Forrester Advises Advertisers To Abandon Facebook Because It Is Biased Against Them | ||
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Forrester, the respected market research company, has a history of releasing reports that cast Facebook in a bad light in the eyes of advertisers. Last year it suggested Facebook was “failing marketers” by “abandoning” its promise of social marketing. Now Forrester is truly hitting Facebook where it hurts: it is advising advertisers to stop using Facebook if they want to build social relationships with their customers. The release of the “Social Relationship Strategies That Work” report follows Facebook’s announcement on Friday that is going to reduce the organic reach of brands’ “promotional” page posts even further from January. Facebook says the idea is to “increase the relevance and quality” of the stories people see in their News Feeds by downplaying spammy posts. But it also essentially devalues posts that brands push out from their Pages, meaning advertisers will have to buy up Facebook ads to guarantee reaching their fans. Advertisers have been annoyed by this for some time because at one time Facebook encouraged advertisers to buy ad campaigns that increased their likes and followers, in hopes of extending their reach. Forrester’s Nate Elliott says Facebook’s move to continue to chop down the organic reach of brands’ Facebook posts and the fact that marketers continue to be dissatisfied with the performance of their Facebook Pages point to the fact that brands “don’t actually have social relationships with their customers.” He adds that it is time for marketers — who have been wasting "significant financial, technological, and human resources on social networks that don't deliver value" (which also includes Twitter, in this report) — to explore new techniques such as using smaller social networks (which are less cluttered than Facebook and Twitter because they currently have fewer users and advertisers clogging up the News Feed and by adding social relationship tools to their own websites. Facebook did not immediately return a request for comment. Ad agency Ogilvy reported in February that brands’ Facebook posts were only likely to reach around 2% of users and a Facebook sales presentation leaked to AdAge in March warned marketers “we expect organic distribution of an individual page’s posts to gradually decline over time. Separate research from social media analytics firm Socialbakers provided to Digiday found that not only is organic reach declining but Facebook is actually biased against brands in favour of other types of publishers: The study, conducted from January to September, found brands were only able to reach an average of 25% of their fan bases each month organically, while celebrities reached 54% of fans and news media companies got 58% over the same time period. So it seems little wonder only 55% of 395 marketers Forrester surveyed in October last year said they were satisfied with the results of their Facebook page, as cited in the most recent report (although it's a shame Forrester did not update its survey to ask marketers how they feel about Facebook now, one year on.) Elliott goes on to predict that in the next two years “social marketers will finally stop obsessing over Facebook” if they follow Forrester’s advice. He's not saying advertisers will stop spending on Facebook, but that they'll spend with it like a display ad platform similar to Google, rather than seeing it as a social medium. He adds: “Let’s be clear: We’re not predicting the demise of Facebook. After all, the site offers about one-third of all the display ad impressions online. But Facebook’s decade of dominance in social marketing is ending … Facebook will become nothing but a repository for display ads.” In a further blow to Facebook’s prowess as a social marketing platform, Elliott insists that “marketers will use Facebook and Twitter ads as email companions. “In the next few years, Facebook and Twitter ad spending won’t appear in the social line of marketers’ budgets; it’ll more commonly appear in the customer relationship management line, next to loyalty programs and email marketing.” In response to the report, Jerry Daykin, global digital director at the media agency Carat, a unit of Dentsu Aegis, told Business Insider while Forrester is "right in some ways" because the kind of relationships that brands can have with consumers on Facebook have "always been over-exaggerated by specialists with something to sell", so has the amount of money brands invest in it. Social media marketing always grabs the headlines, but actually represents a tiny amount of media investment compared with TV and traditional display. "Marketers understand what makes their brands grow and big brand marketers understand that means speaking to millions of people, not thousands of fans," Daykin says. He adds: "Facebook's shift to offering a paid platform for brands provides that scale and I actually see a lot of brands massively increasingly their investment into the platform now it offers that to them. [Carat client and Daykin's former employer] Mondelez's 'Storytelling at Scale' [marketing] approach realized this a couple of years ago and it has seen them rapidly accelerate their Facebook spend and forge a global partnership with them. "[Facebook] is now the single biggest reach platform in the world, offers great cost efficiencies, capped reach and frequency and we're seeing strong ROIs [return on investment] greater than TV where we've adopted this scale approach. Now we're looking at bringing different targeted creative to different consumers and maximizing the video potential of the platform." Essentially Daykin thinks the Forrester report is short-sighted: yes Facebook is not offering brands deep and meaningful one-to-one social marketing relationships with customers (read: free), but the advertising opportunity is enormous if a marketer is willing to spend. Facebook also has a huge advertising business: it wouldn't be growing at such a huge rate — up 64% year on year to $2.96 billion in the latest quarter — if its advertisers did not consider it useful. The company also has 25 times more advertisers than Twitter and its executives will be quick to point out the hundreds of case studies on its website from satisfied customers. Indeed, last year, Facebook repeatedly cited a Cadbury Creme Egg case study at conferences, whereby the chocolate brand claimed its Facebook activity drove the same purchase consideration as TV but for a third of the price. Join the conversation about this story »  | ||
