Curated by Stuart Fogarty stuart@admaticallycom for AFAO'Meara Advertising, Streamabout The Video Agency and Admatic Ireland.
All comments will be posted - promise!
Square will start trading today on the NYSE at 9 usd per share, on opening. This gives it a valuation of 2.9 Billion usd. It's the Jack Dorsey company, or was, now that he's back at Twitter. It lost 54 million usd in Q3 2015, a higher loss y-o-y and they've yet to make a profit, although that doesn't really bother us. But the valuation does. It's a mobile payments company (www.squareup.com) largely at retail point-of-sale for Small businesses. Big deal - we've seen a 100 of these types of companies. So what's getting Square the profile and huge valuation? The presence of Jack Dorsey. And if you want a view....that's 2.9 BILLION of madness.....enough already. UPDATE - It opened today at 11 Dollars 20 Cents. Range was 11-13 Dollars but priced at 9 Dollars. So this is real positive. Still makes no sense though....but remember, it has to CLOSE over 9 Dollars.
Bit of a revival in the Twittersphere with better than expected numbers this week. Q2 Revenue of 502 million usd was +4% better than expected. Active monthly users at 316 million was up from 302 million and up from 288 million end last year. That's growth in the face of what was considered a "flat" curve. So no, more people are actively using Twitter. 80% active on mobile giving 88% of the revenue (398 million usd). It has cash of 3.6 Billion usd and shares gained +5% on the day with of course, Jack Dorsey doing all the talking (and straight talking by all accounts). But what this does it raise expectations for Q3 and in particular, growth in users as well as, revenues. The shares have fallen back now somewhat. So it's a bit of good news that has to be sustained and therein, lies the difficulty. Hung by your own success. (Postscript Wednesday - after hours trading in shares showed at nearly -13% decline in prices at one stage. So there was an offload......which seems to be about comments made about the slow user growth - Monthly active Users MAU's).
The USA Ferguson riots again highlight the role of Social Media, notably Twitter, in news. The news of the shooting first appeared on Twitter, long before any Media arrived and was well tweeted before any coverage. Equally too, people shared pics and video of armed police, tear gas and so on, assuming the role of traditional TV news. In fact, Social Media activity became the news story in itself. A greater proportion of black people use Twitter than white with some 22% of African Americans on Twitter according to The FT. This shoots to 40% of 18-29 year old African Americans versus 28% of young white people and Jack Dorsey (twitter founder) was a presence at the protests. He in turn used his Social Media to further the stories and the images. Interesting too, that law enforcement were slow to get behind the Twitter stories and to utilise it for themselves. When you don't, you lose control of the story and they did. The use of Social Media in news is now so prevalent that it's hard to see the traditional provision of news crews at scenes with reporters, as adding anything to the story. They even get there late, compared to the immediacy of Social Media. Perhaps we need to re-think that? Perhaps what's needed is an army of Twitterers available to report reliably and immediately for news. Ferguson has shown us that we are moving into a new game.
Twitter's IPO is probably the most awaited floatation since Facebook. Although still loss-making and small, it is growing and has revenues of 448 million usd in the last year, twice that of LinkedIn when it floated two years ago. LinkedIn then, was valued then at 4 billion usd (now it's 27 billion usd) and Twitter IPO expectations have been between 10-15 billion usd. Facebook we will all sorely remember, peaked at 100 million usd. Twitter will shortly begin their investor roadshow and The FT have reported that a first day of trading is likely to be November 8th. Of course, they'll need to convince investors first, that they've turned a corner and will be showing greater future profitability. Twitter's revenues largely come from US traffic although it only accounts for 23% of Twitter usage, so reaching out globally, will be key. It needs its advertising to be better engaged outside of the US. What Twitter needs to do is to instill confidence that it can generate good solid money in the longer term through advertising and avoid the hyped webby valuations. Facebook lessons still hang in the air and it's fair to assume that this IPO will be more measured, more considered. Notwithstanding that, Twitter has a big following as being a good all round Social Media player with longevity. It's less "flash in the pan" and more down to earth with its potential for profit, still largely, unproven. But all of these IPO's get the market's blood rushing. It's an opportunity for Wall Street to turn a profit quickly on "Mom's and Pop's" shares. So we will see their hype rather than Twitters. So be warned of pre-IPO publicity. But, it's probably a good buy because getting on board now, in a reasonable IPO, reminds one a little of Apple founders. What Twitter does is good and growing. That's the fundamental.
