Is Twitter Another Search Engine Like Google?

In this second of two posts built around an article by Alexander Eule, “How Twitter Might Actually Be Worth $31 Billion”, which was published on November 9, 2013 on barrons.com, I’ll take a closer look at one of the assumptions at the core of Eule’s argument — Twitter is competing in Google’s market.

In his article Eule states “In fact, at current prices, they assume that Twitter’s nascent Internet ad strategy will be even more effective than the groundbreaking model created by Google . . . ” I disagree. As I wrote in the prior post to this blog, Twitter is not competing in Google’s business. The public can’t find anything on Twitter. The same restrictions hold true for facebook. Without a facebook account it’s still very difficult to access content published on facebook. So Twitter is much more a competitor to facebook than it is to Google, or even to LinkedIn.

So all of the financial projections included in this article (most notable of these being the $18 Billion “operating” profit on $47 Billion in sales, presumably, for the current fiscal year, which Eule claims for Google) aren’t relevant, at least as I see it, to Twitter. Google is available to the public for unlimited viewing of content. It doesn’t have a facebook-like product, despite a lot of effort to craft Google Plus into one.

Neither do I find the products Google offers to be comparable to Twitter’s online real estate offer. Google is in an ever growing number of horizontally managed businesses. Increasingly, quarter after quarter, the real Google revenue drivers can be elusive. Are they making money from click advertising, only, or is Motorola Mobility, or Chromebook hardware contributing substantially to their bottom line? Further, if Google’s Q3 2013 Quarterly Earnings Report can provide us with useful information about the true profitability of their business, then I don’t see how Eule gets to the $18 Billion figure. GAAP net income for the quarter was $2.970 Billion, a little over 40% of Microsoft’s total ($6.4 Billion) net income for the comparable business period (Q1 FY 2014).

In my opinion Twitter, like facebook, will face some daunting challenges monetizing its precious online real estate to its real customers — the 230 million “Twitterers”. If Google is posited as being in some enviable position, I prefer the Microsoft story.

Ira Michael Blonder

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


What Does Twitter Sell and Who Buys Their Products?

On Thursday, November 7, 2013, Twitter became a publicly traded business. The opening price for the TWTR stock, set on November 6, 2013, the day before the IPO, was $26.00 per share. TWTR closed the first day of trading at $44.90, 73% above the opening price. Based on the float, meaning the number of share issued on Twitter’s first trading day, the book value of the business is approx $25 Billion.

The Barrons November 11, 2013 edition includes an article written by Alexander Eule, “How Twitter Might Actually be Worth $31 Billion”. Eule states “We now know what the broad market is willing to pay for a company with an unpaid workforce of 230 million people that creates (sometimes) compelling content for a global audience”.

But do we know anymore about what they sell, and what their target market looks like? From Eule’s article, it’s safe to conclude “no, we don’t”. So how do we get to some useful understanding about the product marketing strategy for this business?

Eule’s 230 million people, in my opinion, are consumers of Twitter’s product, and not an “unpaid workforce” for the company. They buy the Twitter product, which for 99+% of them is absolutely free of charge. These 230 million “Twitterers” can build a page, at no charge, on the Twitter website. As long as they respect Twitter’s publishing guidelines, they can publish as frequently as they want to their page, “retweet”, reply to “tweets”, etc. Twitter’s product is a spot on one of the most highly trafficked websites on the Internet. The product marketing opportunity on Twitter’s horizon, in my opinion, is to scale the types of space offered to these 230 million (and, hopefully, growing) people, and to build a method of monetizing their consumption of the product.

The public Eule assumes, meaning all the folks reading the content published by Twitter’s unpaid 230 million employees, do not exist. In fact, the general public can’t review anything on Twitter. Reading content on Twitter requires a Twitter account. So if one tries to extrapolate a Google-like click ad experience for the public on Twitter (which Eule’s article suggests to be the case), one is not likely to succeed. The real comparison is with facebook, which has a very similar accessibility requirement.

In the next post to this blog I’ll dig a bit deeper into Alexander Eule’s article.

