The bigger they are…

Posted on by Billy Tucker
Apple has a long way to fall

The mocking began almost three years ago today. Apple Fan boys & girls chorused in smug, urbane disdain of my Apple hate. How I dared question the gospel according to Jobs.

Well, I did.

In March 2010 I wrote, “Increasingly, fashion’s undesirables are adopting the iPhone as their key to cool, just as the true cool are heard to say “it’s just a phone, I’ll change it soon”. iPhone has some runway yet, there are a few hundred million people still to buy one meaning Apple have at least a couple of years of stellar revenues to look forward to from their phone division; but when the fickle face of fashion is looking the other way, what damage will have been done to the broader Apple brand?”

Right now, the Kids are buying Samsung’s range of Android powered devices, they are unmistakably cool. Parents of those same Kids are “doing Facebook” on iPhones, and there’s nothing cool about that!

The challenge for Cupertino is in the awesome strength of the Apple eco-system, the all of nothing iTunes lock-in they so clearly hoped would bind Appleites to polished metal and white doesn’t work when they have found religion elsewhere.

Losing Mobile Phone share and therefore command of the users’ Media collection undermines the entire Apple product range as well as the economic model – meaning the whole business is on very shaky ground if can’t reverse its fortunes, and fast.

I foresee a very rapid demise ahead for the once mighty Apple, truly a victim of their own incredible success.

Turning Advertisers off with visual Vomit

Posted on by Billy Tucker

As a user, Facebook is frustrating, and as an advertiser, it’s downright useless.

Humans are skilled at ignoring the visual vomit around them, and these are skills that have been perfected over many years of increasingly desperate advertising techniques – from the subliminal to the ridiculous.

Stealing 5 minutes to get critical updates on the latest cat meme is what Facebook is all about, and monetising that experience has mostly been limited to targeted advertising (selling your personal details to advertisers so that they can craft ads most likely to drive a response). But with just $10 of annual revenues from each of its 600m or so engaged users Facebook has a long way to go to satisfy its many Shareholders’ many expectations!

The real challenge for Facebook though is that economically it’s still a One Trick Pony with 8 out of every 10 dollars of revenue coming from advertising. So how does Facebook outgrow the rebounding economy in order to drive up shareholder returns?

I think they have three pillars of advertising growth ahead of them, each of which will likely trade off user experience for advertiser revenue:

More advertising inventory – as the rate of subscriber growth slows more inventory is required to avoid an overall slide in the supply of advertising space – meaning more of the Facebook page will be dedicated to paid media resulting in a poorer user experience

More personal advertising – Facebook will give as much data as it can to advertisers to make the advertising product more effective – meaning Facebook will go even further to leverage their users’ personal data

More interruptive advertising – as consumers get better at ignoring the Advertising Vomit, Facebook will push its products to become more interruptive, meaning you have to wait for them to finish or actively “push” them out of the way. A poorer experience but one that is likely to yield more clicks for the advertiser.

And yet, the real challenge here for Facebook is that it just isn’t a great place to advertise for most businesses. It’s neither a great Brand advertising platform, nor is it a great Performance advertising platform – and in this analytically informed world of Marketing, the investment required to evaluate the effectiveness of an advertising platform is lower than ever before – meaning most big advertising dollars have already come and gone.