Instagram announced the company will soon begin using your content to sell targeted advertising products to the highest bidder. Does this bother you? Should it matter?
This recent announcement has created a virtual firestorm, with bloggers and pundits rising up in unison to trash the company. A recent article on Mashable accused Instagram of “signing your life away,” and even the hacker group Anonymous joined the fray, calling for a general boycott of the service unless the new terms are revised.
I don’t know about you, but I love Instagram. I downloaded the app more than a year ago (the service has been around for just over two years) and use it all the time. If I’m walking around the city and see something interesting, I snap a quick pic and upload it to the service, sharing it with my community. I guess deep down I always thought it would be cool to be a photographer, but never made the time to follow up on it, buy the equipment learn the art behind the art, so to speak.
Prior to the digital revolution, let’s face it, photography looked anything but easy or convenient. I recall friends who were photographers spending hours in darkrooms, not to mention plunking down thousands of dollars on expensive film, chemicals and other equipment. The rise of the camera-enabled smartphone changed all of that. Armed with a smartphone a fraction the size of camera from 20 years ago, any aspiring photographer could take amazingly high-quality pictures. With smartphone adoption rates in the US now more than 50 percent, a whopping total of 119.3 million people are now potentially part of the club.
For many professionals in photo industry, Instagram has been an annoyance from the start. A popular article appearing in the Guardian earlier this year accused the service of debasing photography, suggesting that its bevy of filters are in fact the antithesis of creativity, and make all pictures look more or less the same. Personally, I thought this criticism was a bit unfair and smacked of professional snobbery. I wasn’t alone. A great article by Chas Edwards that appeared on Ad Age quipped that this predictable rant was what happens when members of a professional community are displeased because amateurs get a chance to compete.
So getting back to Instagram’s new terms, what they reveal is that Instagram is developing a revenue model, nothing more. This shouldn’t be too shocking to most readers. Let’s face it, it was inevitable that Facebook was going to want to monetize on its $1 billion investment at some point. While on one hand, I understand people are annoyed with the abruptness of this change, but on the other I think it’s much ado about nothing.
Now I’m sure many users who have been using the service for as long as a couple years probably feel like this is a bait and switch. But, don’t forget that they’ve been using the service for free all this time, while Instagram (and now for Facebook) has plunked down money to pay for developers to write code, servers to host their product, and so on. In order to pay for these costs, the firm needs to develop a revenue model.
So as a business, what is its options? Well, I see three possibilities. The first option is to charge the users for accessing the service. On the face of it, that’s a non-starter. Charging for access is the very antithesis of social media, so no way it’s going to fly. Could you imagine the ensuing firestorm if Instagram had announced a monthly fee for accessing the service? Not in a million years.
Another option would have been to create some kind of image selling service à la iStock Photo or Getty Images. In theory this sounds reasonable, but that would have required developing a an entirely new front-end Web presence to sell the photos, not to mention tons of marketing, lots of time to organize and classify the content, working out how the royalties would work, and so on. In other words, it would have been like starting a new business. After acquiring Instagram for $1 billion, do you think Facebook wants to tool around trying to experiment with a new business for this firm? No way.
The third option is selling targeted advertising, which is frankly a no brainer. Why is that? For starters, the model has already been proven by Facebook, which has made an art form out of monetizing on user generated content and lots of eyeballs. During Q3 2012, Facebook reported $1.3 billion in earnings, up 32 percent from the same period last year. Furthermore, seeing as Facebook is the parent company, it has a prebuilt and tested advertising infrastructure, not to mention trained and effective sales staff, ready to bring the product to market.
The way I see it, this option was a foregone conclusion the moment the ink was dry on the deal with Facebook earlier in the year. It was only a matter of time. So, still unhappy with Instagram’s decision? All I can say is if it bothers you so much, you should have left back in September when the service was officially acquired.
If you have any comments you’d like to share, please let me know in your comments.
Are you familiar with the word “SoMoBiDa”? SoMoBiDa is an abbreviation for Social, Mobile and Big Data—a combination of the three great trends in today’s marketing world. In a practical sense, what does SoMoBiDa mean for marketers?
Social—it’s become cliché to say it, but social media has changed the way in which brands engage and interact with their customers. On one hand, social media has given marketers an incredible platform for disseminating content to the masses, and at an incredibly low cost. Social has given marketers the ability not only monitor what customers are saying and feeling about the firm and its products (social listening or monitoring), but it’s opened the door to actual two-way conversations with clients (social engagement).
