Category Archives: Social Media

Oct 25 2012
Leave a comment
Business, Digital Strategy, Social Media, Strategy

Why Google is Struggling with Mobile?

The future of the business is mobile.

Or so they say. Currently it seems more that future business of companies is ruined by mobile. Zynga has lost 85% of its value, because the mobile adoption has been faster than expected. Facebook has been stumbling with mobile advertising, although its recent mobile ad revenues beat the industry estimates.

Even the traditionally steady high-performer Google has been showing signs of slowing down. The problems have their root cause in mobile: Motorola acquisition has not yet paid off and mobile advertising has driven average click prices down.

Here are five other reasons why Google (like many other companies at the moment) is struggling with the mobile:

1. Status Quo Bias
For years the AdWords has been the hen that lays the golden eggs for Google. As humans, we are more likely to believe that things remain the same and are more likely to select to stay in status quo whenever possible. Every company encounters status quo bias at some point. AdWords are still selling like pancakes, the main difference is that the average click price has dropped for four consecutive quarters in row.
Although no one accuses that Google is not doing mobile innovations and investments, there has apparently not been pressing need for them to roll them out faster.
2. Android Ecosystem does not pay off (expect for Samsung)
According to certain estimates, Google makes about $6.50 through ads on Apple devices, compared with under $2 in Android. Google makes roughly the same amount of profit selling Android ads & apps in year that Apple makes selling iPhones a week. Google has regarded Android ecosystem more of an extension of the advertising. Currently it seems that it only benefits Samsung (and maybe to some extend users).
3. Mobile advertising ecosystem is currently broken.
People are not yet ready to make purchases with mobile. That is likely due to change in the future. Meanwhile, the mobile ads generate less revenue than traditional ads on average. Mobile has been thus far more about duplicating the web experience for Google, than regarding it as a center of the advertising innovations.
4. Consumers are even more unpredictable with mobile
Who would have predicted that texting will become popular? Or that tablets will become hits? Consumers are always fickle and surprising, but especially in mobile. Consumers do not really know (or at least articulate) what they want, but they still act quite fast to get it.
5. Google is not (yet) producing phones
Although Google bought Motorola, there has been a strict separation of church and state between Android and Motorola. Apple and Samsung have proven that the money in mobile lies in hardware. Microsoft has returned to hardware game as well. Facebook will probably enter the competition soon. Can Google stay away from the phone game?

I am sure that Google has certain tricks up on their sleeves regarding the mobile. Until those tricks are revealed, there will be more growing mobile pains ahead.

Tagged , , , , , , , , , ,
Oct 18 2012
Leave a comment
Digital Strategy, Social Media

Why Would You Pay for Your Facebook Status Updates?

Facebook piloted the promoted post –format already last spring and now rolled out the feature in US in the beginning of this month. Basically it allows normal Facebook user to get more exposure for her post when paying money for it.

Sounds great from the Facebook standpoint. They are in desperate need for new ways to monetize the vast user base. The initial cost for rolling out this advertising format is probably quite low. And it might be hit. Judging from the reality tv shows, there are lots of celebrity-seeking self-promoters around wanting the attention at any cost. On Facebook product site for the Promoted posts, there is linfo about practicalities of the function. One crucial piece of information is however missing:

Why would anyone want do that?

The example Facebook uses is engagement announcement. But I find it hard to believe why anyone would pay for that? If you really have to make sure that people now that you are engaged, there other communication vehicles to ensure that message goes through. Also the virality of those announcements is already high and it is likely that you get hundreds of likes and comments for announcements like that naturally. How many likes will it take that you are satisfied? Of course the situation might change if Facebook decreases the reach of non-paid status updates. That has already happened with brand pages.

There seems to be only one inevitable result from this. Your newsfeed gets bombarded with marketing messages. The promoted post function seems suitable for only small-business owners, politicians, bloggers, company spammers commmunity managers, event organizers, social media con artists consultants and other narcissistic egoists. For those people, the promoted post will probably be good addition to advertising toolkit among other Facebook advertising solutions.

What will it do for the user experience?

There will be municipal election this weekend in Finland. Thus I have avoided checking my newsfeed lately because I just cannot bear all that election advertising from all “Facebook friends”. The newsfeed is almost unreadable. Especially because I do not currently live in Helsinki and I am not even eligible to vote. How worse the situation will be when these annoying self-promoters can pay for more wider reach for their propaganda?

