Alphabet: what does it all mean?

Social media went into overdrive on Monday evening UK time when Google announced a formal restructure of all its businesses, creating a new company called Alphabet. For the man on the street, Google means Search, YouTube, Drive (including Docs, Sheets etc.), email and Android. For the average marketer you can throw various advertising products and Google Analytics into the mix. For business IT managers, it is everything from productivity, software-as-a-service and possibly as a supplier of a search appliance for its internal servers.
Google Logo in Building43

Three different customer types exist and a product set that grows layer-by-layer like an onion. The bulk of Google’s revenue currently comes from advertising due to the clever technology behind it. One can see from Microsoft’s move to the cloud that there is less revenue in cloud computing than in Google’s current business, so when advertising reaches a natural ceiling for growth, services will provide an incremental benefit at best.

Android was designed as a conduit to Google services and for advertising to venture out into the mobile space. But the world’s most popular mobile operating system is not without its own issues. Despite all phones essentially looking the same, there is a massive amount of fragmentation in the Android marketplace, which makes life harder for developers. Google is also a developer, so building applications that it can build loyalty through and make money from becomes more difficult.

Secondly, an appreciable amount of Android devices (those sold in China) and many sold in Russia don’t use Google services and provide little to no opportunity for Google advertising.

This means that Google is forced to make big bets in very different sectors. Sergey Brin and Larry Page, partly because of their entrepreneurial nature to explore new opportunities, built in an ability to scale Google beyond the business lines that I have outlined above. This was apparent from their original IPO share prospectus and accompanying letter. Xerox is famous in Silicon Valley lore for fumbling the future, by inventing lots of products that would be recognisable to us today in the late 1960s and early 1970s, only to see a corporate head office miss the boat. Brin and Page would have had some awareness of this. Microsoft’s inability to leapfrog beyond its core business successfully is probably also a factor for consideration.

Alphabet formalises the framework that Page and Brin had been working to for a number of years.

So what does this mean to Google?

For the foreseeable future it will be more of the same for Google. We’ve the seen the business scale back services; by September last year Google had closed down 30 services. It has cut back the functionality of Google Adplanner as a reference tool, to just focus on sales. Google has continued to prune back services such as Google+ (a challenging task given the tentacles + has across Google’s services). The changes inside Google for staffers also reflect similar moves towards profit optimisation, move away from experimentation and being a ‘mensch’.

The biggest move was to get rid of the 20% of time engineers could devote to projects that interested them. The truth is since at least 2009, the Google myth of people working there to change the world rather than delivering profit hasn’t held sway for a great deal of their staff.

On the outside Google will still likely have playful swag and cool offices, but the reality is that it will be more of a ‘normal’ business. That means that we won’t see the next Facebook coming from within Google and that whilst the speed of evolution will continue to run along at the same pace, substantial innovation probably won’t. This kind of business requires a different kind of leader to Page, and by appointing Sundar Pichai, will create a cultural break from the past. Pichai is likely to be able to get more revenue out of the Google ‘cash cow’ to help drive innovation in these other areas.

Page and Brin are freer to bring their energy to the other businesses in Alphabet. For instance, keeping Nest out of Google allows it to work easier with Google competitors like Apple and Microsoft as part of a wider eco-system.

Lastly, it could be an effort to ring fence Google’s anti-trust woes within the existing business and prevent restrictions being imposed against its newer businesses because of the past sins of the core business.

So what does this mean for marketers?

Google is likely to pursue a steady as she goes approach. The focus will be to optimise revenue, so there will be tension with agencies on advertising practices. We’ve already seen this, with Google restricting methods of buying YouTube advertising. These changes will impact the advertising technology business around programmatic advertising.

The picture with SEO is more about slow and steady change; Google has evolved its Panda index changes to a rolling change rather than the massive shake-ups of old.

More information

Android Fragmentation Report August 2015 – OpenSignal
2004 Founders’ IPO Letter – Investor Relations – Google
Fumbling the Future: How Xerox Invented, then Ignored, the First Personal Computer
What’s eating Google’s brand | renaissance chambara
Why Google Employees Quit? | TechCrunch
Google Tightens How Advertisers Buy YouTube Ads | AdWeek
Google’s $6 billion miscalculation on the EU | Bloomberg Businessweek

#Health in 140 characters or less

Finding a space for using Twitter in a healthcare setting can sometimes be a little tricky. There are many issues to consider such as confidentiality, regulatory requirements and perhaps even the perception by some that Twitter is not a suitable setting for health discussions.