It was July 15th 2006, when Jack Dorsey launched Twitter (although his first tweet was in March) with the now infamous 140 characters, designed by the way, so that mobile users could easily text, tweets. He was working in San Fran at that time when he approached a podcasting Software company Odeo and whilst he was obsessed with..... Trains...and Taxis. In fact he wrote software to co-ordinate Taxi locations. The name was inspired by Flickr and it was first used as an internal service within Odeo. 7 years later, 200 million active users (over 500m registered users though), tweet 400 million times a day. 60% of tweets are from mobiles. Now, in advance of the impending IPO, it has a value of between 10 and 15 billion us dollars. It had revenues last year of 250 million usd although that's likely to double this year. Over time, Dorsey was moved out of the company in 2008 and following equity calls, had his stake diluted to just over 3% and he started to develop payments company, Square. That's worth over 3 billion us dollars today. Twitter is now one of the 10 most visited websites and Justin Bieber the most popular on Twitter with over 44m followers. Obama is the highest politician and FC Barcelona, the highest followed sports club. Dorsey was born in 1976 in St. Louis, raised a Catholic and Forbes put his net worth at over a billion usd. With a forearm length tattoo and a drop out of New York University, he originally thought he wanted to be an artist. Very interested in politics, there's been talk about him running as Mayor of New York. Real talk. But all in all, it's a fairly admirable story. Unlikely that Jack Dorsey will make a complete fortune from the Twitter IPO given his stake, he will always be seen as the founder of Twitter. And if you're not on it, get there. It's absolutely an obsession. Oh, it's @stuartfogarty btw.
How many store gift cards do you have in a drawer and never used? In fact, they just go out of date. Most retailers estimate that about 20% are never redeemed, leaving a nice little profit on prepaid cards. Looks like that game is over.....
'Gyft' however, changes all that by allowing you to buy, share and redeem gift cards using your mobile and has just announced Apple "Passbook" integration. Which means buying them (or paying for them) has become much easier. More importantly, so is storing them. How cool is that?
(I blogged about better mobile payments yesterday - so if you're interested, it's the next blog below this one).
Because you can store your gift cards on your phone, it means that you can empty those plastic cards from your drawers and better still, this will warn you as they're about to expire.....Or indeed, to check your balance.They already have about 200 retailers on board but this is a very clever idea that tech was made for. It solves a problem.
Gyft is about bring the plastic card business to mobile by way of an App.
Mobile is of course, ideal for anything associated with shopping. SnipSnap, a mobile coupon-sharing App and Belly, a loyalty card start-up, are also integrating with Apple's Passbook. SnipSnap for example, allows you to store coupons so when you visit a shop, you can see if you have any coupons for that shop on your phone. You have? use them.
Similarly with Belly, you always have your loyalty card to hand and according to Techcrunch, has been downloaded over 500,000 times. So you're in the store and you always collect your points.
The video above, will show you how to incorporate printed coupons into Passbook. But these are great ideas showing how mobile and apps can solve very simple problems,simply.
The key to them being, the development of mobile payment processing such as "Passbook". And points to Jack Dorsey being in the right place with his 'Square' mobile payments venture. Again.
