Putting the best face forward at Twitter.

tdWhen business results look disappointing, one can certainly sympathize with the efforts of company management to explain it away in the most innocuous of terms.

This may be what’s behind Twitter CEO Jack Dorsey’s description of his company’s 2016 performance as “transformative” – whatever that means.

Falling short of industry analysts’ forecasts yet again, Twitter experienced a revenue increase of only about 1% year-over-year during 2016.

Monthly active users didn’t look much better either, with the total number barely budging.

While I have no actual proof, one explanation of tepid active user growth may be that Twitter became the de facto “place for politics” in the 2016 U.S. Presidential election — which didn’t actually end in November and continues apace even today.

Simply put, for many people, politics isn’t their cup of tea — certainly not on a 24/7/365 diet, ad nauseum.

Quite telling, too, was the fact that advertising revenue showed an absolute decline during the 4th Quarter, dropping below $640 million for the period.

Even more disturbing for investors, the company’s explanation about the steps Twitter is taking to address its performance shortfalls smacks of vacuousness, to wit this statement from CEO Dorsey:

“While revenue growth continues to lag audience growth, we are applying the same focused approach that drove audience growth to our revenue product portfolio, focusing on our strengths and the real-time nature of our service.”

“This will take time, but we’re moving fast to show results,” Dorsey continued, rather unconvincingly.

One bright spot in the otherwise disappointing company results is that revenues from international operations – about 39% of total overall revenues – climbed ~12% during the year, as compared to a ~5% revenue drop domestically.

Overall however, industry watchers are predicting more in the way of bad rather than good news in 2017. Principal analyst Debra Aho Williamson at digital media market research firm eMarketer put it this way:

“Twitter is losing traction fast. It is starting to shed once-promising products such as Vine, and [to] sell off parts of its business such as its Fabric app development platform.  At the same time, some surveys indicate that Twitter is becoming less integral to advertisers’ spending plans.  That doesn’t bode well for future ad revenue growth.”

With a prognosis like that, can the next big drop in Twitter’s share price be far behind?

What do you think?

Is the Phenomenon of “Fake News” Overhyped?

fnIn the wake of recent election campaigns and referenda in places like the United States, the United Kingdom, France, Austria and the Philippines, it seems that everyone’s talking about “fake news” these days.

People all across the political and socio-economic spectrum are questioning whether the publishing and sharing of “faux” news items is having a deleterious impact on public opinion and actually changing the outcome of consequential events.

The exact definition of the term is difficult to discern, as some people are inclined to level the “fake news” charge against anyone with whom they disagree.

Beyond this, I’ve noticed that some people assign nefarious motives – political or otherwise – to the dissemination of all such news stories.  Often the motive is different, however, as over-hyped headlines – many of them having nothing to do with politics or public policy but instead focusing on celebrities or “freak” news events – serve as catnip-like clickbait for viewers who can’t resist their curiosity to find out more.

From the news consumer’s perspective, the vast majority of people think they can spot “fake” news stories when they encounter them. A recent Pew survey found that ~40% of respondents felt “very confident” knowing whether a news story is authentic, and another ~45% felt “somewhat confident” of that fact.

But how accurate are those perceptions really? A recent survey from BuzzFeed and Ipsos Public Affairs found that people who use Facebook as their primary source of news believed fake news headlines more than eight out of ten times.

That’s hardly reassuring.

And to underscore how many people are using Facebook versus more traditional news outlets as a “major” source for their news, this BuzzFeed chart showing the Top 15 information sources says it all:

  • CNN: ~27% of respondents use as a “major source” of news
  • Fox News: ~27%
  • Facebook: ~23%
  • New York Times: ~18%
  • Google News: ~17%
  • Yahoo News: ~16%
  • Washington Post: ~12%
  • Huffington Post: ~11%
  • Twitter: ~10%
  • BuzzFeed News: ~8%
  • Business Insider: ~7%
  • Snapchat: ~6%
  • Drudge Report: ~5%
  • Vice: ~5%
  • Vox: ~4%

Facebook’s algorithm change in 2016 to emphasize friends’ posts over publishers’ has turned that social platform into a pretty big hotbed of fake news activity, as people can’t resist sharing even the most outlandish stories to their network of friends.

