Practise what you tweet

Today I got a spam tweet from a company that does A/B testing. It read:

@alexsteer If you're interested in A/B testing, would you like to follow us?

I declined. Then I looked at their Twitter feed, and saw that they'd sent the same message to lots of other users.

Using the exact same words.

Surely, if you work in A/B testing, you mix it up a bit?

Branding consultants who talk in corporate speak. Social agencies who repost banal links. CRM companies who get your name wrong in the email. Weird how we drink our own kool-aid but don't eat our own dog food.

# Alex Steer (12/03/2014)


Black boxes

This post by Faris Yakob got me thinking with this side thought:

My concern is that the advertising industry is in danger of being taken for a ride by the same people who have destroyed trust in banking.

I think the ad tech industry is currently repeating a lot of the mistakes that the financial industry made a decade or so back. And look how well that played out for us all.

It's hiring a lot of people with backgrounds outside of marketing, with specialist skills in statistics and software, and setting them interesting challenges around measuring and optimising the performance of ads and media bids. All of which, when done properly, makes the industry smarter and better informed. The problem comes when those skills aren't balanced with a knowledge of what that industry is trying to achieve in the world. Then you get what you saw in finance and what you're seeing in advertising - solutions that trend towards the things developers can do most simply, and the things they find most interesting, rather than what's most important. And you get a lack of proper oversight and understanding from the people who commission and sell those solutions. The result is a lot of black box algorithms and snake-oil tech that neither the buyers nor the sellers can explain. And that creates a classic market for lemons.

Advertising needs smart planners and smart technologists working together: using strategic thinking to understand what ads really need to achieve, data analysis to see if they're achieving it, and technology to help them achieve it better. And even if the 'how' of the details is specialist, the 'what' shouldn't be. No part of the process of making, distributing or measuring advertising is so complicated that you can't explain it to a moderately well-informed person.

You should know what you're buying, basically - what it's meant do, and whether it does it. Anything else is not just pointless, it's risky.

# Alex Steer (12/02/2014)


Making money on the Hype Cycle

If you work in technology, you know the Gartner Hype Cycle - their superb rundown of what's hot, what's busted, and what's valuable in the field of emerging technology.

They've just released the latest update, and here it is:

gartner-hype

So how do I feel about the fact that what I do - big data and content analytics - is sliding down into the 'trough of disillusionment'?

I couldn't be happier.

The peak of the cycle is where investor money pours in, startups proliferate, sales pitches are made, forecasts are inflated, and lies are told.

But the trough - where people are let down, angry and disillusioned - is where businesses grow, and where money is made.

If you survive long enough to make it to the point where people are fed up hearing about your industry, you've probably learned a lot along the way. About how to put yourself in your client's shoes; about respect for existing ways of working; about the limitations of what you can do; about the importance of a good team; about what really makes a difference to the ways a business operates. If you're still around once the hype money has flowed out, there's a chance you'll make it.

My bet is that the next year will see the quiet extinction of a lot of marketing data/analytics startups that never found a business model. The ones that survive will be the ones that spent the last few years doing more listening than talking, and that are now answering useful questions that businesses have been asking since before big data was a thing.

# Alex Steer (08/11/2014)


How to use Twitter's new 'impressions' metrics

We published this update to clients earlier this week. I'm reposting it here in case it's useful to anyone working with Twitter data. If you have questions about this or want to know more, drop me an email.

Within the last few days, Twitter has released a major update to its analytics platform. One of the new metrics included is 'impressions' – a count of how many times a tweet was seen. This information was previously available only for promoted (paid) tweets.

Fabric's data science team has been analysing the new data for our clients' accounts. The result is striking: on average, only 16% of followers see each tweet that a brand publishes.

Why this matters

The update means that, for the first time, brands can compare the organic performance of their tweets against their other media – and particularly against Facebook.

Facebook has been widely criticised for the declining 'organic' reach of brand posts, which we have been tracking since Q4 2012 and which is now as low as 2% of the total fan base, for large brand pages. Twitter has largely escaped such criticism because there has, until now, been no way of knowing how much free reach a tweet gets. This means it's been impossible to quantify the media value of a Twitter follower.

