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59% of Facebook's advertising revenue or $1.34 billion was from mobile as their overall revenue surged to $2.5 billion which was a 72% increase over the prior year. Facebook has had an awesome mobile quarter and have demonstrated another successful pivot. Here's what I believe Facebook is doing really well and what they should change.
What Facebook has done well:
- The shift to mobile has been nothing short of extraordinary. While they may have been a little late in pivoting, once they did, Facebook did so with gusto. Other companies can learn from this. Facebook also recognized that a second pivot was required - a pivot to mobility and niche applications. The development of Paper, Messenger and Camera and forcing users to move to them was the first manifestation of this. The second was of course the acquisition of What's App and like Instagram the proclamation that there's no rush to monetize the platform.
- Establishing credibility among advertisers around the world. No platform has established as much marketing credibility in as short a period as Facebook has. Barring minor public relations challenges as the one with GM when it chose not to advertise on the platform, by and large Facebook has very quickly (and deservedly according to most) won the hearts and minds of advertisers everywhere. Probably Google is the only other online platform that carries more credibility than them today. Facebook has done this successfully in a shorter time period and on a platform that has been changing more dramatically too.
Now what Facebook must change quickly:
- Allowing for fake brand metrics to persist longer than they should. The same discipline that is used to kill product features, should be applied to its brand metrics as well. Facebook should remove page like counts from brand pages immediately. They're useless and are tied to a Facebook philosophy from another era. They continue to cause confusion and angst among marketers. Similarly, Facebook should make a definitive decision on organic reach and consistently apply it everywhere - not allowing any confusion or ambiguity to take place. These aren't small questions as millions and millions of dollars are at stake. Instead, Facebook should double down on helping brands truly measure the advertising impact on offline sales not just in North America but especially in other countries around the world.
- Sharing of Facebook User Data. As I've advocated in the past, Facebook is sitting on a gold mine of data that can and should be shared (anonymously) with other organisations, the way Twitter does. Facebook understands humanity in ways that no one else does. Sharing of the data more quickly and more expansively will help individuals, institutions, academia, governments, human rights groups and corporations learn, understand, innovate, create and more. It'll move humanity forward. Not to mention that it'll help marketers create advertising that consumers care deeply about. Please rethink the approach to Facebook Data It's time to open up the date in new, imaginative and trusted ways. It shouldn't just be a hobby. Innovation doesn't have to be just in products, it can be in what you do next for the world.
The next decade will be a fascinating one for Facebook and for all of us who continue to care deeply about the company. Whether Facebook looks very similar or very different in the next decade, we don't know. In the meantime, I hope Facebook continues to build on its strengths while changing what needs to be changed right away to benefit not just its users but other stakeholders too.
Super Bowl advertising mania is setting in. Somehow the narrative about the advertising seems as important as the game itself. There is no doubt, marketers will pull out all the stops this year and already have. The stakes seem to rise with each Super Bowl. And this year it is no different snow or no snow.
In fact, from putting the ads online weeks before the game and plastering hashtags everywhere, to creating teaser ads to promote the actual ads and rushing to find the most shocking celebrities to sign, the Super Bowl advertising mania is at its most flamboyant. But not everyone can or will win the day. For me advertisers that do the following are much more likely to have success with their gigantic spends.
- Marketing to the Network not the Individual: It's odd to say this in 2014 but most advertisers still haven't cracked the true potential of marketing to the network versus the individual. The Super Bowl is one of the most social events, and Super Bowl parties define the day. However, most Super Bowl advertising experiences are created for the lone user in mind - a person sitting alone at home in front of a television with a mobile phone in his hand. And what's worse is that the digital environment is treated only as an echo chamber and an extension of what happens on television.
Rather I'll be looking for advertising experiences that are designed for the network and not just the individual. If you assume that your viewer is in all likelihood at a Super Bowl party, how would you create the communication that triggers or leads to a deeper, shared experience with him and his friends? How would you design the advertising to drive physical and virtual world conversations? (Hint - putting a hash-tag at the end of a spot is not enough). Or how would you design a Super Bowl brand experience that is fundamentally participatory that gets more interesting the more people that participate in it? Or for that matter, how would you design a Super Bowl experience that's fundamentally different if you support the winning team or the losing team (different experiences for different tribes)? An advertiser that approaches the Super Bowl with thoughts like those in mind, will standout in my opinion.