Never mind Facebook’s recent steps to change the dynamics by sponsoring fact-checking initiatives and banning fraudulent websites from its ad network; by the accounts I’ve read, it hasn’t done all that much to curb the orgy of misinformation.

Automated ad buying isn’t helping at all either, as it’s enabling the fake news “ecosystem” big-time. As Digiday senior editor Lucia Moses explains it:

“One popular method … is tapping the competitive market for native ad widgets. Taboola, Revcontent, Adblade and Content.ad are prominently displayed on sites identified with fake news, while there are a few retargeted and programmatic ads sprinkled in. Publishers install these native ad widgets with a simple snippet of code — typically after an approval process — and when readers click on paid links in the widget, the host publisher makes money.  The ads are made to appear like related-content suggestions and often promote sensational headlines and direct-marketing offers.”

So attempting to solve the “fake news” problem is a lot more complicated than some people might realize – and it certainly isn’t going to improve because of any sort of “political” change of heart. Forrester market analyst Susan Bidel sums it up thus:

“While steps taken by … entities to curb fake news are admirable, as long as fake news generators can make money from their efforts, the problem won’t go away.”

So there we are. Bottom-line, fake news is going to be with us for the duration – whether people like it or not.

What about you? Do you think you can spot every fake news story?  Or do you think at least of few of them come in below radar?

Social media: The biggest casualty of the U.S. presidential election?

smrrOnly one presidential candidate was a winner on election night. But there was more than one loser.

Sure, minor-party candidates lost. But I’d posit that social media itself was a loser as well.

It isn’t an exaggeration to contend that the 18-month long presidential campaign has had a corrosive effect on the social media landscape.

You could even say that the social media landscape became downright “anti-social,” thanks to the 2016 campaign.

For those who might have posted politically-oriented social media posts, they’ve risked receiving strident arguments, flamethrower responses and alienated friends.

Along those lines, a recent Pew Research study found that significant percentages of people have blocked individuals or adjusted their privacy settings on social media to minimize their exposure to all the vitriol.

It’s a far cry from social media’s promise in the “good old days” – not so long ago actually — when these platforms enabled people to stay in touch with friends and make acquaintances across the country and the world that they would never have been able to forge in the days before social platforms.

The easy ability to share information and interests only added to the appeal of social media, as people expanded their horizons along with their network of friends.

Companies and brands got in on the action, too. They found social media a welcoming place – particularly in the case of consumer brands where companies could ride the wave of social interaction and promote all sorts of products, services and worthwhile causes.

Advertising and promotion on social media naturally followed, with many companies allocating as much as 20% or more of their annual marketing budgets to those endeavors.

Until quite recently, that happy scenario seemed to be holding, with brands launching interesting, fun, quirky or cause-oriented shareable content in the hopes that they would “go viral” and pay dividends far in excess of the resource outlay.

What a difference 18 months makes. Suddenly, brands are spending only about half as much on social media marketing as they attempt to stay above the fray.  That also means staying far away from venturing into current topical discussions, lest their prickly digital audiences become instantly polarized.

Unfortunately, for brands who wish to avoid controversy arising from even the most seemingly innocuous of postings, social media is no longer a welcoming meadow of lush green grass and bright flowers. It’s closer to a war-torn field peppered with land mines just waiting to explode.  Hence the hasty retreat.

Unfortunately, just like trying to unscramble an egg, it’s very hard to see social media ever going back to what it used to be.

And for that state of affairs, there’s plenty of blame to go around.

“Dying on the Vine”: Why the video sharing service is now history.

vineRemember back in 2012 when Twitter introduced its Vine video sharing service?

Back then, observers were positively breathless in their accolades for the service, with some positing that Vine represented some sort of tipping point in the world of instant communications.

A little more than four years later … and as of November 1, Vine has just been shuttered. How is it that such a vaunted social media platform went from de rigeur to rigor mortis in such a short time?

There are several key reasons why.

