Jack Dorsey must not abandon Twitter Commerce for Display Advertising Model

Jack Dorsey’s recent submission about the Twitter platform ( “Twitter is live: live commentary, live connections, live conversations.” ) has created/reinstated an enthusiasm among various stakeholders for another revival for the company, from 30% below the IPO listing price with over $500m loses, high employee turnaround and, more importantly, low user growth.

Once the closest rival to Facebook, Twitter has reduced to a 10th of Mark Zuckerberg’s empire and there are many hypotheses around, from the famous open blog from to Chris Sacca to Dick Costolo’s claim for shareholder pressure for a quick and high-profit margin, to a disengaged developer community, as to why Twitter is struggling to take off, both monetarily and on the popularity front.

No doubt since Jack Dorsey took over as CEO, company has shown some promising progress such as a redesigned home page for non-registered users, talks about increasing tweet length to 10K, Twitter Moments, support for GIF and videos, re-integrating the developer community to develop apps using Fabric and opening Direct Message for non-followers. However Jack failed to show any progress on the Twitter commerce side, which in my opinion might leave the company with a lot to catch up with on the social commerce or sharing economy side, which is growing at a far higher rate than any other commerce medium.

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Marissa Mayer must play bigger gamble than Summly to revive Yahoo!

Yahoo

Since Marissa Mayer took over Yahoo, shares are on continuous rise and behave gone from the slightly embarrassing price of $14 to a rather respectable $26. And all credit should go to her quick turnaround approach of product consolidation, management makeover, site revamp, acquiring new-generation start-ups and drive to remain top of the interest graph.

Perhaps it is too early to form an opinion, but recent progress hasn’t shown any real intent from Yahoo to indicate that they would really like to make inroads into the very social media and cloud oriented content generation world, as all these new developments are around enhancing their existing products and linking to Facebook or Microsoft, which rely more on content aggregation than crowd generation.

So let’s look more deeply at Yahoo’s current situation, potential issues and what might help them to overcome these problems and bring old glory back!

Yahoo is consolidating products and services, cutting costs and trying to acquire some new generation start-ups

Marissa joined the company after the Jerry Yang boardroom wrestle and then the very untimely and embarrassing CEO (Scott Thomson) exit, but she is trying very hard to bring focus back to company’s core competence and she and senior management indicated  that Yahoo’s objective is to create personalised and interest-focussed mobile content for users, so that display ads, the prime source of revenue, can continue to grow and give her and the company breathing space to decide their future direction.

One undeniable fact that still hugely favours Yahoo that its home page is one of the most visited and where people spend the longest time, especially in the USA.

But this is not enough

Google has been doing it for many years and the rise of the likes of Facebook, Twitter and the now revitalized AOL as display ad networks means that Mayer knows that display advertising is a very competitive field and she needs some real wow factors to remain in the game long term. Therefore, she has already started exploring other avenues to increase shareholder value, ranging from cost cutting via senior management exits and staff redundancies, to discarding some non-profit products, trying to shed some shares from Alibaba, raising stakes in Yahoo Japan , buying start-ups like Summly, Pinterest-style news startup, Snip.it, video chat startup OnTheAir and Stamped; rumours about Zynga and Dailymotion are also circling around.

Overall, Yahoo, with core competence around content generation and leveraging that via Yahoo Mail, mobile and web and vertical search, are determined to enrich their content factory, which may be a quick fix, but looking at current trends of content consumption or distribution from text, images, music , social network and/or video, Yahoo don’t have any products or services in the top two or three options, which means the future is not that rosy until Yahoo/Marrisa Mayor come up with a product line that can stand out from others in this biz!

What can Yahoo do to become a $10bn company?

If Yahoo wants to regain top spot, they know they have to fight with new content generation tools like Facebook, Twitter, blogs like Huffington Post, and new generation vertical search engines like Kayak.com, TripAdvisor etc. Only acquiring content aggregating companies like Summly or some other start-ups might not be the long-term solution; rather they have to look to more cutting edge and matured companies such as:

Yahoo do an AOL and buy Tumblr/Disqus

AOL’s revival is legendary. Tim Armstrong kept to basics i.e. generating content, but this time did something out of the box and bought new generation blogs like Huffington Post, TechCrunch and Engadget, which means they are very much in the social and interactive world and now in the top five most read categories for politics, sports, technology and others.