Or maybe this is just clever marketing and the next product Facebook announces is: Unpromoted Post. By paying certain fee, you free yourself from those self-marketing promoted posts.Facebook Premium, without ads?

Someone might pay for that as well.

Tagged , ,
Oct 17 2012
Leave a comment
Advertising, Business, Marketing Strategy, Social Media, Strategy

Building a Successful Failing Company

Each year over 30,000 consumer products are launched. 95% of them fail.
The failure rate of TV shows is about the same 95%.
75% of advertising campaigns are failure.
(Probably the real rate 95%, but the years of crafting those Effie entries probably helped to shape that number down)

The conclusion is clear. We are doomed to fail. Or actually we have planned ourselves to failure.

Companies, who do not tolerate small failures, end up doing big ones. Perversely companies are obsessed of micromanaging the staff and punishing for minor mishaps, but eventually end up messing up themselves big time. There is too much strategy & planning, not enough doing (ironically coming from planner). The trick is to fail often and fast to avoid the big failures and to ensure big wins. Actually it is not about failing, but just doing things.

Four ways to encourage doing actual things and failing fast in your workplace:

1. Taking ownership of the ideas and making it a habit
The problem with the companies is not the lack of ideas. Not even good ones. The problem is that there is a lack of ownership of the ideas. Throwing ideas is worthless, planting and cultivating them priceless. That is why Orange idclic works. You do not just throw an idea around. You get the opportunity and responsibility to build that idea.

I remember time selling digital ideas, when clients only wanted TV ads. We always presented those ideas, even though client had not asked for them. First they were irritated, then amused, then interested and finally buying them.

Selling idea is about creativity, vision & perseverance. Mostly the latter.

If you make the habit of producing five presentable ideas to improve your business (or your client´s business) every month, you have presented 60 good ideas by the end of year. I recommend changing the client or the team, if you have not sold any of them.

2. Something Concrete/Month: Test & research with real audience
If after numerous focus groups, strategy workshops and numerous alternations to body copy you still end up messing the project, what is the real risk of just trying stuff out? Also company, which gets its Facebook status updates approved by ten different managers, cannot really be agile innovator.

Your website and social media channels give great opportunity to test things with real people before you commit millions of dollars behind certain idea. When you commit to test one of those ideas every month, you have done 12 prototypes a year. On a worst case you have 12 small failures. On the best case you have done couple of breakthrough successes.

3. Reaction fund: Show me the money to show that you care
World does not spin around your strategy. Your strategy spins around the world. And that world is changing rapidly.

“Ability is little account without opportunity”
-Napoleon Bonaparte

Every company should have reaction fund to react to current events. Something relevant happens in the real world, which opens the opportunity for your company. When the opportunity rises you should have budget to react to it. Whether you produce event, application, flashmob, social movement does not matter, reaction and taking the action is the key. The designated budget is also a proof that your company is serious about that agile innovation.

4. Skunk works Exchange program: Spreading the change to whole company
Big change starts with small movements. That is why it is crucial to start with task force, skunk works or lab, with progressive individuals who are hungry to change the company.

The challenge is to spread their impact to whole company. If people in skunk works are the only ones doing the cool stuff, it helps quite little the struggling company around. Thus every member of that skunk works should be member for only limited time. When revolutionizing the company for appropriate time in that small unit, they would be located all over the company in different units. This works also other way around, task forces giving new meaning to bored employees. Think of it as a work exchange, where you do not move geographically but mentally.

The future is uncertain and the failure is unavoidable. It is how we seize the opportunities and try out new things, which determines our success.

Tagged , , , ,
Oct 16 2012
Leave a comment
Advertising, Business, Digital Strategy, Marketing Strategy, Social Media

39.045 KM: The New High for Advertising

“Sometimes you have to go up really high to understand how small you are.”

Felix Baumgartner not only made the world´s highest parachute jump. And he not only did the record height manned balloon flight or had the greatest free fall velocity.

He is also the future of advertising. Or actually, Red Bull is.

Red Bull made the jump possible with their Stratos-project. Stratos is a textbook example of the new marketing gathering them millions worth of free publicity. When you only have your brand as the differentiator from the competition, you have to change the traditional rulebook. Also if the marketing is pretty much your only cost item, should you do something that stands out with all that money?

Why you should jump from 39 km to succeed in advertising in 2012?

From advertisements to acts.
Once upon a time, there used to be brand films. These long (at least longer than regular tv-spots) films were on top of every advertising creative wish list, because they let you capture the brand essence and flex your creative muscles. Some relics still mourn for the brand films.

