Business

Digiday ID’s the most “overhyped” marketing developments of 2015.

Phillip Nones Business, Marketing, Marketing Communications , , , , , , , , , ,

Digiday logoWhat were the most overhyped marketing stories in 2015? Media company Digiday‘s brand reporter Tanya Dua has come up with a list of four that she feels fits the bill.  See if you agree.

Apple Watch

Apple WatchDua notes that the Apple Watch was announced with so much fanfare that developers began making apps for it a half-year before the product hit the shelves — including big consumer players like Target and American Airlines.  But sales of the Apple Watch have been tepid at best.  There’s no way the marketplace performance of the product has come even remotely close to the company’s hopse for it.

Thom Gruhler, a CMO at Microsoft, says it well:

“When it [comes] down to the Apple Watch, one big question has still not been answered: Will anyone end up really ‘needing’ to engage with this shiny new technology?  What happened in 2015 was a disappointing start.”

Others appear to be even less charitable. A few are even equating the launch of the Apple Watch with that of another product that was similarly hyped:  Remember the Segway?  Everyone was supposed to end up having one of those — whereas the reality is closer to no one having them, with the exception of a few security cops and a few “trendy” businesses with long hallways.

Wearable Tech

wearableMany prognosticators were expecting that the “big data” promise of using wearable technology for experiences that were predictive and personalized would be fulfilled in 2015.  That’s hardly what’s happened.  According to Dua, wearables have yet to deliver anything like that in any meaningful way.

She quotes Julie Lee, Managing Director of marketing communications firm Maxus USA’s Chicago office:

“Technology, design and user experiences still need to be worked out. Though many companies are making great strides, we continue to watch this space to see if ‘what’s possible’ can truly become possible.  Wearables still hold great potential, but we’ll need to address today’s obstacles before we can become a ‘wearables-first’ market.”

Tanya Dua cites two other developments she feels were overhyped in 2015: Influencer Partnerships and Virtual Reality.

The problem with influencer marketing is when there’s little natural synergy between brands seeking to connect with their consumers more directly. “Authenticity” matters — and too often influencers are rather awkwardly tied to products few people would ever associate with them.

As for virtual reality, the problem is one of practical implementation and adoption by consumers; it hasn’t been happening — mainly due to lack of content and available hardware. Without those pieces of the puzzle in place, marketers simply can’t justify the cost having their brands present in the mix.  Instead, look for this trend to gather more steam in 2017 and years further out, Dua contends.

What do you think? Is Tanya Dua correct in labeling these marketing trends as “overhyped”?  What else would you add to the list?  Please share your thoughts with other readers here.

Old Forester: A storied brand attempts a comeback.

Phillip Nones Advertising, Branding, Business, Manufacturing , , , , , , , , , ,

Old Forrester bourbonA half century ago, Old Forester bourbon was the big brand name in the spirits business.  As the flagship brand of the Brown-Forman Corporation, it routinely sold in quantities approaching one million cases each year.

Back in the day, Old Forester was marketed as “America’s Guest Whiskey” – the one to bring out when company came to visit.  (I remember finding an ancient bottle of Old Forrester when cleaning out my late mother-in-law’s liquor cabinet.)

Forward to today.  Despite a recent rise in bourbon sales, Old Forester is a near-forgotten brand entry.  Shipments barely topped 100,000 cases last year, and nearly half of all sales came from just two states:  Alabama and Kentucky.

What the heck happened?

In broad terms, American tastes in distilled beverages shifted away from scotch and bourbon to vodka and gin.  Wine became more popular, too.

But those changes affected the entire market for bourbon, scotch and other whiskeys.  What made Old Forrester sink so low in a category that’s actually been on an upward trend since 2000?

Two words:  “Jack Daniels.”

BF logoIn 1956, Louisville-based Brown-Forman, the makers of Old Forrester, acquired the iconic Jack Daniels brand, and promptly started marketing it big-time.

Jack Daniels advertising has been pretty constant in the decades since.

Then in the mid-1990s, Brown-Forman introduced Woodford Reserve, which it marketed as premium bourbon — much as Old Forester had been a half-century before.

With all of the attention lavished on these two brands, Old Forester got squeezed out of the action.