I was reading in the FT on Saturday (which is completely recommended as a great weekend paper along with The Sunday Telegraph) about Brad Miller, a techy in California. He goes into a coffee shop, but the time he gets to the till to pay for his coffee, his picture has appeared on the ipad, which the coffee shop uses as a terminal. The assistant identifies him from the photo, taps the screen and he's paid. It's one new mpayment system called 'Square'. As he leaves, a receipt drops into his iphone. This is becoming a world without cash and a world without cards. Called mpayments (or mccommerce) as in 'mobile payments' it extends the way we buy tickets, coffee and anything from a smartphone. Indeed, one questions the need for ATM's in the future? Payment processing is something I do know a little about having been involved as a Director with 'Realex payments' from the start, who have been the dominant Irish payments processor for some years. However, what's going on, is an upending of the traditional payments business made possible by tablets and smartphones. Square, one such new company of about 150 start-ups in the space, headed up by Jack Dorsey of Twitter, reached a 3 billion usd valuation this week. A fairly slick App, it's linked to a users credit card or bank account. Running constantly in the background on a smartphone, it allows facial recognition in shops and that single tap to complete the transaction. But changing habits will take time and technology can still get better. What it is doing however, is playing traditional payment processors such as Visa, Amex, off the field and indeed, traditional processing companies. Paypal are seemingly trying to re-invent themselves and fit into the mobile payment revolution but I think their game is up. Definitely, their margin is up (!) as is the traditional outrageously high margins charged by Mastercard, Visa and all. They're definitely facing a low income future - whatever happens - and about time too. They'll certainly also have new competitors in the form of these start-ups but also mobile operators, well placed to adopt these new technologies and embed them in handsets. Which is absolutely key. Own the distribution, you own the customer. Google and Microsoft are moving in and Apple have started, albeit gently, with their 'Passbook'. The space is heating up. Gathering payment data has also other advantages in linking it to say, coupon features, shopping suggestions or indeed, advertising - and yes, given the privacy issues. One thing is certain too, we're looking at a boom in mobile payments at the expense of companies who've had it too long their own way. Digital is changing this business and replacing fat companies with new, lean, smart, start-ups. And you'll see the new folks win. And you'll see the big boys fall. As we've seen before. And no harm too.
There's a lot going on it seems at Twitter, launched by Jack Dorsey below in his first Tweet above, July 2006. You'll note it was called 'Twttr' then a reference at the time to 'Flickr' (2004).
This is a story of a good Social network that is a real success but that now wants to make big money following on from the Facebook IPO. In doing that, they could lose their very essence. Is there an issue with making money? Yes, if it screws up the whole plan.
Recently ending its syndication deal with LinkedIn, meant that tweets no longer show up on LinkedIn pages - and LinkedIn is the poorer for it as its pages start to look sparse. It's the start of Twitter ending their relationships with third parties. Money is at the core of this because Twitters revenue has not been exactly spectacular as we're discovering.
Twitter (over 500 million users today) makes much of its revenue from Ads (according to Forbes, about 260 million usd last year) although is thought to have made a loss in 2010. A loss two years ago.
And from The Wall Street Journal Twitters revenue was even less than the Forbes estimate "Now Twitter is striving to mature its business to be fit for an IPO and finding it has a long way to go. Twitter's ad revenue reached $139.5 million last year, eMarketer Inc. estimates, while ad revenue at Facebook which is two years older than Twitter—was 22 times larger at $3.15 billion."
Not good either way. Shockingly bad actually.
Revenue is as always, based on advertising to eyeballs. So when third parties like LinkedIn, channel tweets onto their own platform, Twitter loses those eyeballs and the Ad dollars that go with it.
So what Twitter is trying to do is to bring those eyeballs back to their own site and therefore, "monetise" them by making more money through Ads. Forcing people to view the ads on Twitter alone. In doing that and creating higher revenues, it's getting ready for an IPO.
Interestingly too, about 80% of its traffic is via mobile, highly lucrative.
Rumours abound that Twitter is to do the same and cut-off Facebook shortly and a general "clamp down" on third party apps. GetGlue could be one in the firing line I'd guess.
From a Twitter point of view, it makes money sense and a precursor I'm sure, to an impending IPO with a value estimated at just under 9 billion usd. It has already raised more than 1 billion usd in venture funding so whilst that's fine, they'll want to see their money back sometime soon. An IPO is one way to do it. Money, money, money.
Rumours also abound that Twitter is about to acquire Sense networks next month, a mobile analytics company, that provides their data for, you've guessed it, advertising. They use mobile location data and behavioural data to fine-tune ad targeting. So local advertising is on offer here by geo location. It would be Twitter's sixth acquisition this year but interestingly in the Ad space.
Roll in the audience, give them more ads, and make more money for yourself. But from a customer experience it may not be so good. After all, customers want their tweets integrated to Linkedin/Facebook and others. It's much easier and spreads the word faster.
