Will Facebook be your next call center operator?

How would you describe Facebook?

Historically, it’s been the social hub of billions of global users looking to stay connected with friends and family through shared content. Yet in recent years, it’s become more difficult to describe Facebook in a few words — depending on who you ask, it’s a place for businesses to share information with consumers, advertisers to market to target audiences, media to deliver news and, as early as last year, it’s became a place to conduct real business.

Full disclosure: I’m not an avid Facebook user. But when the site announced plans last year to socially sell to consumers through Messenger, I couldn’t ignore just how powerful this business transformation could be for both consumers and businesses. The announcement was a strategic move for Facebook, and an extremely attractive offering to business users, because it allowed them to tap into something that few have access to on their own: a billion-person global market.

Other online platforms like Google and Pinterest quickly followed suit, launching “buy” buttons, allowing consumers to make purchases through these non-traditional e-commerce sites. Over the past year, you may have even made your own purchase through one of these platforms, reveling in a customer experience that is real-time, on a platform you have already adopted and that is more tailored to your location. But most importantly, it’s an experience that gives you complete control of your interaction with a business, because you choose when, how and where you’re receiving this communication.

Just recently, Facebook launched a new capability within Messenger that experts believe will expand the site’s business offerings beyond social selling and into the world of customer service. Chatbots offer a new capability within the Messenger platform that will allow a consumer to chat with an automated system, similar to online chat support you may have previously used on an e-commerce site.

Since the launch of chatbots, reports have shown a flock of business developers using the new capabilities, and end users adopting the developed applications. In just one month, almost 5,000 businesses have used chatbots to send order confirmations and automated alerts through Messenger. Even video game franchise Call of Duty has used a chatbot to send upwards of six million messages to its gamers.

These numbers are no joke. With the widely accepted and hugely popular business application of Messenger, it begs the question: Will Facebook become the new call center operator?


Here’s why: As I mentioned, Facebook has a global footprint unmatched by any other business online. More so, because of the vast amounts of personal data they’ve gathered about individuals, they have the ability to create personalized experiences that consumers today demand. But probably the most important technology they’re leveraging right now is video — which for online and offline businesses is now the hottest ticket to customer engagement.

Video is the new communication channel everyone is trying to get their hands on. For Facebook alone, consumers are viewing 100 million hours of video a day via Facebook mobile. In fact, daily views have skyrocketed from one billion to eight billion in a single year. Nicola Mendelsohn, vice president for Facebook in Europe, the Middle East and Africa was just quoted as saying Facebook will probably be all video in the next five years.

Consumers want to consume through video. But consumers also want to engage through video. There are new video solutions available today that go beyond pause and play. Recently, Shoplandia, a video-enabled e-commerce marketplace, launched the first end-to-end shoppable video creation and streaming platform. For sellers, they can create a story behind their product. For the buyer, they can imagine what it means for them. They can see how a product actually works or how an outfit can come together.

Real businesses outside the e-commerce space are using interactive and personalized videos to engage with consumers at unprecedented levels. These aren’t your static YouTube videos. No, these videos offer consumers a self-guided journey, giving all control to the viewer. Viewers can click through the video, choosing a journey they want to experience.

Some insurance businesses have returned an 80 percent increase in revenue after deploying the videos, and one telecommunications company experienced a 12-point jump in Net Promoter Score. A services company even saw $85 million in sales revenue through deployments of videos. So why haven’t e-commerce businesses begun to capitalize on this technology, too?

Facebook is leading the charge for social commerce done right. They’ve proven success as both a social and business platform, but their success as both a social seller and customer service provider will depend on their ability to leverage new video technologies. The use of self-service video technologies that are interactive and engaging will digitally transform any social platform from what it is today to what it wants to be tomorrow.

I believe we’re in the midst of a profound period of digital transformation. Through the integration of social platforms, e-commerce and interactive, personalized video, I will soon hear the words, “Hi, Gregg. Thank you for contacting your call center support, brought to you by Facebook.”

Featured Image: Bryce Durbin

Will Facebook be your next call center operator?
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Facebook crushes Q2 earnings, hits 1.71B users and record share price

Coming off an all-time high stock price of $123.34, Facebook in Q2 2016 smashed earnings again. The social network continued steady growth just slightly slower at 3.63% compared to last quarter’s 3.77%, adding 60 million monthly users this quarter to reach 1.71 billion. It scored $6.44 billion in revenue and $0.97 EPS, blowing past estimates of $6.02 billion and $0.82 EPS.

This is Facebook’s 16th beat out of 17 quarters since it went public at $38 per share. Wall Street reacted to the positive earnings with a 7.5% bump in after hours trading to $132.60. It also hit another milestone: 1 billion daily mobile user.

