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Twitter’s demise would cost marketers an important, useful channel
Looking at Twitter’s financials, it is difficult to see a way for it to survive. The company was in bad financial condition long before Elon Musk bought it, only turning a profit twice in the last decade. Musk’s purchase has made its finances even worse by adding debt and scaring off revenue. For brands Twitter has provided a unique, immediate channel for connecting with consumers. Many companies have boosted their reputation for customer service by rapid response to complaints. Others have broadened their brand values in radical, unexpected and positive ways. Take Steakumms, for example. It has gone from a thin meat product to a substantial voice on difficult, important issues. So, if Twitter does implode, marketers will lose a significant, useful tool. But agile customer service and/or significant contributions to public debates, while raising brand profiles, isn’t advertising and doesn’t make Twitter any money. Trouble from the beginning The fact is the company’s problem wasn’t something Musk or anyone else could solve. It has been evident since Twitter was founded in 2003. To quote historian/humorist Will Cuppy: “The Dodo never had a chance. He seems to have been invented for the sole purpose of becoming extinct.” That problem: Twitter can draw in users, but it can’t make money off them. Worldwide it’s the 10th most popular social media site, with 217 million active users per month. In the U.S. it’s the 5th most popular social media site, with 41.8% of all adult users — only .4% behind fourth place TikTok. While its number of users is far, far behind Facebook’s, so is every other social media platform. The fact that it is the fourth best social media platform for average revenue per user would be good news if it weren’t for the gap between third and fourth place. TikTok $46.86Facebook $30.75LinkedIn $25.97Twitter $9.39 Twitter would have been great as an app or a feature for a larger platform. Google understood that and offered $10 billion for the company in 2010. But, despite earnings to the contrary, its executives continued to believe it could flourish on its own — until Mr. Musk made them an offer they couldn’t refuse. Why did he buy it? It is difficult to believe someone could make a $44 billion impulse purchase, but it is hard to see this as anything else. That is the amount Musk paid for Twitter and double its estimated fair market value. The only comparable tech deal is Time Warner spending $100 billion to merge with AOL more than two decades ago. That did not end well either. This would explain suing to get out of the deal. In April, when Musk made his offer, the economy and social media companies were doing very well. But even then many analysts said it would be difficult for Twitter to ever earn back the purchase price. Musk himself has since said he overpaid for it. A very high price is paid Just the offer was enough to hurt Twitter’s prospects. Moody’s and S&P Global both immediately downgraded its credit rating to junk status. They believed Musk’s divisive, controversial persona would make advertisers nervous and they were right. Dig deeper: FTC hits Twitter with snark and $150 million fine for allegedly selling security data to advertisers According to advertising intelligence platform MediaRadar, the number of advertisers spending on Twitter dropped from almost 4,000 in May to 2,300 in August. Since then numerous agencies have said they are advising clients not to advertise on Twitter because of brand safety risks. Musk has tried to blame this exodus on pressure from the left. However, this was immediately debunked on Twitter by MMA Global president Lou Paskalis who was, as they say, in the room where it happened. In addition to his notoriety, Musk added a lot of debt to Twitter and that will likely prove the final nail in the coffin. Last year, Twitter’s interest expense was about $50 million. With the new debt taken on in the deal, that will now balloon to about $1 billion a year. Yet the company’s operations last year generated about $630 million in cash flow to meet its financial obligations. Right now, Twitter is generating less money per year than what it owes its lenders. Musk is using a kitchen sink approach to increasing revenues and, unfortunately, that is not working out. Consider the plan to charge a monthly fee for the blue verification check. If it’s the case that users will be allowed to self-authenticate in order to receive the check, the value of the check becomes questionable. As was demonstrated when Musk cracked down on the countless blue-checked users who changed their display names to Elon Musk. What will be lost Twitter has always punched above its weight in the media. Journalists love it because it is very much a real-time medium. When news breaks Twitter is a firehose of information and misinformation. It is also a fast, easy (and some say lazy) way for reporters to get public reaction quotes. Despite all of Twitter’s public and political problems over the years, many users — including brands — have found and/or created communities on it. Those kind of connections are hard to replace.
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How marketing campaigns can go wrong
It was supposed to be a public service announcement, promoting an app to discourage binge drinking on campus. It helped college students who drank too much to cut back. It also encouraged a subset of college students to drink more. So what went wrong? To Dr. Brian Cugelman, a senior behavioral scientist at the Toronto-based Behavioral Design Academy, “what went wrong” here is a good example of a “backfire” — an ad campaign that delivers an unintended consequence, sometimes bad. Learning from failure is a good thing, but that won’t work if a mistake is swept under the rug. Cugelman had to approach marketers who made mistakes in order to document and study them. He could get the data, provided the marketers were not named, he said. Nobody wants to admit they made a mistake, especially if they work in an office with a blame culture. That made researching marketing backfires a challenge.
