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News, insight and tips from the social web.
The Hoop blog covers the evolving digital landscape, social media, mobile communications, content marketing and also includes 5 top finds and Fish on Friday. Feel free to make comments.
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What's next for Twitter? »
In the first post in a new series of blogposts (about the future of social media, its impact on business and the potential for innovation), we take a look at Twitter's revenue model.
In just a few short years, social media has changed the way we interact with each other – as consumers, as businesses and as individuals. But there's more to come. We've been covering areas of social interest for a while now here on the Hoop blog, but have yet to discuss where we think the potential for innovation lies.
So we've picked a few of the areas where we think there is room for further innovation...
Twitter needs to start generating (more) revenue
Twitter recently announced they had hit 100m users, who send roughly 5bn tweets every month. To date, the company is valued at $8.4bn after recently closing a funding round that generated $800m. Which is all good and well on the one hand, but not so great when you consider the company doesn't yet have a definitive strategy for monetisation.
Luckily, they have a few options. Twitter currently licenses the 'firehose' – which allow tweets to be searchable in real time – to search engines such as Microsoft's Bing. Twitter did have the sameagreement with Google but it recently fell through. But the firehose surely can't generate enough to cover Twitter's current valuation? So the company needs to also be looking at other revenue generating models.
Arguably the next biggest option would be the potential revenue generated from advertising, be that promoted tweets or trending topics etc. When the model was launched last year, many were happy – as long as the advertising was targeted. Which it was; initially promoted or paid-for tweets were only seen in Twitter search from accounts the user followed. Users seem to like promoted content; with a recent survey showing that around 20% of surveyed users have either used a discount from a promoted tweet or discovered a new brand from one.
Promoted content you didn't ask for
But, at the end of last month, Twitter announced it was rolling out promoted tweets from accounts users don't follow. We were a little uncertain at first – how would this work? How would it be targeted? But then Twitter released a bit more information. These promoted tweets would occur in a user's stream if they followed an account that was subject to these ads. Or, according to All Things D;
In discussions with ad buyers, Twitter is describing the concept, which will roll out to a small subset of users by the end of September, as "Promoted Tweets to users like your followers".
This is a process employed on Facebook when you 'like' a brand's page; you're then subject to advertising from brands that Facebook deems to be similar to the one you've just become a fan of.
So, to justify Twitter's currently large valuation (which will only increase), we reckon we'll be seeing a significant increase in advertising on the social network. Will users cope being subjected from adverts from brands they're not following? If users start leaving the network, what other options will Twitter have to generate revenue instead?
Are there other options?
We'd love to see the site say no to an ad-based model and do something a little different.
Why not use the 5bn tweets a month – a veritable treasure chest of content – as a research tool and turn Twitter into something like a crowdsourced information platform? Or aggregate users and the content they generate into interest groups and sell access to them to advertisers/brands?
Change is coming to the twittersphere, change that will mark a new chapter in the company's history. The outcome is far from certain.
Do you think Twitter will change for better or worse once they finish rolling out the promoted content? Have you got any suggestions or points we may have missed in our discussion about Twitter's future? Feel free to leave us a comment below, via email or of course on Twitter.
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Net or native, you decide. »
After our discussion around going mobile, we take a look at the positive and negative aspects of developing mobile and web apps.
The market's going mobile and businesses need to catch up. Fast.
But should your business develop a native app (i.e. an app that needs to be installed on a mobile operating system) or a web app (i.e. a mobile-optimised site that's accessible on any operating system)?
You could follow e-commerce giants eBay or Amazon's lead and do both. They both have a fully functioning website, as well as a native app for iOS, Android, Blackberry and Windows mobile devices. Amazon and eBay users are already using both platforms for purchase; in January eBay reported almost $2bn of the $53bn profit made from marketplace business was from mobile. Last month, Amazon announced that its customers had ordered more than $1bn worth of products on mobile devices.