But as it turns, out, there may be a second act for Old Forrester after all.  Starting in 2001, bourbon shipments have been on a pretty steady upward trend, with total shipments now topping 1 billion liters annually.

Mad-Men-Season-6Some have attributed the growth in bourbon consumption to the success of the Mad Men TV series, but I suspect there’s a lot more to it than just that.

Besides, even with Mad Men going off the air, market forecast firm Cowen & Company predicts American whiskey growth rates will clock in at nearly 10% per year until 2020 at least.

Because of those dynamics, it comes as little surprise that brands like Bulleit Bourbon have been so very aggressive in the market.

New entrants abound, too, as there are now more than 26 distillery licenses issued by the state of Kentucky (up from just ten in 2011).

Evidently, the key managers at Brown-Forman must have decided that they weren’t going to let the market pass them by, and so they’ve committed to a major initiative to resuscitate the Old Forester brand name.  Major commitments and goals include:

  • Building a new distillery in Louisville that will open next year
  • Expanding the geographic reach of brand sales
  • Undertaking a $20 million marketing effort including digital advertising, point-of-sale promotion and bar promotions
  • Increasing annual shipments to 500,000+ cases within five years

What are the chances that Old Forester can regain its lost luster and once again become one of America’s esteemed bourbon brands?

Brown-Forman's Campbell Brown, a fifth-generation family member, heads up the Old Forrester branding initiative.
Brown-Forman’s Campbell Brown, a fifth-generation family member, heads up the Old Forrester branding initiative.

There are no guarantees, of course.  But starting with a venerable brand name … and then appointing a seasoned industry veteran — and fifth generation Brown family member as well — to head the effort may give this initiative pretty decent odds of success.

We’ll check back in four or five years and see how it all turns out.

Marketing Technology: Is “Implosion” Where We’re Headed?

Phillip Nones Business, Direct Marketing, Employment, Marketing, Marketing Communications, Social Media , , , , , , , , ,
A chart of just some of the major marketing technology platforms -- and this is as of 2013!
A chart of just some of the major marketing technology platforms — and this was in 2013!

It seems that with each passing day, one or two new technology products are announced by MediaPost and other publishers in the marketing field.

The numbers tell the story. The marketing technology industry website chiefmartec.com lists nearly 1,900 marketing technology vendors in more than 40 categories.

That’s nearly double last year’s tally of around 950 vendors.

Software clearinghouse Capterra lists even more: a whopping 3,000+ marketing technology products across 30 categories.

These firms account for well over $20 billion in financing – the dollars that can be tracked, that is – including around 30 companies that are valued at $1 billion or more each.

That’s a lot of companies and vendors. Of course, there are many customers who are looking for tech-driven marketing solutions as well.  The question is whether things have gotten out of balance.

Business writer and marketing tech specialist Malcom Friedberg thinks so. He’s Chief Marketing Officer at CleverTap, and he also publishes columns on a variety of business topics.

In Friedberg’s view, the sheer number of marketing technology vendors and products means that the segment may now be on the brink of an implosion.

Friedman references a recent CMO Council document that reports that more than 80% of marketers are using as many as ten different marketing-related technologies or cloud solutions.

And as new technologies are added, the problem is finding educated staff – and enough hours in the day – to cover all of these products well. In many instances, users may be just scratching the surface of what these products can provide; the “multiple hat” dynamics of many marketing departments mean that very few people qualify as being “advanced” users.

The problems boil down to this: Even if a department has two or three marketing people devoted exclusively to tech-related responsibilities (at tall order in most companies) – this assumes that those people can work equally well on multiple different platforms.

The reality is quite different. It’s more like a big jumble – with consultants brought in to sort things out.  It may get the job done, but it isn’t pretty – and it’s hardly a recipe for “the best of best practices.”

Survey work by the CMO Council supports this hypothesis. The Council has found that fewer than on in ten of the marketers it surveyed reported that they possess a highly evolved digital marketing model that has a proven, clear path of evolution.

Malcolm Friedberg
Malcolm Friedberg

Friedman thinks he knows where things are heading. Not to more choices, but rather to less:

“In my opinion, we’ll start to see massive consolidation and uber-marketing systems. Think super-integrated marketing and advertising clouds … the preoccupation with ‘best-of-breed’ in every category will be replaced by a ‘tree-and-branch’ model, with one core technology and a few ‘good enough’ complementary ones.”

