Marketers need these platforms to work across different channels – including traditional media like TV, print, and direct mail – in the service of all four marketing objectives: customer awareness, acquisition, conversion, and retention. And the platforms must address new spending areas like social media and mobile marketing.

Key findings from this Sector Roadmap^TM include:

• Social-media marketing will be the most important trend in digital marketing over the next 12 to 24 months. Spending on social media is exploding, though there is currently a less-than-perfect understanding of its effectiveness and ROI.
• The other two most important marketing needs that platforms must address are multichannel and multi-objective campaigns. While mobile marketing is exciting and growing fast, most mobile spending is on search and social media, and on choreographing mobile programs alongside other marketing tactics. It will be a much more disruptive force in years to come.
• Likewise, digital video will play out over the long term, and programmatic buying, while hugely disruptive for online publishers, is an issue only for digital display advertising for the moment.
• Some of the marketing-tech platforms are too CRM-centric — at the expense of advertising and customer acquisition. We evaluated a representative selection of suppliers, including some niche specialists, for their strategic focus and vision, as we expect their product sets will evolve rapidly. Of the companies we examined, IgnitionOne and Adobe currently align best with the trends we deemed most critical. Neustar and Salesforce.com are also well positioned. HubSpot and Bronto Software offer compelling, but more narrowly focused platforms

Key:

• Number indicates companies relative strength across all vectors
• Size of ball indicates company’s relative strength along individual vector

Source: Gigaom Research

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This report focuses on sizing and qualifying the EU app ecosystem, with an eye toward revenue generation, jobs supported, and the bottlenecks still facing EU app developers. Key findings from our analysis, which is based in part on two surveys of developers targeting EU markets, include the following:

• EU developers took in $23.7 billion (€17.5 billion) in revenue in 2013, and we forecast that figure will increase to $85.3 billion (€63 billion) in five years. But you might be surprised where a lot of that revenue comes from. In addition to $8.1 billion (€6.0 billion) in app sales, in-app spending for virtual goods, and advertising, EU developers recognized $15.6 billion (€11.5 billion) in 2013 from contract labor. And much of the developer-for-hire business is for companies that aren’t really in the app business per se but use apps to support and market their mainstream offerings like financial services, retailing, and packaged goods.
• Fewer than half of the independent developers we surveyed said they were offering services for hire, so that’s a potentially untapped market for startups. Similarly, half of the enterprises that did their own in-house development also used third-party developers. And in-house developers are by and large more satisfied in achieving their commercial objectives than independents, many of whom are frustrated by low prices, free products, or barely emerging ad revenues.
• The EU app-developer workforce will grow from 1 million in 2013 to 2.8 million in 2018. Additional support and marketing staff result in total app economy jobs of 1.8 million in 2013, growing to 4.8 million in 2018.
• EU developers face more business than technical bottlenecks. Increasing users’ willingness to pay for apps is problematic, but better discovery vehicles could help relieve high customer-acquisition costs. Similarly we see an opportunity for an EU marketplace where companies needing app development could identify, negotiate with, and hire contract developers.

Thumbnail image courtesy of Oleksiy Mark/Thinkstock.

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Key highlights during the fourth quarter in the social-technologies space include:

• Social business software goes both vertical and horizontal. Driven by work media standardizationand the need to integrate older nonsocial tools, large enterprises are starting to adopt a“horizontical” architecture for social business software.
• Small and simple. At the same time, small businesses, freelancers, and creative professionals aredriving a countervailing trend toward a core sharing and sync architecture. These two forces willbump into each other in social business, sometimes resulting in bruises and sometimes insynthesis.
• Adobe and Behance build in community. This year Adobe acquired Behance, an online socialcommunity for creative that epitomizes the vertically focused integration approach.
• Can social media solve the online ad crisis? Ad networks and cheap social media inventory areexacerbating the existing polarization of premium versus remnant ad inventory. Analytics andsocial media could help stave off low CPMs, but much of the profit may go to sellers of marketingtechnologies.
• Facebook tests new revenue streams. Facebook hit 1 billion users, but it’s still dependent on cheapads. It showed some progress in mobile, and it started to test additional businesses. But brandadvertisers remain its biggest payoff opportunity, not ecommerce.

