Has the Facebook killer been in your pocket all along?

I’ve found my facebook usage dropping off gradually over the past 6 months or so. At first glance at my wall you feel it seems to be a hive of activity.  On closer inspection you discover that most of the updates are actually via third party apps or websites, such as foursquare, instagram, youtube and of course twitter.

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This got me thinking about the role facebook plays in unifying various social networks into one place.  To me that’s the only role it ever played.  I’m not one of those users who friends anyone and everyone on other peoples contact lists.  I connected with people I already knew and met in the real world and then shared what I was doing in my life (whether they were interested or not)

So whats changed?  

Well I finally made the switch to an iPhone 4 last September.  Prior to that I’d been a die hard blackberry user.  Hanging on to the bitter end, always in the hope that an iPhone killer was just around the corner.  Moving over to the iPhone allowed me to load my phone with apps from my various social networks.  It also allowed me to update each network and interact with them individually.  I can get updates as often as i want and i can turn them off when i want a break from the noise.  

In effect my iPhone has become my own personal facebook 3.0.  A version that doesn’t have the same privacy issues, bombard you with largely irrelevant ads.  Merge friends, coworkers, clients and family into one bucket.  Its personal to me, created by me and managed by me.

So as of 2 days ago, I said goodbye to facebook and moved on.  It was great while it lasted but for me the platform is now redundant to my needs.  What was oncefacebooks killer feature, the ability to pull all and everything under one roof.  Resulted in us having to manage a myriad of privacy controls and sharing preferences, gradually transformed its users into unpaid site administrators.  

I only have to look at the first screen on my iPhone to see the game has moved on and its not going to take long for others to notice too. 

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11 out of 20 apps are for either communicating or sharing information with others.

Google, Apple and Microsoft (obviously MS is still hedging its bets with part ownership as well) were always potential threats to Facebooks dominance, but the attack has not come from the direction most expected.  

The rise of the tablet is only going to add more nails to the coffin of sites that hope to create walled gardens around their users…….

A business by any other name….

Remember 1999/2000?  Well those of us old enough to have been in the industry back then sure do.  Anything with a dotcom was considered gold dust.  The World was never going to be the same, and in some ways that was true.  The interet has changed things for ever, and in many ways for the better.  Sadly somethings remained the same.  Not disimilar to goldfish, it appears investors have limited memory capacity as well. 

Say hello to the App (AKA, Dotcom 2), and with it we are about to repeat the same mistakes that were made a decade ago. The dotcom era apparently brought with it a new set of investor metrics, which many of us had hoped had gone the way of the dinorsaur. Earnings, we were told, were meaningless, value investing was no longer valid, Buffet was out of step, the future was all about growth…… a new term entered the dictionary, Monetization……..

I should probably confess at this point, I’m turning 40 this year.  I understand that as a middle aged male I’m out of step with many things in popular culture, with the exception of perhaps technology. (I admit, I’m a geek at heart).  Despite this evident handicap, I have had some moderate success in business.  I’ve built an online company over a 14 year period which has grown each year since inception.  We have been profitable (we will return to this point in a moment) each year of trading, and remain to this day debt free.  We have seen and weathered two recessions and adapted to a rapidly changing industry.  Yes some of this can be considered fortune, but the bulk is down to strong leadership, great strategy and a consistent, talented, loyal team.

I know we are not alone, I know there are thousands of businesses out there with similar success stories, some with incredible achievements.  So when I speak now, I speak not only for my own business, but for the thousands of others without the time or inclination to speak for themselves.  

Not all businesses are created equal!  We’ve already established that I’m getting on in years…..I’m also old fashioned when it comes to free enterprise.  I believe that to be considered a business you need REVENUE, more importantly you need to realise a PROFIT.  This might not be that surprising an opinion to those of you outside the world of technology, but in the tech bubble I occupy, it seems im very much in the minority. Today, just as i witnessed back in 1999, I’m told all you need to be considered to have a business is launch an app (back then it was of course a website).  If it gets really popular (stop me if any of this sounds at all familiar), then that means you are a growing business.  In fact that means you are worth a fortune to potential investors, who will clamour over each other to invest (theres no need for me to write about facebooks latest valuation here, suffice it to say, they actually have a director of monetization!).  These speculators, sorry “investors” will come in all shapes and sizes. Some will even have sprouted wings and self-titled themselves angels.  They will explain that the last 10 years of internet businesses are now out of step with the changing world, that social is everything, that if youre not mobile, then you will be dead in the water.  Sure you might make money now, but thats not going to last.  

