What You Should Know About Social Media

Stay away.  As the current barbs about Facebook’s IPO fly and as GroupOn takes a dive with its stock closing in on single digits, the Social Media helium craze is drifting further away from the accountable reality of advertising performance.

Tech stars Google and Apple haven’t escaped the hammering of late by the pundits that are blinded by the hope of social media or even mobile media.
 

They are all wrong.

The reality check that follows tracks the opening price for the above mentioned companies and the Dow Jones and NASDAQ averages.  It may not be a precise measure, but it points out the underlying value placed on these firms by analysts and the public at large.

Since the opening stock price on May 18^th (the first trading day for Facebook) and the closing price on May 30^th the result that follows sends a strong signal and a vote for value creation vs. value deterioration.
 

Apple: up 8.5%

Google: down 5.9%

Facebook: down 33.0%

GroupOn: down 11.1%

Dow Jones: down 1.9%

NASDAQ: up 0.8%

While the averages remain relatively unchanged, Google tries to keep pace while the pure play social media darlings are clobbered.  The clear winner in this “race” … Apple.

ADVERTISING'S BEST KEPT SECRETS

As we begin to assess the upfront TV market we are watchful of the new entries at the kiddie table .... online video networks.  Notwithstanding the embarrassment of a $30,000 Mustang give-away (AOL's grandstanding) we nee to keep things in perspective.

The video that follows was produced by none other than Bob Hoffman (Hoffman Lewis Advertising) and says it better than I can. 

Watch and learn. Sources credited here.

MEDIA OCEAN'S TIES TO GROUPON - OCEANS APART?

GroupOn backers Eric Lefkosky and Brad Keywell, with investments in a host of companies, most notable among them in our world, Media Ocean, have much to explain concerning the financial chess game at GroupOn.

What follows is a recent piece by Chris Nemey, at IT World, on GroupOn’s state of affairs which have since driven the stock price to a new low of $12.58 as of this writing.

As for Media Ocean, a merged entity between Donovan Data and Mediabank, I cannot help but wonder if whatever financial games going on at GroupOn could trickle down to the “Ocean” as Mediabank takes firm management hold.

“Just days after Groupon (NASDAQ: GRPN) had to make yet another revision to its finances, just days after the daily-deals site settled an $8.5 million combined lawsuit regarding illegal coupon expiration dates, just days after the Chicago firm was hit with a shareholder lawsuit accusing it of misleading investors, and just days after it was announced that the Securities and Exchange Commission was again investigating Groupon, the company's stock continues to attract buyers.

Seriously, what is wrong with these people?

Groupon's stock is now selling for less than half its IPO, and I'll tell you right now it's never going to climb above $30 again. The company continues to lose a ton of money, and it essentially has no internal controls.

But you'd think people jumping on board now would know better. Hey, new Groupon investors, I hear Bernie Madoff's starting a new investment business from prison. Get in on the bottom floor!

Maybe they think they're getting some kind of bargain because Groupon hit a new low of 14.01 early Thursday (shares were at 14.35 in the early afternoon). Well, if it's lows they're looking for, they should be more patient because more new ones are coming.

However, they'd be better off being smart than patient. Here's the thing, investors: Whether it's due to incompetence or something far worse, Groupon has proven beyond any shadow of a doubt that it can't be trusted.

Investors aren't supposed to sink money into something they don't trust. That's what casinos are for.”

Disclosure: I am short GroupOn

WE KNOW WHO YOU ARE

It's not a game any more.

From an article last week in The Wall Street Journal ...

"Some of the most widely used apps on Facebook—the games, quizzes and sharing services that define the social-networking site and give it such appeal—are gathering volumes of personal information.

A Wall Street Journal examination of 100 of the most popular Facebook apps found that some seek the email addresses, current location and sexual preference, among other details, not only of app users but also of their Facebook friends. One Yahoo service powered by Facebook requests access to a person's religious and political leanings as a condition for using it.

The popular Skype service for making online phone calls seeks the Facebook photos and birthdays of its users and their friends......a user's friends aren't notified if information about them is used by a friend's app.

An examination of the apps' activities also suggests that Facebook occasionally isn't enforcing its own rules on data privacy. "

With thanks to Bob Hoffman at Hoffman Lewis for pointing this out in his blog, The Ad Contrarian.

SEARCHING FOR SEARCH

I just finished reading a report from Marketing Charts that was chock-a-block with percentage increases for paid mobile search. You can read the report here. But to save you the trouble, I counted 44 references to percentage changes ranging from a negative 26% to a whooping spending increase of 221% …. and not a single reference to a whole number.

I do remember from grade school that a 200% increase over the number one is still just 2.

In my opinion, Mobile Search and Social Search buzz amounts to nothing more than a pre-nascent grab at the cool straws that will keep marketing CMOs spending an inordinate amount of time and money on a less than zero-sum game….for now.