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Should CMOs be political? Lessons from Nike, Delta, Burger King and others
Switzerland is known for its beautiful hills, delicious chocolate and world-class banking system. But 80 years ago, they were also known for their notorious neutrality. In both World War I and World War II, Switzerland refused to join any side. They weren’t naive. They built an impressive military and moved into defensive positions. However, they never engaged in war. They maintain friendly relationships with all European nations throughout both conflicts. Switzerland gives marketing executives a few lessons on how to handle difficult situations. Executives are confronted with a need to respond to current affairs, and often to tricky political events. CMOs and marketing leaders need to make sense of their stances. It’s not just about politics. There are plenty of conversations today about values, commitment to popular causes such as climate change and direct action in response to government actions. Marketing leaders constantly tell me how difficult it can be to tackle these decisions. In this post, I want to share a few lessons on how marketing leaders and CMOs can handle these situations. Remember, you always have a choice Let’s start the conversation by reminding yourself that you always have a choice. Nike may choose to release ads supporting Black Lives Matter, but it doesn’t mean every company should necessarily follow their lead. Marketing teams can feel a suffocating desire to respond to the events around them, but sometimes, the right answer is to be silent. The first responsibility of a business is to its shareholders and customers — marketing is meant to support the business. In some cases, companies can help the business by taking clear stances, but that’s not always the case. Unlike individuals, it’s not just a matter of what is ethically right or aligned to your individual beliefs. It’s a question of what is right for the business. The fundamentals of good marketing haven’t changed much in recent times. Marketing is still built on strong brands, clear messaging and tangible value for customers. Choosing to layer on values that align with certain causes or initiatives is an extra choice that not every company has to make. For brands, the biggest risk isn’t staying on the sidelines; it’s hypocrisy. Consumers can tell when a brand is being honest. I am reminded of pride parades that corporate brands have completely taken over. At this point, it feels like a checklist item for them. Consumers notice these actions. Wading into controversial topics can be tricky and unpredictable. Marketing leaders must act like doctors, remembering their first rule is to “do no harm.” Even large companies like Pepsi can make serious blunders — such as the Kendall Jenner campaign that was meant to promote a message of inclusion but created a completely different response. In those moments where you feel the pressure to respond, remember that you have a choice.
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Customer experience for the modern marketer
As technology continues to evolve, the question of how to craft a meaningful customer experience (CX) remains constant. Successful brands have customer experience almost down to a science, but what’s the actual formula? With so many moving pieces, it can be difficult to get your CX down to a simple definition. What is customer experience CX is about the relationship between a business and its customers. It is made up of both quantitative and qualitative measures. Quantitative measures refer to the aspects you can measure numerically throughout a customer’s interactions with your brand (i.e., number of products purchased, average order value, etc.), while quantitative measures include customer perceptions and feelings (i.e., level of satisfaction, how easy it was to complete the task). These quantitative and qualitative measures are defined as customers move through their journey with your brand — from awareness of your product/service through consideration, product purchase, repurchase, and even joining your loyalty program. For example, my glass-topped patio table was damaged by a storm so I decided to purchase a new table. In searching online, I found a product I was interested in and compared prices with similar items on the market (neutral perception). Once I located the best product for me at the price I was willing to pay, I purchased the table through the website of a big box retailer (positive perception). The retailer sent me an email confirming the purchase and ship date (positive perception). The ship date arrived, but the patio table didn’t (negative perception). It was late by four days (quantitative metric). And, in those four days, I received multiple emails and satisfaction surveys that started with, “It’s Time – Your Order Has Arrived” (negative perception). Ultimately, my overall perception of the purchase journey was negative, and it will continue to impact my future decisions. Though I have had positive purchase experiences with this retailer in the past, I will not order again in the future. Customer experience vs. digital experience With more and more companies investing in digital there is confusion between CX and digital experience (DX). The best way to think about the two is that CX is defined by how customers perceive their interactions with your company while DX is defined by how customers perceive their interactions with your company specifically across digital channels. In this way DX is a subset, albeit a very important and growing subset, of CX. One of the most common misperceptions many leaders have is that focusing solely on DX will remedy CX — but as in the patio table example above, digital is only part of the equation. Fixing the timing of the automated email would help with DX. But, in order to solve the holistic challenge, the big box retailer needs to understand and better connect inventory and shipping to avoid any delays in delivery. To improve CX, companies must break down silos, go across digital and physical mediums, and address friction points from the customers’ point of view. Additionally, CX is not just confined to the channels a brand owns. As seen in the earlier example, I started my search for patio tables through a search engine. Addressing CX means looking at the ecosystem of touchpoints customers have with partners, competitors, and related business as they go through their journey with your brand. Evolution of customer experience: What role does data analytics play here? Improving CX starts with collecting data. This includes both quantitative and qualitative data across touchpoints, earned/owned/and paid channels, and could even extend into the supply chain and partners. One of the areas where data can play an outsized role is in building the foundation for a living, breathing dashboard for leadership to understand CX performance. CX data lives in many places. Understanding customers’ aggregated perceptions starts with bringing all of the touchpoints and internal/external teams together in order to harmonize the experience and drive towards the CX vision. This begins with a measurement framework where the CX or marketing team: Establishes business goals.Documents the customer journey.Sets KPIs.Identifies where to get the data.Understands the interplay between teams, processes, and technologies throughout the journeys; and Has the mechanisms in place to track quantitative and qualitative performance. With these key data elements in place, the brand can create a living dashboard to see connections, understand friction points, and celebrate wins. Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here. New on MarTech
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Wix relaunches hotels solution
Wix, the website design, creation and management platform, has announced the relaunch of its solution for the hotel sector, Wix Hotels. For this new iteration, it has partnered with HotelRunner, an online sales and management platform for hotels. Wix Hotels by HotelRunner will launch first in English and then in other languages. What it does. Combining the Wix platform with HotelRunner’s technology will enable hotels to design and manage websites, as well as their properties, guests, bookings, and sales channels, all from one platform. Among specific capabilities, users will be able to: Connect to online sales channels and travel agents such as Booking.com, Expedia and Airbnb. Receive reservations and payments from their web properties. Manage rates and availability.Manage front desk operations including check-in.Offer extras, promotions, deals, and coupons to guests. Why we care. Sometimes it feels like one step forward, two steps back, especially after the airline cancelation debacle of Memorial Day weekend, but travel is surely returning. Indeed, some predict it will “go big” in 2022.
Tag: Marketing Communications
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