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Samsung Will Make Up To One-Third Fewer Smartphone Models Next Year | ||
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Seoul (AFP) - Samsung Electronics has announced plans to slash the number of smartphone models it issues next year by up to one-third as it tries to cut prices in the face of intense Chinese competition. The strategy, confirmed by a company spokesman Tuesday, was unveiled during a presentation in New York by the South Korean conglomerate's head of investor relations, Robert Yi. Yi said the company -- which last month reported a near 50-percent plunge in third-quarter net profit following a 20 percent drop in the previous quarter -- would reduce the number of smartphone models in 2015 by between one-quarter and one-third. The strategy is expected to be accompanied by a significant increase in the production of remaining models that can be sold more cheaply to compete with cut-price Chinese rivals. The recent nosedive in Samsung's fortunes followed several years of stellar growth and a seemingly endless succession of record quarterly profits driven by its all-conquering mobile unit. Its flagship Galaxy S smartphone has suffered in the high-end market from the popularity of arch-rival Apple's new iPhone 6, while its dominance of the middle- and low-end handset segment has been challenged by Chinese handset makers such as Huawei, Xiaomi and Lenovo. For the moment, Samsung is still the comfortable leader by sales volume, but its share of the global smartphone market has fallen from 35 percent a year ago to just under 25 percent, according to Strategy Analytics. Join the conversation about this story »  | ||
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The New 'Grand Theft Auto' Lets You Have Realistic Sex With Prostitutes You Can Then Kill | ||
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The new release of Grand Theft Auto V is out today, bringing the game to the next generation of consoles. Now running on the PlayStation 4 and Xbox One, players can enjoy the game in first-person mode, making it seem as if they're really inside the game. But eyebrows are already being raised over one part of the new game: First-person sex with prostitutes. Needless to say, this will be controversial, and the company has likely deliberately created this aspect of the game in part because it knows it will generate headlines. Prostitutes have controversially existed in Grand Theft Auto games for years, but in the past, players have had their view of sex acts obscured by car doors. Now, it all takes place in full view of the player, who can move the camera around to get a better view.
Players drive past prostitutes, honking their horn to encourage them to enter their vehicle. Then, after driving to a secluded spot, they select from a menu of sex acts before watching what happens. Of course, this being a video game, some players choose to kill the prostitute after the encounter to get back some of their money. Here's a screenshot posted by a player who killed the prostitute with a hatchet to get their money back:
Rockstar Games, the developer of the Grand Theft Auto series, has actively tried to create outrage for its games in the past. The Grand Theft Auto series was engulfed in controversy in 2005 when it was discovered that Grand Theft Auto: San Andreas had a feature hidden on the disc that allowed players to play a sex minigame named "Hot Coffee" that saw the main character have sex with women. Although Rockstar Games had disabled the feature, essentially removing it from the game, players figured out that it took just a simple modification to add it back in. The game was pulled from some retailers, and later re-released as an adult game with a new age rating. Join the conversation about this story »  | ||
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Forrester Advises Advertisers To Abandon Facebook Because It Is Biased Against Them | ||
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Forrester, the respected market research company, has a history of releasing reports that cast Facebook in a bad light in the eyes of advertisers. Last year it suggested Facebook was “failing marketers” by “abandoning” its promise of social marketing. Now Forrester is truly hitting Facebook where it hurts: it is advising advertisers to stop using Facebook if they want to build social relationships with their customers. The release of the “Social Relationship Strategies That Work” report follows Facebook’s announcement on Friday that is going to reduce the organic reach of brands’ “promotional” page posts even further from January. Facebook says the idea is to “increase the relevance and quality” of the stories people see in their News Feeds by downplaying spammy posts. But it also essentially devalues posts that brands push out from their Pages, meaning advertisers will have to buy up Facebook ads to guarantee reaching their fans. Advertisers have been annoyed by this for some time