But if you've not got the development or financial might to match the e-commerce powerhouses like eBay or Amazon, you'll have to decide which route to take. We recently had this discussion at Hoop HQ, so we thought we'd compile a list of reasons to go down either road. Which route you take entirely depends on what your app needs to do – as we've tried to explain below.
Web
Web apps operate through a phone's browser, allowing the app to function on devices running any operating system (i.e. Apple's iOS, Google's Android, Blackberry, Windows WP7, HP's WebOS etc). A web app, as it is accessible on any smartphone with a web browser, effectively has a larger reach than a native app. Developing a web app (rather than native) can be cheaper, as you're not developing multiple OS versions of the same app and can develop using standard HTML or JavaScript skills. A web app also allows you to release and update the app as and when you see fit (a process sometimes limited by native app stores).
With the rapid evolution of technology, web apps are becoming almost as fast as native apps. For example, Apple's latest Safari 5 mobile browser (released in 2010) was developed with a new JavaScript engine (Nitro) enabling it to run JavaScript 30% faster than the previous browser iteration.
Building a web app can (should) utilise web standards, which in time could unlock previously inaccessible features on the mobile device like the camera or address book (which currently only native apps can do). Web apps are subject to tracking and data gathering as with any website (using, for example, Google Analytics) and allow the developer to have complete control over monetisation (something that is limited through native app stores). Because you're on the web, your app's content is accessible and can be shared using the standard social share buttons. This social share function needs to be built into a native app and content (because it's locked into the native app) isn't searchable. Another plus point to web apps!
Businesses are starting to become more aware of the benefits of web apps – the Financial Times recently pulled their native apps from respective app stores and saw over 100,000 people access their web app in a little over a week post-launch. The FT may have created a web app to avoid Apple's 30% sales cut (their Head of Product Development told the Wall Street Journal that the benefit of developing a web app allows publishers to "un-tether ourselves from app stores"), to take complete control of their customers' data and to bypass app distributors to secure "a direct relationship with readers".
Advantages of a web app
- Accessible via the web, so can be used by anyone with a smartphone browser
- Cheaper to develop than a native app as it works on all operating systems
- No time delay on releasing the app or its updates
- Able to track user information via Analytics
- Content is searchable and shareable
- Developer fully controls monetisation
- Built with web standards
Native
Native apps are accessed via an app store but can also be sold via the web (iTunes has a web platform as well as a desktop program) and are therefore inherently more discoverable than web apps (which are limited to being found on the web). Selling an app (even for a nominal fee) through a store immediately starts generating revenue, which you can't easily do with a web app (users don't generally like paywalls, but in-app advertising and purchases seem to be acceptable).
Native apps can connect to a handset's hardware and sensors (like the camera, address book or calendar for example) allowing a richer and more immersed user experience than a web app can. Native apps are specific to the operating system of the handset it's running on – which requires native operating system-trained developers. Native apps also have a homescreen icon and so are a constant reminder of your content (although on iOS you can create a mobile browser bookmark that produces a homescreen icon to what Apple calls a "web clip" – but not everyone knows that).
Native apps lock users within the app, whereas on a web app one stray click will take users away from your content (and you'll probably not get them back). In a native app, this can't happen – increasing your connection with the native app's users. Native apps also support push notifications (if the user gives the app permission to send them), even if the app isn't open. Web apps are also capable of doing this - but it's just not as easy.
Currently, the biggest difference between a web app and a native app is that the latter does not need an internet connection to function (although if the native app requires data download then it will indeed need a connection). However, W3C are in the process of developing local storage capabilities in browsers using HTML5 - which would bring web and native apps level on this point.
Advantages of a native app
- Easier to find than a web app (sold via app stores and the web)
- Quick to generate revenue (in ways less likely to drive users away)
- Can connect to hardware and sensors giving a more immersive and connected experience
- Can send push notifications easily and has a homescreen icon
- Lock users into your content
- Generally doesn't require an internet connection
If you can't decide between native and web, fear not as there is a compromise.
