We’ve been talking a lot about Facebook this week. The site hit 500 million users on Wednesday and has become a sheer force in our digitally obsessed society. Earlier this spring Facebook made the “Like” button universally available across the world wide web, not just on their own site. Brands and businesses have incorporated the “Like” functionality into their own websites to visually demonstrate customer support. While there was a great deal of buzz about the expanded reach of the “Like” button, there has also been a storm brewing around the concept of a “Dislike” button.
I for one would like to see Facebook add a “Dislike” button. If I can express my support for something so easily, why can’t I express my opposition or distaste? There are nearly 3.2 million people that agree with me who belong to a Facebook group called “Dislike Button.”
There are a few obvious reasons why Facebook has held off: first, there is potential for bullying and hurtful use of the proposed “dislike” button. While I would like to think Facebook users are capable of using the “dislike” button wisely, I am sure there are users that would be abusive.
A second reason is highlighted in a new column by Mashable founder and CEO Pete Cashmore for CNN. In his most recent column, Cashmore explains that the “dislike” button opens door for users to negatively impact the brands and businesses that use Facebook for marketing and promotions. He writes:
“Facebook will never add a Dislike button because it would damage the company’s relationships with brands, businesses and web publishers — these groups are essential for building both web traffic and ad revenue.”
While Cashmore makes a strong point that Facebook does not want to alienate the primary source of its revenue, Facebook has also been known to respond to strong user feedback.
Who do you think will win this debate? Are you on team Like or Dislike?
In a recent blog post, Socialnomics author Erik Qualman shared updated figures on Twitter’s presence in the online search game. Twitter has officially edged out Yahoo! and Bing in number of monthly searches. See graphic below:
At the Aspen Ideas Festival, Twitter founder Biz Stone shared that Twitter now has over 800 million search queries per day, which is a 33% increase from the last time he shared search figures in April (2010).
On his blog, Qualman writes, “We have indicated all along that Twitter & Facebook would be bigger search competition for Google than Yahoo and Bing. The fact that this is coming to fruition so soon is astounding. Social search and social commerce are becoming reality and it’s a great thing to see. Keep in mind we haven’t even mention YouTube and its social search activity.”
To the people who say social media is a fad, or that these sites are unimportant for business I say, think again. Consumers are searching for your products and services on Twitter, Facebook and YouTube and if you are not there, they will find another provider.
Last night Racepoint Group hosted an event about social media and its return on investment (ROI). As social media continues to become a larger focal point in public relations and marketing campaigns, it’s critical to understand how to articulate it’s value to clients.
Last night’s event centered around a panel discussion with three social media experts: Larry Weber, Chairman of Racepoint Group, Erik Qualman, author of Socialnomics and Mike Volpe, VP of Inbound Marketing for HubSpot.
After Larry Weber’s opening remarks, Qualman shared how he first dipped his toe into the digital space by sending a company-wide email instead of the standard hard copy memo. View his story here:
Volpe was up next and shared with the group the origins of his marketing career and the way tracking and reporting on ROI is evolving. Watch him provide tips here:
The evening was full of tremendous ideas and recommendations. The five big takeaways from the panel were:
1) Social media is not about technology. It’s about human interaction. It’s about sharing information and making connections. People who are intimidated by the technology aspect of engaging in social media should not view the applications as a hurdle. It’s simply the current mechanism to maintain relationships and reach out to new people.
2) When it comes to tracking social media, its important to focus not only on the quantitative (number of followers, number of re-postings) but also the qualitative. We need to take into account engagement and tone. Qualman said, “If social media is so trackable, we should just have robots running things. The human element is necessary here.”
3) Everyone and anyone can be a content creator, a publisher, a media property. As we shift away from traditional print and broadcast media, both we and our clients have the opportunity to get innovative and create and distribute our own content. Additionally, content creation should not be isolated to the PR and marketing staff. Volpe shared that, “50% of HubSpot employees have written posts for the HubSpot blog.”
4) Although much of PR and marketing is based in the written word, we need to start thinking more visually. We need to tell stories through pictures and videos. We need to make our content more authentic and dynamic.
