I’ll be curious to hear if there is a business strategy update, but I don’t think we’ll have more insights on what “unbundling the big blue app” really means. I think one possible option is that social data and contextual identity will be the layer on top of Facebook’s new social conglomerate.
I personally will be looking more specifically for an update on mobile app installs. There's no doubt that Facebook has disrupted the app marketing space by becoming a key player in app discovery — which is the key driver behind its mobile ad revenues.
A growing and significant part of this business comes from direct marketers looking to drive app installs, primarily from gaming and other businesses that are increasingly dependent on mobile, such as travel and retail companies. These players know the lifetime value of their apps and have calculated how much they can spend to drive each app download and still have a positive return on investment (ROI). But marketers in more-traditional businesses or who are pursuing other marketing goals should pay close attention to the unique attributes of their mobile social users and optimize their social strategies to engage them.
Messaging apps have the potential either to become digital platforms or to significantly enhance the power of current platforms because they so clearly deliver the three things that determine digital platform power: frequent interactions, emotional connection, and convenience. WeChat is for example already morphing into a digital platform offering, thanks to the deep pockets of its parent company, the Chinese Internet giant Tencent.
While today’s opportunities are limited by consumers’ reluctance to engage with brands on such intimate channels and by immature marketing tools, it is definitely time for marketers to experiment and to anticipate the next steps.
Indeed, you’ve surely heard of the second-largest acquisition in tech history, Facebook’s purchase of WhatsApp for $19 billion. However, you may not have heard of KakaoTalk, Kik, Line, Secret, Snapchat, Tango, Viber, or Whisper.
These messaging apps are the new face of social in a mobile context.
Contrary to social media that are generally public broadcast mechanisms that facilitate one-to-many communications, a messaging app is a typically private, one-to-one or one-to-few communication and media tool optimized for mobile. Such smartphone apps can access your address book, bypassing the need to rebuild your social graph on a new service. As Evan Spiegel, the CEO of Snapchat, puts it, “We no longer capture the real world and recreate it online – we simply live and communicate at the same time.”
By now, you've surely heard of the second-largest acquisition in tech history, with Facebook acquiring WhatsApp for $19 billion.
However, you may be less familiar with other messaging apps like LINE, KakaoTalk, KIK, Nimbuzz, SnapChat, Vibes, Whisper, and many others.
If you think messaging apps are just a free way to communicate, you’re missing their potential: They are Mobile’s Trojan horse, as explained by my colleague Julie Ask here.
Messaging apps are mushrooming.They illustrate perfectly the age of the customer, which Forrester defines as a new business era where your customers are now empowered through social, mobile, and other technologies giving them the power to disrupt your business. Why? Because they are mastering the four key market imperatives Forrester has identified as critical to differentiate in the age of the customer:
■ Transforming the customer experience over SMS and other messaging tools. Messaging apps offer differentiated and seamless experiences over SMS and other mobile communication tools. For example, they offer advanced group messaging functionalities, multimedia features, constant innovation, and ability to opt-in or follow brands at consumers’ convenience. They are now morphing into marketing platforms redefining social media.
Facebook, the social media giant that has already made a large dent in the mobile ad ecosystem, today showed it has no plans to stop the momentum: Welcome, Audience Network.
Before today, there were already several factors working in Facebook’s favor: its reach among avid social users, its engaged and captive audience, and its trove of affinity data, which my colleague Nate Elliott talks more about in his blog post here.
After its Audience Network announcement today, Facebook is breaking the application of its tools and its data out of its own silo, and this could benefit several players:
Other developers and publishers could make more money by offering Facebook data-infused mobile ads.
Advertisers can dip into Facebook’s rich affinity data to target their ads across other mobile properties.
And of course, Facebook itself just extended its potential revenue base and faces a new competitive set with the likes of Google AdMob and MIllennialMedia.
A lot of people have been talking about Facebook’s new Nearby Friends feature for their mobile app, which gives users the ability to see which friends are nearby. But less discussed, and perhaps just as significant, is another change — to a more contextually-relevant Facebook profile.
In the past, when you checked out other users’ profiles, you would see the same static information including their profile photo and links to their friends and “about” pages. There were two problems with this. First, the information is rarely updated, so it becomes stale. Second, if you don’t know the person, it takes a bit of digging through their pages to find out if you know them or have anything in common.
The Facebook iPhone app’s recent update addresses these concerns by taking a contextual approach. Specifically, it presents more personalized and dynamic information, such as whether you and this person share any mutual friends, whether you happen to live in the same city, and what the friend has been up to recently. The app also prioritizes this information, so it’s one of the first things you see after you click on a user’s profile.
In fact, we’ve seen this trend in mobile apps — the best apps are moving away from static web-like experiences and are delivering more personal, relevant content, fast. In my report, "The Best And Worst Of Mobile User Experience," I found that leading mobile user experiences share common attributes that separate them from the pack. These leading experiences:
The vast majority of Facebook and Twitter usage is coming from mobile devices, and both companies generate a significant proportion of their revenues via mobile ads (53% for Facebook and more than 70% for Twitter end Q4 2013).