Friedman calls it “an expensive French meal” instead of “a Vegas buffet.” While there will always be new products promising incremental improvements, he predicts that by 2020, the common business model will be super-integrated marketing and advertising clouds as we see already with the likes of Marketo and Hubspot.

What do you think? Is Friedman onto something … or is the orgy of new marketing technology products going to continue unabated?  Please share your thoughts with other viewers here.

Where Outside Suppliers of Business Services Fall Down on the Job …

Phillip Nones Business, Marketing, Marketing Research , , , , , , ,

Quirk's Corporate Research ReportQuirk’s Marketing Research Review is a periodical I’ve enjoyed reading for three decades or more.  Unlike the articles that appear in other research-related publications that are more “scholarly” and theoretical,  I find the articles in Quirk’s to be chockfull of insights, while at the same time being “efficiently practical” and easy to digest.

Recently, the magazine published findings from its second annual Quirk’s Corporate Research Report, designed to give corporate researchers an in-depth look into their world.

As part of the research-gathering process for the report, Quirk’s conducted a field survey covering budgets, outsourcing, research techniques in use and under consideration, how research findings are reported inside organizations and, last but not least, the experiences researchers have had when working with outside vendors.

When asked by Quirk’s to state what are the main problem areas when research vendors have come up short on a project, these eight factors were cited by respondents most often:

  • The vendor over-promised and under-delivered: ~56% of respondents mentioned
  • The project was handled by low-level staff: ~51%
  • Vendor failed to take time to understand the client’s business: ~50%
  • Vendor had poor communications: ~39%
  • Vendor failed to take time to understand the project’s needs: ~36%
  • Data integrity issues: ~35%
  • Vendor missed deadlines: ~35%
  • Tools/methodologies that the vendor suggested weren’t right for the project: ~14%

Notice how the most pervasive issues have less to do with the inherent quality of the research product being delivered, and more to do with how the vendor interfaces with and communicates with the companies they support.

The above behaviors represent challenges associated with conducting research projects. But I contend that they apply equally well to providers of other types of business and corporate services, whether they’re ERP or IT projects, website development projects, CRM implementation, SEM/SEO programs, media campaigns, PR initiatives … even IPOs, capital campaigns and the like.

Which of these shortcomings do you find to be most prevalent in your dealings with outside service providers — and what have you done about them? Please share any insights you may have with other readers here.

“Boomerang employees”: No longer such a rarity in the corporate world.

Phillip Nones Business, Economics, Employment, Human Resources, Social Commentary , , , , , , ,

Time was, once a person left a company – for whatever reason – the likelihood that they’d ever come back to work there was pretty slim.

Perhaps to be re-engaged as a consultant or a contract worker … but as a return employee? Not likely at all.

That mindset appears to be changing.  Data accumulated from a recent survey by HR research and advisory firm Workplace Trends from ~1,800 human resources executives, managers of staff, and employees provide the following clues:

  • Half of the HR professionals responding to the survey claimed that their organization once had formal policies against rehiring former employees (even if the employee had departed in good standing).
  • Three-fourths of the HR respondents reported that they are more accepting of hiring boomerang employees today. More than half of the respondents who are people managers felt the same way.

The actual incidence of returning to work at a former company isn’t all that common.  Of the employees who took part in the survey, fewer than 15% of them fell into this category.

Still, 15% is way up from where it has been traditionally — and the current percentage is higher than I would have guessed.

What’s more, nearly 40% of employee respondents reported that they would consider going back to an employer where they had once worked.

There are distinct differences in employee attitudes based on age demographics: More than 45% of Millennials would consider returning to work for a former employer … but the percentage is just 29% for Baby Boomer respondents.

As for why boomerang employees are becoming more common, a number of factors are at play:

  • Intense competition for certain technically advanced employees who may be in short supply makes poaching more common … and also intensifies the need for companies to respond in kind. In fields were strong talent is hard to come by, often the pool of workers is too small to summarily omit former employees from consideration.
  • Familiarity with a company’s organization, culture and ways of doing business reduces “ramp-up” requirements and the amount of training needed, when compared to bringing on a brand-new employee.
  • The “devil you know” factor: Even if a former employee possesses a few characteristics that are less-than-ideal, at least these are known quantities, as compared to a brand-new employee who may or may not be all that she or he seems to be on paper.

chairGoing forward, I suspect that boomerang employees will become even more prevalent than they are today.