Ira Michael Blonder

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


Anonymous Website Visitor Information can be a Useful Component of Successfully Managing Online Advertising Costs

We’ve written on the topic of online pay per click advertising options. We’re not convinced they are a worthwhile investment for technology businesses. If a customer’s decision to buy a product can be categorized as a “considered purchase”, there are certainly better ways an ISV can find to invest cash in online promotion.

A useful tool to collect the information your specific business will need to evaluate, to make a correct decision on the true value of pay per click advertising for your product line, is an anonymous website visitor service. VisualVisitor is one of the businesses providing these services.

One of our clients has been using VisualVisitor to track visitor activity on several product pages on his website. We also use the same service to collect information about anonymous visitors to our website, and to blogs we write for clients, for example, Talking-SharePoint.com.

This client is also a customer of Google’s Adwords pay-per-click advertising service. With VisualVisitor, we can identify businesses visiting our client’s website from the client’s online advertising campaign. This access provides us with

  1. a method of verifying the accuracy of billing for the client’s click advertising campaign, and
  2. a glimpse into the website behavior of prospects produced by the pay per click advertising campaign

We’ve noted no conversions from our client’s click advertising campaign to actual customers for the client’s corporate product offers. So we’ve advised the client to, at a minimum, discontinue the pay per click advertising campaign and, for now, sink the same investment into Google’s online brand awareness campaign. For those readers unfamiliar with how the brand awareness online advertising campaign works, our client will not be charged for actual clicks on ads. Rather, the cost for the client is calculated on the number of impressions of the client’s ads on Google’s Display advertising network and its search engine.

Over the longer term we are working with this client to identify a reputable search engine optimization service. We think investing the same budget in a reputable search engine optimization campaign is still a much more promising investment for our client.

Ira Michael Blonder

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


On Mobile Ad Sales and Their Importance to Facebook Growth

Since July 21, 2013, the price of Facebook shares has substantially increased. As of August 4, 2013, the price of these shares has finally crossed the share price on the day this company went public. But does this dramatic increase in share price signal a pivotal turn in the road for this business?

We don’t think so. In an article titled Facebook Crossed Its $38 IPO Price, Ms. Evelyn M. Rusli, who wrote the article, sums up the last 6 months history for the stock: “[s]ince hitting a nadir closing price of $17.73 on Sept. 4, Facebook’s stock has more than doubled in 10 months, powered by increasing ad sales and signs that Facebook is finding its footing on mobile devices.” Ms. Rusli quotes Chris Baggni of Turner Investments who comments on the punishment Facebook shares have received (up to this point, that is) since the IPO: “[I]t only made sense that if they did the right thing, they would get paid.”

We think Wall Street has impatiently pushed Facebook forward into the position of a business doing “the right thing” (to quote Chris Baggni), when it is far too soon to reach this conclusion. There are two sides to any advertising deal. Publishers print ads and sponsors pay for them. Chris Baggni comments on one side of the transaction, but no one, to date, has commented on the other (meaning from the perspective of the sponsors).

Certainly there was the notorious comment from General Motors, published coincidentally with the Facebook IPO, of their intention to discontinue advertising on “the social network.” But mobile sponsors are a different set. We have yet to hear any opinions as to what they are getting from their click ads on Facebook’s mobile feed.

Unless and until verifiable, positive results can be ascribed to the sponsors paying for the ads, we can’t add our own congratulations to Facebook for “doing things right.” We think investors will do well to maintain a highly vigilant attention to news on this topic. The fact is share prices will likely change dramatically, either way.

Ira Michael Blonder

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


comScore Rocks the Boat on Online Advertising With a New Report

Jack Neff wrote an article, Worse Than You Thought: Nearly Half of Online Ads Aren’t Viewed, which was published on June 11, 2013. The intended audience for this article looked to us to be larger businesses, meaning enterprises in the $100MM and up category. But the points made in the article should be mandatory reading for any smaller business with a big commitment and a matching expectation for a pay per click advertising strategy.

