Archive for the 'social media' Category

Three Companies that Apple Could and Should Buy

By: Tim Baker
It’s amazing how a company that went from the brink of bankruptcy 13 years ago now has $51B in cash reserves,  market cap of $275 Billion and a share price of over $300. Last week, CEO Steve Jobs said that Apple plans to hold on to it’s $51B in cash to pursue “strategic opportunities.” As their war with Google continues to grow as does threats from music startups that could potentially dethrone iTunes as the de-facto digital music destination, here’s a list of companies that could be huge acquisitions for the Cupertino giant to buy that could potentially change the shape of the tech industry for decades to come.

Facebook
Facebook is currently valued at a little over $30B. While it would be an enormous investment for Apple to make, the rewards from purchasing the world’s number one social network could have seismic effects across all of Apple’s verticals. It’s pretty safe to say that Apple will be launching a music subscription service in the future and as physical music formats continue on their death march, streaming music startups such as Spotify, MOG and Rdio are winning people over left and right. As smartphone and home broadband penetration continues to expand, it’s only a matter of time until most music fans are enjoying their music in the cloud. Apple realizes this and it’s most likely why they purchased Lala.com last year. Should Apple buy Facebook, every user could have access to a streaming iTunes service instantly. Apple’s new music social network Ping would also have a much better home than living in the iTunes desktop & mobile software and Facebook credits could be used to purchase video rentals.

Putting aside the benefits that an embedded iTunes store from within Facebook could have, the most appealing thing that comes with the purchase of Facebook is their data. Apple’s foray into the mobile advertising business with iAd has put them toe-to-toe with Google and owning Facebook would give them ownership of the very lucrative Facebook ad platform to compete on the desktop as well. Facebook ads allow marketers to deliver very hyper-targeted messages based on the data found in a user’s profile and Apple’s merging of that information with the data they receive from their iAds could very well shift the power in online advertising for years to come.

Netflix
Netflix currently has a market cap of $9B and a subscriber base of over 15 million. While Apple dominates the digital music space, the same can be said for Netflix with regards to digital video. While Netflix started out as a DVD by mail service, their business model has shifted towards streaming video and as they continue to roll out streaming-only plans, their subscriber base is expected to explode. Analysts expect Netflix to have over 19 million subscribers by the end of 2010, which totals about 6% of the US population or 17% of the estimated 116 million US TV households.

An acquisition of Netflix would allow Apple the flexibility to focus on streaming video rather than the pay-per-view rental or pay-to-own model that they’re stuck in now. Streaming video is the way of the future and it’s only a matter of time when Blu-Ray users will see they can get the exact same audio and video experience via the cloud than on an overpriced physical disc that takes up space and is prone to scratching.

Additionally, a purchase of Netflix by Apple would give them enormous market penetration within streaming devices already in-use, such as video game consoles, TiVos, Roku Boxes and Netflix-enabled televisions. While the newest incarnation of the AppleTV is a huge leap forward compared to its predecessor, future success in streaming video will not come from being one of many players in the hardware game – one must control the content.

Last.FM
Last.FM is a popular music social network that founded in the UK and was acquired by CBS Interactive for £140 Million in 2009. While it may not have the cache or price tag as Facebook or Netflix, Last.fm would give Apple something that it’s failed to crack thus far – success in social media.

It’s pretty safe to say that most diehard music fans are finding Apple’s Ping social network to be a joke. Aside from the very lackluster initial offering of artists involved, it’s pretty much the most anti-social social network of them all. Artists that are on Ping are not interacting with fans like often found on Facebook or Twitter. Ping is basically a glorified RSS feed of artists news and events and feels as warm and welcoming as a hospital waiting room.

I don’t see Ping taking off ever in its current form. There’s no way for artists to create their own accounts; an Apple staff member must create the account on their end. There’s also a ridiculous list of rules for entertainers participating on Ping that is nothing if not laughable.

Music loves have embraced Last.fm for multiple reasons, but the three that are most popular are 1. scrobbling, 2. streaming radio and 3. social networking. Scrobbling is basically Last.fm’s way of indexing all the music you listen to on your computer or iPod and keeping a running record of it. It uses that data to show which artists and songs are most popular on the site as well as allows users to meet other music fans based on their compatible music tastes. Last.fm also leverages their API so other music services can import their data into a user’s Last.fm account for even more ways to scrobble music. Two great examples of the API use are Spotify and Blip.fm. Ping currently only automatically tracks your iTunes purchases. The streaming radio on Last.fm also allows users to listen to Pandora-like stations built for them based on their actual listening habits.

