Will Facebook / WhatsApp mark the end of the “App Bubble” like AOL/Time Warner marked the end of dotcom?

facebook whatsapp - Google SearchMany agree that Facebook’s recent acquisition of WhatsApp is the perfect representation of just how disjointed the market is. Where a company that has a flimsy monetization strategy can finagle 19x more out of Facebook than any of their previous acquisitions combined. The last most notably being Instagram for $1 billion in April 2012. Mark Zuckerberg calls this a bargain while the rest of the world, particularly the financial sector, looks on with skepticism.

So how can a messaging app, who’s main function is to provide an amalgamation of  features similar to existing apps, sell for $19 billion dollars? There is all kinds of speculation as to the answer but at least this much is true:  WhatsApp users send 600 million pictures a day. 1 million more than Facebook. 70% of WhatsApp users engage on a daily basis. Facebook sees a 50-60% daily engagement rate. WhatsApp has a strong presence in emerging markets such as Latin America and India while Facebook does not. Lastly, WhatsApp has seen a user growth rate even greater than Facebook’s astronomical growth. Which of these reasons most heavily influenced Facebook’s decision is impossible to know unless you are on the inside, but it’s likely they all factored in to some degree.

whatsapp vs facebook growth - Google Search-1 whatsapp global use - Google Search

What does this mean for the app ecosystem? There is speculation that this will ultimately crash and burn sending Facebook into a tailspin, evoking memories of the AOL / Time Warner deal that marked the end of the Dot-com boom. The major difference here is that WhatsApp, like many other high price tag apps, actually provides a utility, which is to say it adds value. That value may come in the form of saved time or money, better pictures, easier sharing, faster connectivity or more accurate geo-location, whatever the case may be, people find value and they continue to use these apps at a staggering rate.

Whether this acquisition ultimately helps or hurts Facebook is anyone’s guess but irregardless, the app ecosystem is only going to continue getting stronger. If this particular deal does fail it will mean that greater emphasis will be placed on due diligence upfront, in other words, more assurances the app has a working and sustainable monetization strategy. If the WhatsApp deal works out on the other hand, Facebook will undoubtedly try to make similar purchases, perhaps equal to or greater in value. Apps will work to replicate the WhatsApp model, even if that means a barrage of apps that all look and feel very similar to end users – though this isn’t necessarily a bad thing. Competition breeds quality and as long as app makers can continue to produce apps that provide quality utility to end users, then the app ecosystem will remain firmly in tact.

Advertisements

SXSW Diaries Part 1: Key Takeaways from SXSW Interactive Trade Show 2012

I am back in NYC and better than ever after seven exhausting 18- hour plus days at SXSW. The show was a smashing success and there are a number of key takeaways I want to share with other companies, agencies and brands looking to throw a party, exhibit at a booth or employ guerilla-marketing tactics in and around the city of Austin during SXSW Interactive. Below is the first in a series of three posts I am going to share, which detail the pros and cons of exhibiting at the convention center during the interactive portion of SXSW.

Background

This was my 2nd time at SXSW, but it was my first time as an exhibitor and the first time that I threw a party or did a sponsorship. Although our party was a tremendous hit and our sponsorships worked out great for the most part, our booth was a disappointment. I should actually say that our booth was great, but the trade show was a bust for exhibitors. Yes we made some good contacts on Monday, but Tuesday through Thursday traffic dropped off dramatically and meaningful conversations were nowhere to be found.

This isn’t my first rodeo when it comes to trade shows. Fluent does close to 20 trade shows a year and I probably attend half to three quarters of them as an attendee, speaker or exhibitor, so I know how to gauge traffic, quality of conversation and overall value. At the end of the day, the SXSW Interactive Trade Show feels like a sham for the exhibitors inside the main convention center’s inner hall. The companies and brands that can secure booth space in the outer hall (the ring around the inner hall) which is open to everyone with or without a badge, do considerably better. This is because the outer hall is open from Thursday through the following Thursday, to align with the SXSW Interactive Festival.

Overview

An Interactive Festival by definition means that people should be able to interact and engage with a specific piece of content, a booth or an exhibit. The outer hall was filled with such exhibitors and they all did a great job providing badge holders and the general public with a highly interactive experience. The inner hall, although it did feature some interactive displays and exhibits, was largely about showcasing digital companies, agencies or brands. And because the opening of the inner hall Trade Show didn’t align with the Interactive Festival, it seemed more like an afterthought as opposed to an intricate part of the SXSW experience.

