19
Feb

Facebook adds to its success as a leading medium for online advertisers

2-Color-Design-Hi-Res-100px-widthA couple of articles published recently point to further gains by Facebook as a leader in the media market for online advertisers. The first of these, titled Why Google Should Fear Facebook’s New Product Ads, which was written by Garrett Stone and published on the AdWeek web site, reports on some comments from Tamara Gaffney, who is a Principal Analyst at Adobe Digital Index, about Facebook’s decision to debut a product ad offer.

The key takeaway, for me, in Gaffney’s comments was the ranking she gave to Facebook’s analytics: “Facebook has the best targeting capabilities”. If this is truly the case, then it should not be much of a stretch (for anyone interested in just how organizations of all types can capture the highest value from online content publishing) to see the diamonds to be had from online chatter. This kind of press should provide further incentive to stakeholders in enterprise technology to work harder to refine so-called “big data” methods of containing, and then analyzing both text and binary data.

The second article appeared in Direct Marketing News. The title of this one is Salesforce Becomes Facebook Marketing Partner and is written by Al Urbanski, a Senior Editor for the publication. The significance of a decision of this magnitude by Salesforce should not be underestimated. If they see a much better opportunity mining online chatter from Facebook pages (in complete conformance with what look to be very high standards at Facebook Marketing Partners) and leveraging the other features of the program, at the same time, then Facebook is likely onto something big.

One more point on the comments made by Gaffney from Adobe Digital Index: If Facebook truly “has the best targeting capabilities”, then the social media architecture underpinning its online presentation is very likely to be a key contributor to its success. Somehow Google + is not hitting the mark. This lesson is not likely to be lost, once again, on enterprise computing stakeholders looking to incorporate “big data” and unstructured text data into the information they target for analysis.

Perhaps another entity listening to these messages is Facebook, itself. Why else would they throw substantial resources behind their own Facebook at Work, enterprise social computing effort?

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2015 All Rights Reserved

26
Nov

Don’t look to Facebook at Work to change much in the world of enterprise social, but enterprise recruiting could be a different story

Facebook At Work, should it be released in early 2015, isn’t likely to make a dramatic appearance on the market for enterprise social computing solutions. It’s not as if consumers of this kind of computing solution have few choices. But the market is constrained and, perhaps, for a set of good reasons:

  1. Hierarchical organizations have demonstrated substantial resistance to enterprise social computing solutions
  2. Facebook at work appears to be taking a path into the enterprise leading through BYOD and BYOA, and the consumerization of IT computing
  3. Organizations supporting lots of silos have not demonstrated much success implementing enterprise social computing solutions
  4. It’s unlikely Facebook at work will introduce any new features beyond those already offered by entrenched competitors
  5. Neither is it likely Facebook will offer anything like the analytics tools already available to enterprise social consumers using tools offered by Microsoft, IBM, or even Google

So if this rumored suite of tools isn’t likely to make much of an impression on the enterprise social market, then why all the publicity about it? One can argue Facebook is the leading solutions provider for social computing; therefore, any step they take in an enterprise computing direction is worth some commentary. But this argument doesn’t hold up under scrutiny. The history of the efforts of a number of other solutions designed for the enterprise social computing market is not filled with a lot of clearly successful efforts. Bottom line: enterprise social computing is a special kind of requirement, not necessarily a right step for the average organization and, potentially, a detriment to its healthy performance.

But perhaps Facebook, itself, is powering a lot of the “online chatter”. They certainly have a lot to gain should they establish a position as a serious option for this type of computing for enterprise-class organizations. Further, if they approach the market from the direction of LinkedIn, as the article from the UK Daily Mail contends, they will have more to gain. Popping up as a competitor to Yammer will require a lot more work on the backend then Facebook is likely to want to undertake. Even more, it will require Facebook sales and marketing personnel to win over prospects from enterprise IT organizations — not likely to happen anytime soon, in the opinion of this writer.

Taking a piece of LinkedIn’s business with corporate recruiters and the executive search firms supporting them is another matter, and one where Facebook looks like a real force, especially when their expertise in the mobile ad serving market is factored in to the equation.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

12
Nov

Is Salesforce.com in the cross hairs as mature ISVs jump into the customer data and analytics markets?

