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Is time running out for Snapchat?

By Adam Fraser

Tough times for Snapchat right now.

The cool kid on the block a couple of years ago is somewhat losing its shine, as the realities of life as a listed company kick in. The market will fund potential and brand for only so long before the numbers have to actually justify the underlying market cap.

A few recent headlines tell you all you need to know. Forbes discussed  Why Snapchat’s Trainwreck Stock Will Never Have A Facebook Rebound, The LA Times this week reported  Snap is ‘quickly running out of money,’ analyst says. The stock slides to a new low and, on a recent Recode podcast, influential Professor Scott Galloway stated “I believe this company is going out of business… Snap will not be an independent company by the end of 2019.”

Ouch.

The stock price has hit an all-time low of $6.59, with a market cap of (a still massive) $8.4bn. Compare this to the day of its IPO in early 2017 when the stock price opened at $24.

So what’s spooking the market? Another recent Forbes article dissected this, identifying a number of key issues:

  • Snap’s daily users actually declined last results announcement, at 188m daily active users in Q2 vs 191m in Q1 (as the market likes to price social networks like media companies, any miss of market expectations in this area is harshly punished);
  • Fierce competition from other social platforms, particularly Instagram which now over 1bn users, thus impacting demand for Snap’s inventory (the ease with which other platforms’ were able to copy Snapchat’s stories feature has been hugely damaging);
  • Stock market analyst downgrades (a vicious circle as each feeds further negativity to the stock); and
  • Key senior exec departures.

It’s not all doom and gloom of course. Snapchat has a very loyal, very active and very attractive user base, and it is continuing to innovate, most recently announcing a range of new scripted exclusive shows for its Discover map. Snap is a distinctive brand in its own right, and notwithstanding the failure of its Snapchat Spectacles, there is clearly retail potential within the platform.

The issue is not whether Snapchat is a “good business” (on any measure developing a platform with close to 200m users is a notable achievement), more whether its decision to IPO at a nosebleed valuation will be its Achilles heel. As Twitter learned, the public glare of the stock market, bringing a quarter by quarter focus, can be an uncomfortable place for a ‘teenager’ business to grow into adulthood.

The jury is very much out as to whether Snap can make it to sustainable profitability as a stand-alone business. The smart money seems to be increasingly thinking a takeover looks likely in 2019, with Google and Amazon identified as “most likely”.

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CMO tenure trends highlight short termism challenge

By Adam Fraser

A common theme on both the EchoJunction blog and EchoJunction podcast over the last 12 months has been the issue of short-term tactical execution overriding the importance of long-term strategic planning and brand building, in the marketing sector.

On the podcast, Professor Mark Ritson talked about the ‘tactification’ of marketing, JP Hanson discussed the optimum balance for branding vs activation and former ANZ Bank CMO Louise Eyres discussed the challenge of internally managing board expectations around the long-term v short-term results.

An excellent recent article on the Rogue Marketing website on the tenure of CMOs pulled together some interesting stats and analysis very much pertinent to this topic. It’s an excellent piece, well worth a read, but the spoiler alert is simple – CMO tenures are declining, with Harvard Business Review reporting 57% of CMOs have been in their position three years or less and Korn Ferry data showing CMOs have the shortest average tenure of any role within the C suite.

If CMOs are lasting less and less time in their role, the opportunity for genuine long-term strategic planning and execution early diminishes.

The article explores possible drivers of this trend – CEO expectations, clarity of role description and a general lack of patience.

There are also a range of enterprise-wide issues in play here; culture, incentive models, change management, org structures to name just a few.

Whether a symptom or cause, the longevity of CMOs is a key issue for boards and CEOs to address if they truly want marketing to build strong brands for the long term, based on multi-year, rather than month to month, strategic planning.

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Why all marketers need to stop and think

By Adam Fraser

I have been lucky to interview some incredible industry leaders on the EchoJunction podcast in the 3+ years since I started producing it.

From leading professors to top CMOs and best selling authors, the range of perspectives has been fascinating.

However, the guest that has probably influenced my thinking the most is probably less well known – certainly less well known than he should be.

Richard Stacy is a UK based PR industry veteran turned social media author and consultant who tends to swim against the tide with provocative thinking. Richard is not contrarian for the sake of it – this is not what Seth Godin refers to as “set yourself on fire” type of attention. Richard’s ideas are based on a deep theoretical understanding of media history, marketing strategy and the technology landscape.

