Go away! 27bslash6

I was reminded of Mr Thorne recently my one of those annoying group emails that usually you ignore. Glad I didn’t on this occasion.

Facebook Trends 2010

It never ceases to amaze me just how quickly social media is growing. It is no longer a revolution, that has passed, it is a fundamental reality of everyday life. Nielson have published their findings up to February of this year, and the findings have astonished me, and I’m in the business.

Time is money…

Mark Zuckerberg certainly won’t be complaining about these statistics. Not only are there more users on Facebook, but individually people are spending far more time on it each month.

Time spent on Facebook 2007-09 Globally

Two years ago, average usage per month was only a little over 2 hours. By the end of last year, they had more than doubled to over 5 and a half hours. Based on Facebook’s advertising model, this can only be good for for revenue, and for the rest of us who like to get involved with this social media malarkey, it’s a great result. On the downside, Facebook does not generate anywhere near the revenues of China’s Tencent, which published profits of $500million last year from less users. Never the less, the UK seems to be a fan (excuse the pun) of Facebook, heading up the time we spend browsing through photos, groups and pages just a fraction behind the US and Australia.

Time spent on Facebook 2009

Global domination…

Much like Google’s dominance in the online search market, people have become bored of Bebo and MySpace, which now only hold a 3.43% share of the social networking market between them, compared to an overwhelmingly dominant Facebook share of 51.05%.

Social Platform Market Share 2009

Facebook have very simply got it right. While the flexibility of MySpace is certainly appealing, Facebook is far simpler to use, and the common features that every individual’s profile has make it easier to navigate. While many people have got bored of the random games and applications that seem to keep popping along, the level of interactions on company pages is on the up, and people seem more inclined to share pictures, create events and join groups than ever before. What’s more, world wide there are now over 400million Facebook members, 23million of whom are in the UK. That has more than doubled in a year! That even beats China’s very own QZone according to Wikipedia, but then I think the Mandarin would cause problems for most of us.

Age doesn’t matter…

Growth in social networking sites is not just down to young people. There is a growing number of middle aged users, and the ‘silver surfers’ in retirement seem equally as engaged. While the statistics seen here, thanks to Pingdom research, are based on US usage, it clearly shows the relevance of Facebook in the older generations, with the highest number of users apparently between the ages of 45 and 54. That almost seems hard to believe, and while I think that statistics would vary slightly in the UK, with 61% of US Facebook users being older than 35, it may be I underestimate the (dare I say it) middle-aged.

Age Distribution of Social Network Usage USA

The impact on social media…

Ok, so I’ve used the term, but to some extent I don’t care. Social media, brand engagement, whatever you want to call it, is in a strong position to interact positively with ALL members of society, not just the young. With such an impressive audience available, brands really need to look at what is worth using. You don’t even need to understand it, you just need to realise that it is here to stay, and not making the most of such a cheap medium to engage with your clients is downright foolish.

Social media changes so quickly, the socialnomics video has had to be updated…

The ‘Net’ Election Fantasy…

It is the 14th of April and I’m sitting on the train on the way home from work, reading a copy of the now free Evening Standard. I must admit I don’t usually bother with what I consider a load of propaganda, but every rule has at least one exception, and that fine Wednesday was it. What makes this a little different is that the election is just round the corner, and the paper is filled with page after page of political bore.

I turn to page 35, and I read what can only be described as fatuous opinionated and in fact contradictory bull from a Professor of Journalism at City University London, Roy Greenslade. From time to time I meet people like Roy, who believe that just because they are not on Facebook, social media has no relevance or place and particularly no power. More fool you.

His criticism starts with the following; “I am already heartily fed up with the knee-jerk claim, usually by people without a shred of knowledge, that this is Britain’s first internet election. It is not.”

I must admit that thus far, I don’t wholeheartedly disagree with him, but his arguments behind such a rash claim are somewhat thin or… yes that’s right, from a position of ignorance.