5) On a personal level, Volpe stated, “The new resume is what comes up in Google when I type in your name.” As digital and social media continue to play an increasingly vital role in our PR and marketing efforts, we too have a digital and social persona, and that is now what employers are most interested in.
Thank you to Erik Qualman and Mike Volpe for joining us at Racepoint Group last night and providing such pragmatic, realistic, useful and inspiring guidance on the social media ROI frontier. Be sure to follow @equalman and @mvolpe on Twitter for real time updates on their social media adventures. You can also view all the live commentary during the event with the #smroi hashtag here.
Performics study of 3,000 consumers, which was released at ad:tech New York last week, looked at how various segments of consumers use social networks in their daily lives, specifically in regard to finding out about different types of products and in relation to other media channels. Two specifically interesting points from their study, were:
30 % of respondents have learned about a new product, service or brand from a social networking site
28 % of respondents said messages about sales or special deal notifications resonate with them
Meanwhile, Razorfish’s report, which was based on a survey of 1,000 “connected consumers,” echoed the sentiment of consumers engaging with brands online, taking action (recommending / posting feedback) and ultimately purchasing – especially when deals are on the table.
Nearly 70 % of respondents have read blogs produced by products or brands (e.g., Nintendo) in some frequency
26 % have followed a brand on Twitter
40 % have “friended” a brand on Facebook or MySpace
73% of respondents post product or brand reviews on Web sites (e.g., Amazon, Yelp, Facebook, Twitter, etc.)
53% have blogged about a product, brand or service
70% have participated in a brand sponsored contest or sweepstakes online
With that data it’s obvious that engagement is continuing to increase, but why are they following? Similar to last week’s study, Razorfish found that the #1 reason for following or ‘friending’ a brand is simple. They want deals.
43% of those that follow a brand on Twitter, do so for exclusive deals or offers. This beat out ‘I am a current customer’ (24%) and for ‘interesting and entertaining content (23%)
Exclusive deals or offers were also the top reason for ‘friending’ brands on Facebook or MySpace
But perhaps the biggest takeaway from the Razorfish study was the data on how online influences (blogs, YouTube, Websites, online customer service, etc) can change brand opinion and ultimately purchase decisions.
65 % of respondents said an online experience has changed their opinion (either positively or negatively) about a brand or the products and services it offers
97% said that experience has influenced their future purchase decisions
In addition, 64% said they have made a first purchase from a brand based purely on a digital experience (e.g., a Website, micro-site, mobile coupon, blog, tweet, email, etc)
Facebook has been buzzing again in publicly noting that it’s now over 300 million users, and perhaps even more importantly cash flow positive.
The latter of which surprising even those that follow the company daily. Earlier this year Marc Andreessen, who sits on Facebook’s Board of Directors, said the company “would do $500 million in revenues in 2009, up from an estimated $280-$300 million in 2008.”
However, this latest news means that the company could do even better than Andreessen’s predictions for 2009, with eyes on a potential late 2010 or early 2011 IPO.
The one question that remains is if advertising will be the singular revenue stream for the company. Yes, the ads we see on our profile pages and news feeds are lucrative, driving the company’s current revenue growth, but are they missing other opportunities to capitalize on a site that has now outpaced Yahoo! as the second most traffic’d site on the Web (Alexa graph).
Douglas Macmillan of BusinessWeek hypothesises today that Facebook’s users can afford to pay for Facebook’s services and Facebook should charge them.
His basic thesis: Facebook users are no longer college kids with little discretionary income, media companies are planning to charge so why not Facebook and they’re in the unlikely Internet position of having power over their consumer base who are devoted to their product.
Some quick math asserts that Facebook would reach the billions in revenue – Andreessen believes they’ll reach in a few years – in a year’s time by charging only $1 per month to its 300,000,000 active users. To the tune of $3.6 billion in annual revenue. Even if Facebook did it to offset advertising to a percentage of users that didn’t want to be bothered with ads, it’d still be fruitful.
So would users pay? The jury is out on that. I have to believe that there are more creative revenue strategies through engagement points (think of them as frequent flyer miles) or even corporate accounts (brands paying to host their Websites / Fan pages on Facebook). On the other hand the thought of pulling in $3.6 billion by only asking for $1 per month from each user is pretty tempting.
