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What to Expect from Social Media in 2012

January 2nd, 2012 9:42AM by Brendon Kensel

Social media is experiencing exponential growth in the U.S. and worldwide and this growth is expected to continue in 2012. Social networking sites now reach 82% of the world’s online population and account for about 20% of time spent online according to comScore. In the U.S. 98% of the online population uses social media. As mass social networks such as Facebook and Twitter are nearing saturation points in the U.S. it is leading to new user behavior and new social platforms that are focused on particular topics and market segments.

Mobile Social Activities Among Mobile Social Networking Users” width=

Source: comScore, December 2011

Social media user behavior seems to be changing as saturation points near. People are becoming less engaged in creating content and instead are increasingly sharing existing content according to a recent report from GlobalWebIndex. The report notes that a huge exception is the growing propensity for consumers to post images and video to their social media profiles. Consumers are also increasingly using mobile devices to access social networking sites. comScore notes that in 2011 80% of consumers used their smartphones to check posts by people they knew, and 70% posted a status.

The lifecycle of social media often follows a path of from niche market to mass market. Facebook went from targeting college students to allowing the general market to sign-up. MySpace has gone full circle by launching as a social network focused on the music niche, morphing into mass market site, and now returning to its music roots under the stewardship of Justin Timberlake. LinkedIn is a scaled example of a social network that launched with a focus on a niche audience, business professionals, and retains that focus today.

As mass social media platforms mature it is expected that new entrants will emerge and focus on particular topics and market segments. While Google’s G+ is focused on the mass market, consumers appear to be picking their favorite platform and spending their social media time there. Consumers also appear to be seeking out specialized social communities. Niche audiences of highly active participants will continue to emerge as consumers seek more tailored experiences and advertisers look for specific audiences.

New niche social media sites to keep an eye on in 2012 include: Chime.in, an interest network, where people share, connect with others, and build communities around their favorite topics; Pinterest, an online pin board to organize, share and follow collections of shared items and interests; and Jock Talk, a social media publishing platform that provides professional athletes and fans a single location to post conversations, videos and photos, and enable richer engagement.

Smartphones will also play a large in how consumers use social media in 2012. While Facebook and Twitter are forces in mobile social networking there a few emerging companies worth noting. These include: Path and Milk with its first app, Oink. Several additional specialized mobile networks that will ride on top of Facebook are expected to appear this year.

Social media will be fun to watch and socialize about in 2012!

Digital Media and the Social Web

January 9th, 2011 1:26PM by Brendon Kensel

Digital media will continue to be heavily influenced by social media in 2011 and the social web will likely facilitate increased cross-channel engagement. Digital media has expanded from an online medium into mobile, and is now rapidly expanding to connected TV’s. Key lubricants to integrating these channels are the social media and marketing platforms that track and influence consumer behavior. And in a new twist advertisers are now leveraging groups of digital-based social influencers to help market products.

In 2010, Facebook grew to more than 500 million users and pushed past Google (NASDAQ: GOOG) to become the most popular site on the Internet for the first time. Nearly one in four page views in the U.S., or just over 24%, took place on Facebook in 2010 according to Experian Hitwise. Additionally, 23% of all online display ads in the U.S. appeared on Facebook according to comScore, however, Facebook accounts for just 9.5% of the spending on display ads in the U.S.

But beyond Facebook as the 800-pound social networking community there are several underlying trends that should be noticed. The ever-expanding world of influence via social media is exploding. Marketer’s efforts to analyze, track and manage influence across a social graph will continue to mature. A social graph is an individual’s online community or communities.

One company taking advantage of this emerging trend is XGraph. This company provides brand marketers with online ad targeting that is tied to deep audience insights. XGraph’s targeting approach is based on the premise that people who are connected through online graphs share similar lifestyles, interests and purchasing habits. Another player in the space, 33Across, provides technology to track possible customers among friends and identifies possible purchasers and shoppers that are socially connected. A different approach to tracking social influence is being pursued by Klout, which identifies influencers on topics across the social web. Klout lets users track the impact of their opinions, links and recommendations across a social graph. Markers are now learning how to tap in to groups of influencers to help market products. Leveraging social graph information is becoming extremely important to marketers as they track and rank influencers and brands attempt to affiliate with their online credibility. These are trends that extend far beyond just using Facebook and Twitter.