Time and place: The year 2012 was a perfect time to launch Vine, as it coincided with when many companies and brands were shifting their focus towards video communications.  At the time, short-form video was a novelty, making it a kind of dog whistle in the market.  But Instagram, newly acquired by Facebook, swooped in and made a big splash, too, while Snapchat attracted younger audiences.  What was Vine’s response to these competitor moves?  If there was much of any, no one seems to have noticed.

Competing … with yourself: Strange as it may seem, Twitter itself ended up competing with Vine in 2015, launching its own branded video playback capabilities.  When something like that happens, what’s the purpose of the older brand that’s doing the same thing?  Twitter’s simultaneous foray into live-streaming was a further blow to a brand that simply couldn’t compete with these newer video services introduced by Vine’s very own parent company.

Commercial viability? — What commercial viability? In all its time on the scene, Vine never figured out a way to sell advertising on its network.  It had a good germ of an idea in sponsored content, but never seemed to capitalize on the opportunities that presented, either.

Knowing your audience: From the outset, Vine attracted a fairly unique and crowd of users, such as people involved in the hip-hop music scene.  It was vastly different from the typical user base in social media – and yet Vine never did all that much to support these users.  As a result, there was little brand affinity to keep them close when the next “bright, shiny object” came their way.

In the social media space, the rise and fall of platforms can happen with amazing speed. Unlike some other platforms, Vine was a big hit from the get-go … but perhaps that turned out to be a double-edged sword.  Vine never did figure out a way to “mature” with its audiences – which eventually left it behind.

In the end, Vine went out not with a bang, but with a whimper.

Twitter is looking more and more like the old, hidebound player in social platforms.

tWe’ve been hearing for a while now that Twitter’s go-go-days might be in the rear-view mirror.

But even so, the latest growth forecast for the company still seems pretty shocking for a “new media” participant.

In its most recent forecast of Twitter usage in the United States, eMarketer has lowered its projections of Twitter growth in usage to essentially “treading water” status.

More specifically, digital data research company eMarketer forecasts that by the end of the year, ~52 million U.S. consumers will be accessing their Twitter accounts at least once per month.

That will represent just a 2% increase for the year.

Long-term growth prospects for Twitter don’t look any better. At one point, eMarketer was forecasting growth estimates of nearly 14 million new Twitter users by 2020.  But today, that forecast has been downgraded significantly to only about 3.5 million new users.

In the world of social media platforms, such paltry growth expectations mean that Twitter’s share of domestic social network users will continue to decline. (It’s at around 28% now, which is already a bit of a drop from last year.)

What’s making Twitter seem like such a “passé player” in the go-go world of social media? Oscar Orozco, an analyst at eMarketer, sums up its challenges succinctly:

“Twitter continues to struggle with growing its user base because new users often find the product unwieldy and difficult to navigate, which makes it challenging to find long-term value in being an active user. Also, [Twitter’s] new product initiatives have had little impact in attracting new users.”

Who’s eating into Twitter’s market presence? How about Snapchat and Instagram, for starters.  A host of other messaging apps are also hurting Twitter’s growth prospects.

It hasn’t helped that Twitter has been struggling mightily to monetize its service offering. While it has made valiant efforts to do so, Facebook and LinkedIn have done a more effective job of leveraging their massive user data into attracting advertising dollars.

Facebook is a cash machine … LinkedIn does a respectable job … while Twitter seems almost hopeless by comparison.

After flying high for so long – even to the degree that many companies still speak about social media as one mashup term “Facebook-Twitter-LinkedIn,” Twitter’s decline is all the more surprising.  Poignant, even.

Antisocial behavior: Major retailers do much better broadcasting on social media than they do responding.

untitledWhen it comes to social media, it turns out that the major U.S. retail brands are a lot better at dishing it out than consuming it.

On the “dishing out” side of the ledger, these retailers have been posting an ever-increasing number of social messages aimed at their target audiences.

A recent report from Sprout Social Index titled Snubbed on Social shows just how much:  In the 3rd Quarter of 2014, the average number of messages deployed by the typical major retailer was around 150, but in the 3rd Quarter of 2015, the number had grown to in excess of 350.

But what happens when these retailers are on the receiving end of social messages? Sprout Social has determined that the typical retailer receives around 1,500 inbound social messages over a busy quarter (such as during the holiday season).