Revenue growth was 59% year over year, which looks favorable compared to competitor Twitter, who yesterday announced its YOY revenue growth sunk to 20% from 60% a year ago. With 84% of ad revenue from mobile, total ad revenue was $6.24 billion.

Facebook DAU Q2 2016

Though the big monthly user count gets the spotlight, Facebook’s daily active user count is a better measure of its health. Total DAUs reached 1.13 billion up 17% for the year, with 1.57 billion mobile MAUs up 20%. What’s especially remarkable is that Facebook’s stickiness, or DAUs divided by MAUs, stayed steady at 66%. That means people aren’t using Facebook less even as it grows and ages.

On the earnings call, the most exciting reveal was that Facebook now sees 2 billion searches per day, up from 1.5 billion a year ago. Zuckerberg said people searching for what others are saying about certain topics is driving that growth, which highlights Facebook’s on-going quest to win public chatter — as space Twitter has long ruled. However, Facebook doesn’t plan to rush to monetize search.

Facebook’s efficient social network operation raked in $2.05 billion in profit, compared to $719 million a year ago, while average revenue per user is now $3.82, up a big 15% from last quarter. As we detailed last quarter, Facebook has found a way to squeeze more cash out of the developing world, where ARPU grew a sharp 24% to $1.13. 

And after years of success, Facebook has stockpiled $23 billion in cash on hand in case it wants to make any other big acquisitions.

Facebook Mobile DAUs Q2 2016

Facebook hit with bad press while product keeps winning

Facebook’s Q2 was marred by several bouts of negative press. Allegations from anonymous sources suggested it was purposefully suppressing conservative news Trends. Facebook denied the allegations and its internal investigation found no proof, but it vowed to better train Trend curators to avoid bias.

Later, on the behalf of its users, it changed the News Feed algorithm to prioritize posts from friends and family over stories from news publishers and brands. It’s still too early to draw conclusions on the size of the drop in reach and referral traffic for publishers, though Facebook admitted it’d be significant.

Facebook Messenger Growth Graph

Facebook Live continued its growth, pulling some attention from Twitter’s acquisition Periscope that beat it to market last year. Live got new creative expression features and an API to help broadcasters use professional equipment. Meanwhile, video on Facebook continued its ascension, becoming a legitimate YouTube competitor. Mark Zuckerberg wrote in his letter to shareholders that “We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services.”

Facebook’s secondary products enjoyed big milestones. Facebook Messenger hit 1 billion active users, thanks to constant product iteration like the new addition of an end-to-end encryption option, though also the fact that Facebook removed chat from its main app and forced users to download Messenger.

Meanwhile, Instagram reached 500 million users. Its community bristled at the announcement that an algorithmic feed would start highlighting the most popular posts instead of showing a purely reverse chronological stream. But that backlash hasn’t seemed to hurt Instagram too bad.

Facebook ARPU Q2 2016

Overall, it looks like Facebook keeps winning despite its massive size and old age for a social product. It’s got a diversified set of products thanks to acquisitions, and plenty of cash to buy more. The company has figured out how to squeeze more cash out of each user while still adding tons per quarter thanks to emerging markets and its internet access initiatives.

While Snapchat might be pulling away daily life-casting, and Twitter is combining the first and second screens with its livestream deals, Facebook remains the core social network and messaging product of the world.

Facebook crushes Q2 earnings, hits 1.71B users and record share price
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Tumblr to introduce ads across all blogs

Tumblr this week quietly announced plans to roll out a new advertising program across its site which will see it implementing ads across users’ blogs. The company did not provide specific details on how the program will operate, but it appears to be an expansion of its earlier Creatrs program, which connects brands with Tumblr users directly, instead of having advertisers work with third-party influencer networks.

Now, Tumblr says that the same opportunity provided by its Creatrs program will be available to “any eligible Tumblr—poet, musician, fan artist, and misfit weirdo memelord alike,” the company explains on its official Staff blog.

Tumblr users wishing to earn money in the program will need to go through some sort of registration process, which is launching this year, Tumblr also noted. The details of the partner program and how users will be onboarded is still being worked out, however.

In addition, users can opt out of having ads displayed on their blogs by turning off on-blog advertising in the Settings. Yes: that means that ads on blogs will be the default – effectively allowing Tumblr to monetize its network of over 306 million blogs from 65 million users, unless those users take an explicit action to disable ads. Users will also be able to disable ads on a per-blog basis if they choose.

Tumblr says that ads will appear in three places, including the main page of the Tumblr blog if the blogger is using the default Optica theme for their blog, as well as on the slide-out section on the web, and on Tumblr’s mobile apps and mobile web.

The company says it plans to launch the ads on Thursday.

“This was a long time coming, and will be one of the biggest projects we’ve ever launched at Tumblr,” wrote Tumblr founder David Karp on his blog. “It’s been a busy summer—a new GIF maker, live video, new messaging stuff—and there’s a whole lot more on the way. Next up: getting you paid for your work.”