If Yahoo buy blog hosting sites like Tumblr with over 200 million blogs, or comment generation tool like Disqus, they would have a very cutting edge solution to integrate their display advertising concept!

Yahoo does a Google and aims for an enterprise presence by buying DropBox

Even though Yahoo Mail is still a huge presence, they failed to materialise that in the enterprise arena and I think that, in the same way that Google drive mail and business apps, Yahoo must expand their offering to businesses. Perhaps buying a company like Dropbox, in the same way that Microsoft bought Yammer, could be the way forward?

Yahoo buy a new generation of vertical search engines like TripAdvisor;

Buy Yelp or FourSqare to provide some real-time location-based mobile services – this will give a huge boost to their mobile push;

Buy WhatsApp or another new generation messaging tool.

Like Microsoft with Skype and Google eying up WhatsApp, Yahoo should also jump into the race, as SKYPE, Twitter and WhatsApp have, and change the way we message now – Yahoo must grab this space before it’s too late!

Yahoo must bring search in-house

Coming from Google, no-one knows better than Marissa that search is the trick to make bucks in the online arena, because search is about intent, not just interest, and intent to buy something can drive more money than just mere interest.

Conclusion: Play big with $4.8bn cash – otherwise slow death

Overall, Yahoo is great company founded on aggregating content and creating a one-stop shop portal along with Yahoo Mail and search. However along the road they missed the social, search and mobile boat which reduced them from one of the web giants to a company struggling to survive, and if Yahoo want to compete with Google, Facebook and Twitter now, they might have to take make some drastic changes like buying Tumbler, Dropbox, Zynga, Disqus, or Yelp, who can help them crowd source content and make inroads into the enterprise market. If they don’t take a major step, some smart tech teamed with old-fashioned aggregation and directory structure will only lead to slow death.

In other words Marissa Mayer is right to push for interest graph and mobile-oriented content but rather than banking on small start-ups, she must make a bigger gamble by buying established cutting edge tech companies and restoring the advertising space that used to belong to Yahoo, who had over $7bn turnover in 2008!

Dick Costolo is right to aim for one billion twitter users and more monetisation maturity before an IPO

Seems like both Twitter and Wall Street are embracing the Twitter IPO sometime in Q4 of 2013 or very early in 2014. No doubt Twitter growth has shown loads of promise and, in the leadership of Jack Dorsey and Dick Costolo with some notable new hires, they have a very balanced team in place to execute the plan. In addition, recent Super Bowl data more or less confirms that Twitter has become a second screen while watching telly!

From Grammy Awards to Olympics, everything seems to be gaining momentum at Twitter, and no one can ignore Twitter’s growth: the number of users has doubled since 2011, and the range from celebrity to businesses to the masses has made this an integral tool for information publishing and gathering!!

To monetise their success, Twitter has been rolling out various advertising and data mining products such as promoted accounts’ tweets, and licensing Twitter stream to 3rd parties! And the results are very encouraging too: Twitter has generated over 300m revenue and a variety of companies from Kuwait investments to the Black Tones have invested a substantial amount to leverage this service!

But despite all this success, the $10billion question is, is it really a $10bn company? That’s the evaluation by secondary market; and is it really ready to go public, and has it got a proven and sustainable long-term revenue model? And how can they make sure that they will not meet the same fate as Facebook, Zynga and GroupOn, when launching into the stock market?

http://siliconangle.com Image

https://Twitter.com/PrivCo/status/297566587509157888

To find the answer, let’s look at what Twitter has in its armoury to justify its valuation, and the potential products and services they can offer to keep generating value for their shareholders.
Like Google and Facebook, Twitter too is a numbers game
Twitter is playing their huge user base card, which no doubt is really very impressive, and as soon as they roll out its services to other countries it grows exponentially! Current stats suggest it has over 200m active users with 30% growth every year. These can be categorised into 40% active participants (i.e. those who read and write tweets) and 60% listeners (who only read tweets from top brands, celebrities and friends). Twitter claims around 40% of people follow brands to find special deals and new product information, and 80% follow their favourite celebrities and journalists to keep up to date with news, gossip and other information. Overall, Twitter has a huge base with a vested interest in business-driven information, not just focusing on mingling with friends like Facebook!

