Wednesday, September 28, 2011

Why Facebook Metrics may be BS

A graph surfaced this past week, that showed US Share of Time Spent Online for major web properties.  This chart began in Q3 2006 and is current through Q3 2011.  The graph illustrates that Yahoo, AOL, and Microsoft properties have seen a decrease in time spent online, Google showed a slow and steady increase, and Facebook illustrates the classic and elusive hockey stick.  Twitter, Google+, and the internet in general seemed to think that this graph signaled the demise of Google and society in general.  Be warned, however, that this graph is crap.

A few weeks back I was contacted by a client about a campaign that recently ended.  He noted that his impressions from standard reporting were much lower than what Facebook was saying his fan page views should be.  After digging around for a while we uncovered that Facebook counted any view by any person at any time.  Standard reporting was only counting users who were logged in and who liked the page.  While Facebook's reporting was not wrong, it wasn't presenting the data in the most accurate manner (their inability to slice and dice data by active users/likes is a different story entirely).

As soon as I saw this hockey-stick graph I immediately thought about my previous experience with Facebook data.  Looking at the web properties listed, they all serve different functions.  Facebook is a social network with photos, games, and chat.  Yahoo is a portal with news and fantasy football.  Google is a search engine with email.  While it is certainly important to note that more time overall is being spent on Facebook, that's not the entire story.

Some have argued that this increase in time spent is due to Mafia Wars and Farmville.  Others have noted that almost every web page is connected to the social graph which may be counted as "time spent on Facebook."  As I noticed with my client, what exactly do these numbers mean?  More importantly, what do these numbers mean for the other companies on the graph and the industry as a whole?

As I mentioned earlier, a lot of the resultant commentary on this graph suggests that Google should be shaking in its boots.  I honestly do not see this to be the case.  While Facebook has become a powerful site with many uses and purposes, it serves no real utility.  Facebook does not let you communicate with people outside of its ecosystem.  Facebook won't let you share documents with friends, family, or colleagues.  Facebook cannot give you directions to the new Thai restaurant that just opened, and Facebook does not allow you to keep and share a calendar of personal events.  For all of the things that Facebook does, and all of the things we use Facebook for, it serves no real purpose.

Should Facebook disappear overnight, many of the things we use it for exist elsewhere.  We can share pictures on Picasa.  We can check-in to places on Foursquare.  We can connect with friends and colleagues on any number of websites.  While Facebook is a powerful platform, it is not indispensable.  Maybe Google should  be concerned that Facebook has seen a meteoric rise in time spent on its services.  At the same time, Facebook should be equally concerned.

There is no question that Facebook has gained serious momentum in its short existence.  With nearly 800 million users there is also no question that Facebook is a popular service.  How is Facebook going to continue to build and retain its user base?  How is Facebook going to fend off the growing number of people who are "over it?"  Most importantly, how is Facebook going to stay relevant and keep from going the way of Myspace?

Thursday, September 15, 2011

The Future of Shopping Online

Earlier this week, many a nerd saw that a dream might be coming true; Nike announced it was going to sell a limited number of "Back to the Future" shoes.  For those not in-the-know, these are the shoes that Marty McFly wears in the second installment of the series.  What makes these futuristic Nikes so nerd-worthy is that they mold and adjust to the wearer's feet with the touch of a button.  How cool is that?  While the version released this week still requires lacing "the old way," it still brings us one step closer to the 'future' we all pictured in that movie.

As we move closer to a future filled with re-hydrators and self-lacing shoes, I wonder how we will obtain those items.  Will we go to a store in a mall?  Will we order them online and have them delivered?  Will we be able to shop from our TV?  Maybe we will just be able to think about the item and it will show up the next day.  Regardless of how shopping will look in the future, it's pretty evident that shopping today is in dire need of a makeover.

At the start of the 20th century, downtown areas were the prime shopping venue.  Department stores were massive buildings that contained everything from shovels to stockings to sofas.  Smaller boutiques dotted the streets, window dressings enticing the passersby.  After the war, the automobile not only decreased foot traffic in urban cores, it also decreased the population as families fled to suburbia.  Another 20 years brought shopping malls and strip malls, and another 20 years beyond that brought the big-box-megaplex.

