Twitter Starts Developing Commerce Operations. Hires Ticketmaster CEO to Lead Commerce Efforts

Twitter has recently hired Nathan Hubbard, former Ticketmaster president, to lead the charge on its commerce operations. This move is a part of Twitter’s efforts to pass the $1 billion revenue threshold by 2014. With its current revenues coming almost exclusively from advertising, Twitter figured it can unlock its social commerce potential, a market that is still untapped by most social networks.

Twitter's new Head of Commerce - Nathan Hubbard
Twitter’s new Head of Commerce – Nathan Hubbard

While Twitter’s intention is not exactly disruptive or unexpected, it is interesting to have a look at some of the subtle nuances. Hubbard recently declared in an interview that…

“We’re going to go to people who have stuff to sell and help them use Twitter to sell it more effectively. One of the hallmarks of Twitter’s entire approach has been partnering. We’re going to take the same approach with owners of physical and digital goods.

– Nathan Hubbard

Taking into account Hubbard’s words and the recent developments in social media and eCommerce some things are to be expected:

  1. It’s really important to note that Twitter’s efforts seem to be going into C2C territory, as well as the traditional approach into B2C. Twitter’s users may be empowered to exchange and trade stuff on the social network, an activity that is not that uncommon on its main competitor platform, Facebook. That may mean that Twitter’s commerce innovation will be to help transform its social network by adding a C2C commerce layer, not unlike Ebay’s platform. It does have the users, it might just as well let them trade.
  2. There seems to be a great focus on digital goods, as they may work better with the digital market Twitter is building. Some of Facebook’s best commerce results came from digital content, such as apps, especially Mobile App Install Ads. The Install Ads have helped Facebook increase its share of mobile – related revenue to 41% of total. But digital products is a far larger market than apps. It goes beyond to include concert tickets, airline reservations, hotel reservations, digital books and many others.
  3. You might have noticed that Twitter left the “e” out of its “eCommerce” operations as the company has a Commerce target. Both online and offline. A multichannel approach, if you will. As the lines between traditional and online retail have become almost invisible in the past years, Twitter seems to be looking into an integrated commerce approach, tracking and targeting the potential consumer via brick and mortar stores, as well as online. To help deliver metrics on such efforts, the company recently paid $90 million for Bluefin, a social and TV advertising metrics company.

 

There is a high chance that Twitter’s commerce efforts might not be all that spectacular, as even the mighty Facebook seems to be running around in circles when it comes to commerce, but I am personally looking forward to see where their efforts take them.

F-Commerce And Why Facebook Can’t Get It Up

facebook logoLess than a couple of years ago Facebook Commerce seemed to be inevitable. It just seemed one of those things that are just waiting to happen. Yet it didn’t. After a promising start, e-Commerce’s wonder child just stopped being interesting.

How did that happen? After all – so many were jumping the wagon and everyone was just eager to tap into Facebook’s social market. Well … Facebook’s IPO happened. Its market cap dropped. It got dizzy and greedy. All of a sudden Facebook stopped being a revolutionary product. It stopped valuing its users, be them companies interacting with customers or users (sometimes) willing to have a virtual conversation with a company.

Facebook got greedy and careless

Mark ZuckerbergIn may 2012 Facebook introduced “Promoted Posts”, marketed as another way for page owners to advertise their pages. It slowly, but surely, grew into a steady source of income and a few months later the company allowed page owners to promote pages not only to fans but also friends of fans.

It didn’t stop here. Sponsored stories were introduced in august 2012 and suddenly Facebook Walls stopped being ad-free.

Meanwhile, the Big Daddy of all social networks thought … “hey, there’s a lot of spam out there and people kind wanna spam each other on Facebook too. What if … “.

5 minutes and absolutely no second thoughts later, Facebook introduces … get ready … the option to send unsolicited messages to complete strangers. If paid. Wait a minute … isn’t this spam? Oh, yes it is.

While allowing advertisers to post ads on walls of people completely unconnected to their page, send messages to anyone on Facebook, whether they opted in or not, and generally ignoring the concept of privacy, the company still has the nerve to say … “The problem we face with the news feed is that people come to Facebook everyday, but people don’t have enough time to check out absolutely everything that’s going on” (Will Cathcart, Facebook’s News Feed Product Manager).

