Personalization Personalization Personalization

- Personalization is important
- Instagram CTR outperforms
- 3 in 5 companies NOT there!
- Baby Names
- Google Quality Rater guidelines
- L2 Predicts, Yahoo Acts
- Black Friday and Cyber Monday recap
- Amazon drops mic

Special Bonus: The extended Trailer


Let's spend some time today talking about personalization. Almost all companies agree that it's important and most are working towards it in some way. When asked to name one marketing capability that will be the most important in the future, 1/3 of businesses say Personalization is their top priority. Customers want personalization and are beginning to demand it. Nonetheless, Many companies find themselves hamstrung by privacy concerns. Very few are doing personalization well. In fact, according to Greenlight research, even though personalization capabilities are most advanced on Web sites and in email, with 54% of companies doing it on both these channels, Mobile, which is perhaps the most personal experience, lags behind with less than a quarter of businesses personalizing on mobile sites or in-apps. In fact, 9 out of 10 brands are failing to personalize effectively. They don't recognize customers across channels, which is a shame because, according to L2, customers are twice as likely to buy from a brand who knows them wherever they are.

• Personalized emails deliver 6x higher transaction rates but only 30% of brands use them.
• Only 39% of retailers send personalized product recommendations via email
• 3/4 of online consumers get frustrated when content has nothing to do with their interests. I know I do.
• Customers want personalization, but they also want control: 2/3 want the option for privacy controls and just having privacy controls available makes customers 30% more likely to trust a company with their data.
• 58% want personalization based only on information that they proactively provide and 38% are willing to specify their individual interests so that the company can deliver content tailored to their needs.

Based on all this, I would like to see Philips offering our customers a subscription to a customized newsletter which allows them to specify what Philips-related topics they're interested in and how often they want to receive it. An offer like this would help build our opt-in database, it would keep us in regular touch with these customers with content that interests them, giving us the opportunity to market to them in a personalized way.

In addition, we should be building a sophisticated back end into our Web presence which allows us to track customer behavior on the site so we know what their interests are and where they are in the buying cycle.

These technologies aren't just possible. They're widely available and absolutely necessary for us to succeed in a world where personalized marketing is increasingly expected by our customers. And the fact that most companies aren't getting this right yet gives us a window of opportunity to gain a competitive advantage. Let's make 2016 the year Philips moves into this important space to make our mark with best in class personalization.


Instagram advertising has been available for a couple of months now and the first reports are making people jump up and down. Not only does the new ad platform have the reach to connect with 400 Mn people, but the clickthrough rate is 17x higher than standard ad clickthrough and 1.5x higher than Facebook ads. It's possible this will wane as more ads show up. but take opportunities when you can get them. The platform offers full-funnel marketing capabilities to raise brand awareness, attract prospects, retarget site abandoners and retain current customers.

The bar has been set high for creative imagery. Stock and studio photography won't work on Instagram. But when good creative is combined with all of the targeting and optimization capabilities available on Facebook, Instagram advertisements provide a powerful and visual way to reach target audiences. If you're not on Instagram already, you should at least be considering it.

Couple other cool comments about Insta, while we're on the subject...
3 in 5 marketers are not targeting Instagram users. but half are planning to, mostly to boost brand awareness
The platform is so influential that parents have started naming their children after it's filters.
The boy's names Lux and Ludwig are up 75 and 42% respectively since last year. And for girls Valencia and Juno are up 26 and 30% Amaro, Willow and Reyes are also up, though not quite as much. Yikes! This is the first time ever that a technology has inspired baby names.


Followers of SearchEngineLand and SearchMOS know that Since at least 2005, Google has been using a large, worldwide focus group to help refine the algorithm. These highly trained people review search results from Google's current algorithm side by side with results from a proposed new algorithms to determine which delivers the best results. The people in this program are called Quality Raters and, as you can imagine, the work they do is important to search marketers everywhere. So it's big news that Google just published their updated Quality Rater guidelines. The document gives us a look inside Google’s decision-making processes and what the search engine wants to see from a site. Reputation is a big factor. Google expects big brands to generate positive and trustworthy mentions (not just links) and it will be problematic to a brand’s SEO if that’s not happening. This will force SEO and PR people to work together.
Google also added several other exciting new capabilities in 2016. Offline measurement, which is when a search concludes with a searcher arriving at a new physical location rather than a Web page. And app search, which delivers content from apps in search results and in some cases, through app streaming, allows users to engage with an app they don't have on their device through the Search Engine Results page interface. In fact, the results page, especially on a mobile device has become a much more transactional engagement space where searchers can click to do something concrete rather than just to choose a Web page to visit.
I'm an android user and I definitely crossed the chasm this year to treating my phone as a personal assistant, especially when I'm driving, telling it, through the Google Voice interface to do things like send a text or call someone, get directions, set an alarm or play a song or artist. It's really a different way of interacting. You don't even need to look at your phone to get what you want.


On November 19th, L2 Research offered a recap of Yahoo's management under Melissa Meyer, suggesting that this company should be sold. Ms 'lean in' has one of the best known brand names in the world, among the world's oldest and top trafficked sites with a solidly respectable reputation for news, finance and sports yet after all this time, they haven't been able to monatize their considerable assets. Right now if you subtract their stakes in Alibaba and Yahoo Japan, their core business is worth negative $5 Bn. Scott Galloway is the first to say he get's this stuff wrong all the time, but that's apparently not the case here as on December 1st, The Wall Street Journal reported that Yahoo's board is planning a series of meetings this week to discuss spinning off the Alibaba investment and finding a buyer for the core business. We with them the best of luck.


