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Instagram’s growing importance as it cracks 700m users

By Adam Fraser

Instagram is truly motoring. In stock markets they often say “the trend is your friend” and the momentum is absolutely with Instagram at the moment.

The platform recently announced it had exceeded 700m users. It has almost doubled its user base in only 2 years, and its rate of growth is actually increasing when looking at the time taken to add each incremental 100m users:

  • October 6, 2010 – Launch
  • February 26, 2013 – 100 million;  28 months
  • March 25, 2014 – 200 million; 13 months
  • December 10, 2014 – 300 million; 9 months
  • September 22, 2015 – 400 million; 9 months
  • June 21, 2016 – 500 million; 9 months
  • December 15, 2016 – 600 million; 6 months
  • April 26, 2017 – 700 million; 4 months

As context, this is more than double the size of Twitter and more than four times the size of Snapchat.

Its importance as a social network continues to grow as it evolves, regularly adds new features and further encroaches on Snapchat’s territory, whilst maintaining its original value proposition as an easy to use and creative, thoughtful, visual environment. Users of Instagram stories alone have surpassed 200m thus exceeding the total user base of Snapchat, whilst its direct messaging platform Instagram Direct has over 375m monthly users.

Imitation may be flattery but Snapchat is starting to feel the pain of IP that can be easily copied.

The growing interest and focus on influencer marketing is closely tied to the world of Instagram. Commercially the benefits are flowing through to Facebook, with Instagram having more than 1m active advertisers.

As a marketer, this is a platform not to be ignored. Always mobile first at its core, it seems to have balanced the focus on its core value proposition, whilst innovating enough to remain fresh and interesting. In the hurly-burly of the fast moving digital world, it has somehow remained a calmer, and higher quality, content environment in stark contrast to the ‘buy now’, neon flashing lights characterised by so many other digital properties,

Whether thinking about social listening, social customer service, building brand equity or executing paid campaigns, Instagram deserves active consideration.

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A world of 5000 marketing technology tools

By Adam Fraser

It’s that time of the year again – when Scott Brinker aka chiefmartec.com releases “that infographic”.

The one summarising the martech landscape packed with tiny logos that you see at every marketing conference on the planet.

And 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.

To be precise – the landscape shows 5,381 tools from 4,891 vendors. Wow. From social media to newsletter marketing, ecommerce to CRM, all the subsections continue to grow.

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.

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, media fragmentation in a post internet world, the rapidly changing consumer buyer journey and constant technology innovation (as just one example think AI and chat bots which weren’t a “thing” 2 years ago and now are very much in play).

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 turbo charge 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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Social networks face measurement challenge

By Adam Fraser

Interesting times for the big guns in the digital media world.

As we entered 2017, Google and Facebook were increasingly dominant to the point of being labeled a duopoly in terms of digital advertising market share. It seemed they were untouchable.

Suddenly a few bumps are appearing in the road.

Facebook is coming off the back of a string of data measurement errors, some of them astonishingly material.

Google is in the midst of an advertiser backlash, as brands push back on their ads appearing alongside extremely distasteful content.

Suddenly the risks of programmatic and algorithmic decision making are becoming all too clear to brands – the low cost and ease of process comes with a lack of control and high brand risk that your ad may appear alongside inappropriate context.

Then one of the world’s biggest spenders, the CMO of Proctor and Gamble, sets an open measurement challenge to the big digital “walled gardens” – show us the metrics or we will pull our ads.

An industry-standard audience measurement by year end for the digital universe is a big goal, but if the major platforms don’t play ball, the risks of advertiser backlash grows.

As with the major colonial empires in history, is it at the peak of your powers that a dominant force becomes complacent and vulnerable? It’s always hard to see at the time, but perhaps the first signs of some very faint cracks are appearing for Google and Facebook.

The transparency and measurement issues for the digital publishing sector are certainly not going away.

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The rise of the micro influencer

By Adam Fraser

As content marketing was in the prior periods, Influencer Marketing seems to have been anointed as the “next big thing” in recent months.

There are a number of macro trends driving this, including media fragmentation, the rise of ad blockers (32% of US internet users will use in 2017) and declining trust in ads.

People may jump to the idea they need to engage major ‘stars’ like Kim Kardashian, Pewdie Pie or Taylor Swift in order to jump into Influencer Marketing.