Really, Will? Really? So basically I, a Facebook user, don’t have the time to check everything. Unless it’s paid for and then I have the time to check it, even if I never subscribed, liked, opted-in or even thought about that particular piece of content.

Facebook has very long term strategy and short term tactics. How about something in between?

Given this approach, where Facebook showed absolutely no consideration for either users or advertisers, it was of no surprise companies were going to pull back a little bit on their Facebook spending. Facebook Commerce, potentially one of the greatest streams of revenue the company could have tapped into, given the rise and rise of online commerce, was badly affected.

Payvement, a company providing retailers with access to F-Commerce features, just announced it will shutdown Payvement and its partner website Lish.com. The market reacted quickly to the news. Media’s backlash focused on Facebook Commerce but the bottom line is not just about commerce. It’s about Facebook’s vision. We know Mark Zuckerberg  wants his company to usher in a connected world, with no communication restraints and no privacy. We also know that those who invested in the company early on are now pushing for financial results. What  we do not know, and probably Facebook’s management doesn’t either is – what is Facebook all about? Now.

In order to address F-Commerce issues the company may need to take into account a different perspective on its product and market. It has to address some issues such as:

1. Pages should reach their full audience. Free.

Right now the usual Facebook page post reaches approximately 7% of all fan base. Let’s say a Social Media Manager has the audacity to wish for its message to reach all of its fans. Remember – these are people that willingly pressed the “Like” button, knowing that means they will receive updates.

In the mean time – Facebook decides reaching the audience is unethical if unpaid for. Yet if you are a brand and you are willing to pay you can reach your audience easily. And their connections. And their inboxes. And soon enough – their mobile phones.

What is wrong about this is that Facebook never mentioned anything about promoted posts or limiting reach when the companies were developing their Facebook pages through ads, Facebook contests, Facebook content and others that were directly beneficial to the social network.

If you were a large retailer you would think twice before moving your ecommerce operations to a company that neither cares for your business nor does it have any clear development strategy.

2. Facebook.com is just a tool.

The social network concept is out there. Facebook is not innovating anymore. At least nothing useful and visible. Soon enough it will be replicated by a company with a better vision and greater care for its users and advertisers. It is not the first social network and it certainly won’t be the last. Judging by current events Twitter and maybe MySpace (the new one is just amazing) might actually stand a chance at Facebook if they keep on this way.

3. How about thinking before rolling in the changes?

Facebook is an engineers company. Trial and error was fun back in the day and it probably worked when there weren’t 1 billion users actively using it. If you think about it, Apple is also an engineers company but it evolved a human approach. They listen to their customers, even when they are not speaking. Unlike Apple’s, Facebook’s customers, the advertisers, are not really glad about their purchase.

How about the company puts a little more effort into improving its user and customer experience and less into imposing new features that usually help no one?

Bottomline

Facebook needs to think a little bit more on its overall strategy. It really has to figure out what the “F” in F-Commerce stands for. Mark, you gathered 1 billion people, you got this far, don’t “F” it up!

Mobile, Social search, Photos and iOS integration makes Facebook Stocks Rise

After dropping more than 50% since the IPO, Facebook’s market cap restarted growth following Mark Zuckerberg’s on-stage interview at TechCrunch Disrupt. The company closed today with a 7.62% increase in its share price. Several factors could have lead to this fortunate turn of events but the keywords are: mobile, social search, photos and iOS integration.

facebook market capitalization growth
A surprising growth in Facebook market capitalization

Facebook’s focus on mobile

On stage, Mark Zuckerberg made it very clear that Facebook is focused on mobile growth. A very bold statement, probably targeted at investors that so far have had their fair share of drama, was “On mobile we are going to make a lot more money than on desktop”.

Facebook has more than 488 million mobile users and the numbers are growing fast, due to increase in smartphone and mobile internet adoption. Recently the company introduced new ways for advertisers to target mobile users through sponsored stories. The advertisers were not so fast to switch to mobile ads, however: although mobile revenues are estimated at about $72 million this year, the figures are below Twitter’s estimates.

This situation is sure to change as Facebook’s focus seems to follow the mobile trend.

