Most Recent Articles In Digital
Latest Digital Articles
- Amazon to Launch Prime Day, Toast 20 Years
- Michael Kors’ Social Connection
- Instagram Updates Explore and Search Functions
More Articles By
Hold on tight.
The pace of digital transformation shows no signs of slowing down, and a study set to be released today by New York University think tank Luxury Lab, or L2, details the rapidly changing landscape, where Google and Facebook dominate mobile advertising, the influence of Asia is rising and photo and video sharing are eclipsing texting.
The agility of Facebook, whose stock briefly traded Wednesday above its initial public offering price of $38, is among the leading takeaways in the report, which ranks the social platforms for the first time. The ranking uses metrics from 247 prestige brands’ social media efforts across 15 platforms: Facebook, YouTube, Twitter, Instagram, Pinterest, Google+, Vine, Tumblr, Sina Weibo, WeChat, Kaixin, Line, KakaoTalk, YouKu and Tudou. The brands span fashion, beauty, retail, hotels and watches and jewelry, and on average each maintains a presence on seven platforms. Swarovski and Uniqlo, are active on 15 and 13 platforms, respectively.
“Effectively, right now Facebook is the most innovative media company in the world. The ability they’ve shown to be nimble around rolling out new products in the marketplace is staggering. Despite the flack they’ve gotten from the IPO, there’s a lot of reasons to suggest it isn’t going away anytime soon,” Maureen Mullen, L2 director of research and advisory, told WWD.
Facebook’s second-quarter earnings results last week showed that increases in mobile advertising dollars helped the company post a $333 million profit, reversing year-ago losses of $157 million. Fueled by mobile advertising, the company marked a 53 percent increase in revenue, reaching $1.81 billion. Mobile ads made up 41 percent of the company’s $1.6 billion in ad revenues, up from 30 percent in the first quarter. On Wednesday, Facebook’s shares hit an intraday high of $38.31 before falling again to close at $36.80, which still represents a 38 percent increase so far this year.
Despite a slew of entrants, Google and Facebook continue to dominate mobile advertising — with eMarketer projecting that the two units combined will be responsible for almost 70 percent of the market by year’s end.
Google’s cost per clicks, as it relates to mobile, are lower priced than what Facebook has been able to garner. Facebook is effectively charging the same for mobile ads that it has been charging for traditional online advertising. “And they’re the only ones that have really been able to do that,” Mullen said of Facebook’s rapidly growing mobile advertising business.
She maintains that while overall Facebook’s growth in terms of fan acquisitions for brands has slowed down, engagement continues to grow, and prestige brands have turned to the site as a key tool in penetrating emerging markets. Asia now commands the largest Facebook user base (29 percent of Facebook’s 1.15 billion users come from Asia), and for prestige brands specifically, users in the Asia-Pacific region are more than two times as engaged on the site as their North American counterparts.
“When you look at all of the innovation coming out of the U.S.-oriented social media platforms, what’s happening over in Asia is moving even faster. The integration on the commerce side around loyalty, mobile payments and advertising product is really a crystal ball for what’s going to happen globally,” Mullen said.
China’s Sina Weibo — originally touted as “Chinese Twitter” — has evolved into a microblogging platform with a strengthened commerce focus since Alibaba acquired an 18 percent stake in the company in April. But it’s also increasing competition from newer channel WeChat that is forcing Sina Weibo to innovate — and Weibo’s introduction of online banking services illustrates that.
Mullen thinks WeChat, the two-and-a-half-year-old mobile native app, has the potential to become the first successful export of a Chinese brand in the space. The app is image-based and strongly connected to loyalty and mobile payments. As of last month, Mullen said that of its 350 million users, 80 million were outside Mainland China.
Beyond mobile, the rapidly increasing role of photo and video sharing can’t be ignored, and even though Instagram has been getting lots of hype, it’s Snapchat that’s winning the social media photo sharing game, according to the study.
The app, which allows users to view an image for just 10 seconds before vanishing, received a $60 million investment led by Institutional Venture partners on June 24. The same week, Snapchat reported that it sees more than 200 million photos shared on a daily basis — about five times the amount of Instagram.
For Mullen, who called Snapchat the “dark horse” of the report, the real opportunity is for retailers targeting a 14- to 18-year-old demographic.
It’s also worth noting that Instagram video has not significantly eroded demand for Twitter-owned Vine in the almost six weeks since the former launched video on June 20. Research showed that 35 percent of brands were active on Vine and 26 percent had experimented with Instagram video. Even though Instagram has an edge with larger community size, Mullen maintains that Vine still has greater engagement. For the month of July, Instagram’s weekly post frequency was 0.84 and Vine’s was 1.98 (with Instagram’s still image postings coming in at 5.04). Vine’s overall interaction rate (combining likes and comments) was 1.24 percent, versus Instagram’s 1.06 percent.
Even though Chanel has no official presence on Instagram, it’s the most posted about brand on the platform; there are nearly 3 million images with the hashtag #chanel. This number should not to be confused with actual Instagram followers — as Chanel doesn’t even maintain an Instagram account. Victoria’s Secret commands the most followers on Instagram — it has almost 2.2 million — followed by Topshop with 1.1 million. Average prestige brand users are 18 times more engaged on Instagram than Facebook and 48 times that of Twitter, the report said.
Chanel also has the most engaged following on Twitter, which is measured by the percentage of fans who retweet content. The brand’s official handle @Chanel saw an average of 216 retweets per tweet for the month of July, according to the study.