The Future Direction of Search Engine Marketing (SEM)

13 12 2010

SEM is pretty straightforward, right?  You use some analytics software to figure out the search terms that customers are using to find your product or service and then you bid on the right to place ads with those terms.

A new white paper from Forrester looks at the future trends in SEM.  Like a lot of things, the searchable Internet is fragmenting  in many ways:

  • Into new forms of content.
  • Into new uses: Mobile/Social and GoogleTV are examples.
  • Into communities and platforms that are opaque to traditional search engines.  Examples include the Apple iPhone, Android phones, and social media platforms such as Twitter and Facebook.  Search engine technology is going to adjust.  In fact, Bing and Google are already making changes.

But, the bottom line is that search engine marketing techniques and analytic approaches must change as well.

You can download the full Forrester report for free from Omniture (owned by Adobe):  The Future Of Search Marketing

It’s well worth reading.


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Categories : Enterprise Marketing, Inbound Marketing, Marketing Plan, Social Media Marketing, Technology

What Are Twitter and Facebook Worth?

7 04 2010

Assuming they were for sale that is.  The San Francisco Chronicle quotes sources giving a wide range of valuations on these two companies:

  • Facebook:  From $5 Billion to $35 Billion
  • Twitter:  From $656 Million to $1.5 Billion

Why the wide range in valuations?

First, you look at the more traditional methods of valuation:

  • Current and projected revenue streams.
  • Current and projected profit streams.
  • Market share.  Let’s face it, if you aren’t #1 or #2 in a “network effect” business, you are no place at all in your market.
  • Growth.  Especially such that it would move the company to a #1 or #2 position at some point in the future.

Then, you get into the more interesting area: Synergy.  Synergy is probably the most abused term in the history of corporate acquisitions.  Surveys show that planned synergies between companies rarely happen.  The vision has to turn into execution and that is where the ball often gets dropped.

When Synergy Fails

  • GM and Hummer.  GM has failed to sell of this business and is now quietly shutting it down – at great loss.
  • AOL and Bebo.  AOL paid $850 million for social networking site Bebo.   AOL has been discretely shopping the business and may shut it down in the next month.
  • The Grandaddy of Them All:  AOL and Time Warner.  Stockholders lost more market value on this “merger” than on any other in the history of the universe!

When Synergy Actually Works

  • Cisco does an amazing job of acquiring young companies and integrating them into their strategy.  The Flip acquisition looked like a head-scratcher, but is key to their strategy of communications, collaboration and video today.

Google was able to integrate its intelligent advertising business with YouTube and to monetize the huge audience YouTube that brought to them.  If you think of YouTube as a video search engine, then they were probably the second biggest search engine (to Google itself) at the time of acquisition.

AOL and Time Warner on the other hand were culturally at war from day one, never integrated their businesses in any meaningful way, and the rest looks like something from a disaster flic.


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Categories : Company Valuation, Social Media, Social Media Company

Is Twitter Worth $1 Billion?

25 09 2009

Twitter TThe news this morning is that Insight Venture Partners (venture capital) and T. Rowe Price (mutual fund) are close to investing $100 million in Twitter, which would suggest a market valuation of $1 Billion for the service.  Not bad at all for a company that is still in the “Pre-Revenue” stage.  So, today’s question is: is Twitter really worth a Billion?

Yes, Twitter is Worth At Least $1 Billion

  • Size: Twitter is in “The Tornado” of hyper-growth and in this stage of their lifecycle  it is all about maximizing market share right now.  They are doing a great job with 54 million unique visitor per month (ComScore)
  • Growth: Twitter has that too.  From Feb 2008 to Feb 2009 it grew 1,374%.  In May, the WSJ reported that Twitter had 32 million unique visitors for the month.  This month it is 54 million according to ComScore.
  • Experience: Evan Williams, the CEO, built and sold Blogger to Google back in 2003. He knows what he is doing.
  • Investors: Do you think Insight and T. Rowe Price put their money down without seeing some sort of plan to generate revenue?  Not likely.
  • Advertising: Twitter says it can easily add advertising but has no plans to do so before 2010.

No, a $1 Billion Valuation on Twitter is Highly Questionable

  • Differentiation: What is Twitter’s market differentiation relative to Facebook?  The gap narrows daily as Facebook adds Twitter-like functionality to their service.
  • Market Leadership: Facebook has 300 million unique visitors per month and it’s functionality is a superset of Twitter’s, although I would give Twitter a slight edge in mobility.
  • Monetization Hurdle:  Facebook has experienced strong user backlash from rumors of planning to charge for parts of its service.  While changes may be technically easy to implement, they can be punishing culturally.
  • Monetization Again: Mark Andreesen was quoted as saying Facebook would make $500 million (profit) and be valued at “billions” in a couple of years. Where is the Twitter plan?
  • Experience: The Twitter people have good technology and an excellent growth plan, but no previous track record of monetizing a service.

Twitter has said it wants to be the “pulse of the planet.”  It is going to be very interesting to watch both Twitter and Facebook for the next few years.  This story has a long way to go before it plays out.

Recent stories have said that Twitter has turned down offers from both Google and Facebook.  They must have something in mind, but so far they aren’t telling.


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Categories : Company Example, Social Media Company, Social Media Marketing, Technology

“Facebook Exodus” Is There Cause for Concern?

2 09 2009

There was an interesting article in the New York Times yesterday, in fact, it was the #2 most emailed article when a friend brought it to my attention late in the afternoon.  The drift of the article was about how people were becoming disillusioned with Facebook and were dropping their participation and profiles.  It was purely anecdotal information but interesting reading.

So, does this mean that Facebook is finished as a social marketing took, particularly for B2B marketing?  It might be a little bit soon to draw that conclusion.  The fact remains that Facebook is growing at a rapid pace from 150 million in January 2009 to over 250 million active users as of August 2009.

Even more interestingly for those interested in B2B, the fastest growth is in the 35 to 54 year old demographic, which experienced a 276% gain year/year in 2009.

Conclusions

  • Applications (like Myspace, Facebook, Twitter, etc.) will come and go.  This year’s market leader can be next year’s dog meat.
  • Also, check out LinkedIn if you have not already.  It is more business-focused, is also growing rapidly (46 million as of 8/25/09), and has recently added company profiles as well as personal profiles.
  • Social networking is not going away.  It will probably evolve rapidly for the next few years, but it is not going away any time soon.  Social Media fills a fundamental human need.
  • The important thing is to watch the technology space, not the individual applications.
  • In the B2B world, the evidence is overwhelming that the most trusted source of information on products and services is industry peers and friends.  Social media enables these people to connect and exchange ideas.

Action Plan

  • Watch the social media space closely.  It will evolve rapidly for the next few years.
  • Ask your customers and target customers what sources of information and networking they use and target your efforts there:
    • What blogs do they read?
    • Where do they go to do business networking?
    • How do they do their research on a product decision?
    • How do they like to get their information: articles, videos, audio podcasts, etc.

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Categories : Enterprise Marketing, Social Media Marketing


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