Welcome to the Ad Duopoly: Google and Facebook

Unless you’ve been living under a rock, it’s pretty obvious that the advertising marketplace in America has changed radically in the past few years.

In short order, we’ve seen the largest concentration of digital advertising converge on just two players:  Google and Facebook.  In fact, according to digital advertising research firm eMarketer, those two firms alone are attracting two-thirds of all digital ad dollars in the United States.

But this development isn’t all that surprising.  The vast bulk of Google’s ad market share results from its search engine marketing platform (paid search). As for Facebook, it dominates digital display advertising not just in America, but in many other countries all over the world as well.

And both companies are the “big kahuna” players in the mobile advertising sector, too.

What’s interesting is that, despite the shortcomings that many people recognize in both types of digital advertising – banner blindness and often ill-targeted paid search results — healthy growth in both forms of advertising continues apace.

Google’s ad revenue growth has average around 20% for more than 30 straight quarters. Its growth in the third quarter of 2017 is right on pace at 22%.

For Facebook, the growth dynamics are particularly lucrative; its year-over-year ad revenue growth is pushing 50%.

Mobile ad revenues are growing even faster; they accounted for “only” $9 billion in revenues for Facebook in just the third quarter.  And just as paid search advertising revenues represent more than 90% of Google’s total company revenues, mobile advertising accounts for nearly 90% of Facebook’s overall revenues.

With so much advertising activity, one might wonder from where it’s emanating.

One answer to that question is that the “universe” of advertisers is exponentially higher than we’ve ever encountered before. With low barriers to entry and “anyone can do it” ad development tools, “Jane and John Doe” are far more likely to be advertisers in today’s world of digital marketing than was ever contemplated just a few decades ago.

To wit: Facebook estimates that its social platform has more than 6 million active advertisers participating on it at any given moment in time.  That’s the equivalent of 2% of the entire population of America.

It’s kinda true:  “We’re all advertisers now.”

Facebook attempts to shake the “Fakebook” mantle.

There are a growing number of reasons why more marketers these days are referring to the largest social media platform as “Fakebook.”

Back last year, it came to light that Facebook’s video view volumes were being significantly overstated – and the outcry was big enough that the famously tightly controlled social platform finally agreed to submit its metrics reporting to outside oversight.

To be sure, that decision was “helped along” by certain big brands threatening to significantly cut back their Facebook advertising or cease it altogether.

Now comes another interesting wrinkle. According to Facebook’s statistics, the social network claims it can reach millions of Americans across several important age demographics, as follows:

  • 18-24 year-olds: ~41 million people
  • 25-34 year-olds: ~60 million people
  • 35-49 year-olds: ~61 million people

There’s one slight problem with these stats:  U.S. Census Bureau data indicates that the total number of people living in the United States falling in the 18-49 age grouping is 137 million.

That’s a substantially lower figure than the 162 million people counted by Facebook – 25 million (18%) smaller, to be precise.

What could be the reason(s) for the overcount? As reported by Business Insider journalist Alex Heath, a Facebook spokesperson has attributed the “over-counting” to foreign tourists engaging with Facebook’s platform while they’re in the United States.

That seems like a pretty lame explanation – particularly since U.S. tourism outside the country is a reciprocal activity that likely cancels out foreign tourism.

There’s also the fact that there are multiple Facebook accounts maintained by some people. But it stretches credulity to think that multiple accounts explain more than a small portion of the differential.

Facebook rightly points out that its audience reach stats are designed to estimate how many people in a given geographic area are eligible to see an ad that a business might choose to run, and that this projected reach has no bearing on the actual delivery and billing of ads in a campaign.

In other words, the advertising would be reaching “real” people in any case.

Still, such discrepancies aren’t good to have in an environment where many marketers already believe that social media advertising promises more than it actually delivers.  After all, “reality check” information like this is just a click away in cyberspace …

Why are online map locations so sucky so often?

How many times have you noticed location data on Google Maps and other online mapping services that are out-of-date or just plain wrong? I encounter it quite often.

It hits close to home, too. While most of my company’s clients don’t usually have reason to visit our company’s office (because they’re from out of state or otherwise situated pretty far away from our location in Chestertown, MD), for the longest while Google Maps’s pin for our company pointed viewers to … a stretch of weeds in an empty lot.