The world´s highest parachute jump is the brand film of the next generation.

We cannot get back to the times of the brand film and the one-sided broadcasting era. If we, the advertising industry, cannot make the shift to do acts instead of ads, we will vanish. And deservedly so.

Many marketing managers and advertising executives throw the term “lifestyle brand” around too carelessly. Whether it is mobile phone, toothpaste, ice cream, jeans, hemorrhoid creams, you name it. The brutal truth is that the majority of brands are just products, which have merely functional value to audience. There are less truly inspirational brands than brand managers in the world. Red Bull is a lifestyle brand, build around extreme experiences. Can you really say that your brand is lifestyle brand compared to Red Bull?

The role of traditional advertising is totally miniscule for Red Bull. Judging from their cartoon TV ads, traditional advertising might even be counterproductive for their success. They have build their brand by events, strategic sponsorships and great content produced from those two. This content is mainly distributed digitally.

Before the death-defying jump, there was also a double-win on Sunday for Red Bull F1 team. Red Bull does not just stamp their logo to everywhere to fulfill their sponsorship duties. They use sponsorship as a strategic marketing weapon.

Great brand is media.
The key to successful content marketing is not producing content. The key is to produce interesting content. If your brand wants to really be part of your audience lives and be that “lifestyle” brand, you have to create content which is up to par (or as in Stratos, even over) with every other content your target audience consumes. Being OK in “advertising standards” is not enough, because people could not care a less whether you are brand or not. There is no handicap league for advertisers.

If you go visit Red Bull website, their content about extreme sports and music beats many major media sites. If you build a media, it takes longevity and it requires quality. You have to have clear picture about what your brand represents and act upon it. The parachute jump was totally on Red Bull brand. If your brand aspires to be media, you cannot only be content agregator and rely only on your partners. You have to be an active content creator as well.

Digital is natural part of the winner brands.
When you understand your target audience, the digital executions are not the challenge. You do not need social media expert to tell that you should broadcast the jump in YouTube. Or that you should have hashtag dedicated the event. Great brands master digital presence efforlessly, because they understand their audience.

Digital is air, you either breathe or die.

You might not be able to fund the world´s highest parachute jump. It might not be the right for our brand either. You should still find ways to become truly part of the lifestyle of your audience, instead of just being an interrupting nuisance for them.

Tagged , , , , , ,
Oct 15 2012
Leave a comment
Marketing Strategy, Planning, Social Media

Gangnam Style: The Evolution of Popular Culture

Click the video, if you have not yet see this after 462 252 104 (and counting) views on YouTube. Otherwise proceed to text below.

It has affected South Korean tourism and the stock values of software firms. Even F1 drivers are doing it.

No doubt about it, Gangnam style has been the biggest popular culture phenomenon in 2012.

What it tells about the current state of popular culture?

1. There is always demand for a catchy pop song.
You can debate about the artistic and musical merits of PSY, but you cannot deny that structurally it is typical and effective pop song. All the elements of the perfect summer jam are there: catchy chorus, shout-outs to sexy ladies and the signature dance which you can perform even after few pints. Gangnam Style is just the Macarena for 2012. Or Ketchup Song, Lambada… You catch my drift.

This brings us also to the important point about YouTube. The Internet might have revolutionized the distribution and the traditional business model of the music. It has not as much changed people´s taste for music. Although major record labels are struggling, there is still huge demand for mainstream music. If you watch top 10 of the most watched music videos in YouTube, they are all from major label artists. PSY was huge in South Korea before Gangnam style and hardly a rookie, having released his first album already in 2001.

Gangnam style would probably be not as big hit without YouTube, but it would have been hit nevertheless. You will always have gatekeepers in popular culture. The gatekeepers just might not be the same ones as before.

2. The cultural focus shifts to Asia
If you watch any new Hollywood movie, you are more than likely to see one (or all) of the following things:

a) One or more of the characters are Asian-origin (i.e. wife of Bruce Willis is Chinese in The Looper)
b) There are cultural references to Asia (i.e. Chinese gambling dens in Premium Rush)
c) The film takes place in certain Asian country (i.e. Bourne Legacy scenes in Manila)

The main reason for this is naturally the rising importance of Asian countries as the target market for Hollywood movies. As a movie producer, you have to take Asian countries in account to maximize profits and to secure investments in the future.

