Will low user retention cap Twitter's growth?

This is my century posting on this blog. It has been 9 months since i started this blog and i appreciate your patronage to my ideas, thoughts and feelings.

A study conducted by Nielsen reveals that 60% of Twitter users fail to return to the micro blogging site a month later. In other words the user retention rates of Twitter languish at 40%! Whats more worrying from Twitter's perepective is Nielsen's forecast that at 40% retention, Twitter wont grow its internet reach at more than 10% per annum. The retention- reach model that has been used is based upon regression analysis and the following is its pictorial depiction.

Although a high retention rate doesn’t guarantee a massive audience, but it is a prerequisite. There simply won’t be enough new users to make up for defecting ones after a certain point.

There are two arguements in favour of Twitter are:

1. The majority of Twitter use happens away from the site, on mobile phones and apps like Tweetdeck, and it’s theoretically possible to be an avid Twitterer but never visit Twitter.com after you sign up

2. A lot about Twitter is a huge amount of Media mouthing as well from Obama to Ashton Kutcher to Oprah Winfrey, Lance Armstrong and more.. In essence there is lot of hype and expectation bubble around Twiter, which otherwise left to itself is doing pretty decent.

However young, it may be, Twitter's illustrious record pits it against the behemoths: Facebook and My Space in terms of Internet traffic. But the, compared tpo the boom period of Facebook and My Space, Twitter still fails to score points on Reach and Retention.

The study clearly states that retention levels at social network behemoths was double of Twitter even in their early boom phase and that retention only went up, and both sit at nearly 70 percent today.

The chart below shows the retention rate comparison with early years of Facebook and Myspace.

The answer to this may lie in the perception and usage of Twitter and its user profile. Poor retention, in other words -- just like the characteristics Nielsen attributes to Twitter traffic.The consumer value of a social-status service like Twitter resembles the value of "news" as a service. It is incidentally important, but not always important, and never all important to any one person. The intervals between incidents that you or I might deem important defy any prediction. Hence, a Obama election may form a Twitter peak, but a economic overhaul simply may not. Is this a question on supply as well? (May be another Obama-esque Twitter centric campaign or a Hudson landing will create the refresh for Twitter. Will it? We will watch this space.

Will Apple slip back now?

reproduced from http://www.guardian.co.uk/business/2009/may/03/apple-iphone-technology-market

"Every once in a while a revolutionary product comes along that changes everything. Today Apple is going to reinvent the phone."... That was Steve Jobs at the launch of iPhone in 2007.

The ever-expanding array of touchscreen handsets is just the physical evidence of the monumental change the iPhone has wrought. It has sent some of the largest technology companies in the world back to the drawing board and proved that, given the opportunity, people will do far more with a phone than make calls and send texts. For Apple, the iPhone may also be one of the most important products it has produced since its first personal computers in the late 1970s.

Before the iPhone there were already touchscreen devices; there were mobile phones that could play music and videos; there were mobile phones that could access the internet and send emails; and it was already possible to download applications on to some devices in order to personalise them. But hardly anyone took advantage of these features. Finding them was hard enough; getting them to work was a nightmare and most consumers gave up.

"It is not as though Apple invented a totally new technology," says Adam Leach, principal analyst at consultancy Ovum. "What they did was re-think the whole mobile experience and produce a very polished experience compared with what people were used to."

The iPhone was also aimed at a segment of the market that the giants of the handset industry had been ignoring - the "high end". Nokia, Motorola and Sony Ericsson were chasing the middle of the market where the high volumes and high subsidies from the mobile phone operators were. Their launch strategies involved upgrading their phones bit by bit - a better camera, a brighter screen or larger memory - so as to make the "new" device just a little more attractive. Making a phone a different colour boosted sales, but did nothing to persuade anyone to do more than make calls, send texts or download the occasional ringtone.

The iPhone, in stark contrast, is sexy and very, very easy to use. Since its arrival there has been a stampede back into making top-tier phones, not least because the recession has decimated the mid-market. Cash-strapped consumers are demanding a much better phone in return for signing an expensive monthly contract; if they don't get one, they are opting for cheaper Sim-only deals and holding on to their old handset.

BlackBerry rushed out its first touchscreen device - the BlackBerry Storm - to be followed by the first from Nokia, the 5800; Samsung and LG have been churning out touchscreen devices from the Tocco and the Omnia to the Renoir and the Arena. Waiting in the wings are new touchscreen devices from Palm (the Pre) and Sony Ericsson (the Idou).