It turns out, the situation isn’t uncommon. Recently, the Wawa gas-and-food chain hired an outside firm to verify its location data on Google, Facebook and Foursquare.  What Wawa found was that some 2,000 address entries had been created by users, including duplicate entries and ones with incorrect information.

Unlike a company like mine which doesn’t rely on foot traffic for business, for a company like Wawa, that’s the lifeblood of its operations. As such, Wawa is a high-volume advertiser with numerous campaigns and promotions going at once — including ones on crowdsourced driving and traffic apps like Google’s Waze.

With so much misleading location data swirling around, the last thing a company needs to see is a scathing review appearing on social media because someone was left staring at a patch of weeds in an empty lot instead being able to redeem a new digital coupon for a gourmet cookie or whatever.

Problems with incorrect mapping don’t happen just because of user-generated bad data, either. As in my own company’s case, the address information can be completely accurate – and yet somehow the map pin associated with it is misplaced.

Companies such as MomentFeed and Ignite Technologies have been established whose purpose is to identify and clean up bad map data such as this. It can’t be a one-and-done effort, either; most companies find that it’s yet another task that needs continuing attention – much like e-mail database list hygiene activities.

Perhaps the worst online map data clanger I’ve read about was a retail store whose pin location placed it 800 miles east of the New Jersey coastline in the middle of the Atlantic Ocean.  What’s the most spectacular mapping fail you’ve come across personally?

This LinkedIn sayonara message says it all.

Over the past several years, it’s been painfully evident to me as well as many other people that LinkedIn has become a sort of Potemkin Village regarding its professional groups.

While many groups boast enviable membership levels, there’s been precious little going on with them.

It’s almost as if the vast majority of people who signed up for membership in these groups did so only to be “seen” as being active in them – without really caring at all about actually interacting with other members.

And if any more proof were needed, try advertising your product or brand on LinkedIn.

Crickets.

Today I received the following message from Alex Clarke, digital content manager and moderator of the B2B Marketing LinkedIn group. You know them:  publishers of B2B Marketing, one of the most well-respected media properties in the marketing field.

We’ll let the Alex Clarke memo speak for itself:

What ever happened to LinkedIn Groups? What was once a bustling metropolis, teeming with valuable discussion and like-minded peers sharing success and insight has now become a desolate, post-apocalyptic wasteland – home only to spammers and tumbleweed. 

We’re sad, because, like many other groups, our 70,000+ strong LinkedIn community has become a stagnant place, despite constant love and attention and our best efforts to breathe life into its lonely corridors. 

That’s why we’re moving to a new home … Facebook: bit.ly/B2BGroupFB. 

We’re aiming to build a similar – and ultimately, better – community on this platform, with an eye on providing B2B marketers with a place to seek advice, share success, and connect with like-minded professionals in a well-moderated environment. 

We’ll still drop in to keep an eye on the LinkedIn Group, continuing to moderate discussions and approve new members, but much of our effort will be invested in building a brand-new community on Facebook. Many of you will already know each other, but please feel free to say hello!  We’re really excited to see where this goes, thanks for coming along with us.

So, while B2B Marketing will maintain a default presence on LinkedIn, what’s clear is that it’s abandoning that social platform in favor of one where it feels it will find more success.

Who knows if Facebook will ultimately prove the better fit for professional interaction. On the face of it, LinkedIn would seem better-aligned for the professional world as compared to than the “friends / family / hobbies / virulent politics / cat videos” orientation of Facebook.

Time will tell, of course.

Either way, this is a huge indictment of LinkedIn and its failure to build a presence in the cyberworld that goes beyond being a shingle for newly minted “business consultants,” or a place for people to park their resumes until the time comes when they’re ready to seek a new job.

It’s quite a disappointment, actually.

Legislators tilt at the digital privacy windmill (again).

In the effort to preserve individual privacy in the digital age, hope springs eternal.

The latest endeavor to protect individuals’ privacy in the digital era is legislation introduced this week in the U.S. Senate that would require law enforcement and government authorities to obtain a warrant before accessing the digital communications of U.S. citizens.

