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Social media threads require weaving October 15, 2012

Posted by David Card in Uncategorized.
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Last week a pair of thoughtful posts and some announcements from Facebook were a reminder that the social web is more complex than you might think. Burned by Groupon, Zynga, and Facebook, investors have soured on consumer social media companies lately, perhaps thinking that all the good opportunities have been figured out, and the growth days are over. Far from it.

The ways that consumers use social media and the way developers and marketers harness its audiences and underlying technologies is still evolving. Smart companies must recognize social media provides threads they can weave into more traditional marketing, media, and commerce programs. It’s too simple to think of Facebook, Twitter, and YouTube as slightly updated versions of the mass-market websites – and their accompanying business models – that we have understood for the past 10 years or more. Facebook, for instance, is not just Yahoo 2.0.

Social doesn’t just mean “social sites”

Yes, Facebook seems to have wisely adopted some tried-and-true digital marketing techniques. It is adding to the value of its advertising inventory – and raising prices – by enabling it to be more easily used in re-targeting campaigns. But the reason it’s a relative latecomer to this practice, and why Facebook is still missing easy opportunities by offering conventional branding formats for big advertisers, is because the company is still trying to prove the effectiveness of new and truly different social marketing techniques.

A post by Jaap Favier lays out an ROI model for social media marketing that uses customers in bars as a metaphor. Read the post; it’s not the only way to evaluate social media, but it points out some of its key benefits relative to traditional media. Meanwhile, Alexis Madrigal points out in The Atlantic that if you run your analytics properly, you’ll see that a great deal of social content promotion comes from sources most people don’t associate with “social media,” including email and instant messaging from older online brands.

Thinking of social networks as social media sites gets a company only part way there. Facebook’s latest plan surrounding Open Graph actions for user- and developer-initiated sharing apply to apps that run on its site, even if “Collections” doesn’t look like much of a threat to Pinterest yet. But, possibly more important, these platform tweaks can be used by apps that run elsewhere on the web and on mobile devices.

Multi-channel weaving

I recently had conversations with two unrelated companies that offer services that help companies weave these various social threads together across channels:

  • Shopigniter recently updated its promotions management system for retailers. The company offers a bundle of cloud services that resemble a lightweight content management system for merchandisers with analytics and shopping cart accommodation. It enables a higher degree of interaction than conventional posts within the Facebook stream – although Facebook’s own analytics may not capture those actions, so EdgeRank promotion might need some help. Shopigniter works across Twitter and Pinterest, too, and looks competitively priced relative to six figure custom campaigns done with digital agencies.
  • SocialTwist is a company with app server roots that builds a cross-channel offer-promotions vehicle for big packaged goods and financial services customers like Sara Lee and CapitalOne. SocialTwist primarily focuses on coupons for both customer acquisition and retention. It integrates and tracks across the usual social media suspects as well as IM and email, which still drives over half of interactions. It has a similar pricing model to that of Shopigniter.

The ecosystems supporting social media marketing continue to produce new companies, and big players with their eyes on social CRM make acquisitions. The social platforms themselves continue to evolve at a rapid pace. All this swirling around social marketing and content discovery adds complexity, but it also means opportunity. Expect to see further expansion in the space before any serious consolidation.

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Facebook app auto-sharing changes October 11, 2012

Posted by David Card in Uncategorized.
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Facebook announced some changes to its auto-sharing features for third-party apps that will take effect in 90 days. Facebook won’t allow any custom “verbs;” apps will have to make do for the time being with the existing built-in actions like Listen, Read, Watch, Follow. (Actions where a user clicks a button are still okay.) Facebook also said it would tweak its ranking algorithm to show more stories with images or locations in them, while it will prohibit “post to a friend’s wall” and some auto-authorization techniques.

Facebook’s rationale is that these steps will produce more consistent user experiences, and also increase story sharing and interaction. Of course, any time Facebook makes changes, apps and content companies depending on it for discovery cringe. It’s an over-reaction to say these changes foreshadow a disintegration of Facebook’s ecosystem and grand vision of social sharing and discovery. The ecosystem will watch for results, and chances are, if they’re completely disastrous Facebook will react quickly and change its policies and practices again. It has done so before.

