First, Twitter users who engage with promoted tweets buy more. That’s unsurprising — if you retweet, favorite, or reply to a tweet, you’re likely paying attention, understanding what’s been promoted, and reacting to it emotionally enough to respond. That engagement, Datalogix’ study says, drove an average 12 percent sales lift across 35 brands with dozens of products in the study.
Perhaps even more significantly, however, even those who simply saw a tweet — without responding to it — bought 2 percent more often.
Second, users who are “exposed” to a brands’ own unpaid tweets buy 8 percent more than those who are not. This is probably one of those not-very-surprising results, since Twitter followers are inherently self-selecting. But the interesting part is that this buy-more effect increased almost 300 percent when users saw five or more organic tweets.
“The implication of this finding is that brands who actively build their follower base and regularly tweet to their followers can see an increase in offline sales,” Twitter’s Ameet Ranadive wrote.
Third, and most impressive, a brand’s Twitter followers who see the brand’s promoted tweets buy almost a third more than other followers who simply see organic tweets.
That’s huge for Twitter.
Essentially, this is data-driven validation of Twitter’s advertising ROI argument to brands. First, brands need to be on Twitter to get organic lift, Twitter’s data is saying. And second, they need to buy promoted tweets to maximize the effect and see optimal offline sales growth.
The most interesting part?
Twitter’s not just putting the study out there and claiming the impacts. Instead, the social network is clearly comfortable enough in the veracity and duplicability of the results that it is offering brands Twitter tools to measure offline sales impact themselves. Currently, that’s limited to consumer packaged goods advertisers in the U.S., and available only on a 1-on-1, case-by-case basis.
However, that’s still a massive validation of the effectiveness of Twitter’s growing range of ad tools.
That’s something that consumer goods companies like those that make Oreos and Trident gum desperately want:
“Twitter’s study is highly valuable to us because it brings social activity even closer to measurable sales impact,” Bonin Bough, the VP of Mondelez International, which own Oreos, said in a statement. “Many of our brands like Trident, Oreo, and Wheat Thins are very active in the Twittersphere, and with Twitter’s new offline sales impact capability, we will be able to measure the connections between our organic and paid Twitter activity and in-store sales. This is a significant step in evaluating the power of real-time marketing.”
You've seen it before. Someone raises a bazillion dollars and Twitter lights up with congratulations, as if the ability to raise money is synonymous with success. While it's true that sometimes venture money does signal something positive is happening at a company, the best indicator of long-term success is a large and growing ecosystem.
In other words, look to developers, the tech industry's "kingmakers," to borrow Redmonk's term.
Something Ventured, Little Gained
Why not venture capitalists? After all, they're the ones funding tomorrow's next big Microsoft or Google, right?
Well, no. First of all, none of today's industry titans started with venture capital. From Facebook to Google to Microsoft to Oracle, each of the industry's leading technology vendors started with great technology that developers or users loved.
Besides, it's not as if VCs have much of a track record (Webvan, anyone? Or Color?). While we tend to think of venture capital as a high-risk, high-return gamble on the future of technology, the reality is that venture firms have averaged a measly 7.4% return over the last 10 years, according to Cambridge Associates, which means that VCs delivered worse returns than every major U.S. stock index.
In other words, your money was worth more in an index tracking the S&P 500 this past decade than with a venture firm:
Credit: Cambridge Associates
Not every VC, of course. As Businessweek notes, some firms like Greylock have delivered outsized returns for their investors. Even so, as O'Reilly Alpha Tech Ventures co-founder and managing director Bryce Roberts thinks the industry must change to survive:
Not surprisingly, OATV's investment thesis is to follow the alpha geeks; to see the future by looking at what matters most to the über geeks of today. OATV helped to spark the trend toward smaller funds tailored toward early-stage deals, many of which try to predict where ecosystems will emerge.
The irony, however, is that smart money is rarely as good as smart developers at predicting the future. JBoss, SpringSource and other companies already had vibrant communities before VCs got involved to try to monetize them.
Slavishly Following VCs On Twitter
When not dispensing cash (which is most of the time), VCs are also prone to dispense wisdom via Twitter. There are a few, like GRP Partners' Mark Suster (@msuster) and Union Square Ventures' Fred Wilson (@fredwilson), who regularly teach me a great deal about the technology business. Others, like O'Reilly Alpha Tech Venture's Bryce Roberts (@bryce) and Greylock's John Lilly (@johnolilly), offer insight into life in general.
