Paul Wallbank – Brilliant Communications

Tag: social media

User generated content starts getting expensive
Ten years after being founded YouTube is facing competition as new sites are being setup or existing video services start aggressively courting creators reports Variety magazine.

YouTube is the poster child of the user generated content movement where it’s largely unpaid contributors who generate the material that people watch on the service.

This model works fine as long as it’s amateur cat videos people are watching but when as it becomes a big business the justification for not paying content creators becomes flimsy.

Google’s management recognised this some time back and started rolling out its own partnerships with creators to add more income than the often tiny advertising revenues most earn.

Now it turns out those popular video bloggers are being tempted over to other sites and for YouTube the cost of premium content is about to get expensive.

For the Silicon Valley businesses is requires a change of culture as they simply don’t like paying creators; in the tech startup view of the world it’s only coders, founders and few lucky support staff who get the rewards while the bulk of people who add value to the product are treated as commodity ingredients.

For a period it was difficult for media startups to get funding unless they had a free source of user generated content, as Buzzfeed founder Jonah Peretti revealed in 2012.

Tech investors prefer pure platform companies because you can just focus on the tech, have the users produce the content for free, and scale the business globally without having to hire many people.

The movie studios and record companies on the other hand have a culture of paying their artists and production staff, despite their reputation of exploitation and stinginess.

It may well be that we’re past the golden era of user generated content and the free lunch for the sites that depend upon free materials.

If it is, then standards on sites like YouTube can only improve even at the costs of Google’s profit.

Similar posts:
- No Related Posts
March 16, 2015
What happens when others control your traffic?
Quartz magazine is held up as one of the most innovative news websites and one of the models for the future of online publishing however its president Jay Lauf suggested at the Digital Media Strategies conference in London yesterday that web users are increasingly shifting towards social sites to find their content.

This isn’t new, most sites have been dependent upon referrals from the popular social media services and companies like Buzzfeed have built their entire strategies upon traffic from Facebook.

Lauf suggests that sites like Quartz and Buzzfeed are increasingly losing control of their own audiences which raises risks for publishers and readers as they become dependent upon the social media gatekeepers.

Quartz’s traffic from LinkedIn is a good example of how a gatekeeper can control traffic with referrals falling away as the social site pivots into a publishing platform of its own.

It could turn out that control of traffic backfires however as people find those services deliver less value or relevant information.

Ultimately it may be the gatekeepers who suffer from restricting traffic as readers decide they aren’t getting the news they want.

Similar posts:
- No Related Posts
March 12, 2015
Advertising and the mobile, digital consumer
Last week Google and Facebook announced their quarterly results with the search engine giant continuing its worrying slowing of advertising revenue. The respective changes of the two online services show how online advertising is changing.

While Google slows, Facebook is showing accelerating growth for its advertising, driven mainly by mobile users, illustrating the shift in internet usage from desktops to smartphones.

In its 2014 New Digital Consumer report, market research company Nielsen observed that US consumers in 2013 were spending more time accessing the internet on their smartphones than on personal computers; PC use had fallen seven percent to 27 hours a week while mobile use had surged 40% in 2013 to 34 hours.

Television still remained dominant with the combination of live and time shifted TV viewing making up 144 hours of the average American’s week, although it did fall slightly.

Those figures are a year out of date and there’s no doubt the numbers have accelerated since then. One of Tim Cook’s triumphs at Apple has been the release of the iPhone 6 and the larger form factors in the current generation of smartphones is a response to consumers’ demand to watch video on their devices.

Bigger Android, Windows and Apple smartphones will only seen even more people using their mobiles to watch video and surf the web.

Which puts Google’s predicament in sharp focus; we are definitely in the post-PC world yet their revenue still overwhelmingly comes in from desktop users while Facebook’s is increasingly coming from mobile consumers.

A strength Google has is that its revenues still dwarf the social media upstart’s – Google’s income is currently six times greater and its gross profit margin doubles that of Facebook’s – giving it plenty of leeway to change.

The question is where do the new revenues come from? Probably the biggest opportunity Google missed was in replacing the Yellow Pages franchises with their own local small business listings with Google Your Business (aka Google Place and Google Plus for Business) being lost in a confused and bureaucratic corporate strategy.

Compounding the problem for Google in the small business space is Apple’s entry and while Apple Maps is no contender against Google’s far superior product, an integration with Apple Pay would give Apple far more rich data to enhance listings with – not to mention more of an incentive for merchants to sign up.

With the changing web, Google are going to have to change as well. If advertising is going to remain the mainstay of their business then the company needs to find a way to capture smartphone users.

It could be worse however, a report from consulting firm Strategy Analytics estimates print media’s share of advertising revenue fell another seven percent this year. Time is running out for newspapers.