While a purchase of Last.fm would be a drop in the bucket for Apple, it would allow them to buy into an established and trusted network of music lovers. They could also leverage all the data they obtain from users on their listening habits to offer a better targeted buying experience within the iTunes music store.

I believe all three of these aforementioned services provide excellent growth opportunities for Apple as they continue into the next decade. I’d love to know what other companies you think Apple could and should realistically buy. Leave your thoughts in the comments.

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Social is not a Campaign!

A recent study of US marketers by the Direct Marketing Association and COLLOQUY found that brand awareness was the most popular objective of social media “campaign”. How can this be I ask? For starters, “Social” is not a campaign, it is an ongoing dialogue between a brand and a consumer.  Secondly, how can companies expect to build brand affinity without first establishing customer loyalty?
My opinionated attempt to explain:
Think back to the days when marketers referred to word of mouth as the best form of “advertising” a company could ever hope for, yet there were very few ways to prove that positive or negative word of mouth affected brand or impacted the bottom line. Even more puzzling was the fact that marketers had very few ways of touching consumers on a personal level if they needed to remedy a problem, or thank someone for being a loyal supporter.
Today, those same “word of mouth” conversations still take place, except now marketers have an opportunity to see them, understand them, influence them, and most importantly, connect them to individual customers. Never before, have Marketers and Brands had an opportunity to get as close to their customers as they can today, yet so many of them limit their “social efforts” to simply “advertising” to consumers within social forums.
Those who understand the value of today’s social ethos, know that social media is not about a “campaign”.  Its not how much money you sink into advertising on social networks, and it’s not about how many leads can be delivered. It’s about making sure your company in sync with its customers – It’s about providing value. When you provide value to consumers you establish trust and loyalty, which lead to brand affinity & awareness. It is only then, when companies can expect to see the fruits of their labor through increased sales, and overall growth etc.
Now that I’ve got that off my chest, I will say that I do believe its beneficial for Marketers and Brands to “advertise” in social environments, but these efforts should not be looked at a social media, they simply should be looked at as advertising campaigns (which is what they are). And should not be measured any differently than other “campaigns” with specific and measureable KPI’s.
I welcome your thoughts.

Why Twitter Followers are Better Than Facebook Fans

By: Tim Baker

An informative article in today’s eMarketer shows that Twitter followers are more likely to induce advocacy and future purchases than those on Facebook. According to their data, 37% of respondents were more likely to purchase from a brand after following them on Twitter as opposed to only 17% of those that “like” a brand on Facebook.

The numbers are also pretty similar when asked if they would be more likely to recommend a brand after following them on Twitter or Facebook.

I can’t say that I’m surprised one bit by these numbers, and I believe the reason is simple: Twitter is a platform that attracts an audience receptive to marketing messages much more than Facebook. A great quote that I wish I could say I came up with goes something like this: “Facebook is for the people you know while Twitter is for those you want to know.”

Statistics tend to show that there’s a fork in the road that many new Twitter users reach. There’s a marked drop-off by users with only a handful of tweets that abandon the service versus those that continue to embrace it. Many of those that find value in Twitter gain that value from its function as a news platform. In fact, 44% of adult internet users aged 18-29 and 45% aged 30-49 are getting their news online.

Facebook is not a good platform for delivering news. The default front page view does not show a user every post from all of those in their network but rather an abbreviated feed that Facebook feels is most relevant to them. Additionally, the function of setting up lists, which are an excellent way to segment content on Facebook and could provide value in the service as a news aggregator, is vastly underused.

Lastly, a factor that I believe plays a part in gaining more quality followers on Twitter versus Facebook is the fact that it’s generally a two-step process to follow a brand as opposed to the one-click “like” on Facebook. One that visits a brand page and sees a “follow us on Twitter” option has to click through to the Twitter profile page of that brand, and from there they can choose to actually subscribe to their stream. This multi-step process not only cuts down on the number of more casual, less-likely-to-buy followers but also gives potential subscribers a taste of one’s stream before they are convert to a follower of the brand.

