The end of TV as we know it

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By Karl-Heinz Land, Chief Evangelist & Senior Vice President Social iCommerce at MicroStrategy

 

Today we really are at the turning point where Television viewing is returning to its original roots and once again becoming a truly social experience. This change is being driven, at least in part, by the exponential growth of second screens (tablets, smartphones) and the new ways that people are using them to consume and interact with media of all types, at all times. Of course this trend will have an impact not only on people's day-to-day lives but also on marketers, technology innovators and business development teams around the globe.

 

Second screen activity has become normal in many households, with viewers able to connect to, discuss and recommend the shows they are viewing through social networks like Facebook and Twitter. The experience of TV-viewing is even more social and dynamic than ever before and we are now on the cusp of a significant shift in the way brands can connect with consumers through the medium of television, using social networks as the gateway.

 

We all know that one of the most powerful features on Facebook is the ‘Like’ button. Through Facebook people are continuously building on their own personal social graph with objects and connections, ultimately behaving as recommenders of brands and products online. Many brands already have a presence on Facebook with a Page but how many marketers have truly tapped into the power of the Open Graph?

 

Consumers are already socialising online whilst jointly watching shows and this is a major opportunity for brands to connect with their customers at the optimal point – the moment when they and their friends are the most engaged with your brand and are primed and ready to connect (and possibly make a purchase). It is a mistake to think that television is just the act of watching on a television set or even on the PC – the whole consumption process can happen anywhere, much like the way we consume information from the internet.

 

More significantly, all these screens are merging, at least from a functional perspective. In the not-so-distant future every screen will likely be able to serve any purpose we wish and work together in harmony to enhance our experience. Business leaders and marketers need to understand and get ahead of this evolution to ensure they are taking full advantage. Futurescape gives an interesting overview on the relationship between Facebook and the TV industry. Retail brands might provide pricing, availability and link to their online store for the dress one of the judges is wearing through a tablet experience as the whole family watches the latest Saturday night talent show on their 42" plasma screen in the lounge.

 

What's more, the more insight a brand can get about their customer behaviour - by integrating with Facebook and using it as the identity platform for the online brand experience - the more they can adapt their own business and marketing activities to drive engagement, sales and success. Tapping into the graph of people's interests and likes on Facebook means you can start to deliver what they want, according to their mood and add real value to the viewing experience. Ultimately this will breed loyalty and preference, for brands and consumers alike as the whole experience adapts to match both the preferences of the masses and the individual at the same time.

 

Social TV will reshape the way we market, how we connect with customers and when and where we sell to them. As Professor Dr. Ralf Kreutzer of the Berlin School of Economics and Law points out social TV could be even more important in reaching certain demographics: “Social TV offers a fantastic opportunity: to win back and attract the younger generation. Based on findings in Germany the average consumer spends 225 minutes watching TV per day - the older they are the more they watch. The 70-plus audience spends around 296 minutes, while younger consumers, between 14 and 19 years old, spend only 104 minutes watching TV per day. Up to now advertisers have lost this channel to reach the customers of the future via TV. Now social TV offers a unique possibility to create additional relevance of TV for this generation. Today, their first screen is a laptop or the smartphone. And the challenge is to define TV as a necessary second screen - with additional relevance for social interaction via Facebook or Twitter. It´s high time that marketers identify and use this window of opportunity - connected with social TV.”

 

The days of one-way marketing are numbered. To me, it is evident that the future of TV is social and I couldn’t agree more with Brian Solis, who is speaking at the upcoming SMiCS event in Amsterdam, as he sums up his vision in his article on the future of TV: “This is a time when bringing to life what’s possible takes imagination, design, scripting, and innovation. We need to raise the bar. The future of TV won’t be driven by a social media strategy. Instead, the future of TV will be driven by innovation and a vision for more meaningful entertainment and engagement. This innovation will in turn inspire new programming, revenue opportunities and ultimately social media strategies.”

 

Join us at SMiCS 2012 this July in Amsterdam to see if you agree (www.smics2012.com) or find us on Facebook to keep up with what’s happening at the event - www.facebook.com/smicsevent

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Facebook shares not for short-term speculators: shareholders should look to the Californian company’s long-term strategies

The whole world is laughing at Facebook’s IPO. Even the German tabloid newspaper “Bild-Zeitung” is talking about a bubble bursting. Thilo Weichert, a data protection expert from Schleswig-Holstein, is sitting pretty, now that his critical prophecies have come true much earlier than even he considered possible. He considers the shares of the Californian company to be overvalued and is also anticipating a collapse of the Facebook business model due to conflicts with data protection laws in Germany and Europe.