As the internet evolved from educational information sharing to public use, companies were quick to capitalize on the extra exposure.  It was thought that creating electronic versions of a mall was a smart move.  But how else can you be certain to get the best deal?  Comparison shopping engines - view one product  at all the stores online where you can buy it.  Since then we have seen familiar stores open up digital storefronts, as well as mobile sites and other innovations keeping pace with technology.

The one area where all of this technology is lagging, however, is bridging the gap between site and store.  Walmart offers a service that lets a customer order a product online and pick it up in a local store.  Nordstrom offers a similar service that will search the entire national inventory to display in the ecommerce site.  These are fantastic ways to close the gap, and it seems that many of the pieces already exist.  The challenge now is how to connect all of the pieces for a seamless experience.

For the near future, I envision a more connected experience for shopping.  Store inventory will be available to the customer on the website.  If I choose to go pick it up at a store, I will know that the product will be waiting for me.  If I want the product delivered, it will be sent to me regardless of where it lives in the store's supply.  If I search for the product on Google Shopping or PriceGrabber, the inventory will be real time, avoiding any consumers being misled by outdated product feed inventory and pricing.

Taking this one step further, smartphones will play an increasingly important part in the shopping process.  Google Goggles technology can be advanced to assist with finding products online (perhaps this is why Google purchased  Product searches can return Local Search results in stores nearby, preferably only showing those stores with inventory in stock.  Perhaps technology can be advanced and integrated to the point that you can make the purchase from your phone and then go pick it up in-store by waving your phone at the cash register to call up your receipt.

Technology is not only changing the experience for shoppers, it is also changing the entire nature of the way companies do business.  The internet gives equal footing to companies of varying sizes.  In addition to shopping advancements many technologies are changing on the payment side of the equation as well.  Google is dipping its toes into the near-field-communication arena with Google Wallet.  Several companies are experimenting with alternatives to credit card processing.  American Express even developed its own PayPal-like service.  In brick-and-mortar stores, small businesses are already embracing some of these payment technologies such as Square and LevelUp.  Google is already experimenting with inventory values in Product Search.  As these enhancements converge and morph, it will be very interesting to see just how many of these "futuristic" ideas become as real as the "Back to the Future" shoes.

Thursday, September 8, 2011

What's For Dinner?

Before Yelp came along, Zagat was one of the most revered restaurant review guides.  The premise of Zagat's guides is simple; customers fill out reviews which are aggregated both as a small blurb and as an average of scores in several categories.  While Zagat was never as prestigious as a Michelin rating, it certainly influenced many a dining decision over the years.

One of the main goals of the Zagat guide, as stated by the founders, is to collect and organize reviews to enable customers to make informed decisions.  Zagat has grown from one guide for restaurants in New York to over 70 cities, covering food, lodging, travel, and entertainment.  It's almost like Zagat was the original social network - they even distribute stickers for merchants to place on their doors just like Yelp and Foursquare do now.

Yesterday, Google announced that they intend to purchase Zagat.  While this announcement seemingly comes out of left field, it actually makes so much sense it is a wonder that it didn't happen sooner. Google's mission statement is "to organize the world's information and make it universally accessible."  While restaurant reviews in NYC is a much smaller scope, the original intent of the Zagat guide was also to organize information and make it useful.

Even more importantly, however, is Google's increasing reliance on user reviews to power Local Search and Shopping.  Google used to rely on third party sources to provide these reviews.  As social networking and peer interactions became the way of web 2.0, Google started to cultivate their own database of user reviews.  These reviews became more important in how local search results and shopping results would rank.

It only makes sense then that instead of slowly and methodically imploring users to write reviews, Google essentially purchased that content.  In doing so, Google has filled in a large gap in their library of reviews.  Google now has the ability to take some of the most trusted user reviews in the industry and spread that content to every corner of the internet.

It will be interesting to see how Google uses this new content aside from just adding to the Places and Maps listings.  Will it help with rankings?  Will it help with organic listings?  Only time will tell what Google has in store for Zagat, but it's safe to say that this was definitely a smart acquisition that actually makes sense for Google's business model.