Of these, approximately 40% of the messages are ones that warrant a response.

But only about 1 in 6 – fewer than 20% of them — actually get one.

And those consumers who are fortunate enough to receive a response are waiting approximately 12 hours to get it. That’s up from ~11 hours a year earlier.

One interesting factoid from the Sprout Social reporting is that customer messages on Twitter tend to get a better response from brands.

But it’s the difference between merely poor (~14% on Twitter) and downright embarrassing (~9% on Facebook).

untitledScott Brandt, chief marketing officer at Sprout Social, states it succinctly: “More often than not, brands are silent when their customers reach out.”

What are the implications of this (non-)behavior?

For one thing, interacting with customers helps drive more interesting and more purchases.  Sprout reports that consumers are seven times more likely to respond to social promotions and other social news if they have had meaningful interaction with the brand.

Obviously, ignoring the social messages that come through isn’t the way to build that engagement.

One dynamic that appears to be at work is that brands continue to use social media as a vehicle for broadcast messaging, whereas many consumers view social platforms as the place for a more conversational, two-way level of engagement.

You know – just like social media is supposed to work.

But there are some seemingly intractable reasons why it’s difficult to put the “theory” of social interaction into “practice.”

For starters, there are so many ways for people to communicate with companies and brands today (versus only by letter, phone or in person not that many years ago), that too many businesses are either stretched to thin or simply don’t feel the need to respond urgently if at all.

Another issue is similarly personnel-related. For brands to respond better would mean hiring and training people who possess the authorization to actually do something about a question or concern.  Low-level staff with low wages and benefits and with no authority to resolve issues is a clear ticket to nowhere.

At the very least, putting a process in place that provides a quick response to all inquiries – even if the initial response is auto-generated – is just plain common sense. The value to the consumer of a response that comes within just a few minutes – even if the message was posted in the dead of night – is what makes consumers bond with a brand.  (Just having their existence validated is huge for some people.)

Contrast that to the other, more common experience of brands ignoring their consumers to death … and where people never forget which companies aren’t good at responding to their questions or concerns. Does anyone think that reputation doesn’t have a dampening effect on sales?

More information about the Spout Social Index can be found here.

Twitter’s Continuing Monetization Challenge

Press reports have been pretty consistent over the past year or so about the underwhelming financial performance of Twitter.  Here’s the trend line for Twitter shares of stock since the beginning of 2014:

 

Twitter share price trend

 

… And beyond the financial performance, I’ve been writing about Twitter’s fundamental business challenges off and on for well over five years now.

While Twitter undoubtedly has its place in the social realm — its place in “breaking news” is a biggie — it remains a frustrating platform for advertisers, which is one reason Twitter’s business model has turned out to be less effective than Facebook’s.

Recent stats from eMarketer reveal that over 50 million Internet users in the United States are accessing their Twitter accounts via any device at least monthly.

That equates to about fifth of U.S. Internet users — and nearly three in ten people active on social networks.

So … this means that many people are seeing ads on Twitter. And that’s confirmed through an evaluation conducted by Cowen & Company which finds that well over half of U.S. adult Twitter users are e encountering ads on their Twitter feed at least every 10 or 20 tweets.

Predictably, most of the advertising pertains to retail, app installations and travel. Those are pretty relevant as broad advertising categories.

It’s just … many Twitter users aren’t finding the ads effective.  Here’s what Cowen’s findings show in terms of user feelings about Twitter advertising:

  • Ads on Twitter are relevant and/or insightful: ~3%
  • Ads are OK: ~26%
  • Ads are not really relevant: ~45%
  • Ads are usually a poor fit: ~14%

These results suggest that advertisers need to improve their targeting capabilities significantly if they wish to reach the right audience segments with relevant messages.

More fundamentally, current attitudes about Twitter advertising pose continuing challenges for Twitter as it attempts to further-monetize its platform. The tepid performance of Twitter shares since the beginning of 2014 underscores how the company continues to cast about for answers to that fundamental challenge.  I wonder when (or if) the company will ever figure it all out.