From my own experiences as a marketer, I consistently see this play out time and time again. Brands that have a much greater number of Facebook fans than Twitter followers that are serving their audience with the same discount savings offers consistently showing a higher return via Twitter. This is not to say that Facebook should be ignored, because there’s definitely  value in reaching a large audience with marketing information. What I feel this says is that those brands that are late adopters to the social media game and still don’t see value in Twitter, or are not using the site to its greatest potential need to understand that from a lead generation perspective, Twitter must be a part of their social media strategy. Social media is a quality versus quantity play and nowhere is it more apparent for brands than on Twitter.

Is Gowalla Dead?

By: Tim Baker

GowallaA little less than six months ago, Gowalla was riding very high. They were the darlings of SXSW, at least in the eyes of the Austin residents, and were in a promising position as they stood toe-to-toe with Foursquare. My, how a lot has changed.

Despite just being named one of Time’s 50 best websites of 2010, Gowalla has lost a lot of steam in the geolocation wars. Foursquare, the New York City-based startup, has been racking up win after win with many high-profile deals including Zagat, TLC, Bravo, VH1 and Starbucks. With Facebook throwing their hat into the ring with “Places,” I believe Gowalla is at a make-or-break point if they hope to survive.

Despite the beautiful aesthetics of their mobile app, Gowalla has been criticized by some as being too confusing or even childish. The feature where random virtual objects are left behind for others is often cited as the most confusing aspect of the service. However, in the world of tech startups, having the prettiest service doesn’t always resonate with consumers.

The data is not on Gowalla’s side. Analyzing their website traffic stats shows a sharp decline after their SXSW peak in March, compared to Foursquare who’s site hit over 1.8 Million unique visitors in July.

Gowalla vs. Foursquare Traffic Statistics

Granted, website usage isn’t the best metric as these services thrive on the mobile app experience. Analysis of the social media data is also very telling. Aside from small spikes for Gowalla when they announced their iPad app and their use of the Foursquare Places API, their mentions throughout the “blogosphere” have remained very flat.

Gowalla vs. Foursquare Popularity In Blogs

If you’ve been following the “checkin wars,” none of what I’m talking about is surprising. Foursquare has been the hottest startup in 2010 and the service to beat. Facebook Places, with an install base of over 500 million, is not as well received initially as some may have thought, but it’s way too early to call it a flop. Facebook has the money and the muscle to compete with anyone on this front and their biggest obstacle is their users who already have trust issues after previous privacy missteps.

Geolocation is a crowded space and is only getting more crowded. With very promising services on the rise such as Shopkick and SCVNGR pushing the checkin experience into valuable consumer rewards, even Foursquare shouldn’t be (and isn’t) resting on their laurels. In the end, Gowalla may end up being the next Pownce – a beautifully designed and well coded service that couldn’t break out of their small core audience and resonate on the big stage.

“Never Hire a Social Media Expert” – SlideShare edition!

Thanks to @Quentin_Be for this visual representation of this post.

Are Brands racing too fast into social?

By: Nick Dimitrakiou

It sure feels like it. Much like in the early 90’s when every company had to have a website, today brands “need to be social”. Only problem is many of them don’t know how, and unlike yester-year, today they are getting called to the mat when their efforts are disjointed.

While I’m an advocate of the social world, I strongly believe brands should not dive in until they have strategically defined a reason for being. I see too many brands participating in things that are not in sync with their customers or their employees.

Allow me to share a personal experience. I recently walked into a Sports Authority (@sportsauthority) to purchase a good amount of equipment. As I checked in using @foursquare, I was excited to take advantage of their $10 cash card offer (which I had unlocked). As I attempted to pay for my merchandise, I showed & told the cashier about my offer, but no luck. This is when things started to get ugly. For starters, the cashier didn’t know what Foursquare was, never mind the offer I was trying to redeem. It gets better – she calls for a manager (takes about 5 min for someone to show up at the register), and when he arrived, he did not know about the offer either. I think you see the problem here – the left side of the brand pushes out a great promotion, but the right side of the brand has no idea what’s going on…an obvious recipe for disaster. To finish the story, without making a stink, I simply paid for my merchandise and walked out. On a positive note, both folks were pleasant to deal with; they were just unfortunately not informed.

The fact I was unable to redeem my offer isn’t what concerned me. I was more bothered thinking that a brand like Sports Authority couldn’t connect the dots on what should have been a great case study, but is now a missed opportunity to connect with me in a meaningful way.