Richard doesn’t just explain what is happening, he dives into the why. You can listen to his fascinating perspectives on “hot marketing”,  big data and social media and privacy on the podcast.

Richard has previously authored a book – the brilliantly titled “Social Media and the Three Percent Rule: how to succeed by not talking to 97% of your audience”. Written in 2013 it still remains relevant today.

He has now released his latest “manifesto” – longer than a normal blog post but shorter than an ebook. We often use the acronym TLDR in social (too long didn’t read), however, I would dub this work TLMR (too long must-read).

This isn’t one to browse on the train in a hurry. Set aside a quality 45 minutes and dive into some heavy yet deeply insightful thinking on the future of marketing.

You can find “Stop and Think” here. Something all marketers should read and have a very deep think about.

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Martech merger activity continues

By Adam Fraser

An interesting period in the martech sector.

In a world of 6800+ marketing software offerings, there’s rarely a slow news week and the constant M&A activity is interesting to observe.

A few recent major transactions:

This is just a small selection which illustrates the diversity of trends and drivers:

  • Extension of new capability (Meltwater deal)
  • Deepening of existing capability (Spredfast Lithium deal)
  • Management consultancies further encroaching into land traditionally controlled by agencies (Deloitte deal)

If you are looking for a nice simple consolidation trend of “the big guys hoovering up the small guys”, then martech is not the place to search. There are many trends within trends and a mix of underlying dynamics at play.

Is the much talked about ‘broader consolidation’ of this space coming? The quote attributed to the first American winner of the Nobel prize in economics, Paul Samuelson comes to mind:

“The Stock Market has Predicted 9 of the Past 5 Recessions.”

Since the martech landscape from Mr ChiefMartec himself, Scott Brinker, hit 2000 participants in 2015 (it’s now at 6800+) people have been discussing (including Scott and myself on the EchoJunction podcast here, here and here!) whether consolidation is coming. And every year the landscape grows deeper and broader. Scott himself dug deep into the cycles of new entrants, mergers and failures within martech in this recent excellent blog post on the topic.

Predicting the future size of this sector feels like forecasting the stock market – tempting to do but difficult to execute. However, never a dull moment as the recent M&A activity illustrates.

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Facebook Q2 results – have we finally reached a tipping point?

By Adam Fraser

Blogging about Facebook’s quarterly results since they became a listed company had become somewhat monotonous, such was the consistent strength and predictability. Growing users, growing profits, impressive free cash-flow generation. Quarter after quarter. Copy/paste previous quarters blog and change the headline. Rinse and repeat.

The recent Q2 2018 results, however, seemed to mark a potential watershed, and the share price was smashed 24% as the results were released.

Don’t get me wrong, the headline numbers were still strong, but the market was spooked about the road ahead, rather than the rearview mirror. No doubt the recent Cambridge Analytica crisis, Mark Zuckerberg’s recent testimony to Congress and a range of other governance and privacy-related headwinds created a level of tension which did not help the market’s willingness to be forgiving. Sell now, ask questions later.

To the numbers. If you want to dive into the details, you can find the financials, investor presentation and management conference call. For those without the time to review all of the details, here are 10 key points from the results:

  1. Monthly active users reached 2.23bn from 2.20bn last quarter (1.7% growth) and 2.01bn a year earlier (11.4% growth).
  2. Daily active users hit 1.47bn from 1.45bn last quarter (1.5% growth) and 1.32bn a year earlier (11.0% growth).
  3. An interesting quote from Mark Zuckerberg on security: “Looking ahead, we will continue to invest heavily in security and privacy because we have a responsibility to keep people safe. But as I’ve said on past calls, we’re investing so much in security that it will significantly impact our profitability.”
  4. During the quarter, Facebook launched two ad transparency tools; one to let anyone see the ads any page is running – even if the ads are not targeted at the person – and the other, an archive of ads with political or issue content starting in the US, ready for the midterm elections.
  5. For the first time, Facebook released how many people use at least one of their apps – Facebook, WhatsApp, Instagram, or Messenger – which was 2.5 billion people each month.
  6. Total revenue was $13.2bn versus $12.0bn in the prior quarter (a 10.6% increase) and $9.3bn a year earlier (a massive 40.9% growth), generating a net profit of $5.1bn, in a single quarter!
  7. Facebook has a reasonably balanced global spread with just under 50% of revenue coming from the USA and Canada, a ratio that has remained reasonably consistent over the past 4 quarters.
  8. Average revenue per user was $5.97 vs $5.53 last quarter and $4.73 a year ago. Note, revenue per user is significantly higher in the USA/Canada ($25.91), compared to Europe ($8.76) and the Rest of World ($1.91).
  9. Facebook ended the quarter with a cool $42bn in cash, enough to buy both Twitter and Snapchat!
  10. Some interesting other soundbites: over 200 million people are now members of meaningful groups on Facebook, Instagram active users now exceed 1 billion and mobile ad revenue was $11.9 billion (a 50% increase year-over-year) making up approximately 91% of total ad revenue. Also, over the next five years, Facebook is focused on building out its business ecosystem around messaging on WhatsApp and Messenger.