This has led to some fairly wild assumptions. A common industry shorthand for 'Twitter reach' is the total number of a brand's followers, plus the total followers of anyone who retweets that brand's content. This is a hugely optimistic measure of 'opportunities to see' that doesn't stand up to scrutiny: we know that people don't spend all day glued to Twitter, and they don't see every tweet from every account they follow.

The average reach of a tweet

For the last two years, Fabric's data science team has used an algorithm to give a rule-of- thumb estimate of true organic impressions. We've suspected that the view count of a tweet is a low percentage of the follower count, just as it is on Facebook.

Over the last few days we have been digging into the new Twitter data for our clients. On average, we've found that an un-promoted tweet is only seen by 16% of a brand's Twitter followers. For 'reply' tweets, the figure is typically between 1% and 2%.

Retweets help improve organic impressions, of course – but not by the vast amounts assumed in many calculations. There is no significant relationship between 'favourites' and the impressions a tweet gets.

Two metrics that matter

Marketers should pay attention to the new 'impressions' metric. It shows how far a tweet really travels and will let brands do better optimisation of the best times of day and week to schedule un-promoted tweets.

The other metric worth watching is the 'multiplier' on promoted posts: organic impressions as a percentage uplift on paid impressions. This is the hard currency of social media – the extra reach you achieve as a brand because people chose to follow your account, and retweet your content.

# Alex Steer (07/18/2014)


What planning is for

If you care about the question implied in the subject line, read Martin Weigel's speech to the APG, but especially this:

In a world characterized by constant change and innovation, planning will be knowledgeable about the fundamental principles of marketing and communications. It is breathtaking how little planning knows about how businesses actually make money, and how brands grow and are sustained. It is equally depressing how uninterested many planners appear to be in any of this today. Planners who find this stuff too tedious, or beneath them, would probably be better off advising production companies, than advising clients on how to address their business issues. In contrast, radical planning will take a keen interest in how our clients actually make money – in the business behind our clients’ brands.

There's so much wisdom in the whole piece, but I believe the root of it all is what's above. Planners should know how to use marketing communications to help increase an organisation's revenues, by reinforcing and changing perceptions in ways that reduce the cost of sales or justify higher prices. If they can do that, they will still be valuable to people who manage brands, regardless of the kind of organisation they work in.

# Alex Steer (06/18/2014)


Fun with funnels

The more I think about the tendency to overstate the importance of ROI in digital and social media channels, the more I wonder whether marketing technology companies are implicitly trying to reshape their clients in their own image.

If you run a software start-up, you really care about sales funnels. That's because most of your marketing activity is sales activity. You develop a great product, you get feedback on that product and improve it, you generate qualified leads and you sell to them. With technology in particular, a lot of this activity happens online and can be tracked; new leads can be stored in CRM databases; and there is a defined customer acquisition funnel down which you can see those leads moving.

Do you know what doesn't work like that? Selling margarine.

Yet if you believed the way in which a lot of marketing tech firms talk about selling a £1.50 tub of margarine, though - or beer or jam or deodorant - you'd swear that it was exactly the same kind of problem as selling a £15 million software license. People who sell retail analytics software obviously want you to believe (and tend to believe themselves) that there's definitely a sales funnel in your category - you just need the technology to help you see it.

The truth is, there probably is no funnel if you sell margarine. You don't move from 'aware' to 'in-market' to 'loyalist' to 'repeat purchaser' in any meaningful way. In fact, there's excellent data demonstrating that in these categories loyalty (the classic bottom-of-the-funnel effect) is largely a function of market share.

So even if people did buy all their margarine online (and they don't), being able to track every stage in the customer journey wouldn't necessarily give you much advantage.

When you sell low-price products to the mass market, you grow share by making many small, weak, positive brand impressions in people's minds - not by 'closing' customers and moving them up a linear sales funnel. That logic works for high-price, high-consideration, infrequent purchases like cars, computers or mobile phones. For cheap, fast-moving goods it matters far more that you know which brand and advertising metrics correspond to sales growth, and that you have a way of measuring which advertising content and media is performing best against those metrics.