I write this post not to criticize Sports Authority, but to merely illustrate my point of how a brand rushed into a promotion/campaign and did not have all the I’s dotted and T’s crossed. I actually applaud Sports Authority for leaping in by using Foursquare as part of their marketing mix. However, the experience was not seamless, and their efforts fell short of satisfying – which I have to believe is their end goal.

Hoping this helps create a “Social” Authority.

Never Hire a “Social Media Expert”

 

Social Media Ninja

Photo by: scion_cho

By: Tim Baker

One of my biggest pet peeves is the “social media guru.” You know the type, the person that  spends all their time on Twitter retweeting Mashable articles and Chris Brogan’s blog posts and thinks that having 40,000 followers makes them an instant expert in marketing. These people are bad news for many reasons, but what makes them most dangerous is the damage they are doing to the term “social media.”

You see, as hard as it may be for you to believe, there are still many companies that don’t see value in social media. Whether it’s the fear of giving up control or the mentality that it’s just a fad, key decision makers in many corporations have cold feet. As time goes on and more of these companies begin to get more adventurous, they may make the mistake of hiring one of these “ninjas” only to see their biggest fears realized.

Before you hire your first (or next) social media employee, here are some things to be on the look out when attempting to filter out the true experts versus the snake oil salesmen.

1. There are no “experts” in social media. If your candidate is claiming to be an expert, chances are they have never worked in a meaningful social media job. You see, the people that are widely regarded as “experts” in the field will be the first to tell you that they’re always learning. The rate at which technology continues to grow and people find new ways to connect, it’s unrealistic to think one can ever truly be a social media expert/guru/ninja/maven.

2. If your candidate is using their Twitter followers or Facebook fans as a testament to their knowledge, chances are you’re dealing with a fraud. Rather than rehash the same diatribe that follower count does not equal influence, just know this: a Twitter account that posts nothing but facts about Justin Bieber (@OMGJDBFACTS) has over 4,000 followers. If that doesn’t convince you that Twitter follower count has nothing to do with one’s social media marketing knowledge, I don’t know what will.

3. Social media is nothing new. If your candidate thinks social media started with Friendster and MySpace, there’s a good chance they’re not as versed in the space as they’d have you believe. You see, before social media became the buzzword it is today, it was referred to as “new media.” Before “new media” – well, we just referred to it as BBSes, Usenet and chat rooms. The point is, the communication that occurs on the modern social networking sites has been happening since the minute people started connecting to networks via modems, it’s just become a lot easier for the non tech savvy to “join the conversation.”

4. This next point may seem obvious, but you’d be surprised. Before you hire someone to run your social media initiatives, make sure they themselves are engaged. Ask them what social networks they use outside of Facebook and Twitter and verify that they are in fact using them. You see, anyone can say they’re blogging and using sites like Digg, Stumbleupon, Flickr, Reddit, Tumblr and so on, but take the time to check out their profiles. Are they active? How long have they been so? Social media is not unlike any other career path in that in order to be successful, one must know what is going on in the world around them. I’m not suggesting that one must be engaged in every social network out there, but if their only presence is Facebook, Twitter and a blog on social media, be very skeptical. (Note: for a very comprehensive list of the different social networks out there, Wikipedia has a great resource.)

5. Be on the lookout for “The Constant Marketer.” Maybe you’ve seen them in action, where everything they contribute to their community is related to social media marketing.One sure-fire way to spot one of these folks is to follow them on Twitter. If you receive an auto-response via direct message promoting their blog or telling you how excited they are to connect with you and look forward to your tweets, move on! These people obviously don’t get it.

6. Ask your candidate how they measure social media success. If they look at you with a blank stare or tell you that success in social media can’t be measured, move on. While organizations may have different reasons for using social media, every one of them can and should be measuring it.

7. With so many creative uses of social media out there, it’s a good idea to ask your prospective employee to name a few of their favorite case studies. Many companies have done some really great things, such as Ikea’s use of Facebook photo tagging and VisitPA’s partnership with Foursquare, two of my personal favorites. (Bonus points should be awarded if they can name something other than the Old Spice campaign!)

There are some really brilliant people that truly understand how to use social media, it just takes some effort to cut through the weeds to find the flowers. Hopefully these tips will help you find your true “rock star” and prevent the phonies from tarnishing the term social media any more than they’re already doing. Have any other tips? Share them in the comments!


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