It is hardly breaking news to hear that there has been a massive shift in advertising spending in the last decade. Many traditional media outlets, especially directories, newspapers and magazines were affected early by the rise of online. Others, such as free-to-air TV, subscription TV and radio have seen more gradual erosion of their bases, but erosion nonetheless.
The problem for most traditional media is that the shift is far from over. In fact, its still only early days and the social networks are just getting warmed up in the advertising market.
The following chart is compiled by Borrell Associates and displays the ongoing migration to online advertising in the USA at the expense of many traditional media. There are some sizable falls in ad spend for some media here…and that’s just from last year to this year.
The initial growth of online advertising was in the areas of display (basically replicating magazine and press advertising) and the early online classifieds.
The launch of Google’s Adwords service saw search engines become major players in the advertising market. And they were different, a lot different. Suddenly advertising could be more contextual, more relevant, more cost-effective and much more measurable. And they were self-serve. Anyone could suddenly build and launch their own online advertising campaign in minutes. As a result, Google now owns 44% of the global online adverting market.
But now the social networks are ready to stake their claims.
Last year Facebook had 3.1% of the global online advertising market, despite never having been in a hurry to build their advertising business. Now they’re starting to take it seriously. Anyone who has used the Facebook Ads Manager tool will know it is very easy and intuitive compared to Google Adwords. Facebook’s Promoted Posts feature is even easier and can deliver great micro campaigns in the click of a button. Their new Graph Search feature is a clear signal that Facebook is about to step up even more in the advertising market.
Then there is Linkedin, quietly bubbling along with another easy-to-use advertising product aimed squarely at the employment market. Last year advertising on Linkedin accounted for 25% of their revenue, and that’s before they opened their API to marketers at the end of 2012. That will grow substantially in the next few years.
Now Twitter is muscling in on the action. The new Twitter Advertising API is a way for companies to automate more of their ad spending. The initial list of advertising partners isn’t very long, but is expected to grow quickly. The API, combined with Twitter’s self-serve ad platform, will allow advertisers to promote tweets based on what is trending and where the activity is.
In effect Twitter is heading in a very similar direction to Facebook. Google+ is presumably not far behind.
For social networks, in which the content generated by users is almost indistinguishable from the advertising offering tools that let advertisers automate their spending based on hard data will be far more lucrative than another generic banner ad.
The rapid rise of mobile usage is also another reason the social networks will grab even greater slices of the advertising pie. Their “integrated” advertising solutions are well suited to mobile display, whereas the display advertising of other media are not.
The shift away from traditional to online advertising will only continue to grow in the next few years as the social networks refine their offerings and mobile becomes our main screen.
One of the biggest fears we hear daily from organisations expanding their online presence is how do they protect their online reputation? Its a valid question.
Here are some great tips from the team at Trackur in the form of a very nice infographic. To summarise:
- Identify your reputations – monitor names brand names, company names, product names and variations.
- Quantify your audience – who has a stake in your online reputation?
- Understand your goals – how are you going to measure the whether your reputation is improving?
- Specify your needs – what tools do you require and what sources do you need to monitor?
- How will you monitor? – what processes are in place to be alerted and respond to issues?
- Who will monitor the conversations? – who are you entrusting with managing and responding to online reputation issues?
My theme this year is “adapt or die”. Last week I explained 5 ways businesses must adapt in 2013 to survive and thrive. I am convinced that organisations must either commit to making significant changes to the way they do business or keep doing what they’ve been doing and try survive while their market share is steadily eroded by smarter, faster, more nimble competitors.
I’d now like to introduce you to one of those smarter, faster, more nimble competitors….Dollar Shave Club.
Here’s a start-up that launched in mid- 2011 and then relaunched in March 2012 and is already making a big splash in the exciting world of…..men’s razor blades. You know, that purchase you have to make at the grocery store once a month. Its been dominated for a century by Gillette and Schick. No other challenger comes close. Until now.
This video (which had had over 8 million views) is their main marketing tool and hilariously and effectively explains why you should stop buying blades at the grocery store and start buying from Dollar Shave Club. It’s pure genius. In 90 seconds they have skewered the industry leaders, entertained us and invited us to be part of their”club”.
A close look at their website is like a blueprint for online retail success:
- the aforementioned video tells you everything you need to know…and its laugh-out-loud funny.