To break this down simply, I will look at six key arguments presented by Mr Greenslade and hopefully give some insight into his misjudgment.

He claims that politicians are falling over themselves to partake in this digital revolution, and sarcastically criticises the unimaginative use of just one, Facebook. Yet later in the article he highlights the effective use of David Cameroon’s YouTube Channel. Nice maths Roy. The fact is, even if politicians only used one platform to attempt to engage with their audience, Facebook would not be a bad choice. With 23 million UK users, it is not simply “in the background” as Roy suggests, it is a fundamental shift in the way we communicate.

Roy also argues that overall, Facebook, Twitter and blogging will make very little difference, and that mainstream media will play by far the biggest role. I am not going to argue that main stream media has less of an impact today, that would be unfounded, but for a large proportion of members, more time is spent browsing Facebook then watching TV. The Electoral Committee has in fact teamed up with Facebook to encourage the inclusion of people who were eligible to vote in the last election but did not register. In the 2001 elections, it was estimated this equated to 3.5 million people. The page, ‘Democracy’ now has 39,550 fans… wait 39,558..59…60. Sorry it keeps going up every time I refresh my page.

To argue that Facebook can never have as much impact as the “supposedly outmoded platforms of print, TV and radio” is ridiculous. Let’s look at last year’s Christmas No.1, Rage Against the Machine, who beat the highly televised and financially backed X-Factor single by Joe McElderry (cor that was a struggle to remember his name) through a single Facebook page. Rage Against the Machine are now performing a free gig to recognise the support it had from fans. I’d say that was a pretty decent result for social media, and guess how much it cost… nothing.

Roy looks at the incident of Scottish MP, Stuart MacLennan, and claims that “his ‘crime’ occurred months before the election was called and is of no lasting significance”. Roy, you may agree with MacLennan that X Factor judge Louis Walsh is a ”c***” or that his elderly constituents are ”coffin dodgers”, but I think he would disagree with you that it has no lasting significance, now that he has joined the ranks of the unemployed. I doubt any politician will be in a hurry to promote their own crude opinions.

The next criticism of social media I find highly amusing, as Roy argues that, “In marginal seats, it could well make a bit of a difference, but overall I just don’t see blogging, Facebook and Twitter having a massive impact”, and then goes on to say, “It is hard to imagine that floating voters in marginal seats – the people who really control the makeup of the next Parliament – are spending time assessing what’s available online.” Of course highly contradictory, the statement is also poorly thought out. Many of those who have not yet decided who to vote for are likely to turn to their peers for advice and guidance. Let’s face it, we are all a little ‘sheep’ like at times, and when better than those moments we are undecided on which political lies are less untrue than the next.

Finally, Roy’s (clearly vast) experience of ‘social media’ is derived from email campaigns to his constituents which under perform compared to good old fashioned knocking on doors. Research shows that generations x and y consider emails passe. Boston College stopped issuing email accounts to freshmen in 2009 because not enough students were using them. I hate to break it to you Roy, emails are not social media. Emails talk at people, the point of social media is listening first.

Could it be Mr Greenslade is simply a uninformed biased and peed off journalist? After all, with 24 of the 25 largest newspapers in the world seeing record declines, no wonder he is a University Professor. The only reason I do not entirely disagree with his initial statement is that politicians are not harnessing the potential power of social media effectively enough at the moment. This is not the first net election in that sense, but it does not mean that bloggers, journalists, opinioneers and yes, even ordinary people are not using it in that way. Whether you like it or not, social media will influence voters’ decisions and impact on the election.

Say ‘goodbye’ to advertising, and ‘hello’ to socialising

It’s taken 9 years, but it was inevitable that growth in online display spend would eventually subside. In fact, since the dotcom boom of 2001, advertising spend on the Internet has done nothing but increase by epic proportions, with 2007 seeing a year on year increase of 38%. Finally overtaking television ad spend in 2009, overall spend in the first two quarters of that year equated to a market share of 23.5%, not a bad chunk of the UK’s £7.47billion ad spend.