https://Twitter.com/PublicisUSA/status/301330359730188289

Twitter can leverage its user base by selling advertising
Considering Twitter has a huge user base interested in various types of information, they have come up with the idea of an interest graph to help businesses to leverage people’s interests. Therefore, like other content driven businesses, they have launched advertising products like promoted accounts and tweets. They also verify businesses for a fee, to give them more credibility on their platform. In summary, these products are very basic online advertising products with similar kinds of conversion ratio, which would act as cash cow for Twitter in the long run.

Platform openness enables Twitter to license their data too
Twitter via Gnip and DataSwift and them self has gone into 3rd party data licensing where Twitter sells data generated on their platform to businesses for further integration and analysis; no doubt this has huge potential for business, as this can help them to trap customers and/or market sentiments and subsequently help them to develop their products and services. Lately businesses have also used Twitter as a communication channel to provide customer support!

And now, like LinkedIn, Twitter is exploring industry-specific B2B products
They are also actively integrating and exploring opportunity on TV analysis and recently got into a partnership with Nielsen and bought TV social media analysis company Bluefin Labs. This shows Twitter is ready to leverage their success from last Super Bowl, where 50% of advertisers integrated Twitter hashtags to carry on conversations with customers after their 30 sec TV ads. This is a huge opportunity for Twitter as TV is still gets the most eyeballs for businesses; however Facebook is also apparently testing a watch button, which means Twitter could face stiff competition from its obvious competitors.

Twitter with Amex has introduced commerce too

Twitter has also taken an initiative with Amex to enable users to buy products just with a tweet; it is an enormous minefield to explore as Twitter with credit card details and using hashtags can really make commerce very simple, but users might shy away from using tweets as a buying instruction, as you are telling (or spamming) the world, not just friends, that you have just done the transaction. Facebook is trying this concept with Facebook Connect and Facebook Gifts.

Twitter is replicating the micro-blogging concept with video and images!!
Like any tech company from Google to Facebook to Apple, Twitter too has a huge challenge to come up with a product line so that investors can see scalability and be comfortable with investing. The reason for this is probably that in this day and age disruptions occur at supersonic speed and if Twitter keeps banking on their obvious product line, it may not be on the map after a while. However, Twitter is aware of it and they have already introduced a Twitter-like video service, @vine, and have improved image attachments to take on Instagram and Pintrest.

But and it’s a big but – Twitter will always have issues about data ownership and Privacy
I think Twitter will at some point find themselves in the middle of a data ownership controversy where they will be in the crossfire with authorities and their users for not sharing the revenue with those generating content on their platform. Basically, Twitter is licensing and analysing, and subsequently selling, data that is not produced by them and therefore, somewhere along the line, someone will ask the question, why is the content producer not getting a share from data licensing?
I think Twitter might need to adopt the Youtube business model where they share revenue with publishers too.

Per user valuation might be too high like Facebook?

Facebook launched $100bn valuation IPO by valuating per user around $100, when they were yielding only $3/user and subsequently struggling in the stock market. LinkedIn valued their company around $4.3bn for an IPO, when they were making around $5/user and now trading at two times of the list value. So for Twitter with $1.5/user, a $10bn valuation might not be the best valuation?

*Note: Calculations are based on Facebook Revenue $3.5bn and 100bn users, LinkedIn revenue around $944m with 200m users and Twitter revenue around $350m with 200m active users

Twitter technology and ecosystem desires more!
Twitter was recently blamed for killing its most progressive ecosystem when they suddenly changed their API terms and conditions, citing the reason that there are too many hackers around, stopping Twitter making their services consistent across the platform. However even after that, technology is still not resolved e.g. tweets are not synchronised on all platform i.e. if I deleted a tweet on iPhone, it still appears on my web client, if I don’t delete from there too!

Conclusion – All going in the right direction but Twitter need to prove more monetisation tools than advertising to launch an IPO!

Overall it seems Twitter is, like Facebook, making sure that they have strong user base and, like Google, they are hoping to leverage big data produced on their platform via selling advertising. The openness of Twitter has also enabled them to license their data to businesses for further analysis and/or use their content to provide industry specific products. Plus, the lesson they have learned from Facebook’s recent hiccup on the stock market and Apple’s on-going agony of not having a product roadmap, forced them to start thinking of future products, leading to partnerships with Nielsen and Amex and the launch of micro-video-blogging app @vine, which means Twitter is ticking all the right boxes.

However, despite being on right path, apart from growing their user base and advertising products, the rest of the products need to be monetised before Twitter can launch into the stock market. After the Facebook, Zynga and GroupOn stock debacles, any move from tech companies will be received with a pinch of salt by investors. Also, Twitter as a sharing platform might need to embrace sharing economy i.e. sharing revenue with content producers to ensure they have sustainable non-controversial revenue model and do not end up in various court battles. Therefore, the right thing for Twitter is to first prove their model beyond advertising, and then to value their company correctly before launching on the stock market. But would investors have the patience to wait that long, given that businesses lifecycles are shortening at lightning speed these days?

Is Google (not Facebook or Twitter or LinkedIn) poised to win the Graph war?

Recently we have had big announcements from Facebook, Google, Twitter and LinkedIn around improving or extending their search technologies! Facebook announced a social graph to leverage social relationship data, and then Twitter introduced human-aided search results to cut the noise and deliver more precise and interest-driven data via search results; The LinkedIn CEO, Jeff Weiner, claims that LinkedIn will be the home of a world economic graph to consolidate the human resources and skills market, and Google has its eyes on a knowledge graph with more holistic data to enrich consumer searches with complete information. So what exactly is this graph war; why are these companies insisting so much on graphs to leverage their platforms; and who will come out as the eventual winner?

We have looked at all these graphs and analysed the pros and cons to reach a verdict on who might be going in the right direction.

Facebook joined the search bandwagon by introducing the Graph Search beta version. No doubt the Graph Search premise is founded on very lucrative logic, which promises to enable the Facebook user to search things within their extended social circle, and as studies suggests that 73% of the time we do, or buy, things based on friends’ references or recommendations, we might end up using Facebook search more often than even accessing the newsfeed or timeline or Google!
In addition, Facebook will, at some point, release this whole functionality to developers via APIs to integrate to their apps and/or websites, which means, like Facebook Connect, the site can now integrate Graph Search to enrich their customers’ journeys with recommendations, reviews and so on i.e. higher conversion!

Pros:
• People can find relevant information based on their interests, activity and location within their social circle e.g. “best pizza restaurants in west London area” and “SkyFall”.
• Businesses can now weave in their ads to search results, similar to Google AdWords i.e. higher conversion.
• Facebook Connect with Graph Search enables websites and apps to integrate customers’ social circle’s sentiments for corresponding products, to help them in decision making.
• Graph Search analytics will enable businesses to have better customer insight, as they would now know exactly what people are looking for through search keywords, locations etc.

Cons:
• Privacy and Data Protection is still a huge concern for Facebook and Graph Search
• Processing 2.5bn likes, 1 bn comments and 3bn pictures upload every day to produce an accurate search graph is not easy.
• Facebook Mobile integration is running behind.
• The data war between Twitter and Facebook is leading to a decoupling, so social data is incomplete.
• Facebook uses Bing as default search engine, which may be a liability rather than an asset.
• Facebook is often used to show off i.e. we don’t share everything we buy on Facebook!

Twitter Interest Graph and Human-Aided Search Results
Initially Twitter started to sell their advertising products based on an interest graph, but it has also recently enhanced its search algorithm by introducing human element (using Amazon Mechanical Turk) to ensure people get the best results when they search live events based on hashtags, keywords, pictures and/or with certain linguistic emotions. Personally, I am the biggest fan of the Twitter platform for finding information, and if they manage to fix their search it could really be a game changer, as the amount of information from various sources they have is unmatchable!