But then there are legendary investors like Kleiner Perkins' John Doerr whoseTwitter feed reads like an infomercial for his portfolio companies. Not very interesting or enlightening.
Like venture returns, I suspect the ROI on following the average VC is quite low. While the average Twitter user has just 208 followers, the average VC commands 3,500 followers, according to Zeno Group data. People likely follow the VCs hoping to get a nugget of insight or to make a connection that will generate a nugget of Series A financing.
In my experience, neither is likely.
Average Joes, Average Josephines
Which is not to disparage VCs. Rather, it's simply to recognize that they, like everyone else, can be average without much to say. And they can be exceptionally brilliant, generous people, just like we find outside the VC world.
But the larger point is that developers, not VCs, are the best indicator of a technology's success. As Gustavo Niemeyer argues, "Network effects and dependency relationships [are] what make developers a better indicator [of success] than VCs," because a successful developer ecosystem reinforces and feeds itself. VCs can dump money into a company, but money ultimately is no guarantor of success.
In sum, VCs aren't members of the Justice League, donning capes and skintight suits (thankfully) as they battle poor returns and gift cash to a benighted underclass. Importantly, they're also not nearly as good as developers at defining the future of computing.
So if you want to see the future, look to what developers are doing today. Which open-source projects are they embracing? In which partner programs are they enrolling? These are the real indicators of long-term technology success. Not venture money.
Google's push for the living room got a fuel injection yesterday when the company revealed its Chromecast streaming stick. The compact dongle can push Web video, music and pics from the cloud to your television, but the really big deal is that you can control it all from a range of devices for a dirt-cheap price—a $35 price tag that could tip the scales for fence-sitters.
Here's what you most need to know about the little streaming stick that looks poised to make big waves:
(1) Chromecast really is tiny:The stick is just three inches long, with a micro USB port on one end and a HDMI plug on the other. So it won't take up precious space in an entertainment center.
(2) It has a power cord: That micro USB port is for power; you'll need to run a USB cable from the Chromecast to the included power adapter or a USB port on your TV. So the unit isn't a fully self-contained gadget that will hide neatly and completely behind a TV. It's worth noting for anyone who plans to carry it around to friends' houses, meetings or other places where connected TVs aren't available.
(3) There's no learning curve: Google repeatedly emphasized that there's nothing new to learn and no configuration to fuss with in Chromecast. It's fully controllable from iPhones, Android phones and laptops—in other words, a variety of gadgets that lots of people already own. Those can manage playback, pause, skip and even volume without any real setup or need to learn new sets of controls.
(4) Chromecast is largely platform agnostic: You can control Chromecast from Android phones or tablets (version 2.3 or above), iOS devices (6.0 or higher), and computers with Chrome for Mac (Mac OS 10.7+) or Chrome for Windows (Windows 7+), as well as the Chromebook Pixel. Support for other Chromebooks is in the works.
That agnosticism extends beyond simple control of the Chromecast. You can also resume watching, say, a Netflix movie on your mobile—whatever it is—from the precise moment where you left off on the TV, and vice versa.
(5) It's cloud-only: Unlike Apple's AirPlay, Chromecast does not involve flinging saved files from a phone, tablet or laptop to the television. Just tap a button inside a compatible site or mobile app, like YouTube, and the device grabs the same clips, songs and pics from the cloud. The upside is that this won't kill your mobile's battery, and you can keep using your device without causing the stream to stutter or crash.
The downside is that if you have a big media library saved on, say, your PC, you'd presumably first have to upload it YouTube or another compatible site before you can play it through your TV—at least for now. Google's new Googlecast Software Developer Kit could change all that, though. Now that developers can make existing and future apps work with Chromecast, it's not hard to imagine some crafty app maker figuring out how to pull in local files too. (Yeah, I'm looking at you, Plex.)
[UPDATE: A workaround has been found. If a user opens a local video and plays it in Chrome, in most cases, it should cast to the Chromecast. This doesn't appear to be intended functionality, but people have been reporting some success.]
(6) Compatible streaming sources are limited now, but sure to grow: The list of current and future offerings cover only a few major sites, including YouTube, Netflix, Google Music, Pandora and Google Plus photos. In time, though, there are sure to be others, thanks to the Googlecast SDK. (For a list of resources, click here.)
(7) If your media plays in a Chrome browser, it will play via Chromecast (for the most part): You don't have to wait for specific apps to support it. The Chrome browser powers the device, and it's capable of tossing practically anything from your laptop to Chromecast on your TV (though Silverlight and Quicktime videos need not apply, notes Wired). Hulu, Rdio, and HBO Go reportedly work this way; so do Flickr photos and browser-based online presentations.