With APRs on credit cards doubling out of the blue, investment options dwindling and banks tightening their loan policies, RaceTalk connected with Kim Muhota – CEO of Pertuity Direct – to discuss how online social lending could play a significant role in freeing up consumer credit and helping the U.S. pull out of the financial market meltdown.
A financial services industry veteran, Kim provides insight into the current credit crunch and how social lending (otherwise known as peer-to-peer) is quickly becoming a viable alternative to traditional banks.
Q: Celent predicts that by 2010, there will be $5.8 billion peer-to-peer loans made in the U.S. – an 800% growth from 2007. Why do you think peer-to-peer lending has taken off the way it has?
Peer-to-peer lending has grown quite fast over the last 2 or so years for a number of reasons. Most recently, there is the issue of the liquidity crisis which means that even the prime borrower or small business owner does not have access to credit as they did a year or two ago. Traditional providers are also raising prices pretty aggressively to drive more revenue growth and compensate for added risk – and this impacts the consumer adversely.
There is also the fact that P2P loans are installment loans and are therefore very transparent and user friendly – in other words, there is no penalty pricing, hidden fees or anything like that. The P2P marketplace offers good potential returns for lenders and allows individuals to participate in a vibrant community of borrowers and lenders. So there are multiple compelling reasons why P2P is becoming more of a main-stream alternative than it was just 2 short years ago.
Q: What are the benefits of taking out a loan on a social lending site, as opposed to a traditional financial institution?
Social lending sites offer loans that are well priced (typically between 6.9% – 17.9%) and have fixed rates. Alternatives like credit cards have been increasing their interest rates across the board and have gotten very aggressive with penalty pricing and unfair fees. Social lending sites offer a loan product that allows you to go through the application and approval process in minutes; any time of the day.
The no-hassles loan option is a much better alternative to having to go into the branch, dealing with paper work and high fees. Further, it’s a great social networking opportunity where borrowers can tell their story and lenders can get to see where their money is going. Most of the lenders and borrowers are like minded individuals looking for a better deal than what they are getting from their bank.
Q: JPMorgan Chase — the largest credit card issuer in the U.S. — recently began adding a $10 fee to borrowers’ monthly balances (which accrues interest) and raise minimum payments to 5% from 2%. Is social lending a viable alternative to credit cards help consumers mitigate debt?
Absolutely. The fact that the loans are fixed term and fixed rate loans means that the consumer knows exactly what their loan payment is going to be and they know exactly how long it will take them to pay off the loan. It’s a great mechanism to get proactive around managing debt.
Q: Do you believe that social lending can play a role in helping to reverse the current economic crisis?
Yes. The current economic crisis is driven in large part to a lack of liquidity in the credit markets. Any option that provides much needed credit liquidity will help solve the current crisis – and the social lending model allows for the liquidity in the credit market by the consumer themselves. So in many ways, it’s the consumer driving the solution directly by participating in the social lending marketplace.
Q: How do you see the social lending space evolving in the next 9 – 12 months, following the October 2008 decision by the SEC to crackdown on the industry?
The recent regulatory changes raise the barrier to entry and increases the price to play in the space for the various companies out there. Most importantly, it provides an added level of regulation which is built to protect the consumer – and that’s always a huge positive. I think we will see more people adapting to the social lending marketplace as it continues to gain awareness and traction broadly. As a result, there is a good chance that we will see one or two innovative banks and financial services companies looking to partner with some of the social lending players as a way to get a head start into what is positioned to become a great customer acquisition channel.
For more of Kim’s thoughts on the current credit and liquidity crisis, you can check out his posts to the Pertuity Direct blog here.
Disclosure: Pertuity Direct is a Racepoint Group client
As I log into Facebook each day and quickly read through my “news feed” to see what my friends are doing (much like how “normal” people read the daily paper), I’m noticing a trend. These days news feeds are also populated by advertisers and products that want to update me on free ice cream at Ben & Jerry’sor new candy from Mike & Ike’s (Facebook’s targeted ad system must have me mixed up with a sugar-comatosed eight-year old boy).