To do well at that, companies might wish to look into maintaining open lines of communication with select former employees. It seems like a good way to keep choice workers “in the loop” and potentially available — and interactive/social media makes it easier to keep those channels open.

As things stands now, the results of this survey suggest that such channels are, at best, ad hoc rather than being part of a formal “alumni” communications strategy.

Addressing this point, Dan Schawbel, head of WorkplaceTrends, had this to say:

“In previous research we’ve done, we’ve found that Millennials are switching jobs every two years because they are searching for the job – and organization – of best fit. But this new study indicates that this younger generation is more likely to boomerang back when they’ve experienced other company cultures and realized what they’ve missed.”

Schawbel’s prediction? “We’ll see the boomerang employee trend continue in the future as more employees adopt a ‘free agent’ mentality – and more organizations create a stronger alumni ecosystem.”

What about you? Are you a boomerang employee? Or do you know colleagues who have done this? What are the pluses and minuses? Please share your thoughts with other readers here.

Google businesses: One big star and a bunch of perpetual understudies?

Phillip Nones Advertising, Business, Marketing, Media, Media Consumption , , , , , , , ,

Alphabet or no Alphabet, when it comes to anything beyond its core search and display advertising business, Google’s performance is pretty ‘meh.’

canHere’s an interesting news byte: Morgan Stanley estimates that Google has lost between $8 billion and $9 billion on its so-called “side projects.”

So reported the Barron’s blog this past week.

It’s the strongest signal yet that Google’s vaunted business model is spectacularly successful for its core business … but that it’s as ineffective as most other companies when it comes to building the next silver-bullet product or service.

Even Google’s YouTube business unit is likely only a break-even proposition, despite years of concentrated attention, enhancements and tweaking. According to Morgan Stanley’s Brian Nowak:

“We estimate YouTube runs at a 0% profit margin … YouTube’s profitability could [actually] be lower than we estimate, but since it likely varies significantly from quarter to quarter, and until we have more visibility into the business, we believe break-even is a safe assumption.”

umbrellaIt’s likely we wouldn’t have even these clues were it not for the recently announced creation of Alphabet, a new umbrella structure for Google’s various business segments:  search, which is an estimated 96%+ of its business volume, and then everything else.

This development is providing more “transparency” that enables investment houses like Morgan Stanley to come up with back-of-the-napkin rough figures like this:

Google Revenue and operating profit Morgan Stanley

As time goes on, it will be interesting to see if Alphabet can demonstrate that the corporation is more than a one-trick pony.

Regardless of that outcome, the way that Google has cornered a ginormous $60 billion+ chunk of the advertising business is amazing – and laudable. Fair dues on that.

State of the States: CNBC’s take on the best ones for business.

Phillip Nones Business, Demographics, Economics, Education, Employment, Government, Manufacturing, Social Commentary , , , , , , ,

In CNBC’s recently published scorecard, don’t look to the Northeast or California to find the states that are best ones for business.

CNBC State Rankings for Business
L’Etoile du nord: Just as in its state motto “Star of the North,” Minnesota is the stellar performer in CNBC’s 2015 state ranking of business competitiveness. (Click on the map for a larger view.)

State and city rankings are a source of fascination for many people. Of course, there are many ways to fashion them to place nearly any state or city you like at the top of the heap.  Some of the lists use criteria that are so convoluted, it stretches credulity.

Since when is Baltimore the best city in America for single men?  Since it was ranked #1 in this evaluation, evidently.  Many of us who know the city’s innards really well would disagree heartily, of course.

But I think the CNBC 2015 scorecard on state business climates, published earlier this month, is based on a more solid set of criteria.

CNBC created it by scoring all 50 states on approximately 60 separate measures of competitiveness – a list that was developed with input from an array of business and policy experts, official government sources, and CNBC’s own Global CFO Council, and that uses government-generated data.