# Alex Steer (06/18/2014)


The ROI error in social media

From time to time, people ask me how to demonstrate the ROI of social media. For the record, this is my answer.

  1. You should calculate the ROI of social media in the same way as you calculate the ROI of other media.
  2. You should calculate the ROI of social media content in the same way as you calculate the ROI of other advertising creative.

ROI is one of those trump cards that you can always play as a marketer or advertiser whenever you want to sound like you're being businesslike and focused. It gets played a lot when we're talking about digital or social because those things feel intrinsically less familiar to many advertisers than other types of media (TV, press or outdoor, for example).

As a result it can become a sort of comfort blanket, a way of saying 'I don't want to do this' that doesn't involve grappling with the difficult issues of how best to use new media channels to a brand's advantage.

'Show me the ROI' is an unfair question to ask, if you're not following the two guidelines above. Specifically, people tend to ask more of unfamiliar media than they do of familiar ones.

Do you know the financial contribution to your business of your last press ad, or of that sponsorship banner at the cricket pitch? Can you split out the contributions of the media (the placement and format of the advertisement) and the creative (the advertising content itself)? If you know those things, I am impressed, and you are perfectly entitled to ask the same questions of your Facebook posts or that witty Vine video you published.

If you don't, though, you should hold your social media and its creative content to the same standard of measurement as your other advertising - not lower, but not higher either.

That means, in practice, that where you have developed proxy metrics for one medium, you should also develop them for your others. Suppose, for instance, you have worked out that reach and frequency for your TV advertising is a valid indicator of future financial performance for your brand; you should apply the same modelling to your social media. If possible, you should do this properly, with your research agency, developing a valid model that will let you say, in future, that you are confident that metrics X, Y and Z are useful predictors of likely sales growth.

In lieu of that, it makes sense to start with metrics in one channel that you at least know are valid in another, if you think that there are good enough reasons to think that the two channels are broadly alike. If reach and frequency matter in TV, they might also matter in online video, for example; if in press, then perhaps in Facebook posts.

Doing that at least gives you a business case for continuing to invest in channels that you believe are important, while you test and prove whether or not they are. One of the weaknesses of social media providers is their enthusiasm for promoting their own rather obscure metrics, which don't allow for such easy comparison. One of the things we do at Fabric is to help marketers cut through that definitional clutter, to see which oddly-named social metrics in fact have more old-fashioned ones underpinning them: online equivalents of reach, frequency, impressions, word of mouth, etc., that at least stand a chance of being validated.

# Alex Steer (06/16/2014)


Finding business models in big data

In July last year, at the height of the big data nonsense surrounding the doomed Omnicom/Publicis merger, I wrote this about the overused notion that 'it's what you do with the data that counts':

Everybody with a bit of common sense in marketing knows this, and could tell you where and when they want to use data more – when identifying specific challenges and opportunities, when taking the temperature of an issue and figuring out a response in real time, when measuring and adapting the performance of creative content mid-stream during a campaign, and when measuring the relationship between short-term activity and long-term brand value and behavioural change.

I think it's still true, and I think this is a crunch time for the firms that flooded the marketing industry selling the dream of big data. They're maturing, they need to get out from under the wing of their startup funders, and that means they need to start developing proper business models that attract customers and generate revenue.

Based on what I wrote above, I think there are four business models where big data will make a serious impact on the marketing industry. They are:

  1. Adding good-quality behavioural data into the econometric models used occasionally in strategic planning.
  2. Supplying metrics which can be used to measure and improve the ongoing performance of advertising content and media.
  3. Supplying metrics as inputs to advertising effectiveness research and brand tracking.
  4. Increasing the speed and breadth of information-gathering during crisis/reputation management situations.

None of these things - marketing strategy, media measurement, advertising research and crisis management - is new. Extra data and new technologies improve them rather than transforming them. Because of that, the data has to be additive: it needs to let marketers see or do what they saw or did previously, but better.

The winners are likely to be organisations who understand what data marketers already have, and how they use it: management consultancies, media agencies, and research agencies in particular. The most successful start-ups will target these relentlessly and concentrate on being useful rather than sounding smart. This is likely to be a bumpy transition for firms who have thrived on VC money rather than customer revenue for so long.