Nothing too much wrong with the actual historical results, but management flagged slowing growth rates going forward as well as further risks from GDPR regulation which led to the savage share price reaction.

As Twitter has learned, news around share price declines can create a brand reputation challenge which can then loop back into actual consumer attitudes and behaviour towards the platform.

With the privacy genie finally out of the bottle, a sense of declining consumer trust and regulatory headwinds, the waters seem far choppier from here than they have done for some time. The network effect (“I have to be on there because everyone else is there”) is a wonderful thing on the upside but delivers a savage, brutal impact on a business when it goes into reverse.

For the first time in a long time, people are openly saying Facebook may have hit a tipping point and could be in serious decline. For a business still valued at $US500bn+, that’s a big (and early) call but the headwinds are real and the risk is tangible. Interesting times.

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15 quick facts from the Yellow Social Media Report 2018

By Adam Fraser

The Yellow Social Media Report 2018 has been released. It’s a report I look forward to as, as I have previously discussed in 2017, 2016 and 2015, there are lots of stats about global social media usage, but limited stats specific to Australia. Previously branded as the “Sensis Social Media Report” this year Yellow get the naming rights for what is, in my opinion, Australia’s preeminent report on social media usage and habits.

1,516 Australian consumers were sampled this year (increasing from 800 in the prior year) with the survey shifting from a telephone to online methodology. For the purposes of the report, the term social media refers to platforms such as Facebook, Google+, LinkedIn, Twitter, Instagram, as well as online blogs and online rating and review mechanisms. A separate report covered business use of social media.

There are stats and insights aplenty from the report, but here are 15 highlights for those without the time to read all 47 pages of the detailed document:

  1. Almost nine out of ten Australians are now on social media. Penetration is up to 88% (from 79% in 2017 and 69% in 2016) of Australians, an incredible growth rate when many would possibly assess social as having hit maturity,
  2. Sixty percent of Australians use the internet more than five times a day. The average number of internet-enabled devices owned is 3.5.
  3. Smartphone penetration is 87% which compares with 76% for laptops, 59% for tablets and 52% for desktop computers.
  4. The two most popular times for social networking are in the evening (61%) and first thing in the morning (59%).
  5. The top four reasons users highlighted for social networking are to catch up with family and friends (85%), to share photos or videos (46%), for news and current affairs (36%) and to watch videos (32%).
  6. Nearly all social media users access it at home (94%) with the lounge or living room (78%) and the bedroom (58%) being the two most popular areas of the house where people use it. The toilet was mentioned by 20%!
  7. Almost two-thirds use social media while watching TV and this occurs across a range of genres with news, current affairs and reality shows mentioned most. Almost one in three discuss the program on social media whilst viewing. Only 5% primarily watch free-to-air TV replays via social media.
  8. More than nine in ten (91%) social media users are on Facebook, accessing the site 37 times a week for 16 minutes each time on average. This translates into an average of nearly 10 hours a week on Facebook (same as indicated in the 2017 survey).
  9. Facebook Messenger is used by 79% of social media users, 28% have used Facebook Live to watch live or recently recorded videos with 9% publishing their own live video. Forty-four percent have published videos or pictures via the story function on Facebook (35%), Snapchat (16%) or Instagram (16%).
  10. YouTube is the second most popular social media site with usage at 53% ahead of Instagram (39%), Snapchat (23%), LinkedIn (22%), Pinterest (22%), Twitter (19%) and Google+ (13%).
  11. Users of Instagram and Snapchat access these sites almost as much as Facebook users access that site – respectively 33 and 36 times weekly on average. Instagram users have many more friends, contacts or followers than Snapchat users – 241 on average compared to 93.
  12. The proportion of users follow a social media group associated with a brand or business is 44% (Instagram 44%, Facebook 39%); the types of brands most likely to be followed operate in the fields of holidays/travel/accommodation, entertainment, music and movies/TV shows. The benefits most desired by those who follow brands or businesses are discounts (62%) and giveaways (51%).
  13. Social media consumers are inclined to believe it impacts negatively on their privacy, sleeping, concentration, productivity, patience, grammar and spelling.
  14. Twenty-three percent use social media for retail research. Items most likely to be researched via social media are movies / TV shows (66%), holidays / travel / accommodation (65%), entertainment (63%) and clothing / fashion items (60%).
  15. Over two-thirds of consumers read online reviews and blogs (68%) averaging eight before making a purchase decision.