I've never liked the term Black Friday, it's incredibly cynical and unfestive for the name of the beginning of the happy holiday shopping season and it seems a lot of people agree. 82% of tweets about Black Friday in November were negative. That may be because past Black Friday incidents have left a lot of people cold. In store sales over this THanksgiving weekend dropped over a $Bn -- almost 10% -- since last year to 10.4Bn while Cyber Monday was the largest US online sales day in history, up 16% year over year, topping $3 Bn. and that's after $4 Bn in online shopping on Thursday and Friday. By the way, a quarter of consumers began their Christmas shopping before Halloween this year so a LOT of spending has already happened.
The online shopping was so robust that a number a retailers, most notably Target experienced Website overload on Monday. They were putting visitors into virtual lines where they had to wait before they could even browse Target's sweet deals which included at least 15% off on everything on the site as well as doorbusters on many larger items.
More than half of Online transactions over the weekend happened on mobile -- 3/4 of those on Apple devices, a quarter on Android -- and for the first time, Average Order Value was higher on Tablets than on Desktops.
Finally, we may think of email as an out of date technology, but it drove almost a quarter of all sales over the weekend, outperforming organic, paid, direct traffic, affiliates, social and display. So email is still very much alive and well.


I'm sure no one will be surprised to hear that Amazon crushed it this weekend. Largely through their unprecedented presence in paid search. You should think of search as the biggest store window in the world. And in that all-important shelf space, Amazon scored the highest in paid search visibility in almost every holiday product category. Electronics, sporting goods, toys, you name it. As L2's Scott Galloway says, you CAN buy your way to happiness on Google. Unlike organic, paid search isn't a skill set. It's just a function of deep pockets. And with $115 Bn market cap and a stock price up 105%, no company has ever had access to such cheap capital for so long. As a result, they have more chips to put down on more numbers, they are going underwater with the world's biggest oxygen tank and forcing other retailers to join them. But the other retailers are beginning to drown.

It's all BACK to the Future Now!

- It’s all BACK to the future now
- Bing makes money!!
- Transformation Perception Gap
- Instagram – the ‘it’ social network
- Prepared for Wearables?
- Snapchat sponsored filters
- Twitter stats
- Twitter polling
- Mondelez vous?
- Google Shopper Insights
- The BIg Box shrinks

Special Bonus: The preferred Social Networks of The Breakfast Club


We entered a new era last week in which all of Back to the Future now takes place in the past. I confess to a little ambivalence because it makes me a little sad, but it's also exciting because we're now in uncharted territory. The movie correctly predicted wearables, smart phones, video conferencing (though only on a wide screen, not a small one), googleglass and maybe hoverboards?. We're still waiting for coats that automatically resize and dry themselves, self-tying shoes and Mr. Fusion. But the Cubs definitely didn't win the World Series, thanks to the Amazin' Mets. #letsgomets

Interestingly, the flood of references to Back to the Future day last week benefitted the brands that were associated with it. Especially Pepsi and DeLorean, althought it's too late to do DeLorean any good.


Enough with the fun and games...

Bing makes money!

It's been a long wait, but Microsoft's Bing search business has finally become profitable, generating $1bn in revenues during the company's first quarter of this fiscal year. Here are some key stats related to the surprise announcement:

•Search revenue grew 29%, driven by higher revenue per search and search volume.

But here's the kicker!!

•Nearly 20% of search revenue in September was driven by Windows 10 devices.

Why is this interesting? Anybody? Anybody? Beuler... Because Windows 10 devices, their Tablets, their Phones and now almost every existing Windows 7 and 8 laptop and desktop, which are all eligible for free upgrades to Win 10, all have Bing as their default search and are notoriously difficult to change. So all these miriad devices are now functioning for Microsoft the way the Kindle works for Amazon. That is -- Amazon takes a loss on it's Kindles because it's essentially putting a really streamlined amazon store in every owner's hand. Microsoft has this growing media sales business, they're putting a Bing search engine in every owners hand, lap and office. But the Windows 10 upgrade offer has only just begun and there 1 and a quarter BILLION Windows 7 PCs out there in the world. So this is likely just the beginning of a rapidly expanding period of good news for Microsoft's and Bing. I predict it'll be worth the wait for the Big M.

Perception Gap

There's a perception gap in digital organizations. According to a recent study by L2, 9 in 10 organizations are undergoing a digital transformation, only 1 in 7 think they're doing it fast enough. 55% of CEOs think they're doing this very fast, fast or about right. 64% of Line Managers think the transformation is happening slow or very slow.

How is Philips doing? I'd love to know what you guys think. Can you respond either in this thread or on the SocialCast group at bit.ly/DigitalNAConnect? But I can show you some results of the Digital @ Scale Change adoption survey and other stats that Blake just reported to the Exco last week. The survey tracks what respondents think about the progress we've made in Digital since the inception of D@S:

The strongest improvements have been made in analytics
Half the respondent's now think Digital Strategy is extremely important
North America is above average in Digital Capabilities
North America is the leading market at collecting new marketing contacts
The Level 2 training onboarding level for Personal Health in August is leading the world at 89%


Instagram

If you're a regular reader, You know Instagram is the growingest presence in Social. We talk about it almost every
month. According to research by eMarketer, 32% of US companies with 100 or more employees currently use Instagram as a marketing tool. This figure is set to increase to 49% by next year, and will reach an incredible 71% by the following year. According to the research, the photo-sharing app could be more popular with marketers than Twitter within two years.

Twitter stats

And as much as we all love Twitter, it's hemmoraging users and over 44% of its Bn members have never sent a single tweet! 391 Mn of them have no followers. Interestingly, I couldn't find a stat about the % of Twitterers who only post but never read Twitter. I'm sure there are a lot of them. Anyway, Something needs to be done to jumpstart the venerable channel and there's increasing scepticism that Jack Dorsey will be able to do it as a part time CEO while he's also getting ready for an IPO at Square, the other company he's CEO of. But here's a bright spot...

Twitter polling

Twitter just launched a new polling feature. Tweeters can now create a 2-button poll that will remain live for 24 hours. Voting is anonymous and there's no limit to to how many polls you can create or participate in. Seems to me this is a great new way to engage on Twitter. Although it may get overused for a while before it settles down. Of course, you could always ask questions and get answers on twitter, but I think the anonymity and ease of just choosing a button rather than composing a tweet may get more response. Like any other tweet, the cleverness of the

question and choice of answers will likely be determinative. It's also rudimentary social listening. And it can even help you shape your approach to your twitter account...

What do you think of tweets without links? 1. They're useless. 2. Tweets can be fun and infomative without links.