Known as the ECPA Modernization Act of 2017, it is bipartisan legislation introduced by two senators known for being polar opposites on the political spectrum: Sen. Patrick Leahy (D-VT) on the left and Sen. Mike Lee (R-UT) on the right.

At present, only a subpoena is required for the government to gain full access to Americans’ e-mails that a over 180 days old. The new ECPA legislation would mean that access couldn’t be granted without showing probable cause, along with obtaining a judge’s signature.

The ECPA Modernization Act would also require a warrant for accessing geo-location data, while setting new limits on metadata collection. If the government did access cloud content without a warrant, the new legislation would make that data inadmissible in a court of law.

There’s no question that the original ECPA (Electronic Communications Privacy Act) legislation, enacted in 1986, is woefully out of date. After all, it stems from a time before the modern Internet.

It’s almost quaint to realize that the old ECPA legislation defines any e-mail older than 180 days as “abandoned” — and thereby accessible to government officials.  After all, we now live in an age when many residents keep the same e-mail address far longer than their home address.

The fact is, many individuals have come to rely on technology companies to store their e-mails, social media posts, blog posts, text messages, photos and other documents — and to do it for an indefinite period of time. It’s perceived as “safer” than keeping the information on a personal computer that might someday malfunction for any number of reasons.

Several important privacy advocacy groups are hailing the proposed legislation and urging its passage – among them the Center for Democracy & Technology and the Electronic Frontier Foundation.

Sophia Cope, an attorney at EFF, notes that the type of information individuals have entrusted to technology companies isn’t very secure at all. “Many users do not realize that an e-mail stored on a Google or Microsoft service has less protection than a letter sitting in a desk drawer at home,” Cope maintains.

“Users often can’t control how and when their whereabouts are being tracked by technology,” she adds.

The Senate legislation is also supported by the likes of Google, Amazon, Facebook and Twitter.

All of which makes it surprising that this type of legislation – different versions of which have been introduced in the U.S. Senate every year since 2013 – has had such trouble gaining traction.

The reasons for prior-year failure are many and varied – and quite revealing in terms of illuminating how crafting legislation is akin to sausage-making.  Which is to say, not very pretty.  But this year, the odds look more favorable than ever before.

Two questions remain on the table: First, will the legislation pass?  And second, will it really make a difference in terms of protecting the privacy of Americans?

Any readers with particular opinions are encouraged to weigh in.

Employee churn rates underscore the volatile nature of e-mail contact databases.

Most marketers are well-familiar with the challenges of e-mail list maintenance. In the business-to-business world in particular, e-mail databases can become pretty stale pretty quickly, due to the horizontal and vertical movement of employees inside organizations as well as jumping to other companies.

Whether they’re moving up or out, often they’re no longer good prospects.

Based on my experience, my personal rule of thumb has been that approximately one-fifth of any given list of B-to-B names will “churn” within a 12-month period, meaning that any such contact database will rapidly lose its effectiveness unless assiduously maintained.

And now we have a new report from Salesforce Research that confirms this basic rule of thumb.

Salesforce looked to LinkedIn, exploring this social platform’s data from more than 7 million records over a 48-month period to gauge the lifecycle of the typical “persona.”

The research considered not only changes that result in the deactivation of an e-mail address, but also circumstances where individuals may keep the same e-mail address but still should be removed as a target because a horizontal or vertical change within the same organization places them in a different employee function.

What the new research found was that the average annual B-to-B churn rate for such “personas” is ~17%.

That figure turns out to be fairly close to my basic rule of thumb based on years of observing not only e-mail contact databases, but also the postal mail databases we’ve worked with in my company or with our clients.

Beyond the broad average, there are some small but meaningful differences in the B-to-B churn rate depending on the product focus and on the type of employee function.

In high-tech fields, the average annual churn rate is higher than the average. And it’s across the board, too:  23% churn in marketing … 20% in sales and in HR personnel … 19% in IT, and 18% in finance.

People employed in the retail and consumer products industries also clock in at or higher than the overall churn average, but the annual churn rate is a tad lower in the medical and transportation fields.

