Thursday, 17 May 2012

Facebook IPO Price Announced. 38 Dollars a share. Could it go to 67 Dollars tomorrow?

Facebook Nasdaq IPO opens tomorrow and so tonight they've decided on the price per share.
38 Dollars. I predicted 37 Dollars (not bad, eh), which will bring in 16 billion. 
It is the biggest Internet IPO in history.

Bono will make about 176m Dollars on opening.

Remember they started with an indicative pricing range of 28-35 Dollars. On Wednesday they revised it up to 34 - 38 dollars. A typical play to show the market that the shares were so well demanded, they "had to" push up the price. And of course, the demand is clearly there.

At that price this is going to shoot on Day one 30%+ and you'll see some selling day one as people flip it for a short term profit.

My blog of May 5 said and right now, I'm standing over it 100%. Now that I know the price, convinces me here's part of  that blog again if it helps you (but you can read it in full on the right hand side):

Facebook IPO. Could the Share open at 37 Dollars and go to 67 Dollars? 

1. Share Price will open at 37 Dollars (higher than the indicative band indicating early interest to the market....and, of course (!), giving early institutional investors an immediate profit).

2. On the day it floats, it will open to huge demand (very bullish) and over the first 2/3 days, it will then bounce and climb to circa 67 dollars (60 usd+ anyway). A 30% gain on the first day would bring it to 48 usd alone.

No one is saying anything like that (in fact, good traders tell me that I'm mad...we'll see) but I know Facebook will go past the magically 100 billion usd valuation mark easily (1st day) and well past it. They'll want that to get headlines.

3. It will then stabilise and then you'll see profit taking on a grand scale. So selling (bearish) at the 60+ usd mark. A Bear attack?

4. That'll bring it down quickly and as the market sees that trend they'll short it, to I think what will be the real long term price of 45 usd.

The opportunity is over the first 1 or 2 days.

Buying at 37 usd and selling at circa 50 usd seems to me anyway, a play.

This pricing is indicative of exactly what I was saying on May 5. 

It's perfectly placed now to explode and whilst I suggested 67 Dollars as a high, I'm practically sure of it now and I might be low....Mad isn't it?

Get ready. Get set.
Circa 11am New York time with the bell ringing going on in Facebook's office (unusually) in Silicon Valley.

Wednesday, 16 May 2012

General Motors pulls it's "ineffective" Facebook Ads Today. IPO games are being played. Ignore them.

"There seems to be some perverse human characteristic that likes to make easy things difficult." Warren Buffett (81).

Funny thing this...General Motors just announced that it will stop advertising on Facebook. Claiming they've just discovered (!) that Facebook advertising is ineffective.
It's a Wall Street Journal story confirmed by Reuters (you can read it at the end of this blog) which are both business channels - the interest deepens - because an announcement like this, on business sites like these, in the days before an IPO, is peculiar to say the least. 
A loss to Facebook of only circa 10 million usd but a big loss in terms of face and PR. I'd love to see Facebook take down their page as shown above.
So what's the General Motors Facebook connection?
Of course, following its bankruptcy and recent rebound, GM is owned, in no small measure (26%), by the US government.
But legendary, market influencer Warren Buffets Berkshire Hathaway has recently announced (28 minutes ago, a half hour after the Facebook news on GM) they've taken a huge financial position in General Motors! 257m dollars worth.
The same Mr. Buffett who of course, only last Monday told investors at his AGM that he won't be buying into Facebook. And now, the company he announces major investment in, pulls out of Facebook - suddenly.
"We never buy into an offering," billionaire Warren Buffett told CNN at the annual meeting for his company Berkshire Hathaway this weekend.
"The idea that something coming out ... that's being offered with significant commissions, all kinds of publicity, the seller electing the time to sell, is going to be the best single investment that I can make in the world among thousands of choices is mathematically impossible," he said.
At the same time, The UK Guardian comes out with "The news comes as a poll conducted by the Associated Press and CNBC found nearly half of Americans believe Facebook is a passing fad"

A passing fad??? 

