When is Google going to admit the obvious?
Google+, the “social spine” of CEO Larry Page’s counterattack on Facebook, is a flop.
RJ Metrics selected 40,000 Google+ users at random. It then analyzed their public posts.
What they found is that a lot of people start sharing on Google+, then stop. 3 out of 10 made a single public post, then never posted again. Even among people who made five posts, 15 percent had stopped posting.
RJ Metrics said this “decay rate” was disturbing.
Other analysts have found that people spend an average of 3 minutes a month on Google+, versus 7 hours on Facebook.
Now, it’s possible that many Google+ users are not posting publicly and are sharing privately instead, as Google+ allows. That’s Google’s timeworn excuse when asked about Google+ engagement. But Google has refused to give clear statistics about activity on Google+.
“Google is just refusing to answer the question for its own reasons, which is probably because Google+ has far less activity as a standalone social network than either Facebook or Twitter,” wrote Google expert Danny Sullivan recently.
Over the past few months, Twitter has experienced explosive growth, attracting celebrity users such as Oprah, and a growing mountain of media and blog coverage. Sysomos Inc., one of the world’s leading social media analytics companies, conducted an extensive study to document Twitter’s growth and how people are using it. After analyzing information disclosed on 11.5 million Twitters accounts, we discovered that:
- 72.5% of all users joining during the first five months of 2009
- 85.3% of all Twitter users post less than one update/day
- 21% of users have never posted a Tweet
- 93.6% of users have less than 100 followers, while 92.4% follow less than 100 people
- 5% of Twitter users account for 75% of all activity (see the report on analysis of top-5% users)
- New York has the most Twitters users, followed by Los Angeles, Toronto, San Francisco and Boston; while Detroit was the fast-growing city over the first five months of 2009
- More than 50% of all updates are published using tools, mobile and Web-based, other than Twitter.com. TweetDeck is the most popular non-Twitter.com tool with 19.7% market share.
- There are more women on Twitter (53%) than men (47%)
- Of the people who identify themselves as marketers, 15% follow more than 2,000 people. This compares with 0.29% of overall Twitter users who follow more than 2,000 people.
Taking the top box office results for each of 52 weekends from the past 10 complete years (1998 – 2008; Source: IMDB.com) we see consistently that occasions like Valentines, Memorial Day, July 4th, and Thanksgiving show increased movie going activity. People have more time during these holidays to go to the movies and Valentines is a date+movie occasion. Also, during the summer, many people go to the movie theatre to escape the heat so there is an overall hump every year during the summer months — from Memorial Day to Labor Day.
People go out during Valentines, Memorial Day, July 4th, and Thanksgiving. And they still spend what they planned to spend — 2 tickets for movie — they didn’t buy 2 more tickets and see a second movie on the same date or holiday weekend. If they had several good movies to choose from (often, they don’t), they would choose to spend the finite dollars on the one movie they really wanted to see. The overall movie spending “pie” did not increase much, if any, year over year.
1998 $4,055,194,733 n/a
1999 $4,253,601,768 5%
2000 $4,496,554,005 6%
2001 $5,003,433,737 11%
2002 $5,489,974,199 10%
2003 $5,581,797,720 2%
2004 $ 5,697,299,530 2%
2005 $ 5,524,566,579 -3%
2006 $ 5,660,826,625 +2%
2007 $ 5,968,027,963 +5%
2008 $ 5,887,193,490 -1%
The chart below shows a red line which is the average of all 10 years. The 10 thin blue lines are the annual lines from1998 – 2008, inclusive and these are plotted as actual dollars. They come out right on top of each other.
Movie advertising, which runs into the hundreds of millions of dollars a year, has failed to noticeably increase the overall spending year-round or even during specific times. The chart below shows the differentials (difference between an annual line and the 10-yr average line). These all hover closely in the +$50M and -$50M band. The amplitude of the 10-yr average (red line) is larger than $50M in the summer hump — implying that the average change in movie ticket sales due to normal seasonality is larger than the change in amplitude caused by ALL movie advertising combined.
And the summer “hump” is due to actual demand (people going out to movie theatres, some to escape the heat) not due to advertising. The only effect of advertising is to share-shift from one movie to another — the total spending remains consistent and even seasonal variations are consistent — a “zero-sum game.”