Hybrid
[Watch the PhoneGap promo on YouTube here]
Companies like PhoneGap, Sencha and Worklight provide a development platform that wraps a standard web-based HTML and JavaScript codebase in an open source framework that gives your web app access to the native app's APIs for hardware and sensors, enabling it to act as a native app across multiple platforms. The best of both worlds!
There are definitely advantages and disadvantages (nicely summarised in the slide below from a presentation by Worklight) to developing an app on either platform, or both, but at the end of the day it entirely depends on your requirements and your resources.
Do you want to develop a mobile app or have you got any suggestions or points we may have missed? Feel free to leave us a comment below or let us know via email or Twitter.
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Why you need to be thinking about mobile. »
"The future of the web is digital... And the future of digital is mobile". So says the Business Development Manager for Mobile (EMEA) at Google – and we're inclined to agree with her.
It's hard to remember a time when it wasn't instantly possible to connect to the web (signal depending of course) straight out of you pocket. With the release of the original iPhone – arguably the first smartphone to be embraced by the general public – back in 2007, the number of mobile users has increased exponentially. The dramatic rise in smartphone owners has been accompanied by an even bigger increase in the consumption of mobile internet.
In 2009, roughly 8% of the internet's users were on a mobile device. Today, that number sits at around 23% – an increase of almost 300% in just two years. The jaw-dropping facts don't stop there; three weeks ago American cloud networking provider Meraki announced that in the 12 months between Q1-2 of 2010 and 2011, mobile device usage had jumped 26% to become the greatest consumer of wifi network data. Mobile devices currently account for over half (58%) of the devices accessing US wifi networks, with desktops lagging behind on a lowly 36%.
At the end of last year, market research firm IDC published findings showing that for the first time ever, the sales of mobile devices were projected to overtake and significantly exceed the sales of desktops (it's worth noting that, in 2010, the sales of smartphones increased by 87.2%, compared with 5.5% for PCs).
In another American study published this week, Pew Internet surveyed 2,277 American adults about smartphones. 35% of the adults surveyed owned a smartphone and of that 35%, 25% said they would rather access the web via their smartphone than their desktop. Yes, the study's sample size isn't huge so we can't draw too many certain conclusions, but that's a fairly good indication of where the market is heading.
According to Amanda Rosenberg, Google's Business Development Manager for Mobile, mobile device users aren't just surfing the web. They're shopping – a massive 28% of UK smartphone users have made a purchase on their device, gambling and going hyperlocal.
You can see Amanda's presentation on how Google are focusing on mobile here and here.
The evidence is pointing overwhelmingly at a move towards mobile over desktop when it comes to consumption of internet data. But as Ian Carrington, mobile advertising sales director at Google, recently wrote; "only 17% of UK businesses report having mobile optimised sites". There's a glaringly obvious lag between what internet users are doing and what businesses are doing to keep up.
You need to start thinking about mobile. Or you'll be left behind on dial up whilst your users speed off into the distance on fibre optic broadband.
If you have any thoughts on mobile, or anything else you've seen on the Hoop blog, let us know via email, Twitter or in the comments below.
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The battle for Silicon Valley supremacy »
Facebook have recently been outed after trying to plant negative stories about Google. Is this the start of the war for power between the two technological giants?
So it's been a bad week on S California Avenue, Palo Alto. Facebook HQ must have been pretty busy after the bad press they've had. In case you missed what's happened, we'll give you a brief summary.
On May 3rd, an American online privacy and cybersecurity researcher called Christopher Soghoian published an email exchange (which you can read in full here) with a well known PR firm called Burson-Marsteller. Burson had contacted Soghoian asking if he would be interested in writing an op-ed piece about the 'privacy issues' behind Google's Social Circle. Burson even offered to "help place the op-ed and assist in the drafting, if needed". When Soghoian asked Burson who their client was he was told "I'm afraid I can't disclose my client yet". So Soghoian posted the emails online.