- a prominent call-to-action “A great shave for a few bucks a month – DO IT”
- a testimonial (which is fairly tongue-in-cheek)
- a simple range of 3 packages to choose from
- a simple and fun rewards program for sharing the Dollar Shave Club story, “Free blades for life”
- a quick and easy payment gateway you’ll only ever need to visit once
- Facebook sign-up option for membership
- social media sharing
The whole site contains the same irreverent, “they’re just razor blades guys” style humour. Its fun, its compelling and it works a treat. I signed up within minutes and was actually excited when my blades arrived.
But the real genius is in the very simple proposition and business model.
The blades are made in South Korea and can be found under different brands in Pharmacies across the USA. They’re pretty good, not much more than that.
But Dollar Shave Club turns a traditional $15-20 grocery store expense into an easy $7 / per month subscription. They don’t just get the sale, they get your repeat business and a nice big database of customers.
Their product line is ridiculously small. Just 3 types of razor blades. By focusing in this way they maximise buying power and minimise overheads.
The Dollar Shave Club business model doesn’t rely on advanced computer algorithms and other amazing tech innovation like many startups we follow. It’s simply a business where the founder Michael Dubin looked at an industry and said he wanted to help men have fun with shopping online, because, “Women have all the fun [shopping online] with fashion, shoes, and accessories.”
By making shopping for blades easy, fun and more affordable they have seen explosive growth and have attracted an impressive $10.8 million in VC funding. For razor blades??!!
An old industry suddenly interrupted by a simple but new way (subscription) of selling an existing product, executed extremely well. Hell, any of us could do that…couldn’t we?
If you don’t adapt now, you’ll die.
Alarmist? I don’t think so. Scary? I hope so.
2013 is the year businesses need to draw a line in the sand. Either commit to making significant changes to the way you do business or keep doing what you have been doing and try survive while your market share is steadily eroded by smarter, faster, more nimble competitors.
The pace of change over the last decade or so has been blinding. It has caught many (most) industries off-guard with some only realising what happened once it was too late. Combine that with a troubled global economy that shows no real signs of improving any time soon and you have the perfect climate for massive disruption.
In Australia we are far from immune. Many Australian industries have been extremely slow to adapt as several studies have highlighted in recent times. As the warming glow of a record mining boom subsides the cracks in our economy will begin to show and uncompetitive, old-fashioned organisations will be the first to fall through.
Don’t think you will be affected? Think again. No industry is immune to the current pace of change. Your current competitors may not even be the ones to worry about. Right now dozens of startups are thinking of ways to revolutionise your industry and nibble away at your market.
Consider the these monumental changes that have taken place in the last decade or so. Then realise that its only the beginning. The magnitude of upcoming change will be even more stunning.
In 2013 you need to adapt or you’ll die. You need to rethink your offerings, your market, your size, your agility and your overheads.
Here are the 5 minimum steps you must address this year (if you haven’t already):
1. You MUST get a strong online presence.
Your crappy old website (if you even have one) with a list of products or services is no longer enough. You need to be found online easily by potential customers. You need to deliver the information they need as efficiently as possible. You need to offer solutions. If this isn’t on your to-do list in 2013 then you might as well give up now.
2. You MUST have a mobile website.
The mobile web is massive now and growing rapidly every year. Mobile devices now account for 13 percent of worldwide Internet traffic, up from 4 percent in 2010. If your website isn’t mobile friendly, at the very least, you have big problems and are already losing business. Ideally, you should have a mobile version of your site, which will have different requirements depending upon the nature of your business. The internet is going mobile, why aren’t you?
3. You MUST start looking for new revenue or marketing channels online.
Do you have a niche product or service that could potentially be exported anywhere? The future of your business could be in building a national or global market for just one of your products or services via an efficient online strategy rather than sticking to your current generalist approach in your current market. The barriers to entry are so low these days that you’d be crazy not to start testing and experimenting with sideline business opportunities which could potentially grow to become the main show. I did this with my own business a few years ago when we launched NLYZR.com as an online SEO tool, attracting a new international market as well as countless new Australian business opportunities.