Just to recap for those who have never been, the SXSW Interactive Festival starts on Thursday night but the first full day is Friday. The Interactive Festival then runs Saturday, Sunday and most people either leave sometime Monday, or early Tuesday morning. For those reading closely, I understand you might be confused because I just noted that the Interactive Trade Show runs from Monday through Thursday. This means that you are just getting started as an exhibitor in the Trade Show, when everyone else there for the Festival is leaving. To validate my point, all you have to do is look to the top of SXSW.COM, the official site for the show, and you can clearly see the dates for Interactive. The 9th – 13th is Friday through Tuesday.

It’s perplexing I know. The Trade Show should start on Friday and end Monday or Tuesday afternoon, to align with the actual days of the Interactive Festival. To all those exhibiting, it feels like you’ve been taken by SXSW. The amount of money it costs to exhibit isn’t worth the booth traffic you receive on the best day, which is Monday.

Takeaways

The net net here is that unless you have a booth in the outer ring of the convention center, that’s highly interactive, you are paying to exhibit for three days after your core audience has left, assuming your audience is people who are attending the Interactive Festival. Why the Trade Show doesn’t align with the Festival has eluded me, but what I do know is that the $7,500 I paid for setup and to exhibit wasn’t worth it. Next year I’ll be more wisely spending that money on platinum badges for my team, then sending them out to proactively network during day. We will skip the hours spent loafing around a booth talking to UT students and faculty about how great the new Wi-Fi hotspots are on campus – it’s simply not worth it…

This week look for SXSW Diaries Part 2: Key Takeaways for Throwing a Party or Doing a Sponsorship

Next week look for SXSW Diaries Part 3: Key Takeaways for Guerilla Marketing

Does it really mean anything to be a Foursquare Mayor?

I currently hold 6 mayorships on Foursquare. I wouldn’t consider myself a super user but I have a large friend network so this isn’t too bad considering. It’s fun to walk into a place that you frequent and then receive a unique offer simply because they want to give you a little something extra. In New Orleans, a place I called home for 5 years, they have a saying for this called lagniappe. A French Creole word used almost exclusively in Louisiana that means “a little something extra.” This may come in the form of something you receive at the time of purchase, like the extra donut in a bakers dozen, or even a compliment, something for good measure.

In Foursquare, lagniappe is typically extended at the time of purchase. At Starbucks this means $1 off a Frappuccino, while Pizza Hut rewards mayors with free breadsticks. This is different than rewards you earn for checking-in. In Manhattan many of the bars and restaurants on Third Avenue reward users with a free draft beer the first time they check-in, while mayors receive 15% off their tab. There is a clear distinction between a reward you receive for checking-in and a reward you receive for achieving mayor status. Greater rewards are extended to mayors as these are the people who return most frequently – the regulars.

Foursquare, in their 3.0 release a few months ago, created a “Specials” section in the main nav where users can search nearby destinations based on whether or not they offer rewards for check-ins or for mayors. This update came in response to critics who said brands had no way to clearly monetize the LBS and “Specials” is a feature loyalty programs can be built upon. Clearly this is something that Foursquare wants to emphasize and it’s not surprising that so many brands want to participate. It’s really a win-win situation for both user and brand if executed properly. The user receives a tangible reward for their loyalty (lagniappe) and the brand receives ongoing customer loyalty and social props that will probably come in the form of evangelism on the social web.

This all sounds good in theory, but unfortunately in reality, it’s not so simple. I was at BLT Fish in Manhattan just last Friday. I have held onto the mayor title for the last 6 weeks and I’ve been anxious to redeem my reward, which is pretty generous – a free lobster roll. I shared my excitement with Twitter and I even got a couple of responses from @BLTFish as you can see below.

I went Friday night at around 6:00 before any real dinner rush had formed. I beelined it to the bar for a few drinks and to show the bartender my mayor status as instructed by Foursquare.

After a few drinks I sat down to order and then showed the server my phone before he put the order in.  The server, who was clearly channeling Todd from Wedding Crashers and probably shouldn’t have been in the service industry to begin with says, “Ohhhh yeahhh I’m like so sorrrry, this is like only good at like the barrrr.”   His insincerity and cloying tone immediately prompted me to ask for the manager who then told me the same thing. Knowing this was wrong, I referred to the above tweet and offered the phone up, twitter message clearly displayed, for validation.  The manager said he would check with corporate before shuffling off.  Unfortunately he never returned.

