Infinite Path » Industry News

Can T-Mobile’s Angry Birds ad really be considered a hit?

admin — Fri, 08 Jul 2011 11:54:24 +0000

There’s no doubt a successful viral ad can give a brand a buzz in a way that other channels can’t, but can they ever be anything more than gimmicks?

You get the impression that T-Mobile certainly think so as they continue push their Life’s For Sharing campaign down the throats of anyone who has a TV, computer or mobile phone. Having used the now hackneyed flashmob to great effect, their latest ad saw the company set up a real-life version of Angry Birds in Barcelona and then filmed the results as a group of unfeasibly attractive young people, who just happened to be passing by, launched (fake) birds at (also fake) pigs.

It was a huge success and according to the Internet Advertising Bureau was shared 438,246 times, hardly surprising when you consider how popular Angry Birds is. But did the ad really create any extra value for T-Mobile, or was it just passed on with a simple message “isn’t this cool?”? Brand recognition is obviously the aim here, but given the firm was recently widely mocked for the patronising way it communicated a change to existing users’ terms of use that recognition might not necessarily be positive.

Further clues as to the actual effectiveness of viral ads can be taken from last month’s second most successful offering, which came from the English National Opera. It took a clever idea – the conceit being what would happen if you were to interact with the real world the same way you interact with things online – and executed it well. It was shared 64,630 times, a long way behind T-Mobile but still a respectable figure. However, it’s highly unlikely anyone who shared the ENO ad then went on to buy a ticket for Two Boys, the piece it was promoting, rendering the exercise pointless. Opera, for reasons far too complex to examine here, is an elitist pastime and it’s going to take more than a good viral ad to break the long established demographic barriers that exist.

Clearly there’s an element of gimmickry about viral ads, but the most important thing to remember about them is that they may not always do what you want and if that happens you’re wasting your money. Viral ads may look flashy, but there can be much more effective ways of using your online marketing spend.

You can watch the T-Mobile ad here…

And the ENO ad here…

Google+ kills real time search – Twitter and paywalls bear the brunt

admin — Tue, 05 Jul 2011 15:59:53 +0000

It’s not something that would immediately jump out at you, but Google has made a significant change to the way it presents search engine results by killing off its real time function.

The service, which pulled information from a range of social networking sites, most notably Twitter, offered searchers a constantly updating stream of information – anyone who has ever searched for information on a breaking news story on the main Google page will have seen it in action.

Its demise seems to be down to two factors – the culmination of a contract with Twitter which allowed tweets to be used in this manner and the search giant’s plans to integrate its new social network, Google+, into a revamped version of the tool, which is set to be launched at an unspecified point in the future.

The lack of real time search won’t be a huge loss for average searchers – the various different search functions it offers mean relevant information will still be at their finger tips. However, it isn’t the best news for Twitter as it has lost what would have undoubtedly been a significant source of high-quality traffic. Tweets, as long as they are public, will still be indexed but being at the top of Google on breaking news stories looks like a thing of the past for Twitter and as everyone knows being at the top of a results page is crucial.

It doesn’t take too much imagination to see how this will damage the microblogging site – exposure levels will fall significantly as people who may have never considered signing up will no longer have it thrust in their face when using the world’s biggest search engine. Fewer people click through, fewer people sign up. It’s clear that Google, which is looking to make serious inroads into the social networking market, wasn’t exactly enamoured with the idea of sending people to one of its rivals while it attempts to build up its own user base.

Which brings us to the second group of people who will suffer from this move – publications that operate behind a paywall and those who write for them. The nature of a paywall is such that an article’s exposure to the wider internet is pretty much non-existent. Stories aren’t indexed and many of those operating with this model have also taken a stand against aggregators such as NewsNow, with the obvious consequences.

Twitter is a neat way round this. Writers working for subscription-only digital services can use the service to promote their material while giving people some idea what they’re going to be getting. Converting followers into subscriptions is never going to be easy, but at least it ensures they’re not operating in a world of total digital anonymity. Google’s real time search allowed them to have their cake and eat it. A Times journalist, for example, could fire off a piece about a breaking news story, tweet a brief description with a link and then expect to see his message floating around the top of Google despite the fact the publication itself isn’t indexed. With the death of real time search that option is no longer available to them, meaning Twitter is a (slightly) less attractive proposition for journalists than it was.

It’s tempting to view this move by Google as it sticking two fingers up at News International and other corporations who have decided they want as little as possible to do with the search engine, but it’s far more likely to be another move designed to hurt Twitter and other social networking sites.

Once real time search is resurrected with Google+ as its driving force it will be able to offer journalists and celebrities the very tempting incentive of once again seeing their messages appearing at the top of a Google results page just by joining a different social network site. If that happens, it’s not a massive leap to suggest a significant number of fans will follow suit as they look to keep tabs on the people who interest them. Is it really giving the search giant too much credit to suggest that this thought has played at least some role in the decision to reshape its real time feature?

As Facebook’s triumph over MySpace shows most people are happy enough with one social networking profile that does everything they want and Google+ is an obvious attempt to combine the plus points of Facebook and Twitter while addressing their downsides. However, social networks are nothing without people and Google+ needs to work hard to get the substantial number of users which push it past the “nice idea stage”, something the firm has failed to do with offerings including Buzz. If Facebook and Twitter can find the right response to this new rival Google+ may be left on the sidelines, no matter how many clever plans are hatched.

Groupon makes a profit (If you ignore its $179m online marketing spend)

admin — Fri, 03 Jun 2011 15:33:09 +0000

It’s a scene that will be familiar in any student house. After painstaking hours of attempting to draw up a balanced budget it becomes clear that no matter how long you look at the numbers you’re going to end up in the red. With a weary sigh, you get your coat head to the nearest cash point machine, withdraw all the money you’d earmarked for textbooks, clothes and food, concluded it will all work out somehow and head off on the lash. Acceptable behaviour for an undergraduate perhaps, but when an international company starts behaving in a similar way it’s bound to raise a few eyebrows.

To be fair to Groupon, its recent behaviour has been nowhere near as reckless as the example above, but its $81 million “profit” for the first quarter of 2011 should be viewed as extremely surprising – mainly because according to Generally Accepted Accounting Principles it actually made a loss of $103 million over that period.

So how does a company magic $184 million out of thin air? The answer is, of course, it doesn’t. As the FT’s John Gapper points out in his blog, the Groupon “profit” only appears in the company’s “adjusted consolidated segment operating income”. If you’ve been blinded by jargon, this may still seem like fantastic news. However, as soon as you realise Groupon arrives at this figure by knocking off the cost of stock-based compensation and, most importantly, its online marketing spend eyebrows start to arch.

Although it’s impossible to miss Groupon’s online presence it may still be something of a shock to learn that it spent $179 million internet advertising last year a whopping 97 per cent of the difference between its GAAP loss and its self-reported “profit”.

Of course, given the fact it has built up such a substantial user base in the last few years it may see these costs, perhaps even correctly, as sizeable expenditures which are unlikely to be repeated on such a scale again. Is it really pushing the bounds of imagination to suggest Groupon won’t need to spend nearly as much on online marketing now it has 83 million registered users? Obviously not. However, that still doesn’t make the company profitable and pretending that you haven’t spent money will never change the fact you have.

Given that Groupon is planning to float on the stock exchange this sort of news is likely to heighten concerns that the internet sector as a whole is heading for a fall. It will certainly be interesting see how investors react when the company does go public.

That said, even a rapturous reception would only serve to increase the worries of some observers. After all, unprofitable firms entering the stock market to massive fanfare has strong echoes of the dotcom crash.

Google, Microsoft, Apple, the fog of war and a new dotcom bubble

admin — Thu, 12 May 2011 13:56:35 +0000

It’s not often one has the opportunity to begin an article about developments in the online world using a quote from a Prussian military analyst without challenging the inhabitants of Private Eye’s Pseuds Corner for sheer pomposity.

However, every now and then a little historical perspective does everyone good and so, briefly, the stage is handed to Carl von Clausewitz who, in his 1832 best seller Vom Kriege, wrote: “The great uncertainty of all data in war is a peculiar difficulty, because all action must, to a certain extent, be planned in a mere twilight, which in addition not infrequently – like the effect of a fog or moonshine – gives to things exaggerated dimensions and unnatural appearance.”

This passage ultimately coined the phrase “the fog of war” – a term that essentially means because one side can never know exactly what the other is up to it’s much harder to kill them in an efficient manner. Former US Secretary of Defense Donald Rumsfeld would recognise this as “known unknowns”, while middle-aged gamers would recognise it as the reason they keep getting killed by 12-year-olds on Call of Duty.

But what does this have to do with recent moves by some of the world’s largest tech companies? Well, it’s fair to say that although Apple, Google and Microsoft will have some idea of what their competitors are up to, it’s highly unlikely they will know the full picture – the fog of corporate war as it were.

Of course, the uncertainty faced by military commanders can lead them to make decisions which result in the deaths of hundreds, if not thousands, of people so the analogy can never be a perfect one. The stakes the tech giants are playing with aren’t quite so high, but the capacity for mistakes is still there. With Apple, Google and Microsoft all keen to muscle in on their rivals’ territories without being able to fully grasp what their competitors are up to the possibility of panicking and making a tremendous error is very real.

Take Microsoft’s $8.5 billion acquisition of Skype. Obviously it can’t be branded a mistake just yet, but it’s difficult to see how the software giant hopes to fully monetise a service which makes around ten pence per user. Add to this the fact some sources have suggested Microsoft ended up paying massively over the odds for Skype because of rumours Facebook was going to mount a bid – when in reality, so the story goes, the social networking site had no interest in the company – and you can see just how damaging the fog of war can be.

Google, meanwhile, has announced the launch of the first laptops to be powered by its Chromebook operating system, an obvious attempt to eat into the market share currently enjoyed by Windows. Again, a bold move and one which has tremendous potential to backfire, not least because the laptops will be largely cloud-based and it remains to be seen how much appetite there is for devices which come with little internal storage. (The problems faced by the PlayStation Network in recent weeks show that even the largest companies aren’t safe from determined hackers and this is bound to be a concern for many potential Chromebook users).

Of course, as things stand both Microsoft and Google can afford to take a huge hit on their respective new projects and walk away relatively unscathed, but with the value of tech-related deals in 2011 now hitting $85 billion, its highest level since the run up to the dotcom crash, there are bound to be one or two twitchy executives out there. After all, $85 billion is an awful lot of money.

So then, Major General Von Clausewitz, what was that you were saying about things appearing to have “exaggerated dimensions”?

Facebook and Skype? People need to think bigger than just better instant messaging

admin — Thu, 05 May 2011 15:50:59 +0000

Facebook and Skype. On the face of it, it looks like a match made in heaven. As anyone who has used the social networking site’s instant messaging service will know it’s frustrating at best, so it seems buying a company which has already made significant strides in the field would be the next logical step. That is until you think about things a little longer.

Firstly, you have to wonder why Mark Zuckerberg would want to, as some are suggesting, undertake a project which would essentially see Skype integrated into Facebook. What would be the point? Even if he is desperate to improve Facebook’s IM service buying a whole company to do so seems a little like overkill. Besides, if Zuckerberg did take control of Skype there might not actually be much point in integrating the two to such an extent. The deal would, you’d hope, make so easy to transfer contact details between a user’s Facebook and Skype accounts it would seem sensible to keep the two offerings separate to ensure they both do what they’re supposed to as well as possible.

Nor is it likely acquiring Skype would lead to a boost in the number of people using Facebook overnight. Both services are reported to have in excess of 500 million users, but it seems reasonable to suggest the fact they appeal to similar demographics will mean the vast majority of people are already using both.

So it’s no to improving Facebook IM, and no to expanding the site’s user base. So just why would Zuckerberg be interested in Skype? Perhaps the answer can be found in your pocket.

In recent months Facebook, along with a number of other major players, has increasingly been turning its attention to the possibilities held by mobile phones and rumours have been rife that Zuckerberg is planning a major move relating to the sector.

Not that the company has rested on its laurels when it comes to the field. The chances are that if you’re on Facebook and have a smartphone, you’ve got the Facebook app installed. And it’s here where Skype could be a game changer. Right now, the Facebook app allows you to do little more than “like” things, update your status and comment on the activity of others. It’s hardly cutting edge. However, imagine what would happen if Skype was integrated into the app. Suddenly you’d be able to make a free call to any of your Facebook contacts (assuming they also had the programme installed). By acquiring Skype and using it in this manner Zuckerberg would secure a major foothold in the world of mobile telephony by doing relatively little.

If Facebook is able to get its hands on Skype, you can expect the social networking site to do much, much more than jazz up its instant messaging service.

BlackBerry and Bing join forces to take on the might of Apple and Google

admin — Wed, 04 May 2011 13:34:10 +0000

It’s not a pleasant analogy, nor a particularly original one but it seems, much like two people left dancing alone when the nightclub lights go up, BlackBerry and Bing have lunged at one another based on a sense of urgent desperateness rather than any actual desire to be together.

A cruel analysis of the situation would sum up the move as the smartphone for people who don’t like technology joining forces with the search engine for people who don’t like relevant results. Of course, that’s overegging the pudding somewhat. Bing and BlackBerry might not be everyone’s cup of tea but obviously they do more than enough to hold on to a substantial user base, although even a casual assessment of the situation demonstrates the major challenges they face just to stand still in a rapidly changing marketplace.

The deal seems to have come about because Research In Motion, the manufacturer of BlackBerry devices, are desperate to gain ground in the emerging mobile maps and search business – two areas that are helping drive the growth in smartphone usage. With this in mind, the first question that has to be asked is “why not Google?” After all, it’s by far the most popular search engine in the world and as such seems to be the logical option for any firm looking to achieve the goals RIM has for BlackBerry.

Although the details of the arrangement between RIM and Microsoft, Bing’s parent company, aren’t known it seems probable that brand identity played at least some role in the decision to keep Google away from BlackBerry. According to Microsoft chief executive Steve Ballmer, Bing will be “deeply integrated at the BlackBerry operating system level” on the new smartphones. If RIM had struck such a deal with Google it doesn’t take a huge leap of imagination to picture a scenario in which the arrangement slowly started to impact on BlackBerry as a brand.

It’s possible that RIM may have ultimately embraced these changes and gone all the way with Google – developing BlackBerry Powered by Android or something similar. However, even if this did eventually happen it seems likely the company would have lost a significant number of users through Google’s involvement by the time they got around to making the switch.

Why? Well, imagine you’re a BlackBerry user and you get one of RIM’s shiny new smartphones with mobile search powered by Google and you like it. A lot. So much so, in fact, that you start to wonder how much better things would be if you just went out and got yourself an Android phone. When your contract expires 18 months later that’s exactly what you do and there’s one fewer BlackBerry user in the world. RIM, in effect, would be offering its customers a test drive of a competitor’s product and, sensibly, this is something it seems keen to avoid.

Yes, Microsoft has its own mobile operating system but it’s nowhere near as established a brand as Android, and it seems likely any of the software giant’s products that make it on to RIM devices will be labelled as Bing, vastly reducing the chances that the BlackBerry will lose its identity.

The deal between RIM and Bing, despite offering many benefits for both parties, is far from ideal but it’s almost impossible to find an answer to the question “what choice did they have?” Apple has the market for apps sown up, while Google is tightening its grip on mobile search and mobile operating systems.

With their competitors edging away from them, clearly both Bing and RIM thought they had to do something, but as with our cliched nightclub couple it’s hard to picture the result of this unexpected union being much more than a clumsy, awkward one night stand.

Are big businesses missing out by putting the iPhone above Google Android?

admin — Tue, 01 Feb 2011 10:28:56 +0000

The iPhone may be the brand du jour when it comes to fashionable smartphones, but by ignoring Google’s Android operating system businesses could be missing out on huge numbers of potential customers.

Figures released by Canalys show that Android became the world’s most popular smartphone platform in the final quarter of last year, and although firms shouldn’t feel the need to start dishing out the handsets to staff, they should ensure they’re taking advantage of the opportunities it provides them.

In most cases this means apps, but the iPhone-centric view many organisations have taken of the smartphone market means they are failing to exploit their potential customer base. With 33 million Android phones sold in the last three months of 2010, roughly a third of the market, you’d expect big businesses to be keen to embrace the platform.

Take Tesco for example. It’s hard to avoid their TV ads promoting their iPhone app which allows people to scan barcordes to generate a shopping list and then order items. A great idea, which makes it even more shocking they are yet to launch an Android version.

It seems they’re working on it. Nick Lansley, who blogs on the supermarket’s technological endeavours, has said as much, but that was back in September and four months down the line there’s no indication of when it will be launched. Meanwhile, Ocado, an online supermarket, does have an Android app and is steadily growing in popularity and will no doubt be over the moon that Tesco is yet to try and squeeze its market share.

By focusing on the iPhone in an attempt to appear cutting edge, firms could be missing out on millions of potential customers, and you don’t need an app to tell you just how stupid that is.

Is it now Facebook v Google v Groupon?

admin — Fri, 28 Jan 2011 15:27:59 +0000

It seems that the powers that be at Facebook have decided that anything Google can do they can do better, with the social networking website outlining plans to enter into the emerging social buying market.

Earlier this month, Google revealed that it was set to go head-to-head with Groupon, the most successful firm in the sector, and now it looks like Facebook has decided to turn proceedings into what wrestling fans would probably call a triple threat match.

It’s a move that certainly seems to make sense – social buying is all about linking people with similar tastes and then getting them to buy into a special offer with a local company. As anyone who has used Facebook will know, the format of the site invites people to submit as much information as they want, so from a data and user point of view Mark Zuckerburg’s firm certainly seems to have a solid base.

People seem to like it too. Forbes recently reported that Deb Liu, Facebook’s head of commerce product marketing, had revealed that half of test users chose to share news of a purchase with friends via their news feeds.
That said, the “Buy With Friends” feature won’t start life as a direct competitor to Groupon. Instead, it will focus on social gaming and virtual goods via the credits system which is to be introduced soon. Still it seems unthinkable that, if it proved to be a success, Facebook wouldn’t expand it to include real-life goods and services.