However, I’m also noticing that a leading Web company is advertising on Facebook. You may have heard of them before, they’re called Facebook. Yes, as confusing as I made it sound, Facebook is advertising their own ad network in most user’s news feeds. My 17 year-old sister, for one, also has the image I posted above popping up in her news feeds with supporting text that says, “80 million users strong. With Facebook’s highly targeted ad system, how will you connect them? Learn here now.”
That my friends, does not equal the likelihood of a high Click-Through-Rate (CTR). I love my sister to death, but her current understanding of advertising -and interest in it- solely revolves around the latest Prada bag she bought thanks to what she saw in Cosmo.
Why to begin with is Facebook advertising its Ad Network to everyday consumers? Wouldn’t they be better suited to target the advertisements to users in the industry that actually have control over advertising budgets (or even work for a company in my sister’s case).
It really points to the bigger problem that Facebook has. Its targeted ad systems just isn’t that targeted. The company is on the right track in creating social advertising but the holy grail of the next generation ad network will be intelligently engaging in brand discussion with the right group of segmented users. Facebook needs to find a way to better target their advertisements so advertisers (including themselves apparently) will know that their product/advertisement will be recommended to a certain % of consumers that have a high likelihood of buying the product or service.
It’s all about CTR’S, which are created by getting relevant ads in front of interested users. Until they can figure this out, they might want to stop advertising their ad network all together.
As business issues around globalization, sustainability, green IT and social responsibility become crucial for any corporate communications strategy, Racepoint Group is excited to announce today a deepening and expansion of our corporate and public affairs capabilities.
Racepoint has added David Whitmore as executive vice president of our new Washington D.C. offices.David will be heading a growing office that now includes: Brian Lunde, senior consultant of issues management and government relations; Timothy Binning, senior consultant of issues management and government relations; and Rich Blewitt, senior advisor crisis and issues management (who joined Racepoint several months ago).
The new Washington D.C. office will join our offices in Boston, London and San Francisco.
Using Racepoint Group’s expertise in digital and social media, the Washington D.C. practice will deliver a next-generation corporate practice to help companies enhance their reputations and navigate the challenges of 21st century communications.
For more information, read our press release on the new offering.
From energy efficiency to reuse, recycling and sustainability, green is an emotive issue. The subject is covered by the media and bloggers with differing levels of accuracy and relevance. RaceTalk took the opportunity to speak with James Murray, editor at Business Green.
James is one of the UK’s most respected specialists on green issues. Here, RaceTalk gets his insights:
RaceTalk: Hi James, many thanks for taking some time out to talk to us today. Have you been surprised by the growth in volume of communications on green issues?
James: Not really, it’s been one of the longest running but slowest burning issues of the last 10 years! I think the impact Al Gore made was a big kick-off point for the most recent movement – that’s almost two years ago now, so it’s taken quite a while for the majority of companies to get their houses in order.
RaceTalk: In terms of the volumes of PR communication on green issues – have you been seen a dramatic rise in that in the last 6-12 months?
James: Yeah, absolutely, that’s really come through. It took a year for companies to get their heads around green issues and decide whether they wanted to do something.
Now we’re moving into the second year and they are all trying to communicate and push the green message – it’s really taken off. However, while it’s approaching the mainstream, it’s still not completely mainstream and a large proportion of companies have yet to adopt a green strategy so the potential for it to expand is enormous.
RaceTalk: Given the rapid growth of green communications, how would you rank the quality?
James: It varies enormously. It depends on the maturity of the PRs and the companies they represent. What I will say is there’s an awful lot of rubbish out there – PRs just cobbling together a survey saying that: “businesses now care about green issues” or “90% of businesses are starting to worry about energy costs.” It’s so passé and it’s been done to death, but then at the same time you are getting a lot of organisations that have a good solid handle on how to adopt green practices and communicate them. These are the ones that have good stories to tell and products that actually meet green standards. Communication with these guys doesn’t come across as marketing fluff.