So what went wrong? Let us not forget that overall spend on advertising has fallen sharply in recent times, the last quarter of 2008 revealing a close to 10% year on year drop in UK ad spend, with newspaper advertising falling the fastest at 12%. Breaking it down sector by sector is revealing. The magazine sector saw a 9.9% fall, with radio close behind at 8.5%. TV fell by 5% and outdoor by 3.8%. Contrary to this doom and gloom, Internet advertising continued to grow sharply and buck the trend completely – until now.

Should media companies feel concern over the decrease? Are we to assume return rates are falling on digital campaigns? Is the future of online in doubt?

Yes, yes and no. With a global recession, Internet advertising was an obvious option for measurable and cost-effective marketing, but with confidence growing in the market, businesses are starting to really look at their consumer engagement and assess where their future lies. Media companies reduced their margins considerably over the passed two years to maintain big clients, but the price war has effected them to the extent that a serious change in fee structures needs implementing. The future of Internet advertising is certainly not in jeopardy, and in future, integrated campaigns will be more important than ever. Media companies may need to adjust their pricing matrix to remain profitable and competitive, but the movement to PPA (pay-per-action) advertising is potentially providing them with an opportunity to do just that.

I actually see the whole thing as a potential positive. My hopes are that this fall is a result of companies finally taking note of their consumers. They are no longer advertising to a robotic nation of cash rich time poor consumers who are roped in to online deals. We’ve ‘wisened-up’, understanding more fully the language and occasional cons adverts have to offer. With emptier pockets, tighter belts and perhaps even less time, it takes something special to drive the sale. Even clever use of call to actions and promotional messages doesn’t necessarily win our curiosity over. In fact, next time your on a website with online display, go make yourself and cup of coffee, then try and remember what the ads were for – my guess is you probably didn’t even look at them.

With this in mind, social media steps up to the plate. There is so much hype and buzz around the issue, and ‘gurus’ that use long industry specific words to confuse everyone and make their services seem valuable often miss the obvious. When you’re thinking of buying something, what do you do. Ask someone? Go online and read reviews? More often than not, you engage with people, not companies to make your decisions. That’s social media, engaging with your audience, listening to their ideas and responding, encouraging consumer participation, and giving something back. I hope the decrease in online display is a movement towards social media. It can still be quantifiable, and anyone that says otherwise simply doesn’t understand how to utilise social platforms properly. In my view, it is the growth sector of the future, it’s the only way to engage with a cynical public successfully… and it’s cheap.

EU Small Business Accounts Rules

EU Small Business Accounts Rules ‘Utterly Absurd’

@smallbiz_uk tweeted an article from SMEweb.com relating to a recent EU rule that would in effect exempt around 75% of all EU companies from needing to file online accounts. Now let me start by saying I do agree with the article’s initial viewpoint, the rule is utterly absurd, and allowing that many companies to get away with limited accounting and paperwork opens the door to fraud, tax evasion and 99 other things they will hardly help our European ‘community’ stagger its way out of record debt.

Having said that, I also completely disagree with ICM’s Chief Exec, Philip King’s comments:

“Whereas it is laudable to want to help small businesses, this is not the way to do it,” King insists. “If the last 12 months have taught us anything, it is that businesses must provide more information for credit to be extended, not less.” [Paul Williams for SMEweb, 26/03/2010]

I have worked with a great number of SMEs in my time, and when it comes to credit, there are several things to consider.

