An agency head told me how he was on a call between the European head of marketing for a US brand and that brand’s board of directors. The chairman asked the marketing honcho, “How is the European market?” The marketer answered, “There isn’t one.” Awkward silence. “That is, there is no European market. There is a French market. A German market. A British one. And so on. I can tell you about those.”
In no other sphere of marketing are these national differences magnified more than in social media. Social media is, by its nature, participatory and thus takes on the form, tone, and color of its users. Social media in Germany is German social media. In France, French social media.
Then brands enter the picture. That social media strategy hatched in Dallas or Dublin, with a sum earmarked for translations, will not cut it.
Three reasons cookie-cutter strategies will fail in Europe:
Europeans as a broad group are less likely to engage with brands on social media than, say, in the United States or metro Hong Kong.
Europeans’ usage differ significantly country to country; Italians usage is not comparable to German usage.
Each market boasts strong local players that excel at the intricacies of their market’s social media usage.
Pundits’ take that Facebook has “solved” mobile advertising after its home run last week hid a bigger, behind-the-scenes story:
We’re finally seeing branding and direct response marketing merge in a meaningful and measurable way; Facebook is just one place where it’s happening most demonstrably.
Here’s important context: Facebook’s quarterly earnings beat projections last Thursday, driven by the 62% of its ad revenue that comes from mobile. Also note that Facebook’s only ad revenue from mobile is its in-feed ads (or native ads, or whatever you want to call them).
The in-feed ad is Facebook’s holy grail. If they can manage to position ads in users’ mobile feeds so that these ads: a) perform well, and b) don’t kill engagement with Facebook, then they can print money against their 1 billion-plus monthly active users.
Facebook knows they’ll need advertisers’ and their agencies’ help to achieve this. That’s why I want to draw your attention to a slightly less publicized study that came out of Facebook and two partners the week prior to its quarterly earnings announcement.
Working with the social ad platform Adaptly and Refinery29 (one of a new set of savvy content-driven eCommerce outlets), Facebook showed that social advertising that merges branding and direct response outperforms direct response ads alone, by a margin of about 70%.
I’ll be curious to hear if there is a business strategy update, but I don’t think we’ll have more insights on what “unbundling the big blue app” really means. I think one possible option is that social data and contextual identity will be the layer on top of Facebook’s new social conglomerate.
I personally will be looking more specifically for an update on mobile app installs. There's no doubt that Facebook has disrupted the app marketing space by becoming a key player in app discovery — which is the key driver behind its mobile ad revenues.
A growing and significant part of this business comes from direct marketers looking to drive app installs, primarily from gaming and other businesses that are increasingly dependent on mobile, such as travel and retail companies. These players know the lifetime value of their apps and have calculated how much they can spend to drive each app download and still have a positive return on investment (ROI). But marketers in more-traditional businesses or who are pursuing other marketing goals should pay close attention to the unique attributes of their mobile social users and optimize their social strategies to engage them.
According to Reuters, Japanese messaging app Line has filed for an IPO valued at over $10 billion.
No doubt the space is heating up. Competition is increasing. Facebook acquired WhatsApp for $19 billion. Japanese Internet giant Rakuten purchased Viber for $900 million. More recently, Kakao Corp (the maker of KakaoTalk, South Korea’s top messaging service and a direct competitor to Line) and Daum (one of South Korea’s largest Internet portals) announced they would merge through an equity swap, creating a company with about $2.9 billion market capitalization!
To put all this activity in perspective, I recently published a new piece of research explaining how messaging apps are morphing into new media portals and are becoming the new face of social.
WeChat is jockeying to become a global digital platform, thanks to the deep pockets of its parent company, the Chinese Internet giant Tencent. The other Chinese Internet giant, Alibaba, which recently invested $280 million in Tango, could also connect the dots between its commerce, payment, media, and social capabilities.
Soon to have 500 million registered online users, Line is definitely a key player in the space. The money to be raised will help in developing the already significant international expansion and further develop the positioning of Line as a “smartphone life platform.” The majority of the $335 million in revenue generated in 2013 came from games and about 20% from stickers — “emoticons on steroids,” as my colleague Julie Ask called them.
Mobile is changing the daily life of Chinese consumers; the phone-addicted population (ditouzu) is growing fast. With high adoption and usage of mobile devices, consumers in China are experiencing the mobile mind shift: the expectation that they can get what they want in their immediate context and moments of need. However, marketers in China are not keeping up with consumers. Why? They aren’t thinking about mobile strategically:
They hold false assumptions on how to reach Chinese mobile consumers. Most marketers in China still think in a traditional way: They assume that consumers in tier one cities are the most active mobile Internet users; that Chinese mobile users can actually use the mobile Internet on the go; and that a city-tiered approach in mobile marketing will be successful.
Their mobile marketing strategies are still experimental. Although many marketers in China have tested mobile, only few have incorporated it as a consistent marketing channel. Marketers only spend a very small portion of their ad budgets on mobile.
