Mobile Fix – Facebook reinvents marketing
Simon Andrews, founder of the full service mobile agency addictive!, says Facebook is increasing its focus on advertising ahead of the IPO…
The Facebook Marketing Conference rolled into town last week, with Facebook announcing its new tools and techniques to UK marketers. With pretty much the same story as the event in New York a few weeks ago, it is dialing up the focus on advertising ahead of the IPO.
The big news is that Facebook’s reach generator, where by paying you are guaranteed to reach 75% of your brands fans versus the average organic reach, which is around 16% according to Facebook.
Some of the smarter thinkers about social media are questioning this – pointing out that some brands are achieving 20% reach daily and up to 85% in a month. But with the news ticker impressions now folded into reach figures this is getting harder to measure. The thing is, Facebook need brands to spend money with them on ads rather than spending money on people who optimise the organic reach.
We are going to see new creativity in Facebook and their call for brands (and agencies) to think about why should people care and why should people share.
Another interesting development at Facebook is their recognition that design is really important now.
Making advertising work better
We’ve talked in the past about how the $50 billion gap between time spent online and the money spent online is having a corrosive effect on content creation. As analogue dollars turn into digital cents, most of the media organisations creating the content that people value are struggling with the need to produce more content for the same or less money.
Michael Wolff has written a great article on how the business model for news is imploding as mobile grows. He does the math and shows how mobile is getting a fraction of the revenue of online, which was already much lower than print. In effect $100 revenue in print shrinks to a $1 on mobile.
Unless we sort out the true value of online and mobile advertising, the content that draws the eyeballs will disappear.
New research from comScore will help. Their validated impressions mean that online advertisers can now be confident that the right people see the ads they buy. The tool allows advertisers to measure reach and frequency against various audiences, using GRPs to give a much closer comparison between online and traditional media. One stat that came out of the research was that many campaigns are planned and bought at far lower weights than in traditional media. One campaign mentioned was 40 GRPs, which means it reached just 8% of the target audience – and was seen an average of five times. It’s not too long ago that a typical TV campaign was 10 times the size of that – 400 GRPs reaching 80% of the audience. So if people say online doesn’t work, it could be because it’s just not reaching enough people.
So better measurement should encourage higher investments, but to close that $50 billion gap we need brands to invest as well as the direct response businesses. Google are developing a research study to improve the way advertising impact is measured online, which is promising.
The research project we’re planning – to prove that mobile can build brands, based on our ancient YesSirNoSir study – is coming along nicely and we’ll shortly be looking for media partners. We’re also developing some thinking around whether Robert Heaths seminal work on Low Involvement Processing could be how online advertising actually works. We’re keen to talk with any research companies interested in helping us develop this.
Patent wars
We mentioned last week that Apple were trying to impose a new nano Sim format on the market. Rival device manufacturers, including Nokia and Motorola are resisting this as they fear Apple could exploit the patent at some time in the future. Well Nokia is fighting back by flexing their patents. They are threatening to withdraw 50 patents they hold if the Apple proposal is approved. This would mean that no-one could build a Sim card to Apple’s design but wouldn’t affect current Sims.
Patents are becoming a huge issue in technology. A key reason for Google buying Motorola was obtaining 17000 patents, with a further 7500 pending.
Facebook are getting in on the act too, with a more modest purchase of 750 from IBM. But given that they apparently only had 56 before, it’s a big step up.
Mobile disruption
Amex is using mobile and social to carve out a new position in money – and their view that we’re four or five years away from the tipping point for mobile wallets to really take off is interesting. Dan Shulam of Amex thinks the retail refresh cycle for upgrading in-store payment terminals is around four years. This supports our view that there is no business model to support retailers investing in new kit, so we’ll have to wait for it to wear out before NFC becomes common.
Another interesting part of mobile money is direct to bill payments, where purchases are added to your mobile bill. UK firm Banjo has built a strong position in this space and now work with Facebook, Amazon and RIM.
Further evidence of the disrupting effect of mobile on retail can be seen by this new app from US department store NiemanMarcus. The app does all the usual stuff but also announces your presence to staff, allowing for a whole new level of CRM. And the location based shopping app ShopKick has added some heavyweights to its board.
Finally
We had a lot of fun at two excellent events in the last few weeks. At MediaTel Group’s Mobile 2012 – the year of reckoning? we took part in a really good panel (including Google, RBS and Everything Everywhere) talking about the role for operators and why money isn’t flowing into mobile – yet. And at the IPA inaugural Mobile Inspiration day we did Mobile Fix live, summarising the key themes from a series of impressive demos, including Google, Apple, Zeebox, Aurasma and Blippar.
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