  1. Entrepreneurs are creative, dynamic people with (hopefully) good direction, but are notoriously unorganised, bad at paperwork and down right awful at accounting.
  2. Small firms need to focus on driving revenue and developing new products to market rather than book keeping. In my experience, few SMEs hire a financial controller until staff numbers reach 6 or more. After all, who wants to pay someone not directly driving revenue into a business. This basically leaves the boss (and probably the biggest bread winner), spending time in Excel and Sage rather than sales pitches and strategy meetings.
  3. When a small firm needs finance it is often due to poor cash flow, perhaps stemming from seasonal fluctuations in sales or larger companies enforcing unreasonable payment terms. To put it simply, when they ask for money, it’s usually because they need it pretty quickly. Having to provide detailed sales forecasts, historic data or worst of all a business plan in a presentable fashion is time consuming and ultimately sole destroying, especially when the expected answer is ‘no’ regardless, and the ‘Manager’ assessing the case has about as much understanding of real business as I do of nuclear physics.
  4. Data recorded on Companies House is historic, grossly historic, and I’ve seen businesses go from tens to hundreds of thousands by the time more filing is due. Increasing the amount of data does not help the banks make finance decisions, how can it, it simply drains on the SME in question. Oh, and before it is suggested, requiring more regular filing is about as absurd as the EU rule itself.

I can see why the EU have tried to provide SMEs with flexibility and less red tape, it does make sense to try to stimulate growth in this fashion, but this new rule will hardly achieve that initiative. Going the other way by forcing more information from SMEs will worsen matters and will, in the end, cost businesses in time, stress and money.

Business Plans

While on the subject of increased information for banks, I thought I would touch on a subject that both benefits and frustrates me. Many of the start ups I work with present me with questionable, and rather thin, business plans. Contents is sparse, forecasts are ridiculously overstated, and research is obviously lacking (the number of ‘original’ ideas I hear is laughable).

Take a new comer to the game. It’s the first business for this budding entrepreneur, who lacks experience, but is passionate and enthusiastic. All he needs is a little cash to pay for some business cards, get a website and perhaps a nice shiny new laptop.

Now take a 2 to 3 year established business with a turnover of say £20-£25k a month – very small, but growing. Overheads are on the rise as work loads increase, an unfortunate bi-product of growth, and a poor summer results in a few consecutive loss making months. Suddenly the coffers are empty. Historically, summer last year was bad, and with the launch of a new product around the corner, Mr MD is confident he can expect a good autumn/winter, but simply needs a little working capital to get him there.

Introduce Mr Bank Manager, who pleasantly requests a business plan from both parties, and from the second, estimated sales growth broken down by product category, and detailed explanations as to why the last 2 months have made a loss. Figures may prove me wrong, but I would wager the start up is more likely to get finance. They can walk in to pretty much any high street bank, open an account, and get a £1,000 overdraft and a commercial card with a £1,500 spending limit. I have seen it time and time again, and so many of them fail within 6months. For the other entrepreneur, he knew his business plan went out the window within 2 months of trading, and he certainly has no time to put one together of any worth with pay day around the corner and frustrated staff perching nervously on the edge of their seats. Even if he gets the go ahead for a loan or overdraft, the bank will require a personal guarantee from a person who has spent the first 2 years of business not earning anything and getting himself into debt. Thanks.

Now don’t get me wrong, this allows people like me an opportunity to get involved in exciting growth businesses for relatively small sums of money, hence my benefit. But with banks reporting record profits, surely it makes more sense to get capital through them. Of the 2 options above, I know where I would put my money, even if it does cost me a little more.

TradeRelief invest in the “missing middle”

TradeRelief Invests in OneTouch

OneTouch - Western Kenyan Initiative

If you have had a chance to browse Me, Myself & in particular I, you will have seen the involvement I have in TradeRelief, a charity that finds budding entrepreneurs in developing nations and invests relatively small amounts to develop local business that has a wider impact on the local community.This is our latest venture, an Internet shop that allows locals and local businesses the use of computers and access to the web. While I believe in what I am doing, and think that micro venture capital is a key ingredient to fighting poverty, I can’t help but get a personal buzz out of seeing the tangible results. This picture to me is brilliant.