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Some Things to Watch for Post-Snapchat IPO

Some Things to Watch for Post-Snapchat IPO

The Snapchat IPO is just around the corner, and there are a few key points to pay attention to once the company goes public.

I’ve been fairly vocal about my hesitations when it comes to Snapchat’s big move to go public. The company has done an amazing job building a loyal following, and it’s poised for a monster IPO when it goes public in a few weeks. By raising $3 billion, Snapchat will be worth over $25 billion, and it beat earnings expectations last year while boasting a loyal audience of over 150 million users. So what are some of the things I’m talking about when it comes to hesitations? That has a lot to do with mainstream viability with regards to advertising.

What’s Great About Snapchat

Snapchat has taken messaging and made it something fun and exciting. No matter how many times a user has received a snap, he or she is still happy to see one come in, and the anticipation of opening a snap up to see what someone has sent is as exciting as ever. But excitement does not a $25 billion company make; there needs to be a lasting, broadly-appealing revenue model in order to justify the company’s valuation and keep it going in the long run. There is hope, however.

Currently, Snapchat advertisers are spending more and more with each passing quarter. Snapchat, now Snap, FYI, has also expanded its product offering. The powers that be have seen the opportunity in making the selfie and sharing of everyday, often mundane experiences more lively. It’s not just about adding those filters, it’s about sharing experiences with through the use of things like comments, art, overlays and, yes, filters. I’ve done a lot of research while writing my new book (Marketing to Millennials for Dummies, which is slated to be on shelves this June – #bookplug) and if there is one thing that has become obnoxiously apparent it is that Millennials seek to both have and share experiences. Snapchat offers that, and it is one of the major reasons why the app has done (and continues to do) so phenomenally well with regards to activity and engagement.

But what is missing when it comes to Snap’s potential on the open market?

What’s Missing with Snap(chat)

The big missing piece when it comes to the long-term success of Snap is in its viability as a marketing platform/media buy for SMBs. There are far more small and medium sized businesses out there, and if they don’t see value in leveraging Snap’s products, then Snap is going to have a very hard time maintaining that $25 billion price tag.

Right now, marketers can take advantage of Snapchat’s custom filters for a pretty modest fee – not unlike the very affordable advertising options that exist on social platforms like Facebook or Twitter. The different is in the return generated from the use of these filters. On other social networks, members of a target audience can take some sort of action, like providing data or clicking through to a landing page. Unless you get very creative with Snapchat, like Domino’s did in the UK, you’re going to have a hard time leveraging the network to generate some sort of calculable return. Like Instagram (which has the added benefit of integrating with Facebook) Snapchat exists in the form of mobile application. The thing about mobile applications is that users do not want to have their experiences halted by leaving the app. Add to that the fact that content disappears and insights are limited for advertisers, and Snapchat is at a pretty tricky point with marketers that do not have extensive budgets that can be put towards brand exposure. Essentially, Snapchat needs to find a way to appeal to small and medium sized businesses that can’t afford the massive price tag that comes with Discover ad placements.

So What Should We Expect

The only other tech IPO that is of any interest to the world right now is Uber. Snapchat’s filing has been highly anticipated and the market adrenaline is very high. We can expect to see a similar soar like we did with Facebook when it first went public. (Or maybe the market will be a little more careful this time…) One thing Snapchat has going for it is that it is making a lot of money and has been growing considerably. While losses have shot up year over year, that is to be expected as the company expands into new markets. But will it be able to hit its targets for 2016 and over the course of 2017? That remains to be seen.

Snap is an exciting IPO and if it can find a way to reach audiences greater than Fortune 100s, it will do amazingly well. But just as we’ve seen with television, appealing only to the top 1% as a media buy will not last forever. Snap will need to do a lot of work in order to ensure that the $25 billion valuation is not simply related to the excitement the market feels about the company.

What do you think we can expect to see from Snap after it rings the bell?

Why Targeted Social Ads Are a Good Thing (Just Hear Me Out)

Why Targeted Social Ads Are a Good Thing (Just Hear Me Out)

This week, Adblock Plus announced that it would start serving ads, which is of course, the most predictably ironic thing to happen online in some time. But my question is this: are targeted social ads really that bad?

