Sep 242016
 
cakes_are_like_facebook

The advertising industry is in trouble, as consumers’ eyeballs move from broadcast mediums to online services, the wildly successful Twentieth Century business model that drove the radio and television industries is dying.

One of the biggest hopes for advertisers, and publishers, was social media would be the salvation of their mass market model. Facebook continues to prove it isn’t the messiah with the Wall Street Journal reporting video viewing figures have been inflated for the past two years.

Coupled with the recently announced shift away from publishers Facebook is increasingly showing any hopes of replicating the broadcast media model on social platforms is doomed.

So it isn’t surprising advertisers are angry at Facebook for mis-stating its figures although a cynic would suggest those inflated statistics helped drive its video service over competitors like YouTube at a critical time.

Whether Facebook’s actions were deliberate or otherwise, the service’s misleading behaviour only underscores how publishers and advertisers are struggling to find ways to translate their business model to an online world.

Aug 112016
 
facebook-business-likes

Consumer goods giant Proctor and Gamble has announced they will be dialling back their targeted advertising on Facebook, as they discovered being too precise turns out to stifle sales.

It turns out that big companies need scale, not precision, so to grow sales they need to be engaging with more people and not restricting their message to niche groups.

Given the different natures of businesses it’s not surprising to see strategies that work for one group fail dismally for others, but it’s interesting how targeting turns out not to work so well for mass market products.

The losers though in the P&G story are smaller websites as Wall Street Journal quotes the company’s Chief Marketing Officer as saying they will focus more on the big sites and move away from niche players.

Mr. Pritchard said P&G won’t cut back on Facebook spending and will employ targeted ads where it makes sense, such as pitching diapers to expectant mothers. He said P&G has ramped up spending both on digital sites and traditional platforms. One category the company is scaling back: smaller websites that lack the reach of sites such as Facebook, Google and YouTube.

 

Again we’re seeing the early promise of the web failing as economic power continues to be concentrated with a few major platforms. This is also terrible news for media organisations as big advertisers – P&G are the world’s biggest spender – focus on a few sites and increasingly ignore local or niche news publications.

There’s also the quandary of where the content that Facebook’s users share will come from, with the advertising shifting away from media companies – new players such as Buzzfeed and Huffington Post as well as the old established mastheads – to Google and Facebook, there’s less funds to create interesting and shareable stories.

P&G’s move is very good for Facebook’s and Google’s shareholder but the future media models still seem a long way off.

Jun 232016
 
TV_crew

It seems the Arab Spring has come to the US Congress where Democrat representatives protesting the house’s refusal to vote on gun control legislation have occupied the house.

House speaker Paul Ryan, a Republican, ordered the chamber’s TV cameras to be shut off but the occupying members responded by streaming their own media feeds through Facebook and Periscope.

Once again we’re seeing how new media channels are opening up with the internet. While they aren’t perfect, they do challenge the existing power structures and allow the old rules to be subverted.

Jun 142016
 
Microsoft-acquires-linkedin

“There’s a shared sense of alignment,” says LinkedIn CEO Jeff Weiner during his video with Microsoft’s Satya Nadella to announce Microsoft’s $26 billion dollar acquisition of LinkedIn.

Weiner has been trying to reinvent LinkedIn’s business model for three years and Microsoft’s acquisition is an admission of defeat with the company’s market capitalisation half of what it was a year ago and profits proving hard to find.

The fact revenues were slowing in the face of anemic returns is probably the reason why LinkedIn’s board was happy to accept Microsoft’s deal that’s 46% more than the social media site’s $17.5bn market capitalisation on Friday.

LinkedIn’s capitulation shows what a graveyard social media sites have been for investors. With the exception of Facebook, almost all have failed to deliver the profits or promise hoped for by those making big bets on the platforms.

Both LinkedIn’s and Twitter’s managements have been distracted by the search for revenue streams to justify their huge stockmarket valuations which in turn has alienated core users. LinkedIn’s surrender means Twitter’s acquisition is only a matter of time.