As the market matures, biggest red herrings will be the things that today sound the whizziest: ad-hoc predictive modelling, sentiment analysis, customer lifecycle modelling and automated adaptive advertising. All of these sound (and are) extremely smart, but they're a bad fit for what brand marketers want to be able to know and do, and how consumers behave in most categories. They make for a good sales pitch but a high-risk business model.

# Alex Steer (06/15/2014)


De-cloaking

Time I got back into this blogging lark, isn't it?

That's going to happen both here, and at a Fabric product blog we'll be starting soon. It's been a busy few months, during which we've launched our product, brought on new some major new clients, and started nailing down our positioning, moving out of stealth mode and become a serious part of the marketing data landscape.

If you don't know Fabric or what we do: we help global brands use data to make the most of their digital content. Our main product is a web app that helps marketers see how their digital content is performing. We've been quiet for a long time while big data's been going through its hype phase, but we're now collecting a billion lines of data a day for 150 brands in 25 markets, so it's time to make a bit more noise.

In a polite British way, of course.

# Alex Steer (06/14/2014)


Revisiting the future of social networks

(Long read: 1,400 words.)

Social networking may be ones of those areas where change is the only constant, but over the last few months there have been more reasons that normal to think about how it has changed, and where it is heading.

Facebook, now a 1.2 billion user network, recently had its tenth anniversary and invited users to create 'lookback' videos showcasing the time they'd spent on the platform. At around the same time, an earnings call showed declining (though still dominant) usage among teens. Not long after, it acquired WhatsApp, a single-minded messaging app whose founders proclaim, in a sign taped to their desk, 'No ads! No games! No gimmicks!' But WhatsApp's new owner has spent the last two years commercialising its platform in the wake of its IPO, making it near impossible for brands to reach audiences without paying for ads. Facebook and Twitter remain the big-league networks but, with 240 million monthly active users (and its own recent IPO), Twitter has been almost caught up by Instagram (with 200m), and overtaken by the professional network LinkedIn (with 259m+).

So what do we make of all this, except to whistle 'The times they are a-changin'?

In 2011, working at The Futures Company, I set out to apply a scenario planning approach to the noisy world of social networking, in a report called Status Update. Starting with the idea that user preference would be the the long-term critical success factor for any network that monetised its users, we mapped the user choices that seemed most uncertain at the time - those which could go either way.

We identified six. In honour of the term used to describe fundamental changes of direction within tech startups, we called them Pivot Points and build plausible future scenarios for social networking from the trade-offs they implies. They were:

  1. Scale. 'Big Net' futures where users prefer large networks; 'Tight Knit' futures where they prefer intimate ones.
  2. Privacy. 'Open Hand' futures where users willingly disclose personal data; 'Closed Fist' futures where they prefer to remain anonymous and control their data.
  3. Focus. 'One for All' futures where a few multi-functional networks win; 'One for Each' futures where many functionally specific ones are used.
  4. Time spent. 'Turn On' futures where users prefer to be always connected; 'Tune Out' futures where usage is occasional.
  5. Utility. 'Plug' futures where social networks are utilities; 'Play' futures where they are entertainments.
  6. Worldview. 'Challenge' networks where users are exposed to many differing perspective; vs 'Confirm' networks dominated by the reassuring and familiar.

Three years on, how did these uncertainties turn out? Which are resolved, which are still open - and what's new?

Looking back - Pivot Points in review

The scale question is largely resolved - users still incline towards big, popular networks. The dip in Facebook's use among teens is a slight counterfactual to this, but this is more motivated by the 'focus' and 'utility' drivers than by scale or privacy, as the excellent recent Pew research demonstrates. Teens are using Facebook less because maintaining a presence there and checking up on friends is too burdensome vs the quick clean interactions enabled by Twitter, Instagram, Snapchat etc. They are less concerned about privacy than they were a few years ago, because they feel better able to manage it. Scale of networks is not a significant factor. In general, the promise of small, intimate networks was not fulfilled - remember Color, Path or Diaspora? (Thought not.)