The iPhone's ease of use, meanwhile, has turned the spotlight back on an often neglected aspect of mobile phones: the software. A month after the iPhone appeared in the UK, Google brought together some of the biggest names in mobile to develop a new operating system. Called Android, it has already appeared on two touchscreen devices, made by HTC, and many more are planned. A year after the iPhone appeared, Nokia bought out its partners in Symbian, which produces operating systems for smartphones. Then Microsoft rewrote Windows Mobile and its new guise - unimaginatively called Windows Mobile 6.5 - has borrowed a lot from the iPhone's look and feel.

Already more than 1bn iPhone applications have been downloaded from the iTunes store. The Android marketplace is operating, while RIM - maker of the BlackBerry - is also pushing applications at its users. Nokia's Ovi Market and Microsoft's Windows Marketplace are both set to go live this month.

In the 12 months before the handset launched, Apple raked in $22bn in revenues. That has rocketed to almost $34bn in the past year, largely boosted by the iPhone and iPod Touch. The success of the iPod made Apple's Cupertino headquarters one of the coolest places to work in Silicon Valley and the iPhone has made it one of the most powerful.

With so much now at stake, some experts suggest the iPhone will soon become the most important technology Apple's empire has produced, even, potentially, eclipsing the computer business that revolutionised our lives in the 1980s. There are an estimated 1bn personal computers in use worldwide, but that many mobile phones are sold every year and for many people their first experience of computing will be through a mobile phone.

But while Apple caused a revolution, it is unlikely to become dominant in the market. It has sold just over 20m iPhones since the first device appeared in 2007; in that time more than 1.5bn phones have been shipped by everyone else. Later this month, the first wave of British users are freed from the contracts they had to sign to grab one of the early iPhones and start contemplating a replacement, they will be faced with a range of remarkably similar devices.A similar thing happened with the personal computer market. The concept was championed by Apple when it launched Apple II, the world's first personal computer, in 1977, and the first Macintosh in 1984, but other players now lead the market.

While iPhone is the Touch Pioneer, it faces tough competition from other wannabe's in the market today. So far, the other part of the twin strategy, applications has been successful in creating a stickiness around this product. However, competitors are working hard at that as well. It will be interesting to see, whether Apple slides down despite retain its Technology leadership crown or do the folks at Apple have another ground breaking innovation around the corner.

The rise of the Blackberry

A recent study conducted by Strategy Analytics on Smartphone market shares in the enterprise segment of the US markets has brought forward some interesting results. Contrary to expectations, the Apple I Phone, Symbian foundation and Google Android are not the hot properties as far as Enterprise segment Smartphones are concerned.The smartphone crown in the enterprise space belongs to Blackberry with 36% market share of the enterprise segment. Blackberry is followed by Windows with 27% of the smartphone market. Not only that, the Blackberry dominates the best selling smartphones (NPD group's latest smartphone ranking) in US (list below), RIM’s consumer smartphone market share increased 15 percent to nearly 50 percent of the smartphone market in Q1 2009 versus the prior quarter, as Apple’s and Palm’s share both declined 10 percent each.

1.RIM BlackBerry Curve (all 83XX models)
2.Apple iPhone 3G (all models)
3.RIM BlackBerry Storm
4.RIM BlackBerry Pearl (all models, except flip)
5.T-Mobile G1

Smartphones, which represented just 17 percent of US handset sales volume in Q1 2008, now make up 23 percent of sales. Even in this challenging economy, consumers are migrating toward Web-capable handsets and their supporting data plans to access more information and entertainment on the go. Backberry catapulted itself to the top in smartphones basis a wider range of its carrier network (4 for Blackberry versus 1 for Apple iPhone) and a smart give away promotion.

Blackberry has been able to capitulate on its no nonsense office assistant position very aggressively and with some support from President Obama's penchant for his devices, Blackberry has seen some phenomenal growth in 2008 - 2009. It evens finds itself listed in top 20 (ranked 16th) and only next to Nokia (in handsets) in Millward Brown's Brandz 100 most valuable brands. No mean task this for Blackberry!

Ref Reports:
http://www.npd.com/press/releases/press_090504.html
http://www.moconews.net/entry/419-research-in-motion-says-second-blackberry-storm-on-horizon/

A $100 billion brand

One of my favourite one liners about internet, technology and Google is "There is Internet and there is Google!". One of the most reverred tech companies Google became the first $100 billion brand in terms of Brand value (Millard Brown Brandz Top 100 most valuable 2009). A $100 billion tag is greater than most and many African, South American and Asian countries. Google finds itself to be a case study under Naseem Nicholas Taleb in his book Black Swan. Many analysts and thinkers are wary of the influence that Google holds over the internet often questioning "how much is our digital life is personal anyway (in the shadows of Omnipotent and Omnipresent Google)?"