because at one time Facebook encouraged advertisers to buy ad campaigns that increased their likes and followers, in hopes of extending their reach. Forrester’s Nate Elliott says Facebook’s move to continue to chop down the organic reach of brands’ Facebook posts and the fact that marketers continue to be dissatisfied with the performance of their Facebook Pages point to the fact that brands “don’t actually have social relationships with their customers.” He adds that it is time for marketers — who have been wasting "significant financial, technological, and human resources on social networks that don't deliver value" (which also includes Twitter, in this report) — to explore new techniques such as using smaller social networks (which are less cluttered than Facebook and Twitter because they currently have fewer users and advertisers clogging up the News Feed and by adding social relationship tools to their own websites. Facebook did not immediately return a request for comment. Ad agency Ogilvy reported in February that brands’ Facebook posts were only likely to reach around 2% of users and a Facebook sales presentation leaked to AdAge in March warned marketers “we expect organic distribution of an individual page’s posts to gradually decline over time. Separate research from social media analytics firm Socialbakers provided to Digiday found that not only is organic reach declining but Facebook is actually biased against brands in favour of other types of publishers: The study, conducted from January to September, found brands were only able to reach an average of 25% of their fan bases each month organically, while celebrities reached 54% of fans and news media companies got 58% over the same time period. So it seems little wonder only 55% of 395 marketers Forrester surveyed in October last year said they were satisfied with the results of their Facebook page, as cited in the most recent report (although it's a shame Forrester did not update its survey to ask marketers how they feel about Facebook now, one year on.) Elliott goes on to predict that in the next two years “social marketers will finally stop obsessing over Facebook” if they follow Forrester’s advice. He's not saying advertisers will stop spending on Facebook, but that they'll spend with it like a display ad platform similar to Google, rather than seeing it as a social medium. He adds: “Let’s be clear: We’re not predicting the demise of Facebook. After all, the site offers about one-third of all the display ad impressions online. But Facebook’s decade of dominance in social marketing is ending … Facebook will become nothing but a repository for display ads.” In a further blow to Facebook’s prowess as a social marketing platform, Elliott insists that “marketers will use Facebook and Twitter ads as email companions. “In the next few years, Facebook and Twitter ad spending won’t appear in the social line of marketers’ budgets; it’ll more commonly appear in the customer relationship management line, next to loyalty programs and email marketing.” In response to the report, Jerry Daykin, global digital director at the media agency Carat, a unit of Dentsu Aegis, told Business Insider while Forrester is "right in some ways" because the kind of relationships that brands can have with consumers on Facebook have "always been over-exaggerated by specialists with something to sell", so has the amount of money brands invest in it. Social media marketing always grabs the headlines, but actually represents a tiny amount of media investment compared with TV and traditional display. "Marketers understand what makes their brands grow and big brand marketers understand that means speaking to millions of people, not thousands of fans," Daykin says. He adds: "Facebook's shift to offering a paid platform for brands provides that scale and I actually see a lot of brands massively increasingly their investment into the platform now it offers that to them. [Carat client and Daykin's former employer] Mondelez's 'Storytelling at Scale' [marketing] approach realized this a couple of years ago and it has seen them rapidly accelerate their Facebook spend and forge a global partnership with them. "[Facebook] is now the single biggest reach platform in the world, offers great cost efficiencies, capped reach and frequency and we're seeing strong ROIs [return on investment] greater than TV where we've adopted this scale approach. Now we're looking at bringing different targeted creative to different consumers and maximizing the video potential of the platform." Essentially Daykin thinks the Forrester report is short-sighted: yes Facebook is not offering brands deep and meaningful one-to-one social marketing relationships with customers (read: free), but the advertising opportunity is enormous if a marketer is willing to spend. Facebook also has a huge advertising business: it wouldn't be growing at such a huge rate — up 64% year on year to $2.96 billion in the latest quarter — if its advertisers did not consider it useful. The company also has 25 times more advertisers than Twitter and its executives will be quick to point out the hundreds of case studies on its website from satisfied customers. Indeed, last year, Facebook repeatedly cited a Cadbury Creme Egg case study at conferences, whereby the chocolate brand claimed its Facebook activity drove the same purchase consideration as TV but for a third of the price. Join the conversation about this story »  | ||
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One Chart Explains Why Banks Are Betting On A European Stock Boom In 2015 | ||