The privacy debate has moved on significantly. On the one hand, there is high expressed concern around third-party access to personal data held in networks - by spies and insurers more than advertisers. Yet behaviour around the broadcasting of personal information has become more permissive, with the growth of networks that depend more on public broadcast models and less on intimate sharing with friends (e.g. Instagram, Tumblr, Twitter, or YouTube as a subscriber model for video blogging). As noted above, we've got better at managing and negotiating online privacy - a trend mapped by the excellent work of Danah Boyd and Alice Warwick. We're worried less about our bosses seeing last night's photos, more about spooks putting together metadata profiles about us that we can neither argue with nor control.

The areas of focus and utility have seen some dramatic changes and to some extent converged, as the WhatsApp acquisition exemplifies. Younger users, in particular, have rushed in the direction of networks that do one thing, quickly and well. Twitter and Instagram have also been beneficiaries here. This is driven, though, by a desire for functional efficiency, not for conceptual leanness - and this in turn is likely prompted by the expectations of users who increasingly use mobile devices as their preferred means of access. So Facebook has done well by splitting its user experience into different mobile apps (e.g. Messenger, Paper), while Twitter and WhatsApp have thrived by avoiding distracting bloat - and Twitter has aggressively killed off third-party apps, stripping the user experience back to basics and re-engineering its platform to optimise for speed. Even Facebook on desktop has focused down on the news feed. And LinkedIn has thrived by being all about business networking (stalking in a suit and tie).

The time spent debate is, similarly, largely over. As mobile becomes the dominant way of interacting, so always-on becomes the expectation. The idea of the 'digital detox' is more talked about than done. As seen above, this has become a contextual driver - the idea of very regular connection is so embedded that it conditions the shift towards more focused networking applications. There are, though, probably some niche opportunities for the app equivalent of the 'slow food' movement, targeting jaded thirtysomethings (ahem) who have run out of things to say, who notice their friends have too, and who may want a less persistent, more occasional relationship with their networks. This will remain a counter-trend, though.

Lastly, worldview. Despite the early promise of networks like Quora, we prefer to be in the company of the like-minded, to the point that Facebook has had to act to squash the runaway virality of 'social news' sites like Upworthy which trade on human interest stories and other 'link-bait', in favour of giving breathing room to more 'serious' organs of the press.

Looking forward - revised Pivot Points

So thinking ahead over the next few years, what would we carry forward? I'd suggest that the issues of scaleprivacy and focus will remain relevant, but I'd briefly reframe the uncertainties as follows, and add a fourth which is new.

  1. Utility. Will we want to carry our identity and preferences across networks ('Passport' futures) or keep them separate ('Padlock' futures)?
  2. Privacy. Will we want tighter controls over third-party data access ('Speak No Evil' futures), or limits on what networks know in the first place ('See No Evil' futures)?
  3. Focus. Will we want networking applications to be provided by a few big companies ('Big House' futures) or by many small ones ('Small Holding' futures)?
  4. Discovery. Will we want to discover content based on the people we know ('Connected' futures) or the things we're interested in ('Curated' futures)?

The fourth one is a genuinely new addition because, even in 2011, the use of social networks as channels for large-scale discovery of news, information, entertainment etc. (broadly, 'content') was in its infancy. Since then it has exploded, but its terms have changed. Facebook, in particular, has switched its focus from the social graph (whom you know) to the interest graph (what you like) as a way of serving content and monetising users. This has been a largely unstated change and is generating a backlash from users, as this recent wildly popular post shows. But even while users are demanding their social graph back, they are making more use of interest-based networks (e.g. YouTube subscriber channels, Instagram, Tumblr among teens, Pinterest among young women). In either case, networks will need to be straight about the grounds on which they enable networking and discovery.

As before, these are not predictions, just signposts. These new Pivot Points are more commercial in orientation than before - more about business models and ownership of data, less about the specifics of features provided. Assuming that doesn't just reflect my interests (maybe), I think it indicates the growing maturity of the category, and users' growing awareness of the need to come to an accommodation with what are, after all, businesses trying to make money out of them. If these readings are valid, then even while social networking services become a more established part of everyday life, the business environment could get tougher for those who provide them.

Thanks to Andrew Curry for the invitation/prod to revisit the Pivot Points.

# Alex Steer (04/07/2014)


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