Presentation assessing the competitive environment in which the social media industry participants compete. Includes historical evolution of the industry and the key issues facing participants in the industry now. Also illustrated are the changes in the environment, competitors, customers, and suppliers that have impacted the strategy, business model, and profitability of the industry players.
How To Get Low CPI High Value Users Via Mobile Ad Networks by Naghi Prasad
Social Media Industry Evolution Analysis
1. SOCIAL MEDIA
INDUSTRY evolution ANALYSIS
A
a
r
o
n
L
o
y
a
l
|
2. INDUSTRY HISTORY
• Before 1995
• Discovery of 6 Degrees of Separation
• Bulletin Board System
•1995-2003
• Demise of Bulletin Board System
• World Wide Web
• America Online (AOL)
• 2003-Present
• Social Media Giants
• Gaining revenue from users
3. BIG THREE
• Facebook
• ~1 billion active users
• $5 billion revenue in 2012
• Business model: incremental revenues, ads
• Twitter
• 500 million active users
• $9 billion estimated value
• Business model: sponsored tweets
• Google+
• 343 million active users
• $40 billion revenue in 2012
• Business model: highly personalized ads
4. COMPETITIVE LANDSCAPE: 5 forces
Threat of
New
Entrants
Buyer Intra- Supplier
Bargaining Industry Bargaining
Power Rivalry Power
Threat of
Substitutes
5. COMPETITIVE LANDSCAPE: 5 forces
Bargaining power of consumers
• Brand equity
• Many substitutes available
• Low/moderate switching costs
- HIGH -
6. COMPETITIVE LANDSCAPE: 5 forces
Threat of new entrants
• Saturated market
• Moderate customer loyalty
• Low initial investment costs
• Difficult user accumulation and retention
- MODERATE -
7. COMPETITIVE LANDSCAPE: 5 forces
Bargaining power of suppliers
• High availability of hardware & storage providers
• Equal supplier concentration to firm concentration
ratio
• Minimal supplier differentiation
- LOW -
8. COMPETITIVE LANDSCAPE: 5 forces
Threat of substitute products
• Large number of substitutes
• Decreasing perception of differentiation
• Brand reputation.
- HIGH -
9. COMPETITIVE LANDSCAPE: 5 forces
THREAT OF industry RIVALRY
• Many substitutes available
• Constant need for innovation and differentiation
- HIGH -
10. INDUSTRY trends
• Growth of Mobile Devices
• Shift in Marketing Strategies
• Increase of Online Presence and Activity
13. IMPACT ON STRATEGY | BUSINESS MODEL | PROFITABILITY
Impact on Industry Strategy, Business Model & Profitability
Mobile Device Growth • Opportunities for mobile monetization ↑
• More businesses using Facebook ads and greater data volume
Trends
Marketing Strategies Shift from users → Profitability ↑
• More mobilephone apps
Online Presence & Activity • More advertisements
Growth
Data Privacy
Mobile Monetization • Bad reputation for lack of data privacy-decrease of users
Challenges
• Difficulty monetizing mobile → Profitability ↓
International Censorship • Difficulty expanding overseas (China)→ Profitability ↓
• The top social networks will continue to grow but struggle
ROI & Value Measurement with competing with each other because they are hard to compare
Profit Distribution
Revenue Gain Strategies • Opportunities for revenue from users (in addition to
businesses) ↑
Changes
Connecting Businesses with • Seamless ad integration increased buyer intent
Consumers Profitability ↑
• Difficulty meeting shareholder and Wall Street demands
Transition from Private to
Public
14. FACEBOOK FUTURE STRATEGIES
• Mobile Ad Revenue
• #1 popular app in US but underwhelming mobile ad revenues
• Large amount of mobile apps
• Job Search & Recruitment Market
• Social Jobs
• Graph Search
• Online Dating
• Graph Search
Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Company currently (end of 2012) holds about $10,000,000,000 in cash, which can be used for acquisitions, buying back company shares and other matters. It also has higher gross profit margin than its main competitors, which is equal to 43.9%. Company has no debt and is not directly affected by interest rates or credit markets.Brand reputation. Apple has a reputation of highly innovative, well designed, and well-functioning products and sound company performance. Apple brand is valued at $76.5 billion and was the second most valuable brand in the world in 2012.
Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
Growth of mobile devicesShift in marketing strategiesIncrease of online presence and activity
Mobile ad revenueJob search and recruitment marketSocial JobsGraph SearchOnline DatingGraph Search
Mobile ad revenueJob search and recruitment marketSocial JobsGraph SearchOnline DatingGraph Search
Mobile ad revenueJob search and recruitment marketSocial JobsGraph SearchOnline DatingGraph Search