Peter O’Neill here. We had an interesting discussion with a Forrester client this year, a business unit that sells computer storage hardware and software. Focusing on just one of its major accounts, we asked how much storage the vendor had sold to that account. The number reported was impressive, and the vendor also felt it had a significant market share in that account based on its own addressable market analysis. Well, Forrester talks to marketing professionals and to the IT organization. So we researched the true spending on storage in that company. The actual spending on storage was well over three times the amount assumed by the vendor. There were many business initiatives in progress (ran by business executives, of course, not IT), to optimize business processes or improve their outcomes. All of these projects end up deploying technology including storage, but there is no actual storage purchase — that is “lost” in the project budget. The reality was that this vendor had a miniscule market share because most of the spending on storage technologies passed over its head.
The social advertising space is a rapidly growing and maturing category. Social advertising generates more than 85% of revenue for both Facebook and Twitter, and marketers’ spend is trending sharply upward. In fact, the vendor customer references I spoke with for this evaluation spent an average of $512,000 per month on social ads. However, the public social networks’ native tools are insufficient for enterprise marketers manage this spend. Vendors have responded with products intended to help marketers achieve outcomes that justify the effort and spend.
We define this category as:
Platforms that help marketers buy, manage, optimize, and measure ads on public social networks such as Facebook and Twitter.
These platforms are best used by marketers seeking to reach new customers who aren’t already aware of their offerings; they should be used alongside both TV and search ads as well as social reach tactics, such as influencer and advocate marketing.
We selected vendors that have a standalone social offering, a strong self-service platform, a critical mass of enterprise customers, and customers that spent more than $50 million on social advertising through the vendor in the 12-month period ending July 1, 2013. The best vendors help with analytics and measurement capabilities; measure beyond the social network's walls; and integrate social advertising with other reach tactics and types of ads.
Today, we published our new online retail forecast for Latin America, covering Brazil, Argentina, and Mexico (clients can read the report here). Driven by online retail revenues in Brazil, where the market is forecast to reach $35 billion by 2018, the region’s eCommerce markets will continue to surge. We see the following trends in Latin America:
eCommerce will continue its upward path despite slowed economic growth in the region. There has been significant coverage of the slowing economies in markets like Mexico and Brazil. However, as we saw in markets like the US and the UK during the recent global recession, eCommerce remains a bright spot even during challenging economic times. We expect to see online sales continue to increase at a rapid pace across Latin America, even though many countries are no longer seeing the high economic growth rates of recent years.
Some exotica for the end of the year: Yesterday I did an interview with the French publication NouvelObservateur on Google's recent robotics acquisition Boston Dynamics. Google has been acquiring robotics companies hand over fist during 2013, and it's quite a reveal of how they are planning for the Google of tomorrow - something of interest to almost every brand. Here is my short take:
Earlier this year, I spoke with Kathleen Cattrall, interim chief experience officer at VCA Animal Hospitals about the company’s customer experience transformation efforts. VCA is a publicly traded company (fittingly, its NASDAQ ticker symbol is WOOF) that owns and operates more than 600 pet hospitals in the US and Canada. Its work to create more customer-centric hiring processes features in my latest report, "How To Hire And Onboard Customer-Centric Employees."
Kathleen and her colleague Aaron Frazier were gracious enough to answer a few more questions about their progress in building a more customer-centric culture and what they’ve learned about creating great pet-owner experiences. Here are some of their insights.
Q. How did VCA know it needed to improve customer experience? Was there a “burning platform,” or did someone senior at the organization decide it was time to make a change?
A. Art Antin, co-founder and COO, was the real visionary here. VCA was approaching its 25th anniversary, and Art was frustrated with clients visiting less frequently. Our customer retention rate was lower than VCA wanted to see. Complaints were escalating, and they all pointed to a poor customer experience. Art said, “We’ve spent 25 years becoming the leader in veterinary health services. We’ve accomplished more than any other company in that regard. We need to focus the next 25 months on improving our customers’ experiences with us.”