I guess I was most disappointed with the fact that the manager never came back to apologize, or even to inform me the roll wouldn’t be on my tab. My server also disappeared and sent 3 other people to bring out my food and drink. Good or even decent customer service would dictate an apology or at least an explanation, especially considering the whole reason I hold the mayorship in the first place – I’m a regular. I go there, I check-in, I spend money.

My point is this, if you are going to run a Special on Foursquare then all the details need to be communicated from the top down. Starbucks uses a “Need to Know” sheet that is posted next to the cash register. This includes detailed information on Foursquare promotions and rewards, as well as the promotional code the server should be using when tabulating the bill in the system.

Many brands that run Specials fail to do this and it is an unfortunate, albeit common problem. The main objective, when offering a Foursquare Special, is to promote positive experiences and increased loyalty.  So when the mayor, or whoever else is checking-in  receives their reward, they will then evangelize their experience on the social web and via word of mouth.

Even though BLT Fish begrudgingly honored my mayorship, I am left with a bad taste in mouth – the fish was good but the service and overall experience were terrible. The question I posed to the Twitterati is this: “Is my one measly lobster roll really worth losing me as a customer and even more importantly, the negative sentiment that will be amplified throughout my social network?”

Sadder still is how some words are lost in translation across a thousand mile divide. The only lagniappe I received was a headache followed by a stomachache. That’s a little something extra I would have cared to avoid.

MEMBER CELEBRITIES PART II: Real World Examples of Brand Advocacy Evolved

I was in Houston two weeks ago meeting with clients and speaking at the Houston Social Media Club Breakfast. I was reading USA Today (under the hotel door addition) the morning before my speech and I saw an article that perfectly validates the impact and importance of Member Celebrities. With that in mind, I wrote this to serve as an addendum to my previous Member Celebrity post.

Two weeks ago the New Jersey Devils stole a term from NASA (and Gatorade) and launched what they are calling Mission Control. Mission Control is a “social media hub” within the team’s headquarters in the Prudential Center. This social media hub is really a state-of-the-art media room that will serve as the nerve center for team related social media creation. The coolest thing about this story isn’t Mission Control, but rather the fact that the Devils have literally given the keys to this room to 25 of their biggest fans. So the duality of Mission Control is that it’s serving as a social media hub and the ultimate reward for some very lucky Member Celebrities (the Devils call them Army Generals). Below is a step-by-step guide to creating and promoting successful Member Celebrities who are impactful to your brand.

Step 1. Identify your biggest fans:

With the right tools and strategy, this is the easy part – The Devils do it by holding a contest. Essentially the team is looking for a way to hone in on fans who are brand advocates and very active in the social space.  The Devils’ goal was to choose 7-10 people, but they ended up with 25 due to the sheer volume of quality entries. These fans are what I call Member Celebrities and they are the evolution of brand advocates (see my previous blog post for a more detailed explanation).

Step 2. Provide a platform:

Your Member Celebrities need an official platform that they can leverage for content creation and distribution. Giving Member Celebrities admin rights to a Facebook page doesn’t count. If you are using Facebook you need to enable Member Celebs with the right tools such as community functionality built into a Facebook tab or community tools on the homepage of your brand’s domain site. These Member Celebs are responsible for content creation on the brand’s behalf and the brand is responsible for content curation.  (Brand as the curator is becoming a very en voue topic as of late – if you don’t believe me – Google it or check out the BeanCast – you’re welcome Bob)

Step 3. Communicate content creation plan:

One thing that differentiates Member Celebrities from brand advocates is that the brand is in direct communication with a Member Celebrity and the brand develops a content creation plan that the Member Celeb is trained to follow (the Devils have daily meetings at Mission Control). The idea here isn’t to detract from the authenticity of the content, but rather to provide the Member Celebrities with a set of guidelines and to set expectations. Most Member Celebrities aren’t professional writers, bloggers, marketers or advertisers, although they are socially savvy, they aren’t necessarily brand savvy, so this is a way to educate them on the brand’s voice as well as general marketing principles to ensure they stay on-brand.

Step 4. Broadcast UGC to key social and digital touchpoints:

Another key differentiator between brand advocates and Member Celebrities is that a Member Celebrity’s content is broadcast outside the community. Brand advocate conversation is featured in a community such as Kraftfirsttaste.com but you can’t find it on any affiliate sites or the social web. This is a mistake. This is exactly the kind of content that should be featured on affiliate or partner sites. From Facebook and Twitter, to ad banners and even at offline events like the Prudential Center Jumbo-tron, broadcast your Member Celebs.