4. You MUST start outsourcing.
Lean and mean is the new business mantra. Asset-heavy, full-time workforces are being replaced by asset-light freelanced workforces. By only hiring talent where and when you need it your organisation doesn’t just save on payroll, it saves on floorspace and all the employment “on-costs”. Even if your company hasn’t realised this yet the young, up and coming workforce has. Thanks to the Internet and increase in online social activity, endless new opportunities for young educated people are opening up. They realize that the traditional 9-to-5 is no longer their only career option.
Futurist Mark Pesce says, “That much connectivity in the economy creates this enormous capability for fluidity, and so jobs are going to start to become gigs and those are going to start to become tasks, and eventually we’re all just going to be doing a little bit here and a little bit there and it may not be until we get up in the morning and check the smartphone that we’re going to be knowing what we’re going to be doing that day.”
Outsourcing is more than Indian call centres for banks and telcos. There are a vast and growing number of functions you can currently outsource via sites such as Freelancer.com, oDesk, FlatPlanet and our own more locally-focussed option InsiderJobs. What functions can your company start outsourcing?
5. You MUST start cloud computing.
“The cloud” is a bit of a hackneyed and overused term these days but you can’t deny the efficiencies and cost-savings available by enabling a range of cloud-based applications. The options are endless, from large scale data storage and hosting through to smaller applications. Here are just some you should be considering:
- Basecamp for project management
- Yammer for a secure, private social network for your company
- Unleashed for inventory software
- Vend for point of sale software
- Shoeboxed scans and organises your receipts, invoices and documents securely online
- GeoOp for job tracking
- Deputy for timesheets and payroll
Honestly, the cloud options are endless. Integrating a range of these into your organisation will save time and money.
In 2013 you can attract new customers, grow new markets, lower your overheads and become more efficient….or you can keep doing what you have been doing and hope for the best. This combination of moving your marketing and sales online, outsourcing as many functions as possible and integrating more efficient cloud-based solutions are the basic steps to take to survive and hopefully thrive in this rapidly evolving economy.
“The magnitude of upcoming change will be stunning” – Mary Meeker
Stats guru and analyst Mary Meeker, a partner at Kleiner Perkins Caulfield and Byers, has just published her latest report filled with amazingly useful data, the “2012 Internet Trends Year-End Update.”
Some highlights include:
- 2.4 billion Internet users worldwide, a number that’s still growing eight percent yearly.
- There are 1.1 billion smartphone subscribers worldwide — but that’s still just 17 percent of the global cellphone market.
- 29 percent of adults in the U.S. now own either a tablet or an e-reader.
- Mobile devices now account for 13 percent of worldwide Internet traffic, up from 4 percent in 2010.
- Mobile app and advertising revenue has grown at an annual rate of 129 percent since 2008, and now tops $19 billion.
- Mobile traffic app Waze has been adding users faster than all GPS makers combined have sold personal navigation units, and it’s been that way since the beginning of 2012.
Meeker’s spells out how these device and connectivity trends are leading to the complete re-imagination of everything from encyclopedias to money itself. And as slide 58 says….”the magnitude of upcoming change will be stunning – we are still in Spring training”.
Via Australia Post
Australia Post opens 24/7 superstore to keep up with record online shopping and shipping demands
Australia’s leading online commerce enablers, eBay, PayPal and Australia Post are forecasting this Sunday 9 December to be the busiest online shopping day ever, with more online purchases predicted from Australian websites this December than in any other month of trade.
Approximately 2.3 million Australians are expected to visit eBay.com.au on this day alone – a 26 per cent increase over last year’s Busiest Online Shopping Day (11 December 2011).
Additional statistics for the Busiest Online Shopping Day (Sunday 9 December 2012): -
- eBay expects 300,000 items to be sold on eBay.com.au on Sunday 9 December – 17% greater than last year’s busiest online shopping day.
- PayPal predicts week commencing 3 December to be the busiest online shopping week Australia has ever seen.
- Australia Post expects to deliver half a million more parcels across the country in the week following the Busiest Online Shopping day. Last year, Australia Post delivered an additional three million parcels in December alone.
To help address the spike in online shopping and shipping, Australia Post is also today announcing the launch of a new flagship superstore in Sydney CBD, which will help make the process of shipping products in time for Christmas much easier. Positioned adjacent to the Queen Victoria Building at 44 Market Street, it includes a 24/7 zone with self-service terminals, vending machine and parcel lockers so customers can pick up or send their Christmas parcels any time of the day. The superstore also features an online shopping zone with Apple Macs and iPads so customers can shop for their Christmas gifts online, in-store.