No; they’re not.

Admittedly, in answering this question, I’m a little bias. After all, if it wasn’t for things like social ads and the industry in which they find themselves, I’d probably be out of a job. This one, anyway. But my professional reliance on advertising notwithstanding, I still think that targeted social ads are, in fact, a good thing. The problem is with the lack of knowledge marketers have about their capabilities, resulting in the removal of the word ‘targeted’ from the equation.

Sick of advertising

An Explosion in Advertising

Call it what you want – direct advertising, social media advertising, content marketing, influencer outreach – paid media is paid media in all its forms. And, considering we have seen the amount of branded content we are exposed to on a daily basis increase by tenfold in the last three decades (about 5,000 pieces of branded content per day, by the way) I can understand why consumers are so sick of it. In this generation of free, the last thing we want is to have our highly tailored experience online ruined with ad content we didn’t ask for, right? And yet, there we are, at every turn, facing a brand new ad.

Advertising is nothing new. Broadcasting messages to a wide audience dates back about 6,000 years (in the form of flash banner ads, obviously) and modern advertising (arguably) dates back to 1836, when ‘La Presse’ in France sold space in its newspaper so that it could lower its price to consumers. We’ve grown accustomed to seeing these ads, we might just have hit a tipping point in terms of how much irrelevant content we are willing to take in. And right there is why targeted social ads can be a good thing.

Getting to Know You

Social presents an incredible opportunity to advertisers that so few are properly identifying. Blanketing your ads to the general public will lead to a higher cost-per-click, a lower click-through rate and an overall underperforming campaign. That’s unfortunate when social provides the tools necessary to generate the exact opposite.

By properly identifying your audience and drilling down into the specifics that make up a persona, you can serve ads that fit right into their online experience. That means that instead of angrily resisting your content, they will be much more likely to explore it. This, of course, won’t always be the case, but by implementing these kinds of strategies, marketers can begin to join in on the experience of social as opposed to taking away from it. This leads users to seek out the ad blocking software that has grown so rapidly in the last few years.

Alas, this is largely not the case. The simplicity with which marketers can use these ad platforms and the cost effectiveness of running large-scale campaigns with generic messages has rendered the social audience exhausted. Targeted social ads can mean a greater connection to your audience, and the first steps in the development of a deeper connection, but so few brands are properly utilizing that strategy. Until they do, social ads are going to be more of an experience detractor rather than something that can benefit both sides of the transaction.

A Brief (Exciting) History of Social Advertising [Infographic]

A Brief (Exciting) History of Social Advertising [Infographic]

Social advertising has exploded in popularity since it launched just over ten years ago.

Anyone who knows me or has worked with me knows that I am a huge advocate for social advertising. I have been working with every social network’s ad platform (both in and out of beta) since I started working with t2, and am proud to say that my insistence on focusing on the area is a big part of why it is one of our tentpole services today.

With that in mind, I found this great infographic that goes through the brief but (so far) very exciting and explosive history of social advertising, so I thought I’d share it.

history of social advertising

 

Instagram Ads and the Future of Social

Instagram Ads and the Future of Social

As Instagram ads are rolled out to the general public, it is interesting to think on the future of social and digital advertising.

Instagram is about to explode. OK – it has already exploded by most definitions, but it is about to explode as an advertising platform. The Instagram advertising API has been switched on, and marketers simply can’t wait to dig into it. In fact, there is so much anticipation that analysts are predicting that by 2020 ad revenues could be close to $4 billion!

Instagram ads projected revenue

That’s 3,500% growth in five years!

Thinking about this brand new (publicly available) ad space and how many Instagram users will soon be digesting ads at the same rate they do on Facebook or Google, one wonders about the future of the socialsphere and what we might see coming out of the industry in just a few short years (or even months!).

Instagram

So, now we will see ads. We’ve already seen some, but these have mostly been tests and betas run by the companies willing to make the significant investments that come with these types of pilots. Now everyone from your local clothing store to international Instagram sensations can begin promoting content.

This has been a long-awaited integration and we have reason to be excited (on the professional front). As with all things free and tech, however, it won’t be long before people are up in arms over the inclusion of paid content. “How dare they?!” we will shout. But will it make any difference? Probably not. People will still open the app ten times per day to pass the time, only now the occasional snarky comment will be left on a brand’s ad.

