Tag Archives: Social Commerce

How To Solve Marketing Problems for Startups using Social Media ?

Social Media Marketing

My top tip to promote your start up business with social media is to focus on one area of conversation topic and to be very selective about spending any money on advertising at all. I am very strict with my own time management to read new articles and stories from reliable and professional sources. You can comment on reputable online trade journals with links back to your website or blog but make sure you add value to the article and not just an aggressive sales pitch. Be prepared to give before your receive.

I started my business in 2008 with just £1 and a smartphone and a very niche service. I had to plan my blogs and tweets with precision.

The quality of my business connections was more important than quantity of connections. I am focused on how large retailers are using social media locally and I need to hangout online and offline in places where my clients would be.  I choose a blend of Retail trade press and individual blogs and tweets from a small group of practitioners, rather than over hyped general thought leadership with no substance or just a ‘rant’.  I am a loyal viewer of Bloomberg West too, broadcast in the UK at 23:00 on Bloomberg TV. This programme gives a good insight with interviews from the people running the future technology businesses in Retail.

I also am a great believer in tracking down original data to back up my thoughts for my own social media feeds, for example, we published an article for our Social Retail Blog recently which took my team 3 weeks to prepare behind the scenes. It was audit of over 20 large retailers and how they were developing their local social media strategy, or not as our results showed.

So when you’re starting a business and you have very little cash resource for paid advertising, I would recommend social media is the only option to help you connect with future clients and empower them to talk about you in their own words. This means you must focus your business on adding value to your clients’ whilst constantly keeping an eye on your competitors and changing with your environment.  There are no short cuts so invest your time wisely and be focused.

In a B2B context, try and get as many opportunities to speak at industry events and possible and tweet live from conferences so people can see that you’re  contributing towards communities.

Most importantly, don’t give up! Treat every client with a personal service and ensure that they are 100% satisfied with you. As the UK is coming out of ‘The Great Recession” there has never been a better time to start up a business and use social media to grow your connections at the speed of a tweet.

Why Facebook, Twitter and LinkedIn Have Failed to Commence Social Commerce?

Social commerce

Online commerce is on the rise; last year online sales went up by 20% worldwide and touched down at over $1.5 Trillion. Mobile commerce has also made inroads and accelerated commerce through internet-enabled portable device. The turnover of online retailers or marketplaces likes Amazon or EBay is far higher than many yesteryears retail giants and has forced multiple closures and mergers within retail industry.

Despite all this growth, online commerce is always poised for disruption i.e. businesses and start-ups are trying to find new ways to sell their products and services: pure electronic and/or mobile commerce sites/applications (e.g. Amazon); combination of ecommerce and marketplace (e.g. EBay); email subscription-based commerce sites (e.g. Groupon); and price comparison sites (e.g. Kayak.co.uk).

And now with the growing popularity of social networks like Facebook, Twitter, LinkedIn, Pinterest, and Instagram, there are many attempts within these networks, or by start-ups, to find ways to commence transactions in this medium. However, so far success is limited to marketing products and services via various forms of display and notification advertising techniques. Let’s look in to what exactly the issues are with social commerce:

1.People don’t mean what they say on social networks

Many studies suggest that social networks have lost their spontaneity and more become tool for brand and personal perception management. In other words people don’t really say what they mean; instead they broadcast things they believe will improve their perception in the public, which means social networks can’t really predict people’s interests, and therefore businesses are finding it hard to really target people based on their taste for any further transactions.

2.Dark social is far bigger than public social media

Despite the huge success of social networks like Facebook, Twitter and LinkedIn, people still largely use personal messages in the form of mobile text messages, email, WhatsApp, Skype and Snapchat to communicate with their friends, and mainly use public networks for general socialising, which means again businesses are clueless about consumers’ real intentions and fail to convert them to sales.

3.Semantic analysis is not smart enough

Social media is all about freedom of expression and people can express themselves in many ways e.g. write text, share sentiments, and upload videos and images. So far, semantic analysis has failed to understand the intent behind rich media. Therefore businesses are really unable to see their spending on display advertising converting into high sales.