Listening to, responding to and engaging with users on Social is a challenge that marketers will be forced to meet with increasing effectiveness in coming years. Recently, a host of new solutions has sprung up to help with the task. Using a Social CRM tool, for example, marketers can match Social Insight against existing customer and prospect data, creating a powerful marketing tool for acquisition, retention or customer service.
Similarly to campaign management, marketers are already starting to experiment with ways to automate some of their organization’s Social Engagement. In fact, some believe that a large portion of Social Engagements can be automated, and new tools have sprung up to fill the need. When it comes to the tone or content of the social conversation, however, many firms have discovered that Social Media is a double-edged sword where control of the conversation has shifted to the crowd—truly a frightening concept to any marketer! Ultimately, marketers who ignore Social do so at their own peril.
Mobile—if marketing is about sending the right message to the right people at the right place at the right time … Well then mobile is the right place. And marketers need to be there. More than simply a “channel” in the conventional sense, mobile is more like a way of life. This is because the mobile device has become hardwired into the way we go about our lives. How do you feel when you accidentally leave home without your phone, or when your phone dies and you have no way to charge it? Not good, right? Can you sit down for an entire meal without picking up your phone at least once to check your email, see what’s trending on Twitter or find out you’re your finds are doing or saying on Facebook?
Mobile presents marketers with an “always on” touchpoint with customers and prospects, giving marketers potential 24/7 access to them, the ability to monitor what they do and where they are, and so on. Now of course being an “always on” channel is both a blessing and a curse. Because the smartphone is used all day long for a variety of reasons, users are understandably hypersensitive with regard to uninvited or unwanted intrusions.
Big Data—“Yeah, yeah. Enough about Big Data, already,” you’re probably saying. At this point, I think it’s safe to say we’re all familiar with this über-meme on a high level. What it means for marketers, however, is another story. Try asking most marketers what benefit Big Data will have for their organizations and their heads will probably start to spin. The trouble with explaining the benefits of Big Data is that Big Data is the activity of analyzing and deriving insight from the mountains of unstructured data that are accumulating within and across today’s enterprise firm, on servers and in stacks, on PCs, in spreadsheets, on the Web and in the Cloud. Fact is, Big Data can tell us anything, or nothing—you just won’t know until you gotten down into the weeds and done the dirty work.
In a great recent post by Sandro Catanzaro titled “Taming the Wild West: 7 Trends Uncovered With Big Data,” the author identifies seven super-practical and highly impactful insights firms have gleaned with Big Data. Among the discoveries that Catanzaro highlights are a retailer who realizes that consumers browse higher-end lines before purchasing one tier down. Another was a discovery by a credit card company that consumers in urban areas viewing an ad for a new credit card on Tuesday are more likely to sign up on Sunday night. Catanzaro gives us seven real-world examples uncovered using the latest tools. These are just seven examples—the potential list is truly endless.
Beyond a sum of its parts, SoMoBiDa refers to the confluence of these three great forces and the immense power this combination unleashes for marketers. Standing alone, any one of these trends signals a momentous shift in the way we do business. When they’re combined together they can become truly transformative.
Let’s look at an example in which a potential customer walks into a retail location and looks at some merchandise. While doing so, let’s say he or she scans a QR Code above the device and learns more about the product using an in-store app. Because it is the first week of the month, using Big Data the marketer knows that this is when most big-ticket purchases are made, right after payday for most consumers. As a result, a special time-sensitive offer pops up in the in-store app asking the user to share the offer with his/her network. The customer then tweets about the product.
Using a Social CRM tool, the firm is able match the social engagement to the CRM database, which has been beefed with Big Data custom attribution modeling leveraging past purchase info combined demographic and psychographic data to identify this Twitter user as a repeat customer with a high lifetime value, who usually buys online from someone a couple days after an in-store visit. Using location services, the firm is able to discern at which location the customer is shopping. To help close the deal, the in-store sales staff is immediately sent over to assist the prospect, armed with complete customer order history and personal information on a tablet. Pretty awesome, huh?
Now of course this is just one example for one type of business. Nor am I claiming to have all the answers now—it’s way too early in the game and no one does yet. But just think for a moment of the power that marketers will have in their hands if they do SoMoBiDa right and incorporate it into their business model? If you project several years in the future, companies that get it right will be the ones that succeed. Those that don’t … well, they probably won’t be around.
Okay, looks like over my word count limit again and I’m out of space for this post. Got any observations or SoMoBiDa ideas for your company or products? If so, I’d love to hear about them in your comments.