Jack Neff notes: “ComScore raised eyebrows with research last year showing 31% of online display ads are never actually viewed, but upon further review, things are even worse: its latest data indicate 46% of ads are never seen by website visitors.” (quoted from Jack Neff’s article as published on the Ad Age website on June 11, 2013. We have provided a link to the entire article above). If ComScore is right, and only 54% of website ad impressions are ever seen by website visitors, then the cost of pay per click advertising is a lot higher than even we expected it to be.

In a post to this blog published this month, we reported on some new marketing collateral we received from Google. This collateral attempted to explain the new sophistication of online buyers, who may click on an ad, but then take a much longer amount of time than had previously been the case, to actually buy something as the result of what actually amounts to an online research mission.

Most of our clients cannot be satisfied with this kind of likely scenario. So we recommend smaller businesses implement a service like VisualVisitor or netFactor in lieu of a pay per click advertising campaign. VisualVisitor and netFactor provide anonymous website visitor recognition services. These services will provide the business names behind website visitors. Internal direct marketing teams of telemarketers or outbound email marketers can then, proactively, attempt to engage with these “leads”.

Certainly pay per click can work for an advertiser, but, in 2013, the marketplace is much more sophisticated. The expertise required to deliver, successfully, on a campaign will have to match the same level of sophistication and can translate into a higher management cost for the advertiser.

Ira Michael Blonder

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


Promoting Tech Products to the Google Adwords Display Network with the Topics Feature

One of our clients sells help software for a popular collaboration tool widely used by enterprise businesses and large groups in the public and not-for-profit sectors. This client is promoting its products online with Google Adwords campaigns. We perform the daily maintenance required for these campaigns. Separate search network and display network campaigns have been set up for the help software product.

These campaigns haven’t produced desired results. The landing page for campaign ads was part of the problem. The editorial content for this page has been corrected. But clicks on ads for the display network campaign still exhibit too high a bounce rate (nearly 100%).

We spoke to Adwords about the problem. They recommended completely removing keywords for the display network campaign. They also said that topic targeting may provide a better way to select useful placement domains for our ads. We followed their recommendations.

They also recommended using image ads. Adwords now has a “Display Ad Builder.” This tool builds image ads for the advertiser at no additional charge. We think the ads are attractive and certainly worth testing live on the public. Each of our text ads was replaced yesterday with an image ad.

We spend most of our time with Google Analytics. Whenever we receive a click that ends up in a visit beyond our landing page, we want to know more about it, including the placement domain producing the click and the geographical location where the click originated. The Adwords team showed us how to build a custom report, which produces most of the information we need, including each page visited. Note: we still can’t identify the geographical location of the visitor for each click. We can easily determine the placement domain by running a standard report where the Primary Dimension is the Campaign Ad Group and the Secondary Dimension is the Placement Domain. This report provides us with the information we need on Pages/Visit, Avg. Visit Duration, and Bounce Rate.

In most cases, once we run our custom report for the Placement Domain identified by the standard report, we can take each of the pages included in the specific visit and run them back through another report, this time on content, by day, to determine the geographical location for the visitor. The visitor identification problem comes up when the visited page is very popular.

On March 7th the Adwords team demonstrated how we can use the “Dimensions” feature for the Display Network to expose the geographical location of the visitor. The “Customize Columns” feature, in Adwords, can be used to display City, Region, Country and Associated Geographical information.

Ira Michael Blonder

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


Pay Per Click Advertising Campaigns Need Lots of Management to Deliver on Objectives

With this post, we return to a topic that we revisited on February 12, 2013 in a post to this blog, Search Engine Optimization Continues to be an Essential Component of Online Marketing. Note that we refer to our current interest in SEO as a revisit. In fact, we’ve looked at SEO on several occasions during the life span of this blog; therefore, the present interest that we have in the topic is really nothing particularly new. Rather, we have to be interested in this topic, presently. The web site of one of our client’s promises to produce a lot of useful leads. The gating factor is we need to optimize the site to unlock its treasure.

It’s worth taking a few moments to repeat some of our earlier remarks on this topic, which we made in the context of briefly reporting on an exploration of Dr. Michael Porter’s Five Competitive Forces that Shape Product Strategy.