Salesforce.com acquired ExactTarget in 2013. Arguably, ExactTarget can produce a comparable quality of customer data to Facebook, or the just announced IBM Twitter partnership. But as Marc Benioff, CEO remarked during Salesforce.com’s Q2 2015 Earnings Conference call, Salesforce.com is an enterprise cloud business.

We’ve written at length in this blog on the unique character of enterprise business markets for computer hardware, software (including cloud), and networking. As Benioff noted during a joint presentation with Satya Nadella, CEO of Microsoft, to announce the addition of Salesforce.com as a supported CRM option for Microsoft’s Office 365 customers, Microsoft, itself, is one of Salesforce’s largest customers for ExactTarget services.

But servicing the needs of businesses marketing non durable commodities to consumers is a very different story, which Facebook seems to be winning. Salesforce’s growth rate, at 38% year over year is enviable, but Facebook’s year over year growth rate of nearly 60% is a lot better. Would it make sense for a stagnant mature ISV named IBM, desperate for some big growth, to see an opening to bring ExactTarget-like capabilities to a different market?

IBM certainly has a presence in every leading marketing business in the US and Western Europe. As a trusted partner of Ogilvy and Mather, Forbes, etc. a partnership with Twitter, which promises to provide them with a very unique set of data collected from Twitter’s “fire hose” to be fed into their Watson analytics solution looks very promising.

Salesforce, on the other hand, with Keith Block, an exceptionally capable sales and marketing executive for enterprise business markets, as President, looks clearly dedicated to signing up more enormous businesses like Microsoft. One can certainly argue the very large marketing businesses IBM presently services (and, in turn, the manufacturing and service-providing customers of these marketing firms like Procter and Gamble) fit the bill for legitimate Salesforce targets, but in this writer’s opinion it isn’t likely the way they are leveraging ExactTarget will meet the needs of Omnicom, etc for the consumer non durable goods market. This writer spent a lot of time with IBM from 1994 to 2001 and can speak to what was then a deep, strategic relationship with Ogilvy, Forbes, and others.

So the ExactTarget capability does look like something a mature ISV like IBM would want to repackage for its own, and very different set of consumers.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

11
Nov

Marketers look to be succeeding with customer data and have pressing needs to consume more

During Facebook’s Q3 2014 Earnings Conference Call, Mark Zuckerberg, CEO reported $3.2 Billion gross revenue for the quarter, and a 64% year over year increase in their advertising business. In contrast, Google, as Patrick Pichette, Senior Vice President and CFO reported during its Q3 2014 Earnings Conference Call, experienced merely a 20% year over year increase in total revenue from its Sites business and only a 9% year over year increase in its Network revenue.

So it looks like a fair question to ask what’s up at Facebook? From a teaser summary this writer found on the web site for MIT’s Sloan Review, titled How Facebook is Delivering Personalization on a Whole New Scale, Blake Chandlee, Vice President of Global Partnerships at Facebook pointed to customer data as a very valuable asset Facebook has, apparently, learned to monetize much more successfully than Google.

Customer Data includes “[o]nline [c]hatter” (quoted from another short summary on the MIT Sloan web site, this one titled “Online Chatter is Big Data Gold”. The short piece was written by Leslie Brokaw and published online on October 27, 2014). Online Chatter is the stuff users produce when they post to alerts, interact with friends, etc on Facebook. All of this takes the form of unstructured data, which, in turn, has to be manipulated and given shape with tools developed for the big data trend.

The tools are not the subject of this post. Rather, what this writer finds to be important is how Facebook’s reported growth is emblematic of the success its customers have achieved using this “online chatter” to their advantage. Unstructured data, precisely as the MIT Sloan precis presents it, is becoming a very valuable asset.

One can argue this trend is not new. As far back as year ago, ostensible Facebook competitors AT&T and Verizon were said to be jumping into the same market (interested readers may want to check out an online article titled AT&T joins Verizon, Facebook in selling customer data). But not all customer data is the same. It isn’t likely either Verizon, or AT&T can produce the same treasure chest of “online chatter” to rival Facebook.

But Twitter certainly can and appears to be moving in the right direction with an announced first partnership with IBM. We just published a post to this blog yesterday on this announcement.