CNBC then grouped these measures into ten broader categories, weighting the results based on how often each is used as “selling point” in state economic development marketing and promotional efforts. This was done in order to rank the states based on the criteria they themselves use to showcase their attractiveness to businesses considering expansion or relocation.

Here are the ten broad categories in the CNBC evaluation, and which states ranked first and last within them:

  • Access to capital: #1 North Carolina … #50 Wyoming
  • Business friendliness: #1 North Dakota … #50 California
  • Cost of doing business: #1 Indiana … #50 Hawaii
  • Cost of living: #1 Mississippi … #50 Hawaii
  • Economy: #1 Utah … #50 Mississippi
  • Education: #1 Massachusetts … #50 Nevada
  • Infrastructure: #1 Texas … #50 Rhode Island
  • Quality of life: #1 Hawaii … #50 Tennessee
  • Technology/innovation: #1 Washington … #50 West Virginia
  • Workforce: #1 North Dakota … #50 Maine

Do we see any surprises here?  To my mind, the high and low rankings look pretty well-aligned with the anecdotal information we hear all the time.

Perhaps we might consider several other states besides Nevada to be “bottoms” in education. And personally, I am pretty shocked to see Tennessee ranked last in quality of life. Having lived there during my college years at Vanderbilt University, I never considered the state to be substandard when it came to that attribute.

But It’s when CNBC amalgamates all of the rankings to come up with its overall state ranking that a few surprises emerge.

Such as … Minnesota notches first place overall. I’m sure some people are genuinely surprised to see that.

For the record, here is CNBC’s list of the Top 10 states for business in 2015:

  • #1 – Minnesota
  • #2 – Texas
  • #3 – Utah
  • #4 – Colorado
  • #5 – Georgia
  • #6 – North Dakota
  • #7 – Nebraska
  • #8 – Washington
  • #9 – North Carolina
  • #10 – Iowa

We see that four of the ten top states are in the Midwest … three are in the South … three are in the West … but none are in the Northeast.

CNBC study on business competitiveness
The center holds: According to CNBC, most of the most competitive states for business are in the Mid-Continent region.

By contrast, for the most part the Bottom 10 states are clustered in other areas of the country … including four Northeastern states plus Alaska and Hawaii, two states that clearly have unique locational circumstances:

Hawaii lacks business competitiveness
Not so sunny: Hawaii’s bad business climate.
  • #40 – Pennsylvania
  • #41 – Alabama
  • #42 – Vermont
  • #43 – Mississippi
  • #44 – Maine
  • #45 – Nevada
  • #46 – Louisiana
  • #47 – Alaska
  • #48 – Rhode Island
  • #49 – West Virginia
  • #50 – Hawaii

CNBC has issued a raft of charts and maps providing details behind how their ratings were formulated, and the results for each of the major categories. You can view the data here.

Speaking for yourselves, in what ways would you challenge the rankings? What strikes you here as different from your own personal experience in doing business in various states? Please share your perspectives with other readers.

What’s happening with the Apple Watch these days?

Phillip Nones Branding, Business, Manufacturing, Marketing, Marketing Communications, Marketing Research, Sales, Social Commentary , , , , , , , ,

Not all that much, it turns out.

Apple Watch LineWhen is the last time you heard about a product introduction where initial sales were off by 90% barely three months after coming on the market?

If you’re thinking the Blackberry 10 … you’re wrong.

It’s the Apple Watch. Its introduction in April was made with a big amount of fanfare, promoted before and after the launch by PR, TV and online advertising, and even outdoor billboards.

But the hard truth is that aside from the tech community, few people are buying the Apple Watch.

According to Slide Intelligence, weekly Apple Watch sales have plummeted from around 200,000 per day at launch to fewer than 20,000 per day now. Moreover, most sales have been of the least expensive Sport model ($349).

Even worse, of those who have purchased an Apple Watch, fewer than four in ten would recommend the device to others.

You know there’s a problem when a new product engenders ridicule such as this brief, highly dismissive video review.

It may be too soon to write off the Apple Watch introduction as an abject failure. But I know one thing: The market’s (lack of) receptivity so far can’t be what Apple execs were hoping for.