Don’t ride the wave; be the wave. A friend of mine named Devin, who works as a management consultant, recently taught me this phrase. I simply love it. I interpret it to mean: Make your destiny; don’t succumb to it.
For marketers, I think this phrase has incredible relevance in today’s rapidly changing landscape. It’s no secret that the ground is quite literally shifting beneath our feet as a radical transformation takes place in the way people interact with companies, and marketers are being forced to pivot in a brave new world that is largely unknown.
What’s happened is the Buyer’s Journey has been turned on its head. For those of you unfamiliar with this term, I described it in a recent post. Buyer’s Journey refers to the process prospects go through as they make their decisions on which companies to do business with or buy products from. It’s is a complex evolution that spans the entire progression, beginning with identification of the underlying need, and ending with product selection.
Not long ago, Buyers were relatively uninformed, and the Buyer’s Journey was controlled lock-stock-and-barrel by the marketer. To be successful, marketers essentially needed to try out different approaches, through trial and error, and see what worked. Kind of like throwing stuff at the proverbial wall to see what stuck. Once you found a successful formula, all you needed to do was repeat it again and again.
Companies simply told their customers what they should buy and what they needed to know to buy it. Not surprisingly, firms didn’t really know too much about their customers. They didn’t need to. All they needed to know was what worked from a utilitarian point of view, not why it worked.
Recent technological advances have completely altered the landscape—evolving it to a state that would have been unrecognizable a mere dozen or so years ago. For one, today’s marketer confronts a highly sophisticated, engaged and informed consumer who is comfortable with the digital landscape, and familiar with the latest gadgets and tools. Native to the Web and connected to multiple Social Media networks via the latest devices, today’s buyer may know as much about a marketer’s products as the marketer’s sales or marketing teams. For most marketers, this is a truly frightening concept.
Now add to the mix that many marketers are quickly discovering, to their great consternation, that the sale is often won or lost before the relationship even begins—as greater numbers of buyers educate themselves using the vast resources available on the Web, which include customer reviews , referrals from peers on Social Media, and so on. The Buyer’s Journey of yesteryear has been turned on its head.
This brave new world calls for a brave new approach—one that not only leverages the latest advances in technology, but more importantly focuses on the central narrative of the new way brands engage with their customers and prospects. No, having a slick website and a cursory presence on social media isn’t enough. Marketers need to use technology to transform how they do business.
Today’s firms not only need to get to really know who their customers are, but where they go, what they do, and what affinities they share; they also need to engage them where they’re comfortable, which is increasingly on their mobile devices and in the vast and constantly changing Social Media universe. I know it sounds daunting, but the good news is that marketers can learn to leverage the same technologies that created such change in the first place.
Let’s take a quick look at mobile. Let’s say, for example, I’m in Chicago on business, it’s dinnertime and I’m hungry. I spot a steakhouse across the street from my hotel. But because I’ve never been there, I pick up my iPhone and open up the Yelp App, where I pull up the listing to see what others have to say. Turns out that someone went there last week and had a really, really bad experience … and wrote a review trashing the place. And it’s the only review. Well, looks like I’m not going there tonight.
But fortunately it’s a double-edged sword. Let’s imagine instead that the owner had employed a strategy to drive customers online, specifically to give a review on Yelp. This strategy could involve placing a QR Code on the menu, along with a special offer for a free appetizer for all who give a review—or maybe a deal with Foursquare, Groupon, ScoutMob … or one of many mobile companies offering merchants tools to leverage this exciting new channel. Now instead of seeing just the bad review, I would see many good ones from happy customers.
And this is but one example of many. Another is the best-practice use of QR Codes for Augmented Reality by Best Buy and other electronic retailers. Armed with a smartphone, you can now scan QR Codes affixed to the in-store displays for products you’re interested in. You can obtain detailed product specs, warranty information … even detailed product reviews. Plus, by connecting to social media, it’s even possible to see what friends or followers have to say.
Okay, looks like I’m running out of space. But I guess the main message is: Embrace technology and use it to control your own destiny—don’t let it control you. And the good news is we can take this ‘philosophy’ and apply it to really any type of firm. Take a close look at your company and see how technology can be used to change the way you do business.
Instead of ducking your head in the sand, use new tools—whatever they may be—to give your customers new and improved ways to engage with your company and its products. Delight them. In the end, firms that do so will enjoy great success in coming months and years. Those that don’t … well, they might not be around. Be the Wave.