How about this one...

Is two buttons enough to be useful? Yes No ?

Two choices is pretty rudimentary, but I think Twitter chose this simple version to test the waters. So we may see them roll out multiple choice pretty quickly as this catches on.

Prepared for Wearables?

With the popularity of Wearables growing so rapidly, you'd think that Health Organizations would be dedicating recources to being able to leverage this treasure trove of data. But eConsultancy and Ogilvy conducted an interesting survey in Sept on how ready the Healthcare industry is to jump on the opportunity presented by the consumer adoption of wearables. Only 5% of respondents said their organizations were very prepared, while 66% said their orgs were either unprepared or very unprepared. Only 25% of HealthCare organizations even use data from medical devices, and only 11% are collecting data from wearables. This validates the tremendous opportunity for Philips Healthcare Informatics, solutions and services to leverage our deep expertise in this type of integration, especially with our HealthSuite Digital Platform (HSDP) to help the industry take advantage of this rich trove of data and insight.

Snapchat

SnapChat just completed a new round of funding that pushed it's valuation over $16Bn. Does anyone use Snapchat’s Lenses? Apparently a LOT of people are. The social network launched Lenses a month ago. These are little decorative filters that you can pull over your selfies on The Snap to make your pictures more fun. And they're about to make these available as a media buy. Companies can create branded ones and pay to make them available for a limited time to Snappers. Snapchat expects its new sponsored selfie filters to reach a staggering 16m viewers a day, according to a report by Buzzfeed. The catch? Snapchat is asking advertisers to cough up $450,000 per day for sponsorship running Sunday through Thursday, $500,000 per day for Friday or Saturday, and up to a staggering $700,000 for holidays.

Mondelez vous?

Do you Mondelez? You may not have heard of Mondelez food, but you've definitely eaten them. Nobody could get through life without trying an Oreo, a Cadbury chocolate or a Ritz Cracker. As it turns out, Mondelez is the world's second largest packaged food company, just behind Nestle and just ahead of Pepsi. According to the Wall Street Journal, as part of a massive cost cutting program, this giant has reduced it's TV advertising more than 50% in the last 5 years and almost 20% since last year. Where has the spending gone? Why to digital of course which is less expensive and twice as effective! And to some cost cutting. BUt this company is overcoming challenges from learning new capabilities at a very fast pace, to executive education to tracking. Digital was 32% of their North America media spend last year and will be 45% this year. They've made big deals with Google and Facebook to create new communications paradigms for them beyond simple ads and promotions ad they're starting to get into impulse oriented e-commerce, which, though commonplace in a store setting is entirely new to the snack food market. How will this work? Don't know yet. We'll have to wait and see. But it sure sounds like these folks are finding new ways to market very traditional products.

Google Shopper Insights

Shoppers have used Google for a long time to help them find products and retailers. But this week Google announced Shopper Insights - a new tool that combines search and maps to help retailersfind shoppers. Or more specifically when and where shoppers search for stuff. For instance: In NYC, Gamers are shopping for Playstation 4 twice as often as XBoX One, but on the West Coast, shoppers were 10x more likely to be looking for the Microsoft console. Or on Black Friday, people tend to shop with their phones, while on Cyber Monday, they're more likely to use Desktops. For the first time, retailers can tap into insights yielded by search queries to understand shopping trends in individual markets.

The Big Box shrinks

Here's a surprise: WalMart is getting smaller! Most of their supercenters have around 2500 less products than they had last year and they're looking to further reduce to make inventory easier tomanage as they streamline their systems to boost online sales. Spending on these initiatives, along with it's determination to increase wages for the average worker have the company on track to lose about 12% in profit next year. That news caused the stock to drop 10% in a single day, allowing Amazon to surpass Walmart in value for the first time and wiping out about $11Bn of the Walton kids' fortune. But don't worry, they'll be OK.

Wikipedia leaks, Asos wins SEO.

- Wikipedia leaks page views
- Infinitely scrolling content feeds
- ASOS wins with the basics
- A trillion streams
- Periscope looking over the top
- Look out email, Slack impresses
- Google’s New Logo

Special Bonus: Americans in Space

Wikipedia has lost a quarter of a billion visits/month from Google over the last 3 months. Though they haven't commented on it, Google has clearly made a quiet change to it's algorithm to favor brand sites over Wikipedia for the first time. This is a big big change. For years, Wikipedia's search authority has been unchallenged for almost any term they had a page for, including pages about a brand, but most importantly, up until now, brands could not effectively compete for the right to win many generic search terms that Wikipedia expounded on. Google has apparently decided that allowing brands to win terms like this will also increase their bids for these terms and that logical business decision has trumped their previous leaning toward impartial purveyors of information.

I wanted to point out a relatively new trend in Web site content presentation. A number of sites that I spend time on have started to load one article after another in an infinite scrolldown. Similar to a Facebook or Twitter feed and very mobile friendly. Most often there's some intelligence built in so the next article you see is related. This is because for many sites, the article page has become the new home page because that's the search bait where people enter the site. I think this is a very cool development because until this, if you're on a content site you have to keep clicking back to the home page to find the next thing to read. As we get more into the content marketing business, we should follow this model. Digiday has added a new wrinkle, a TLDR button. in Internet Slang, TL;DR means Too Long, Didn't read. But this button is a way of switching to summaries of each article, of course you can always switch back. This is even better for mobile and a really good user experience. Wish I'd thought of it. But I'm not too proud to implement best practices when I see them.

Speaking of Search, L2's recently released Digital IQ Index of department stores surfaced an unexpected leader. It's ASOS, Britain's big online only retailer. How has it beaten global Digital Omnichannel success stories like Burburry and Macy's? First page search visibility is their secret sauce. And they're beating their competitors across the world for 650 incredibly high value keywords like Shoes, Shirts, Socks and the like. How are they pulling this off? They're doing it by blocking and tackling and getting the SEO basics right. Tagging photos, consistent use of Keywords in Title Tags, H1 Headers and intro paragraphs as well as correct keyword density. They're careful not to allow their pages compete against each other for the same keywords and they have relevant content that answers searchers' needs precisely. It's really not a secret at all. They behave less like a retailer and more like an SEO company that sells clothes.