This is a thorough, professional and comprehensive piece of research on the Australian social media landscape. Having prepared the research since 2012, it is also a good indicator of trends over time. Well worth a read and a great reference doc.

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Top 100 brand survey highlights tech dominance

By Adam Fraser

Jeff Bezos, the founder of Amazon, once said, “Your brand is what other people say about you when you aren’t in the room.”

I am fascinated by the concept of branding, and the emotional drivers which make consumers pay premium pricing for a product or service and have explored branding, brand valuation, and brand strategy on my podcast.

Hence the annual Forbes Top 100 Brand Survey (alongside others) always piques my interest. Forbes values brands (with a US presence) on their financial merits instead of consumer surveys (more details on their precise methodology here). The Top 10 brands were:

  1. Apple $183bn
  2. Google $132bn
  3. Microsoft $105bn
  4. Facebook $95bn
  5. Amazon $71bn
  6. Coca-Cola $57bn
  7. Samsung $48bn
  8. Disney $47bn
  9. Toyota $45bn
  10. AT&T $41bn

Apple topped the list for the 8th year in a row and remains the primary example of brand strength via its ability to generate massive profits through premium pricing and seemingly insatiable demand for its products around the globe.

Some interesting trends within the survey:

  • For those that argue “brands are dying” – the cumulative value for the top 100 brands was $2.15 trillion, up 10% on the prior year
  • Six out of the Top 10 were technology businesses and it was the most featured industry sector (20 of the top 100)
  • Bigger Gainers: Netflix (35%), PayPal (33%), Amazon (31%), Google (30%), Facebook (29%)
  • Biggest Declines: Gillette (-11%), H&M (-8%), ESPN (-8%), HP (-6%), American Express (-6%)
  • New Entries In Top 100 vs. 2017: Volkswagen (#90), RBC (#94), Uniqlo (#96), PayPal (#98), Dell (#99), KFC (#100)

Whilst the concept of brand value (an emotionally driven concept) is always subject to debate and varying methodologies, and the Forbes survey focuses on pure financials as opposed to consumer-based input, an interesting and useful reference point for monitoring trends in major brands’ strength and relative valuation.

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Sprout Social Index highlights what consumers want from social

By Adam Fraser

Long-term readers of this blog will know I am a big fan of research reports into the media and marketing landscape but in particular, those that actually focus on what consumers want (rather than what brands think they want).

Hence I like the approach of the Sprout Social Index 2018 report which asked more than 2,000 social marketers how they approach structure, goals and content, their priorities and what they need to do their best work but then cross-referenced their efforts against what consumers actually want.

Probably no surprise that the report found a disconnect between what consumers want and what brands are providing.

Sprout found that the top three priorities for social marketers are posts that teach something (61 percent), posts that tell a story (58 percent) and posts that inspire (53 percent).

Meanwhile, the top three things that consumers are looking for are discounts or sales (72 percent), posts that showcase new products or services (60 percent) and posts that teach something (59 percent).

Social customer service featured prominently in the report.

  • 88 percent of social marketers understand the importance of customer service via social media.
  • 45 percent of consumers had reached out to companies via social media.
  • For those consumers, 57 percent had questions for the company, 45 percent had issues with products or services and 34 percent wanted to commend the company on their product or service.
  • 21 percent of consumers are more likely to buy from brands they can reach on social and 21 percent said they would rather talk with a brand on social platforms than call.

The report summarised “this tells us that social customer service has a financial impact and is swiftly becoming the consumer’s preferred care channel”.