1. General Motors pulls it advertising. Damages the Facebook IPO.
2. Same day, General Motors announces Buffett has taken major investment.
3. General motors investor, Warren Buffett, then says no to a Facebook investment. Damages the Facebook IPO.
All on the same day.....

Let the games begin. 
There's more to this than meets the eye.
(Reuters) - General Motors Co will stop advertising on Facebook, a move that comes during the same week the social networking website is due to go public.
The U.S. automaker confirmed a report by the Wall Street Journal. A source familiar with the automaker's plans said GM's marketing executives decided Facebook's ads had little impact on consumers.

GM said it will still have Facebook pages marketing its vehicles, but it will drop use of paid ads. Anyone can create a Facebook page at no cost. GM pays no fee to Facebook for its pages, which allow the automaker to reach consumers directly.

"We regularly review our overall media spend and make adjustments as's not unusual for us to move our spending around various media outlets - especially with the growth of multiple social and digital media outlets," GM said in a statement."In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers," GM said.

GM spends about $40 million on its Facebook presence, but only about $10 million of that is paid to Facebook for advertising. The rest covers the creation of content and the agencies involved, The Journal said.

GM, the country's third largest advertiser behind Procter & Gamble Co and AT&T Inc, spent $1.11 billion on U.S. ads last year, according to Kantar Media, an ad-tracking firm owned by WPP PLC. About $271 million of GM's total ad spend last year was for online display and search ads excluding Facebook advertising.

Tuesday, 15 May 2012

Apps. How they can make money + one crying out to be done.

I have a natural boredom with Apps. Like the world needs another App to go with the half a million already in the Apple store alone.

Of course in some ways that's a nonsensical thing to say given the explosion of mobile, 'Draw Somethings' welcome success and the innovation that goes on (Instagram for example). No bigger fan than me, the writer.

But what I mean is there's a lot of companies saying "Hey, let's do an APP!" when they've no idea why. Just that they seemingly "like to have one" - kinda' like they feel they're in the zone, in the space, on top of social media....right.

I see too my good friends in Youngs Advertising/80:20 interactive currently launching a new Bulmers App extensively promoted through TV and being ably tweeted. I haven't tried the APP but knowing who is behind it, I have no doubt it's one of the worthwhile ones. Do get it.

But there's very few out there that really rock and instead, all they do is add to phone clutter.

So I was quite excited when I came across one that links the use of an App with a really great experience - drinking beer at a match.

One thing I do love to do, is to go to The Aviva Stadium (Ireland's national stadium) to watch rugby. I also serve on the Leinster Branch's marketing committee and so I know that before the new Aviva was built (it was formerly known as Lansdowne Road Stadium), a real marketing focus was put on generating food/beer income from attendees on top of high ticket prices.

Because of the poor layout/design of the old stadium, only something like 13% of match goers actually bought anything. So by making food stalls more accessible (convenient), it was argued, this revenue could grow substantially and help offset the development costs. And it has..... but only to a point.

For most people sitting in their seats watching a match, they don't want to move from their seat to the food counter to buy something, because it disrupts other people as they make way and, as everyone knows, the minute you leave your seat.... a crucial goal/try is always scored.

It's like waiting for a Bus. No sign of one until you light up a cigarette and they come in threes.

So during the match, food/programme/beer/merchandise purchases are practically nil and so the real opportunity only exists pre-match. Well, not anymore.

An American start up has developed an APP for coming San Francisco Giants (Baseball) games from May 14 (today). Like a menu, you select what you want from your seat, give your seat number, pay for it there and then online and it's brought to you. Hot dog + Beer? No problem. Kids T-Shirt + Beer? No problem. Just 5 Beers? No problem. Imagine match programme sales? or perhaps pre-order your drinks before you arrive?

It's not an APP, it's nirvana. Imagine the brands that would want to reach out to these rugby fans too via such an App.

One downside is that in San Fran they charge extra to deliver (which is mad because there's plenty of revenue in 50,000+ captive customers even on a small margin). But it's a superb idea around an APP.

And The Aviva? 
I'd say they'd salute you if you developed the APP and were able to implement it. Nevermind the folks over at 70,000 seater Croke Park.