Microsoft now has to show how it is going to derive twenty-six billion dollars worth of value out of LinkedIn. The company’s track record of acquisitions is execrable as we’ve seen with Nokia, Yammer and Skype and there’s little to indicate this deal will fare any better.

Commentary that LinkedIn as a ‘cloud company’ will help Microsoft Azure against an already rampant AWS is downright silly, Nadella himself in a Bloomberg interview with LinkedIn’s Weiner was at pains to point out the networking service’s fit with the Dynamics product.

Plugging LinkedIn’s ‘social graph’ with Microsoft Dynamics might give the Nadella’s team better tools to compete with Salesforce in the CRM market, it seems a high price to pay and almost justifies Salesforce’s Marc Benioff rejecting Microsoft’s overtures last year.

LinkedIn’s capitulation marks the end of social media’s growth phase. Now, as Facebook becomes the platform that rules all, the others have to find their niches in a market dominated by one services. For Twitter the race is now on to find a buyer.

May 152016
 
management and executive training, workshops and keynotes for technology

Jess Miller from suburban Melbourne was a social media star. Two years ago at the age of sixteen she was earning $10,000 a week as ‘Pizza’ on Tumblr.

Miller was a classic social media influencer, with 700 thousand young followers she was popular with advertisers then along came the payday of reposting fake diet pill testimonials.

Miller started to make serious money. She’d already been able to make a little cash: fashion companies and some small Etsy stores paid her to post pictures of clothing on her blog, with a nudge to her followers to check out their sales. She’d earned about $4000 in this way.

But then the big one came along. Two 18-year-old American social media entrepreneurs, Zach Lilley and Jeremy Greenfield – fans and friends of Pizza – approached Jess Miller and other top-performing Tumblr bloggers in April 2014 with a proposition for a money-making scheme. It used a decidedly old-school lure: diet pills.

Lilley, Greenfield and their associate Dennis Hegstad ran a website called Exposely, which connected brands to people with strong followings on social media. Lilley and Greenfield used their social media skills to create diet pill ads that masqueraded as Tumblr posts, essentially fake testimonials from women talking about their weight-loss journey. Miller would re-blog these posts, and get a small payment if the user clicked on the link. If the user bought the pills, Miller would get $23 and Exposely would get $26. She watched the money roll in – to her mother’s PayPal account.

 

Eventually the breaches their terms of service, not to mention ethics, became too much for Tumblr’s management and they deleted Miller’s blog along with a group of others in the scheme.

Miller’s story illustrates the manipulation that is a big part of the social media influencer industry with behaviour that’s almost certainly illegal and most definitely unethical. It also illustrates the risks of basing an income or business on service where you can be closed down any time.

For Miller, she seems relieved her time of fame is over. Those building their businesses around these platforms may not be so philosophical.

Apr 282016
 
facebook-business-likes

It seems Facebook has found its river of gold with the company’s quarterly stock market statement reporting a 57% increase in revenues and a stunning 195% in net profits.

Particularly impressive was mobile sales made over 8o% of the company’s advertising revenue, up from just short of three quarters in the previous years.

For other online services, particularly Google, Facebook’s success on mobile must be galling as they struggle with the shift to smartphones.

How long that growth can continue remains to be seen. For the moment though, Facebook is showing how to make money on the mobile web.

Mar 212016
 
facebook-business-likes

What’s your ethnic affinity? Apparently Facebook thinks its algorithm can guess your race based upon the nature of your posts.

This application is an interesting, and dangerous, development although it shouldn’t be expected that it’s any more accurate than the plethora of ‘guess your age/nationality/star sign’ sites that trawl through Facebook pages.

Guessing your race is something clumsy and obvious but its clear that services like Google, LinkedIn and Facebook have a mass of data on each of their millions of users that enables them to crunch some big numbers and come up with all manner of conclusions.

Some of these will be useful to governments, marketers and businesses and in some cases it may lead to unforeseen consequences.

The truth may lie in the data but if we don’t understand the questions we’re asking, we risk creating a whole new range of problems.