Business strategies for social TV and F-commerce

Karl-Heinz Land from Microstrategy is less pessimistic. At the time of the IPO he told the Wall Street Journal in New York that he did not think the share price would go through the roof straight away. After his return to Germany, ‘NeueNachricht’ spoke to Land about his assessment of the development of the Facebook share price:

“I am a committed long-term investor and don’t assume that share prices will double within three days. I explained to the Wall Street Journal that I’d be happy if Facebook can just about hold its value. There was massive hype before the IPO. The valuation of $100 billion is an amazing achievement. So far Facebook has fared well, despite all prophecies of doom. They have taken in a lot of cash – around $16 billion – and can now invest that in new business models. In my view I would say that the company is actually undervalued. And I’m not the only one. Scott Galloway from the New York Stern University arrives at a similar view. Today, he says, all the emphasis is on the business model relating to marketing and advertising. That generates annual sales of around $4 billion for Facebook. If that figure is used as the basis of a stock market valuation, I don’t get a value of $100 billion,” says Land.

However, he continues, Facebook has completely different markets in its sights, for example F-commerce or social commerce. Where this is headed will be the topic of Microstrategy's iCommerce Summit in Amsterdam in July.

Some analysts believe that in five to six years Facebook will be turning over more than $50 billion as a trader through commerce. The market for advertising will also continue to grow. He estimates that this will benefit Facebook to the tune of $10 to $15 billion in the coming years.

“Also, Zuckerberg’s company is moving into the areas of TV and social TV in order to tap into those advertising markets, which generate a total of $200 billion a year. Even if Facebook only secures 10 to 20 percent of this market, it will be adding further sales of around $20 to $40 billion. Then its annual sales in future will be in the region of $90 to $100 billion. This is the precise reason for the high valuation of Facebook,” explains marketing expert Land.

Why speculators have egg on their face

Critics such as data protection expert Weichert, already at loggerheads with the world’s largest social network, are viewing the IPO with ridicule and malevolent glee. Shortly before the collapse of the new economy twelve years ago, the ‘Bild-Zeitung’ newspaper recommended buying shares.

“If they issue a recommendation to buy, you should do the opposite. Now the tabloid is saying the contrary and is already evaluating the IPO as a flop. Of course, that’s nonsense. The exact opposite is the case. Facebook filled its coffers, which is good for the shareholders. Now the company can sustainably develop its business strategy. Mark Zuckerberg said from the beginning that he wanted to float the company in order to guarantee its ongoing development as a social network. That is why the law suits filed by shareholders due to the fall in the share price in recent days are not appropriate. Zuckerberg himself warned against the hype and made clear reference to the long-term direction of his company just days before the flotation. The short-term speculators now have egg on their face. Those who bought shares for $40 have had a rude awakening. Facebook is no a speculative bet to make a quick buck. The drop in price is a good option to buy shares with a long-term view,” says Land.

A similar thing happened when Google was floated. There, too, the analysts advised against a purchase and warned against the ‘Google gaga effect’. Since then the value of Google shares has increased fivefold. However, that did not happen overnight and it took time.

Brand companies are looking to Facebook’s ecosystem

In the view of Scott Galloway, Facebook could become one of the most valuable brands in the world. He bases this on the amount of time that users today spend on Facebook. Of the total time budget for social networks, 90 percent is spent on Facebook. The other networks share the remaining 10 percent.

“Two weeks ago Facebook launched its own App Center. Companies such as Coca Cola, Mercedes, Nike and Adidas and all the world’s other big brands are starting to develop apps for the Facebook ecosystem. There are companies like Metro who dabbled in the Internet ten or 15 years ago and then stopped. Today many companies see that as a mistake because consumers are increasingly turning away from conventional retailers. This bread-and-butter business is falling away. Organizations are making similar mistakes with social networks. Those that don’t have a presence on Facebook are facing turbulent times,” says Land.

He says that a loyal Facebook customer generates a much higher volume of sales for a company than normal customers do. In some cases the sales generated by Facebook fans is double. Further, he continues, the paradigm on the Web is changing.

“It used to be all about the search. With Facebook the paradigm is changing to the personalization of services. I know what you like, I know your preferences and can serve you as a customer like they used to in the old grocery stores. Facebook is developing into a huge database of preferences and enables services to be provided as if by a concierge in the hotel,” Land summarizes.

His outlook is that the Facebook share price will stabilize at $25 to $30. At this level an investment with a long-term perspective would be lucrative, he believes.

