There is much that can be written about Facebook’s disastrous IPO last month. Prior to its May 18 launch on NASDAQ, there was excitement on both Wall Street and Main Street with almost everyone wanting a piece of the company thought to be valued at anywhere from $76- $95 billion just days before its IPO. Momentum clearly seemed to be building with newspaper headlines claiming just one day prior to the launch that the sale would create more millionaires and billionaires as well as regional spending booms.
So how did the sizzle turn into a fizzle? And should we have been surprised?
An ominous sign that the offering could be overvalued came on May 16 when The Wall Street Journal reported that General Motors planned to pull its paid advertisements from Facebook. But even before that there were signs that the company was struggling to convince advertisers that it is beneficial for them to advertise through Facebook. One story, which had largely gone underreported until too late, was the company’s failure to connect with the many Facebook users shifting their usage to mobile phones where the company had only just started to sell advertising. Although Facebook had taken efforts since March to advertise on its mobile website, the chart below (measuring the sentiment of all articles within Dow Jones Insight specifically regarding Facebook and mobile phone advertising) shows little unfavourable sentiment practically right up to the IPO even though Facebook itself realized the implications of reaching out to this market too late. Coverage was in fact occasionally positive during weeks in March and April with news articles showing Facebook competing well in mobile ads against Google.
Only ten days prior to the launch was there significant attention paid to Facebook’s struggle to make money from mobile devices. The number of unfavorable news articles rose steadily in the days prior, peaking the week after the IPO (as the value of the stock, which remained virtually the same on the opening day, began to decline) with the sentiment almost entirely negative as the second chart indicates.
So should we have been surprised by such a disappointing performance by Facebook on the day of its IPO? The charts above indicate last minute apprehension by investors regarding Facebook’s ability to generate advertising revenue among an increasing mobile telephone audience, so for users tracking this sentiment through Dow Jones Insight, there probably would have been less of a surprise.
For Facebook, the struggle will remain: the amount of time users spend on the mobile version has now surpassed the time spent on the browser version and advertisers are increasingly uncertain about the effectiveness in advertising through Facebook in any form. (A study indicated that four out of five Facebook users do not buy products or services through the site.) Convincing advertisers not to follow the route of General Motors will be Facebook’s greatest challenge in the months ahead.
For more background, watch the WSJ.com video Unfriended: The Facebook IPO Debacle
Tags: Facebook, General Motors, media analysis, media measurement, Social Media
Ethan Zuckerman proposes a new measurement of attention – the Kardashian:
The Kardashian is the amount of global attention Kim Kardashian commands across all media over the space of a day. In an ideal, frictionless universe, we’d determine a Kardashian by measuring the percentage of all broadcast media, conversations and thoughts dedicated to Kim Kardashian. In practical terms, we can approximate a Kardashian by using a tool like Google Insights for Search – compare a given search term to Kim Kardashian and you can discover how small a fraction of a Kardashian any given issue or cause merits.
As Zuckerman notes, Google Insights doesn’t work well for measuring Kardashians. It’s unclear whether Google’s scale is linear or logarithmic.
Factiva, on the other hand, is an ideal tool for measuring Kardashians. Last week, “Kardashian” was mentioned in 5,174 stories on Factiva. So, that week, 1.0 Kardashians would represent 5,174 stories about a topic.
How did some of last week’s other newsmakers fare?
- Mark Zuckerberg, at the peak of his public attention, received a mere 3.6 Kardashians of attention last week.
- JPMorgan Chase CEO Jamie Dimon, in a week when he lost billions of dollars, flashed across our consciousnesses with 1.5 Kardashians of attention.
- Donna Summer had to die to achieve 2.1 Kardashians of attention in her final week. Last year, she averaged 85 milli-Kardashians of attention.
Of course, the value of a Kardashian changes, depending on coverage volume. Eventually, we’ll enter into a period of Kardashian hyperinflation, and we’ll all be overexposed.
Tags: Kardashian, media analysis, media measurement
Grexit: a Greek Exit from the euro. Not as catchy as “Merkozy,” but it works.
Where did it come from?
At Dow Jones we’re well-equipped for quick etymological studies. Our Dow Jones Insight platform aggregates thousands of publications.