APPS work when they relate to something useful.
They stand out when they're practical.
They generate traffic when they're free to download.
They generate revenue when they solve a customer problem.

As Jobs often said about Apple, you start with the customer need, then you build the application. With a bit of real-world problem solving, Apps are a great free way to distribute the solution.

Anyone want a hand to develop one for the IRFU/Aviva? Shout.

Otherwise we've enough Apps already. We only want the relevant ones now.

Monday, 14 May 2012

New Nielsen Data finds trust in TV Advertising in major decline and advises money to move online. They better keep their heads down.

You really can't get a researched company more steeped in traditional Advertising than Nielsen. For many years, Ad Agencies have looked to Nielsen for reliable, robust, accurate reporting of media data, notably on TV, to provide verification for their clients spends (or not, as the case may be).

But Nielsen is at the core of Ad Agencies.

And Ad Agencies have been hugely supportive of Nielsen both ideologically, and also financially - to the tune of millions and millions of pounds.

Whatever then, convinced Nielsen to issue its report this week, "Global trust in advertising and brand messages" it was clearly not personal survival or the ongoing goodwill towards Ad Agencies, its customers. 

Perhaps a "publish and be damned" attitude? 
Brave, in a depressed market especially, because there's no doubt, any Agency reading the report would wonder what they ever did on Nielsen.

The report in essence, drives a further nail into traditional advertising and de facto, the Ad Agencies who depend on it - in turn, Nielsen's customers. Because it will be hard to pooh-pooh this study when it comes from the very same research house that Agencies quote verbatim. Verbatim, daily.

The most trusted forms of engagement, a long way before advertising of any sort (which is in decline again compared to the previous survey) is "recommendations from people I know". 

In other words, a Facebook post or a Tweet from someone you know apart from someone telling you face-to-face. And Nielsen are telling brands to move this way.

And "recommendations" continue to rise dramatically over the past 5 years whilst traditional advertising (TV, Press, Radio, Outdoor) becomes less trusted and are in steep decline.

Indeed it points again to the likes of the great Snickers tweet campaign via "Jordan" Katie Price. The "buy a tweet" idea might be even more powerful than we thought.

Next to trust, is Brand websites (online again) and after that "consumer opinions posted online". Presumably a reference to blogs of all kinds (personal and the TechCrunchs/Mashables of this world).

After that is "editorial" such as a newspaper article and after that again, Brand sponsorship.

Only then does TV advertising enter the frame. Jeez, even email marketing comes out ahead! Wow.

I couldn't put it better myself than Randall Beard, a global head at Nielsen -

"The growth in trust for online search and display ads over the past 4 years should give marketers increased confidence in putting more of their ad dollars into this medium" said Beard and "brands should be watching this emerging channel as it continues to grow".

Put more of your money online says, eh, Nielsen. It's actually hard to spit that out.....

Worse again, they show that not even half the responders trusted TV advertising.

And it's declining at a rate of 24% in 3 years.

Yet it achieves the majority of advertising dollars, presumably on the strength in no small part of Nielsen's own TV Research! 
Strange that?

28,000 respondents (in other words a huge survey) in late 2011 (so it's recent) and you'll get their Press Release here

Clearly Nielsen is a company that just calls it as it is and values its integrity before its own financial standing. To be applauded.... because once Ad Agencies and trade bodies and media owners (notably TV media owners) see this, there is going to be war. And they'd argue, not unreasonably.

It's hard for them to accept a company saying one thing on the one hand, and something else on the other that seems to contradict. Or to produce research which seems to only further the ongoing demise of its very own clients.

But it's good to see Nielsen of all people, endorsing the online space in such a concerted way.

Personally I think they miss a trick by lumbering it all together and comparing one against the other. They're different mediums with different attributes at different times. 

It seems obvious of course, that I'm more likely to trust and believe something which a friends tells me. I always have.

It is not, nor ever meant to be, that such a level of trust is in anyway comparable with TV Advertising and therefore, should be measured/treated separately. 

The whole exercise is one to behold in amazement.
Watch this space.