Music streaming has had it's best year ever, over a Trillion. That's Trillion with a T, songs were streamed in the first 6 months of this year. That's already twice the number streamed in all of 2014. Last year 41Mn people payed for streaming services and streaming revenue increased almost 40%. Can't wait to see the stats for this year.

And staying with the subject of streaming, I can give you an update on the Periscope/Meerkat battle of live-video streaming apps, Periscope appears to be winning due to its native access to 300Mn twitter users and incrementally better design. The result is that over 40 years of footage are watched on Periscope every day and it appears to be the favorite of brands just recently streaming one of Ralph Lauren's runway shows.

Anybody sick of email? I know I am as I receive over 300 emails a day, many of them cold solicitations from vendors. But what's the alternative? Well it could be Slack. An app trying to replace email for internal business communications. This small company has grown from nothing in Jan of 2014 to 1.1Mn daily active users in March of this year. But the most amazing thing is that its most recent round of funding in June valued the company at $2.8Bn. This works out to $2500 per user which is completely unprecedented. The nearest competitor is LinkedIn at $282 per user. Seems like some people are expecting big things from this company and they're putting their money where their mouth is. The generation coming up behind us is managing to do just fine without email, preferring Instant Messaging and Social Media. So as they enter the workforce, it's very possible that there's hope for the end of this time sucking scourge of business.

Learning your Alphabet

- Do you know your Alphabet?
- Amazon going postal
- Lucky or good? UnderArmour and Jordan Speith
- Christian Louboutin World campaign
- Is Social Marketing Dead??!!

BONUS! : Tiny Dancer

You may have heard that Google is getting a new CEO, Sundar Pichai, but did you know that Larry Paige is restructuring Google into a holding company called Alphabet? The current leaders of Google will be the new leaders of Alphabet. Larry will be the CEO, Sergey Brin the President and Eric Schmidt will continue his role as executive chairman and at some point later this year, every share of Google will become an equal share of Alphabet.

Under that big new umbrella will be a subsidiary called Google, run by Pichai, who's been Larry's right hand man for a while now, The new Google company will include the core businesses, Search, ads, maps, apps, youtube, android and the related technical infrastructure.

But also under the Alphabet umbrella, will be a group of other businesses like Calico, Nest, Fiber as well as google Ventures, Google Capital and incubator projects like Google x which will all be managed as separate businesses. This is pretty big news. The market sure liked it as the stock jumped from 633 to 660 on August 10th when the change was announced. Although it got Crushed with the rest of the market last week going from 660 on Aug 19th to 580 on Aug 25th and today it's back at 637. Whoa!

Why do this? There are a number of theories,
They want to Slim down and simplify the Google company to focus on it's core competency, which is of course printing money.
or maybe Larry and Sergey want to focus more on the big picture and not need to run day to day google stuff
or it was a way to make room for lots more CEOs and executives?
Maybe they wanted to give more visibility to the smaller companies, bringing them out from under Google's giant shadow, probably all or some combination of these.
Though we probably won't be hearing much about Alphabet, expect to see news stories about ... Life Sciences - our competitor, Calico - longevity, Nest - Home automation, Fiber - Home video and communications services and so on. They'll be free to promote themselves and, who knows, maybe be sold or taken to IPO... the possibilities are endless.

When you go to check out Alphabet on the Web though, you won't be typing alphabet.com cause BMW already owns that. Instead, try abc.xyz. No really. That's the new url. I encourage you to go read Larry's excellent and aspirational statement there which ends with...
We are excited about
Getting more ambitious things done.
Taking the long-term view.
Empowering great entrepreneurs and companies to flourish.
Investing at the scale of the opportunities and resources we see.
Improving the transparency and oversight of what we’re doing.
Making Google even better through greater focus.
And hopefully… as a result of all this, improving the lives of as many people as we can.

Now let's talk about an UNPROFITABLE organization, the US Postal Service, which has lost more than 46Bn over the last 10 years. They seem to have found a sugar daddy in amazon and are now delivering about 40% of Amazon's packages or about 150Mn items a year, including on Sundays. Amazon pays them an average of $2 per package, which is half of what they pay FedEx and UPS. Amazon gets that deal by presorting everything for the post office using machines and automation rather than workers who move in an almost comically practiced slow motion. That 300Mn should help the old USPS stay afloat a while longer but it's really just a drop in the bucket for an organization that's losing almost 5Bn a year. Amazon may need to buy them yet.

The post office may be neither lucky or good but UnderArmour is both. Back in May, we highlighted UnderArmour on this call, and talked about how they had effectively used social and some uncommon 'athletes' like Misty Copeland and Giselle Bundchen to broaden their all masculine brand so successfully into the female market that they are already threatening Nike and Lululemon. Misty just became the first African American woman to be named principal dancer at a major ballet company. which has boosted her UnderArmour video over 9Mn views. Well they haven't forgotten about the guys as we saw watching the young Jordan Speith write his way into the record books winning both the Masters and US Open in the same year with the UnderArmour logo adorning his gear. Before his Masters win, when he only had one big win under his belt but was already under a 3-yr contract with them, the brand had preciently rippped up the old one and given the golfer a new, 10-year contract. It'll be great to see another classy and talented young role model staring in the company's breakthrough social media.

Fashion and beauty brands have expanded their social media efforts on Instagram by about 40% in the last year, but Christian Louboutin has taken it a step further, realizing that not many are getting their customers involved in the fun. To do that, the brand launched Louboutinworld, a User Generated Content site gallery that gives visitors who post great pix with the # louboutinworld a chance to have their art featured on the LouBoutin site. Effective? Since the beginning of this past July, They've grown their community by 80% and increased organic brand mentions to 5.1Mn!
Maybe we could use a campaign like this to fill our Philips Asset Library!