It must be quite a comedown for a company that experienced the dizzying popularity of the iPod, iPhone and iPad right out of the box — and where those product sales continued to climb at an increasing rate for months or years after their debut.

google-glass-fashionSome people are comparing the Apple Watch introduction to what happened to Google Glass – likewise the victim of tepid sales to the point where Google quietly removed the product from the market after making a go of it for about two years.

Actually, I’m not quite sure the comparison is completely apt.

For starters, Google Glass didn’t come on the market backed by a ginormous PR and advertising campaign. In fact, it wasn’t really presented as a full-blown product – but more like a project with a beta test component.

Also, it was never made available in wide release; some people I know who wanted to “kick the tires” with Google Glass had difficulty finding out how they could do so.

But besides the very different rollout strategies, another factor might explain a more fundamental difference – and which has hugely negative potential impact on the Apple Watch.

Whereas Google Glass offered its wearers some truly new functionality, what does the Apple Watch deliver besides being merely a miniature version of an iPhone?

When something is less user-friendly (too miniature for many) … doesn’t offer any new functionality over alternative products … and is pretty expensive to boot, is it any wonder that the Apple Watch’s debut has had all the pizzazz of a cold mashed potato sandwich?

Speaking personally, I don’t consider a multipurpose device about an inch square in size as a “must-have” gadget, and I’m pretty sure others would agree with me.

Technology writer and CRM specialist Gene Marks cautions that the Apple Watch’s future isn’t likely to be much brighter than its less-than-impressive performance to date because of this fundamental liability: “The Apple Watch is not making people or companies quicker, better or wiser,” he contends.

In the world of technology and gadgets, that’s not recipe for success. Just ask Blackberry.

Now … let’s hear from Apple Watch users.  What’s your take?

Uber über alles? Ride-hailing services are coming on stronger than ever.

Phillip Nones Business, Economics, Social Commentary , , , , , , , , , , , ,

Business travelers have spoken with their wallets.

Uber logoIt looks as if a major milestone has been reached in the battle between “old world taxis” and “new world Uber.” An expense report study covering the second quarter of 2015 is showing that Uber and other ride-hailing services have overtaken the use of taxis – at least when it comes to business travelers.

The quarterly report was released by Certify, an expense management system provider. It reveals that Uber accounted for ~55% of ground transportation receipts, whereas taxi services accounted for only ~43% of receipts.

That’s a big jump from previous quarters; taxi services long dominated, staying well above 50% as recently as the first quarter of this year.

And this report isn’t based on some small data set, either. Certify’s stats are derived from millions of trip receipts submitted by its North American client base – nearly 30 million receipts over the course of a single year.

Clearly, Uber and other services that connect travelers through smartphone apps have succeeded beyond many people’s expectations.

But not everyone is pleased – beginning with taxicab services and their political allies.  Understandably, they’re frightened by the prospects of seeing the most fundamental tenets of their “business protection plan” melt away before their very eyes.

Depending on how people come down on the issue, opinions can be particularly passionate. Consider these responses prompted by a recent AP article on the topic published by ABC News:

Pro-Taxi Reader: Uber is breaking laws and evading taxes and municipal dues on a mass scale. How do you “adapt” to that? How to adapt to this unfairness and criminality? I personally suggest stop paying taxes, or start a strike like they did in Paris. It seems that in [the] U.S., Uber’s lobbyists and endless BS-PR campaigns control the country.

Pro-Uber Reader: Is it really “fair” for a city to charge one million dollars to have a taxi license (New York City)? Most of the taxi BS is from mafia-run business[es] who have fought for the last 70 years to keep competition out.

Another Pro-Uber Reader: The current system of licensing taxis should be reconsidered.  This system smacks of monopolies, with barriers to entry that are impossible.  There is no free market when you can’t get a license to operate.

Certain national politicians are even getting into the game, finding fodder for campaign rhetoric aimed at constituents who are frightened by the implications of the new work paradigm.

Here’s an excerpt from a speech by Hillary Clinton:

“Many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. … This on-demand, or so-called ‘gig economy,’ is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future.”

These are good points to raise, and it’s certainly fine to weigh the pros and cons of the so-called “new economy.”

At the same time, it’s pretty ironic to see how people supporting a candidate who questions ride-hailing services are so “onboard” with Uber – at least in practice if not in their rhetoric.