We found the first usage of “grexit” on February 6, 2012 in Canada’s Globe and Mail. Michael Babad wrote: “Citigroup analysts are warning of the threat of Greece leaving the euro zone. They’ve dubbed it Grexit.”
The following day it appeared in The Economist, the article penned by Willem Buiter now credited with its coinage.
Graeme Wearden on The Guardian’s euro crisis live-blog acknowledged its arrival, he proclaimed: “Word of the day: Grexit.”
Next up: Times of London. Thereafter: Financial Times. Five publications with a combined readership of 3.1 million used the word in two days. Grexit was ready to go viral.
The first non-English language usage was Catalunya’s La Vanguardia on February 8, describing it as “economist jargon”. Now on a roll, the first mention in US media came via Marc Chandler on TheStreet.com on February 19.
Then, it died. Nothing and nobody mentioned the word from March 26 to May 6.
On May 7, Citi upped their figures to 75% likelihood of an exit. Within two weeks the term had appeared in 1,061 articles. Grexit was here to stay.
Until recently a Greek exit from the euro was unthinkable. Now that it’s becoming more likely, the popularisation of this small word is another indicator that the markets may be preparing for the worst.
Tags: Citigroup, Grexit, Insight, media measurement
In the summer of 2011, Netflix was the future of video and its stock was at an all-time high. Within a quarter, the company lost two-thirds of its market value and its strategy was a shambles.
Between July and October 2011, the company unbundled its DVD and streaming services, increased its prices for the second time in a year, announced that it expected to lose a million customers and that it would spin off its DVD service under the brand “Qwikster”, and then canceled Qwikster less than a month later.
Netflix’s stock price has not recovered.
Netflix was trying to mitigate some powerful strategic threats in the summer of 2011, but the company lost control of its message.
I charted Netflix’s Dow Jones Insight Media Index (IMI) for 380,000 news stories since last July. Since October, Netflix’s IMI has returned to its summer 2011 levels, but the company’s stock price is stuck in the doldrums.
The Netflix debacle is more of a strategic than a communications fable, but there are some clear lessons for marketers:
- Think ahead. By delaying the inevitable unbundling until the last minute, Netflix maximized the pain for their customers and themselves.
- Keep it simple. Netflix was founded on a principle of simplicity, but Qwikster was just baffling.
- Own your name. Someone already owned @Qwikster on Twitter. This expensive error signaled a lack of preparation to the markets.
- Think twice before doubling down. Netflix followed its unpopular unbundling with a baffling spinoff.
Tags: measurement, media measurement, Netflix, Social Media, Twitter
I attended PRNews’ Measurement Conference last week. I’ve always liked the format of this conference, it’s only one day which keeps everyone focused, it attracts vendors and clients who want to learn and share, and people actually network because time is short. This conference is valuable for those wanting to learn the basics about PR measurement, as well as getting into the depths of deeper ROI analysis. This was my fourth year attending and I had the honor of participating as one of the “Measurement Dr.” speakers. Pretty cool!
My top five takeaways:
- Can’t stress it enough: it is important to set meaningful and smart objectives when measuring PR performance. If you want to meet or beat the objective, it must be grounded in measurable terms, e.g., “generating significant buzz on a campaign” is not meaningful or measurable. Get concrete and realistic.
- Organizations that operate in social and traditional media need to look at both in tandem. They inform and complement each other. They are different, but you cannot substitute one for the other, nor measure one without taking the impact of the other into account.
- Question: how do you get around corporate lawyers on responding via social media during a PR crisis?
Answer: PR team needs to reach out and get involved early with corporate lawyers before the crisis to define the social media response policy. Doing so during a crisis is too late, and you’ll not be able to measure anything but negative customer conversation about how poorly your company handled the crisis.
- From Linda Rutherford, VP Communications, Southwest Airlines: “It’s a gift to learn something from our community of customers via social media and be able to adopt it as a message within the same news cycle.” This clearly illustrated how fast and impactful the social Web is. Great to see Southwest using it to their advantage.
- RoR – Return on Relationships. A good way to talk about the value that social media has for PR and the organizations they represent and what they can get out of engaging in and measuring social media performance. Two ways to look at it, what did we do with our relationships in social that pushed our message into the mainstream discussion, and what did we do with our relationships in social to purposefully keep something from becoming news.
Tags: crisis communications, measurement, media measurement, PR News, Public Relations, Social Media