This quarterly wrap-up analyzes these events and trends as well as trends to watch in 2013.

The post Social fourth-quarter 2012 analysis appeared first on Gigaom.

So a different set of companies will drive innovation and perhaps a little disruption in social technologies in 2013. Look for the likes of Salesforce.com, Jive Software, and other enterprise players to make headlines in the new year.

The post Social 2013: The enterprise strikes back appeared first on Gigaom.

Key highlights in social media from the third quarter include:

• Social meltdown. Groupon, Zynga, and Facebook all have to prove their growth potential after relatively disappointing performances. However, for Facebook and possibly Zynga, “disappointing” is all in the eyes of the beholder.
• Twitter ecosystem flap. As Twitter continued to take control of its own destiny as a media business, it tightened the screws on its API use. Some third-party de- velopers were left in the cold.
• Work media drives social enterprise. Salesforce called marketing its next billion-dollar business. Enterprise software companies are now facing off against work media startups for the future of work.
• Strategic shifts in social and online media. Once-dominant portals saw continued turmoil during the third quarter, while social media marketing started to look real. But a potential privacy backlash or legislation threatens online adver- tising segments like ad networks and targeting data suppliers.

This quarterly wrap-up analyzes these events, and provides a near-term outlook for trends, technologies and companies to watch in the next 18 to 24 months.

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Twitter feels like it is at a crossroads, so GigaOM Pro took a quick pulse of the tech community’s opinions on the company’s future prospects, its likely business model, and its role in the overall technology industry. The results are presented here, with analysis.

The post Flash analysis: Is Twitter on the cusp of building a business? appeared first on Gigaom.

• Facebook’s IPO. It was the biggest in tech history and the second-biggest U.S. offering overall. But partly because it didn’t pop, a lot of critics took a hard look at Facebook’s core businesses and challenges.
• Social-enterprise acquisitions. Microsoft bought Yammer, and Salesforce.- com bought Buddy Media. Though there was a lot of acquisition activity under the broad umbrella of social enterprise, most of it fueled two distinct market sectors.
• Google+ one year later. Google’s social initiatives have had mixed results, and the company played down social at its own developer conference instead of highlighting innovations in UI.
• Search innovation. Surprise! Microsoft set the standard for social search with a big Bing redesign. Yahoo showed a flashy, visual mobile app that mixed browser and search functions.
• Merger patterns. Facebook bought Instagram; it might have considered Pinterest. Microsoft and Salesforce.com are aiming for different objectives with their social-enterprise acquisitions.

This quarterly wrap-up discusses these milestones and provides a near-term outlook for trends, technologies and companies to watch in the next 18 to 24 months.

The post Social second-quarter 2012: analysis and outlook appeared first on Gigaom.

This report analyzes the results of that survey, including readers’ views on Facebook’s overall success, where the social network stands in terms of mobile offerings and privacy backlash, and its prospects as a major digital-advertising platform.

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Google turned in what most companies would call good quarterly results — 25 percent growth — but raised concerns over shrinking cost-per-click figures. Some blamed mobile search, which, if that’s the case, will not only linger as an issue but also increase in importance. To diversify its revenues, Google integrated its own products and services deeply into a new personalized search initiative. That and continuing privacy gaffes fueled a storm of criticism around the company. But so far, customers aren’t fleeing.

Facebook has often tried to convince Madison Avenue it should rethink advertising in a social context. Yet most of the ads Facebook sells are low-priced direct marketing pitches that take advantage of its plentiful, inexpensive inventory. In Q1 Facebook took some steps to address that, introducing changes in what and how it sells advertising that will be more familiar to traditional buyers. That will help it maintain its rapid growth. At the same time, several big brands shut down their Facebook stores, causing merchants and retailers to rethink the opportunities for f-commerce. Actual transactions will take the backseat to marketing objectives in the near term, and companies like American Express may be able to apply loyalty-program expertise to social commerce. That would help evolve the overall market.

In stark contrast to Google and Facebook, Yahoo’s ad business has been stagnant for years. Scott Thompson, its new CEO, arrived in January, but he’s from PayPal and has more of an e-commerce and technology approach. There’s still plenty of media expertise at Yahoo, so it’s up to Thompson to harness and reenergize it, as well as to see if there are some e-commerce opportunities for the aging portal.