Having previously talked often about brands listening first before shouting about their own brilliance, I also very much liked this paragraph in the intro:

“People spend time on social, first and foremost, to interact with family and friends. As brands put together campaigns and messaging, they must remember that they are guests at dinner, not members of the nuclear family: their role in user feeds is delicate, valuable and should be treated with great care.”

The report is packed with lots of other facts and insights on the social media landscape today and is a very useful reference point.

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Instagram looks to expand video offering

By Adam Fraser

Never a dull moment in the fast-moving media landscape of 2018.

Any sense of having media providers and technology companies pigeonholed in a certain slot is repeatedly rendered outdated as the clean boundaries of previous decades continually evaporate.

One minute Disney is partnering with Netflix, then it is bypassing it. Snapchat began as a messaging platform before effectively bolting on a pure media offering with its Discovery module. Pinterest has evolved from social network to a discovery-focused pseudo search engine. Foxtel launched an SVOD offering to mimic Netflix. The list goes on.

So Instagram’s (rumoured) plans for long-form video shouldn’t really come as too much of a surprise.

Is this Instagram taking on YouTube or Snapchat? Or both? A platform just for influencers or will this evolve to long form, high production quality Netflix style content? Time will tell.

Facebook’s supposedly seamless move to add “Watch” has proved it isn’t as easy as it looks – even for a company of the scale and financial might of Facebook – to “become a TV producer”.

Whilst Instagram has historically been arguably the most skilful of the social networks in evolving its offering without alienating its core user base, there are no guarantees this will be a successful move. But clearly the scale and loyalty of its user base give it a reasonable shot.

Time will tell but this is yet another reminder of just how fragmented and dynamic the media landscape remains.

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10 key insights from Mary Meeker’s 2018 internet trends report

By Adam Fraser

The time is upon us again. LinkedIn and Twitter go into something of a meltdown as one of the tech industry’s most eagerly awaited powerpoint decks – the 2018 Internet trends report from Mary Meeker – is released.

At 294 slides it is a truly deep dive into a number of uber internet trends. Not for the faint-hearted or those looking for a quick sound bite and headline – think more encyclopedia than breakthrough insight – it remains a fantastic (free) resource for anyone performing analysis in the tech sector.

I would encourage everyone to take the time to review the detailed deck, but if you (understandably) don’t have the time to browse 294 slides, here are 10 key takeaways:

  1. Global internet users continue to grow (now 3.6bn), although the rate of growth is slowing (7% vs 12% on the prior year); internet users will reach half the global population in 2018.
  2. Global smartphone shipments were flat year on year, appearing to have hit maturity. Interesting to compare this to 2014’s growth of 28% and 2015’s 10% growth.
  3. The time spent with digital media per adult in the USA continued its steady consistent growth over recent years, up 5% to 5.9 hours/day (as a comparison this was 4.3 hours/day in 2012 and 3.0 hours/day in 2009), with the majority of this time now spent on a mobile device.
  4. Google’s machine learning voice accuracy now exceeds 95%, which is basically in line with the equivalent human accuracy. Amazon Echo’s install base now exceeds 30m, representing rapid growth on the prior year.
  5. Technology companies now represent 25% of the US stock market’s collective market cap, approaching the previous peak level of 33% experienced during the dot combook of 2000.
  6. E-commerce revenues continue to grow, but still represent only 13% of total retail revenue (a surprisingly low number, two decades into the internet revolution), with Amazon’s growth leading the way.
  7. Social media is increasingly driving product discovery. 78% of Facebook users (Instagram 59%, Pinterest 59%) discovered products on that platform, 55% of the consumers who discovered a product on social media then made their purchase online, while 6% of all referrals to e-commerce sites came via social media.
  8. Uber retail trend: consumers are increasingly renting/subscribing and not buying – examples of growth were Netflix, Spotify, Dropbox, NY Times, LegalZoom and Peloton.
  9. The macro growth in internet advertising continued (up 21% versus 22% last year), noting mobile advertising spend is still “underweight” versus its share of time spent across media types (representing a $7bn opportunity).
  10. Key technology disruption drivers noted were cheaper computer storage and processing power, plus rising and cheaper connectivity, facilitating easier data sharing.

Other sections of the report covered healthcare, population density, the future of work, data gathering, personalisation, AI and China, in some detail.

Well worth the time for a detailed review, and an excellent reference point for reliable and trustworthy data points that may be useful in a range of other content analytics use cases.