All-Time USA Box office
|Rank||Title||USA Box Office|
|2.||The Dark Knight (2008)||$533,316,061|
|3.||Star Wars (1977)||$460,935,665|
|4.||Shrek 2 (2004)||$436,471,036|
|5.||E.T.: The Extra-Terrestrial (1982)||$434,949,459|
|6.||Star Wars: Episode I – The Phantom Menace(1999)||$431,065,444|
|7.||Pirates of the Caribbean: Dead Man’s Chest (2006)||$423,032,628|
|9.||Star Wars: Episode III – Revenge of the Sith (2005)||$380,262,555|
|10.||The Lord of the Rings: The Return of the King(2003)||$377,019,252|
|11.||Spider-Man 2 (2004)||$373,377,893|
|12.||The Passion of the Christ (2004)||$370,270,943|
|13.||Transformers: Revenge of the Fallen (2009)||$367,614,540|
|14.||Jurassic Park (1993)||$356,784,000|
|15.||The Lord of the Rings: The Two Towers (2002)||$340,478,898|
|16.||Finding Nemo (2003)||$339,714,367|
|17.||Spider-Man 3 (2007)||$336,530,303|
|18.||Forrest Gump (1994)||$329,691,196|
|19.||The Lion King (1994)||$328,423,001|
|20.||Shrek the Third (2007)||$320,706,665|
|22.||Iron Man (2008)||$318,298,180|
|23.||Harry Potter and the Sorcerer’s Stone (2001)||$317,557,891|
|24.||Indiana Jones and the Kingdom of the Crystal Skull(2008)||$317,011,114|
|25.||The Lord of the Rings: The Fellowship of the Ring(2001)||$313,837,577|
how do we judge the relative merit and effectiveness of different types of advertising? By finding a common parameter that can be used to compare “apples to apples.” We argue that cost of customer acquisition is a great candidate for such a parameter.
For example, if television advertising cost $50 million to produce and air, and 1,000 people came to the acquisition website, and 10 people applied for and received credit cards then the CCA — cost of customer acquisition would be $5 million ($50 million / 10 people who got the credit card). Of course television advertisers would claim that the “impressions” from TV would have “branded” millions more people and they would eventually get a credit card from the company. That’s possible. But for the purposes of this exercise, if there is no absolute end-to-end tracking, we don’t count it. Because, for example, many other possible scenarios can also occur, like the person saw this ad for a credit card but ended up getting a card from a different bank, they saw and remembered the ad but they already had several credit cards from the company, etc.
With “online” we can easily see lift in search activity around the time that brand/awareness advertising is in-flight. This is one of the best indicators of interest — the person saw the TV ad, and was inspired enough to go online to do more research to inform their own purchase decision. Modern consumers will typically search and then click through. In rare instances, they will type the URL, but it is usually the domain name, not the special URL — domain_name.com/special_url — just because of pure laziness or simply because they forgot the /special_url portion.
Now let’s look at a print example: a print ad cost $5 million to produce and traffic in targeted magazines. About 1,000 people came to the website and 10 people ended up purchasing the advertised product. So the CCA is $500,000 per customer acquired. There may be more people who saw the ad and eventually came in to buy a product. But again, there is a problem of attribution.
Now a final example from “online” marketing. Search ads were run using Google Adwords and a $1 CPC (cost per click) was paid. Of those people who clicked through 1 in 20 purchased a product. So it took 20 clicks at $1 each to achieve 1 sale – so the cost of customer acquisition is $20.
OK, so what about prodycts not sold online? We can use a proxy which has a known conversion to sales. For example, once a coupon is printed from the website, from historic data the advertiser knows that 30% end up using the coupon – i.e. redeeming with a purchase. So, again, if we used a $1 CPC and 1 in 20 ended up printing the coupon and 30% of those “converted” to an offline sale, the CCA would be $66.67 ($20/0.30).
So to recap
Television – $5 million CCA
Print – $500,000 CCA
Paid Search – $20 CCA
Paid Search + Offline Sale – $67 CCA
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
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- Brand Advertisers: Escaping an Ecosystem of Digital Advertising Fraud
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- Tips for Marketers Selecting a Digital Agency
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- 2013 New Year's Digital Marketing Resolutions
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- Digital Strategy To-MAY-to vs. To-MAH-to
- The Agency-Client Relationship is Forever Changed
- Targeting vs. Privacy - Who Will Win?
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