Then, on May 10th, USA Today posted an article on their website. As it turns out, Burson-Marsteller had also been contacting top-tier media outlets with a view to them writing about Social Circle and how it's "designed to scrape private data and build deeply personal dossiers on millions of users - in a direct and flagrant violation of [Google's] agreement with the FTC" (which has now been proved to be "largely untrue").
USA Today contacted Google, who responded with:
"We have seen this e-mail reportedly sent by a representative of the PR firm Burson-Marsteller," says Chris Gaither, Google's senior manager of global communications and public affairs. "We're not going to comment further. Our focus is on delighting people with great products," he said.
Whilst all of this was going on, no one had yet found out who was paying Burson to seed these negative stories about Google. All that changed after The Daily Beast did a bit of digging and posted what they found on May 12th. Burson's client was Facebook - not Microsoft or Apple as first thought.
Confronted with evidence, a Facebook spokesman ... confirmed that Facebook hired Burson, citing two reasons: first, it believes Google is doing some things in social networking that raise privacy concerns; second, and perhaps more important, Facebook resents Google's attempts to use Facebook data in its own social-networking service.
Delving deeper into why Facebook might be attempting to smear Google, The Daily Beast discovered that Google's Social Circle seems to be lifting content directly from Facebook. So Google are trying to use Facebook's data in their own social media venture. Facebook claim that this is a violation of their Terms of Service (which are well worth a read if you have the time) but are more likely worrying about the potential threat this would have on their stranglehold on the social media market.
Google wants some of the Facebook advertising revenue. Facebook - with its 600 million active users that are targeted by adverts that annually generate $2 billion - don't like this idea. So they set out to sneakily smear the Google tool that might have an impact on their income and unfortunately got found out. Oops. Bad Facebook.
[An interesting sidenote; Mashable recently reported that Facebook accounts for roughly 30% of all display advertising impressions in the US. Their reach and potential revenue from advertising is huge.]
Facebook hiring a PR firm to seed stories about Google's lack of care for user's privacy is a bit of pot calling the kettle black. Neither of the parties involved have a clean sheet when it comes to privacy.
Google is currently facing a US Senate hearing about why their Android mobile software tracks users' locations. Oh, and lets not forget how they 'accidentally' sent Street View cars out to harvest data from wireless networks.
Facebook aren't exactly champions for user's privacy either. There are currently over 170 different settings for Facebook privacy and 'information sharing' - and they are prone to changing without warning. The social networking site are always getting into trouble for their ideas about privacy - but then they've admitted their concept is a little different from everyone else's. Social media and privacy don't really go hand in hand but Facebook exploit that fact in order to make their money (and they're very good at it).
Mashable have today (May 13th) written an interesting piece discussing if Facebook's points about Google's Social Circle (but not necessarily their attempts in broadcasting said opinions) are valid which you can read here.
This interesting story marks the start of the battle for power between two of the biggest and wealthiest Internet giants as they battle for supremacy in Silicon Valley. Who'll win? We don't know, but judging by Facebook's tactics they're a little bit worried.
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Who reads sustainability reports? »
Freeing content from CSR reports and making it social will not only actively engage stakeholders but also mark out the most innovative corporations.
With a 50% increase in CSR reports between 2007-2008, are these reports designed to engage stakeholders or to account for corporate performance?
A post on the Guardian's Sustainable Business blog caught our eye yesterday. Using data from research commissioned by the Global Reporting Initiative, Solitaire Townsend (co-founder of Futerra) writes that with the number of CSR reports released quadrupling since 2005, there appears to be some confusion as to their purpose.