But “chances are” is a shaky foundation to build a business on. Any developer must have back-up plans in place – including advertising, driving users to its own site and giving them a reason to stay, and vigorous cross-promotion.

Social platform players reveal diverging roles August 6, 2012

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Last week, Facebook and Twitter generated consternation within their respective ecosystems. Disgruntled developer Dalton Caldwell whined that Facebook found his app so potentially competitive that it “threatened” to buy him out. Meanwhile, Twitter had to apologize for temporarily shutting down a reporter who was helping feed a ruckus within its all-important Olympics-coverage network. These unrelated uproars illustrate key differences in the two dominant social media platforms. Facebook APIs channel data and technology services, but Twitter’s all about the data.

Both companies make social technology platforms that enable third-party developers using public APIs to build apps and services. Both platforms have spawned successful business ecosystems generating utility and value for mass-market audiences, app developers and web sites, and the platform companies themselves. Facebook has irked developers with its policy changes: particularly by making changes to how application activity gets shared among users, which can have a big impact on app traffic and promotion. Usually, it’s Twitter that gets accused of competing with its developers.

What matters for Facebook’s ecosystem

Although Google seemed only too happy to try to take advantage of whatever bad vibe Caldwell’s missive might create, the incident is a classic teapot tempest. This piece I wrote assessing the position of some social tech platforms and their ecosystems is still valid. For a thriving ecosystem, in addition to core technologies and support, would-be platforms need to give developers access to large and/or valuable audiences, distribution or even out-of-network syndication, data, and a way to make money.

Google has its own history of API inconsistency, but more important, Google+ hasn’t really clicked with users as a destination or place to use apps. And although Google is making some progress attracting marketers who value the potential for Google+ technologies to permeate other Google apps and affect search rankings, Google hasn’t connected its powerful ad networks to Google+ for developer revenue.

I doubt many developers fear that Facebook will compete with or buy them out, and an Instagram-like exit is an incentive, not a deterrent. Rather, a more serious Facebook platform issue is that its original platform poster child, the social games giant Zynga, is struggling lately. Zynga’s wounds are self-inflicted or the natural ebb and flow of managing a portfolio of entertainment titles. Zynga is experiencing sequel-itis and the fact that not all hits are instant franchises. But many see Zynga as a symptom of the Facebook platform’s vulnerability to increasing mobile usage.

This is premature, but worth monitoring. Mobile-only usage is starting to be noteworthy for Facebook, but some of that may be occurring in emerging markets where neither Facebook nor its ecosystem have business models to be damaged. And Facebook’s “sponsored stories” advertising format is showing early promise and can accommodate mobile usage. However, while individual gaming on mobile handsets is common, social gaming is less so. Neither has Facebook established its role in mobile app distribution or content discovery.

Twitter plays different role

Meanwhile, Twitter’s dust-up reveals the relative importance of the company’s roles within its own ecosystem. My GigaOM colleague Mathew Ingram writes equally about Twitter as an information utility, a media company, and a technology supplier. Yes, Twitter is a true platform, but its APIs are arguably far more important as a data source than they are as tools for developers building application functionality. The journalists, celebrities, and consumers that generate the content that flows through the Twitter network are a bigger part of the ecosystem than are third-party app developers.

So what are the takeaways from last week’s events? Facebook partners should stick close to the company’s budding mobile efforts, and experiment early and often. Caldwell’s concerns about Facebook’s business practices are overwrought, but questions about Facebook’s longer-term mobile platform and its ecosystem remain unanswered. And while Twitter is evolving its technology, developers should notice how much that evolution is about content display. Twitter may have some ideas about apps running within its platform, but Twitter’s most critical role is as an information and content distribution mechanism.

Question of the week

Which social media platform is more vulnerable?

