Recently the New York Times called Google Plus a ‘ghost town,’ and most marketers agree. I understand why. Even if you believe Google’s own user count (many don’t), Google Plus has only one-quarter as many global users as Facebook. Nielsen says that while Facebook users spend more than six hours per month on site, Plus users spend only seven minutes per month on site. Put simply, Google Plus isn’t the Facebook killer some hoped it would be.
But that doesn’t mean marketers should ignore Plus. Far from it: I believe every marketer should use Google Plus.
First, Google Plus has more users than you think. Yes, it pales in comparison to Facebook — but so do most other social sites. Rather than trust Google’s own user data, we decided to run our own survey. We asked more than 60,000 US online adults which social sites they used — and 22% told us they visited Google Plus each month. That’s the same number who told us they use Twitter, and more than told us they use LinkedIn, Pinterest, or Instagram. That means you can build a real follower base on Google Plus: On average, top brands have collected 90% as many fans on Plus as on Twitter. (In fact, the brands we studied have more followers on Google Plus than on YouTube, Pinterest and Instagram combined.)
Just four months later, the debate seems to be over. Is there any doubt now that Facebook has abandoned social marketing, and that its paid ad products aren’t delivering results for most marketers? Consider:
Marketers can now reach just 6% of their fans organically. When we published our research, some brands were surprised to find that Facebook only delivered posts to 16% of their fans. In December a leaked sales deck revealed that Facebook was telling marketers they should expect organic distribution of posts to decline further — but few could guess how far and how fast that distribution would fall. This month, Ogilvy released data showing that the brand pages they manage reach just 6% of fans. For pages with more than 500,000 fans, Ogilvy says reach stands at just 2%.
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.
If you work in social media, you've been hearing variations on a theme for the past week: Facebook is in trouble! It's lost young users! It's getting crushed by upstart social networks! Eighty percent of its users will disappear in the next few years!
But as was the case with Mark Twain, reports of Facebook's death are an exaggeration:
That Princeton report seriously misses the mark. Last week, two Princeton PhD students circulated a report predicting Facebook would lose 80% of its users by 2017. They used epidemiological models to predict that, like MySpace before it, both the rise and fall of Facebook would look like the spread of a virus. But the research wasn’t peer-reviewed, and wasn’t published in any journal, and you can perhaps see why. Facebook itself did a pretty good job of pointing out the limitations of the researchers’ methodology. And I see another problem with this study: The MySpace ‘virus’ hardly mutated in all the years it infected the world, but the Facebook ‘virus’ mutates frequently. One of Facebook’s greatest strengths is its practice of regularly adding new features and functionality to its site; this both ensures it infects new users and also makes sure existing users don’t become immune to its charms.
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.
How much stuff do you own? The answer for most people ranges from a few changes of clothing to a large house full of possessions – your material self. It turns out that most of us also have a digital self – the information and items we create or that others collect about us. It is your footprint, your impact on the digital world. Without a digital self, you don’t exist in the world of computers and the Internet.
The era of Internet has spawned riotous new forms of business disruption as cheap tools and services combined with Internet reach and social media have empowered anyone on the planet to compete with the largest, most established businesses. James McQuivey’s reports and book on digital disruption highlight the fast rise of new hardware devices such as Microsoft’s Kinect and Apple’s iPad, and the fast mainstreaming of new Internet services such as Dropbox, Twitter, and Facebook. Companies in the business of retail, books, movies, and music have been toppled or transformed, with more to come.
Our recent report on why Facebook is failing marketers has caused quite a bit of conversation — with some supporting our findings and others disputing them — and we think that’s healthy. We fully stand behind our data and our conclusions, and we welcome the chance to further discuss what’s working and what’s not working in social media. Conversations like these can only push the industry forward and help all social marketers and sites become more successful.
In particular, we wanted to address a few common questions people are asking about our research:
Facebook’s score didn’t look that low. Are they really failing marketers? Facebook offers marketers access to the largest audience in media history and it knows a remarkable amount about each of its users and their affinities. By all rights, Facebook should be driving significantly more value for marketers than other sites and channels — but according to our survey, they’re not. Forrester’s Data Center of Excellence has looked at this data many different times, through many different lenses, and every view of the data supports this conclusion.
I know this statement sounds remarkable, perhaps even unbelievable. After all, you offer marketers access to the largest audience in media history and you know a remarkable amount about each of your users. As a result nearly every large company now markets on Facebook. Last year your company collected more than $4 billion in advertising revenues.
But while lots of marketers spend lots of money on Facebook today, relatively few find success. In August, Forrester surveyed 395 marketers and eBusiness executives at large companies across the US, Canada and the UK — and these executives told us that Facebook creates less business value than any other digital marketing opportunity.
Why are business leaders less satisfied with Facebook than with any other digital tool? We believe there are two reasons.
First, your company focuses too little on the thing marketers want most: driving genuine engagement between companies and their customers. Your sales materials tease marketers with the promise that you’ll help them create such connections. But in reality, you rarely do. Everyone who clicks the like button on a brand’s Facebook page volunteers to receive that brand’s messages — but on average, you only show each brand’s posts to 16% of its fans. And while your company upgrades its advertising tools and offerings monthly or more, you’ve done little in the past 18 months to improve your unloved branded page format or the tools that marketers use to manage and measure those pages.
Earlier this year, we introduced the Database of Affinity: a catalogue of people's tastes and preferences, collected by observing their social behaviors, that could be the Holy Grail for more-accurate brand advertising. And since then two of the companies we featured in our research -- Facebook and Google -- have been working hard to realize this vision:
In June, Google introduced Affinity Segments -- a tool that allows marketers to target audiences based on the products and categories for which they've expressed preferences. We think Google has room to add more and broader affinity data to these segments, and to do richer analysis on that data. But Affinity Segments blends multiple signals into a single targeting tool -- which makes this an important step forward from the simplistic affinity targeting most social sites now offer.
More recently, Facebook built a team to analyze its affinity data. MIT Technology Review reports that Facebook has assigned eight people to its 'AI' team. Their goal? To address one of the key shortcomings we'd identified in Facebook's business: its inability to bring meaning to its data. It's always been clear that Facebook has one of the largest collections of affinity data online; we hope this move will help the company better leverage that data on behalf of marketers.
Facebook now has 819 million mobile monthly active users. That’s a huge audience. That’s actually 71% of total active users.
Yesterday, Facebook reported they generated 41% of total ad revenues via mobile. That’s pretty impressive considering they generated nearly 0% end 2011 when they had already 432 million mobile monthly users. Since the launch of mobile ads in 2012, Facebook steadily increased the share of mobile in total ad revenues: it was 23% end 2012 and 30% in Q1 2013.
There is still a monetization gap in comparison to the share of their mobile audience, but that’s definitely impressive for a new product.
There are a couple of reasons for this sharp increase. Time spent on Facebook is meaningful. Facebook’s mobile ads integrate well in the natural flow of Facebook’s news feeds. They are quite visible and are increasingly successful at driving mobile app installs. According to our European Technographics Consumer Technology Online Survey, Q4 2012, 16% of online adult smartphone owners (ages 16-plus) who use apps report that they first learned about an app via social networking websites such as Facebook. No wonder why the likes of Fiksu and other app boosters spent a lot of money on Facebook mobile ads. Cost per click increased despite a lot more clicks and ads shown.
For this approach to be successful in the longer term, there are a couple of key questions to be answered: