Much has been written about how social media has transformed our lives. In my opinion it has been an extremely positive impact – providing transparency, accountability and over all, the democratisation of information.
However, the dynamic nature of social media means that its effect is constantly evolving. For example, while mobile is on the rise and will be surpassing desktop traffic this year, recent statistics reveal that Google´s search engine might be facing its toughest challenge since it was first launched. Google search might need some disruptive evolution if it is to survive. On the other hand, Facebook and other social media networks are gaining ground in the mobile world. Is it finally time for the semantic web to emerge? These trends are having a big impact on how companies are marketing their products and services and of particular relevance to me, how people in the financial industry are exchanging information and trading. In this article I will try and identify what I believe to be the major trends in social media marketing and how best to adapt to these trends to improve engagement with your audience.
1. The rise of social media has further elevated the importance of brand
A brand is a promise of a relevant and differentiated experience. The product or service is the evidence of the truth of this promise. This definition was proposed by one of my biggest mentors Larry Light, former CMO at McDonald’s, who launched the very successful “Im lovin it” campaign. I believe that this definition still applies today.
However, we are undergoing big and rapid changes driven by social media, mobile access to the Internet and consumer behaviour. Today, brands have to deliver the product or service to prospects even before they become a client. Marketing and social media become not only part of the promise but also part of the product and service.
2. The proliferation of mobile technology is changing the way information is accessed
The Internet used to work as a library, in which we would need to connect by using a dial-up modem, wait for the modem initiating sounds to tune in and then hope that we were online. Once online we would do one of two things: either open a browser and search for something ”indexed out there” by a search engine or open our email to check whether we have mail.
This behaviour is one of the reasons why Google has been dominating the Internet with the majority of traffic and usage worldwide since 2007, when it surpassed Microsoft. Today, Google is still dominant with 1.2 billion unique visits per month.
Under this model, search engines, and to some extent display advertising, were the main source for people to find products and services online. Many companies worldwide relied mostly on PPC to generate leads and find clients that could benefit from their services.
However, this is about to change. Mobile traffic is on the rise and 2014 is thought to be the the year in which mobile traffic will surpass desktop. In the UK “intelligent positioning” claims that by June this year there will be more people accessing the Internet via mobile phones and tablets than via Desktop. People go to sleep connected and wake-up connected.
This change in consumer behaviour is fundamental. It means that we are moving from a library approach to get indexed information to a more intelligent web, which serves information to us via apps based on our relationships, feelings, background, interests and preferences.
Google has a big challenge. While they still have the largest share of mobile advertising, the trend is reverting. According to eMarketer, by the end of this year, Google is expected to have lost almost 3 percent of its market share in the last 3 years while Facebook is expected to grow its market share by 16 percent in the same period. Facebook has figured this out and their market share is growing at a significant pace, while Google’s is dropping and is less dominant than it once was. This includes everything, Google glass, Android, Youtube, etc.
You can see this same trend among advertisers in the financial industry. In a 2013 eMarketer survey Financial Brands worldwide said they expected to increase their mobile, social media and video spending by 59, 58 and 57 percent respectably, while spending only 40 percent more on search.
Google’s challenge is that they have not been able to construct a successful social media strategy, and what is even worse, they cannot index it.
Matt Cutts recently declared in a Youtube video that Google has no access to index Facebook and Twitter. He also mentioned that we marketeers should not bother using it as a platform to optimise our website ranking. Matt has also mentioned several times that infographics, guest posts, and other forms of content should not be used for search engine optimization.
I agree with Matt’s view that content should not be used for SEO purposes. We should use content more actively, but to connect and deliver value to our target audiences via social media.
However, most brands are now riding the content wagon and as a result we might reach a point in which the opportunity to reach audiences via content will be minimal.