Step 5. Reward Participation:

The last step involves rewards. True: many fans would consider just being a Member Celebrity reward enough, but it’s important to build a level of exclusivity. You want other fans to covet the role of the Member Celebrity. Other fans can publish team or brand related content, they just aren’t doing it from an official platform, account, handle etc. In other words, you need to give Member Celebrities a little something extra to set them apart from the average fan. In the case of the Devil Member Celebs, it’s access to team facilities, locker rooms, players, iPads, plus free tickets and box seats for certain events.

Just one month after introducing Mission Control and Member Celebrities, fan growth along with interaction and engagement on Facebook, Twitter and the Devils’ community, has grown in double digits. The Member Celebs even took it upon themselves to organize an unofficial Tweetup that 50 people attended. The Devils will officially sponsor this event in the future and it is sure to draw more fans, but the key takeaway here is that this serves as a great proofpoint for Mission Control and the Success of Member Celebrities. Whether you are building a new community or doing an audit of your current community, consider how you can use Member Celebrities to elevate advocacy and drive engagement. Make your community members your biggest asset. They will thank you for it.

Member Celebrities Are The New Brand Advocates

Recognizing the key influencers in your community in order to promote brand advocacy and evangelism isn’t a new concept. In fact, many social campaigns start out with similar goals. That said, why is it so hard to create a social campaign that, at its core, inspires members to act as advocates or evangelists?

In order to answer this, it makes sense to take more of a sociological approach and look at the types of people who are engaging with a specific campaign. If the campaign appeals to a group that’s naturally composed of what Malcolm Gladwell would call mavens, then the campaign has a greater chance of becoming viral. If the group is composed of people who may engage but not necessarily share, then viral value is not impacted.

Q: With this in mind, how can we increase viral value regardless of the type of people engaging with the campaign?

A: We do this by creating Member Celebrities.

Where an advocate spreads brand messaging via word-of-mouth and an evangelist converts via word of mouth, a Member Celebrity is featured via a platform provided by the brand. Forms of media created by advocates, evangelists and Member Celebrities are similar in that they include positive ratings, reviews, testimonials, comments, videos etc., however, Member Celebrities are different in that the brand is in direct communication with them and the brand sets expectations when it comes to content creation. The kicker is that the brand will then broadcast this content on domain, the social web and ad banners. Then similar to real celebrities, the brand will provide some form of compensation.

According to a Zuberance study, advocates are worth 5x more than average customers and provide a 10x return on advocacy so it makes sense to proactively target these people, incentivize them to produce content and then broadcast that content to key social and digital touch points.

As an example, let’s look at the Phoenix Suns who have one of the most active sports communities and frequently feature Member Celebrities. Two years ago the Suns found 4 Australian superfans who met on the Suns community and decided to take a month off to come to the US and follow the Suns. The Suns recognized the tremendous marketing and PR opportunity and contacted the fans to ask them to record their experience via blog posts, pictures and videos. The Suns then heavily promoted this trip, even branding it  “Destination Phoenix.” By the time the fans were in the last leg of the trip to see a series of Suns home games, they were so popular and well recognized, that other fans bombarded them before they even entered the arena.

For the last few home games, the Suns showed their appreciation for the fans and their contributions to the community by going the extra mile to rollout the red carpet. The Suns VP of operations chauffeured them to the game, they met players of past and present along with the GM and announcer, they got complete behind the scenes tours and received all kinds of autographs, paraphernalia, plus a ton of other swag.

By prominently featuring the superfans and giving them the platform to display all the incredible UGC they compiled along their journey, the Suns created Member Celebrities that were bigger brand advocates with more authentic messages than any paid celebrity could provide. The buzz within the Suns community was immense. There was a positive outcry from fans asking how they could receive the same kind of treatment. Traffic and engagement increased along with a steep rise in positive sentiment.

Featuring Member Celebrities as the stars of a branded community lets brands take advantage of the UGC opportunities driven by the Member Celebs and enables brands to broadcast a more authentic message. The goal is to leverage Member Celebs to inspire more advocacy and evangelism in an organic way; for a fraction of the price it would cost to employ paid celebrity endorsers.

Webinar Tomorrow: Social Media Integration

I will be presenting a webinar tomorrow here at the KickApps Union Square office. The webinar is entitled “No Social Site is an Island: The Key to Social Media Integration.”