Pros:
• Business can tap into the latest trends to promote their products and services.
• Businesses can use Twitter sentiments analytics to build their products and services. Twitter sentiments are used by the stock market and TV industry.
• Most of Twitter data is consumed on mobile clients, meaning businesses can tap both mobile growth and crowdsourcing!

https://twitter.com/alexhisaka/status/291312770064986112

Cons:
• Despite introducing human intervention, the processing of 1bn 140 chars tweets with free text, emotions, images and videos every two days for accurate search results is still a humongous tasks for Twitter.
• Twitter are reluctant to share profit with the community, which means businesses who are banking on customers to share their services on Twitter, in order to get maximum traction, won’t see much sharing as there is no benefit to the consumer.
• Interest and commerce don’t go hand in hand.

LinkedIn’s vision to produce an economic graph in the next 10 years

LinkedIn’s vision to produce a world economic graph sounds like one of the most realistic and promising approaches. Over the years professionals have already built up their profiles, using the LinkedIn platform for both professional and personal development, and Now LinkedIn is aiming to weave profession, location, and skill sets together to create an economic graph of the business world, which means they can map out human resources and skills supply and demand stats by location, industry, job description etc.

Pros:
• Business development executives are using, and will continue to use, the LinkedIn network for lead generation.
• The recruitment industry is using, and will continue to use, LinkedIn to find best candidates, and vice versa.

Cons:
• Like other crowdsourcing tools, it has data quality issues.
• LinkedIn doesn’t link with Facebook and Twitter data, which would allow a more complete economic graph.
• How will they cover tacit knowledge and skills to complete the economic graph?

Google Knowledge graph (with top search algorithm, G+ , YouTube, Google Place, Android)
Despite all the noise around Facebook, Twitter and LinkedIn graphs, Google has also recently enhanced their search result displays with the introduction of a knowledge graph concept, to give a holistic view to site visitors. For their knowledge graph, Google uses its top quality search algorithm to pull data from various sources including Youtube, Google Images, Wikipedia, Google News, Google Maps and various blog platforms to ensure users have all the relevant information in one place. However, Google still faces severe criticism for its inability to show more recent (i.e. Twitter and Facebook) data in its knowledge graph. To combat this issue, Google is rigorously trying to collect current trending data on G+, which will eventually feed into the knowledge graph. And all kudos to Google, in no time G+ has already become the second most sought-after social networking site!

Pros:
• The knowledge graph with the best search algorithm, YouTube, Google Images, Google Maps, Google News, and G+ data, gives far wider reach to businesses for both promoting their products and understanding their customers.
• Surely behind the scenes Google is feeding Android and DoubleClick experiences into knowledge graph to let businesses and consumers leverage graph features on the mobile platform?

Cons:
• The knowledge graph is missing Facebook, Twitter, Pintrest and Instagram data , which have become part of consumers’ online profiles.
• Businesses perceive G+ to be more or less an SEO tool.

Conclusion

Overall, we know Facebook’s social graph and Twitter’s interest search graph have huge potential to benefit both consumers and businesses, but data privacy, quality of search results, reluctance to link to each other’s data and, let’s get real, how many times we really like to talk about our shopping, apart from when we are knowingly or unknowingly showing off, means all these social networks, despite their claims to breaking the code, have a long way to go before becoming forces to be reckoned with when it comes to understanding consumers.

However, LinkedIn has so far managed to make its niche and is heading in the right direction to become a B2B lead generation and job search engine, by focusing only on professionals and their working relationships!

And despite many critiques and predictions of Google’s demise, it continues to grow year by year at very healthy rates, which demonstrates that when it comes to buying or taking any decision, people still go at Google to find information and Google’s strong grip on the mobile platform via Android and DoubleClick is helping to shape Google’s knowledge graph, to make sure search results now comprise all-round information via Google Maps, Google News, Google Images, Google+ and YouTube, so that consumers can find all they need to make a decision.