However, the social media phobes amongst us in the healthcare industry strongly need to reconsider their aversion if a recent article in the Health Service Journal is anything to go by. They analysed the use of Twitter as a communications platform for NHS Trust chiefs. Their investigations concluded that more than a third of NHS chiefs are now using Twitter as a means of keeping in contact with staff and exchanging ideas in order to drive better practice.  Gavin Boyle, chief executive of Chesterfield Royal Hospital Foundation Trust is just one of the chiefs quoted in the article who says he uses Twitter as a staff engagement tool, with over two thirds of his followers being hospital employees.

It’s not only those at the higher management level of the NHS that are now embracing Twitter as a means of engagement.  The #hellomynameis campaign started by Dr Kate Granger @GrangerKate is a wonderful example of using Twitter to develop better relationships between frontline NHS staff and patients. When she was diagnosed with cancer Granger became acutely aware of the lack of interaction between doctors and their patients.  Unfortunately, when she received treatment last year for a routine kidney stent replacement, she discovered that more often than not she did not receive even a simple introduction by the members of staff providing her treatment.

In light of this, Kate invited healthcare staff to pledge their support and commit to introducing themselves properly to patients, spreading her message using #hellomynameis. The campaign has gained considerable traction, with many NHS trusts around the country encouraging their staff to embrace its message.

hellomynameis

We have noticed the effectiveness of Twitter for our own clients.  Just recently we were trying to reach a number of leading cancer influencers in the UK on behalf of a client who had compelling data around a new diagnostic they are developing.  One of them in particular remained unresponsive to phone calls and emails.  We decided to Tweet him a link to news around the published data and within hours he had replied requesting that we arrange a meeting.  He is now in advanced discussions with the client about running their next clinical trial.

On a global scale, Twitter is being utilised for its ability to reach millions of people and collect lots of valuable data. The Center for Infectious Disease Dynamics based in Penn State University is developing algorithms that will harness Twitter as a disease surveillance tool, crowd sourcing information shared by millions of Tweeters in an effort to identify public health issues as they emerge.

These are just a few examples of the wonderful uses for Twitter in healthcare.  So whether you want to use Twitter for tracking down that elusive key opinion leader or be at the fore front of the health crowd sourcing movement, there really are no more excuses. Please share any examples of Twitter being used in healthcare in the comments section below!

FT vs Guardian: The Ongoing Paywall Debate

The Financial Times has been held up as something of a pioneering newspaper, but its latest digital expansion comes at cost to the print.

The paper has done a good job of adapting to the digital world, attracting large numbers of paying subscribers to both print and online. It’s usually the default pro-paywall example; although with the note its content has the advantage of being unique enough to attract paying readers.

FT guardian paywall

Long standing editor Lionel Barber announced on Monday a renewed focus on digital, and is hiring 10 new employees specifically under a digital remit. The knock-on effect is 35 current FT staffers face the chop – or more accurately being offered a ‘buyout’ according to Paid Content. 35 of these buyouts will save the paper £1.6m this year, according to an internal email sent yesterday.

Barber says “The intention is to reduce the cost of producing the newspaper and give us the flexibility to invest more online”. There’s also a mandate to focus more on “priority stories”, an streamlined international presence and new products in the coming year.

Interestingly, Barber sees less competition with rival papers and more with social media channels, “Our common cause is to secure the FT’s future in an increasingly competitive market, where old titles are being routinely disrupted by new entrants such as Google and LinkedIn and Twitter.”

On the surface it may look like hard number crunching (+10 -35 isn’t tough maths), but these are the hard calls publishers and editors are being forced to make in the digital world. Ultimately is does mean we’re looking at smaller editorial teams, but it also means more focused teams delivering the content readers want to consume and pay for. What Mr Spock might have called ‘the needs of the many’. Although there’s no way around the fact it’s tough times for the 35 potential buyouters.

At the sometime Barber was tapping out his email, Andrew Miller, CEO of Guardian Media, has reaffirmed the group’s commitment to “open journalism” and shunning of the paywall model. Miller is one who has argued the FT’s paywall works because subscribers were always willing to pay for the premium business and financial content – something his paper can’t match. In an article with The Economist last week, he wrote:

“The overriding business task is to monetize the online audience…when we talk of ‘audience’ we still mean our readers…newspapers have always used a blend of different funding mechanisms to extract revenues for their ‘product’. That’s why I am unconvinced by those who say that the only model that works is to build paywalls. This is not an area where one size fits all.