The future (I’m told) is all about social, apps, mobile, clouds (another rant altogether) and most importantly “users”.  Those of us with actual businesses (remember I define this as paying taxes after providing paid goods or services) refer to our users slightly differently (for good reason) we call them customers.  A user you must understand is a “future customer”, or so we are lead to believe.  

Speaking for the silent tech minority out there, i dont buy any of it!  More accurately, neither, in most cases, do the “users”….  

So where does this all lead?  I want us us to come up with a new designation for groups or individuals who produce a service or product, give it away for free in the hope of future revenue.  I’m actually being serious now.  I think speculators/investors need protecting from themselves.  There should be a clear distinction between what is a real business (however boring and mundane that might be) and aspirational businesses.  Please dont get me wrong, I love apps, I have hundreds on my phone, ipad, and as of today my desktop.  I dont hate creativity.  I hate creativity masquerading as a business.  I have no respect for individuals who sell these aspierational fantasies on unsubstantiated claims of growth (not all users are equal).  I believe action needs to be taken very soon to protect the hard earned income of investors who are understandably fighting to regain some of the losses realised in the past 3 years.  

Unfortunately deep down i think its too late. The money is already on the table and the wheel has started to spin….. a few months from now when the ball stops i fear for the consequences of our inaction.


Note: I should also add, that just as was the case in 1999/2000 in amongst the hype and pick axe salesman, some real business did exist.  Ironically those business rarely got any media attention (you rarely do unless you require external funding).  The same situation exists today within the app ecosystem. Real businesses do exist and thrive. They above all should be concerned for the coming bang, for fear of becoming tarnished with the whole.

In Advertising, Intent is EVERYTHING!

What is the goal of advertising?  Branding, Sales, Education? The list is literally endless.  It can however be simplified by one word that unifies everything. Action!  All advertising has the goal of getting the viewer / listener / reader to take action. That action can of course be many different things, from signing up for a newsletter, giving to a charity, or even making a purchase…..

Once we establish the goal of all advertising has the same, then it makes things much easier when we start to look at where best to place our advertising to generate our desired “ACTION”.

The placement options available to the budding marketeer are of course endless. So its no surprise that budgets are often wasted.  Hotel room keys anyone?  (seriously I often wonder who has an ad budget so large they feel the need to test hotel key card demographics). 

I’m all for testing new placements and new ideas as they develop, but the game hasn’t really changed in the last hundred years or so.  Advertise where there is most “INTENT” to take our desired action.  Got a airport car rental company?  Guess what, advertising on airline booking sites on pages that cover youre airports might be a good idea.  Wedding photographer? Advertising on a local wedding planning site might work?  Seems obvious doesnt it, yet so many companies ignore the obvious and instead chase the newest invovations.  I mean seriously I love Peets coffee, but do i want to sign up to be their twitter follower??? No!!!  But hey everyone needs a twitter account, right?  This isnt the time or place to get into social media and the misinterpretation of what is meant by marketing in that sphere. Hint:  its not sponsored tweets.

So where do we find intent?  The simple answer is niche.  Niche is where intent thrives. Its important to remember, when people thing niche, they generally think way too big. They confuse niche for market.  There is a difference.  A niche is a subset of a market. You need to think really small….. 

Can you see where conflict might exist in a world which is dominated by comments like.  Audience size is everything.  Bigger is better.  Who has the most market share wins.  And other such fairy tales.   The smart marketeer doesnt fall for this sort of media hype.  The smart marketeer undestands that all visitors are not alike.  The key difference is?  Yes you guessed it, Intent…….

Intent is the playing field leveller that noone wants to talk about.  Its far to easy to quote visitor numbers and membership statistics, why get into all that complicated stuff which is actually useful to the marketeer. 

Using the airline booking site as an example of niche.  What is the intent of their typical visitor?  I’m going to take a huge leap of faith and assume its the purchase of an airline ticket. Even if some visitors are searching on behalf of a relative or friend, they still represent that intent through a proxy.  Its safe to assume a large percentage of visitors go on to purchase a ticket via that site (assuming the site in question represents a large enough cross section of the available marketplace).  