All in all, I don’t see any feasible threat to Google in the near future and in fact if they can pull together worldwide content including ecommerce site content, location data, YouTube, Google News, Google Images, Google Maps and Google+ content and process and render this via the knowledge graph in the way they have done for web search, they have a clear winner and are likely to remain on top of the game for a long-long time to come, even in the graph war!

Will the High Street evolve as a Pre- and Post-sales or Market Research Tool like Social Media?

Havoc is the word that comes to mind when one reads about the post-Xmas meltdown of top retailers like Jessops and HMV, with so many job losses and uncertainty around the existence of other businesses and of the high street in general.


At the same time the swords are out again against online retailers (like Amazon and eBay), who are being blamed for these job losses and for dragging consumers away from the high street.


So what exactly is happening to the high street? Is it really online retailers causing the damage or are bricks-and-mortar businesses failing to successfully convert into companies that combine a high street and online presence? Is every retail shop going through same decline?

If we look at HMV and Jessops, they were already struggling to survive due to the advent of the digital content distribution era, where buying music and developing photos from shops became things of past. These businesses have been giving profit warnings now for three or four years and their failure to innovate caused their ultimate demise.



But does this mean the end of the high street, as many renowned retailers are going into administration? Will high streets become ghost towns with a few coffee shops with free Wi-Fi and charity shops, or will they evolve to allow a different way of shopping?


For the answer to this we have to look at bigger picture. I have picked some positive examples and experiments being undertaken by some successful retailers in order to remain in, or make a mark on, the high street.
The first one is John Lewis. Despite repeated profit warnings from their immediate competitors like M&S, Top Shop, and H&M, John Lewis has remained at the top of its game by offering unique and quality products with a five-year warranty (for white goods and electronics products) to its customers.

The second one is Apple, who, true to its brand image, is keen to redefine the customer experience by giving them a free hand to play with its products, as well as excellent customer service in its stores, and keeping the online and offline price the same! Not many people know this, but Apple, with no official social network channel, collects its offline store usage data to improve their products and services i.e. use their store for market research!

The third type of examples or experiments are from online marketplace eBay and search giants Google, who both have taken an initiative to open popup stores in high streets or within existing retail giants, mainly to do pre-sales, where people can try, scan, play around and ask questions before buying things online!

The fourth type of experiment is from again Google. They are working with high street retail stores to deliver products on the same day i.e. the consumer can order a product online and it can be delivered the same day by the nearest offline store!

It’s worth noting that Jeff Bezos from Amazon categorically denied that Amazon is intending to open high street stores to cater to their consumers, citing high cost and a lack of obvious immediate need. In addition, Amazon have launched a price comparison app to scan any offline product’s image to get cheapest online price.

Overall, despite the reluctance of online retail giants like Amazon to enter the high street zone, consumers like to experience things before buying and retailers need to capture real customers’ data and behaviour; I don’t think the high street will disappear from the map or will become a giant coffee shop with free Wi-Fi for book or newspaper reading on tablets or smartphones. I think it will evolve as a home to those retail giants who can change to meet current consumer demands of high quality with durability, like John Lewis, or can host stores with pre or post sales (i.e. delivery) or subtle market research facilities, like Apple, and new initiatives taken by eBay and Google, such as a Facebook page or twitter channel, where businesses interact with their customers to educate and/or provide post-sales support for their products. However, the whole transition will be very painful, with many job losses and old beloved brands disappearing from the market; and on the retailer’s parts there will be lots of hard work to win digitally-equipped consumers.

Is it really mobile vs. social or mobile + social = commerce?

As soon as the black Friday commerce data was published with a thumbs up to mobile commerce and a hard beating to social commerce, people started doubting all the hype surrounded social commerce! In a way this thrashing can be justified, as businesses are now expecting significant return on investment after spending substantial amounts of money on social media marketing, from paying consultants to running guerrilla campaigns to engaging people via this medium.



Black Friday Commerce Stats

On the other hand, an introduction of smartphones and tablets has hugely boosted the mobile commerce numbers and if you believe the pundits, by 2015 every 3rd online transaction will happen via mobile device and every second offline buyer will check goods prices on a phone before buying it in the shop!