In light of all the talk of successful social media campaigns, today and in the past on this call, I thought it might be good to discuss the post from Steve McGrew of Philips Design that many of you may have seen on SocialCast this Tuesday. It recommends a post by Josh Bernoff on his Without Bullshit blog that seems to claim that Social Marketing is Dead. For those of you who may not be familiar with him, Josh Bernoff is the author (with Charlene Li) of GroundSwell, perhaps the seminal treatise on Social Marketing and he was also the editor of Outside in - the power of putting the customer at the center of your business. I've found both quite influential. He's a great speaker and a really good writer and thinker. I suggest you read the post but more important, read the comment discussion below it, because that's where the real value is and I think that was his motive in stirring the pot like this.
Josh is agreeing with a post from another digital pundit, Augie Ray who quotes a lot of stats that say that Social doesn't work.

To that I say Social media doesn't work as pure advertising, it doesn't work as a broadcast medium. Wholeheartedly agree. As I said in my reply to Steve's post, What social has always been primarily about, for me, is listening. It's an almost bottomless mine of customer insight for companies willing to invest in developing it. Understanding what the market is thinking. Learning about your customers' needs. Then using this insight and these channels to RESPOND to those needs and thoughts in a meaningful way that connects you to the people who are looking for your help. Not talking about yourself, but doing things that cause customers to talk to each other about you in an upbeat and positive way. That 'asymmetrical' communication is the holy grail of Social.

There's more to it then that. Facebook has sqeezed the life out of social marketing on their platform so that you have to pay for impressions rather than get them organically because that's their business. As we've discussed here before, they did it nefariously, getting brands to pay to build communities, then walling off those communities and charging them for access.
1. That's not social's fault, nor is it marketings fault, it's Facebook's fault. 2. Advertising on Facebook is perhaps the most surefire way to reach a very specific, even a niche audience. It's the most targeted ad buy available. But it's an ad buy. It's not social media.

Last thing I want to say about this is Social is too often used as a broadcast medium by people who don't understand it. Marketers are just as guilty of this as anyone, but it's not a marketing problem. To be effective, Social marketing requires a very refined degree of a specific kind of creativity. Personality that resonates with the reader, quality, value to the reader, honesty, wit and charm, craftsmanship and art are the keys. Quantity is counterproductive. The idea is to find a way to engage that makes your audience feel something. The point is to create situations that make customers talk about your brand to each other. When that happens, earned media will talk about you too.

Peak App?

- Meerkat moves to Facebook
- App Overload
- User generated photos beats commercial photography
- Highest ROI digital marketing tactic?
- Amazon Prime Day kills


Bonus: Any sufficiently advanced technology is indistinguishable from magic
- Arthur C. Clarke

Enjoy this demonstration of projection mapping. A technique for using software to project imagery on moving irregular shapes like cars or shoes…in this case, moving panels precisely controlled by a pair of robots

Meerkat has been getting lots of attention recently. Back in March, Twitter blocked the app from accessing it's users to promote it's own Periscope streaming function. At the time, it was seen as a major blow, but Twitter may have done Meerkat a huge favor because it's pivoted to Facebook. Meerkat users can now sign in with a Facebook account and connect to all their friends and followers. Facebook has said it has no plans to build it's own livestreaming app and we know it has a very keen eye for acquisitions, picking up WhatsApp and Instagram at bargain basement prices compared to what they're worth today. Could the slinky little streaming rodent be next?

Over 1000 apps are submitted to the apple and android app stores every day and more than 1.5 million apps are already available. Have we reached peak app? Certainly the odds of having a successful are much longer than they used to be. In the 4th quarter of last year, people spent an average of 37 hours per month on an average of 27 apps. The amount of time has doubled in the last 3 years, but the number of apps has stayed the same, indicating either that 27 is about the app saturation point - that is - most people can't really use more apps than that or that people have found their favorite apps and they're sticking with them. I think people are just getting tired of downloading and managing tons of apps. Oh and BTW, anyone want to guess the most used app worldwide? No surprise, It's Facebook, according to comscore by a 20% margin over it's nearest competitor, YouTube. Something to think about if anyone is considering creating an app. Of course, I don't think apps that are part of a product, like a fitness app that goes with a fitbit, or something similar are in any danger. one of the problems apps have is finding visibility in the crowded app store, but connected apps are not only visible, but necessary to the people who buy the products they're associated with.

A recent study from L2 on User Generated Content shows that more than half of consumers surveyed believe in User Generated photos while only 45% have faith in professional or corporate photos. On Insta, UGC also produces a higher conversion rate. 9.6% higher than Brand photos. So it makes sense for us to look for ways to solicit customer photography and place it in the path of customer's buying journey.

And you've heard this before on this call. What digital tactic has the highest ROI? It's boring old email. Far from being on it's last legs, eMail is one of the fastest growing channels for customer acquisition. better than direct mail or social media. Even spam is decreasing. Down 1/3 from 90% of emails in 2008 to 60% today.

How many of you took part in Amazon's first ever Prime Day? You were part of something really big. Amazon sold more units on Prime Day than Black Friday 2014, which is the biggest Black Friday ever. 34.4 million items across Prime-eligible countries or about 398 items per second. Worldwide order growth increased 266% over the same day last year and 18% more than Black Friday 2014. More new members tried Prime worldwide than any single day in Amazon history. Sellers on Amazon that use the Fulfillment by Amazon service enjoyed record-breaking unit sales – growing nearly 300%. Customers ordered hundreds of thousands of Amazon devices – making it the largest device sales day ever worldwide. It was a huge day for Amazon, and it'll only get bigger each year. But the long tail effect of the hundreds of thousands of new members and 10s of thousands of new Fire tablets, which are really just the company's way of putting little Amazon stores in people's hands, will be astronomical. Did Philips take part? If we did, please someone come on next month and tell us how we did. If not, let's start planning to be part of this phenomenon next year. I predict this will become a new worldwide holiday that people will take off from work to participate in.

A subtle little thing that no one is talking about, Amazon's self-managing infrastructure weathered a 250% increase in their usual daily traffic apparently without even breathing hard. That's a pretty nice endorsement of their Web services product which will likely also generate more business for them.

Let's talk Twitter

- Twitter
◦ Jack Dorsey replaces Dick Costolo as CEO
◦ Introduces two new tools
◦ Product Pages with buy buttons
◦ Project Lightning – curated event tweets
- YouTube will also curate User Generated content
- Facebook disrupting YouTube
- LinkedIN has a more robust business model
- Keeping Messages consistent across channels
- Personalization without forms?

Bonus: The Science of Great Visuals (NewsCred)

It's been a heck of a month for Twitter, On June 11th, Dick Costolo, the popular CEO stepped down and co-founder Jack Dorsey has stepped in as interim CEO as the Board searches for a permanent replacement. There have been whispers that Costolo would be out since January because, though Twitter continues to be an important platform, it's user growth has been stalled at around 350Mn users and the stock price has been struggling. Professor Aswath Damodaran of NYU Stern who is considered one of the world's foremost company valuators -- one of about a dozen people in the world whose opinions and comments actually move the market -- has said that Twitter could be a very valuable company, but not with it's current management who doesn't have a plan to convert users to revenue. That's what it needs.

So interesting that within 2 weeks of the transition, Twitter introduced two new tools. One for brands and one for consumers
- Twitter Product Pages will be created around some products to provide more information and content.Those pages will include multiple tweets, but they’ll also have basic product information — and, yes, the ability to actually make a purchase. A second revenue stream to tack on to their advertising revenue.
- And with Project Lightning, Twitter will collect and curate Tweets from live events. A button at the center of the Twitter app will direct users to events that are being talked about in real time.
And they say there are more tools to come. Twitter will continue to be powerful and relevant. It's not going away, in fact they may be an acquisition target. The word on the street is that one particular giant has a Googlie Eye on them. So stay tuned.

Along the same lines of Project Lightning, YouTube Newswire has just been announced. With more than 5 million hours of news video watched on YouTube every day and user-uploaded content comprising a major component of global events, YouTube's new service will be selecting the best of those pieces of eyewitness footage, complete with a dedicated Twitter feed and email newsletter. From my perspective, the only problem with that is the same as the problem with the mainstream media. The 'best' of those are in the eye of the beholder and there will be a natural slant that wasn't there when users selected what to watch purely by popularity.

According to eMarketer, Mobile video ads are expected to expand to $4Bn in 2016. That's a 50% increase in the last 2 years! And who will be the beneficiary of this? It's Facebook! The big story this year was supposed to be how YouTube was going to disrupt TV, but it's turned into how FB has disrupted YouTube. FB video views have exploded since the end of last year from 1Bn to 4Bn views. And mobile advertising now accounts for 3/4 of their $3.3Bn in quarterly ad revenue. That's up from ZERO% 30 months ago. That is an amazing performance! Seems like Facebook finds a place in our Digital News every month and it's not because I'm a Facebook fanboy. I don't really even like the platform. But credit where credit is due.

Remember, we talked last month about which companies were in the running to be the 5th Horseman of digital, joining Google, Facebook, Amazon and Apple in the saddle. Uber was the closest, but I told you I'd dig into some of the other contenders over the next few months. And this month, it's LinkedIn...

According to L2, LinkedIn has a more robust business model than Facebook since it has multiple strong revenue sources pretty evenly divided between Premium membership, Recruitment tools and ad revenue, whereas FB only has ad sales. and LinkedIn is active in 200-plus countries, pretty much anyone who matters is on the site, including their fastest growing demographic, 38Mn college students and recent grads along with 1/3 of all professionals globally. Once you put a resume up, you’re unlikely to remove it. LinkedIn drives 1/3rd more traffic to corporate sites than all other platforms combined. They also have the biggest moat around them -- that is the most difficult barriers to entry for would be competitors. The next horseman? we'll see.

2/3s of brands don't keep messages consistent across platforms and only 7% of brands can recognize customer from channel to channel, even though half of consumers in a recent survey self-identify as more likely to buy if they are recognized across platforms.

But there's hope. 33% of brands say personalization is their primary focus for improving customer experience but a slight majority of consumers still don't want to share their data because of privacy concerns or form fatigue. Most brands are stymied by this barrier. Some are pioneering shopper assistance tools on their sites, helping customers build a profile that recommends products for them. But there are implicit ways of understanding customer needs like leveraging Browsing Behavior and Purchase History that allow a more personalized experience. Even allowing customers to customize and build their own navigation experience based on content tagging. We'll be talking more about this.

Amazon Stock Lifts

- Amazon stock ticks up
- Vanity economy
- Human Capital
- What company could be the 5th Horseman of the Digital World?
- Nike – Because denim is dying


A few months ago, I had noted that Amazon seemed to be in the business of losing in the hundreds of millions of dollars per quarter and growing, it's $20 Bn+ revenue numbers insulating it from losses that would be the death knell of any other company and even some countries, But the online retail behemouth was a winner this week, due to a 15% increase in its stock price. While the usual status of high growth with low earnings continued, Amazon’s cloud storage business impressed Wall Street with over $1.5Bn in EARNINGS in Q1, on track for 6Bn this year. That'll make up for a LOT of shipping losses. A number of recent reports on E-Commerce Agility have shown that cloud solutions offer better flexibility in international markets, and therefore make scaling easier. Clearly many companies are turning to Amazon to put the flexibility of cloud to work for them.

Beauty, luxury and apparel make up the vanity economy, which is expected to grow from 3.5 Trillion to over 4.5 trillion over the next 3-5 years, driven largely by China. In 5 years, vanity may be one of the most successful sectors of the economy. Possibly only surpassed by the HealthCare sector. And Philips is a major player in both of them. Let's keep it in in mind and play to our strengths.

Last month, we discussed how Amazon, Apple, Facebook, and Google are 4 companies who collectively equal the population of Lexington, Kentucky with 310K employees. But with those employees, the companies generate the equivalent of Australia's GDP at a little over 1.5 Trillion in Revenue a year. That's almost 10Mn in revenue per employee per year. By contrast, the worlds richest principality, Monaco, has a per captita GDP of 163K.

Earlier this month, L2 Research dug deeper on that, releasing 2 studies centering on these companies. The first was about the return on Human Capital there's a dramatic difference in valuation between these firms and their non-digital peers. I just added Philips in for reference. Remember that these are all consumer companies and we're mostly B2B/B2G. Still we're doing OK as a non-Digital-Pure Play company.