4.Social networks are not designed to support the commerce journey

A typical commerce journey is finding, buying (payment) and delivery of products and services. However, because Social media is still evolving and is not designed to support transactions (LinkedIn has become the place to build a professional circle, Twitter is to catch up with current news and events, and Facebook is to hang out with friends and family), so users are not intending to use these networks for product discovery and delivery.

5.Social Media is too open for phishing

Due to the very open nature and perception of social media, privacy is always a big concern when it comes to divulging some sensitive information such as credit card and bank account details. Therefore consumers are very apprehensive of doing transactions on these platforms, which means businesses are not getting return for advertising investment on these networks.

Conclusion

As mentioned above, social media is still evolving and not designed for commerce. However, considering the amount of time we spend on these networks, which results in our giving out a lot information about our interests, intent and knowledge, even though very dispersed, social commerce is inevitable. As we speak, many efforts are in progress, from social media giants like Facebook and Twitter to start-ups like Tweepforce, to make genuine social transactions a reality.

And being involved myself with a social commerce start-up, I think the first thing these networks need to focus on is to start thinking of simulating the traditional commerce journey (product discovery, transactions and delivery) rather than inventing new ways for consumers to buy on their platforms. For example, when I want to buy a new watch, I should be able discover the best watch and then buy and receive delivery of it, on any given network. This is a humongous task and as I stated above there are many hurdles, but it’s not an impossibility. Let’s see who manages to break this code first.

2014 belongs to Social Commerce, Bitcoin, Wearable Tech and Sentiment Search

2013 saw the rise and rise of mobile commerce, the stock market launch (and surge in share price) of social media sites such as Twitter, LinkedIn & Facebook, the introduction of wearable technologies like Google Glass, and high demand for Bitcoin took its valuation to $1,000.

Google shares reached over $1,000, LinkedIn shares are trading at over 300% of their original value, Twitter and Facebook shares are strong too. Overall, the year was very exciting and reached heights that caused  critics to suspect a tech crunch just around the corner.

On  the downside, 2012 stars like Zynga and Groupon have struggled to maintain their share price and profits, and Samsung and Apple went to war over various patents.

Amid all these highs and lows, I have spotted some trends that might dominate the coming year’s technology developments.

1.Facebook, Twitter and LinkedIn might need to think beyond display advertising or parish

Social media networks have become the most popular and most time-consuming sites and applications for users and the big three ($FB, $TWTR and $LINKD) are already trading on Wall Street with a combined valuation of over $200bn and a valuation per user over $100,  but revenue per user still in single figures. Therefore, I think to justify their valuation and competitive advantage, these networks will be forced to find means for brands to do commerce solely on their platform, because revenue merely based on display advertising and industry specific marketing products is not good enough and might only take them to closure rather than leading them to flourish.

2.Google, Samsung and Apple will indulge in a big wearable technology domination war

The Consumer Electronics Show (CES) 2014 in Las Vegas is full of companies (including LG, Intel, Sony, and Samsung) demonstrating wearable technologies, such as: smart watches, smart bands, smart ear buds, and smart glasses.

Apple and Google are not participating in CES 2014 but undoubtedly they must be keeping track of their competitors with an eye on the almost saturated smartphone and tablet market.
Apple has already filed a patent for iWatch and, due to shareholder pressure, might launch this in 2014. If we believe in the continuation of historical trends around competitors product launches following Apple’s new product release, I am sure Google glasses will come out of beta and Samsung will improve their already launched Galaxy Gear in order to be top of their industry; a wearable technology war seems inevitable.
https://twitter.com/tim/status/410097802664890369

3.Sentiments and Location Search will replace Google Keyword Search

For many, Google keyword search is still the primary form of data finding service. However, the rising popularity of Q&A engines like Quora, Facebook’s Social Graph, Apple’s Siri, Google’s Map, and recently launched Social search app Jelly, by Twitter founder Biz Stone, indicate the futuristic search trend is more aligned to human sentiments, where users can search stuff based on real intention rather than generic search terms.

4.APIs accelerate Marketing Automation but surge bot rates too

“A study by Incapsula suggests 61.5% of all website traffic is now generated by bots. The security firm said that was a 21% rise on last year’s figure of 51%; however, Activity by ‘good bots,’ it added, had grown by 55% over the year.”

The trend will continue because marketing automation with artificial intelligence is gathering momentum and content networks and providers are giving access to their data via open APIs.

5.The direct messaging industry is poised for disruption or consolidation

Snapchat, WhatsApp, Blackberry Messenger (BBM), Twitter Direct Message, and Facebook Messenger process over ten billion direct messages every day. However, none of these has managed to determine their monetisation model, which means consolidation is inevitable. Biggies like Facebook and Twitter in particular are trying to spread their wing in this sector.

6.Bitcoin or virtual currency will become mainstream

Recent developments in the virtual currency industry are:

1) Bitcoin is trading at $1,000 after Zynga announced that they will take Bitcoin as formal currency to sell their products or games.

2) Many companies are already following the Bitcoin success story and launching their own currency such as “a new Bitcoin-like virtual currency inspired by rapper Kanye West is set to be launched, and has been named “Coinye West”. Kanye West is not involved and has yet to comment on its inception. It will follow in the footsteps of “Dogecoin”, another virtual currency based on the popular Doge meme.”

3) Amazon and Facebook are pondering their own currency too! Overall, 2014 will see virtual currencies become mainstream!

4) National government such as Singapore Tax Authorities (IRAS) Recognise Bitcoin;

Apple, Facebook and Beyoncé provide the first real social commerce case study

On 12Dec Beyoncé released her new album exclusively on iTunes without any hype or pre-release marketing. The announcement came on Instagram when Beyoncé released a fifteen-second video showing clips of her new album, followed by a Facebook post with a link to the iTunes page to download songs and videos.

Without a doubt, within seconds of the announcement the whole social media world erupted with a buzz around the new album and iTunes crashed due to overwhelming demand for her music.
https://twitter.com/ShreyaMehta_/status/411475919136915456

Everyone from the media to fellow celebrities jumped on the bandwagon to endorse the star and so get more eyeballs on their respective profiles and websites.

Fans too went crazy about the surprise gift for them just before Christmas from their favourite artist. They were in awe of the subtleness of this launch with no advertising and hoopla. In fact even Beyoncé critics were forced to accept this genius marketing move and were full of praise.
https://twitter.com/andrewwaunc/status/411475368131198976


What does this mean for digital marketers and social commerce?

Apple (iTunes) and Facebook (Instagram), with Beyoncé, have given us the first pure social commerce case study, as this whole experience, from announcing her new album on Instagram & Facebook and releasing it on iTunes with an eruption of follow up word of mouth buzz on Twitter, did not use any traditional means of selling products and services. And yet it managed to:

1) Supersede traditional marketing channels such as newspapers, magazines, music blogs, radios and online advertising.

2) Bypass traditional commerce channels that force you to register your personal and payment details before the transaction.

3) Be a real time experience with ubiquitous accessibility and capture pre-holiday impulse buying.

I know, these are early days for social commerce, as Beyoncé is already a world famous artist, and getting huge attention on social media and exclusive deals with iTunes have made this release an overnight sensation.
https://twitter.com/__megxn/status/411460478666551296

And, there is strong possibility that Tim Cook and Mark Zuckerberg, along with Jay-Z, put together a deal behind the scenes in order to put Instagram and iTunes on the social commerce map, but this experience has been a lesson to digital marketers on the future of commerce, where on demand accessibility with a personal touch will define product and service monetisation, and traditional means of expensive and cumbersome advertising and transactions will have no place.

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!

https://twitter.com/Twitter/status/298310493230206977

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!!

https://twitter.com/Twittercomms/status/300851167909523457

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

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!

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.
https://twitter.com/TwitterSmallBiz/status/301384233249820672

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!
https://twitter.com/crowdedocean/status/138347832267640832

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.

https://twitter.com/satyap/status/301227867554082816

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.
https://twitter.com/SanFranciscoCP/status/275618801897312256

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?