This cultural exchange is not unilateral. As the western companies concentrate more on Asia to keep afloat, especially the western teenagers consume more Asian culture to find their own thing and to differentiate from their predecessors.

Peculiar thing happened few years back in Finland. The teenagers started to dig everything Japanese. Whether it was J-Pop, Manga, Anime or the weird costumes. The cultural glue was the interest to everything Japanese. The same person might go to see heavy metal and dance act on same week, as long it was Japanese.

This goes against of my traditional view of how subcultures emerge. As a teenager I consumed popular culture that was majorly from USA. However it was more about certain genres than geographical areas.

K-Pop phenomenon was already making major waves before Gangnam style and something big was bound to happen. Gangnam style was just the most western-friendly, uniquely odd and the catchiest song to break into global mainstream. As a western listener you do not necessarily know where Gangnam is, or what oppa means but you can nevertheless get into singing the chorus and doing the horse-dance.

3. Ready for remix, build for parody, made for mash-up.
There used to be app for that. Nowadays there is Gangnam Style –parody for that. Even in North Korea. Here is the Singaporean version:

With current digital tools and democratization of technology, it is easier to become active culture participant. Parody is the highest form of flattery. If it has not been remixed, it does not exist. Gangnam style is the perfect song to make mash-ups on. As the money from music business now comes from different sources than traditional record sales, you have to do more than just good songs. You have to create miniature social movements, where people can participate.

Also our view of idols has evolved. When before the idol was someone you could not reach, nowadays you can just tweet to your favorite artist. And as record sales decline, the probability is just getting higher that the idol will actually respond as well. Reflecting to that PSY, who is self-proclaimed “fat father of two”, might just be the perfect idol type for the new century. At least compared to the polished superhumans of traditional broadcast era.

Will PSY be able to match the success of Gangnam style?
Most likely not.
Has he already left a permanent mark in popular culture?
Most likely.

Tagged , , , , ,
Oct 11 2012
Leave a comment
Digital Strategy, Social Media

Endorsements: LinkedIn Likes?

During last couple of weeks, there have been sudden surge of people adding their business skills in LinkedIn. The main reason for this is that  you can now do one-click endorsement of particular skill of your LinkedIn contacts. It is as easy and probably as worthwhile in professional way as Facebook like in less-professional setting. I don´t know will the amount of endorsements affect your employment opportunities in future, unless you apply to become a social media manager.
More than just another way to flex the virtual vanity, endorsements are a great example of smart “nudging” from LinkedIn to make people use their service more. More complete LinkedIn profiles, the closer will be the day that your LinkedIn profile has completely replaced traditional CV.
LinkedIn Endorsements is a great example of the power of social recognition and how it can be one of the most powerful incentives you can have. Overall LinkedIn has been build brilliantly combining nudges, gamification and social elements to make people make their profile complete and spend more time with the service. Naturally that helps LinkedIn to better monetize their service with advertisers. And while everyone has been concentrating on hoopla around Facebook, LinkedIn has been doing their thing more quietly and arguably more effectively (at least adjusted to user numbers) as well.
And thanks for all the endorsements I have gotten in LinkedIn. I probably thank by endorsing you back.
Tagged , , , , , ,
Jul 31 2012
Leave a comment
Digital Strategy, Planning, Social Media, Strategy

Is Facebook Just a Bubble?

Facebook stock hit the new low last Thursday after Q2 results were revealed. Also closely linked to Facebook, game-maker Zynga has lost over 40% of its value. These stock falls have raised feelings of déjà vu  in investors of the merry days of the dot-com buble. Are we facing the sequel: Social-Media Bubble-Revenge of Stock Plummet?
I believe not, based on the following reasons:

What separates Facebook from the failed IT-bubble companies?

1. People: With the expection of the Great China Firewall, Facebook has conquered the world. Over 900 million users would make it the third biggest country in the world. Numbers are great, but over 500 million active users also prove that Facebook has become much more. It is incremental part of the behavior of the people and increasing number of people have developed Facebook a daily (even hourly or constant) habit. And we all know how hard the sticky habits are to break. Also we from the industry are naturally calculating Facebook profits all the time, but average user could not care about less how Facebook ad sales are going. Of course on the long run the financial performance and user satisfaction should be inseparable, but it is easier to tweak on your business model when you have the people already using your network than other way around.
2. Profits: Despite making loss in the latest quarter, the revenues of Facebook actually beat the industry estimates. Also Facebook has already been profitable many quarters before. This is a proof that their business model works, at least to some extend. That could be hardly said from many other failed Internet-companies.
3. Potential: Google has struggled with social: whether it is Google+ or making YouTube profitable. Apple has had Midas touch in everything… expect social. That is why they allegedly have talks with Twitter. Facebook has been the only company to really capitalize and succeed with social. This has made it as one of the key players in the battle of Internet domination (other participants in the ring: Apple, Google & Amazon).