“In some news organisations where growth in readership may not be so important and in particular where there is a strong existing print subscriber base to build on, a pure paywall may make excellent business sense. The Economist and perhaps the Times spring to mind here. It also makes sense in other publications which feature business-critical information – for example, the Financial Times and, in the Australian context, the AFR.”

In short, the FT et al can afford to monetise content and focus on digital because they don’t have to worry about growing their readership – but The Guardian does.

So where The Guardian is competing with paid-for titles and grabbing readers wherever it can, even in Australia now, the FT is more concerned about monitising content and developing a profitable digital business. The idea of “open journalism” is a noble one, and one I hope works out in the long term. But for now, it seems making the tough calls is the better option for newspapers looking for a firm foothold in digital.

Paid Content: All you need is love…and tablets…and smartphones

Paid-for news content is having a tough old time in the Internet age. Us readers are so used to getting news for free that even the lowest cost news and online content is shunned in favour of free site. According to two separate reports, from Forrester and the Columbia/Indiana University, there are two lifelines for news content – the rise of tablets and smartphones and…umm…’love’.

Easy one first. Analyst house Forrester has released its predictions for potential grown in the paid content market in the coming years. It’s being driven by the increasing number of smartphones and tablets out there. The firm predicts the market for music, games, film, TV and news content will grow by 65% by 2017 – bringing it to a total of £8bn. ‘Digital news’ specifically is expected to shoot up to almost £250m, a 77% increase in spending from us consumers.

Which all sounds like good news for those news outlets with paywalls erected around their content – the FT, The Times and New York Times and so on.

Forrester states the change will be driven by the appeal of new services available on cutting edge tech, although how this relates to news specifically isn’t clear. Forrester’s own Darika Ahrens says “Demand among European Internet users willing to pay for digital content grew between 2009 and 2010, but the number of online buyers didn’t due to a lack of compelling service offerings.”

So we need some more compelling services. And also a bit of ‘love’. That’s according to a study from  Columbia/Indiana University titled ‘Paying for What Was Free: Lessons from the New York Times Paywall’.

As the name suggests, the study examined New York Times reader habits and motivations for paying for the paper’s content post-paywall. The 954 participants were shown two “justification paragraphs” that explained why the New York Times had opted for a paywall model.

One focused on the publisher making a profile from editorial, while the other emphasised the charge was needed to avoid the paper going out of business. The respondents were then asked to rate “how the information changed their support for the paywall and their willingness to pay”. By far and away, they were more likely to pay when facing up to the prospect of the paper closing.  Sadly, according to Paid Content, guilt is “not a guaranteed way to get readers to pay”, as most readers chose not to pay at all, regardless of the statement they read.

There are a few bright spots in the paid content space, but it’s a long slog toward a healthy, stable and profitable market. Love and smartphones are not enough.

Infographic: How best to use Twitter and LinkedIn (don’t get excited and don’t ask questions)

It seems the most efficient way to communicate nowadays is through an infographic, especially if your chosen topic is social media. Still, as The Wall notes there are a few interesting tidbits in the below.

The information has been compiled by Dan Zarrella, an award-winning social media scientist and author.

Here’s a snapshot, you can scroll through the whole image to get all the stats and inside info on how to get the most attention on Twitter, LinkedIn and Facebook:

  • 1-5 words is the optimum length for ‘B2C’ tweets, whereas the more wordy B2B folks prefer detailed 11-15 word tweets
  • Getting excited isn’t such a good idea on Twitter. Including an explanation mark in tweets means you’ll get 8%-15% fewer ‘clicks’, but on LinkedIn enthusiasm is your friend and the odd ‘!’ will give you 26-27% more clicks
  • Asking a question is even worse than getting excited. Including a question reduces the ‘clicks’ on LinkedIn messages and tweets by anything from 25% – 52%. Not a great stat for social media engagement
  • If you’re willing to not ask questions and keep the excitement to a minimum, you’re best to get tweeting on a Wednesday – and possibly a Monday too if you’re all consumer-like. However, LinkedIn is far better on a Sunday for B2B types (presumably they’re all too busy to network during the week) and Monday if you’re a consumer (that’s the Monday blues for you).

Twitter LinkedIn infographic

@simonhill