Google certainly has an enormous repository of a type of unstructured data in its GMail service. Assuming they have access to a comparable capability to anonymize the data, then, one might argue, they are prepared to go toe-to-toe with Facebook. But the contrasting sales growth numbers from the two quarterly reports mentioned at the top of this post point to a looming problem for Google — email just doesn’t seem to be producing as useful a set of customer data. How else to interpret the differences in growth? Pity Google + is not doing better. Google + failure is a big deal and likely to emerge as a major obstacle Google will need to fix.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

30
Jun

Gallup Poll Results on U.S. Consumer Buying Habits Support a Skeptical View of Social Media Business Valuations

Public companies in the Social Media business (facebook, Twitter, LinkedIn, Google, etc.) have all implemented global business strategies. Nevertheless, some substantial proportion of the business plans for each of these businesses, over the next near term, depend on sales to advertisers for the U.S. consumer markets. But the results of a Gallop® report on the buying habits of U.S. Consumers, published on June 23, 2014 may point to excessively optimistic revenue forecasts in these plans, and, in turn, even more inflated business valuations than previously appeared to be the case.

Here are some important points coming out of this report:

  • 62% of a cross section of respondents to the survey reported Social Media had “No influence at all” on their purchasing decisions. Two caveats on this statement should be noted: 1) the numbers of respondents from each of four groups — “Millennials”, “Generation X”, “Baby Boomers”, “Traditionalists” — are not included in the article about the report, which is now widely available to the public (a link to the article is included in this post) and 2) despite a landing web page for the report, itself, the landing page does not offer the visitor any access to the report, so it is not possible to explore the report, at least at the time this post is being written
  • But this percentage drops to 48% of “Millennials” who responded to this survey. “Millennials” are defined as people born after 1980.
  • Only 5% of a cross section of respondents reported social media exerted “A great deal of influence” over their purchasing decisions. The percentage rises by 40%, to 7% when only responses from “Millennials” are considered.

In Facebook’s 10Q filing with the U.S. SEC, dated April 25, 2014, for the three months ended March 31, 2014, 45% of total global business revenue for the quarter was reported for the United States market, alone. The sources of revenue are clearly defined in this report as follows: “We generate substantially all of our revenue from advertising and from fees associated with our Payments infrastructure that enables users to purchase virtual and digital goods from our developers with applications on the Facebook website.”

Given the claimed results included in Gallup’s report, it might make a lot of sense for investors to recalibrate the cost of an investment in Facebook. In the opinion of this writer Facebook is grossly overvalued, as are most of its peers in this segment. Online advertising is simply better suited to the promotion of tangible items, or intangibles highly dependent on tangible factors, (for example, geographical location) than it is for purely intangible offers.

Since the range of items suitable for online promotion is, therefore, limited, the extent to which valuations have been inflated is even more extreme than this writer previously assumed to the be case.

Disclaimer: I have no current investment in any of the businesses mentioned in this post

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

27
Nov

How Will Social Media Evolve Beyond Facebook?

In an article published on the New York Times website on Monday, November 18, 2013, titled “Facebook, Still Dominant, Strives to Keep Cachet”, Jenna Wortham, Vindu Goel and Nicole Perlroth report on some strategic cracks in this business’ barriers to entry from competitors. The most dangerous of these include:

  • a Facebook App developer community less inclined to build new Facebook analytics hooks into their systems
  • an apparent popular dedication, on the part of early stage businesses in the social media sector, to look “long and hard” at any acquisition offers from Facebook. The most recent example of this attitude is SnapChat’s decision not to accept an acquisition offer from Facebook
  • apparent waning interest in Facebook on the part of a very important segment of its consumers — young people of high school age

So is there room for social media to evolve beyond Facebook? If yes, then how?

Certainly Facebook, or a “next generation” Facebook-like service could do a better job of balancing the privacy benefit many of its core consumers value, with the inevitable access advertisers, and business consumers, will require to the larger Facebook “community” of consumers.

Facebook’s efforts to retain consumers, while providing advertisers with greater accessibility to the wider Facebook user community with, for example, its own version of Twitter’s hashtag, have been clumsy. I have a business page on Facebook. I’ve made consistent use of the hashtag feature since it was debuted, but I’m not seeing any positive results from it. But it would be hard for me to see these results, anyways, as Facebook doesn’t provide any analytic data, whatsoever, until a site can magnetize 30 “likes”.