It appears that 60% of businesses producing CSR data think the reports should be used as a stakeholder engagement tool, whilst just 17% of stakeholders agree. Although 60% of readers are positively influenced by sustainability reports, it seems CSR reporting should be a way of communicating performance rather than an attempt to engage stakeholders.
CSR data and social media
To us the time is right for businesses to embrace social media and utilise it to distribute CSR content. This is not a fad or a bandwagon to jump on. It is about getting compelling information and stories out to people in the best possible way. Report content is rich, it can be interpreted, released and distributed as facts, stories and to stimulate debate. In our recent digital strategy with PepsiCo, we showed that the social media platform is ideally suited to both reach and engage stakeholders.
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How are things for you? »
Most of the people we work with are facing big changes. Rather than batten down the hatches, this is the ideal opportunity to innovate.
As business considers the challenges that lie ahead it can, with the right advice and help, discover, trial, and adopt new web based tools that increase workflow, improve customer engagement and drive down costs. These new tools, coming in from the edge to the mainstream, can deliver huge downstream benefits and help make change exciting rather than onerous, and free up people to do more with less.
Now is the time to innovate
Economic pressure, a new Government agenda and a general change in the wind are forcing many organisations to rethink how they do things. As the digital infrastructure around us becomes ever more sophisticated, people are finding new ways to design and deliver services in more agile, efficient and user friendly ways. This is an era of innovation, driven by those that have the vision and guile to make things happen. Many of them responding a social, rather than business need.
The signal we are getting from the people we work with is very clear - with so much technology around, how do we know we are making the right choices? It's a valid point. Keeping up with the pace of digital business is beyond many. But technology isn't really the issue. There's a lot of it around and it's getting smarter everyday. It's what people do with that really matters. And that's where it gets interesting.
In our research work we talk with people about their experiences of using technologies business and consumer technologies. The insights we gain into their needs, frustrations, requirements and capabilities are accumulating in our research knowledge bank. Certain themes recur: (ease of) access, (fair) value, (good) usability, relevance and (quality) service. Compare this desire with the experience most of us have of using existing technology. It's generally the polar opposite.
Fat technology - or light and fast
Many organisations are tied in knots by technology that is no longer fit for purpose. Bloated, over-specified enterprise systems, conceived in a different era, and with little involvement of the poor folk who have to use them every day. It's not easy for a business to uncouple from such systems, but if a strategic decision to do so is not taken, frustrated staff simply work around it in any case.
They generally seek out and recommend to others, web based tools and applications that enable them to work in newer, smarter ways. These tools tend to be easier to use than the systems specified by their employer. By working around complicated and cumbersome IT systems they become freer, more connected and more productive.
Employers should not try to crack down on this and force their people back behind the firewall. Instead, they should empower their people to work in the way that best suits them. Encourage this user led innovation and go with it. Enterprises that embrace this shift away from IT specification enjoy many benefits. Staff are happier, productivity increases and costs are reduced.
People are choosing their own preferred tools
The emergence of web based tools that can be adopted by even large enterprises is part of a wider shift from ownership of technology to subscription. It also marks a shift towards people self selecting the technology they find most useful. What this tells us is that people are taking technology into their own hands and completely redesigning the way they work.
This is another step change in the evolution of the web that's being driven by people, not technology. Many enterprises however, adhering to the top down rather than bottom up change approach are too inflexible to grasp the opportunity. This is unsurprising, and will continue until a move away from IT is common place.
Much of the real innovation in people's hands now happens on the edge, and is often a response to a social rather than business need. In trying to meet or improve a social need, these new tools can reveal new and exciting benefits and even entirely new business models. Tools such as Patient Opinion and MyPolice are bringing service providers and the public closer together and delivering improvements and efficiencies that weren't possible by any other means. School of Everything is revolutionising learning and has the power to make massive savings for Local Authorities. And the king of edge innovations - Twitter - which started out as side project - proves that small tools that aim to do one thing brilliantly can be much more effective than a big one that does many things badly.
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