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Twitter Q1 results deliver second profitable quarter

By Adam Fraser

Twitter has delivered its Q1 2018 results, producing another profitable quarter that has built on its first-ever quarterly profit from 2017. Whilst Twitter results announcements are always something of a mixed bag, growing monthly users and encouraging revenue trends were key positive aspects.

The headline profit clearly impressed the market, with the share price jumping on release, although this optimism waned a little following the earnings call.

If you want to dive into all of the detail, you can check the financials, investor presentation, shareholder letter and investor conference call. If you want the key highlights here are 10 key takeaways:

  1. Monthly active user (MAU) numbers were 336m, up6m from the prior quarter and an increase of 3% from 326m a year ago.
  2. 21% of Twitter’s MAUs (69m) are based in the USA, up1m on the prior quarter. Most of the user growth came internationally (267m v 262m in the prior quarter).
  3. Attempts to drive greater engagement and more regular usage on the platform continue to be effective. Daily Active Users grew at 10% on the prior year (interestingly the company still does not reveal the absolute number of DAUs).
  4. Total ad engagements increased 69% year-over-year, resulting from increased aggregate demand, continuing mix shift toward video ad impressions, and improved CTR, which grew on a year-over-year basis across the majority of ad types based on improving ad relevance.
  5. Video now accounts for more than half of Twitter’s ad revenue, and was the fastest growing ad format in Q1, with strength across in-stream pre-roll and mid-roll ads, FirstView, Video Website Cards and Video App Cards.
  6. Revenue at $665m exceeded market expectations and was up 21% on the same quarter of $548m a year ago.
  7. The breakdown of revenue for the quarter showed 86% of revenue coming from advertising and 14% coming from data licensing/other.
  8. Twitter made a GAAP profit of $61m for the quarter (vs $91m profit in the prior quarter); it also discloses “adjusted EBITDA which showed a profit of US$244m after adjusting for stock-based compensation, depreciation and amortisation  Twitter ended the quarter with US$4.5bn in cash so the “Twitter is Dying” narrative isn’t backed by balance sheet evidence.
  9. Live video remains a key focus. During Q1, Twitter announced approximately 30 new live-streaming, highlight, and VOD partnerships, including a deal with Fox Sports for a unique live FIFA World Cup recap show and highlights of every FIFA World Cup goal, MLB for live games and highlights, MLS for live games and highlights, and People TV for a new nightly interactive live series called “Chatter”. In total, the platform streamed approximately 1,300 live events throughout the quarter, with 68% of those reaching a global audience.
  10. In Q1 Twitter continued to make it easier for people to follow topics, interests, and events on Twitter, via curated timelines of Tweets around breaking news events in different parts of the app, including the Home timeline and search results.

“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter CEO. “We grew our audience and engagement, marking another quarter of double-digit year-over-year DAU growth, and continued our work to make it easier to follow topics, interests, and events on Twitter. We also introduced a new framework to think more cohesively about the issues affecting our service, including information quality and safety. This holistic approach will help us more effectively address these challenges by viewing them through the broader lens of the health of the public conversation, and we’re encouraged by our initial progress in this area.”

The market cap of Twitter has now bounced back to around $25bn (as a proxy, Snapchat is now down to $13bn), and there seems to be a broader optimism around its strategy and focus since Jack returned as CEO.

Never a dull moment with Twitter, will continue to watch the business with great interest.

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Wetherspoon’s social media move highlights brand-centric perspective

By Adam Fraser

As widely reported and discussed, in mid-April the major UK pub group Wetherspoon’s closed all of its social media accounts, covering its Facebook, Twitter and Instagram handles.

As a high profile business, making a controversial, somewhat contrarian move, the strategy invoked wide-ranging discussion.

Wetherspoon’s founder and chairman quoted a number of reasons for the decision, including:
  • He had always thought the idea that social media was essential for advertising was untrue
  • The increasing amount of time spent by staff dealing with social media messages
  • Concerns about the security of data
  • The unhealthy social media “compulsion” of many customers
  • He was not convinced that being on social media sites brought any commercial benefit to the business

In summary, as headlined in this article in the UK Standard, “We’re quitting social media as its a waste of time”.

The company’s PR advisor chimed in that he wasn’t a fan of Twitter – “Give me a 200-word story in The Sun or The Times any day over a tweet.”

Many commentators applauded the move, focusing on the challenge of creating content, or the weakness of the marketing use case for a pub group.