It’s no secret that the mobile channel is exploding in our lives. Unless you’ve recently been living under a rock, you’ve undoubtedly come across some jaw-dropping stats on mobile usage. Here’s a couple more to chew on. According to a recent article in Mobile Commerce Daily, mobile retail dollars doubled between April and December 2011 alone. That’s just eight months! And, Mobithinking.com reports that approximately 25 percent of Americans access the Web only on their mobile devices. Kowabunga!
Many marketers refer to the mobile device as the Third Screen, after the television and personal computer. In this post, I’m going to propose a bold new idea here about the Third Screen, and why recent technological advances mean this exciting new channel is going to change our lives in ways we cannot possibly fathom today. This idea is predicated on the fact that in its new form, mobile essentially presents us with an entirely new paradigm in not only the way individuals interact with technology, but also how companies engage with and market to individuals. Let me explain.
Remember in the movie Minority Report, starring Tom Cruise, in which stores changed their signage when you entered, using your profile data to create a custom experience? Well, to a certain extent, that’s what’s possible now with mobile. Using location services, you see, mobile knows exactly where you are. Not where you live. Not where you’ve been. Where you are right now. It’s effectively marrying your personal profile to your geographic location. But that’s not all. Mobile also connects you seamlessly to your social networks—friends, followers, networks, reviews, blogs posts, etc. This provides a truly three-dimensional user experience. I call it the Mobile Nexus.
The Mobile Nexus is the intersection of three major elements in our lives—Personal Attributes (your demographic and psychographic profile), Geographic Location and Social Media. In theory, this confluence should enable marketers to craft marketing messages and personalized promotions based not only on who you are, but where you are, while at the same time giving users the ability to interact with your various social media networks to get more information, invite friends, share opinions, post reviews, and so on. The possibilities are simply staggering.
Sure, one could argue that mobile phones have been around for a while. But it was the recent emergence of the smartphone connected to the Internet and enabled with location services that, in my opinion, at least, changed the rules of the game for marketers. And although smartphones only came on the scene a few years ago, they’re gaining traction fast. In fact, according to MediaPost, smartphone penetration in the US is currently at 44 percent. What’s more, Mobile Marketing Watch reports that, as we speak, an astounding 75 percent of all new mobile phone contract subscribers are for smartphones. So count on the number of devices in the marketplace to skyrocket in coming months as old contracts expire. Can you say, “game changer”?
Of course, anyone familiar with the interactive marketing world could easily argue that geographic profiling is nothing new. Yes, it’s true that many websites and pretty much all ad serving networks drive personalized Web content based on IP address location. But, location services takes geo-targeting to an entirely new place, by providing real-time dynamic location data while you go about your day—not where your computer happens to be plugged into the Internet.
Turning to the social media component, if you look at current usage stats, you begin to appreciate its pervasiveness in our lives and why it’s playing such a big role in the mobile channel. Facebook has 600 million users. Twitter has 175 million. Meanwhile, 10 million foursquare members “check in” at more than three million locations a day, and consumers have posted more than 20 million business reviews on Yelp, and counting. So the numbers are eye-popping. Now with smartphones becoming the norm, accessing social media on the go is becoming mainstream, too.
Hype aside, let’s not forget that the mobile channel is still in its infancy and it will need much more time to reach maturity. At this early stage, enterprising firms are only now releasing the first generation of tools, while innovative agencies and consultants concoct new techniques to harness its power for business. In fact, we can see the preliminary results of the Mobile Nexus already.
Want to go out to eat? How about searching for a local restaurant nearby using your mobile device? Then use an app like Yelp and it’s not hard generate a list of nearby places, based on your preferences, along with user-generated reviews, hours of business, contact details, etc. Are you a traveling salesman in need of some fresh leads to visit? Well, install the Hoover’s “Near Here” App and, voila, you can search for look-alike businesses in the surrounding area based on proximity and business type. And if technology like this already exists, imagine what the future will hold?
“Those who call themselves ‘Mobile Experts’ only have two to three years of experience in the field,” explained a friend of mine who works as a consultant at a major management consulting firm. He and his team develop multi-channel sales and marketing strategies for their clients. With the recent proliferation of mobile technology, it should come as no surprise that many, if not all, of their new projects have a mobile component.
At this point, even the most experienced consultants have overseen no more than a handful of mobile implementations, and successful mobile marketers probably have no more than a dozen successful campaigns under their belts. “But things are changing so fast. Those who jump in now will be able to call themselves experts within a year’s time,” he explained. In other words, the best is yet to come.
Are you getting involved in the exciting new Mobile channel? If so, what success have you enjoyed? I’d love to hear your comments.