Deborah Sharkey, Vice President, eBay Australia said: “Despite positive online growth figures, we recognise that the retail industry is facing real challenges. Consumers are not spending more, they are spending differently. They are sending us a clear message that they want to shop online and mobile, alongside physical stores. The challenge for the modern retailer is to be everywhere the consumer is.”
“Retail has never been as simple for the consumer and more complex for the retailer. Leading service providers like eBay, PayPal and Australia Post are innovating at pace to provide elegant consumer solutions on behalf of the retail industry.”
Jeff Clementz, Managing Director, PayPal Australia said: “We are witnessing an increased growth in the number of Australian retailers who have opened their virtual store doors to receptive consumers. This year, consumers will be shopping across a mix of retail channels, from their tablets to their mobiles to in-store. Wherever they are shopping, consumers are looking for flexibility, convenience and security.”
Australia Post’s Executive General Manager Parcels and Express Services, Richard Umbers, said: “To make it easier for Australians to shop online and collect their parcels at a time that’s convenient for them we’ve installed new 24/7 parcel lockers in 49 locations across the country in time for Christmas. Customers can register for the free service today at www.auspost.com.au to have their online Christmas purchases delivered direct to a parcel locker location of their choice. We will be rolling out these lockers nationally over the coming year to a further 200 locations.
“More than 2,350 of our retail outlets are also open for extended Christmas hours during the week with the majority trading on Saturdays and more than 375 outlets also open on Sundays. We’re also delivering parcels on weekends to ensure people receive their items in time for Christmas Day.”
On Sunday 9th December 2012 on eBay.com.au:
- An average of more than 200 items sold on eBay.com.au every minute
- A piece of women’s clothing will be sold every 5 seconds
- A DVD will be sold every 9 seconds
- A piece of fashion jewellery will be sold every 12 seconds
- A radio controlled toy will be sold every 30 seconds
- A pair of women’s shoes will be sold every 40 seconds
- A watch will be sold every 48 seconds
Continuing my recent theme of how technology and social media is affecting and interrupting various industries, this week I thought I’d look at real estate. My family was in real estate for 40 years so its something I have been watching for a long time. I also took a lot of interest in a friend of mine who sold his Sydney home after moving to the USA by utilising social media. He said the best inquiries and the ultimate sale came from his online strategy rather than the agent.
In a buyer’s market, exposure is one of the most important factors to consider when you are selling property. There is no outlet that will give you wider exposure than the internet. Real estate agents have long been aware of this, with a recent online marketing survey finding that real estate is the industry with the most internet savvy, second only to those in the internet business itself. For individuals who have property they wish to sell or rent, taking a two-pronged approach to online real estate marketing is recommended. The use of online listings websites combined with social media marketing will reach the largest audience in the shortest amount of time.
Listing Property with Real Estate Websites
One of the primary ways to use the power of online marketing is to use websites for selling your home. Approximately 87% of Australian consumers turn to online listings before they contact a real estate agent. This means you should put forth the effort to create a flawless listing. Attractive photos, attention-grabbing headings, and a list of your home’s most important features will help your property stand out. Listings without images or any relevant information will usually get skipped over by anyone performing a specific search, so be sure to include all pertinent information.
Market your Listing Using Social Media
You may already have your listing up, but if you want to draw in the full potential range of potential buyers or renters you’ll need to start casting a wider net. This is where social media marketing tactics come into play. The following techniques can help you market your listing.
- Property Blog – Create a blog for your property. You could use free services like WordPress or Blogger to get started, which come equipped with free templates. This helps you tell the story of your home and reach out to potential buyers on a more personal level, using video, images, and social media widgets.
- Keyword Research -Determine which keywords are searched for most frequently by those looking for property listings in your area. You can then work these into your blog and online listing.
- Create Multiple Accounts – Setting up different social media accounts for your property will allow you to reach out to a potentially unlimited audience. Twitter, Flickr, Picasa, Facebook, and LinkedIn can all be used to sell your property when given its own unique profiles. This is less time-consuming than it seems, because you can use the same information for each account.
- Post Regularly – It’s tempting to set up these accounts, post your listing online, and be done with it. Yet this defeats the purpose of using social media to market your property. If you want to rent your house, use your Twitter account and blog to post interesting news for renters or personal anecdotes about features in your home.