Nestlé China's ice cream business unit has two major brands: BenNaNa and Five Rams. BenNaNa is an unusual ice cream stick with a peelable jelly shell that shapes the ice cream, which is eaten just like a real banana. Because of its playfulness, BenNaNa is the No. 1 kids’ brand in China and is also popular among young consumers. Five Rams, a local brand that has been based in Guangzhou for more than 50 years, was licensed by Nestlé in the 1990s. As a regional brand, Five Rams is the category leader in Guangdong province.
Nestlé started using social media in 2012. For the first two years, the company confined its social marketing efforts mostly to Sina Weibo, as it had tested other platforms but did not find any that generated good performance. Starting this year, the Nestlé marketing team added WeChat to its social spectrum and gradually shifted its efforts to this rapidly growing mobile social platform.
Messaging apps have the potential either to become digital platforms or to significantly enhance the power of current platforms because they so clearly deliver the three things that determine digital platform power: frequent interactions, emotional connection, and convenience. WeChat is for example already morphing into a digital platform offering, thanks to the deep pockets of its parent company, the Chinese Internet giant Tencent.
While today’s opportunities are limited by consumers’ reluctance to engage with brands on such intimate channels and by immature marketing tools, it is definitely time for marketers to experiment and to anticipate the next steps.
Indeed, you’ve surely heard of the second-largest acquisition in tech history, Facebook’s purchase of WhatsApp for $19 billion. However, you may not have heard of KakaoTalk, Kik, Line, Secret, Snapchat, Tango, Viber, or Whisper.
These messaging apps are the new face of social in a mobile context.
Contrary to social media that are generally public broadcast mechanisms that facilitate one-to-many communications, a messaging app is a typically private, one-to-one or one-to-few communication and media tool optimized for mobile. Such smartphone apps can access your address book, bypassing the need to rebuild your social graph on a new service. As Evan Spiegel, the CEO of Snapchat, puts it, “We no longer capture the real world and recreate it online – we simply live and communicate at the same time.”
Ever since Facebook CFO David Ebersman admitted last October that young teens were visiting the site slightly less frequently, most have accepted as fact that young people are fleeing Facebook en masse. Ivy League researchers have forecast that the service will be all but dead by 2017; President Obama recently claimed that young people “don’t use Facebook anymore”; and when comScore recently reported that fewer college students were using Facebook, media outlets ran stories on the “social platforms college kids now prefer.”
But if you take a closer look at the data it tells a very different story. Sure, many data sources show that Facebook’s usage among young people has declined slightly — but the drops are small, and the huge majority of this audience still uses the site. For instance, that comScore report only found a three-percentage-point drop in college-aged adults’ Facebook usage and reported that 89% of this audience still used Facebook — far more than used any other social site.
To investigate teens’ social behaviors further, we recently asked 4,517 US online youth (aged 12 to 17) not just whether they use social sites like Facebook, Instagram, Snapchat, and Tumblr — but if they use those sites “about once a day,” “at least a few times each day,” or even if they were on any of the sites “all the time.”
Mobile messaging apps are super-hot, but it’s still early days for monetization. WeChat, the largest mobile social platform in China, has been focusing on building a large user base globally and maintaining stickiness by upgrading its functionalities constantly. With the strong support of Internet giant Tencent, monetization is not an urgent concern for WeChat yet, but it has paved the way for many monetization options.
There are three options that could work well in monetizing WeChat:
Mobile gaming. Online gaming is Tencent’s best strength and the primary source of its revenue, so it’s natural for the Internet giant to want to transfer that strength to mobile. For example, when Tencent launched its first WeChat game, the Candy Crush-like Tiantian Ai Xiaochu, it soon became the most downloaded game in the app store. In-app purchases in games will become an important money generator for WeChat.
Mobile commerce and payments. Selling products on the WeChat platform is not new; last year, local smartphone brand Xiaomi sold 150,000 units in 10 minutes on WeChat. But with the successful launch of the new WeChat Payment service and its cooperation with JD.com, China's second-largest eCommerce player, mobile commerce and payments will soon become scalable on WeChat.
Today, Nokia’s HERE just announced it plans to acquire Medio Systems, a Seattle-based company that is a pioneer in the emerging field of real-time predictive analytics. I met Medio founder and CTO, Brian Lent, a couple of times in the past few years and have always been impressed by his vision of what analytics would become.
Such an acquisition will help HERE and then Nokia Networks and Technologies deliver more contextualized and personalized experiences by adding smart data to its location intelligence capabilities.
At Forrester, we believe that to embrace the mobile mind shift, companies will have to serve customers in their mobile moments. To do so, they must anticipate their customers’ next likely actions. Already, almost 1 in 4 smartphone users expect their mobile experiences to change based on their location.
According to Nokia, it could, for example, mean delivering individual restaurant recommendations to someone ready for lunch, giving drivers routes that match their driving style based on real-time conditions, or helping businesses personalize their customer offerings.
To be able to deliver these experiences and engage with customers in real time, marketers will have to think about mobile not as yet another digital channel but as a catalyst for business transformation. To do this, Forrester believes they need a business discipline to win in the mobile moment by implementing what we refer to as the IDEA cycle, by:
• Identifying the mobile moments and context.
• Designing the mobile engagement.
• Engineering platforms, process, and people for mobile.