We will be discussing the digital revolution and how that has impacted online behavior, necessitating an integrated social media strategy and a move towards fully socially integrated sites.

The webinar will be available for download later this week.

Social Selling: How to Make Social Impact Your Bottom Line

2011 marks a new year and another chance to examine the evolution of social strategy. In working with brands from a consultative perspective,  it’s very interesting to note the changes in their social strategies, content creation plans and especially social benchmarks in comparison to last year’s. Last year it was all about the undefined. It was social strategists and marketers trying to convince the c-suite to pull money from existing buckets with proven ROI models and invest it in a rapidly emerging, but still unproven medium of social media. 2010 was really the first year that the majority of businesses and brands actually set aside a bucket for social. BUT, and this is a big BUT, they did so without having any solid ROI model or meaningful business metrics.

Jets fans gathered for a rally in Times Square Thursday in anticipation of Gang Green’s AFC Championship game against the Pittsburgh Steelers.

“Yes we got a million Facebook fans last year.” “Yes we were @mentioned 5 million times on Twitter.” “Yes we’ve got unerring positive sentiment.” “Yes to all the above.” But when we break this down and look at how all the social media buzz is impacting our bottom line, it becomes a very difficult question to answer. In the past it was, “we know we need to put up a Facebook page as quickly as possible” and now it’s, “we have a Facebook page but how can we use it to make money?” Luckily we’ve made it this far but we’re still not taking the time to really think through the answer in a smart way that we can prove time and again. Part of the reason is because there isn’t a true set of globally accepted metrics – but trust me, we’ll be there soon.

In the meantime it’s all about strategy. Brands need to start treating social strategy like they would marketing or any other strategy. No savvy marketer would ever pump a million dollars into a marketing strategy without some semblance of what the return would look like, but this is exactly what’s happening with social.

Okay. So what does this all mean? It means we need to get back to selling – SOCIAL SELLING. Essentially it’s all about adding real marketing messaging that will drive people to purchase and then (now this will really blow your mind) enabling them to do so. This should be the core of your social strategy unless you are cause based.

People know that even though brands have created fun and engaging experiences on Facebook, look at Oreo, Starburst, Vevo, Red Bull, Ford, MTV, Starbucks and the list goes on and on, but at the end of the day the consumer isn’t stupid and they know a brand really wants them to BUY something.

Many of these brands have great social experiences, games or apps but they aren’t getting anything meaningful and measurable in return. This can only go on for so long before the c-suite says, “Alright ACME marketers, you have 16.5 million fans on Facebook but you don’t have any meaningful analytics that will prove this is really impacting my bottom line.”

This probably sounds familiar and to put it into perspective using a real world example, lets look at a professional sports team that is using social media to drive sales, establish itself as a leader in it’s space and most importantly, impact it’s bottom line. I am talking about the New York JETS and the Wall Street Journal has a great write-up on them in today’s issue. The JETS are doing extremely well with all the social intangibles (“intangibles” means social metrics that don’t necessarily have an impact on ROI) such as social mentions; they lead the NFL with 1 million; twitter following, they have the largest; and Facebook fans, they have the third most among NFL teams.  These are all great stats but the JETS are also excelling at something most other teams and brands for that matter haven’t figured out, SOCIAL SELLING.

Here are some ways the team is using social to generate revenue and directly impact it’s bottom line (taken directly from the WSJ article) “The team’s Fireman Ed Chant app ($1.99) is the second-best selling paid sports app on iTunes. Their Ultimate Fan app on Facebook, which allows fans to make predictions and stage virtual tailgates, has four sponsors, making it a rare revenue-generating Facebook app for a sports team.”

The JETS are also utilizing social apps such as Twitter and Foursquare to better the customer service experience. They use Foursquare to upgrade your seats if you check-in at a game and they leverage Twitter to, “solicit advice from fans on everything from staging rallies to the stadium experience.”

The JETS have figured out the answer to the social paradox; creating and implementing a social strategy that has actual benchmarks, real sales metrics and a positive, measurable impact on ROI. Even if you aren’t a fan of the team you have to admit they’ve gotten something right (aside from Hard Knocks).

A sound testament to this is the fact that the JETS are already planning to increase the social media component of sponsorships to 50%. That’s up 40% from this year. That should be a call to arms for all social strategists – Social Selling does work and when you can provide meaningful metrics and demonstrate the impact on ROI, you will be rewarded with larger budgets to do even greater more innovative things in your space. To that I say, “J-E-T-S! JETS. JETS. JETS!”