A feature like Google’s Analytics product, which is free to anyone with a Google account and a website, would certainly be welcome, as it would be useful, to business consumers, as they try to improve their exposure to the universe of Facebook consumers in order to collect the required 30 “likes”.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

21
Oct

New Publication Policies Implemented by Prominent Online Social Media Test Consumer Commitment

On Thursday, October 10, 2013, Google published its plan to provide its advertisers with an opportunity to include consumer testimonials in their ads. I recommend reading this article by Joshua Brustein as published in BloombergBusinessWeek, Google Is Going to Include Your Face in Its New Ads, to get an idea of where they plan to take this new notion of just how far they can go with your content if you opt to publish it on one of their products.

Broadly speaking there’s little new about this announcement. Advertisers routinely include real life success stories and other types of testimonials in campaigns. But what is very new about the announcement is the treasure trove of endorsements Google plans on exposing to its advertisers for their use. All of the blog posts, alerts, status updates, and, perhaps, even emails produced by Google consumers are now fair game for these advertisers.

This decision is not likely to be well received by Google consumers. When this tactic is put together with very similar announcements from facebook (and, I believe, LinkedIn, as well), the average consumer of these services should be able to clearly see the boundary, perhaps for a first time, between online social media with attractive offers, versus online social media to be avoided.

The catalyst for these new positions, in all likelihood, is yet another round of efforts by Google, and other online social media hosts hungry for profits, and revenue growth, to monetize the enormous amount of content published by consumers.

Click advertising efforts have not been producing the profits of the past. Plans like the one Google announced will likely provide them with a new set of products they can offer to online advertisers at a premium, over and above normal click ad rates. The plan also serves as a tacit acknowledgement that more of the market for click advertising opportunities is after a method building brand awareness, and market exposure, than in the past. The “bread and butter” segment of these click advertisers used to be after an opportunity to sell products and services directly to the consumer. But those days are long gone.

These tactics may create an opportunity for paid media to offer completely private venues where consumers of these services can publish, in privacy. It’s hard to envision a large proportion of social media publishers simply accepting these new policies and continuing “business as usual.” It’ll be interesting to observe just how consumers actually react to these new tactics.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

1
Feb

Participating in Discussion Group Topics can Drive Not Only Engagement but Sales

In contrast to creating and moderating discussion groups on social media, dedicating lead generation personnel to monitor discussion groups, and, where relevant to reply to topics posted by other participants can be very productive. In fact, not only can this type of online dialogue stimulate response, and, thereby, engagement, but, more, this type of online dialogue can actually produce sales opportunities.

Roughly speaking, at least two criteria must be met in order for this tactic to produce positive results. The first of these criteria relates to an assessment of whether, or not, the discussion group in question is designed as a self-help forum, where the expectation is that any advice will be provide at no charge. There are, in fact, lots of these groups online. Usually they exist to support users grappling with specific technology, for example, LINUX, or other open source software. We don’t see a meaningful return on the time that will need to be invested in monitoring topics of conversation within these discussion groups.

On the other hand, where discussion groups exist to support proprietary applications, it certainly makes sense to monitor conversation topics. Spending some time each working day to quickly review abstracts of discussions can certainly produce useful opportunities to at least engage with a target audience for one’s market. Opportunities are very likely to arise where participants have already acknowledged an interest in identifying 3rd parties for specific tasks. In our experience, participants will often post a query like this on the expectation that any resources that may be identified will, in fact, be recommended resources, for which some first hand references may be forthcoming, upon request.

Nevertheless, in order to obtain true benefit from the time and effort it takes to participate in one of these topics, personnel selected for this type of product promotional task must be credible representatives with a legitimate right to participate in the topic discussions that may arise. Usually credibility can only be established for personnel who are actually involved, as users, of the technologies that often provide the basis for these discussions. Therefore, we think it makes a lot of sense for businesses to train operational personnel to perform some rudimentary prospect qualification should an opportunity arise where it makes sense to participate in a topic of discussion.

We should note that where personnel are clearly selected from a sales team, we have had rather poor results from this tactic. In part, we attribute these poor results to a “self help for free” style which characterized some of the discussion groups where our personnel have attempted to participate in discussions.