Instagram’s ‘Instagram Direct’ announcement this morning left me speechless, as I followed the live feed (thank you CNET) from the West Coast. First, let me disclose that I am middle-aged. I’m 45 years of age. What does this mean? I remember AIM in the late nineties. I remember the days when chat sessions evaporated. I remember my first cell phone in 1997 and texting my friends – mostly in Europe at that time. The idea of communicating with people I know first and foremost is not new to me. It is very comfortable – more so than Tweeting or posting.
Bottom line: This is a “catch-up” move for Instagram.
1) Mobile phones have always been about communicating with friends and people we know. The magic of mobile phones early on was that a person’s phone number was their ID. It made it so easy to send SMS or MMS messages.
2) Instagram has 150M downloads, and half of their users are active daily. That is awesome. However, its competitors globally – Kakao Talk, WeChat, etc. – have two to three times that number. Apps like WeChat already allow users to share videos, photos, messages, cartoons, voice clips, etc. to individuals, groups, groups created around an event, etc.
3) Messaging will help them earn more mobile media minutes. I spoke with Chris Hill at Mobidia last week, and he shared some of their data on usage minutes. In their sample from mid-October, Kakao Talk had more than 200 minutes of usage per week, WhatsApp was just shy of 200, while Kik Messenger, LINE, and WeChat fell just below 100 minutes of use per week. If they were to post ads as a means of monetization, minutes spent is key.
Perhaps you’ve heard him in meetings — he is the one questioning your results. Perhaps you’ve seen him at his desk surrounded by tombs and tables in an effort to lower incremental sales calculations — he calls it reducing bias. Perhaps you’ve hoped he will not be assigned to your project — he delivers lower lift estimates than his peers. He is the measurement curmudgeon.
How do you detect if a measurement curmudgeon resides in your office? Listen for the following clues/questions:
Is that control group really comparable to the experimental group? Isn’t it biased toward less engaged customers and inflating your measured lift?
Wasn’t that concurrent with our fall promotion? Isn’t that event likely accounting for most of your positive results?
Haven’t sales been trending up? Did you incorporate that trend into your analysis?
Today we’re publishing two reports exploring the current state of online video advertising, one focused on US and Canada and a second on Europe. This is a piece of research Forrester has conducted periodically over the past five years, allowing us to map the growth of the medium as it has risen to become a major component of the marketing plans for many brands, and this long-term perspective has allowed us to identify both the good practices and the bad habits that have taken root in the practice.
Amongst the positive elements are:
Many publishers now take great care to ensure that video content on their site is presented in an uncluttered fashion. This is allowing marketers who’ve bought in-stream ads access to consumers without having to compete against a barrage of banners on the same page.
Publishers in the US are leading the way here in delivering ‘clean’ viewing experiences – The New York Times and USA Today are good examples of how to present video in a way that benefits both advertisers and consumers.
The adoption of interactive ad formats has also gathered pace, bringing new and engaging approaches to in-stream video ads and facilitating a break from a ‘TV-lite’ medium toward something with its own creative boundaries to play with.
Most of them are US startups initially backed by venture capital (VC). Some of them are now worth more than $1 billion; others are planning for an IPO; and a couple of them have been acquired for a lot of money while generating little (if any) revenue. Most originated in social media, in the collaborative economy, and pretty much all of them depend on mobile as a significant and growing part of their business. They represent the typical attendees at the LeWeb conference in Paris, looking to become the next Facebook or Amazon in the next 10 years. Some other smaller and less well-known startups competing in LeWeb's startup competition this year may join this list: http://paris.leweb.co/programme/startup-competition
In fact, what they really have in common is that they are all digital disruptors leveraging digital platforms to create new experiences on top of connected devices. They are taking advantage of open development tools and free infrastructure resources to overhaul products, invert category economics, and redefine customer relationships. They are more agile than traditional companies. As my colleague James L. McQuivey stated recently, digital disruption requires an organizational fix if you don’t want your company to be disrupted.