December 2013 - DigitalParc

Video Ads & The Future of Facebook

Posted on December 19, 2013 by dpadmin

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If you have been browsing the Facebook newsfeed recently you may have noticed some subtle changes to the way videos now function on this main page. Videos will begin playing on their own, albeit without sound, as the user scrolls past them. In between status updates and links to the newest internet meme, some videos will now start functioning with this auto-run feature. If this has happened to you do not assume that you have a virus of browser error, this is merely preparation for the new Facebook video ads that will begin making their way onto your screen.

The first official video ad for the film “Divergent” should be on screen for a select number of profiles sometime today. This move by Facebook has not been quick or without much consideration. The video ads and their environment have been in the works for months, and this single ad is the first real application of this feature at work. There is some debate on the usefulness of this new tool and the implications for advertisers and user alike.

A major update or a major pain?

The first concern falls on advertisers. Content for these new video advertisements must be remade, so that advertisers cannot simply port over existing commercials or ads and have them automatically play. This will increase costs for advertisers just on the production end.

The upfront cost is estimated to be substantial as well. Earlier this year, Adage reported that Facebook was asking $1 million for a 15 second ad to be displayed on profiles for a day, a pretty penny when you consider that Superbowl advertisements run at a similar cost level per second and can potentially reach a broader audience.

The second concern falls on the user. Advertisements online have begun to reach the level of the infomercial, with many of us counting the seconds before we can skip the remainder of an advertisement for a YouTube video. An auto-play function for what used to be a static ad could end up generating substantial backlash for Facebook and the advertisers alike.

Facebook says that the ad will stop playing once the user scrolls past it, but what if the ad is located close to a post the user wants to stop and read? No doubt that the relevancy of the content surrounding the ad will factor in to the cost of placing the ad. A friend posting about an upcoming movie may now be accompanied with an advertisement playing the trailer for that exact film. The implications are interesting, but have the potential to become a headache for users. These ads will also be coming to mobile as well. Facebook says they will not affect data plans, with the ads downloading from wi-fi when available, but they will may end up causing issues for some users. Here is a link to the official statement from Facebook.

Will it work?

Effective marketing has become much more difficult over the last few years. Facebook ads in the same vein as Vine videos may be a way to drive customer interaction, but it could also alienate users who see this new effort as an invasion of their online safe zone, by taking away the control for some of the ads. What is next? An advertisement for Tide shows up on my profile if I post a picture of me in a dirty shirt? Or maybe cat pictures will now be accompanied with a plug for Friskies cat food. Facebook must tread lightly here, the social network with “special offers” may not be as friendly as they think.

Apple Acquires Topsy, A Twitter Insight Tool

Posted on December 5, 2013 by dpadmin

It was announced on December 2nd that Apple has acquired Topsy, a social analytics firm, for over $200 million. The Topsy platform allows users to view the content of any tweet that has been written since 2006. This information can be used to draw conclusions about the relevance of certain issues in the digital realm. Although tweets about cute cat videos and Miley Cyrus have no doubt been popular, Topsy has had a big impact on real issues such as politics.

Topsy made the news during the 2012 presidential election when it was used to help measure candidates popularity on Twitter. Topsy is a large partner of Twitter that creates products that sift through the hundreds of billions of Tweets, and allows users to find out what has really been trending on Twitter for the last few years.

In addition to tracking tweets, Topsy has expanded to allow trends to be viewed based on links and photo shares as well. This has helped researches to see the true impact and reach of content that has gone viral over the last few years. With an opportunity to gain control of a powerful consumer insight tool, Apple decided to acquire Topsy to learn more about what consumers are really interested in.

This is not Apples first purchase of what they refer to as “bolt-on” companies. Apple often has acquired small hardware companies and integrated the new technologies provided by those companies into their new products. While another “bolt-on” company purchase is not unusual for Apple, Apple is not known for its ventures in social media. Apples last attempt at social media was with it’s music sharing service, Ping, which was shut down when it failed to gain traction with consumers.

While Apple has yet to comment on what it intends to do with Topsy, many have speculated its usefulness in Apple services such as Siri and the iTunes online media store. Topsy could be useful in helping to provide purchase recommendations to customers on the iTunes online media store.

-By Evan Wright

Using Customer Lifetime Value to Grow Your Business

Posted on December 2, 2013 by dpadmin

Customer Lifetime Value, or CLV, is a way to measure the value of a customer over the entire relationship they have with your business. Many companies, and especially online companies, primarily focus on customer metrics such as the click-thru rate or average order amount. However, the CLV gives a much clearer picture of the long term revenue potential for your customer base. It is vital to know how to use this information. It allows you to find out which customers are truly the most valuable for your business, and determine how to keep them as loyal customers for a long period of time. Here are some questions to ask when you are looking at your company CLV:

Are you paying enough to acquire customers from each channel of marketing?
Are you acquiring the best kinds of customers?
Are you spending too much/little on social media for customers?

Customer Lifetime Value ends up being a dollar amount that is associated with any customer relationship that is long-term; it shows how much that relationship is worth over a certain period of time. If your company is not yielding this dollar amount in revenue, it could be a signal that you are spending too much money on acquiring or retaining customers, often times spending the money in the wrong places.

Customer Lifetime Value can determine where exactly to spend your money. For most businesses, it is smart of them to spend their money in multiple areas such as marketing, production, sales, and customer support. With Customer Lifetime Value, you not only find the dollar amount that should be spent on each customer, but also which ones are your best customers, how you can better serve those customers with your products, determine how much service you need to give to these customers to keep them, and which types of customers your sales people should be spending the most time on.

Harvard has designed a calculation tool for determining the lifetime value of a customer based on a number of different factors. These include the average purchase amount, the number of purchases a customer makes per year, the advertising costs to reach this customer annually, and some other tools such as the profit margin for your business and the customer retention rate. All of these can factor into making the CLV of your customer base positive or negative.

By using this tool and others like it you could find out a number of things about your business. For example, you may have customers that spend a lot of money in their first purchase, but a low retention rates means you do not have a sustainable base of loyal customers. Conversely, you may find that your customers do not contribute much to the bottom line initially, but over time their loyalty builds and they spend more with your company. Technical tools such as this can show you how effective your advertising has been, when customers are likely to increase your profits, and how valuable a single customer really can be. Check out our services to find out how to refine your online marketing process, increase your CLV and ultimately grow your business.

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