And as a result of this, every online and offline retailer is vigorously competing to introduce apps with all the latest technologies, such as voice recognition, Image and barcode scanning, to win mobile-savvy customers and to support mobile payments; meanwhile, all remittance suppliers are surging ahead with one-click mobile payment technology!

Which means, if John Smith wants to buy a tie he’s just seen in a magazine or website, he will scan that on his phone to check best available price and buy in one click to be delivered next or same day to him! i.e., the convenience at the best for price sensitive customers!!

So the question is – in this mobile and app commerce world, where does the social commerce fit, or is there any room for the social-verse when all swords are out for Social ROI? And the answer is – definitely social commerce is going to prevail due to simple reason that, we gradually start spending more of our online time on social media networks,those have become our second point of contact when we are watching TV, dinning at restaurants, shopping at mauls or even spending time with friends.

However, there will be a transition, or perhaps it’s already happening, from finding information (or products) on social media to eventually buying the product from that medium! Currently even social media networks from Facebook to Twitter to Google+ to Pinterest are positioning themselves as information gateways, so that when it comes to finding the best shopping trends, images, ratings and reviews, many look at their social universe but still buy on at non-social network platform ranging from Amazon to eBay.And for businesses social media is the place to collect data as thousands of people around many platforms are talking and sharing views continuously about their products!



I think the next stage would be, or perhaps already is, that we will be able to buy desired products from purely social networks rather than using them just as pre- and post-sale discovery tools.


However, I am not a firm believer in an app economy i.e. I don’t believe that apps running on social media will be the main tool of its transition from discovery to transaction tool.


But, if Facebook, Twitter and especially Pinterest can become pure marketplace for both suppliers and consumers, yet maintain consumer privacy and business identity, than they have a winning formula.
And, to a certain extent, Facebook, Google, Twitter and Pinterest brand pages, widgets and APIs are gradually building social interest and knowledge, and professional graphs, which are the right steps in social commerce directions, where both businesses and consumers can interact and know each other. However transactions with payment are still a stumbling block as these networks don’t have their users’ credit card info, which means that to make payment on social networks, both suppliers and consumers needs to seek third party help.

I think here Apple, Amazon or eBay, with millions of consumers’ credit card details, are in very advantageous position, and if they somehow manage to amalgamate social media to their platforms, then we have winner too! But Apple, with Ping, has already burnt their hand in this area – eBay is currently going all image driven (like Pinterest)– results are yet to be seen! And Amazon reviews remain one of the most prominent places to find product information, but not the place to hang out with friends!

Overall even, if we know the winning formula for Social Commerce is eBay + Facebook, there are still a few very hard yards to cover to reach this stage. We all know that just as we don’t hang out with friends in shops and don’t buy goods in restaurants or bars, it would be a humongous task to mix social and ecommerce sites, but I am sure we are not far now from a time when we will have the technology to mix these two, leaving buyers’ privacy and business identity intact. And while this transition will take place, mobile will become (or has already become) the prime device to find and buy products and services. Which means the formula for successful monetisation would be mobile device + social network = commerce!

Why is Mick Jagger so angry with Ticket Reselling Sites?

Since Channel 4 showed its documentary on inflated concert ticket prices and how this market can be manipulated by secondary ticket sellers and event promoters, many angry voices argue against aggravating ticket prices, and against resellers, whenever tickets go on sale for big concerts, music festivals and gigs. This is really putting the whole entertainment industry in a very bad light, especially well-known artists and event organisers. In fact, recently Mick Jagger went on record to defend the roles of the Rolling Stones regarding inflated prices for their sold out 50th year celebration concerts, mainly blaming reselling sites for all the chaos.

To be fair to the fans, it is really absolute rip-off when they buy tickets for their favourite artists and events at double or triple the list price.


So now the question is why are ticket prices so high? Is it really secondary sites who are pushing resellers to sell tickets at very high prices, or vice versa? If it is, why is the government not introducing regulation to curb this situation? Or is it simply a supply and demand situation where supply is comparatively lower than demand and therefore ticket resellers are cashing in? Or are ground zero list prices too low for organisers and not really covering their costs; therefore they are forced to allocate a large chunk of tickets directly to resellers to sell on at premium prices?