To illustrate, take a look at these Federal Election Commission filings from the Ready PAC (the pro-Clinton SuperPAC formerly known as Ready for Hillary PAC) here and here and here.  There’s a “whole lotta Uber” going on!

Getting back to the real world of business travel, in nearly every city, Uber is offering better pricing than taxi services – at least when it comes to services like UberX which typically involve transport in smaller cars like a Honda Civic or Toyota Camry.

SUVs and limo cars are pricier, of course, and may not represent a major cost improvement. And Uber’s prices charged also rise during periods of “surge” usage.

taxi cabBut considering the comparative cost as well as the quality of service, in some markets Uber beats out taxis by a city mile.

How else to explain results in the most recent quarter where ~60% of rides in Dallas expensed through Certify were for Uber vehicles rather than taxis. In San Francisco, Uber’s share was even higher:  nearly 80%.

No wonder taxi services are running off to local elected officials, boards and commissioners to try to shore up their faltering business model.

It’s worth noting that some employers harbor reservations about ride-hailing services — particularly concerns about lack of regulation, safety and liability. But even in non-regulated locations, protections exist. Uber as well as Lyft, another industry participant, provide driver insurance during paid rides, and they require drivers to carry their own personal auto insurance as well.

It would be interesting to hear the views of people who have used Uber or other ride-hailing services. Do you see them as the wave of the future? Or are there drawbacks? Please share your experiences and observations with other readers here.

… And then there were two: Facebook is nipping at YouTube’s heels.

Phillip Nones Advertising, Content Creation and Content Management, Marketing Communications, Media, Media Consumption, Social Commentary, Social Media , , , , , , , ,

Facebook “grows up great” to challenge YouTube for video supremacy online.

FB vs YTOnly few years ago, YouTube was pretty much the only game in town when it came to online video.  And Facebook wasn’t even in the picture.

Today, the online video landscape looks far different.

In fact, Facebook is on track to deliver more than two-thirds as many video views as YouTube this year.  And both services have a comparable number of monthly users overall.

Recently, market forecasting firm Ampere Analysis surveyed ~10,000 consumers in North America and Europe.  Approximately 15% of them had watched at least one video clip on Facebook within the past month.

While Facebook hasn’t exactly caught up with YouTube, its rise has been pretty stunning — especially when you consider the massive head-start YouTube had.  More than five years, in fact, which is a lifetime in the cyberworld.

Undoubtedly, one reason for Facebook’s success in video is its “autoplay” feature which snags viewers who might otherwise scroll by video postings.  Facebook reports that it has experienced a ~10% increase in engagement as a result of adding this functionality.

And there’s another big advantage for advertisers that Facebook possesses.  Since its viewers are always logged in, Facebook has the potential to collect far more demographic and behavioral data on its viewers that advertisers can tap into to target specific demographics.

For now at least, Facebook doesn’t offer the option for ads to run before video clips begin playing (the ads appear after the content).  Also, Facebook’s ad charges kick in after just three seconds of the ad being shown, compared to YouTube which sets the bar higher for ad charges to take effect.

[Incidentally, Twitter has the same 3-second policy as Facebook, whereas Hulu charges only for ads viewed all the way through.]

Another difference is that Facebook charges for every ad view, so if a viewer watches a video twice — even if it’s the same video in the same viewer session — Facebook counts it as two views.  On YouTube, that would be considered one view, regardless of how many times the video is watched.

Of course, these kinds of differences can be adjusted — and there’s no reason to think that Facebook won’t do just that if it determines that making those changes are in their best business interest.

Besides, advertising rates are already similar between the two platforms, which suggests that advertisers have come to place a high value on Facebook’s robust audience targeting.

Autoplay features have raised some questions as to what constitutes a true video “view.”  If video ads are being autoplayed, views are easier to get, but are they worthwhile?  Also, the fact that autoplay videos are running without sound until such time as the viewer chooses to engage is causing some advertisers to create content that “make sense” even on mute.

But the bottom line on Facebook’s foray into video seems to be that the demographic and psychographic audience targeting Facebook can deliver is of important value to advertisers.

Add the fact that YouTube is no longer the only major online video platform, and it’s easy to see how significant competition from Facebook risks the loss of advertising dollars for YouTube, along with damaging YouTube’s growth prospects over time.

This is getting interesting …