And Pinterest emerged as the newest social-media star. The female-focused curation site shows signs of staying power and is starting to be a force in content discovery. No revenues are attached yet. That means it might be a good idea for media companies and merchants to get on board with Pinterest fast, before it decides to charge for services.

Looking forward, Facebook’s IPO should arrive in May, possibly preventing the usual stock market summer doldrums. It will set the stage for more social consumer offerings, including some Facebook spin-offs. Connected work activity should increase after a relatively quiet quarter. And the never-ending debate over Web versus apps will continue, with HTML5 at the center of the discussion and perhaps the solution.

The post NewNet Q1: Advertising, commerce and discovery dominate appeared first on Gigaom.

In contrast to recent offerings from Groupon, Zynga, Jive Software and Pandora, Facebook’s shows a very solid and profitable business. The company had $3.7 billion in 2011 revenue, up 88 percent from the prior year. It has profit margins comparable to those of Google (47 percent operating margin in 2011) and generated $1 billion in net profit. Advertising sales made up $3.2 billion, and fees from the 30 percent cut Facebook takes off sales of virtual goods from gaming companies accounted for another $550 million.

Facebook’s ad sales grew nearly 70 percent last year, and its fees grew by five times after the company mandated that games had to use its Credits system. Can Facebook maintain this pace? Here are some issues to watch:

Revenues per user. Facebook will have to dial up its dollars per user, because it will be increasingly harder to rely on user growth. According to its own estimates, Facebook has a 60 percent penetration of online users in the U.S. and the United Kingdom, two big ad markets. It hasn’t entered China, but it may never figure out how to compromise on government censorship and regulation, and competing communications and social networking companies like Renren and Sina are already there. Social gaming spending depends on a relatively small number of “whales,” so Facebook will have to roll out Credits for more digital goods and apps. As for advertising, Facebook will have to prove that its performance-based ads are more than modestly effective to raise rates. It should build out more sponsorship opportunities, offer rich media or video inventory, and get back into deals or coupons to continue to outgrow the market.

Mobile opportunities. Or are they challenges? Facebook is seeing tons of mobile usage: 425 million monthly active users in December, representing over half its audience. But it doesn’t yet show advertising in its mobile app or its mobile-optimized website. Facebook acknowledges that mobile substitution for web usage is a risk. While mobile advertising is a high-growth market, early action may center on search and offers, marketing vehicles where Facebook has little experience. Kevin Fitchard looks at Facebook’s mobile issues below.

Convincing arguments. Facebook will also have to convince some key constituencies, including investors, users and developers, to trust that the company is under control and headed in the right direction. Mathew Ingram points out that CEO Mark Zuckerberg is pretty much in total command, and Facebook has a controlled, rather than independent, board of directors. Investors and partners have to buy into his vision, including the company’s mission to rewire the world, its focus on product before profit and its hacker culture. At the same time, Facebook will have to cultivate
developer relationships better than Twitter has and build out revenue streams for its business ecosystem the way Apple has done. And finally, it has to satisfy customers and the FTC that it can protect user privacy.

Some doubters will look at Facebook and say it could still “pull a Myspace” and lose its audience to the next big social media phenomenon. Hardly. Unlike Myspace, Facebook built a real technology platform that is extending its reach and developer lock-in. And Facebook data show that its user engagement is actually going up as it grows. Rather than tiring of the social network, more of them engage daily than a year ago: Its ratio of daily users to monthly users has increased from 54 percent to 57 percent during 2011. This is remarkable.

No, Facebook’s real competitors aren’t just social media alternatives but companies like Google and Microsoft, as it notes in its S-1. They have far bigger cash cows fueling their technology platforms than Facebook has. Facebook has a somewhat cavalier attitude toward making money. “Simply put: we don’t build services to make money; we make money to build better services,” Zuckerberg said in his letter to investors. Its ad strategy is aimed more at delivering the long-term promise of social marketing rather than adding traditional formats that would pay off immediately. Investors and competitors should expect revenue growth deceleration for a year or two and should watch closely to see if Facebook can actually deliver on its potential.

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