- Harnessing Viewer Real-Time Feedback loops: There is no question in my mind that real-time marketing took a few steps back at last year's Super Bowl. The concept got trivialized, over-simplified and reduced to a raw tactic. And in all likelihood with war rooms galore and agency hours waiting to be burnt, that'll happen again this year. I suspect though, that as with the Grammys last week, it will be with limited success. However, more important than trying culture-jacking or quick-witted copy writing, is tapping into what your brand loyalists are feeling and creating a uniquely shared experience with them that doesn't compromise your brand.
Brands that have real-time feedback loops corresponding to what their loyalists are doing (versus what's happening on the field alone or with the electricity supply) will win. You've got to make those loops work in your favor, but you need to know them to take advantage of them. Of the approximately 30 million tweets expected during this game, how many of them will be from your brand loyalists? Can you guess? Can you also analyze what just your loyalists are thinking, feeling and saying to create communications in real-time against that? If you're able to do that, I'll be impressed. I don't believe any brand truly and deeply focused on its loyalists last year. We all treated every viewer the same way and engaged with them online as if they all shared the same loyalties to our brands.
- Responding to the Human Condition. If there's one thing that's changed significantly in the last few years is the return to reality for advertising. Today, good advertising reflects, projects, represents, identifies with and responds to the human condition. It doesn't use fancy words, made up jargon, invented settings or cheap tricks to grab your attention and distract you from what you're really trying to do. Instead, it tries to add to that experience, complement it or contextualize it in meaningful and natural ways.
The brands that connect with their consumers tapping into the language of culture, with real symbols, rituals, heroes and icons will do better than those that pay celebrities for gratuitous appearances or dangle babies in front of viewers to grab their attention. It is those brands that also have simple, authentic narratives that they have permission to express will do best over the longer term.
The Samsung ad last year with Seth Rogen and Paul Rudd that played upon the culture of advertising itself in a very meta way fit this bill. Given that Samsung had spent the better part of the previous year mocking Apple and its advertising, for it do the same but with Super Bowl advertising in general seemed very normal.
- Using the Super Bowl air-time for what it is - a perfect trailer for a deeper, more longitudinal and honest narrative preferably one anchored in digital. That is the future of television in my opinion after all. One of my favorite ads from last year's Super bowl was the Dodge Ram "God made a farmer" spot which used radio legend, Paul Harvey's voice from a 1978 speech he gave to Future Farmers of America. It stirred pride and passion in the agriculture community and kicked off the Dodge Ram Year of the Farmer Campaign to raise money for the Future Farmers of America organization. An initiative that did indeed last the entire year. It's not surprising that the ad got 16 million views on YouTube and over 55,000 thumbs ups. You can't buy that kind of attention.
Marketers that spend many months and many millions of dollars creating the perfect television spot to have their :30 or :60 seconds of fame on the Super Bowl and get their next promotion on the back of the buzz created are fundamentally missing the point. We are truly in an era of authenticity where brands should create fewer ads, put more meaning and depth into the ones that they do create and anchor them deeply into a greater sense of purpose and an ongoing narrative for the brand. I hope more brands go this route in 2014 and use the Super Bowl as a staging ground for strategies of that kind.
- Focusing on brand building, customers and the business. It's a tragedy but if you follow the story of Super Bowl advertising as closely as I have, you'll notice that too much about Super Bowl advertising is driven by vanity. It's apparently the pinnacle of marketing for too many of us - to be able to work on a Super Bowl marketing initiative that wins the traditional USA Today ad meter or one of the many online conversation buzz meters (fortunately, each year more buzz meters crop up making me believe that soon there will be one for every ad in the Super Bowl soon!). Bizarrely, the role of the brand, the effect on the brand's customers and the corresponding business results don't seem to matter for such an expensive marketing initiative.
On this particular point, we all have blood on our hands. Whether you're a marketer, an agency, a journalist, a news anchor or a social media pundit, you're complicit in furthering the notion that marketing during the Super Bowl is not about building a brand or a business and instead is about winning some ad meter or the other that may do nothing for you. The brands that fight the temptation to succumb to that pressure and focus on the business rationale for why they're advertising (and with the right corresponding metrics in place), will be the ones that win over the long term. Now, this doesn't mean that they can't or shouldn't try to grab attention but grabbing attention is the means not the end.
It was a little over two years ago that I came across Bluefin Labs and Deb, its charismatic CEO. It was before Bluefin had a product (it was a technology only) and definitely well before they had any sort of sales or marketing team. Deb and I discussed how GRPs needed to evolve as a measurement format for broadcast television and it was at that time that I coined the phrase "GRPE" in a Harvard Business Review piece.
