My colleague Nate Elliott and I have been thinking about the Facebook IPO. Our thoughts:
The world’s biggest social network will complete its initial public offering in a few days, with a valuation based largely on its strong history of innovation. But we have to wonder: Will Facebook ever focus any of that innovation on helping marketers?
After all, Facebook is fantastic at introducing great new features and services for its end users. The moment another social tool gains the interest of enough users – whether it’s Twitter’s rapid public chatter or Foursquare’s location-based check-ins – Facebook updates its own site to offer similar features to its legions of users. We’ve rarely seen a company borrow from its competition as quickly or as well as Facebook. And that focus on better serving end users has seen Facebook grow quickly over the years, even in the face of consistent privacy concerns.
We listened to marketers of the world’s biggest brands when they asked, “What’s the impact of Facebook on my brand?” and we decided to take a look for ourselves. We proudly present our latest research, “The Facebook Factor.” In the report, we answer the pressing question, “How much more likely are Facebook fans to purchase, consider, and recommend brands, compared with non-fans?” We used logistic regression modeling to find out. The impact? We call it the “Facebook factor,” and I urge you to read the report to find out how you can leverage our methodology to assess the Facebook factor for your brand.
In the report, we use four major brands as case studies to assess the Facebook factor for Coca-Cola, Walmart, Best Buy, and BlackBerry(Research In Motion [RIM]). Guess what? Facebook fans are much more likely to purchase, consider, and recommend the brands that they engage with on Facebook than non-fans. As the graphic below shows, Facebook fans of Best Buy are about twice as likely to purchase from and recommend Best Buy as non-fans.
I've been hopscotching Europe this week, seeing clients and colleagues in London and Istanbul — but my thoughts have been in Los Angeles, where in a couple of weeks I'll be giving a speech called "Taking Social Media From Cool To Critical" at the 2012 Forrester Marketing Leadership Forum.
I chose that topic because it’s a concern I hear almost every day — and sure enough, I heard it from several clients on my travels this week. "We’ve put time and resources into social media marketing, because it seemed like we had to, but . . . it’s just not having much of a business impact." By comparison, four or five years into the era of search marketing, most companies were making a killing from their SEM programs. The same goes for email marketing. But here we are four or five years into the era of social media marketing — and for many companies, social media is still a curiosity, a sideshow that attracts lots of interest but adds little value. It's still cool, but at most firms, it's just not a critical part of the marketing plan.
I think the main reason marketers still struggle to make social pay is simple: They overestimate social media as a marketing tool. Let me be clear: I'm not bashing social's value for marketing; social media can have an enormous impact on the success of your marketing programs, as we’ve seen time and time again. The point I'm making is that it can’t create that success all on its own. You need to use it as merely one tool in your marketing tool kit.
Around 60,000 global movers and shakers of all things mobile once again descended upon Barcelona to attend the leading annual mobility event, the Mobile World Congress (MWC). This year’s main themes centered on metadata analytics, the customer experience, and over-the top business models:
The big data opportunity fueled the fantasies of almost all MWC attendees. In the case of telcos, data analytics is seen as the driver for improving the customer experience and developing new markets. Telcos talked a lot about the opportunities of analysing user behavior and turning user data into the new operator currency. The context- and location-aware nature of mobile solutions makes the big data opportunity particularly attractive. However, despite the talk, there were practically no case studies of operators that have succeeded in monetizing data on a large scale. Progress regarding data monetization is slowed down by a lack of clear business models, but also by an OSS/BSS infrastructure that does not support real-time or near real-time analytics. Moreover, privacy concerns also act as a drag on the uptake of data analytics. Equipment vendors such as Nokia Siemens Networks, meanwhile, showcased their customer experience management and analytics solutions for telcos. The solution combines analytics and the actions that operators must take to correct or improve the end user experience, such as a level one call handler pushing the correct settings to a phone or a marketing manager setting up a marketing campaign.
The online registration page has always been a necessary evil. Despite the obvious need to collect customer information online, 11% of US adults have previously abandoned an online purchase either because they didn't want to register online or the site they were visiting was asking for too much information. Many websites make it downright difficult to register, with seemingly endless input fields, complex password requirements and even annoying captchas all conspiring to make the process of buying online incredibly frustrating. To put this in context, a retailer with $200m of annual online revenues could be leaving a further $22m on the table simply due to the complexity of the registration step in their checkout process. But this is old news. For years eBusiness professionals have obsessed with optimizing the registration process, using A/B and multivariate testing to try and find the right balance between collecting enough customer information and exasperating their customers.