Surprising statistic? One-third of American adults still aren’t on social media.

social mediaFor the many people who use social media on a daily basis, it may seem inconceivable that there are a substantial number of other Americans who aren’t on social media at all.

But that’s the case. The Pew Research Center has been tracking social media usage on an annual basis over the past decade or so, and it finds that about one-third of Americans still aren’t using any social networking sites.

To be sure, today’s ~65% participation rate is about ten times higher than the paltry ~7% participation rate Pew found the first time it surveyed Americans about their social media usage back in 2005.

According to Pew’s field research findings, here’s how the percentage of social media involvement has risen in selected years in the decade since. (The figures measure the percentage of Americans age 18 or over who use at least one social networking site.)

  • 2006: ~11% using at least one social networking site
  • 2008: ~25%
  • 2010: ~46%
  • 2012: ~55%
  • 2015: ~65%

In more recent years, the highest growth in social media participation rates has been among older Americans (over the age of 65), ~35% of whom are using social media today compared to just 11% five years ago.

That still pales in comparison to younger Americans (age 18-29), ~90% of whom use social media platforms.

While it’s a common perception that women are more avid users of social media than men, Pew’s research shows that the participation rate is actually not that far apart. Statistically it isn’t significant, in fact: a ~68% social media participation rate for women versus ~62% for men.

pew-research-centerSimilarly, there are more similarities than differences among the various racial and ethnic groups that Pew surveys — and the same dynamics are at work when it comes to differing education levels, too.

Regional differences in social media practice continue to persist, however, with rural residents less likely to use social media than suburban residents by a ten-point margin (58% versus 68%). City dwellers fall in between.

More details on Pew’s most recent field research on the topic of social media participation can be accessed here. See if you notice any surprising findings among them.

Social media data mining: Garbage-in, garbage-out?

gigoIt’s human nature for people to strive for the most flattering public persona … while confining the “true reality” only to those who have the opportunity (or misfortune) to see them in their most private moments.

It goes far beyond just the closed doors of a family’s household. I know a recording producer who speaks about having to “wipe the bottoms” of music stars — an unpleasant thought if ever there was one.

In today’s world of interactivity and social platforms, things are amplified even more — and it’s a lot more public.

Accordingly, there are more granular data than ever about people, their interests and their proclivities.

The opportunities for marketers seem almost endless. At last we’re able to go beyond basic demographics and other conventional classifications, to now pinpoint and target marketing messages based on psychographics.

And to do so using the very terms and phrases people are using in their own social interactions.

The problem is … a good deal of social media is one giant head-fake.

Don’t just take my word for it. Consider remarks made recently by Rudi Anggono, one of Google’s senior creative staff leaders. He refers to data collected in the social media space as “a two-faced, insincere, duplicitous, lying sack of sh*t.”

Anggono is talking about information he dubs “declared data.” It isn’t information that’s factual and vetted, but rather data that’s influenced by people’s moods, insecurities, social agenda … and any other set of factors that shape someone’s carefully crafted public image.

In other words, it’s information that’s made up of half-truths.

This is nothing new, actually. It’s been going on forever.  Cultural anthropologist Genevieve Bell put her finger on it years ago when she observed that people lie because they want to tell better stories and to project better versions of themselves.

What’s changed in the past decade is social media, of course.  What better way to “tell better stories and project better versions of ourselves” than through social media platforms?

Instead of the once-a-year Holiday Letter of yore, any of us can now provide an endless parade of breathless superlatives about our great, wonderful lives and the equally fabulous experiences of our families, children, parents, A-list friends, and whoever else we wish to associate with our excellent selves.

Between Facebook, Instagram, Pinterest and even LinkedIn, reams of granular data are being collected on individuals — data which these platforms then seek to monetize by selling access to advertisers.

In theory, it’s a whole lot better-targeted than the frumpy, old fashioned demographic selects like location, age, income level and ethnicity.

But in reality, the information extracted from social is suspect data.

This has set up a big debate between Google — which promotes its search engine marketing and advertising programs based on the “intent” of people searching for information online — and Facebook and others who are promoting their robust repositories of psychographic and attitudinal data.