The announcement comes at a time when Tumblr’s future is up in the air, given that parent company Yahoo this week was acquired by Verizon in a $4.8 billion deal. Verizon gains the Tumblr social network as a part of the larger group of content sites it’s taking over, which also includes Flickr, Yahoo News and Yahoo Sports. (Disclosure: Verizon also owns TechCrunch parent company, AOL.)

While Tumblr is inconsequential to Verizon in terms of making its Yahoo deal profitable, it’s still unknown how it will fit in with Verizon’s ad strategy in the future – that is, if Verizon will forget the site and leave it alone, or perhaps even invest it in its further development in a way that Yahoo failed to do.

Reached for comment, a Tumblr spokesperson said, “We continue to deliver ad solutions to grow Tumblr’s business and maximize value for our advertisers and community. Featuring Yahoo display and Gemini native ads across the Tumblr blog network is another example of these ongoing efforts.”

Tumblr to introduce ads across all blogs
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Twitter dives after mixed Q2: $602M sales, $0.13 EPS, MAUs up 3% 313M

Twitter today reported Q2 earnings, and the woe that is its poor user growth continues, with its 313 million monthly active users up just 3% on a year ago, and up less than 1% on its previous quarter.

The company reported revenues of $602 million with adjusted earnings per share of $0.13. While revenues are up 20% on a year ago, the numbers were a miss on sales and a beat on EPS: analysts were expecting $606.8 million in revenue and adjusted earnings of $0.10 per share.

It also reported a Q2 GAAP net loss of $107 million; non-GAAP net income was $93 million.

And Twitter has also published Q3 guidance that also does not speak of big growth ahead: it expects revenues in the range of $590 million and $610 million.

The market is not happy with the numbers: the stock is now down 10% in after-hours trading.

Last quarter, the company reported revenues of $595 million with 310 million MAUs and weak guidance. In other words, sequentially, user growth in terms of MAUs was just under 1%.

This graphic provided by Twitter clearly illustrates the problem: the company — despite its various efforts — has hardly moved in the last quarter, and excepting Q4 has had nearly identical quarters for the last year.

twitter revs

Advertising revenue totalled $535 million, an increase of 18% year-over-year, Twitter said. Mobile advertising revenue continues to lead the way, accounting for 89% of total advertising revenue.

Mobile was also 82% of total MAUs.

While growth was not great overall, in the U.S. it was especially bad: U.S. MAUs were 66 million for Q2, Twitter said, up a mere 1% year-over-year and up only 1 million on the 65 million of the previous quarter.

Internationally, things were slightly better, with MAUs of 247 million for Q2, up 4% year-over-year and up 2 million on the 245 million of Q1. The issue is that generally speaking, if you compare Twitter to other social platforms like Facebook that pick up users abroad to offset some saturation in its home market, international and developing markets should be a much bigger growth engine for Twitter than it is.

Twitter has consistently disappointed the market with its poor user growth, which all but stalled earlier this year. Yesterday, the company seemed to be trying to head off today’s news at the pass by announcing yet another marketing effort to better explain the company and what it’s purpose is for the world at large.

This is something that came up in the shareholder letter, too:

“Twitter is what’s happening now,” CEO Jack Dorsey writes. “Whether it’s breaking news, entertainment, sports, or other everyday topics, seeing what’s happening and watching live events unfold with the conversations around them; that’s the power of Twitter.”

He also noted five priorities for the year: “refining our core service, live-streaming video, creators and influencers, safety, and developers,” and the company believes it has made “meaningful progress” across each of these in the past quarter.

There certainly have been some changes: Twitter has tweaked its basic format by instituting algorithmic changes in the timeline to surface more “sticky” Tweets rather than chronological Tweets; and it has contemplated ways of extending its 140-character limit: these are examples of how the company has tried to address some of the complaints.

The company has also been making a big effort to sign a lot of content deals, specifically around sports, to stream events live on its own platform. It’s still very early days, and one initial effort covering Wimbledon was nearly impossible to find on the site, but it’s an interesting turn for a company that had up until now positioned itself as a place to share links to things, not consume things directly. Whether it works to keep people around for longer is the big question.

And it’s trying to make more headway into new areas like the currently trendy area of VR and AR, such as with its recent acquisition of Magic Pony Technologies.

But the challenges remain. One of the biggies that we’ll be listening for on the call is whether the issue of harassment comes up at all. The company is still working through ways of dealing with so-called trolls who bully others on the platform, trying to walk the fine line between the free speech that Twitter in theory celebrates, and shutting down bad actors.

More to come.

Twitter dives after mixed Q2: $602M sales, $0.13 EPS, MAUs up 3% 313M
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