3. The semantic web is emerging. Browsers and traditional search engines need to adapt or die!
The changes in user behaviour also mean the internet is becoming more fragmented. People are becoming used to receiving their information via apps, and the web is becoming less interconnected. Search is becoming more intelligent and is getting integrated into apps, Siri, Google glass and probably soon into Oculus too. This will lead even further to the demise of the library style search which I referred to earlier.
Furthermore, we no longer need to leave an app and open a browser to see a website. Traditional browsers are becoming less and less necessary. The semantic web seems to be finally here. The challenge for facebook and other leading apps is how to re-integrate the web.
Could the semantic web be one of the points of the agenda behind Zuckerberg’s internet.org project?
Today marketing has to be multi-layered, multi-faceted, multi-targeted, integrated and agile. At Saxo Bank we work like a news organisation. In order to deliver value you need to ride the content wave and deliver superior experiences in the form of entertainment, education and in our case, first-class thought leadership. These experiences have to be delivered both digitally and in person.
Now I would like to consider the use of social media in the financial markets.
1. There has been a revolution of information and social media in the financial industry
In the financial world we are experiencing some mega-trends when it comes to social media. With the increasing volume of information available to traders, there have been various projects aiming to provide faster access to relevant information. In some instance this has been done via algorithms which can tap into the pull of information available, filter it and therefore improve trading performance.
A key milestone in this area was in 2006 when Monitor 110 hit the front page of the Financial Times.
Roger Ehrenberg, the former head of Deutche Bank’s fund of hedge funds launched Monitor 110 with the vision of centralising & turning Internet information into alpha generation for institutional investors.
The basic idea was that the system would act as an aggregator and a filter for hedge funds to get faster access to relevant information. They would have access to information before it became visible to the average investor. This announcement generated great amounts of publicity; however, only one year after its launch the company went out of business. #FAIL
In its post-mortem, Roger claimed the reason the project failed was that they had too much PR, too much money and no customer relationships. I believe that there is no such thing as too much PR if the product and service are good; there is no such thing as too much money; and in actual fact Monitor 100 did have valuable customer relationships, in the form of ten hedge funds testing the system. The truth is that Twitter, a more decentralised way of accessing breaking news launched in 2006 and by 2008 it was already getting a lot of traction. However, Twitter did not solve the filtering challenge. Funny enough, it was Roger Ehrenberg who launched TweetDeck a powerful filtering system and later sold it to twitter for 40m USD.
2. Major banks are banning traders from using multi-dealer chat-rooms while the rest of the world is sharing more openly
Global banks such as JP Morgan, Deutsche Bank, Goldman, Citigroup, UBS, have decided to ban traders from using multi-dealer chat functions through fear that such platforms could open the door to market manipulation. Under a new policy, these banks will not allow person-to-person communication over instant-messaging services created by Bloomberg LP, Yahoo Inc., AOL Inc. and other third-party providers.
The financial industry seems to be lagging behind when it comes to sharing in social media and even going against the flow when it comes to sharing openly. For the rest of society, there is a move to even greater transparency – today it seems that most people have no secrets and we are becoming accustomed to sharing our pictures, thoughts, profiles, interests and lives openly. We even share our homes (Airbnb).
Finance used to be social, the London Stock Exchange started at a coffee house! Traders used to gather at coffee shops where a list of prices would be presented and they would casually buy and sell commodities and stocks. This has changed and today, in spite of all the technology advances, banking seems to be the last fortress of secrecy.
Gone are the days when trading decisions were being made based on corporate announcements, print news articles or delayed data emanating from exchanges. We trust our peers and we are making more of our decisions based on their open recommendations. While Twitter is now an agile community where the news break and markets are being discussed, are Twitter users putting their money where their mouth is?
At Saxo Bank, we have embraced social media – we have created TradingFloor.com, a trading platform which we have described as the ‘facebook of trading’ and which we hope will democratise access to trading. We have combined our award winning multi-asset platform with a social trading community of serious investors and believe that this will revolutionise the way people trade.
Imagine a world where finance is open, transparent, social and with decentralised information. Take a look at www.TradingFloor.com