Our conversations led us, at PepsiCo Beverages, to first use Bluefin Labs to power the Pepsi Music Index at SXSW 2011 and then to become one of the first brand clients for their Social TV platform. So it is no surprise that I'm excited to hear that they are being acquired by Twitter. This acquisition is important and it means a few things in my opinion for Twitter and the social media ecosystem:
1. Twitter believes in Social TV's future. They're really placing big bets on Social TV recognizing that the discovery and engagement feedback loop with television has been responsible for considerable growth on the Twitter platform and will probably continue to drive growth in the future. They also know that this phenomena translates into advertiser interest which requires tighter metrics. That's where Bluefin labs enters the picture. Social TV has been a smart play by Twitter and continues to be one.
2. Twitter wants to build its own measurement ecosystem. Everyday of my life I get to talk to a lot of different people in the media and marketing industry. Some of them have strong opinions of Nielsen and don't particularly appreciate its dominance on everything measurement related. While that dominance simplifies my life on the brand side, I can understand why it may make certain media companies, publishers, brands, platforms and technology companies nervous. By acquiring a social analytics firm, Twitter is saying that it wants to control and own its own measurement destiny. It also sees opportunities to monetize its data more directly and doesn't want to leave that to Nielsen or anyone else. Smart again.
3. Twitter recognizes that marketers really want better metrics. If there is any single thing holding advertisers back from spending more in digital and more in emergent social media platforms, it is the rather raw measurements of this space. There are too many measures, not enough standardization, limited co-relation to broadcast and other forms of media and in some cases weak ties to ROI. This issue is exacerbated among the social media platforms. Twitter and Bluefin both recognized this and this acquisition signals that Twitter believes that it can make measurement and broadcast measurement co-relation a differentiator. The other social platforms can learn from this.
4. Twitter is comfortable in its own skin not competing with broadcast. If there's any a time to say that Digital has truly come of age, it is now. The fact that Bluefin labs and by extension of that now Twitter (with its 100 million users) believe that the platform can be used to gauge the effectiveness of television advertising shows how much has changed. Furthermore, Bluefin believes (as do its competitors like Networked Insights and Trendrr), that its tools can be used to make much smarter, cost effective and impactful television media buys. Influencing those spends is something what Twitter wants to do. It elevates Twitter from being just a social media platform to something more insight led.
5. Twitter's competitors should be getting more and more nervous. We all know that Facebook is a massive success and its aggressive move into mobile will play dividends. But what people don't talk about it is that it's never been very successful in the Social TV ecosystem (It's telling that Twitter was mentioned in 26 of the 52 national Super Bowl 2013 commercials while Facebook was in only 4). One can argue that Facebook can surive and continue to grow immensely without playing in the Social TV space or at least at the same scale as Twitter. But what does this mean for Pinterest, Tumblr, Path and the other social platforms? Each are incredible platforms but they need something to juice their next wave of hockey stick growth. It's unlikely that it'll be television and the Social TV ecosystem now with Twitter obviously doubling down in this space.
Today's Facebook earnings call was illuminating on several fronts. However, two pieces of information stood out the most. They both in my opinion represent the future of Facebook. Everything else matters less.
1. Mobile monetization will be through sponsored stories. That's smart and insightful. No mobile experience can truly support a variety of ad formats. Mobile banners are certainly not the right approach for Facebook. And their own other ad units will significantly degrade the mobile experience. Sponsored stories is the only ad format that doesn't do that. Sure there are privacy questions that remain with the use of sponsored stories but if there's any type of advertisement that I'd be willing to accept amidst limited real estate that's a cell phone, it would be a sponsored story telling me about actions that a friend or a brand has taken. This will scale up in time especially when you throw in location specific sponsored stories (not just on the targeting end but localizing the sponsored stories based on where you are.)
2. Investors and even many marketers don't understand the potential. The second key takeaway for me was that most investors do not understand the potential of the Facebook social graph. In my mind, it's like the intangible brand value associated with iconic brands. You have to put a dollar value on its very existence as it can be monetized in ways yet to be reflected in the marketplace. Mark Zuckerberg seemed to hint at this issue when he said,
"Imagine a day when you buy a new car and log in to the car's computer with Facebook and it lights up with [music, friends' addresses and retail locations] targeted to you based on your friends and interests," he said. Then he added, "Our vision for the platform is bigger than most people perceive."
Can you put a valuation on this potential today? Do you think many investors are thinking about this? Probably not but that's what's going to be at the heart of Facebook's future because 1) no one else can create social experiences in a similar fashion without access to the Facebook social graph 2) as the generation that's growing up with Facebook starts to have real spending power they are going to expect their social graph to travel everywhere with them...into their cars, refrigerators, televisions and hotel rooms. I'd suggest that marketers don't understand this potential completely either otherwise more companies would be thinking about creating Spotify and Pandora type applications on the platform and leveraging the social graph in more unique ways into their own products. Facebook on its part needs to share of its payments and mobile strategic roadmap.
