Should Marketers Check In To Location-Based Social Networks?
Location-based social networks (LBSNs) have been all over the media lately. Foursquare hit 2 million users. Twitter launched, revamped, and re-launched Places. CNNMoney partnered with Gowalla around its popular annual “100 Best Places to Live” list. There’s even a social experiment -- PleaseRobMe -- that was started in response to the hype around this new social sharing technology. So it’s no surprise that we’ve been getting a lot more questions from marketers lately about these services. Marketers want to know who’s using these services, how often they’re using them, what they’re using them for, how marketers can get involved, and whether they should.
We dug into our research to try to answer these questions, and at a high level what we found is that just 1% of US online adults are using LBSNs weekly, while 4% of them have tried them at least once. The sample size of this 1% of adults who use LBSNs regularly is small, so our findings on their behaviors are directional only, but our research shows that these users are typically young, male, well-educated, and influential. In fact, LBSN users are 38% more likely than the average US online adult to say that friends and family ask their opinions before making a purchase decision.
Apple reinvented the distribution of products and services on mobile phones, opening up direct-to-consumer opportunities for nontelecom companies. The numbers look impressive — more than 5 billion downloads and $1 billion paid to developers in the two years since the launch of the Apple App Store.
However, it also generated $429 million for Apple itself in two years. These revenues are not meaningful to Apple’s core revenues. Due to the limited number of paid apps and their significant concentration among games and navigation apps, it is likely that a significant number of independent developers have not recouped their investments via the current revenue-sharing model. The recent launch of iAd is a way for Apple to maintain the attractiveness of its platform, allowing third parties that provide free apps to develop sustainable business models.
But, despite all the hype around apps, only a minority of consumers download them monthly. A recent Forrester survey of more than 25,000 European adults shows that only 4% of all mobile users and 15% of smartphone users report downloading apps at least once per month. However, the fact that 21% of all European mobile users consider apps to be an important feature when choosing a new mobile handset highlights the large gap between today’s limited usage of apps and consumer awareness and interest.
The application store market is still nascent, but it is evolving quickly. However, in the longer run, few players will be able to address the key factors that will make them a success:
Most companies are now building a social media strategy, with a presence on Facebook, Twitter and/or YouTube. At the same time there's much debate over the value of a "Facebook fan." In this whole discussion I was wondering which consumers are most likely to become fans of a brand. Our Technographics survey data shows that about 13% of European online adults have become “fans” of a brand, company, or product they liked recently. About 10% were interested in interacting with companies through social media but haven’t done so yet. The first group we called “brand fans,” the other “aspiring brand fans.” How do the two compare?
Aspiring brand fans have a more mainstream online profile: Half of them are male, and they are older in general. Brand fans, on the other hand, are more likely to be female, and two-thirds are younger than 35 years old. And 20% of these Europeans who are fans of a brand say they are more likely to recommend the brand that they are “friends” with to their network of friends over any other brand. And this is exactly where the value of the Facebook fan lies. As my colleague Augie Ray said in his blog post: "Facebook fans have little actual value until they are activated by the brand."
This is a phenomenal week to be covering the publishing industry. Tuesday, Apple released its quarterly earnings. Big surprise, another record-breaking quarter for the folks in Cupertino. A few billion here, a few billion there, blah, blah. How amazing is it that we're not really surprised by such overperformance in an otherwise still-troubling economic environment? Of great interest to me, the eReader guy, was the final iPad tally for the quarter ending June 26th: 3.27 million units worldwide. Still no good guidance on what the US split is, but no matter how you slice it, iPads are hot. (And, no, I still have not bought one, still holding out for iPad 2.0).
And if you follow the implications of that success, as many in the media have, Amazon should just concede the eReader business, pack up its cream-colored Kindle and go home, right?
Wrong. And to prove it, Amazon made a point of announcing some news of its own, the day before Apple's results were public. Amazon flaunted its own success in selling both Kindle devices and eBooks. That's right, despite that iPad upstart, the Kindle is still flying off the shelves, selling more units each month than the month before it all through Q2, when the iPad challenger was supposedly pummeling it. And it's dominating the eBook business as well, selling as much as eight in ten of the eBooks of major bestsellers, seeing its eBook sales rate triple over last year. Oh, and Amazon indicated it sells 1.8 eBooks for every hardback book it sells. That's right, even though it discounts hardbacks to paperback prices for many bestsellers.
I recently sorted through just shy of 2,000 inquiries that Forrester analysts completed from insurance industry clients, from a grim Q1 2009 through the cautious optimism at the end of Q1 2010. Along with the insurance inquiries, I also looked at what was on the minds of bankers and the Global 500 segment during the same period.