However, a recent article from Venture Beat suggested that a more effective “bang for your buck” approach may be to target micro influencers. Defining micro influencers as anyone with a following of 10,000 – 1m followers, the article noted based on stats from a study from Markerly:

  • Micro influencers are 4 times more likely than macro influencers to get a comment on a post
  • Users with less than 1,000 followers get a comment 0.5% of the time versus 0.04% for those with 10m + followers
  • Users with less than 1,000 followers gets likes 8% of the time versus 1.6% for those with 10m+ followers

The study concluded that accounts with followers of 10,000-100,000 represented the best combination of engagement and reach.

The conclusion may be unsettling for marketers used to the reach/frequency simplicity of mainstream broadcast TV communication. Developing effective relationships with a large number of influencers is not easy. This is trench warfare. Hard work which doest scale in the way media buyers would prefer.

There are also subtleties and nuances to influencer marketing based on trust and the necessary transparency required about what is sponsored which dont exist for conventional advertising programmes.

Influencer marketing is new terrain, and the value provided from insights back to a brands from influencers (ie listening), rather than merely broadcasting out via them, should not be under-estimated. Not a topic often discussed based on the almost hard wired “broadcast out” start point for most marketers.

The game is changing. And this makes for uncomfortable times for brands and agencies alike. Legacy behaviour and vested interests are strong, but disruption is alive and well within marketing.

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Twitter Q4 results continue sideways trend

By Adam Fraser

Twitter has delivered its Q4 results, as always eagerly awaited and much analysed.

The key user trends are creeping up but overall the best you can probably say is that they have at least arrested their decline. Far too early to call a turnaround for a business that has never made a profit, The stock market remained unimpressed. The business has substantial cash in the bank but at some point needs to work out how to turn a profit.

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 grew slightly to 319m from v 317m last quarter (up 0.8%) and 306m a year ago (4.6% growth); the steady growth is encouraging but the pace remains insignificant compared to other social networks – Facebook continues to grow in the tens of millions while Twitter crawls in single digits
  2. 21% of Twitter’s MAUs (67m) are based in the USA; user numbers in the USA are broadly flat with the user growth coming internationally
  3. Attempts to drive greater engagement and more regular usage on the platform are working, with Daily Active Users growing at 11% on prior year v 7% last quarter and 5% in Q2
  4. Mobile MAUs were 83% of users, indicating Twitter sits in between Facebook ( 90%+ mobile users) and LinkedIn (approx 60% mobile users) for mobile penetration; note mobile products drove 89% of total ad revenue
  5. Revenue at $717m was 16% up on the prior quarter of US$616m and 1% higher than a year ago; ad revenue actually declined on a year ago, with data licensing income increasing
  6. The breakdown of revenue for the quarter was broadly consistent with recent periods, with 89% of revenue coming from advertising and 11% coming from data licensing/other (the ‘big data’ aspect has huge potential for Twitter). Video ads are the most popular and effective form of ads on the platform
  7. Tweet impressions and time spent on Twitter remained strong, each increasing by double digits on a year-over-year basis in the fourth quarter.
  8. Twitter made a loss of US$167m for the quarter but also discloses “adjusted EBITDA  which showed a profit of US$215m after adjusting for stock based compensation, depreciation and amortisation  Twitter ended the quarter with US$3.8bn in cash.
  9. In the fourth quarter, Twitter streamed more than 600 hours of live premium video from content partners across roughly 400 events, attracting 31 million unique viewers in its first full quarter of operations. Of these hours, 52% were sports, 38% were news and politics, and 10% were entertainment.
  10. The key strategic areas of focus in 2017 were identified as product changes to make Twitter safer, investing in core use case and product areas such as live streaming video, among others, simplifying and differentiating revenue products to drive sustainable long-term revenue growth and focusing on making progress toward GAAP profitability.

“2016 was a transformative year as we reset and focused on why people use Twitter: it’s the fastest way to see what’s happening and what everyone’s talking about,” said Jack Dorsey, Twitter’s CEO.

There is no question Jack as CEO has had a positive impact on the Twitter business. The shareholder letter shows a greater willingness towards transparency and the strategic focus is undoubtedly tighter. But Twitter was asleep at the wheel for some time as newer platforms such as Instagram and Snapchat stole its thunder. It still seems to be a great business utility seeking a sustainable commercial business model, and remains vulnerable to takeover at current stock market pricing.

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Review of 2016 (and some holiday reading and listening)

By Adam Fraser

Another year in the fast moving world of social media and digital marketing is coming to a close.

The pace of change is relentless. The social platforms are constantly changing and the media landscape continues to fragment and self disrupt at pace.