What does all of this mean as a digital marketer thinking about Facebook?
Well first and foremost, I was hoping for more details on the Facebook advertising products and how the company plans to further evolve them. Lawsuits aside, Facebook continues to bet heavily on social advertisements even though that may limit its revenue growth. That's a relief. The last thing I would want is for Facebook to over-monetize the way MySpace did and degrade the experience for users and advertisers. The downside to this is that these are ad units that the marketing ecosystem isn't too familiar with. A lot more education and measurement will be required as a result. No surprise that the Facebook headcount has gone up dramatically. I suspect a lot of the new employees are sales people who will probably share the details of the evolving Facebook advertising strategy in 1:1 meetings.
Secondly, a lot can be gleaned by what a company chooses not to talk about during an earnings call. The company didn't talk about why the Fortune 100 advertisers aren't spending more on Facebook and what the company is doing to address that challenge. It maybe early days for this but I'd love to see Facebook be more transparent in how their advertising machine is performing and what the major barriers to driving more advertising growth are. I loved hearing about the three brand examples. I think that's really an important step to transparently demonstrate the impact that Facebook advertising can have. I want to see more and more specifics though and a much deeper Nielsen partnership. Maybe even something tied in with Catalina or an SymphonyIRI. Talking about the brand studies is valuable, but it isn't enough. More is needed.
Lastly, but not the least what's obvious is that Facebook is being coy in how it plans to use all the data it has about its users and its advertisers. Along with the social graph, I believe this data trove is one of Facebook's most valuable assets. An asset that can be monetized as a real-time research product for brands (with anonymous data of course). Arguably, the data can even help governments, businesses of all sizes, researchers, students and scientists. How my brand is talked about relative to competitor brands on FB can be a leading indicator of brand health and sales in a way no other measure maybe. How people live their lives as reflected by their online conversations with certain friends is massively powerful insight for companies. Facebook has access to that data and the metrics that they share publicly today are severely limited and arguably not always credible (Like counts, Chatter analysis and PTAT data). There's a lot more that could be shared. The earnings call pointed out that Facebook is no rush to open this data to marketers. That's a pity.
Barely six days ago, Oracle announced that it was buying Vitrue for $300 million. Tonight rumors are spreading (thanks to Peter Kafka of AllthingsD) that Buddy Media is going to be picked up by Salesforce for $800 million. How time flies and a category of software that didn't exist a few years ago (yes, I remember being pitched by them all when they had fewer than five employees each) is now a billion dollar plus one. But where do we go from here and why are these companies so valuable? Here are a few thoughts.
- If you're able to put aside the noise around the Facebook IPO and what certain auto manufacturers may say, you'll realize that social media marketing is here to stay on a mass scale. Every day it only gets bigger and bigger and CEOs of Fortune 100 companies are recognizing this. Both the Unilever and the P&G CEOs talked about social media during their recent earnings calls. Just look at time spent online versus dollar spends or how companies like Ford, American Express and Nike (not to mention us at PepsiCo) are marketing through social media to see its importance. Social Suites which make it really easy to publish engaging experiences on the social platforms are valuable and for companies manage the global/local tension of social media, these suites are going matter more.
- Unfortunately, the links between a company's CRM database and its social media fan base has always been broken. In fact, they've been treated as two separate, distinct and disjointed CRM marketing efforts. As a result, without realizing it, many brands have developed competing CRM efforts. You harness your CRM database for effective email marketing in a certain way and then with a separate department you reach your Facebook, Twitter and YouTube consumers not knowing if there's any overlap or which is more effective for specific types of communication. Any company that can help solve this problem is going to win. That's why Oracle+Vitrue makes sense and similarly Salesforce+Buddy Media (if the rumors are true) do as well. CRM Databases have always been extremely valuable and when you tie them in with social media engagement, they become so much more so. All of sudden you can understand your customers not just by what they purchase and what marketing you throw at them but also by their loyalty and advocacy towards the brand.
- Just as important is the ability to execute real-time marketing effectively. Last summer, when I introduced a Real-Time Marketing framework at John Battle's Conversation Marketing Summit, I fully knew that not all the pieces were in place. It was indeed hard to go from strategy to execution in a matter of minutes or seconds as I proposed was the future of marketing. Companies that can help brands do that are going to win. Social Suites play a critical role in that, not necessarily because they do something that no one else can do (you can custom build a lot of the functionality) but because they make it fool proof and quicker to deploy. Building for engagement and not just on Facebook but elsewhere across the web and on a global scale gets really easy with these social suites. And don't forget the power of this form of marketing when it becomes hyper local and mobile specific. If I want to roll out a Facebook marketing campaign that's unique for each of Nielsen's 210 DMAs, the only way I can do that quickly is with a social suite.