Now lets take another typical marketeer who’s focused on audience size and market share (see notes relating to airline booking site in the footer).  They decide to focus on market and not niche.  Choosing instead to advertise on travel sites.  People that travel after-all often rent cars dont they?  In this rather obvious example for illustration purposes only, the intent of the travel site visitor is vastly different than one visiting an airline site.  The list of intent is pretty much endless, places to stay, where to eat, things to do, entertain the kids, etc etc.  So lets be generous and say that 10% of people visiting a travel site have the intent of buying an airline ticket. Ignoring airport targeting for a moment, that means we need 10 visitors for every 1 booking site visitor to register the same level of intent.  

In most industries the ratio of intent is vastly reduced the further you move away from the niche.  Sure techcrunch and mashable are incredibly useful sites for those keeping up with the latest technology developments.  There audience figures are in the millions and have legions of loyal fans.  The audience figures shrink dramatically however, once you apply an intent ratio to your product or service.  Generally you would be lucky to get into a single digit percentage.

You can generally increase the intent ratio the higher you delve into a niche.  If your looking to rent luxury sedans, then business ticketing sites are obviously going to represent a higher degree of intent than a budget traveler site.  

So before you reach for your wallet, when the next headline from the latest hot funded internet property spouts rapidly increasing audience size.  Ask yourself what what’s the appropriate intent ratio to apply.

Note: OK so airline booking sites are a big easy example to use.  Many of these sites represent the largest on the internet.  So they actually fulfil audience and niche criteria.  Thats unusual, and only generally exists in a few search verticals. The others being retail, financial services and media / entertainment.   

Decline isn’t always a bad thing!

For the last week I’ve seen a lot of press given to the decline in email usage. Apparently anyone over the age of 20 just simply isnt using it anymore. Prefering to use IM, SMS, Twitter and Facebook updates to communicate. Aside from the facts being skewed to produce yet another Facebook related headline, ( we’ll get onto that part later) this really got me thinking about why we always have to seemingly destroy one medium before we seem to be able to accept another?

They said, radio will kill the newspaper, then television will kill the radio, then the internet will kill everything…..and now Facebook will kill the internet…….blah blah blah.

Yes of course prior mediums do often decline as a result of the introduction of the new. But Importantly decline does not mean death.  In many cases it can result in improvement.  In other words, just because Henry Ford rolled out the model T, and the sale of horses declined, does not mean people stopped riding horses……

What I’m trying to say in this somewhat rambling piece, is that when something declines it can actually become better.  Its quite possible, sticking to the horse riding analogy for one painful sentence longer, that people might just enjoy riding horses more than they did before the invention of the car.  

In essence, just because somethings not growing, does not mean it becomes less relevant to you as an individual.  

Bringing things round in full circle, lets look at the use of email for a moment.  The basis for the “decline” in the use of email, seems to stem from two “facts”.  Firstly that traffic to email service websites (gmail, hotmail, etc ) is in decline.  Secondly that people under the age of 20 dont use email.  

I’m pretty sure anyone in the tech industry doesn’t find any of this that surprising. Decline to these websites is an obvious consequence of massive adoption of smart phones technology.  I use my phone to check and send email, probably 80% of the time.  I’m a heavy email user by any measure, yet using these broad brush metrics, my visits to gmail are in decline…..(theres that word again)

As for the other startling statistic, that people under the age of 20 use email less, I’m confident the same could be said for bookings in business class flights, mortgage adoption rates, 401k contributions, medical insurance, luxury car sales….. Younger people dont use email…..Yet!  Because they dont have the need, not because its becoming irrelevant.  

The real conclusion we should draw from all this is that segmentation of communication is continuing to evolve.  In the distant past (ok well 10 years ago) email was the one size fits all approach to semi instantaneous communication.  We all know what happened next.  An increasing amount of poorly targeted communication in a single pile, called our inbox.  

So is email in decline?  Yes even contrary to the poorly utilised statistics above, it most probably is.  Is that decline a bad thing?  No it most certainly is not!  The removal of trivial 140 characters or less from my inbox is a welcome relief.  

Email is still the business communication tool of choice, which certainly wont be replaced in entirety by unthreaded twitter conversations, wall posts on facebook, or emoticons over IM.  

So next time you see a headline about an industry being in decline, ask yourself, is that really such a bad thing……