Instinctively the focus was on the megaphone – shouting at customers, reach and frequency. Brand-centric – what can social media do for ME? How can WE drive more sales?

The customer-centric view was largely forgotten. What do our customers need from us? How can we enhance the customer experience? The value of social listening to understand customer feedback and broader attitudes and sentiment. Answering customer queries on social media in real time on a channel of their choice. Listen and respond. Two ears and one mouth.

The overall commentary around the Wetherspoon’s decision was largely positive. I wonder how it would have differed from the lens of “Wetherspoons drops all focus groups and stops answering the phone”.

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Facebook Q1 results – a rearview mirror perspective

By Adam Fraser

The quarterly blogger routine. Facebook announces results. Change the headline from last quarter’s blog post. Look for new ways to describe the strength of financial and operating numbers without it looking like a copy paste job from three months earlier. Publish.

Suffice to say it was another extremely solid set of quarterly results from Facebook.

However, unless you have been living under a rock, you would know the context is very, very different this time. Facebook is in the midst of a privacy/data sharing crisis in relation to Cambridge Analytica, third-party access to its user data and its overall vetting model relating to both content and ads. The rearview mirror reflects the undoubted strength of its market-leading operating position, but will it be plain sailing from here? For the first time in a long time, the jury is out on this one. Some say nothing much will change, others predict an awakening of consumer consciousness to all things privacy and a material decline in user numbers and engagement (as well as possible impacts on margins, based on increased costs from higher manual content review processes). And of course, the threat of regulation looms large from a number of angles, following Mark Zuckerberg’s recent testimony to Congress.

Firstly, to the numbers. If you want to dive into detail, you can find the detailed financials, investor presentation and management conference call. For those without the time to review all of the detail, here are 10 key sound bites from the results:

  1. Monthly active users reached 2.20bn from 2.13bn last quarter (2.8% growth) and 1.94bn a year earlier (13.4% growth).
  2. Daily active users hit 1.45bn from 1.40bn last quarter (3.4% growth) and 1.28bn a year earlier (12.9% growth).
  3. A fascinating quote from Mark Zuckerberg on the changes coming in the future: “We are going through every part of our relationship with people and making sure we’re taking a broad enough view of our responsibility – not just to build tools, but to make sure those tools are used for good. This means continuing to invest heavily in safety, security and privacy.”
  4. Consistent with its commitments announced in recent quarters, Facebook is doubling their team on security and content review to more than 20,000 by the end of the year. This includes content reviewers with specific language skills to detect hate speech.
  5. Between WhatsApp and Facebook Messenger, people now send almost 100 billion messages every day. They also do more than 3 billion minutes of video and voice calling every day, making the Facebook group by far the largest network for video calling.
  6. Total revenue was $12.0bn (exceeding market expectations) versus $12.9bn in the prior quarter (a 7.8% decline, noting the seasonal factor) and $8.0bn a year earlier (a massive 49.0% growth) – generating a net profit of $5.0bn (reminder – in a single quarter!).
  7. Facebook has a reasonably balanced global spread with just under 50% of revenue coming from the USA and Canada. While a ratio that has remained reasonably consistent over the past 4 quarters, the share from the USA is showing early signs of decline.
  8. Average revenue per user was $5.53 vs $6.18 last quarter and $4.23 a year ago. Note, revenue per user is significantly higher in the USA/Canada ($23.59) compared to Europe ($8.12) and the Rest of World ($1.68).
  9. Facebook ended the quarter with a cool $44bn in cash, enough to buy both Twitter and Snapchat!
  10. Some interesting random stats: 200 million people are now members of meaningful groups on Facebook. More than 80 million small businesses around the world are using Facebook Pages. Mobile Ad revenue was $10.7 billion (up 60% from last year), contributing approximately 91% of total ad revenue. Over 18 million businesses are now communicating with their customers through Messenger.

Note, mobile usage of Facebook has now become so prevalent that Facebook no longer separately discloses mobile users. While it did, the number of users accessing via a mobile device was consistently over 90%

With revenue growth, user growth, strong margins and consistent cash flow, this is another powerful set of quarterly results. The rate of growth inevitably slows at the scale Facebook finds itself, but for now, the cash cow continues to produce.

However, there are some troubling lead indicators abound. A respected survey showed a declining use of Facebook in the USA for the first time. Some sort of regulation seems inevitable. The overall impact of GDPR on the business remains uncertain. Relationships with the developer community are also in flux in the current climate.