What jumped out was how different the character of questions from insurers was from the other two segments and how differently each segment (and role!) of the financial services market navigated the economy over these five quarters. So what’s the Reader’s Digest version?
I booked my first hotel night via a mobile device a year ago.
I didn’t even think about the fact that it would be considered an “mCommerce” transaction, as I simply booked it directly on the hotel group’s Web site via the browser of my mobile phone. The site wasn’t actually optimized for mobile devices, but it was possible to enter my credit card details via a secure Web transaction. That’s not ideal, so I wonder how many mobile transactions that firm has missed simply because it doesn’t provide a compelling user experience.
European mobile commerce is still at an early stage. Digital content is still the primary product purchased via mobile devices, but European consumers show growing interest in using their mobile phones for all sorts of shopping activities. I have recently contributed to a new report on the state of mobile commerce in Europe, written by my colleagues serving eBusiness Channel and Strategy Professionals. The report reveals that:
Lesson No. 1: Paid and earned integration is the key to a successful social campaign. Paid support plus a motivated audience to amplify the message equals success in building earned media and awareness.
Lesson No. 2: Adaptive Marketing means you need to be flexible. The world has changed, and marketing is not only always on but also increasingly unpredictable.
Lesson No. 3: Lose Control. It is something you need to give up willingly.
Are you ready to handle this truth? Tell us about your brand, what you would like to accomplish in this ever-adapting world of marketing, and how social media can contribute by commenting below.
Many consumers find ratings and reviews helpful when doing product research online. Our Technographics survey shows that about half of US online men and 42% of female Internet users are using ratings and reviews at least monthly. Less than half of them are posting ratings and reviews regularly.
But how do consumers value these ratings and reviews, and what do they do about not knowing who's behind the ratings? To get a better understanding of this, we recently asked the community members in Forrester’s Digital Consumers Community the following question:
'Do you read customer reviews before you buy a product? If so, how important are others’ reviews when making your decision to buy a product? Does your reliance on customer reviews vary for different products?'
While most are checking consumer reviews, the comments reveal that they are not heavily influenced by peer reviews. People tend to seek out reviews when they are about to purchase a big ticket item and they are reading the reviews to make themselves feel more comfortable with spending that money – like they have done their homework – but in the end, it’s their own judgment they rely on.
Some key quotes:
“I always see what others have to say regarding the products, some are helpful and some are not”
This week, I was at the Microsoft Worldwide Partner Conference in Washington, D.C., and it was all about THE CLOUD. Now, many colleagues argue that Microsoft will be the second-to-last major vendor to show a 100% cloud commitment, saying that “it’s too embedded in its traditional software business,” “it doesn’t understand the new world,” and “it’d be scared of cannibalizing existing and predictable maintenance revenues.” But I remember Stephen Elop, president of Microsoft Business Systems, tell me with a mischievous grin that he’ll probably earn more money from Exchange Online than the on-premise version — “firstly, it’s mainly new business from other platforms like Lotus Notes, and second, I even generate revenues by charging for things like the data center buildings, the infrastructure, even the electricity I use.” That was in Berlin last November. I suspected then that Microsoft did get it but was just getting its platform ready. This week, I am convinced — Microsoft is “all in,” as they say.
And at the Microsoft Worldwide Partner Conference, it was driving its partners to the cloud as aggressively as any vendor has ever talked to its partners at such an event. All of the Microsoft executives preached a consistent mantra: “MOVE to the cloud, or you may not be around in five years.”
Microsoft’s cloud-based Business Productivity Online Suite (BPOS) is already being promoted by 16,000 partners that either get referral incentives for Microsoft-billed BPOS fees or bundle it into their own offerings (mainly telcos). There are nearly 5,000 certified Azure-ready partners. This week, Microsoft turned up the heat with these announcements:
On two occasions in the past few months, I’ve given a speech to members of Forrester’s Market Research Forrester Leadership Board about vendor management best practices, a topic I’m writing a report on.[i] With market research budgets increasingly shrinking and research expectations growing, we see that market researchers need to select, manage, and measure their vendors more efficiently.
The key to success here is to develop partnerships with your key vendors. Why? Because conversations with Market Research professionals at a variety of organizations show that partnering with research vendors leads to better projects, deeper insights, and lower costs. As one of my interviewees said: “It’s about intellectual ROI: You need to invest less time for each project. You build a lot of equity. You also get more of a team thing going — to me, this is very important. You work with these people on a daily basis, so finding the right vendor and contact is critical, as we see them as colleagues.”
To understand how Market Research professionals currently collaborate with their research vendors, we surveyed our Market Research Panel earlier this year. The majority of our panelists feel that they already have established partnerships with most vendors, and two-thirds state that price is less important than quality.