Another interesting finding from the Salesforce evaluation is that annual churn rates are somewhat lower than the average for personnel at director levels and higher in companies (around 15%). For managers, the churn rate matches the overall average, while “worker bees” have a higher churn rate averaging around 20%.

Considering the critical importance of e-mail marketing efforts in the B-to-B environment, Salesforce’s finding that it takes only 4.2 years for an e-mail database to churn completely means that the value of these marketing assets will decline dramatically unless cultivated and maintained on an ongoing basis.

The volatile nature of e-mail contact databases also helps explain why so many companies have adopted a multi-channel approach to marketing, including interacting on social media platforms. Yes, those platforms do have their place in the B-to-B world …

The full report of the Salesforce findings can be downloaded here.

Brands tiptoe through today’s political minefields.

In 2017, not only is the United States politically divided into nearly equal camps, but it seems as though the gulf between the two sides is wider than it’s been in decades.

In my own personal experience, I haven’t witnessed political rifts this big since the anti-war era of the late 1960s and early 1970s.  But even then, that divide wasn’t so much on partisan grounds as on philosophical ones.

[And it wasn’t an equal divide, either.  Remember President Richard Nixon’s slogan about the “silent majority”?  It was — to the tune of a 61% Nixon victory in the presidential election of 1972.]

Historically, the people who manage product brands have adhered to a formula similar to that of distant relatives getting together for a holiday meal: avoid talking about politics and religion.  But in times where politics can overtake even the best-curated brands, that’s become more difficult.

Recently, international market research firm Ipsos studied the issue. It tested a number of well-known brands that have been the subject of “political” controversies.  Considering one measure – stock price – Ipsos found that there has been minimal impact on brand health when looking at the publicly traded brands that President Donald Trump has mentioned in his various late-night tweets.

But viewed another way, Ipsos found that there’s an ever-expanding emphasis on partisan politics. Americans have become more likely to combine their behavior as consumers with their ideological or partisan loyalties.  One measure is the spike in searches on Google for the term “boycott,” as can be seen clearly in this chart:

According to Ipsos, politically-minded boycotts appear to be having noticeable business impacts. Looking at around 30 publicly traded brands, those with the highest rate of consumer boycotts since the November 2016 election are the ones that experienced the worst stock market performance – by a factor of about -15%.

Prudent advice would be for brands to respond to the hyper-partisan environment by trying not to be drawn into ideological debates. That’s a smart move, as most of the brands Ipsos tested have a fairly evenly balanced mix of self-described Democrats and Republicans.

In such an environment, no matter which way a company might be perceived to be moving “politically,” there will be a substantial portion of its customers who object.

And object they do: As part of its study, Ipsos surveyed consumers on their boycotting behaviors.  More than 25% of the survey respondents revealed that they have stopped using products or services from a company because of its perceived political leanings.  And as Ipsos has found, the brands with the highest rate of recent consumer boycott activity have also experienced the worst stock market performance.

Trying to avoid becoming part of today’s sometimes-toxic political environment isn’t always easy for brands to accomplish. Even for brands that make a concerted effort, it is increasingly hard to predict what factors might drive a company into the limelight — or whether anything the company does or doesn’t do can control what actually happens.

Ipsos cautions that staying on the political sidelines isn’t as easy as it has been in the past. It has determined that political party identification now ranks as one of the most central aspects of how consumers organize their lives – and how they relate to brands as well.

To illustrate, Ipsos presents the cases of Nordstrom and Uber. Both companies feature customer bases that skew somewhat more Democrat, but with significant percentages of Republicans as well.  Since the 2016 Presidential election, both companies have experienced politically-themed PR incidents that were magnified on social media platforms, to negative effect.

Different groups reacted in different ways – Republicans turned off by Nordstrom (dropping Ivanka Trump’s clothing line) and Democrats turned off by Uber (Travis Kalanick’s involvement with Donald Trump’s economic advisory council).

But the end result was the same:  the brands’ reputations suffered.

In today’s environment, it seems as though assiduously maintaining a non-partisan, non-confrontational stance is still the best policy for maintaining brand strength.  But it isn’t a guarantee anymore.

Additional findings and conclusion from the Ipsos evaluation can be found here.