For a business of this scale and might, it would be a brave man to “call the top” and predict material declines from here. Yet, with the privacy genie finally out of the bottle, and regulatory headwinds, the waters seem choppier from here than they have done for some time.

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Martech landscape expands to over 6800 tools

By Adam Fraser

Scott Brinker, aka chiefmartec.com, has released his annual infographic into the marketing technology landscape (the one you see at almost every marketing conference on the planet with the tiny logos jammed in, that tends to get a “that’s insane” reaction).

Incredibly, it keeps getting larger and more complex. From 2,000 tools in 2015 to 3,500 in 2016, up to an amazing 5000+ in 2017 when the “Martech5000” was born. However, 2018 has gone up a notch again with an incredible 6,826 tools from 6,242 unique vendors. Wow!

From social media to newsletter marketing, e-commerce to CRM, all the subsections continue to grow. As one stark data point –  the size of the 2018 landscape is equivalent to adding all of the martech landscapes assembled from 2011 to 2016 together.

I was lucky enough to have Scott as my very first podcast guest back in April 2015. Even back then – in a world of “only” 2,000 tools – we discussed the complexity of the market and whether consolidation was imminent. We discussed this again on the podcast in 2017 as we hit 5,000+ tools, exploring why consolidation was still seemingly not on the horizon.

It should be noted that the raw landscape doesn’t accurately reflect the sizes of the different martech companies. If they were to be organised by valuation, it would illustrate a classic long tail; a handful of multi-billion dollar giants in the “head,” quickly tapering out across a very long “tail” of thousands of smaller firms.

There are a number of drivers of this breadth and complexity in the marketing technology landscape – including (at a high level) low barriers to entry in a cloud-driven world, media fragmentation in a post-internet world, the rapidly changing consumer buyer journey, constant technology innovation and increasing private equity interest (2017 was a record year with over $14 billion invested in the sector).

The landscape is divided into subcategories. The largest category —  the category with the greatest number of vendors — this year was Sales Automation, Enablement & Intelligence, with 490 solutions. Salestech is a big thing!

One final (also mindblowing) data point – the average enterprise uses over 1,000 cloud services, led by 91 in the marketing function. The world of the API – and stitching together best of breed solutions – is alive and well.

If you are feeling utterly overwhelmed by this landscape and what it means for marketing and IT professionals please know you are not alone! The basic premise remains – strategy first, technology second. Focus on your business objectives and your marketing strategy and execution. Then, and only then, start to think about how technology can enable and potentially turbocharge your business processes.

People, process and technology. A three-legged stool. In almost all cases the technology decision should come last not first.

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Search outstrips social in inbound web traffic

By Adam Fraser

With an ongoing focus on shiny new toys and the “next big thing”, discussion on good old-fashioned search/SEO doesn’t seem to garner the share of voice and attention I always suspected it warranted within the marketing community.

Some new research from Shareaholic provides a fascinating and somewhat stark data point – Search has now overtaken Social (again) as the leading inbound traffic generator for websites.

The Shareaholic Traffic Report looks at externally referred traffic from 400+ million users to over 250,000 mobile and desktop sites. The data reveals “share of visits,” a percentage of overall traffic via direct traffic, social referrals, organic search, paid search, etc. The size of websites in the study varies from less than 1,000 monthly unique visitors to over one million.

Since 2014, Search had been behind Social in the share of visits but retook the lead in 2017, with the top 6 search engines driving 34.8% of site visits in 2017, compared to 25.6% from the top 13 social media sites.

Some key takeaways from the report were:

  • The key driver of the declining social referral traffic was Facebook’s algorithm changes which led to a massive 12.7% decline in Facebook referral traffic from the same period a year ago.
  • Users are spending less time on Facebook in general, and, when on there, more time on video and live streaming content which is less likely to link out to other pages.
  • Within the overall decline of social referral traffic, Pinterest and Instagram increased their traffic generation, with Twitter and YouTube broadly flat (note search within Pinterest is becoming increasingly important).
  • Google, in particular, benefited from the changes in social traffic; their dominant market share within search allowed them to reclaim their spot as the number 1 overall traffic referrer.

US thought leader Jay Baer wrote an interesting blog post on the four key reasons driving the decline in social referral traffic versus search, with the algorithm changes – particularly at Facebook – very much key.

This is an important data point and a reminder that Search should not be forgotten when assessing the marketing mix.

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