- But wait, there's more to this than meets the eye. Let's take Salesforce as an example for a moment. They already own Radian6 which means they have a powerful tool through which brands can gather real-time insights and engage in Real-Time Response. With a social suite platform like Buddy Media, they would now be able to participate in Real-Time Engagement as well. By harnessing the Brighter Option Facebook ad marketplace solution (recently bought by Buddy Media), those brands can juice up their social media engagement with paid digital media in real-time. By tying this all into their Salesforce CRM databases, the brands can get a real-time end to end view of their customers -understanding their brand preference, intent to purchase, actual purchases, loyalty and lifetime value. Not to mention, they can also better understand which marketing tactics worked best. Powerful stuff (as long as they figure out the potential privacy minefields).
- Last but not the least, Social Suites have evolved into a lot more than Facebook tab canvases which is why they're so valuable. Many of these players have cross platform solutions that allow you to create once and deploy in multiple places in ways that are appropriate for each social network. Furthermore, they let you measure the effectiveness of a particular campaign, piece of content or engagement activity more holistically and in a more benchmarked fashion. They also institute workflow that reduce business liability with legal checks. And with globalization capability they smoothen the roll out of social in countries where the brand may not have a large digital team. That's all really valuable for brands.
In my opinion, the potential acquisitions of these social suite players by the major CRM companies represent the final nail in the coffin of social media. No more is it something separate, disconnected, cute and experimental. It has just moved to the heart of all marketing efforts and the stock price movements of Facebook will not change that. Social Media Marketing is on scale and needs to be at the heart of your marketing efforts right now.
I should have drawn attention to this book many moons ago when it was published last year (especially since I was interviewed for it). It's Clark Kokich's Do or Die. It's sharp, insightful and thoroughly engaging. Most important of all and unlike many books, it has a differentiated point of view on marketing and the evolution of brands. It's case study driven and makes a compelling argument for why traditional advertising and the historically safe forms of marketing aren't enough to succeed in today's world. You literally have to do versus just say. Not surprisingly, I'm a big believer in that philosophy and talked about it at the time of the Pepsi Pulse launch.
Once you're done reading Do or Die, a very different book to pick up is Rex Briggs's SIRFs-Up which explains how measurement and marketing effectiveness should really work. I've always been impressed by Rex's thinking and his contributions to our industry. He won't let you down with this book. Covering spending levels, medix mix, forecasted sales and performance metrics it'll help you answer the tough questions that you may get from your CEO or CFO. I was also interviewed by Rex for SIRFs-Up.
It is easy to forget that social media marketing has one critical challenge. You cannot scale it consistently. If your plan goes really well, it'll scale on its own. Similarly, if things go really badly your marketing efforts (much to your irritation) will probably scale too. However, there's never any guarantee as to why and when your social media marketing efforts will scale. If you're trying to reach a certain number of consumers in a certain way in a certain time period, you simply can't depend on organic social media to do so. Even the most perfect marketer cannot depend on that.
Hence the rise of Facebook and Twitter as major marketing platforms. Facebook's revenues appear to have more than doubled year over year. They realized as did many marketers that while social media marketing is critical, it alone without highly synchronized paid digital media investments won't give the consistent scale that a marketer needs to achieve business results. That's why dollars are shifting to Facebook and Twitter so dramatically. The platforms allow for organic, authentic social media engagement to be scaled up with paid investments through advertising products like Reach Generator and Promoted Trends.
This leads to another challenge though - and that's in how you do budgeting. Historically in most corporations, social media spends have been tied to digital cash budgets and separate from the digital media spends. Those budgets were aligned more tightly with the TV, Radio, OOH and Print spends. Certainly not through the same lens as the social media organic spends. In many cases, they even had different budget owners and organizational hierarchies around them.
Now the two sides of social media marketing need to be executed together and therefore the budget needs to sit in one place as does the accountability. Separating out paid digital media as a separate budget bucket from organic social media makes less and less sense. Thinking of paid, owned and social media as fundamentally different is wrong too. They're intrinsically linked. However, your organization is probably not making that change. It probably even uses different agencies to manage the different dimensions of social media marketing. That's a problem. Break down the paid, owned and social media chinese walls right now.
For more on this read the 2nd edition of Social Media Marketing for Dummies.