(8) If you're hoping Chromecast will play nice with DRM-protected iTunes files, well, stop: This is not likely. At all. iTunes DRM (digital rights management) is fierce, and it has foiled countless other developers who'd like nothing better than to let their users enjoy iTunes videos.
Things get even more complicated when you consider Chromecast's cloud-only modus operandi, since shows you buy or rent from iTunes usually come via download. Although Apple does allow some streaming, it's mostly aimed at other iOS or OS X devices. It's not like you can stream all of your iTunes media to any device with a browser. These details are daunting enough, but with the bad blood between Google and Apple, Chromecast has next to no chance of overcoming any of these issues.
(9) Consumers are already swarming in: The Google Play store has sold out of Chromecasts, with the earliest ship date showing August 7 (as of this writing). Amazon briefly had it, but then also sold out. At this time, Best Buy online is the only Internet retailer I found that has inventory, and here too, it's very likely to sell out quickly.
[UPDATE July 25, 2013: BestBuy.com has sold out. UPDATE 2: BestBuy.com showed more stock, but seems to be out again. Clearly inventory levels are fluctuating, so if you're interested, you may want to check the page periodically.]
At $35, it's likely that many customers aren't just buying one—they're probably picking up piles of them, as Google recommended, for use on every TV in their house. The takeaway: If you want Chromecast and you spot it online, grab it. Grab it now.
(10) The free Netflix promotion applies to everyone [see update below]: Every product purchase comes with three months of Netflix for free. This is not some restricted offer for new customers only, but a valid promotion for both new and existing subscribers. (I confirmed this directly with Netflix.) If you factor that in, the already meager price of the Chromecast drops even lower still—to the tune of $11.
[UPDATE: The Los Angeles Times reports that, due to overwhelming demand,the Netflix deal has been terminated. Presumably, orders that came in prior to the decision will still be eligible, but if we get confirmation to the contrary, we will update this post.]
The Bottom Line
Users looking for TV streaming devices don't lack choices. But so far, no single company has been able to deliver quite this combination of promised ease-of-use and cross-platform compatibility at a rock-bottom price.
Roku comes close, but it doesn't integrate with mobile platforms very well—apart from having a remote control app—and its least expensive unit, the Roku LT, is more expensive ($50) and can't handle HD. The Roku 2 XD can, but it costs $80. Interestingly, the company launched its own streaming stick last year, which plays 1080p HD, but at a high cost of $100. And it's not easy to view a simple YouTube video on a Roku.
That's not to say that Chromecast can satisfy every one of your streaming needs. As mentioned, Chromecast can't play locally stored media files (at least not out of the box, though there are workarounds), and it will likely never play iTunes movies. But at this price, it's tough to criticize it.
This isn't the first time Google has dabbled with connecting TVs. Remember Google TV and the Nexus Q? Maybe third time's the charm, because by the looks of it, the Chromecast seems like the company's best chance for a hit.
To see the device in action, check out Google's promotional video below.
Search — the very cornerstone of the Web — has begun to show signs of decline on desktops and laptops.
Meanwhile, search is surging on smartphones and tablets. Mobile searches are quickly becoming the main way in which consumers find everything they need — whether it's information, services, or physical and digital goods.
That means there's a great opportunity, but also that search has more work to do. There are kinks to figure out in areas ranging from app discovery to tracking the effectiveness of local search ads.
In a recent reportfrom BI Intelligence, we analyze the current state of mobile search, look at how different players in the mobile ecosystem can better take advantage of new mobile-driven search behaviors, detail why search quality is an important issue and why marketers need to gain visibility across multiple search-driven platforms, analyze how mobile search will create opportunities for developers, and examine how it will help determine which platforms succeed or fail in coming years.
Apple's new operating system for iPhone just got a bit too much in common with Windows Vista, the much-berated 2007 update to Windows XP, he thinks. (XP, of course, was perhaps Microsoft's best operating system ever, and many who transferred to Vista regretted the update.)
Vista's main visual update from XP was that its folders all appeared to be made out of frosted glass:
Goeldi's point is not that frosted glass is bad in and of itself. Rather, when Microsoft introduced it into Windows, it signaled that the company had stopped innovating the system in a genuinely new and useful way and was instead tinkering with style details that no one wanted tinkered with.
Apple, he suspects, may have reached the same peak: iOS is a great operating system. There may be diminishing marginal returns in improving it. So the easiest way to make it "new" is to tweak its looks.