Facebook and google need only 6 and 8 employees respectively to generate 10Mn in revenue, whereas competing media companies need 65. Amazon only needs 17 people to generate 10Mn compared to other Retailers who need around 50. And Apple can do it with 5, vs other manufacturers, again, I added Philips in and we're doing pretty well

Here's the real eye-opener though, lots of people are leaving packaged goods companies to go to Google, FB and Amazon. Not so many coming back. So if you want to know where the smartest people at P&G are, they're at Google.

For the second study, They also looked at what companies might be next to join the '4 horsemen' based on an eight-piece algorithm. The fifth horseman must have a differentiated product, cheap access to capital, a global consumer-base, a maternal attitude towards employees, inventory control through vertical distribution, they need the ability to track data to specific identities, an aspirational brand that gives people the benefit of feeling better about themselves by associating with it and finally, access to high end technical thinking like a world class engineering university.

Seven companies come close. They are Uber, Alibaba, Starbucks, Linkedin, Tesla, Nike, and Walmart. But none have demonstrated all of the above characteristics. Walmart, Linkedin, and Alibaba don’t have a brand people want to associate with. Starbucks spends more on its employees than on coffee beans, but does not have access to cheap capital. Tesla has a finite consumer base rather than a global one. And although Nike is a prestigious global brand and a fantastic place to work, its product is not all that differentiated from competitors.

Uber was the closest brand to the four horsemen. One million people ride the service every day, which is more than the Chicago CTA or Boston T. At 162,000 drivers, Uber’s employee base is triple that of Delta Airlines. So where does Uber lag in the algorithm? It does not have a maternal attitude towards employees, as it has access to the cheapest source of on-demand labor without unions or health insurance. While that is good for users and the company, it may not be as good for the workers, on the other hand, no one is forced to work for Uber.

But over the next couple of months, I'd like to take a closer look at these potential horsemen. And Today I'm going to zoom in on Nike. Let's look at it via the algorithm. It's the preferred brand of upper income teens. They are the most desireable demographic, the future of wealth, the most influential people in the world. Among the contenders, Nike is by far the number 1 brand. There's a huge shift going on in the fashion industry, it's the shift from Denim to athletic wear (sweat pants). It doesn't seem like a big deal, but it's a techtonic shift in an enormous industry. Fashion is the second largest consumer category in the world. Athletic wear has now overtaken denim for the first time and what company is at the top of the list? Nike by threefold over any of the competitors in a crowded field.

BUT, there’s no real defensible Intellectual Property around their products. They’d have to create something new and tech-related beyond the fuelband that was truly differentiating. Their stock trades at a healthy multiple, but nothing like the digital giants. They need to establish a presence outside Portland where they would have access to world-class engineering talent.

We'll look at another company next month, but till then, let's think about how Philips fits into the algorithm, where we can improve and how we can make it better. Maybe someone would like to spend a couple of minutes plotting where our company is against these 8 elements and present that on our call next month? Please tell me your thoughts about this. Who are your favorite companies? Did L2 miss any good prospects? Let's have a discussion about it in the SocialCast group.

The 4 Horsemen

- Apple watch ‘sells out’ in 6 hours. More than Samsung sold in a year.
- Differentiating through customization
- With a combined market cap of $1.3 Tn, the ‘4 Horsemen’ Amazon/Apple/Facebook/Google are worth more than the GDP of So Korea.
- Scott Galloway of NYU believes Pure play is dead. Prediction: Amazon will undertake a transformative brick and mortar purchase in the next year. Who?
- Uber and other rideshare platforms could disrupt the delivery business.
- Facebook is still the DOMINANT social network by far and becoming more powerful. Check out Jon Kirwan on the F8 conference
- Is Google losing its grip on Search leadership??


Seems like Apple comes up a lot in our Digital News, and here we are again, The Apple Watch became available for pre-order on April 10th and sold out in 6 hours. No one actually believes they sold out, except the crazies on MacRumors.com, but Apple has become very crafty about creating the perception of scarcity. Really it's marketing 101. But don't worry, you probably won't have a problem getting one if you camp out at your nearby Apple store on the 24th. Or just show up there on the 26th. But regardless of whether the scarcity was real or manufactured, they still sold more watches in 6 hours than Samsung has sold in a year. That's pretty impressive. Interestingly, the model that 'sold out' first was the 18 carat gold one which pushed back delivery dates to July almost immediately. The others are only back ordered till sometime in May.

Customization is on the rise in the online apparel market, according to a new report out last week from L2 Research. It's apparently becoming an expectation for some consumers as shoppers look to put theri own stamp on everything from coffee (Starbucks enables around 80K drink combinations) to digital playlists. Sportswear and Fashion brands are putting the most resources behind customization to develop more revenue and profit through this new means of differentiation. Think of Nike and it's advanced customization tools that let customers print and share posters of their custom sneaks. It got me thinking that offering some level of customization of Philips consumer products might be something to look into. Avent bottles with a baby's picture on them or Sonicare toothbrushes with a kids artwork wrapped around the handle, Norelco shavers and trimmers monogrammed or engraved with the owners signature... hmmmm, something to think about.

And here's something else to think about... the 4 horsemen of technology, Amazon, Apple, Facebook and Google have a combined market cap of $1.306 Trillion that's just more than the GDP of South Korea, and that worth breaks out to about $5Mn per employee, if they were a country, they'd be a utopia.

One of my favorite analysts, Scott Galloway of NYU Stern School, is predicting that Pure play retail is dead. Stores will need ecommerce but etailers will also need stores to survive. Amazon forced other retailers to offer free shipping in the last year, so more than 2/3 of Christmas deliveries were free this past season, but this advantage is eroding because stores are incredibly valuable, flexible warehouses that are allowing businesses like Best Buy, Macys and a dozen others to grow their eCommerce businesses faster than Amazon over the last 5 years as they use stores as local, on-demand delivery sources and click and collect points. Based on this reality, Galloway is predicting that Amazon will make a transformative purchase of a brick and mortar company in the next year, his favorite possibilities are Radio Shack, a Gas Station Chain or the US Postal Service.