RaceTalk: Obviously, you are a specialist in this area and you know the issues inside out. How would you rank mainstream media’s coverage of green issues?
James: From a business perspective that’s part of the reason we launched. The environmental coverage particularly across the mainstream media tends to lean towards ‘tree-hugging’. There is an assumption that all businesses are raping and pillaging the planet.
The business press meanwhile has struggled to get their collective heads round this whole new sphere. It’s there for them to worry about, but they haven’t really got in-depth understanding of environmental issues and legislation to be able to report on it adequately.
RaceTalk: Do you think procurement departments are updating their buying and due diligence approaches by incorporating environmental considerations?
James: Certainly. It’s slow progress but it is happening. All Government departments are legally obliged to do so and now more than ever, you can see multinationals doing it. In fact, a good example is Walmart. They’re actually dropping suppliers that don’t meet required standards now on the environment. On the technology side, HP has a big outreach programme to all it’s suppliers to try and train to improve environmental impact. The importance of the issue is gradually filtering through to mass business and consumer consciousness.
RaceTalk: Does any organisation stand out as excellent communicators in this field?
James: It’s a very difficult one. In terms of the big names it’s hard to fault companies like M&S and HSBC – they’re not perfect but they have communicated their initiatives well. Aside from the big boys, some of the younger, less ‘sophisticated’ companies like Ecotricity, Innocent smoothies have grown quickly from a solid environmentally conscious base – ultimately, they find it a lot easier to communicate because they don’t have skeletons in the closets.
The consumer technology industry is a mixed bag. Most are doing it quite well and the majority are open about the fact that they have got major issues within the industry.
One thing I will say is that there’s a large and growing element of Greenwashing going on. It must be tempting to say that the latest model is green when in fact, more often than not, the greenest thing is for users not to replace the previous product! There is also the tendency towards communicating the benefits of energy efficient devices, but at the same time a lot of nasty chemicals are inside the product or being used in the manufacturing process.
There has been a degree of honesty I think from the IT industry that they’ve got problems, and the level of R&D investments from the big members in improving energy efficient has been pretty impressive so I’m hopeful that in the next 5 years we really will see progress.
Ultimately, the question in the back of our minds is whether the tech companies back away from green issues and revert to pushing as much kit as possible, regardless of environmental concerns, or whether they are genuinely serious about this.
So there is a list of reasons why Coke is bad for your health (even though Coke wouldn’t have you believe any of them) – but at least they’re committed to helping the environment.
Coca-Cola is serious about making a difference, and they’re not just talking the talk – they’re walking the walk. Their new initiative moves beyond a traditional bottle recycling campaign to take aim at vending machines.
Vending machines and commercial coolers that keep drinks cold run around-the-clock, rely on inefficient compressors and, worst of all, use HFCs, a potent greenhouse gas. So when Greenpeace challenged the Coca-Cola Co. to get rid of conventional vending machines and coolers, the world’s largest beverage company promised to develop replacements that are 40 to 50% more efficient and HFC-free.
Since then, Coke has invested $40 million in research and testing, published a 900-page technical study and organized a coalition of companies that sell cold drinks and ice cream, including Unilever, McDonald’s and (gasp!) PepsiCo., to attack the problem. Last year, at the World Economic Forum in Davos, Coke declared victory: E. Neville Isdell, the company’s chairman and CEO, and Gerd Leipold, who leads Greenpeace, unveiled a new, HFC-free, super-efficient vending machine. About 8,000 of the climate-friendly machines have been deployed, most to high-profile venues like Davos and the 2008 Summer Olympics in Beijing.
Marc later wrote in his blog that he’s become an admirer of Coke as he’s learned about the company’s sustainability work.
It’s great to see a company investing money to make real change, because although recycling bottles helps, that along is not nearly significant enough to spur wide-spread results.
This is explained in a video that BusinessWeek’s Heather Green wrote about yesterday called The Story of Stuff. The video goes into detail about our production and consumption patterns, and exposes the connections between a huge number of environmental and social issues. It’s 20 minutes long, but worth every minute.
The bottom line: Coke’s actions are admirable, but we need a lot more businesses and our government to take action in order to make significant changes.