This post is brought to you by a Report from the magazine “NeueNachricht”

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SMICS 2012 Amsterdam - Agenda

Day 1: Tuesday, July 10, 2012

10.14 - 10.30

Welcome – Conny Czymoch, moderator and anchorwoman of Phoenix TV

10.30 - 11.00

Social-Local-Mobile – How Data Is Changing Everything – Karl-Heinz Land, Chief Evangelist & Senior Vice President Social iCommerce, MicroStrategy

11.00 - 11.45

The End of Business as Usual and the Beginning of a New Era of Relevance – Brian Solis, Author and Principal Analyst Altimeter Group

11.45 - 12.15

Welcome to the real business: Management, Utilization and Integration of Social Media for Businesses – Prof. Peter Gentsch, Chief Analyst, Business Intelligence Group

12.15 - 13.15

Lunch and networking

13.15 - 14.00

Mobile Wave and the Impact on Our Businesses – Michael J. Saylor, CEO, MicroStrategy

14.00 - 14.45

Best Practice: 0 or 1 – Winners & Losers in a Digital World – Scott Galloway, CEO, L2 Think Tank

14.45 - 15.15

Coffee and networking

15.15 - 16.00

FC Barcelona – Best Practice in Sports Marketing, Merchandising and Facebook Commerce – Fernando Gonzalez, Senior Director Social Intelligence, MicroStrategy

16.00 - 16.40

Industry Cases – Best Practice TED-Style Presentation: Dennis Wedderkop (Vodafone/EOL), Michael Buck (DELL), Peter Mann (CDS/ UK Army), Ulf Valentin (HRS)

16.40 - 17.40

Panel Discussion: Brian Solis (Altimeter Group), Scott Galloway (L2), Prof. Peter Gentsch (Business Intelligence Group), Dennis Wedderkop(Vodafone/EOL), Michael J. Saylor (MicroStrategy), Michael Buck (DELL),Peter Mann (CDS/UK Army), Ulf Valentin (HRS), presenter: Karl-Heinz Land

17.40 - 18.15

Visionary Keynote: Social TV – The End of Television as We Know It? –Marco Seiler, CEO & founder of SYZYGY, and Ralf Rottmann, CTO & Managing Partner at GrandCentrix

21.00

MicroStrategy World 2012 Amsterdam Conference Party

Day 2: Wednesday, July 11, 2012

08.16 - 09.00

Breakfast Session: Social Network User Data – Legal Dos and Don’ts –Stefan C. Schicker, LL.M., Law Professional, SKW Schwarz Rechtsanwälte

09.00 - 09.45

Big Ideas and Brand Building: Storytelling in a Completely New Context –Andreas Trautmann, CEO McCann Worldgroup, and Matias Palm Jensen, Chief Innovation Officer, McCann-Erickson Europe

09.45 - 10.30

Standing Up and Standing Out – Martha Rogers, Author and Founding Partner of Peppers & Rogers

10.30 - 11.00

Coffee and networking

11.00 - 11.15

The NEXT Survey – Effective Strategies for a Social Media World – Dr. Alexander Rossmann, Research Associate, Institute of Marketing, University of St. Gallen

11.15 - 11.45

Marketing as a Service: Privacy and One-to-One Solutions – Two Sides of the Same Coin – Prof. Dr. Ralf T. Kreutzer, Berlin School of Economics and Law

11.45 - 12.30

5 Steps to Success – How to Integrate Facebook Data – Roland Fiege, Senior Director of Social Media, MicroStrategy

12.30 - 13.15

Panel Discussion: Stefan C. Schicker, Andreas Trautmann (UM), Martha Rogers (Peppers & Rogers), Dr. Alexander Rossmann (University of St. Gallen), Prof. Dr. Ralf T. Kreutzer (Berlin School of Economics and Law),Roland Fiege (MicroStrategy), presenter: Karl-Heinz Land

13.15 - 14.15

Lunch and networking

14.15 - 15.30

Workshops

14.15 - 18.00

Social Media Excellence Circle (SME ) + Thursday 12.07. 09.00 - 13.00

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SMICS 2012 Amsterdam - A New World of Marketing

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Welcome to a new world of Marketing!

Discover how social media is heralding a new era in marketing. Discover at first hand how marketing is becoming a service and how you can already enjoy the benefits of this today. The future of marketing starts here! At SMICS 2012! (http://www.smics2012.com) 

Social Media is not an evolution for marketing and sales. It’s a revolution. We all know the massive numbers around Facebook’s ever-growing usage, but the challenge is now to turn conversations into business. Your fans do not necessarily want to see ads; they want valuable and personalized content, including offers and a VIP experience. Only if you know your customers well can you deliver relevant offers, and only if your customers trust you will they engage with your business.

The question is not whether or not to implement social media into your business strategy, the question is how well you will do so. After a successful SMICS event in 2011 we are again hosting Europe’s unique Social Media Marketing and iCommerce Summit to help you to kick off your corporate social media strategy NOW. You will meet visionaries and thought leaders as well as practitioners who share their experiences on how to monetize social media.

We will present exclusive industry case studies and are happy to discuss your specific questions regarding social media, Facebook fan analytics and segmentation. Alongside the visionaries, we have some of the world’s leading social media marketers joining us, so at the same event you’ll be able to see state-of-the art developments that will help you turn social media from a cost to a profit center. Come and join us on July 10 + 11 at SMICS 2012 in Amsterdam to meet and discuss with some of the most skilled and experienced professionals in the industry.

Please find here the agenda: http://www.microstrategy.com/training-events/events/smics/#agenda

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