Twitter’s decision to restrict access to its data has cost them dearly
It’s been a bad week for the social media service Twitter with its stock pounded after the leak of poorer than expected results.
Writer Matthew Ingham says Twitter lost its way five years ago when it started closing down access to third party developers, a move that hurt the service’s growth and user adoption.
Twitter’s move was greeted with disappointment at the time and many developers gave up working on the company’s APIs.
With the growth of third party applications stunted, there was little reason for new users to come on board and so Twitter is now disappointing the market with its results.
Basically Twitter CEO Dick Costolo and his team reaped what they sowed in restricting access; they kept control of their data but it’s cost them users and hurt their share value.
Twitter’s woes show that the economics of cloud and social media services reward business that share data. While there may be some commercial and legal limits to what information can be shared, the default position should be to make data available.
In an information rich society, those who contribute the most get the rewards. This is the point Twitter’s management missed.
Facebook and Google both put their users first in their latest updates. It’s something other business should consider.
Over the last few weeks much has been written about Google’s mobile search update that went live on Wednesday, some said it would be the death of small business on the internet while others claimed it would be the end of corporates online.
While all the focus has been on Google’s search changes Facebook quietly made a change that will probably be more vexing for many businesses.
Both Facebook and Google are struggling with making their services more useful for users, with the Google changes the intention is to make search on mobile devices more useful in giving preference to websites that work on smaller screens.
In a post on Google’s webmaster blog, Developer Programs Tech Lead Maile Ohye answered the basic questions about the search engine changes which dispelled much of the hysteria and myths about the update. The main point of Ohye’s post is that Google want to show users useful information.
Facebook have a similar problem, they have to balance the often competing interests of their users and advertisers with the main aim being keeping visitors on their site for as long as possible.
The objective of keeping users engaged is the reason for a series of tweaks Facebook announced this week that change the newsfeed visitors see.
The goal of News Feed is to show you the content that matters to you. This means we need to give you the right mix of updates from friends and public figures, publishers, businesses and community organizations you are connected to. This balance is different for everyone depending on what people are most interested in learning about every day. As more people and pages are sharing more content, we need to keep improving News Feed to get this balance right.
Facebook are putting their users priorities first in making sure the news feed is interesting and relevant, which the company believes will entice visitors to spend longer on the site and make advertising more attractive.
If it works then it’s a win for Facebook, their users and those who pay to advertise on the site. Again though, the losers are the companies and brands not advertising who thought they could get views by the quality of their content.
Unless the content is very good, those companies not paying Facebook are in for more disappointment as their reach collapses even further than its current pathetic rates.
Google’s change too is something that puts users first; rather than dumping mobile web surfers onto an unreadable page, they are making sure people get to sites that are useful.
In many ways Google is only encouraging what has been best practice for at least five years, that every site should work equally well on mobile devices as they do on desktop computers.
What Facebook and Google are showing us is the value of putting users’ needs first. If your guests are happy then your business model has a much better chance of succeeding, regardless of who the eventual customer is.
Making business more user friendly should be a priority for all companies in a competitive world.
Join us on April 29 to look at how business can grow in rapidly changing markets
On April 29 I’m helping Flying Solo with a webinar on how small and single operator businesses can future proof their businesses.
During the webinar we’ll be looking at how businesses can adapt and profit from a rapidly changing economy.
Some of the things we plan to discuss include the trends driving the changing marketplace, some of the tools businesses can be using to harness a rapidly evolving workforce and methods to attract mobile consumers.
We’ll also have a look at some of the ways canny business owners can use social media, cloud computing and other online services to make their businesses more profitable and flexible in a tougher business world.
The webinar itself is free and you can sign up at the Flying Solo website. Hope to see you there.
Social media services like Facebook and LinkedIn are building API walled gardens that will change how online services work
One of the great strengths of the social and cloud business model was the idea of the open API, recent moves by Twitter and LinkedIn show that era might be coming to an end.
Earlier this year LinkedIn announced they would be restricting API access to all but “partnership integrations that we believe provide the most value to our members, developers and business.”
Monetizing APIs
Increasingly social media and web services companies are seeing access to APIs as being a revenue opportunity – something many of them are struggling to find – or as a way of building ‘strategic partnerships’ that will create their own walled gardens on the internet.
For developers this is irritating and for users it restricts the services and applications available but it may turn out to backfire on companies like LinkedIn and Twitter as closing down APIs opens opportunities for new platforms.
A few years ago industry pundits, like this blog, proclaimed open APIs will be a competitive advantage for online services. Now we’re about to find out how true that is.
One thing is for sure; many of the companies proclaiming their support for the ‘open internet’ are less free when it comes to allowing access to their own data.
W2O’s acquisition shows how data analytics and visualisation is increasingly an important tool for management in a world where businesses are drowning in information.
Last year Vintank co-founder Paul Mabray spoke to Decoding the New Economy about the company and how social media data is a valuable tool for the wine industry.