In the next post of this blog we will start to look at the passive aspects for these same methods.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

31
Jan

Posting News and Other Announcements is a Legitimate Use of Social Media, but, Often, an Ineffective Method of Driving Engagement

We have never been big proponents of using Twitter, Facebook, or any other social media as a method of letting an audience know our whereabouts, or what we may be up to at any particular time. In fact, we see little use for this type of online content creation to be of use to businesses in need of product promotion. Rather, we make a lot of use of each of these venues to post news and announcements of client products, services, and even commentary (crafted in the form of blog posts around products and services).

Nevertheless, we can’t claim good results from this type of active tacticv of online product promotion. We think the best return on the time invested in posting news and announcements is still to be found in the legacy activity of posting press releases. In other words, the prime audience for news, in our opinion, remains an audience of journalists, who, in turn, can craft follow up content around a company’s announcements and news to better reach specific communities of readers.

Our attitude about press releases is that they are, largely, a mandatory effort for clients targeting business audiences, but not an effort that produces much in the way of tangible results. The publishers that we work with appear to be aware of this gap. Most of them — PR Newswire, PRWeb, Businesswire — now offer the tools that product marketers require to track how press releases are distributed, the individuals, organizations, and even businesses that apparently open and read them. Nevertheless, in our experience, there is still a pronounced gap between all of this information and any truly useful indication of how an audience actually engages with the information.

Rather, we are working on including text within the press releases that we craft for clients that, literally, drives engagement, whether that text amounts to a invitation to register for a webinar, or to obtain one’s own copy of some new information. In fact, we see little reason today to produce press releases that do not include some form of call to action on the part of the reader. We simply don’t see the return on investment by simply publishing news for a presumed audience of journalists, who, in fact, are no longer to be found online reading this kind of content.

The best method we’ve found of crafting a real opportunity for engagement from a tweet on a piece of news, or an announcement is through an annotation that has prompted engagement for us in the past.

In the next two posts to this blog we will present some of our thoughts on discussion groups as a method of driving engagement with an audience.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved

30
Jan

Moderating Discussion Groups can Provide Businesses with a Means of Driving Engagement

Electronic discussion groups have been around for quite a while, and certainly predate the world wide web and the Internet as we know it in 2013. Usenet provided a realm of data communications over the Internet prior to the advent of the world wide web. The type of data communicated over Usenet amounted to a near real time exchange of information between human beings over computer terminals, on topics of interest. Highly sophisticated examples of Usenet were to be found on AOL, Compuserve, etc.

Now, in 2013, Usenet is very much history. Nevertheless, the same discussion groups that provided the reason for data communications across Usenet in the past are ubiquitous today. Almost every example of social media offers a discussion group feature. One method of using discussion groups is to build one around a topic, typically a topic that is relevant to one’s products or services, and then to provide the moderation service required to manage the group. As early as in the mid 1990s it became apparent that group moderation was a necessary activity, as the amount of promotional information disguised as discussion group topics became excessive. If left exposed to this topic abuse, without moderation, most of these discussion groups became ineffective as a method of driving legitimate engagement with an audience.

Not much has changed today. We participate in a number of these groups on behalf of clients and for our own purposes to drive business development for IMB Enterprises, Inc. We see the same topics repeated from group to group, and, further, the same group participants doing much of the topic posting. Therefore, in our opinion, if discussion groups are to be successful, businesses must plan on a substantial effort to moderate them, for, potentially, little return in the form of truly useful engagement.

Further, we think that discussion groups, as a tactic to drive engagement, also are susceptible to the problems that often plague other similar methods. These groups can, in fact, become no more than a hang out for customers and prospects looking for free information on a topic, or technology. Once again, skilled group moderation is required to ensure that the flow of conversation does not, unknowingly veer into the freeware area. If one’s product is open source software, freeware discussions may be fine, but the same is not the case for companies with proprietary products and/or services.

We cannot claim much success, at all, moderating discussion groups that produced productive engagement. On the other hand, we are certain that some experts can deliver excellent results from this method, but we think the skill is highly specialized.

In the next post to this blog we will discuss posting to discussion groups as a wholly separate method of driving engagement.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved