Why Did Facebook Buy WhatsApp? Dwindling Supply Of Options To Grab Hundreds Of Millions Of Users ... That Are For Sale

Julie Ask

That's one reason ... but here are a few more .... 

1. 450M active users (Source: NY Times)

2. Adding 1M users daily

3. 70% of MAU use the service daily (Source: TechCrunch)

4. WhatsApp offers users in Europe, Brazil and other emerging markets (= net new audience) (Source: Gravity/Techcrunch)

5. Nearly 200 minutes of usage each week (Source: Mobidia)

6. Facebook gets how to monetize mobile through paid advertising without wrecking the user experience. (In Q4 2013 they crossed over from 49% of revenue from mobile to 53% from a base of 945M mobile monthly active users) Source: Facebook, TechCrunch

 

Why $16B to $19B? I am not a financial analyst, but here are a few thoughts:

- Facebook generated $1.37B in mobile revenue in Q4 2013 on a base of 945M users ... annualized that is $5.80/MAU (monthly active user)

- WhatsApp already generates $1/user for a chunk of their users through a subscription fee (less fee to app store?)

- If WhatsApp users can be monetized at the same value, that adds another 50% approximately in mobile ad revenue

- Facebook reported 914 minutes of use on mobile per month in 2013 (Source: allthingsd.com)

- According to Mobidia, only Kakao Talk has more

- WhatsApp is already located in Si Valley

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Three Steps To Combat Elusive Mobile KPIs And Demonstrate Performance

Jennifer Wise

First, the good news: Mobile marketing is maturing within organizations. More marketers than ever have mobile programs in place, and they are shifting from testing to “see what happens” to the more strategic, and Tim Gunn-recommended, “make it work.”

Now for the bad news: Marketers have to demonstrate whether their mobile programs are, in fact, working. And in a still-evolving industry that lacks measurement standards, coupled with marketers who are just starting to measure strategically, this is no easy task.  

But it can be done! Our advice to marketers is this: Start by benchmarking against yourself. Here are the three steps to help you set the right baselines:

  1. Set up a mobile dashboard. You’re going to need a clear view of your data to develop consistent measures. And for mobile, this requires a feature-rich dashboard with the right level of granularity. What does your mobile dashboard need to have? New filters like operating system (OS) and app version, new data sources like app review sentiment, and cross-channel measurement capabilities to demonstrate mobile’s full impact.  
  2. Establish your baselines. So many variables impact the success of any one company’s mobile program — from its stage of mobile maturity to its audience to the campaign's creative. To make sure you land on the right baseline for your company, create a measurement plan that defines which KPIs matter for your goal and what the right frequency of tracking is based on the longevity of the program or introduction of new factors.
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Mobile App Developers: Stop Capturing Unnecessary Data Before Regulators Stop You

The findings presented in an article by German magazine Computerwoche published on Feb 11, 2014, are a forceful reminder that messages about excessive data capture via mobile apps seem to have gone unheeded so far.  As reported, tests by TÜV Trust IT established that “almost one in two mobile apps suck up data unnecessarily”.

What’s “unnecessary” of course depends on your viewpoint: it may seem unnecessary to me if my mobile email app captures my location; the provider of the app, on the other hand, could be capturing the information to provide me with a better service and/or to make money from selling such data to a third party. The trouble is that I don’t know, and I don’t have a choice if I want to use the app. From a consumer perspective, this is not a satisfactory situation; I’d even go as far as calling it unacceptable. Not that it matters what I feel; but privacy advocates and regulators are increasingly taking notice. Unless app providers take voluntary measures, they may see their data capture habits curtailed by regulation to a greater degree than would otherwise be the case.

Let’s step back a moment and consider why so many mobile apps capture more data than is strictly speaking necessary for the functioning of the app:

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Just Let Me Fling Birds At Pigs Already! Thoughts On The Snowden/Angry Birds Revelations

Tyler Shields

“But until a person can say deeply and honestly, 'I am what I am today because of the choices I made yesterday,' that person cannot say, 'I choose otherwise.'” 

― Stephen R. CoveyThe 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

"Privacy is a decision best left in the hands of the professionals."

- Tyler Shields, Senior Analyst Forrester Research

This posting is in reference to the recent Snowden revelations that mobile applications are a conduit for governments to spy on citizens. New York Times article HERE.

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Native Advertising: Worth Pursuing

Ryan Skinner

Forrester analysts are encouraged to “make the call” and here’s a call that is sure to invite some heated disagreement (native advertising has a way of doing that).

Today my report about native advertising came out and, if I had to bottle up the recommendation of the entire report in a two-word slogan, this would be it: Worth pursuing. That’s not “pour all your advertising dollars into it”, “go hog wild!” or any variant on that theme. By “worth pursuing”, I would say that it: a) is a very imperfect tactic, b) holds great promise, and c) requires some experience to get right.

(First of all, if you’re not sure what native advertising is, quickly go here [definition] or here [examples]).

Let’s start by assessing the promise of native advertising. What’s so great about it?

From a marketer’s perspective, the opportunity to go from a position “next to the show”, “interrupting the show” or “between the shows”, to “part and parcel of the show” is extraordinary. The church/state editorial wall that media outlets have trained advertisers to respect has become porous, and it’s the outlets themselves who are pounding holes in it (most recently, the New York Times). That change should not be underestimated.

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Predictions 2014: Mobile Trends For Marketers

Thomas Husson

My colleague Julie Ask and I revisited our predictions for 2013's mobile trends and found that all of them are still evolving and relevant in 2014.

During 2014, we’ll pass a key milestone: an installed base of 2 billion smartphones globally. Mobile is becoming not only the new digital hub but also the bridge to the physical world. That’s why mobile will affect more than just your digital operations — it will transform your entire business. 2014 will be the year that companies increase investments to transform their businesses, with mobile as a focal point.

Let’s highlight a few of the mobile trends that we predict for 2014:

  • Competitive advantage in mobile will shift from experience design to big data and analytics. Mobile is transformative but only if you can engage your consumers in their exact moment of need with the right services, content, or information. Not only do you need to understand their context in that moment but you also need insights gleaned from data over time to know how to best serve them in that moment.
  • Mobile contextual data will offer deep customer insights — beyond mobile. Mobile is a key driver of big data. Most advanced marketers will get that mobile’s value as a marketing tool will be measured by more than just the effectiveness of marketing to people on mobile websites or apps. They will start evaluating mobile’s impact on other channels.
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Another Year In Review: Revisiting 2013's Mobile Trends

Thomas Husson

Every year for the past few years, I've revisited our predictions for the previous year's mobile trends. It's now time to look back at 2013 and, specifically, at the 2013 mobile trends post I put together a year ago with my colleague Julie Ask.

So many things happened in 2013, making it difficult to sum up the year overall. BlackBerry’s struggle and Microsoft’s acquisition of Nokia devices offered apt symbols for the end of the old mobile era. However, the mobile war is far from over. Following marketers’ integration of mobile into the mix, many vendors started to acquire mobile expertise, technology, and resources — and those acquisitions are far from over. Players like Facebook that acknowledged their past mistakes and turned into mobile-first companies managed to generate significant revenues; mobile now represents more than 40% of Facebook's ad revenues.

Let’s take a look at some of the key trends we highlighted last year. We expected that:

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Despite Impressive Growth, Facebook Is Facing Mobile Ad Challenges

Thomas Husson

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:

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29% Of Online Ad Spend In The US Will Be From Mobile By 2018

Michael O'Grady

Mobile ad spending is finally taking off. The Forrester Research Mobile Advertising Forecast, 2013 To 2018 (US) predicts that mobile ad spend (smartphones plus tablets) will represent more than 29% of the total online ad spend in the US by 2018. The forecast looks at mobile device ownership in the US, trends in device usage, and mobile advertising supply-side data to fix the current and future market size for display, search, and social spending.

The drivers behind this take-off of mobile ad spending are:

  • Increased device ownership, particularly of tablets. Smartphone installed base growth in 2012 was more than 35%, while tablet installed base growth exceeded 120%. By 2016, tablet sales will overtake the sales of desktop and laptop PCs.
  • The intensity of online tablet use. Despite tablets representing less than 30% of the mobile device market in the US, they represent more than 40% of total mobile page views. In addition, the majority of tablet users watch video on their tablet, compared with about a third of smartphone users.
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The AppGratis Controversy And The Mobile App Discovery & Promotion

Thomas Husson

AppGratis is a French app promotion and discovery platform startup that was recently ejected from the App Store on the grounds that it violated Apple’s developer T&Cs. Back in September 2012, Apple tweaked its developer guidelines, adding a clause that states: “Apps that display Apps other than your own for purchase or promotion in a manner similar to or confusing with the App Store will be rejected.”

Simon Dawlat, the CEO of AppGratis, shares his vision in great detail here and explains why he thinks the ban is totally unfair. Even France’s digital industry minister, Fleur Pellerin, has spoken up in support of AppGratis, describing Apple’s actions as ”extremely brutal, unilateral, and without explanation,” and calling on Cupertino to “behave ethically.“ Natasha Lomas at TechCrunch fairly and exhaustively summarizes the whole story here.

Without going into the legal details here, one may argue that there is a blurring of the line between app discovery and app promotion. I personally viewed AppGratis as a traffic booster based on curated app discovery experiences. I think it definitely helped gain some initial visibility in app stores, but I think app developers and publishers still needed to measure the customer lifetime value and make sure their audiences would stay engaged.

Anyway, the AppGratis controversy highlights the growing dependency from publishers and developers to Apple and Google in the app economy.

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