Blogging and podcasting weekly is challenging from a consistency and delivery point of view, but in this environment the topics to discuss are never in short supply.

A few blog posts and podcasts for you to review over the holiday season if you want to ponder the broader trends we have seen in 2016….

We saw Maccas in the USA dump their ad agency of decades and introduce a new incentive driven (and zero margin) business model for the incoming agency partner. Facebook continued to smash their results out the park, Twitter went sideways and LinkedIn got hoovered up by Microsoft. CMO spend on tech is now approaching that of the CIO, and podcasting continues to go from strength to strength. Vine is being sold off by Twitter and Blab and Google Hangouts shut down.

Podcast wise, I had so many great guests on it is hard to select a few highlights, but for variety if you missed any of these, you may want to check out global guests such as Robert Rose talking the state of advertising, Joe Pulizzi talking conferences and Scott Monty talking influencer marketing. Close to home, ex head of digital at Telstra Gerd Schenkel talked digital transformation, Clive Dickens talked the media landscape and Oliver Weidlich talking mobile user experience.

Finally I wanted to thank you for your interest in the EchoJunction blog and podcast. I hope you find it valuable and look forward to continue brining you both in 2017. Your attention and support is never taken for granted.

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Facebook survey highlights brand loyalty drivers

By Adam Fraser

Facebook publishes research based on its own data blended with external market research on its own Insights Blog “Facebook IQ”.

It produced some very interesting recent research via its survey on brand loyalty across several key marketing verticals.

In an era of almost infinite choice across so many product sectors, and with the clichéd image of Millennials as a group who will product hop on a whim, many may assume brand loyalty is almost dead and hence an out of reach goal for marketers to aspire to.

Not so says the survey, backed by interviews with 14,700 people across 5 different sectors (car insurance, airlines, hotels, groceries and restaurants). In summary brand loyalty is “thriving with rich opportunities for brands”.

5 of the most interesting insights from the study were:

  1. 77% of consumers are returning to the same brand, but the drivers vary between “brand loyalists” (37%) and “repeat purchasers” (40%). Significantly, brand loyalists have more emotional and experiential drivers such as trust and service while repeat purchasers focus more on utility factors such as price and convenience
  2. Millennials can potentially be as loyal to brands as baby boomers but face certain potential barriers unique to their generation – issues such as availability of healthy options and ease of communication with a brand are far more important to Millennials and hence can impinge on the desire to remain loyal more than for other demographics
  3. Whilst higher household income (US$150k plus) are 32% more likely to be loyal, customer experience is the key driver of loyalty across all income brackets
  4. Interestingly new parents are more likely to be loyal – 42% of New Parents describe themselves as loyal compared to 36% of non-parents.
  5. Regular users of Facebook and Instagram are 1.25 times more likely to be loyal to brands than non regular users of these platforms

The key theme of the research is consistent with something I have consistently blogged about and regularly discussed on my podcast – marketers need to focus more on customer service and customer experience to drive existing customer retention beyond the traditional obsession with new customer acquisition. Millennials specifically over index to brands they can easily communicate with (think social customer service); all demographics value customer experience as a loyalty driver (customer service is very often a key aspect of this).

It re-affirms my core belief that social listening and social customer service should be foundation pillars in any enterprise social media strategy.

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Content to Generate Links and Shares

By Adam Fraser

Some interesting new research from BuzzSumo looked at the question many marketers and publishers regularly wrestle with – what content can I produce to maximise the number of shares and links?
Social media marketers have tended to focus exclusively on shares, but links remains a very important aspect of SEO for google rankings.
The research is in-depth and worth reviewing; in summary, the 5 key factors to driving content which readers will want to share and link to are:
  • Authoritative content that answers popular questions, such as ‘what is ..?’
  • Strong opinion posts and political posts
  • Content that provides original research and insights
  • Content that leverages a trending topic but that also provides practical insights
  • Authoritative news content on new products or developments
Focusing on well researched, authoritative content which answers core questions among customers and readers makes intuitive sense (sadly much of what passes for “content marketing” at present does not meet these criteria with brands often being too sales-focused and dressing up pseudo advertising as independent content or publishing content outside their realm of expertise which the target audience has little interest in).
The research is impressive and provides good examples across each of the 5 areas demonstrating what has worked.
Behind this question (and the data) lies the core issue – generate content your customers/audience want, not what you want to produce (and as I have previously written, don’t waste time joining conversations you have no right to be a part of).

