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Posts Tagged ‘facebook’

Facebook flotation – there’s still gold in them thar e-hills.

In Marketing, Social Media on May 26, 2012 at 6:53 am

Facebook owner Mark Zuckerberg

There’s been a lot of press around the Facebook share flotation recently, a lot of it negative, both before and after the flotation.

Most of it centres on the monumental valuation, and the amount they were looking for per share.  Many analysts asked how you could justify such a high valuation when Facebook were only making around $3 per user in actual revenue.

Talking about ignoring the bleeding obvious.  Yeah, maybe it started overpriced – the market soon sorted that out – but what would you rather invest in:

1. A mature company with mature products and customer base looking for capital to expand still further, into unknown territory, perhaps, or

2. A new and energetic company that has spent years building a massive customer base (900 million, in fact) and has barely scratched the surface of captialising on these customers?

Starting from that low point of around $4 revenue per customer per year, the potential for growth is absolutely enournous. And, Facebook has shown in the past that in this new online age, you can try something, fail, and move on pretty quickly without people really noticing. In many ways, the more failures you can have, and get over, the more successes you’re likely to have.

I think many observers also thought “they aren’t making much money from Advertising, and there may not be much room for advertising growth, so how can they grow revenue”?

This fundamentally misunderstands the what Facebook offers. As I stated in a previous blog, Advertising is just a tiny part of where Facebook could head.  In reality, the company who really needs to be quaking are not other social media outlets, but Amazon.  If Facebook has the potential to get products people want in front of them when they are not looking for them – a big jump on sites like Amazon where you have to be looking for something to be exposed to other potential purchases.

Indeed, the natural continuation of this thought is that Amazon needs to become a much more social experience. Maybe then facebook would have a real rival. At this point it doesn’t. I await the next move with baited breath.

Tesco + Facebook = The end of high street shopping?

In Marketing, Online on March 1, 2012 at 9:07 pm

According to the wordcloud on my blog, two of the things I like talking about the most are Tesco and Facebook, so there’s no surprise that this article caught my attention:

Tesco launches Facebook-based virtual fitting room

http://econsultancy.com/uk/blog/9164-tesco-launches-facebook-based-virtual-fitting-room?utm_medium=feeds

(courtesy https://twitter.com/#!/engagingbrand)

In one of my previous posts, I posited the idea that as soon as large retailers, like Tesco, start to properly adapt to and exploit social media channels like Facebook, all forms of physical shopping – malls and out of town, too, not just the High Street – would be in real trouble.

(Read the previous post here: FB hoax – the online mall and why Facebook will never charge you)

Here’s the final paragraph from that post:

“People still like to meet people, and clothes shopping particularly requires physical interaction, and is a very social experience, but FB is so near to being able to offer a similar experience that the shopping malls – especially the smaller regional ones – should really start to worry.  Just as malls killed off the High Street, maybe online will kill off the mall?”

Well, today’s announcement seems to even begin to tackle this basic need for ‘physical interaction’ by taking it all online.  I think it’s interesting that Tesco in particular have developed this ‘online fitting room’ given that I’m not sure they even have physical fitting rooms in their stores. Theirs is not high fashion – it’s based on “it’s cheap, so even if it doesn’t fit me properly, it’s no real loss”, so really Tesco are looking to radically increase the levels of social interaction involved in buying their clothes. Do you know anyone who’s ever been on a genuine clothes shopping trip, with friends, to a supermarket?

This is why this announcement is a double threat to physical shopping. Not only are they looking to move clothes shopping online, by launching on Facebook and including social sharing, they are looking to directly attack the ‘social shopping’ experiences that traditional fashion outlets like River Island, H&M & Topshop (forgive me if I’m out of touch with female fashion brands – I’m a 32 year old man) can offer. Forget that Tesco currently sell manky clothes – this can easily change, and the power of market research information they will get from social sharing and commenting will help them do this rapidly (note how Primark managed to gain press attention by offering a few ‘designer’ items in amongst their other pap).

The High Street is a 70s concept that was destroyed by the Mall in the 90s. Now the combination of a severe and long-lasting recession, and the maturation of online retail across a wide range of sectors and age groups, will I believe, start to kill off the Mall by the time the decade’s out.

Physical spaces have to think of something else to do. Something that is unique, that there is a high demand for in the UK, but an undersupply. Something which is highly social, but definitely requires the physical body to experience.

I’ve got 2 words for you.

Water.

Park.

Plurchase – short follow up to last week’s post on Facebook as an online mall.

In Marketing, Online, Uncategorized on October 2, 2011 at 2:19 pm

Following up from last week’s blog on how Facebook will always be free, and it’s likely next direction towards being an online version of a shopping mall, I recently found reference to a service called ‘Plurchase’ which seems to already be doing this.

It’s essentially a sidebar for Amazon and similar online shopping sites, where you can invite friends to ‘shop’ with you, and all can comment via text on the various items you’re currently browsing.

I can see this being useful for people discussing Xmas present lists, or for distant parents and offspring to have some ‘social’ time together, but I think until something like this integrates with video and sound the real ‘social’ aspect will be limited, and with Facebook now tied to Skype, I’d still back FB to get there first.