In an year, where the overall value of the the top 100 brands had grown by 2% Google grew 16%. It's worth is 25% more than the worth of its second competitor, Microsoft! Coke,McDonalds, IBM, Apple, China Mobile, General Electric, Vodafone and Marlboro complete the top 10 list. This is the third year in a year when Goolge has secured the Tops in Millard Brown's Brandz 100!

Technology companies make the bulk of the the top 10, with Google (no 1), Microsoft (no 2), IBM (no 4), Apple (no 6), China Mobile (no 7) and Vodafone (no 9)! Handset manufacturer Nokia slips out of the top 10 with Vodafone replacing it as the most valauble European brand. Blackberry has seen a fantastic 100% jump in its brand value over the year.

It has been a good year for fast-food, cigarette and alcohol brands, as consumers suffering from so-called "recession depression" appear to have sought quick pick-me-ups.
McDonald's recorded a 34 per cent increase in brand value, year on year, followed by Marlboro (33%), Budweiser (23%) and Johnnie Walker (42%) The most valuable category was mobile telephone operators; its value grew 28 per cent year on year. This was followed by soft drinks and coffee.


Millward Brown chief executive Joanna Seddon said: "In the current environment, brand has become even more important because it can help to sustain companies in tough times. "Those who continue to invest in their brand will be better positioned for business growth as the economic situation starts to improve than those who have cut spend. The recession does not always harm individual brands as much as it does faceless corporations," she added.

Is India ready for MVNOs?

This is the second post on the series: The advent of MVNOs and discusses the MVNO environs in India!

A few months back, Sunil Bharti Mittal (CMD, Bharti - Airtel) went on record saying that the MVNO model will not find many takers in India (read report). The idea was that with the kinds of tarriffs prevalent in India, MVNOs will not be able to sustain business and be profitable. The fact that Virgin Mobile's foray into MVNO platform has not been as hugely successful bears this statement for the timebeing. But in a long term basis, can MVNOs be ruled out of the country?

A study of 16 countries where MVNOs have been operating for a few years now, conducted by Diamond, a global management consulting firm has some interesting pointers in terms of emergence of the MVNO business models in India.
1. The threshold mobile penetration levels (for the emergence of MVNOs) in these markets are around 40%! --> Markets typically disply a level of mobile penetration above 40% at the time of launh of the first MVNO.
2. Higher levels of industry wide consolidations favour the launch of MVNOs.
3. Less competitive markets (high levels of dissatisfaction amongst consumers) favour MVNOs (because they cater to new customers and innovative solutions).

India with its fastest growing telecom subsribers status is typically a mash of various degrees of penetration. On one end, the A category circles have 70 - 80% penetration ratios and on the other end, C category circles are at 15 - 20% penetration status. Thus India is to be seen a collection of 23 separate markets instead of a single homogenous market when assessing the opportunity for MVNOs. The Cat A and B circles are over ripe for MVNOs and there are states, where the MVNO business would not be as effective given low penetration levels. Also the tarriffs are getting rapidly commoditized and if its were not for the consolidation, these tarriff would be close to unprofitable! Number portability could rapidly increase churn in the eco-system, unsettling the top rug high ARPU consumer bases with the existing operators.

Within these set of circumstances, there may exist an opportunity to serve users better or serve a high profit niche segment. With the penetration levels at 32% nationally and tarriffs touching lows, the MVNO route may be a key differentiator and an access to higher premiums. One needs to be define MVNO at this time. A re-selling, re-branded plain vanilla will not be attractive to users. In the case of Virgin, it has done some excellent work in associating itself with a category of customers. However, its proposition is based on cost which by itself is not the best way to differentiate especially if you are re-selling airtime.

Thus it is important, that the MVNA and MVNE route is taken to differentiate oneself in this market! Healthcare sector is one lucrative idea for MVNA/E, so is department of posts and telegraph, railways, banking etc. There is a need and necessity for including this diversity into the existing eco system. This would constitute differentiated service to consumers for which they would be ready to pay premiums. A focussed attempt centred around the metros and high penetration areas can also keep costs under control and if the collaboration within the players in the eco system is good, can lead to high profit businesses.

Should we reconsider the model once more, Mr Mittal?

The third part of The advent of MVNOs will deal with the legal challenges of establishing this business in India.

Calculating your Social Media Initiative's Payback

While Social media is a new kid in the block, the promises it holds are huge. It enables the marketeer to host a platform to hear what his consumers have to say about him, engage them and engineer products/services. In short it allows the marketeer to pro-create with the consumer.From a marketeers point of view, their is an abundance of media vehicles and the final choice of media is very often led by RoI or Cost/Benefit analysis. It is very interesting that calculating the RoI/ Payback of Social media is still based on the age old business perspectives and principles. So the tool and the procedure remains the same.It is just the metrics that have evolved.