It’s funny to think that that social network that (I think) has done the best job of seamlessly integrating advertising without an uproar from the public – Twitter – is having the hardest time finding its stride.

And speaking of Twitter…

Twitter Gets a Much-Needed Takeover

Twitter is struggling. Jack Dorsey is a smart kid – there’s no denying that – but he is also the CEO of payment processing startup Square, which is also set to go public. Twitter needs a full-timer at the helm if they ever want to succeed, and the only way to get the network on track might be through a takeover.

Rumblings can be heard that Google will be the most likely to buy the network. After all, Google has decidedly failed when it comes to social (more on that shortly) and Twitter would be a great fit. What’s more, even if Google paid triple the stock price (which they would never do, but humor me for a moment) they would still have double-digit billions in cash leftover. If they paid a slight premium on what Twitter is worth now, they would be able to buy it four times over.

But will Google be the one to take it over? Probably not. (But still maybe. But probably not.)

Larry Page and the Google M&A team are looking to acquire companies that are literally changing the world. Twitter would be a valuable tool when it comes to expanding their mobile and native ad presence (which Facebook is dominating, and Instagram will, too) but Twitter has (probably) affected all the change in the world that it is going to affect. Google tends to go bigger picture.

That said, someone is more than likely going to step in and scoop up the company. Even though it has struggled (despite a smart move to come into the market at an undervalued stock price) there is still a lot of value there.

As For Google

Google has conclusively failed when it comes to building a ‘Facebook Killer’. It built the opposite, in fact. Google built a network that put into perspective just how well executed Facebook really is. So what will become of the ‘social layer’ Google once boasted?

Required Google+ sign in is gone, the building that once housed Google’s tentpole for social is emptying (slowly and sadly) and everything is moving towards alternatives. That said, there are a few things we can still expect to see from Google on the social front.

I wrote an article a little while ago that details what we can expect to see from Google+ and Google’s social efforts. Take a look at it here.

Conclusion

Certainly, there is a lot we can expect to see in the realm of social. It is a constantly evolving space with a ton on the horizon. While these might be the trends of the day, expect so much more to come in the next few months (or even days, who knows?).

Twitter TV Targeting and the Second Screen Experience

Twitter TV Targeting and the Second Screen Experience

The second screen experience has become an increasingly important means of reaching key demos.

Roughly two years ago, Twitter rolled out an incredible new feature that allowed advertisers to communicate with users that were watching a specific TV program, or even a branded commercial. The idea, as Twitter puts it, is to give “networks and brands the opportunity to participate in [Twitter] conversations, and to continue the conversations [advertisers] start on TV with Twitter users discussing relevant programs.” This video does a pretty good job of explaining the goal:

Pretty cool!

Well, while this is a great tool for advertisers, it speaks to a much larger societal trend that is making the lives of marketers (like myself) significantly more difficult every day.

The Second Screen Experience Trend

The second screen experience is nothing new. Ever since smartphones, laptops and tablets became commonplace, the second screen experience has been very much alive, wherever we are watching television.

The problem is that not enough advertisers are taking advantage of it.

On Facebook, there are over 54 million registered Pages, but just the other day I got a ‘Thank You’ message from Mark and Sheryl (Zuckerberg and Sandberg, but you probably guessed that) because I am one of two million advertisers. That’s less than 4% of Pages registered on the network.

On Twitter, the numbers are even lower. In 2014, 92% of social marketers said that they advertised on Facebook, while only 23% said that they leveraged Twitter’s ad platform.

My question relates to the why. Why have advertisers not embraced these platforms for one of their most powerful capabilities: engaging through the second screen experience?

As noted above, Twitter TV targeting – a mechanism that I, as an advertiser, think Twitter has not sufficiently promoted – immerses brands directly into the conversation while it is taking place. One rule I tend to live by and preach to all of our clients at t2 is this: Don’t try and start a new conversation and hope users will come to you; rather, identify the conversations that your audience is already having and join in.