While print is ailing, the advertising battleground is mobile digital although TV still dwarfs the market. How this evolves in the next five years will define the next generation of media tycoons.

Similar posts:
- No Related Posts
February 1, 2015
Happy mobile new year
It’s a bit late in the month for New Year’s resolutions but with the work year now fully underway it’s not too late to do a quick health check of your company’s mobile presence.

Two years ago we passed the point where smartphone sales overtook those of personal computers and increasingly customers are expecting not only to find a business on their phone but also be able to read the company’s website on a mobile.

So the new years resolutions are simple; look at your company’s website on some smartphones and check the listings in Facebook and Google My Business are correct.

The Facebook and Google listings are simple and if it turns out they are out of date or wrong can be quickly and easily fixed. These are probably two of the most cost effective marketing things you can do for your business.

Should the website look dreadful on a smartphone then things are bit trickier and you may have to contact your web designer to enable a responsive function on your site. Responsive design detects the device a visitor is using and adapts to suit. Some older sites and platforms don’t support this and if that’s the case you need to start planning and budgeting for a redesign immediately.

If the site is based on modern platforms like WordPress or Drupal there are plugins that will do most of the work automatically while services such as Blogger and Wix have responsive features built in, although you may have to tweak the site’s template to give prominence to important information on a smaller screen.

That important information includes contact details, address, opening hours and a concise description of your business, the quicker customers can find these, the more likely you’ll win them. If you’re in hospitality then linking your location to Google Maps will help guests find you.

While these three tasks are simple things, and by no means a full digital strategy, they are probably the quickest, easiest and cheapest things you can do to get in front of customers in an increasingly demanding and crowded market that expects to find you on their smartphones.

Similar posts:
- No Related Posts
January 22, 2015
Measuring Facebook’s network effect
It’s always best to treat a business’ or industry group’s claims of economic benefits with a grain of salt and the survey released yesterday by Deloitte on measuring Facebook’s effects on the global economy is a good example.

Facebook’s Global Economic Impact looks at what the social media service added to the world’s economy and finds the company created 4.5m jobs and $227 billion of value in 2014 outside of its own operations.

Deloitte’s analysis breaks down Facebook’s effects into three general categories; platform effects, connectivity effects and market effects.

In coming to their figures, Deloitte’s researchers further broke the numbers down into the direct revenues of businesses using Facebook, the indirect impact upon suppliers and the ‘induced effect’ of employee spending patterns.

The basic formula, although the methodology gets quite complex in extrapolating the value added, is described in this illustration.

The main areas of contention are the employment multiplier effect, which Deloitte marks at 3.1 in Brazil down to 2.1 in the UK with the United States coming in at 2.7, and the valuation of individual Facebook actions.

For example here is the description of how companies’ page engagement is valued;

Sales from Page engagement are estimated as
a product of the total sales of businesses with
Pages and the sales uplift estimated due to their engagement on Pages (see section A3 for how elasticities are estimated by econometric methods). The total sales of the businesses that have a Facebook Page are estimated using the revenues of the private sector in the economy based on national statistics. Survey evidence is then used on the percentage of businesses with a Page in the US and the UK.

For the rest of the world, the value of a liking action of a Page is estimated using relative GDP per capita of each country to the UK and USA to reflect the local economic conditions.

The gross revenue supported by Pages is then the product of the number of Pages liked and the value of a liking action of a Page.

The key here is the word estimated, there’s no doubt it’s in the interests of Facebook, the marketing agencies and the staff employed to manage social media to overstate this effect; it’s an arbitrary at best measure.

Marketing is claimed to be the most valuable aspect of Facebook, accounting for about two thirds of the service’s claimed economic value with a $148 billion contribution. Deloitte defines marketing effects as “the impact from businesses’ use of Facebook marketing tools to drive online and offline sales, and to increase awareness of their brand.”

Again this is subject to a number of arbitrary definitions and guesstimates which take us into the tricky area on measuring social media’s Return On Investment.

The reason why the numbers don’t pass the smell test is because of the sheer size; in Australia for instance the company’s effects are valued at $5.7 billion and employment generated at 63,000 workers. If we fully apply the 2.6 multiplier Deloitte attributes to the country this would suggest over 17,000 Australian workers are directly employed full time in running Facebook related tasks.

While it’s hard not to be sceptical of Deloitte’s numbers, it certainly is true that social media platforms have opened new roles for administrators, developers and other staff. We just need to be a touch cautious of overstating the benefits.

For businesses, probably the best lesson from Deloitte’s survey is to measure the genuine effects of social media on a business there have to be properly thought out measures and objectives. Guesstimates are not good enough.

Similar posts:
- Newly normal in the English Midlands
January 21, 2015