However, the move into full on social buying isn’t guaranteed to be as smooth as one may imagine, with the issue of advertising looking like a potential stumbling block. Anyone who has used the social networking site in recent months will have no doubt noticed a significant number of Groupon banners brightening up the place, but would the two firms still want to carry on this relationship if they became director competitors?

Indeed, would other firms get the hump if Buy With Friends started offering discounts for real-world goods and services? After all, why would a mobile phone company want to stump up for a banner ad if a user’s news feed was packed with special offers telling them how to get the same phone for less with one of its rivals?

Facebook could be a serious contender in the social buying market, but unless it goes about things carefully the company could end up losing an awful lot of friends.

Now it’s Google vs Groupon

admin — Fri, 21 Jan 2011 14:11:45 +0000

Not many firms turn down an offer from Google, and not many firms turn down a bid of $6 billion to buy them, but that’s exactly what Groupon did and it seems the social buying site may live to regret that decision.

The search engine giant made the offer towards the end of last year, but the powers that be at Groupon decided it the best course of action would be to remain independent. Now Google has revealed that it is to launch its own group buying site, meaning it will be going head-to-head with the company it tried to snap up.

Operating on the same model to Groupon and other sites such as Groupola, Google Offers will offer deals on services and products from local businesses and will incorporate social networking tools from Twitter and Facebook.
Groupon’s owners are unlikely to panic at the news of Google’s entry to their market, after all their firm was named the fastest growing company of all time by Forbes in 2010. However, Google Offers will no doubt give them a lot to think about.

As it stands, Groupon is well-established and is by far the most successful social buying site around, but Google will be confident of closing that gap quickly. The firm has been putting a lot of emphasis on local search lately, and this will no doubt pay dividends when it comes to Google Offers. Its status as a high-profile brand and its presence across numerous markets will also be a massive bonus.

Indeed, the growing popularity of Android, the firm’s smartphone operating system, could provide Google Offers with hundreds of thousands of users in a very short space of time. According to Gartner 20.5 million Android phones were sold in the third quarter of 2010. If they’d shipped with a Google Offers app preinstalled, that would have been 20.5 million people who had the service at their finger tips.

The worst case scenario for Groupon would see them go the same way as Friendster, the early social networking site that rejected a $30 million bid from Google in 2003 before sliding into obscurity.
On the other hand, Google’s game plan of using its size and massive resources to expand into and dominate new sectors can’t go unchecked forever.

Groupon fail highlights the problems it faces

admin — Thu, 20 Jan 2011 14:43:52 +0000

It’s almost inevitable that as a company’s profile grows, so do the apparent size of its blunders and Groupon is an excellent case in point.

In a few months the site, which allows people to club together to enjoy discounts on a range of goods and services, has shot from obscurity to become a household name. Anyone who has surfed the web in the last will have found it almost impossible to avoid banners promoting the company, although it’s still something of a surprise to learn it now owns the internet’s largest ad network.

But its rapid expansion hasn’t been trouble free and the experience of 500 customers in Japan highlights just how badly thing can go wrong. These customers had signed up to buy osechi – a traditional meal eaten at New Year which should consist of a variety of dishes presented in an attractive manner.

What they got wasn’t up to scratch, with many people complaining that the meals were in a “terrible condition”, while others arrived late. The problem arose because Bird Cafe, the restaurant that actually supplied the meals, was overwhelmed by demand and couldn’t cope.

But, perhaps unsurprisingly, it’s not the eatery’s reputation that has taken a hit in Japan, it’s Groupon’s. As in now common, disgruntled customers vented their anger on the internet and in some cases even posted images of the meals.

The firm’s CEO, Andrew Mason, responded by apologising in a YouTube video, but even though the company is teaching capacity planning to the businesses that sell goods through it, it’s hard to see how future problems can be avoided.

After all, although it promotes the special offers Groupon has no control over what other businesses ultimately do and how they treat customers, but when things go wrong it is the US firms that consistently takes the flack, mainly because its profile is so much higher than many of the firms it works with. No one is going to finish reading this article and think any less of Bird Cafe (or indeed remember its name), but their views on Groupon may have been influenced by the restaurant’s cack-handed actions.

No doubt Groupon has countless happy customers, but stories of happy customers don’t usually end up spreading across the internet like wildfire. Groupon seems to be going places, but it remains to be seen if it can deal with high-profile spells of bad publicity generated by the failings of others.