Facebook is splitting into a collection of apps (Instagram, WhatsApp, Messenger, Paper, etc…) and likely to announce a mobile ad network at its F8 developer conference in San Francisco in a couple of days. While failing brand marketers, according to my colleague Nate Elliott, Facebook is increasingly powerful at driving app installs for gaming companies and performance-based marketers who have a clear mobile app business model.
Facebook today announced a new optional feature– the ability to see which friends, or friends within a created group, are nearby. The social network is smartly looking to better serve its members who have made the mobile mind shift, expecting to get what they want in their immediate context and moment of need. In this case – knowing when a friend is nearby.
Prviacy will be a concern with this feature, but users are protected by opt-in’s and by only mentioning how close someone is, not their specific location. Connecting directly in person requires a number of steps including messaging and permission. A few thoughts:
1) This isn’t original, but Facebook has a better shot at success than the original services.
About 10 years ago, Sam Altman started a company called Loopt that he sold about two years ago to Green Dot for $43.4M. It started out as friends connecting, but eventually needed to make money. Mobile advertising wasn’t a big market 10 years ago – in fact, it is still somewhat small today. But Facebook has two key advantages now: first, they have more than one billion users so they don’t have to recruit (and many of my friends will already have the app on their phone). Second, they don’t have pressure to make money near term. Facebook will win if even 5% or 10% of their members adopt.
Google acquired Nest for billions, and then Facebook spent several more billion on Oculus VR. We’re only a few months into 2014, and already billions have been spent by some of the world’s largest digital players, with each of these companies eager to own the next big thing. Mobile is right here, right now, but everyone knows that very soon, there will be something else. But what else?
In the battle to find and claim the next device that everyone will want, these companies will soon realize that next big thing is not a thing at all: It’s your voice.
Voice control suffers from the same things plaguing augmented reality or virtual reality: It has been around for so long that we think we know what it is. Any fan of Star Trek: The Next Generation knows that voice control involves invoking an invisible computer with a command, “Computer,” followed by a query, “How many Klingons does it take to screw in a light bulb?” Maybe that’s a question you don’t want the answer to, but the computer — as voiced by Majel Barrett in the TV series — would know it.
It’s possibly a long history of popular depictions of voice control that made us collectively show so much enthusiasm for Siri when Apple first debuted it in 2011. It’s also partly to blame for why we quickly turned on Siri, declaring her soothing semi-robotic tones to be merely amusing at best or irrelevant at worst.
When Microsoft recently announced its long-rumored Cortana voice service for Windows Phone 8.1 as a catch-up to both Siri and Google Now’s own voice interface, the interest was modest, perhaps because if Siri hasn’t changed the way millions of Apple users use millions of Apple devices, how can Microsoft initiate a wave of behavior change when it has so few Windows Phone users?
Facebook’s purchase of WhatsApp shows that the market for messaging is far from dead. But it’s just gotten worse for the telcos. We’ve already discussed the underlying reasons in a report — but the fact that Facebook put $19 billion on the table, of which $4 billion is in cash, for a global messaging service with 55 staff should scare telcos, with their millions of employees and high-cost structures. Over-the-top communications tools like WhatsApp, Line, KakaoTalk, WeChat, and Viber (which itself was bought a few days ago by Rakuten) have pushed telcos further and further away from any meaningful customer engagement.
To be sure, WhatsApp is about much more than instant messaging; it’s about content sharing — which is an emotional activity. Such emotional activities are critical to closer customer engagement. As the online giants use ever more granular user analytics to cement their position as marketing powerhouses, telcos’ hopes of developing new revenue streams from analyzing user behavior are slipping away faster and faster. This is what makes the deal so dangerous.
Of course, it’s tough to justify the deal simply on the basis of WhatsApp’s revenue model of $1 annual subscriptions. In my view, the deal is really about:
Bringing a major competitor into your family. Otherwise, someone else could have lured WhatsApp into theirs. The deal, which accounts for about 10% of Facebook’s market capitalization, could be seen therefore as an insurance cover.
This week, Facebook announced its rollout of auto-play advertising videos – starting with a teaser for the upcoming movie Divergent. The video ads automatically start playing, without sound, when they appear. Users can click on the video to view it with sound or scroll past it if they aren't interested.
Video definitely has the future. In a blog post by my colleague Michael O’Grady last year, he revealed that video was the fastest-growing digital content category. The Forrester Research Online Display Advertising Forecast, 2013 To 2018 (Western Europe) shows that European Internet users spent 68% of their online time in 2012 watching online videos, and we expect more than 90% of the online population to watch online video regularly by 2017. As a result, video advertising will account for a third of total display advertising spend in 2018.