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The chart above, from Credit Suisse's global outlook for 2015, perfectly explains why so many investors are looking more favourably at European stocks. Europe's corporate earnings are near a 10-year low, while US earnings are smashing through new records. European stocks may present a good opportunity because they have neared the bottom — there's nowhere to go but up if the economy improves, even slightly. Credit Suisse explains in their own words: If global growth improves, the economies with the largest output gaps – such as the euro zone – may see risky asset prices bounce sharply from depressed levels. The huge gap between corporate earnings in the US and Europe hints at massive room for improvement. The massive room for improvement is clear in the bank's base case for returns. Credit Suisse is expecting a 14% return from Eurostoxx 50 equities in 2015, with a massive potential upside. In the best-case scenario, they think returns could hit 25%. In comparison, their base case for S&P 500 stocks is an 8% return, with a 10% return as the best-case scenario. There is a clear downside: the worst-case scenario for Europe is much worse than for the US. But the European Central Bank is still stimulating the economy through quantitative easing (QE), which should be broadly good for stocks. There's a huge potential for expansion if it goes for a full QE programme, which would involve buying government bonds, in turn, giving investors even more money to put into stocks. Credit Suisse is not alone. JP Morgan last night swapped US stocks from overweight to underweight (suggesting they deserve a smaller place in an investor's portfolio) and raised European stocks to overweight. Join the conversation about this story »  | ||
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German Investor Confidence Just Surged Out Of Negative Territory | ||
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Germany's ZEW index, which measures investor sentiment, just smashed out of negative territory. Analysts had expected the "economic sentiment" part of the index to rise just out of negative territory for November, to 0.5, from -3.6 in October. In reality, it hit 11.5. Last month was the first in negative territory for nearly two years, but this month's figure has soared well away from zero. The part of the index that measures the current situation was lower, at 3.6. But analysts had expected it to reach only 1.7. The figures come after Germany's Q3 GDP growth was confirmed at a dismal 0.1%, barely avoiding a technical recession. Join the conversation about this story »  | ||
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Samsung Will Make Up To One-Third Fewer Smartphone Models Next Year | ||
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Seoul (AFP) - Samsung Electronics has announced plans to slash the number of smartphone models it issues next year by up to one-third as it tries to cut prices in the face of intense Chinese competition. The strategy, confirmed by a company spokesman Tuesday, was unveiled during a presentation in New York by the South Korean conglomerate's head of investor relations, Robert Yi. Yi said the company -- which last month reported a near 50-percent plunge in third-quarter net profit following a 20 percent drop in the previous quarter -- would reduce the number of smartphone models in 2015 by between one-quarter and one-third. The strategy is expected to be accompanied by a significant increase in the production of remaining models that can be sold more cheaply to compete with cut-price Chinese rivals. The recent nosedive in Samsung's fortunes followed several years of stellar growth and a seemingly endless succession of record quarterly profits driven by its all-conquering mobile unit. Its flagship Galaxy S smartphone has suffered in the high-end market from the popularity of arch-rival Apple's new iPhone 6, while its dominance of the middle- and low-end handset segment has been challenged by Chinese handset makers such as Huawei, Xiaomi and Lenovo. For the moment, Samsung is still the comfortable leader by sales volume, but its share of the global smartphone market has fallen from 35 percent a year ago to just under 25 percent, according to Strategy Analytics. Join the conversation about this story »  | ||
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Japanese Prime Minister Shinzo Abe Just Called A Snap Election | ||
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Japanese Prime Minister Shinzo Abe just called a snap election, after the country slumped into recession. He has told his party leadership earlier Tuesday that he planned to call a snap election for Japan's lower house next month, Japanese public broadcaster NHK World said. Abe was expected to announce an early election on Tuesday after an unexpectedly bad GDP report showed that Japan had slipped back into a recession. Analysts were expecting a 0.5% increase in GDP for the third quarter, but the figure actually came in at -0.4%. The prime minister wants the election to get a mandate for some changes, including support for a plan to postpone a sales tax hike scheduled for October next year. The GDP slippage is being attributed to a sales tax hike in April, which was agreed by political consensus before Abe came to office. Japan's NHK is reporting that Abe wants an 18-month delay on the hike, which he says will be the last delay. Abe's party currently has an 85 seat majority in the lower house. Pushing back the tax hike will also likely extend Japan's monetary easing until at least 2017. The Bank of Japan unexpectedly boosted its quantitative easing (government bond purchases) at the end of October, as the April sales tax hike's effects were more severe than expected. The combination of fiscal easing, monetary easing and structural reforms pursued by Abe have become known as 'Abenomics'. Join the conversation about this story »  | ||
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