“The wine industry is last industry to have been changed by internet,” Mabray says. One reason for this in his view is how that the sector hasn’t had a disruptive startup like Yelp or Open Table to drive change and upset incumbents.
Despite the wine industry’s reluctance to adopt digital technologies, social media and the disruption of established media channels is having a profound effect on the sector’s marketing and sales.
“In the old days there was a playbook originating with Robert Mondavi in the 1970s which is create amazing wine, you get amazing reviews and you go find wholesalers who bring this wine to the market,” Mabray told Decoding the New Economy during a visit to Australia in 2014.
Dealing with global proliferation
Mabray also flags the massive growth in the wine industry as being one of Vintank’s driving forces, “the global proliferation of brands the increase of awareness and consumption patterns where people like wine more, those playbooks didn’t work in 2009 when the crisis started.”
A proliferation of new competitors coupled with disrupted communications channels isn’t unique to the wine industry, the attraction Vintank has to the w2O Group’s president Bob Pearson; “VinTank provides us with a way to create agile audience engines for a brand, where we can learn what an audience is doing online, understand what content they like.”
For many businesses social media is a both an opportunity and a mystery; while customers are telling the world what they’re buying through services like Facebook and Twitter capturing, managing and using that information remains a challenge.
Panning for digital gold
As Robyn Lewis of Visit Vineyards whose database holds details on over 30,000 Australian wineries and associated tourism business says, “the gold is in the data.”
Panning for that gold is Emma LoRusso of Sydney social analytics startup Digivizer who told Decoding The New Economy two years ago “the truth is in data”. Services like Vintank, Salesforce’s Radian6, Klout and startups like Digivizer attempt to add context to that data.
Another aspect of Vintank’s technology is the ‘geofencing’ of information, creating a virtual geographic perimeter so only data relevant in that region is flagged. As well as reducing noise, this increases the value to local wineries and tourist operations.
In some respects the geofencing is possibly the most powerful part of services like Vintank as it allows regional operators to focus on visitors and customers to their districts rather than worrying about national or global activity.
W2O’s acquisition gives Vintank access to a broader market outside the wine industry as well as deeper data analytics capabilities. For W20 the purchase adds to the social media tools the company can offer.
Data driven business
The Vintank deal with W2O shows how the marketing and advertising industries are increasingly becoming data driven. For other business functions this is true as well.
For businesses of all types, understanding the data pouring into their companies is going to be the difference between success and failure in an increasingly digital world. Providing those tools to do so is one of the great opportunities in today’s economy.
TripAdvisor is showing how the travel industry is adapting to the new world for brands
Last week this site looked at the idea from Colonial First State Funds Management economists James White and Stephen Halmarick that brands are doomed in a world of perfect information.
Forecasting the end of brands is a big call despite the massive changes the internet is bringing to industries. One of the things I suggested is that the concept of the brand – which was largely born out of Twentieth Century mass communications – is evolving with the social media and online world.
In Ireland Vanderbilt claims the hotel industry found TripAdvisor to be a harsh wakeup call that saw local hospitality businesses lift their game as they realised customers were now far better informed.
Across the Atlantic on Mexico’s Yucatan peninsula Vanderbilt describes how hotel owners in the town of Tulum had to realign their listings and marketing when TripAdvisor changed how they were grouped in the region. It shows how users are searching and finding accommodation.
Importantly for guests, hotel managers are using online reviews to measure how their premises are measuring up to expectations through social tools and using the results to justify capital expenses on upgrades.
This could justify White and Halmarick’s view that the major global brands such as the Marriots, Hiltons and Sheratons are in decline however it more likely shows those chains are having to raise their game to maintain their worldwide position.
What Vanderbilt, White and Halmarick indicate though is social channels are changing the way the hospitality industry works. This is an opportunity for smaller operators to build strong brands in their own niche or region.
One of Halmarick and White’s assertions is that brands are dead as consumers in emerging economies don’t care about corporate names and in developed nations people have better information about local businesses.
The former argument seems flawed from the beginning; Apple for example is making huge inroads in China while local manufacturers like Lenovo, Huawei, Great Wall and Haier are all working hard to establish their names in international markets.
In developed markets, White and Halmarick’s views have more basis with brand names not having the cachet they once did now consumers have a global platform to voice complaints and find alternatives.
A good example of brands that are struggling are companies like Microsoft and McDonalds, although in the case of both companies this could be more because of a shift in the marketplace rather than better informed consumers.
However brands are surviving as they lift their game and adapt to changed marketplaces, in fact its possible to argue that today’s consumers are more responsive to brand names than ever in the past.
We should also remember that brands as we currently know them are largely a Twentieth Century phenomenon born out of the development of mass media communications and many of today’s household names came into the culture thanks to television in the 1950s and 60s.
So as creatures of last century’s media it’s not surprising that brands are having to evolve to a changed world, some of them will thrive and grow while others will shrivel away.
It’s safe to say though that the concept of brands isn’t dead, although many of the names we know today may not exist by the end of the decade.
