name (like Finance Manager Margie, IT Ian, or Landscaper Larry), and include a real-life image of your persona so everyone can truly envision what he or she looks like. Purchase an image from a stock photograph site like Thinkstock, or download one of our royalty-free images. It may seem silly, but it really helps to put a name to a face, so to speak!

COMMENTARY:   

Customer Profiles vs Customer Personas 

Most business owners have an ideal customer in mind. However, far too many of them fail to do more than scratch the surface when describing that person. Their customer profiles contain generic, basic information: age range, geographic location, household income, whether they have children or pets, rent or own their homes, etc. In the B2B environment, the customer profile may focus on business information, such as number of years in business, the market served, annual sales and length of time in operation. Taken together, the customer profile provides a marketing starting point.

The first step in developing customer personas is to develop the ideal customer profile. Again, the profile is different from the persona; the profile is generic, overarching information. You can cull this information from your customer data, as well as based on the market research you’ve done to determine who your product appeals to. As you develop the profile, it should include:

B2C:

• Age
• Gender
• Marital status (if applicable)
• Geographic data (country, region, ZIP code)
• Household income
• Household size
• Homeowner status
• Education
• Special characteristics (children, pets, hobbies, interests, political affiliations, etc.)

B2B:

• Industry
• Products
• Geographic data (country, region, ZIP code)
• Number of employees
• Number of locations
• Length of time in business
• Annual revenue

Once you have a customer profile, you can move on to creating a persona. The first rule of creating buyer personas is that you cannot make them up, based on assumptions, your existing customer data, and anecdotes from your sales and marketing staff. You can’t base personas on what you glean from the social media profiles of the people who engage with your company online. That information may be useful in creating a customer profile in that it provides some general demographic insights, but it doesn’t give you what is referred to as the “customer archetype.”

The Science Behind Creating Buyer Personas

To help you get started developing your customer personas, I found this very helpful infographic titled, "The Science Behind Creating Buyer Personas," which encapsulates much of the above information into a concise format that walks you through the process of creating buyer personas.

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To know today’s B2B buyers more deeply involves the use of qualitative contextual inquiry. Contextual inquiry has served the fields of social science, qualitative research, and journalism very well.  It can serve B2B Marketing and Sales very well also.

Strategic Management

Buyer persona development is an exercise in formulating customer and buyer strategies.  To formulate strategies requires informed knowledge about your customers and buyers.  One way to characterize buyer persona development is to call it a strategic modeling initiative.  An initiative every level of management should go through to make informed decisions.  One piece of advice Zambito can give after being at this for a dozen years – do not skip strategy and jump to tactics.  You are going to miss out on plenty about your buyers.

Strategic Modeling Tool: The Buyer Persona Canvas™

Zambito utilizes a strategic modeling tool designed for buyer persona development: the Buyer Persona Canvas™.  (Zambito drew inspiration for the canvas from Alex Osterwalder’s, founder of Business Model Generation, wonderful creation of the BUSINESS MODEL CANVAS  commonly used in start-ups. NOTE: But should be a key element for developing business models for any company regardless of its stage of development)   It is designed to serve as a strategic guide for understanding your buyers more deeply.  The model highlights ten (10) areas where we need in-depth knowledge about buyers to make informed strategy decisions.

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I have actually been involved in the process of creating buyer personas.  However, instead of calling them personas we called them lifestyles.  Lifestyles is a pseudonym used in marketing that describes how customers spend their time and money.   To determine the lifestyles of our customer database, which numbered almost 100,000 customers spread over 17 national geographic areas, we used the services of a professional marketing analytics firm.  This was an expensive process which took over three months to complete.  I don't recommend this for everyone.  The lifestyle analysis that we compiled utilizes demographic data, consumer credit data, census data, and behavioral tendencies about consumers by specific geographic locations.

Courtesy of an article dated May 28, 2015 appearing in Hubspot Blog and an article dated June 30, 2014 appearing in Digital Currents and an article dated September 2013 appearing in Tony Zambito Blog and an article dated May 20, 2014 appearing in WSI Blog

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