So comparisons with the high-flying and crash-landing dotcom rockets to the new big blue are unjust. They pretty much had only potential, but neither the users nor the viable business model. Facebook is not a bubble, but that does not mean that it does not have certain serious challenges. The future success of Facebook lies in how it can solve the following issues:

1. Advertising revolution: The advertising model of Facebook is based on really traditional online media sales and the effectiveness has been questionable. Sometimes it feels that only drunk people click on the Facebook ads. The new ad units have been disappointing at best and almost disastrous at worst (ie. Facebook deals). Facebook has to find a way to get people to see and engage with ads when and where they want to actually see them. Google cracked this and it has been the core reason for its success. Until now Facebook has just poorly emulated Google with a mix of traditional display, with average results.
2. Going beyond advertising: The information of Facebook 900+ million users is a goldmine. There just should be a way to utilize it better. Currently the revenues beyond ad sales have been quite modest. This also raises the controversial question which Facebook has actively been avoiding. Could users pay for Facebook? And how much would they pay for it and for what elements? There is thin line between the effective utilization of user data and the utter exploitation of it. If you do the latter, the deliquate trust between the service and users has been ruined forever.
3. Mobile: Future of Internet is the Mobile. And Facebook damn well knows it, with over 500+ million mobile users. As smartphone will be the computer of the new generation, it needs more innovative and effective mobile solutions than just sponsored stories in mobile (although they have been performing above average). The rumoured Facebook phone is step to the right direction, but just one of the first steps into the mobile world.

“Facebook is not a bubble, but it has not reached its full potential either”

Tagged , , , , , , ,
Jun 22 2012
1 Comment
Digital Strategy, Social Media

Pinterest Generation: Lazy & Self-Obsessed

Pinterest drives more sales than Facebook
Pinterest drives more traffic than Google+, LinkedIn & YouTube combined
Pinterest hit the 10 million unique visitors faster than any other other site in history

In retrospect, it is totally obvious that Pinterest has become so huge. It is such a great representation of the current times we are living in:

1. Many want to express themselves, few want to invest time in it

I think the main drivers in the rise of is the Pinterest is the growing amount of self-obsession combined with the laziness typical with many people. It is perfect tool for the modern man, who evaluates how his success by the number of likes and comments. Or values celebrity over his own health. Pinterest gives you easy tools for self-expression.

If we think about evolution of self-expression in the Internet, it has become more and more easier. The tools which have provided the solutions to the lazy users have been winners.

When people had own websites, you had to have technical skills to create them. Then came blogs, which reduced the technological barrier, but you still had to spend lots of time to actually write the blogs. Twitter made the expression even easier with the character constraint. Then came instant photo applications. Also social networks have undergone the same transition. MySpace had much more opportunities to pimp your profile, but Facebook showed that usually people do not want to spend time creating something themselves. When it was easy enough, everyone started to share what they had for lunch and started to also think that someone really cares.

Pinterest frees you from creating anything yourself.

In Pinterest you do not have to be a content creator, you just pin. You can grab whatever content you feel represents you and use it. No need to write even 140-characters or take photo. You are just a curator. Pinterest did to web services, what mash-ups did to music.

2. Visual learning and expression

The last centuries have been run by written word. Now we are moving more towards visual world, where we increasingly learn & get our information from visual sources. Pinterest is good example of it. Other main players in this change is Instagram (no wonder that Facebook bought it) and YouTube.

3.Interest-driven network

Underlying philosophy in Facebook is that we are defined by our social connections. Facebook works actively to blur all the lines of your different personas to merge it as one in their network. Pinterest on the other hand is build around our interests, which gives its huge opportunity for certain target groups. The great thing in the Internet was the opportunity to be something else or something more than your everyday self. Pinterest gives that opportunity back to us. If Facebook is reflection of who we are, Pinterest might be more of about what we want to be. Usually the hobbies tell much more about people than their CV.

The future succesful web services are build on the laziness and the self-obsession of the users.

Tagged , ,
Newer posts →