We talk alot about disruption here and how it can come from anywhere. Here's another example: Uber and other ride share and car sharing services have already disrupted the rental and taxi businesses, but they may now be positioned to disrupt the package delivery and shipping businesses. In most cities, point to point local transportation is far less expensive and faster than messenger services and big shippers like Fedex and UPS. I'll be interested in how this plays out.

This month's Facebook mention: Though teenagers are spending less time on FB, they're all still members as is almost everyone in Europe who's on a social network and overall, 91% of users age 18-34. In fact, 2/3 of all time on Social Media is now on FB. And other than gmail, FB is the ONLY platform that can track you specifically by your identity. And now, thanks to their cookie free Atlas ad-server, they can do it anywhere on the Web. I hope you all had the chance to listen to Jon Kirwan's terrific presentation on Philips global Digital Excellence Network call. Jon did a great job relating his experience at Facebook's F8 conference which Brands were invited to for the first time this year. GREAT information. If you haven't joined Sarah's bi-weekly call yet, check it out. You won't be disappointed.

Finally, Google still owns the search market with 3 Billion searches/day, but its beginning to be challenged for the first time. There are now a billion searches a day on Facebook, 300 Mn on Twitter, 2/3 of PRODUCT SEARCHs begin on Amazon. These are arguably the highest value searches. And the mobile economy isn't friendly to Google. People are not likely to search when they're in an app. So their cost per click is finally declining overall, net profits and revenues, while still astronomical, are slowing down and Google + is all but dead after a 97% decline in engagement rate, shares of Android devices declined for the first time in Q4 compared to the previous quarter and I heard someone say that Google Glass isn't a wearable it's a prophalactic that will insure the wearer will never conceive a child because no one will ever get near them.

Spock is Dead

Spock is dead. Long live Spock
Is Instagram the world’s most powerful platform?
If we’re gonna be on Insta, let’s do it right!
Apple watch…to buy or not to buy
Sony’s Apple blues
Uber bests Yellow in NYC
Microsoft’s project Spartan Goodbye to Internet Explorer?
Target cuts jobs to invest in Digital and Mobile on major mobile gains
China’s Desktop Weaponization

Bonus!: Pharell Williams interviews Leonard Nimoy. Fascinating!


- Last month, the digital/geek domain lost a true master, Leonard Nimoy. Known for his iconic role as Spock, he was a gentle and thoughtful man who strove throughout his life to rise beyond Spock as an artist, photographer, poet and director. But he had created a character so vivid, that when his bright light went out, it left an indelibile impression burned into our collective consciousness. I was a fan so I'm happy to be able to take a moment to remember him and say thank you. Check out the bonus link to an interview of Mr Nimoy conducted by Pharell Williams.

- A couple of months ago, I mentioned on my monthly call that FB had paid a $Bn for Instagram and that that may have been the deal of the century. Well, with a new study out this week from L2 saying that the photosharing app may be worth as much as 35x what FB paid, the acquisition looks more brilliant every day. It's the fastest growing social platform with 200 Mn users and with Engagements rates that are 80% higher than Twitter and 15% higher than Facebook, consider that around 3 Mn teens have fled FB since 2011, but FB is still in touch with them because they're all on Insta! And they consider it their most important social network. It's becoming the same for Brands which are posting more on Instagram now then they are on Facebook. That's probably because, for now at least, there's the possibility of 100% organic reach on Instagram whereas only 6% of Facebook messages reach the end community. Facebook is forcing brands sto pay for access to their own communities. Today's teens are tomorrow's decision makers. So as we relaunch our brand let's think about whether it makes sense to get in front of this audience with our End to End health messaging which study after study shows they are receptive to.

- And if you're chasing likes on Instagram, here are a couple things to keep in mind. According to the Content Standard Web site, Images with Faces get 32% more comments, Real customers using real products, 30% more likes, Likers prefer light images over dark images by 24%, photos versus video by 26% and bluer images over redder images by 24%.

- The Apple watch announcement on March 9th introduced the Cupertino Giant's first all new product since the debut of the iPad almost exactly 5 years ago. Hard to believe iPads have only been around 5 years. And like that launch, this one was accompanied by many reviews predicting that it would fail for one reason or another. I personally wouldn't buy a first generation one, even if I was an Apple acolyte rather than the Android person I am, but I know better than to bet against Apple. They'll sell tons of these, and probably even a lot of the crazy $10k gold plated ones. And they'll keep getting better and better, driving innovation across the competitive set. You can stand on line to preorder your Apple Watch on April 10th or Stand on line to get one on April 19th.

- With success like Apple has seen, there are bound to be losers and the big loser of late has been Sony which is hardly even an electronics company anymore. The most profitable division at Sony is now their Financial Services Group, which most people don't even know they have. It's been bleeding money from it's mobile division for years in a world that has become a game of iOS with 42% of the market revenue and Android with 53%. That doesn't leave much room for anyone else and the once great gaming and computer giant has been relegated to a supplier of components for Apple.

- We've talked before about digital disruption: The NYC Taxi and Limousine commission announced last week that there are now more Uber drivers registered in NYC than Yellow Cabs. Yellow Cabs still give more rides overall than Uber, but it's still a big indicator of major shakeup of an established industry.

- Microsoft is hard at work on it's next generation browser which will debut with Windows 10. Which will have a name other than IE in order to put decades of IE problems behind them. But they assure us that it's not the death knell for IE 'so that companies who limit themselves use it can still use it.

- More evidence that conversion rates are better on mobile than desktop. Target has seen that clearly, releasing a report this month showing a 69% increase in mobile conversion on a 44% increase in mobile traffic year over year. They have announced they'll be cutting jobs to invest more in Digital and mobile.

- China has effectively weaponized all the computers in the country. When a chinese citizen tries to access a banned site like Facebook or Twitter, the Great Firewall of China automatically redirects them to another site. They have been experimenting with directing all traffic to random sites and crashing them with the traffic overload like a denial of service particle beam.