Another trend driven by the social web is “social commerce.” This involves an e-commerce experience where shoppers’ friends become involved in the shopping experience. An interesting example of the movement towards social shopping is WeShop. This platform blends the daily deals phenomenon and social influencers and allows consumers to share purchase information on an anonymous basis. Unlike Groupon and some of the other services which are only deal alerts, WeShop also enables customers with similar interests to build virtual and anonymous marketplaces that have the potential to attract better offers from vendors depending on the number of potential buyers. Blending social influence, mobile and bricks-and-mortar shopping is Shopkick. This company is built on the belief that as the proliferation of smart phones and the concept of social sharing increases offline shopping as an experience can and will mimic that of the online world.

While we are clearly seeing social networks influence online and mobile environments the next frontier will likely be connected TV’s. This past November Google chief executive Eric Schmidt said at the Web 2.0 Summit that Google TV will liberate companies to create a whole new set of applications that will generate revenue. While this may be true, it appears that Apple (NASDAQ: AAPL) is taking a more integrated social approach with an all-in-one Apple TV scheduled for debut in 2012 which could incorporate built-in Apple TV, MobileMe and iTunes. A small company attempting to harness social interaction across mobile devices, online and connected TV’s is Ultralivetv. This company wraps social interaction and games around live sports events.

Expect to see many more companies emerge that integrate social engagement across legacy and emerging channels.

Strategic Buyers will lead M&A Activity in 2010

January 30th, 2010 3:12PM by Brendon Kensel
M&A Activity” width=

Source: Dow Jones VentureSource

The M&A market the past twelve-months has been weak, but strategic buyers will likely lead an increase in deal activity in 2010. Financial buyers have continued to be challenged with the lack of credit availability while many potential strategic buyers are sitting on cash or have some access to existing lines of credit. We saw an increase in M&A activity in Q4 2009, but I expect deal makers to very creative this year to get deals done.

Since the economic crisis began many firms have streamlined operations and increased their cash positions. This improvement in financial health is expected to produce an increase in mergers and acquisitions as firms try to kick-start their growth.

While venture-backed companies may seek an IPO exit in 2010, I expect strategic buyers to emerge as the more likely exit. According to Dow Jones VentureSource there are 25 venture-backed companies currently in IPO registration, but there were 86 M&A transactions in Q4 2009 generating $7.3 billion. Amazon.com’s (NASDAQ: AMZN) $847 million purchase of Zappos.com was the largest deal of Q4 2009.

Mergers and acquisitions are off to a brisk start in Q1 2010 with several transactions in the media and marketing sectors. A few deals follow: Dentsu, Japan’s largest ad agency, acquired Innovation Interactive, the parent of digital ad shop 360i; AOL (NYSE: AOL) acquired StudioNow, an online platform for content creation and distribution, for $36.5 million in cash and stock; and LivePerson acquired web analytics company NuConomy for $3 million.

I contacted Alexander Haislip, senior writer at Thomson Reuters’ Venture Capital Journal and a columnist for Private Equity Hub, to get his point-of-view on the M&A outlook for 2010, particularly in the cleantech sector. “There’s a great opportunity for innovation in the cleantech M&A where startups license their technology to big manufacturers who can put it directly into production,” commented Mr. Haislip. “Project financing for cleantech is way off levels we saw just a few years before and it is harder for ever for entrepreneurs to connect with expansion capital. Investors may find their best hope for at least partial liquidity in 2010 is through licensing. That’ll mean tangoing with the likes of The ABB Group (NYSE: ABB), GE (NYSE: GE), First Solar (NASDAQ: FSLR), and a host of other biggies that have yet to make their intentions known.”