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5 key insights from Brandwatch social listening conference

By Adam Fraser

I was lucky enough to attend a recent conference run by Brandwatch in the UK – Now You Know Europe.

Brandwatch is the worlds leading social intelligence company (with whom EchoJunction partners in the Australian market) and the conference provided a fantastic update into both future developments in the Brandwatch platform as well as social intelligence trends more broadly and case studies of brands effectively using social listening,

So many insights in a jam packed 2 days, but my 5 headline take aways were:

  1. Social listening is maturing; in the early days it was all about tracking brand mentions (something which of course remains important) but the leading brands are now also using social listening as a form of market research to deepen understanding of customer insights and customer psychology. This could relate to the brand but also more general topics of consumer interest (eg buying a first home, drinking coffee, eating ice cream, 5G technology, Brexit etc). Some great case studies were presented around this.
  2. Image recognition is coming and will be an increasingly important aspect of social intelligence in the future. The entry level technology has arrived (but remains of limited value today) – the ability to bring up image recognition (eg brand logo) as well as valuable context is the challenge, and Brandwatch is planning on adding this capability to its platform in early 2017
  3. Social media is evolving to a more private environment (as I previously discussed) – a world of 1:1 or 1:few rather than everything being public. Clearly this represents a challenge for the industry as a whole.
  4. Never confuse correlation with causation – lots of sessions with big data analytics specialists dissected this topic and showed why high quality, specialised analytics capability is critical to extract maximum value from social intelligence
  5. Data merging – some of the best brand examples came where social data was being blended with other data – whether internal (eg sales, CRM etc) or external (e.g weather, political, economic indicators) to derive business insights of demonstrable value.

The Brandwatch blog has a much more detailed commentary around many of the presentations and I highly recommend you have a browse.

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10 Quick Facts About Twitter Q2 2016

By Adam Fraser

Twitter has announced its Q2 results to the stock market.

At a high level the company disappointed the market on lower than expected Q3 guidance and the stock fell 10% post the announcement.

If you want to dive into all of the detail, you can check the financials, investor presentation (also broadcast via Periscope!) and investor conference call. If you want the key highlights here are 10 key takeaways:

  1. Monthly active user (MAU) numbers grew slightly to 313m from v 310m last quarter (up 1.0%) and 304m a year ago (3.0% growth); the return to growth is encouraging but the pace remains insignificant compared to other social networks
  2. 21% of Twitter’s MAUs (66m) are based in the USA; user numbers in the USA are broadly flat with most of the user growth coming internationally
  3. Mobile MAUs were 82% of users, indicating Twitter sits in between Facebook ( 90%+ mobile users) and LinkedIn (approx 60% mobile users) for mobile penetration; mobile ad revenue was 89% of total ad revenue
  4. Revenue at $602m was 1% up on the prior quarter of US$595m and 20% higher than $502m a year ago; the market was expecting slightly higher
  5. The breakdown of revenue for the quarter was broadly consistent with recent periods, with just under 90% of revenue coming from advertising and circa 10% coming from data licensing/other (the ‘big data’ aspect has huge potential for Twitter). Video ads are certainly growing but generally cannibalising marketing budget from other types of Twitter ads
  6. Total ad engagements grew 226% year-over-year, an acceleration in growth compared to the prior quarter; the average cost per engagement fell 64% year-over-year, again primarily due to the shift to auto-play video
  7. Twitter made a loss of US$107m for the quarter but also discloses “adjusted EBITDA” which showed a profit of US$174m after adjusting for stock based compensation, depreciation and amortisation. Twitter ended the quarter with a healthy US$3.6bn in cash.
  8. Growth in Periscope is important and encouraging: a number of further features have been added in the quarter and the integration with the main Twitter platform is tighter now
  9. By product, Promoted Tweets with video is now Twitter’s single largest revenue generating ad format and remains its fastest growing ad format
  10. Twitter is preparing the launch of additional features and functions including accurate audience verification, reserved buying, and reach and frequency planning and purchasing

CEO Jack Dorsey stated “We’ve made a lot of progress on our priorities this quarter. We are confident in our product roadmap, and we are seeing the direct benefit of our recent product changes in increased engagement and usage. We remain focused on improving our service to make it fast, simple and easy to use, like the ability to watch live-streaming video events unfold and the commentary around them.”

Jack remains confident. With advertising demand softer than expected, the market is not so sure and the takeover rumours around Twitter may well start to surface again.

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