Recently in Experiences Category
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.
Super Bowl is upon us as is the advertising madness around. There are a few key themes that will hold true this year for sure and are already surfacing:
1. Releasing ads online early is becoming table-stakes. Nearly everyone seems to be doing this and with good reason. It's about building momentum into the Super Bowl typically done with a mixture of paid and organic promotions of the TV ads online.
2. The smarter advertisers are constructing narratives around teasers, the TV commercial and what should happen after the ad airs. Some are even focusing on second screen social TV experiences (we being one of those).
3. A much smaller subset of advertisers are recognizing that there's more to the Super Bowl than just the advertising or their own advertising. As a result, they have a more integrated, cohesive strategy build around the entirety of the Super Bowl experience. More will move in this direction next year.
4. Hashtag mania is taking hold. Lots of advertisers will be promoting hashtags. Many over their Facebook urls or website address. Time will tell whether these are valuable or if they get lost in the clutter of the moment. How many people will use those hashtags that are promoted?
5. Ad-meters galore for certain. Last year we got to experience lots of different ad meters. This year there are going to be even more with many varied measures of success. What's certain every advertiser will probably have at least one meter that they will be able to point to and say that they did well! In another year or two, the ad meters will reduce in number.
Working with very large brands in large organizations means not knowing whether you're taking two steps forward, one step back or one step forward and two steps back in any given moment. We all like to say that there's light at the end of the tunnel but working within a marketing organization versus in an agency, the tunnel is much longer and sometimes the light can seem much further away. You're thinking about how decisions you'll make today will effect your brand three or four years hence.
Yes, we absolutely live in a real-time world and we have to be hyper-quick. But at the same time changing consumer perceptions of a brand sometimes can take years just as meaningful competitive marketshare moves take time. Influences affecting consumers are more varied, more random and less controllable than ever before too. They're also global and hyper local all at once.
It is indeed a fascinating time to be in marketing. And while some facets of marketing make it an extremely sexy discipline, others make it a more difficult discipline than ever. In this world, the adage, don't mistake motion for progress gets infinitely more complex to recognize.