This is a concept lost on so many marketers and advertisers. When and where are prospects most actively using their smartphone? Well, a study conducted by Telefónica’s O2 UK and Sony Mobile found that 75% of smartphone owners use their phone while in the bathroom. The day Facebook and Twitter offer a means of targeting users with ads while they are in the lavatory is the day everyone will pay to advertise. But another one of the most popular uses for smartphones and social media is during TV programs.

Globally, 61% of smartphone owners claim to engage in some sort of second screen viewing activity. 61%!

Taking Advantage of the Second Screen

I’ve written quite a bit about the Golden Age of social media advertising. We’re slowly moving away from that on Facebook as prices begin to mount, but we are still very much there on Twitter. Advertisers are just not taking advantage of it.

Small investments in social advertising at the right time and with the right bidding strategy (see the video below) can generate HUGE returns! If you can identify when you audience is most active based on a series of interests that you are trying to target as well as an analysis of your free analytics on Facebook and Twitter, you can launch campaigns timed specifically to get your message in front of users when they are openly willing to absorb and engage with them.

Now, what do I mean by appropriate bidding strategies? I’m talking about the incremental bidding systems that I developed with my team that have proven to decrease cost-per-action significantly in any given campaign. Here is how it works:

Limiting your targeting to the times when you know your audience is most active will lead to results. It’s about time smart marketers realized this and started taking advantage of the opportunity.

3 Things You’re Almost Definitely Forgetting in Your Digital Marketing Strategy

3 Things You’re Almost Definitely Forgetting in Your Digital Marketing Strategy

There are some things that even the most knowledgeable of marketers might be forgetting to include in their digital marketing strategy.

A digital marketing strategy is a pretty robust thing. With that in mind, it shouldn’t come as any surprise that most marketers and business owners often forget about a few important components that need to be included in a digital marketing strategy in order for it to be successful.

Like I said, there is a ton that needs to be considered in order to build a working strategy, and just because these three components are included, it does not mean that it’s a finished product. But they are important and they are going to help your brand grow online. That said, here are three elements that need to be a part of every digital marketing strategy in order for it to find success.

Social Media Advertising

Gone are the days when paid advertising was a luxury afforded to the largest and wealthiest of brands. Even in more recent years, digital advertising, which consisted primarily of Google AdWords and banner ads, was too grand a cost for most brands to bare. Now, with social media advertising becoming more commonplace (and about as simple a practice as any) all brands can and should be taking advantage of it.

A few months ago, I conducted a little internal case study/experiment in order to showcase the cost effectiveness of social media advertising when compared to ‘traditional’ digital advertising, Google AdWords. I decided to look at a relevant and pretty competitive keyword: ‘social media’. What I found was that on a CPC and CPM basis, social media advertising could be nearly ten times more cost effective when targeting the right demographics on social media (another value added).

Include social media advertising in your digital marketing strategy

So the question becomes, why are brands not jumping on the opportunity to build their digital presence by including a section devoted to social media advertising in their digital marketing strategies? The proof is in the numbers, and the more you work with social ads, the simpler and more successful they become to achieving business-specific goals.

Data-Backed Strategy

I’ve grown to accept that data is not for everyone; I guess my attraction to numbers makes me an anomaly. But if you don’t like data, at least do the longevity of your business a favor and find someone who can help you analyze data and incorporate it into your strategy. Hypothetical marketing plans are a thing of the past. We have a world of insights at our fingertips – literally!

Build your digital marketing strategies using your data

Delving into your owned media (i.e. any digital media that you are in total control of, such as your website or branded social media channels) and industry media (using a listening or data aggregating technology) can produce some incredibly valuable information. This information can help you create things like content strategies, help you identify new demographics and opportunities and begin building ResponsiveBrandingTM campaigns.

Don’t let a distaste for numbers deprive you of a huge amount of potential. Let the data be the driving force behind your digital marketing strategy, and let it reinvent your strategy as it changes.

Influence Marketing

We often hear a lot about influence and influencers, but what exactly are we talking about when we say ‘influence marketing’? Leveraging the power of influencers can launch your brand into a new realm and expand your reach and your own influence in the marketplace. Why is that? It all comes down to trust.

According to the results of the 2014 Edelman Trust Barometer – an annual, global trust and credibility survey – 67% of people trust experts in a particular field, and 62% of people their peers (or, as the study puts it, ‘a person like yourself’). The beauty of influencers is that they can be – and often are – both of those things: industry experts that people consider their peers (in large part thanks to social media and its ability to connect people).