As far as I can see, this is currently US only, so if anyone has any experience of Plurchase, I’d be interested to find out what it’s like.

More on Plurchase.

FB hoax – the online mall and why Facebook will never charge you

In Marketing, Online on September 25, 2011 at 1:10 pm

A Facebook friend posted a status update saying due to recent changes FB were going to start charging (more here).

I didn’t need to google it to know it was a hoax because charging for access goes fundamentally against Facebook’s money-making proposition both now and in the future. They’ve just gone past 800m active users on the back of being free, and whilst this has its own value in terms of advertising and online games, that’s just the start of it.

Facebook’s ambition is to become the first World Mall – an online shopping and leisure destination for everyone.

Think of the USPs of shopping malls:

  • All the shops you need in one place
  • Leisure destinations like Cinema and Restaurants to make it a social experience to be enjoyed in groups
  • Easy access (free car parking, bus & raill links) & comfortable surroundings (air con, benches, plants etc…)
Of those 3, it is the third which is most powerful, as this is what differentiates a mall significantly from the High Street.  This is what makes many malls a weekly destination for families and friends – it’s easy and free. You don’t even necessarily go to buy some stuff, but while you’re there…
Now consider what would happen to those decisions if your local mall charged you £3 each to get in, or £7 per car to park.  This might still be cheaper than a trip to town, but the thought of paying to access would mean you would only go when you had the express intent of doing a decent sized shop, or spending a long time there.  Footfall would decline, and so would income in the shops, and it probably wouldn’t offset the amount being taken in in charges.
This is exactly how Facebook operates. By being free, and offering some basic functionality of use to subscribers, FB ensures people come back again and again and again, and in doing so, their opportunity to to sell to you increases.
Currently FB makes its money from the targeted pay-per-click ads down the right side of your profile, and from monetised online games such as gambling or those games where you buy a cow for your farm or something.  However, FB are relatively few stages away from being a one-stop shopping and leisure destination – an online mall.
In fact, I reckon they are only 3 or so tie-ins away from achieving this. Consider the following Facebook additions:

Paypal tie in (for ease of online payment – not sure their own currency ever took off other than for game obsessives)
Spotify & Flixster tie in – rights issues are the big stumbling block, but having HD movie streaming from Flixster with live FB comment box (or Skype connection) would allow people to essentially go to the cinema together on Facebook. Spotify is struggling to cover its costs with advertising alone, but if it was FB’s primary way to listen to & buy music, it would soon start making money.
Tesco Online via FB – in the UK, if FB got Tesco Direct plugged in to FB, that alone would drive all other retail brands onto FB (just looked and Tesco only have 300k followers on FB – this is appallingly bad considering their customer base).

People still like to meet people, and clothes shopping particularly requires physical interaction, and is a very social experience, but FB is so near to being able to offer a similar experience that the shopping malls – especially the smaller regional ones – should really start to worry.  Just as malls killed off the High Street, maybe online will kill off the mall?

Social Media is redefining the role of the marketing department

In Marketing on March 14, 2011 at 9:01 pm

There’s no doubt that Social Media has changed the game for Marketers, but so far this has just meant internal marketing departments adjust to new methods of communication.

However, if you consider what exactly SM does for the relationship between the company and the customer, it should actually fundamentally change what the marketing departent does.

Traditionally, an internal marketing department will get involved with ‘big idea’ marketing – finding new niches, new markets, how to fill them, defining the message, and then rolling it out. There’s a lot of work to be done in this, and this is what fills most of a traditional marketers time.

If you’re customers are really active in Social media, though, you should throw this out of the window. That’s because, much more than ever, SM gives a very public forum to customers experiences, both good and bad.

You can’t control the message – the brand if you like – anymore, so why try? Wouldn’t it be much more effective if the marketing department spent it’s time analysing the minutae of every single customer touch point, and ensuring that the people involved at those points understand what the company stands for, and how their performance affects the brand, its value, and the company’s profitability.

Scrap the design agency – fancy pants graphics only really matter if your product is ‘high-brand’ (like Nike, where the name means so much more than the product). For your website, usability is all. If it looks terrible but works great, it will get noticed (Ryan Air’s website looks terrible – deliberately so, I think – but searching and booking is still easy).

As I say, you don’t control your brand anymore, your customers do (haven’t they always?) so why put your effort into a logo redesign, when monitoring and responding to negative and positive comments on the social web could enhance your brand much more, and create those all important cyberspace advocates that help drive traffic, and demand, to your product.

Most marketers are still only just waking up to the game-changing nature of Social Media, perhaps because it will take time for the digital natives to come through to the key positions, but it does seem from the number of  ‘Understanding Social Media’ courses around that they are waking up.  However, will they be willing and able to adapt and do what the most successful social media sites, like Facebook and YouTube did – forget about the ‘look and feel’ and the fancy ‘fun’ bits of marketing, and get right down to functionality and customer experience?

I fancy that those that do will flourish.