Recent changes on Twitter include website redesign, photo sharing in 2011, privacy updates (always comes with a warning because mostly it allows them to share more of your data), logo updates on June 5 which all sounded very "corporate" and in particular, improvements on their Search, long overdue.
So Twitter is turning into its own social network (it's the number 1 Social Media site in Japan, ahead of Facebook) but with only 140 characters, which is Not a Facebook. And opening up the possibility of a new "me too" SMS service which does integrate.
Add to that alienating the whole world of developers who've helped get Twitter to where they are - and they're not happy about it. Not one bit and boy are they blogging about it. Twitter would do well to remember how quickly things can turn against you and the bottom line is that the internet is an "open" network not a closed one.
It could be viewed that in an ambition to generate more revenue before an IPO, customers are being squeezed. Despite this quote "I'm never going to optimise for short-term revenue at the expense of user experience", said Twitter non-founding CEO Costolo recently, at a Wired Conference in NYC.
He took over when the three Twitter founders departed although founder Jack Dorsey returned in March 2011 with whom he says he "works well". Jack Dorsey (media person of the year at Cannes 2012) seems to spend a lot of his time though, with his other venture, Square. So why did he come back? Optics?
There's a dramatic push on at Twitter to start making some money and in advance of an IPO (or indeed a Google trade sale?). It might be some way off just now, but it's coming. An IPO to make money for the Twitter shareholders possibly to the detriment of Twitter itself.
The question will be whether the changes and new money-making attitude will have a detrimental affect, notably on users, who are the very reason Twitter exists. In a Boardroom, a drive to make money might rule customer principles. I've seen it before and certainly these changes reduces the profile of Twitter on third party apps like Linkedin.
If it does alienate users, it will all have been for nothing. Especially, and ironically, if an IPO is on the cards. The 'P' in IPO stands for Public.
Got a huge response to my post of the weekend about BBH and BritishAirways. I'm sure just because people wanted to view the commercial but I think also, Ad people like to admire good work.
Interesting too, that BBH got 2nd place in Cannes as 'Ad Agency of the year' behind Wieden Kennedy. No shame there.
Just two other points about Cannes first : Jack Dorsey (I always thought if I ever wrote a detective novel, he'd be called, 'Jack Dorsey'. Just made for it), the 34 year old founder of the 6 year old Twitter, got 'Media person of the year'.
And mobile ad of the year? It's the one that's all over this blog as you read on.
What's interesting too about the BA commercial was that it premiered on Facebook and not TV - a blending of Social Media.
Now I know what you're going to say about this post because I'm asking you to view a video that's an hour long. Crazy. Who has that time? But perhaps if you want to remain inspired, you will. And it will be worth it. Maybe we all need to take an hour out every now and again to refresh our thinking.
But you know what, so many Agencies don't understand the space. This will show them how it can be used and integrated into traditional advertising. It's magic.
This is Google's "Project brief" which is about taking classic, iconic Ad campaigns of the past, with Agency people of the past, and seeing can they bring them into today.
I've been following it and the individual/shorter clips are all here. Avis, Alka Seltzer, Volvo and the best of the all, Harvey Gabor for Coke ("I'd like to buy the world a Coke" 1971). Or I think so.
The long version on this blog brings them all together, telling each story and to the unveiling at SXSW. It is the best thing I've seen in advertising in 20 years and Google, are to be applauded (I never really liked them but this propels them in my head).
So here are the 4 individual blogs for each brand. If you're going to watch only one and not the longer video, click Coke (the first one here). But try and watch it. You'll learn from it that if we embrace the technology, we can do amazing work. To embrace the technology, we have to understand it first.
Hats off Google. You've done a great job here and I hope the Ad Agencies get on board.
Mind you, The Pitch is one of the great TV programmes on-air at the moment. Terrific stuff. Does a great job in showing Ad Agencies to be intelligent thinkers rather than flaky, over paid, traditionalists.
And it's being pulled.
Oh why? Ad Agencies won't take part in the first place + aren't watching (Nielsen ratings just above zero).
You know what? Stop giving out. We do it to ourselves.