Facebook search

Probably the most important thing Zuckerberg mentioned was the fact that Facebook now serves 1 billion search results per day, “without even trying”. To put that in perspective – that is 10 times the number of Bing searches and approximately 30% of Google’s searches. Imagine that – 30% of the world’s largest search engine.

With social input Facebook search can potentially deliver better results than Google. After all, Google is not really good at answering questions but rather locating information. Facebook users usually ask their friends for help on different issues and this type of behavior creates a huge pool of data Facebook can use to answer questions in a very efficient way. Even “without trying”, Facebook has recently started monetizing its searches through contextual ads.

Facebook and Instagram Photos

instagram facebook
Image source

Zuckerberg mentioned that there is no hidden agenda in Instagram’s acquisition. They want to help the app grow and so far they increased exposure by 1100%.

Photos seem to be a very important area in future Facebook development. Although it’s obvious that photos have a positive psychological effect on users and increase revenue through photo-page delivered ads there is probably something that we don’t know yet.

iOS integration

Facebook is deeply embedded in iOS 6

iOS is the most popular mobile operating system on the Internet, with an astonishing 65.27% of all mobile internet users. Today Apple announced several news, including the long awaited iPhone 5, the new iPod touch and some social features based on Facebook and Twitter social relationships.

Having been integrated in the world’s most popular OS means big exposure for Facebook. Even more – it means an increase in revenues.

As I mentioned a few days ago Apple and Facebook were planning and started rolling out a deeper iTunes integration. Although Facebook is just starting monetizing its mobile users, Apple is one of the best at this game. Using Facebook’s social features Apple can sell even more, bringing a new stream of revenues for both companies.

It seems as though George Soros knew what he was doing when he purchased Facebook stocks

The sad truth about print media

Print is dying. You don’t have to be fortune teller to understand this. You just need to be rational enough to accept the facts.

After all print was never about the technological print process. It was about written content, ideas, news, thoughts. Along the way some people failed to grasp the changing media landscape and technology made the printed media obsolete.

decrease-print-revenues
Print advertising decreases. Online increases. But does it increase fast enough? Source: State of the Media – 2012

The internet let individuals and smaller media companies reach potential readers. With low overheads such small editorial operations let the founders survive on advertising alone. “Free” content meant a larger access to potential readers. The increase in internet adoption, increase in online publishing websites popularity and increase in advertising revenue meant that in a very short time these websites became serious threats to print industry’s revenues.

How did it get to this?

Print publishers failed to adapt on several key moments:

1. The internet made online publishing possible: This was the most important moment. This was the moment a certain key element previously reserved to large media companies became publicly available. Anyone with access to a computer, internet, a few bucks could potentially start a online publishing company. Of course, funding was scarce, especially after the dot-com crash, advertising revenue was almost impossible to reach so most publishers decided they weren’t going to join the club. At the moment the decision may have sounded rational as there was no point in spending money on something that many considered a fad. There were no economic incentives so the publishers decided they were not going to risk established business over some geeky internet stuff. It was all downhill from here.

2. Online independent publishers started monetizing their audience: Through advertising online publishers started making at least some kind of money. With low operational costs some of them reached break even. However large media companies were still dismissive of this new trend as revenues were still way below their radar. Were this companies to seriously consider the online alternative they may have just detracted the public from the “free” advertising sustained model independent publishers adopted. Maybe, just maybe, a paywall solution could have been accepted were it proposed and generally introduced at the time. In my opinion Rupert Murdoch’s idea of pay per written content is not feasible on a large scale. It may work on a select few buyers that need accurate financial information, for example, but it’s pretty hard to impose such a model on, say, a daily news website.

3. Print revenues started declining: Even when revenues started declining large media companies were not able to seriously consider the online alternative. With a short term vision they treated their, by now existing, online division as the “town freak”. Rather tolerated then encouraged and developed. Focus was (and with most print-based companies still is) the print. That’s where the revenue (still) came from – that’s where they thought they should focus on. Wrong. Readers  switched sides. Advertisers switched sides. The whole world switched sides. After all, Amazon is already selling more ebooks then hardcover and paperback books. Why wouldn’t newspapers and magazines get the same treatment?

The print companies faced denial, denial, denial and now they face survival. They now face the sad truth that print is going to die and there’s nothing they can do about it. Maybe just survive the crush.