There are clear signs that some of the social platforms recognize the drawbacks of the ad programs they’re promoting — to the extent that they’re now trying to convince advertisers that they deserve consideration for search advertising dollars, not just social.

In an article published this week in The Wall Street Journal’s CMO Today blog, Tim Kendall, Pinterest’s head of monetization, contends that far from being merely a place where people connect with friends and family, Pinterest is more like a “catalogue of ideas,” where people “go through the catalogue and do searches.”

Pinterest has every monetary reason to present itself in this manner, of course.  According to eMarketer, in 2014 search advertising accounted for more than 45% of all digital ad spending — far more than ad spending on social media.

This year, the projections are for more than $26 billion to be spent on U.S. search ads, compared to only about $10 billion in the social sphere.

The sweet spot, of course, is being able to use declared data in concert with intent and behavior. And that’s why there’s so much effort and energy going into developing improved algorithms for generating data-driven predictive information than can accomplish those twin goals.

Rudi Anggono
Rudi Anggono

In the meantime, Anggono’s admonition about data mined from social media is worth repeating:

“You have to prod, extrapolate, look for the intent, play good-cop/bad-cop, get the full story, get the context, get the real insights. Use all the available analytical tools at your disposal. Or if not, get access to those tools. Only then can you trust this data.”

What are your thoughts? Do you agree with Anggono’s position? Please share your perspectives with other readers here.

Going up against Goliath: The latest privacy tussle with Facebook.

Is that Maria Callas?  Check with Facebook -- they'll know.
Is that Maria Callas? Check with Facebook — they’ll know.

It had to happen eventually:  Facebook’s “faceprints” database activities are now the target of a lawsuit.

The suit, which has been filed in the state of Illinois, alleges that Facebook’s use of its automatic photo-tagging capability to identify people in images is a violation of Illinois’ state law regarding biometric data.

Facebook has been compiling faceprint data since 2010, and while people may choose to opt out of having their images identified in such a way, not surprisingly, that option is buried deep within the Facebook “settings” area where most people won’t notice it.

Moreover, the “default” setting is for Facebook to apply the automatic photo-tagging feature to all users.

Carlo Licata, the lead individual in the class-action complaint filed in Illinois, contends that Facebook’s practices are in direct conflict with the Illinois Biometric Information Privacy Act.  That legislation, enacted in 2008, requires companies to obtain written authorization from persons before collecting any sort of “face geometry” or related biometric data.

The Illinois law goes further by requiring the companies gathering biometric data to notify people about the practice, as well as to publish a schedule for destroying the information.

Here’s how the lawsuit states its contention:

“Facebook doesn’t disclose its wholesale biometrics data collection practices in its privacy policies, nor does it even ask users to acknowledge them.  With millions of users in the dark about the true nature of this technology, Facebook [has] secretly amassed the world’s largest privately held database of consumer biometrics data.”

The response from Facebook has been swift – and predictable.  It contends the lawsuit is without merit.

As much as I’m all for of individual privacy, I suspect that Facebook may be correct in this particular case.

<em>Brave New World:</em>  Biometrics
Brave New World: Biometrics

For one thing, the Illinois law doesn’t reference social networks at all.  Instead, it focuses on the use of biometrics in business and security screening activities — citing examples like finger-scan technologies.

As Eric Goldman, a professor of law at Santa Clara University notes, the Illinois law is “a niche statute, enacted to solve a particular problem.  Seven years later, it’s being applied to a very different set of circumstances.”

And there’s this, too:  The Illinois law deals with people who don’t know they’re giving data to a company.  In the case of Facebook, it’s commonly understood user data is submitted with consent.

That may not be a particularly appealing notion … but it’s the price of gaining access to the fabulous networking functionality that Facebook offers its users – all at no expense to them.

And of course, millions of people have made that bargain.

That being said, there’s one nagging doubt that I’m sure more than a few people have about the situation:  The folks at Facebook now aren’t the same people who will be there in the future.  The use of faceprint information collected on people may seem quite benign today, but what about tomorrow?

The fact is, ultimately we don’t have control over what becomes the “tower of power” or who resides there.  And that’s a sobering thought, indeed.

What’s your own perspective?  Please share your thoughts with other readers here.