However, the days of optimizing the registration process may be fast coming to an end. In fact the playbook on customer registration tactics is being completely rewritten as a new and increasingly familiar button takes hold across the web:
It seems everyone’s obsessed with Facebook’s IPO right now. And while CMOs are beginning to understand the possibilities of Facebook, and other social technologies, to connect and engage with customers, many CIOs remain unclear on the value of Facebook.
A question many business executives ask is this: “What’s the value of having someone like your page?”
On its own, maybe not much. But the true potential lies in the ability to collect insights about the people who like brands, products or services – be it your own or someone else’s.
For example, the chart below shows the percentage of consumers by age group who have “liked” Pepsi or Coca-Cola. These data suggest Coca-Cola is significantly more popular with 17-28 year olds than Pepsi, while Pepsi appears more popular with the 36-70 crowd. I pulled these data points directly from the Facebook likes of each of the brand pages using a free consumer tool from MicroStrategy called Wisdom. Using this tool I can even tell that Coca-Cola fans are likely to also enjoy the odd Oreo cookie and bag of Pringles.
Plenty’s been written already about Facebook’s IPO filing yesterday. I won’t rehash the many excellent analyses that you’ve surely already seen.
Instead, I want to take this blog post into thought-experiment territory. I want to think about a world in which Google and Facebook are primary competitors in a mano-a-mano battle—not just for our eyeballs, but for our data, too. For the right, as it were, to be our “digital identity.”
Over the holidays, my mother—67 year old tech-accepter, Kindle-owner, smartphone-avoider—called me into the office to show me her Facebook newsfeed. “How,” she asked, “do they know that I’m interested in Persian classical music and that I live in Los Angeles?” As I was explaining behavioral targeting and computational advertising, I glanced over at the computer, only to see her click through and order tickets from that Facebook ad.
So I asked, “Do you trust Facebook?” To which she replied, “Of course not!” as she entered her credit card number, home address, and email address for a very spendy concert ticket.
“Do you trust Google?” I asked. “More than Facebook, I suppose,” she answered. “But Facebook shows me stuff I like more often than Google does.”
That experience, plus a brainstorm with my colleagues on the Customer Intelligence team here at Forrester got me thinking: What if, as a consumer, you had to choose between Facebook and Google? Which service is more valuable to you? Which will BE more valuable in the future? I decided to compare the competitors (and let there be no mistake—Facebook’s S-1 filing very clearly identifies Google as Enemy No. 1) across the dimensions of Forrester’s customer engagement cycle:
After two days of very well done presentations from the Bazaarvoice team, observers of the social space and some business leaders, I come away from the Bazaarvoice Social Summit with a few thoughts:
Generally, the big theme was that use of ratings and reviews by eBusiness pros continues to deepen and add value to overall business success. We heard from Argos, Urban Outfitters, J&J, Xerox, Adobe, Best Buy, Rubbermaid, P&G, LL Bean, 3M and Estee Lauder. All of these businesses showed how they have fully embedded the use of ratings and reviews content throughout their businesses. For example, improved product data gained from ratings and reviews content is sent to all customer touchpoints such as the call center, POS, etc., at Argos; Rubbermaid realized from review content that people don’t read packaging and found that products didn’t perform well when consumers didn’t use the product as directed, so it changed the packaging and the product collateral and thus set expectations more in line with the intended use of the product and now have highly satisfied customers. And the examples like this continued throughout the conference. Look for our coming snapshot report showing some other examples of how eBusinesses continue to mine this valuable content to drive business results.
The world of hyper scale web properties has been shrouded in secrecy, with major players like Google and Amazon releasing only tantalizing dribbles of information about their infrastructure architecture and facilities, on the presumption that this information represented critical competitive IP. In one bold gesture, Facebook, which has certainly catapulted itself into the ranks of top-tier sites, has reversed that trend by simultaneously disclosing a wealth of information about the design of its new data center in rural Oregon and contributing much of the IP involving racks, servers, and power architecture to an open forum in the hopes of generating an ecosystem of suppliers to provide future equipment to themselves and other growing web companies.
The Data Center
By approaching the design of the data center as an integrated combination of servers for known workloads and the facilities themselves, Facebook has broken some new ground in data center architecture with its facility.
At a high level, a traditional enterprise DC has a utility transformer that feeds power to a centralized UPS, and then power is subsequently distributed through multiple levels of PDUs to the equipment racks. This is a reliable and flexible architecture, and one that has proven its worth in generations of commercial data centers. Unfortunately, in exchange for this flexibility and protection, it extracts a penalty of 6% to 7% of power even before it reaches the IT equipment.