Facebook’s app ecosystem is still missing a piece of the puzzle January 23, 2012

Posted by David Card in Uncategorized.
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At its f8 developer conference last September, Facebook CEO Mark Zuckerberg laid out a grand vision of a new class of lifestyle apps enabled by Facebook’s technology platform. Last week, at a subdued event that attracted far less media coverage, Facebook sketched out its progress and showed some 60 apps. Facebook’s apps ecosystem is showing positive signs of evolving, but it still lacks an effective marketplace for app promotion and monetization. Such a marketplace would reinforce a virtuous circle: It would attract more developers and help generate more money for them and for Facebook.

Signs of progress

You will recall that one of the powerful — and potentially creepy — features of Facebook’s Open Graph was “frictionless sharing,” where apps could automatically post user activity without requiring the press of a Like button. Facebook has done some fine-tuning to its privacy and auto-sharing controls, including prominent instructions on how to opt in and how to focus sharing among particular friends, even for existing apps. But Facebook still mostly relies on users’ increasing acceptance of activity broadcasts. That seems appropriate for all but the most privacy-conscious rights organizations.

Facebook also has opened its apps approval process, offering simple guidelines that appear less restrictive than, say, Apple’s App Store. Facebook claims it wants to open up the ecosystem, but it remains to be seen if it has the staffing needed to enable speedy approval for hundreds of apps.

Developers appear to be excited about Actions, a key new technology from September’s announcement. Actions expands the vocabulary of sharing beyond Liking and Sharing to shopping-oriented terms like Own and Want as well as the media-focused Listen and Read, adopted successfully by the first wave of new apps like Spotify (which has added 4 million users since f8) and Yahoo (which has enjoyed a sixfold increase in referrals). Developers like Facebook store builder Payvment think these new Actions will better suit commerce and shopping than Likes, while others like Foodspotting expect them to broaden the type of activities people use their apps for. Even if generating transactions on a social network remains a challenge, Facebook’s new tech seems to be gaining developer attention. Ticketmaster’s new app even mashes up Actions to present concert information based on listening behavior, a smart idea.

Missing marketplace

My GigaOM Pro colleague Greg Sterling wonders if Facebook is poised to challenge Apple and Google in app stores. Facebook’s app ecosystem has already produced Zynga, a bigger company than Apple’s biggest star, Rovio, but I would estimate Facebook’s yearly take from virtual goods sales is measured in the low hundreds of millions of dollars, while Apple’s apps and music sales approach $1 billion a quarter. That is partly a function of app volume, but, just as important, Facebook lacks a store or marketplace to focus app discovery and sales.

Facebook told Sterling that a marketplace “would probably make sense at some point.” OK, but pointing to apps from an About menu link is no substitute. Right now, Facebook depends on Likes and frictionless sharing by friends to drive app discovery. Facebook filters a very limited number of app activities into a user’s news feed: Users spend the plurality (27 percent) of their Facebook time there, but Facebook doesn’t want to clutter or spam their major communications stream. The company is adding features to display app activity on profile pages, where users spend 20 percent of their time. In other words, Facebook is working hard on viral app discovery among friends, but it has a weak story for a user who wants to explore related interests outside his own circle of friends.

What Facebook needs is an app store with the necessary merchandising. Facebook should copy Apple, Amazon and Best Buy. That means featured products, apps ranked by category and popularity, sortable consumer ratings and reviews, and a merchandiser’s “editorial” voice as well as algorithmic promotion, sales on virtual goods, and so on.

Facebook’s marketplace should also do something that the others don’t. It should emulate paid search listings and enable developers to buy prominent promotional positioning via auction. Sure, that entails some serious effort, but Facebook has tons of user behavioral and preference data it could use to enforce paid link relevance to eliminate scams, spam and irrelevant promotions. This would be bold app store differentiation, and perhaps Facebook is nervous about appearing to be “for sale.” But paid promotions aren’t payola if they are transparent and fair, with enforced relevance.

An effective apps marketplace would accelerate the growth of Facebook’s ecosystem and add revenues for Facebook and for developers. With its expanded Actions that crucially work outside the Facebook site, Facebook could effectively extend its marketplace web-wide and build momentum for a potential mobile network.

Question of the week

How else could Facebook juice up its apps?