Presenting the pointers to calculating the efficiency of marketing initiatives in social media:

1. Start from the objective. The more precise and focussed defination of the question, the better is the probability of a meaningful answer.

2. Identify ways to measure your objective/put metrics

3. A prior measurement of scores in the metrics sets the base

4. Identify gaps between your objective metric scores and the base scores.

5. Set time bound targets on the Gaps

6. Identify the investments you are willing to put in targets and gaps

7. Execution of the plan

8. Against the investments that have been put, the %age increase/decrease of your metrics against your targets will give you the efficacy of the programme.

Since we are talking social media initiatives, the metrics can be chosen from the list:
Views/hits; Followers/Subscribers; Comments/Blogs/Tweets/Board Posts; Tonality; Frequency; Sales; Inbound Links; Engagement Metrics; Visibility/Credibility; Inbound Links; Profile visibility @ SEO; Referrals and others.

There is another part that cannot be measured: Cross Referencing of the suite of products/services through Social Media (i.e influence of social media on perception of the brand when you seem to be only talking about the product/solution/platform.)

Is Social media/networking a marketing hyperbole?

I believe in the power of social media and strenghts of networking. I use my blogs, my Linkedin, Facebook and Orkut profiles to stay in touch, share my life with my network of friends (Facebook and Orkut) as well as keeping myself updated on subjects of interest and learning from forums and other experts (Linkedin, Blogger, Twitter, Word Press). Deep down there is an effort to market myself to the world at large and social media and social networking are important tools to do them. I met my childhood schoolmates on Orkut (after being incoomunicado for over 10 years).The last person i interviewed was a contact from Linkedin (instead of the pay per use job portals). I am trying to actively position myself for my next job through the Social Networking media. I find it difficult to ccomprehend when someone doesnot have a profile/doesnot use Linkedin/Facebook and others. All this is an ode to the virtues of social media/networking: Life, Work, Learning and Friends have become interesting.

Yet, i sense a bubble of social media/networking all around. It is the next biggest thing in marketing. Someway, i have begun to think that from a marketing perspective, if you dont have social media in your portfolio you are "uncool". Social media experts are mushrooming all over and there are more "social media" bloggers and experts than any other subject (i dont confirm this statement!!) With the rise in Facebook and Twitter and such others, these mediums have become the cynosure of marketing and brand experts. Now everyone wants to have an internet presence/ Facebook profile/ Social Media leg to their marketing campaigns. The efficacy of this idea/thought is questionable.

The central thought when a user is logged into a social networking site is to talk/ bond/ network with his kind of people or friends. A product advertisement/banner/ pop up is seen more as an intrusion into the users time. I may not have the statistics, but i have a hunch that these ads are mostly "skipped" or "closed" or "ignored" by the user. There is a moment of truth, when the user may eye the contents for a brief second, but that happens rarely. Especially in India, where the internet speeds are low, an ad frame that takes time to load and hence impedes the user from doing what he is doing is generally dismissed straightaway.

For a marketing campaign, its cool to have a Facebook user profile and a "fan" following. Except that a large percentage (again unratified) of such profiles are not refreshed for weeks and months and are only used as a platform to "advertise", not "engage". A leading marketeer in India has a Facebook profile of its most important gaming service with 46 fans for about 8/9 month now. This platform has a host, but there is no dialogue and no discussion except version release circulars. It doesnot cost a penny to put a Facebook profile up. However, all this without consistency of engagement is a waste.

Similarly, a particular product based company (i know of) believes in 15% allotment of its budget to digital media. Most often digital media is less understood by its marketing folks who judiciously use the money in the banner ads and in page ads, the success rate of which is about 5%! Thats 95% waste, which could have been used better elsewhere. In the company being spoken about, this 95% is seen as an investment (the fruits of which would be borne later).

A recent discussion on Linkedin, featured someone asking for "best ways in Social media/networking to market a consumer product to xyz profile...". Well, for a start social media/ networking doesnot "Market", it only generates "Awareness" and can be used to enagage customers in a "Dialogue". The dialogue also is necessarily not required to be product led... instead it ought to be the platform that the product hopes to provide a solution to. It is a communication media and not an advertising media. Users differentiate between communication and advertising very sharply. An enagaging conversation is one thing, an advertisement is another. One has a lot of credibility and the other has none.

It is important that marketers need to now understand the virtues of marketing beyond advertising and sales is to listen, engage, hear and discuss with the consumers. Social Media has a role in marketing and organization strategy. It has to be treated more fairly than just another media and advertisement vehicle.