It is argued that those who use mobile search are not of the normal search variety. They are wanderers looking for a pizza shop or the nearest Starbucks. Or want the latest sports scores….that just might lead them to a sports bar.

Marketers pay attention: Paid Search dollars are most effectively placed to generate returns on a PC, laptop or mobile device (tablet) that will mimic the former. Cell phones are simply not there yet, unless, of course, you’re drinking their Koolaid.

Until the mobile industry provides a standard and user friendly delivery system, let’s take the lipstick off the mobile pig and stick to simple paid search.

PS….I resent the idea that a tablet (iPad) is called a mobile device. Mobile always referred to cell phones. A tablet is a wireless (not phone) device that is transportable with a more appealing internet interface. When these two devices converge to form a more complete user experience, call me.

3D: DISMAL, DISAPPOINTING, DISASTER

My Open Kimono's blog post on 8/15/2010 warned about the 3D craze as a trending and short lived fad. That prediction is now becoming reality.

The article linked here details the downturn in feature 3D films, suggesting it was a fading fad as it was in the 1950s. Yes Virginia, history always repeats itself!

While the Guardian article focuses on films, it fails to extend the story to 3D TV. This is a huge warning sign for the set manufacturers the likes of SONY, Samsung, LG, Panasonic, Vizio, etc. that sunk billions into the 3D craze. It's so over.

Advice to the CEOs who signed off on the manufacturing folly .... cut your losses. The only potential for 3D remains with gamers.

That's my story and I'm sticking to it.

AND THE CLIO GOES TO ....

Sit back and relax. The next three and one half minutes will mesmerize you.

The dreamlike fantasy should be high on the list for a Clio. Reluctant to tag this as a commercial, let's label it a film short. The film took 2 years to compose with the help of 50+ designers and professionals.

Credits:

Client: Cartier

International Communication Director: Corinne Delattre

Agency: Marcel

Partner and Brands directors: Charles Georges-Picot, Benoît Candelle, Emilie De Saint-Martin et Benoît Jehan

Creative Directors: Sébastien Vacherot, Emmanuel Lalleve et Florent Imbert

Creative: Emmanuel Lalleve, Seyrane Boulekache

Director: Bruno Aveillan

Production: Quad

Music: Pierre Adenot

Panther tamer: Thierry Le Portier.

BREAKING UP IS HARD TO DO

Neil Sedaka first recorded the song back in 1962. This hilarious spoof version by the http://www.citizen.org/ group is a must see.
Enough said .....watch the video.

HOW TO BUY INTO APPLE'S STOCK SURGE

As we all wait for the iPad 3 (HD) to hit the streets in March, investors are watching as Apple stock (NASDAQ:AAPL) continues to hit new high notes.
The price of Apple's stock closed near $536 today and will likely continue its upward swing as major investors take advantage of the frenzy and its momentum.
While the stock is pricey for the small investor it may be wise to take a position in the voice recognition technology that drives SIRI for the iPhone. Nuance (NASDAQ:NUAN) is the company that drives that technology for Apple and a host of other companies. It's priced at about $27 a share and is a multi-billion dollar company in its own right.
Nuance is also rumored to be a potential acquisition target by Apple, IBM or Microsoft.
I tracked both Apple and Nuance stock for the last 5 years. The chart below reflects the almost parallel trajectory for both stocks, noting that Nuance (red) lags behind Apple movement by about a week.

Click to enlarge
Note: These are my own observations which may or may not be predictive of future stock prices. As a matter of record I maintain positions in both Apple and Nuance as of this writing.

IS IT TOO LATE?

Have we gone too far to trust the house of cards in whose hands we place our private lives?
Yesterday I was given to understand that banks are now scanning Facebook pages to qualify you for a loan. If they sense your activities through postings, comments and photos are questionable as a loan risk, you just might not get that loan or a great rate.

It is now standard practice for HR departments to do the same when applying for a job.

Unfortunately, what happens online stays online … forever. Online actions have consequences that can haunt from cradle to grave and beyond. The need to connect and share with “friends” is often so intense that it’s easy (especially for younger generations) to lose sight of what can become devastating consequences.

Cyber bullying has become all too common thanks to the Internet flaming and spreading hurtful posts faster than they can be stopped. The trend needs to be arrested before more kids follow in the footsteps of those we already lost.

The social networks have a responsibility to protect their user base on many levels. It’s unfortunate that the business of collecting our data (most often in circumventing ways) completely overshadows the need to protect us. Week after week we read that Google, Facebook, Twitter, Apple, Verizon and others have overstepped privacy concerns in an effort to track our online movements and locations.

It will not stop. Data of every size, shape and form has become the currency of choice for all online services. The stakes are too high. Witness the current explosion of Big Data and Cloud computing companies chased by VCs like it was during the pre-bubble days. VCs are tripping over themselves to share the spoils.

In 1984, Big Brother was too far off to be a concern. Today, what we read in 1984 was child’s play.