- Engage and Share – Interact with your audience, responding to comments and encouraging contacts to share stories you’ve posted. The more you engage with social media, the higher the likelihood that you’ll find a receptive buyer.
By combining the use of a professional listings website with your own social media marketing campaign, you can reach out to a far more diverse audience. Although it takes a bit of effort to take the online initiative, you’ll boost your chances of success in a tight housing market.
In 2012 its amazing to still learn that many businesses are yet to embrace online as part of their marketing and sales strategy. A recent survey by Hunter Valley Research Foundation revealed that many Hunter businesses are not embracing the digital economy with rates of taking orders via the internet remaining very low and 42.7% of businesses having no website.
Contrast those statistics with a new survey report released today by American Express showing those who have embraced e-commerce are 33 per cent more likely to have reported a profit increase in the 2011-12 financial year.
Here is the full media release. I have highlighted significant points.
GOING ONLINE MEANS GOING STRONG FOR SMALL BUSINESS
Company website and Facebook page top marketing channels
One in three small businesses have made their products available for purchase online and those that have are reaping the benefits, according to a nationwide survey.
Commissioned by American Express among more than 1000 Australian small business owners, the survey shows that those who have embraced e-commerce are 33 per cent more likely to have reported a profit increase in the 2011-12 financial year.
Those small businesses who have introduced e-sales say it accounts for almost half (45 per cent) of their revenue and the majority (55 per cent) predict an increase in this type of trade in the next 12 months.
“Small business owners who have incorporated e-commerce into their business are seeing it as a worthwhile investment and appear confident of its long-term benefits. This comes at a time when having an online presence is becoming more and more important for small businesses. In fact, Australian business owners cite company websites and Facebook pages as the most effective marketing channels,” said Amelia Zaina, Head of Marketing and Customer Engagement, Small Business Services at American Express.
Social media drives revenue growth
The American Express survey also found that social media has helped almost one quarter (23 per cent) of small business owners to grow their business – and those that attribute business growth to social media are more likely to have reported an increased profit in 2011-12 (57 per cent) than those who don’t (35 per cent).
Small business operators who use social media believe it has helped them grow their business in several ways, including:
- Sourcing new customers (54 per cent);
- Raising brand awareness (51 per cent); and
- Generating new sales (40 per cent).
“These findings support the notion that small businesses who have gone online and are using social media, are seeing comparatively stronger revenue growth” Zaina said.
“While different channels work better for different industries, both e-commerce and social media can be innovative and affordable. Businesses can benefit in many ways to offset the impact of tough economic times on their business.”
Non-embracers reluctant to introduce e-sales
Despite the success of e-commerce, those who have not established an e-sales strategy are reluctant to do so, with only 12 per cent planning to sell their products and services online in the next 12 months. An even smaller number of small business owners (9 per cent) consider e-commerce necessary for future-proofing their business.
This reluctance can partly be explained by the significant proportion of respondents (40 per cent) who don’t find e-commerce relevant to their business – a view most prevalent among those in construction, finance, insurance and health and community services.
“Some small business owners also say they are not sure how to approach adopting e-commerce with their main concerns surrounding difficulties in setting up the payment platform and customer privacy issues. Seeking out information and advice on how to do this could potentially benefit their business and allay any concerns they may have,” said Zaina.
“Fortunately for small business owners, the internet offers limitless opportunities so even those who feel e-commerce isn’t right for them can make use of the online opportunities offered by social media to promote their products and grow their business.
The education sector is another example of an industry that is beginning to be interrupted by technology. In some cases this may be accelerated by the cost cutting of governments such as we have been seeing in NSW with TAFE courses recently being slashed.
The inevitable discussions have turned to online learning (and teaching) options. Online learning is still in the early stages of development and acceptance, however it also appears to be looming as a major growth industry.
The following infographic addresses some of the myths and facts around online learning.
A focus on customer experience can result in vastly improved metrics for any company. We’ve seen it for years in traditional retail where companies such as Nike and Apple have created amazing customer experiences in order to maximise sales and profits, but can this work online?
The team at Monetate have designed this excellent infographic to demonstrate how excellent customer experience can impact key online metrics like web traffic, referrals, conversion rates, average order value, revenue and customer lifetime value.