2014 Edelman Trust Barometer for your digital marketing strategy

By identifying your industry’s influencers and reaching out to them, you can forge relationships that can turn into brand advocacy. This can be an invaluable asset when looking to build your business not only in the short term, but in the long run as well.

Conclusion

There is a lot that will go into your digital marketing strategy. These three assets will only be a small part of the overall product, but they can play an important role in the overall success of your business, and so few people are properly taking advantage of them. Next time you review your business strategies, consider including these three elements in your digital marketing plan.

The Demise of Facebook Organic Reach and What to Do Now

The Demise of Facebook Organic Reach and What to Do Now

What do you do now that your Facebook organic reach is about to hit zero?

OK, maybe not totally zero, but virtually zero. Facebook organic reach is on its way out. There has been speculation for some time, but it is now all but plastered on our Facebook Page: organic reach is out. And to replace it, the 96% of brands that are not yet advertisers are going to have to reach into their wallets.

End of Facebook Organic Reach

Why Facebook Organic Reach is Disappearing

As a company, Facebook boasts a price tag of over $150 billion. At the end of 2013, Facebook’s assets sat at roughly $18 billion. That’s quite a discrepancy. This is not unusual, however. Is Facebook’s stock price inflated? Maybe slightly. But that does not take away from the huge potential it has with regards to revenues.

As I noted above, only 4% of brands are currently advertising on the network. With roughly 25 million brands on the network, that leaves an untapped market of 21 million potential customers. Facebook needs to make to start making real money somehow, and this is their best bet. (And a pretty safe one, at that.)

Why Brands Won’t Leave

You might be saying to yourself, “Well, if brands need to pay-to-play, they’ll just leave the network.” Unfortunately for the brand, Facebook has reached that critical mass every company hopes to hit. Sometimes bad for Average Joe and Joanne (i.e. any bank that’s ‘Too Big to Fail’) great for the brand at critical mass (i.e. I return to the ‘Too Big to Fail’ example).

With its current active user base, the fact that WhatsApp has completely devoured the SMS market overseas and the numbers that show the value in using networks like Facebook for business development, brands will not have much of a choice but to buy into the advertising model on Facebook. Luckily, there is so much potential there, so it’s not all bad.

The Good News

Brands need not fear when it comes to advertising on Facebook. By phasing out Facebook organic reach, the network is going to have to entice brands to advertise on the platform. That means a very attractive pricing model.

Contrary to established digital advertising platforms – namely Google’s Search and Display Networks – Facebook is trying to attract new advertisers with a sensationally pricing model. Take the term, ‘social media’ for instance. Using the AdWords Keyword Planner, estimates show that to run an effective campaign that reaches as many of the 60K+ users searching for the term (in the United States) you would need to set a bid at close to $6.00. That’s six dollars per click.

Based on suggested bids per click on Facebook, six dollars can get you over 10 clicks – and that’s on the more expensive end. Here, we’re looking at a ten fold price discrepancy. It won’t be like this for long, but right now, marketers are looking at huge potential when they invest in Facebook advertising.

More good news comes in the ability to narrow your targeting down to the exact audience you’re looking for. Don’t get me wrong: Google has some extremely intelligent software when it comes to behavioural targeting. That said, social networks are filled with people that are explicitly telling you what they are interested in. Here, you know who you’re reaching and the more targeted your ads the more likely it is that the clicks result in some sort of action.

The Prognosis

Historically, these kinds of moves tend to happen much faster in the social world than they do in conventional business. If you look at your clients and tell them that you will be introducing a new pricing model, you’ll likely grandfather it in over time. Take the recent announcement by the government, for example, that they plan on raising minimum wage…over the next three years. In the socialsphere, things tend to happen much faster.

We’ve already seen sharp declines in our pages’ organic reach. It won’t be long before our content reaches a mere handful of fans before its halflife is hit. My recommendation is to make the move to the ad platform sooner rather than later. Familiarize yourself with the ins and outs and start setting ad spends for your brands. Now, no longer will every individual be a publisher, but an advertiser as well.