How publishers must adapt to multiple content discovery options December 12, 2011

Posted by David Card in Uncategorized.
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Last week, companies including Google, Facebook and NetShelter introduced new products and services that, while unrelated, all promise to be new vehicles for web content discovery. And with so many new offerings coming to market, content companies must evaluate whether and how to best use services like news reader apps (Google Currents and mobile Flipboard), social sharing mechanisms, etc., to achieve objectives like audience acquisition, content engagement and revenue.

None of these new initiatives actually pays syndication fees for content, and making money off them depends on publishers doing their own advertising within the frameworks of the apps or sites, or securing revenue sharing. In many cases, even where they enable the consumption of full articles or videos, it’s best to think of these new products and services primarily as discovery tools and concentrate on driving audiences back to the actual sites. It’s there that content owners have more control over monetization.

News readers worth testing

Right now news readers are low-risk/low-reward options for content owners due to their relatively low adoption. For example, this summer Flipboard was growing fast but still had only 2.5 million users. At that point it wasn’t generating any revenue, but has since rolled out an advertising program with key publisher partners like Conde Nast and Dow Jones. Figures on how those revenues are split are hard to come by, but the ads are magazine-classy and likely command a higher-than-average CPM compared with traditional websites. That’s promising, but won’t be exciting until Flipboard quadruples its audience.

Flipboard’s new mobile app, meanwhile, is getting rave reviews. But while that may bode well for content discovery, mobile display advertising — as opposed to search — is barely off the ground and Flipboard hasn’t solidified its mobile ad offerings yet. Similarly, Google’s brand new Currents news reader doesn’t offer advertising — mobile or otherwise. The company is promising to work on a payments scheme for premium content in the future, so publishers should use Currents for discovery rather than revenue.

Facebook promotion starts to pay off

Facebook is becoming an important traffic driver for content sites, whether from its own site or indirectly through its distributed Connect services. Last week it introduced a Subscribe button for Connect that’s a lot like Twitter’s “Follow” concept: Publishers can establish Subscribe buttons on their own sites that enable Facebook users to receive updates from content authors without having to establish a confirmed, two-way “friend” relationship. Subscribing is relatively new to Facebook’s own site, but it seems to be catching on and should prove popular off-site as well.

Updates appearing in Facebook news feeds, meanwhile, drive user engagement with content, as shown by Yahoo’s smart deployment of a Facebook app that takes advantage of the new “frictionless sharing” that auto-posts user activity updates. While media companies like The Washington Post and News Corp. are posting full articles in their Facebook apps, Yahoo posts snippets that drive users to its own site. Last week, Yahoo reported 10 million participants and a sixfold increase in Facebook referrals, along with new, younger audience usage.

Other companies are putting full content on Facebook. News Corp.’s The Daily and the Wall Street Journal house site promotions and ads in their Facebook apps, including units that are much bigger and feature more rich-media interaction (likely generating much higher CPMs) than the ad units Facebook itself offers. The Washington Post’s Facebook app does not have any advertising right now and often shows a user more third-party content through its personalized Trove aggregation feature than content from the Post. While this may be useful for building brand awareness, it feels like the Post is missing an opportunity to engage with its own articles and drive users to its own site, where they can take advantage of Trove personalization.

Advertising as discovery

Last week, NetShelter Technology Media introduced a new advertising format that simultaneously syndicates content (Samsung is the official sponsor). The ad network operates across a collection of otherwise-unrelated technology blogs, analyzes articles across the network and pulls them into the expandable ad when they’re relevant. It’s like a sponsored “related content” module that will help smaller sites participate in bigger ad buys as traffic circulates across the network. NetShelter wants to charge premium rates for this unit: It’s hoping to hit a $35 CPM target, though that sounds high to me.

These new discovery vehicles reinforce the need for content companies to think of themselves as networks or even platforms, as my colleague Mathew Ingram says, rather than simply site developers. They must distribute their own content through APIs and syndication, at the same time aggregating, curating and monetizing on and off their home sites. But the ones that can adapt these new programming and distribution techniques will be leaders in an increasingly digital-first era.

Question of the week

Should publishers distribute their full content or offer only highlights?