Back then we noted that the SEO task is very much a task for a product marketer who understands, clearly, that the promotional playing field (if not the commerce playing field, as well) for these online marketing activities is ultra competitive. Obviously, there can only be one number one SERP for a product targeted by a search engine query. There are absolutely no shades of gray on this question. Either your product is at the top of the first page of search results, or not. Sure, one can argue that positions two through ten, are, in fact, the very shades of gray that we just said do not exist, but when one looks closely at results two through ten, one will likely note that the real binary factor is whether one’s product comes up on page one of search engine results, or not.

In any case, getting to the first page, and, even more, getting to the number one spot on the first page of search engine results is exceptionally competitive. Nevertheless, the task of improving SERPs for one’s product, as a means of establishing residence on page one of search engine results, is an activity worth careful consideration as the rewards of a successful effort to attain objectives should be very promising, in deed.

But, when one looks carefully at the market for these services, one cannot help but note a marketplace ambivalence on the topic. In fact, the cost of SEO tools has gone up, substantially over the last several years, but end customers seem less than feverish as regards their level of interest in so-called SEO expert services. Further, a number of the tools manufacturers, themselves, do not seem to be in the best of health. All of this leads us to approach this topic with skepticism.

In the next post to this blog we will present some of our own recent experience with SEO.

Ira Michael Blonder

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


Use Online Advertising Opportunities to Fill in Where Marketing Communications Budgets are Otherwise Limited

It makes sense for an early stage enterprise IT ISV to produce a realistic (meaning that the investment represented by the budget is truly available to be allocated, as planned) marketing budget. This budget needs to include the financing required to pay for the promotion that will need to take place to deliver an adequate volume of leads to produce the sales, which will, in turn, successfully deliver the revenue expected from the sales function.

But what if the planned budget amounts to a cash commitment beyond the reach of the business? In fact, from our experience, this situation is the norm, more often than not. We think that a combined effort that includes:

  • Online Advertising through a program like Google Adwords
  • Web page optimization for high search engine results placements (SERPs) for useful key words
  • Social Media Presence through News Annotation and Community Building
  • Integrated Direct Marketing including eMail Blast and follow up teleprospecting calls to recipients within 72 hours of receipt of communications
  • and, finally, lead management with Salesforce and/or MS Dynamics

can be very effective and, is much more cost-effective (if not outright less expensive) than a traditional marketing communications budget process that would avail of online services like Marketo or Hub Spot.

We have recently spent considerable time examining developments that Google has made with their Adwords product. In fact, IMB Enterprises, Inc. has joined the Engage for Agencies Program offered by Google. We plan on achieving certification for Adwords and, subsequently, Google Analytics in the near future. The point is that we now have a better of understanding of how Adwords campaigns can be used, effectively, for complex enterprise IT software products, through a combination of a MARCOM campaign to build brand awareness and a specific, targeted campaign to build sales opportunities. The beauty of this type of a strategy is that, once active, lots and lots of data will be forthcoming that can be used for two important purposes:

  • to refine key words
  • and to establish a ratio between click ad dollars spent and useful leads

Of course, an Adwords program complete with Analytics tracking will deliver much more useful data, but for our purposes in this post, the above two points are the most value results of a carefully coordinated campaign. Any size budget (even one that amounts to less than $10.00 per day) can be exercised to test the usefulness of the program. It will certainly make sense to add dollars as realistic objectives are achieved. The big plus is that there will be no need for a large cash outlay at the start.

If you have been following our recent posts on the importance of marketing communications, and product promotion for enterprise IT software, and you have a limited budget, you ought to consider the plan we have just described. Our retained services (3 mos minimum) start at $1250.00 per month. Please contact IMB Enterprises, Inc to learn further.. You can call Ira Michael Blonder at +1 631-673-2929 to further a discussion about our services plan, which start at $1250.00 per month (3 mos minimum). You may also email Ira at imblonder@imbenterprises.com.

© IMB Enterprises, Inc. & Ira Michael Blonder, 2012 All Rights Reserved