To find the exact reasons, we may have to look deeper into the ticketing industry and how it works. Ideally there are many layers between artists cash-strapped due to less music royalties and fans. These layers include music publishers, event promoters, venues, fan clubs, ticket resellers and corporate houses.


So the industry is a complex web of event commercialisation, where everyone wants to grab as big a chunk of pie as they can from highly emotional and impulsive fans, who are prepared to go the extra mile to see their favourite artists and events.

So for example an artist like Robbie Williams, whose publisher is EMI Music, can have a concert at The O2 Arena, London, promoted by AEG Live with tickets going on sale at Ticketmaster, and therefore all from EMI to The O2 Arena, to AEG Live, to Ticketmaster, can have an exclusive partnership or commitment with fan clubs or corporate houses like American Express, Barclaycard or O2 mobile customers, to provide some exclusive tickets on list price. This means not all tickets go on sale to general public. On top of that, the limited tickets for popular events go on sale very early, at least five or six months before the show date, and usually are sold out within day or two. In nutshell, it is very hard for a fan to get hold of tickets at list price because there is a very small selling window and a requirement to plan very early!

Considering this multifaceted ticketing system and early ticket sales, as well as sometimes the number of fans wanting tickets outnumbering the total ticket numbers that go on sale, the resellers take advantage. And there is no regulation around resellers putting tickets on sale at far higher prices than the list price.

So what are the ticket industry and regulators doing to help fans find their tickets on time at list price? To be honest there is no definite answer for this. Even if ticket sites like Ticketmaster and Eventim have a ticket alert service, to email fans when tickets go on sale, honestly how many of us open those alert emails?

Robbie Williams’ promoters this time issued e-tickets, with a requirement for a valid card holder to be present at venue, to avoid resellers grabbing tickets. A seemingly good idea, but what if parents bought tickets via credit card for their teenage kids? Do they have to tag along with them to the concert to get them entry? Recently Bon Jovi issued £12 tickets for their fans, but unfortunately 60 to 70% of those tickets were bought by resellers and resold at £45-£60.

Many independent interest groups are lobbying the government to completely stop ticket reselling in the UK, but what if a site setup outside the UK, providing tickets by next-day UPS and FedEx delivery, starts reselling tickets on far higher premium?


AXS.com is coming up an idea to enable fans to register their card with an event wish list, so that when favourite artists’ tickets go on sale, AXS will automatically reserve tickets for them; but what happens if between a fan registering their card and the tickets going on sale, their circumstances change and they don’t want to go, or can’t go, and they forgot to cancel registration at AXS.com? This would lead to unnecessary costs of cancelling tickets etc.

So what may be the solution to this problem? I think answer may lie in an out-of-the-box technology solution with no vested interest in the ticketing business, which can help us to develop a platform purely dedicated to tickets, where fans can easily find, compare and buy tickets for their favourite artists. A ticket portal might disrupt the ticketing industry in the same way that Kayak.com has done in the flight industry, bringing in price comparison and taking the middle man from between flight ticketing companies and flyers; or in the way that TripAdvisor, with its robust review system, has changed the way people book hotels; or Nectar cards, with refined customer data management technology, have changed the way businesses organise their customer retention. A platform where fans can feel safe, not ripped off, get a holistic view and reviews, get incentives for loyalty, be informed via the best possible, and non-spammed, way, and on top of all that find the best prices, can create a win-win situation for both promoters and fans.

I don’t think the solution lies in regulation, because resellers will find loopholes and make it more lucrative than before; and I don’t think concepts like pre-book or email alerts can reduce prices, due to their spamming issues and complicated processing structure.

Overall, due to high demand and complex ticket selling structures, it will always remain challenge for both promoters and fans to keep price in-check, at least in short run. However, if a highly sophisticated consumer driven technology solution evolves that can enable fans to find and buy tickets as they wish, with no hassle, whenever they go on sale – that might reduce some tension among fans and save promoters and artists from the wrath of their fans!