Facebook COO Sheryl Sandberg sparked a firestorm this week with her bold assertion that email "is probably going away."

But she's not the first to make this claim. Just do a quick Google search, and you'll find plenty of bloggers warning of email's demise. (You'll also find loads of puns saying we should "Google Wave" goodbye to email--so much for that.) Even the Wall Street Journal published an article last year arguing that Facebook and Twitter were now king among online communication tools ("Email has had a good run...but its reign is over"), echoing Sandberg's beliefs.

Is email really finished?

According to Sandberg, only 11% of teens email daily, a statistic she sees as a sign of the coming transition to SMS and social networks. But in 2005, another study found that less than 5% of American teens aged 12-17 preferred email over instant messaging for digital communication. Now, five years later, many of those teens are entering the business world--but we haven't seen AIM, Yahoo Messenger, and G-Chat overtake good old-fashioned email.

At least not yet.

A study by the Nielsen Co. of email consumption in Australia, Brazil, several European countries, and the U.S., found that usage rose 21% between August 2008 to August 2009, reaching 276.9 million people. During that same period, users of social-network sites leaped 31% to 301.5 million people. Because of this sharp growth, Internet communities like Facebook are eating away at the amount of time users spend communicating through traditional messenging services: Between 2003 and 2009, time spent on email sites dropped 41%; social networks, on the other hand, now represent 22% of total user Internet time--up 24% since last year.

Another recent Nielsen study, however, found that social networks have actually helped increase email consumption. "We decided to churn some quick data to test our hypothesis that 'Consumption of social media decreases email use,'" explained Jon Gibs, VP of media analytics for Nielsen. "It actually appears that social media use makes people consume email more, not less, as we had originally assumed."

To further complicate the situation, tech market research firm the Radicati Group released a report in April which estimated that social networks will grow at a remarkable pace in the next few years--but it also showed that worldwide email usership would balloon as well. "The number of worldwide email accounts is projected to increase from over 2.9 billion in 2010, to over 3.8 billion by 2014," the report said. "However, Social Networking currently represents the fastest growing communication technology among both consumers and business users, with over 2.1 billion accounts in 2010 which are projected to grow to over 3.6 billion accounts by 2014."

The Radicati Group's report also showed how daily email use has been dropping for both consumers and business people--clearly an effect of social networks.

Average Number of Consumer Emails Sent/Received per User/Day:

So is Sandberg right? Are social networks and SMS replacing traditional messenging services? Is it even fair to pit these services against each other?

After all, what is "email" anyway? Today, services such as Gmail now include elements of chat, status updates, document editing functionality, and more--it's impossible to clearly define what makes a social network, and what makes an email service.

"There's a lot of grey area," says Todd Yamasaki, a market research analyst at Radicati. "It's the combination of everything, not just social networks, that's contributing to this decrease in email usage."

"[But] I think what Sandberg said was a bit premature."

So far, it seems the evidence is inconclusive. What's your take?

My emails have become so boring over time it is a big "notification" service in many respects and it is no longer the platform where "conversations" are had. What about you? I am experiencing that other forms of social media have given volumes a bit of a boot recently.

May 24, 2010

Standardized Marketing Metrics = Herding Cats

BY: Pat-LaPointe TAGS: building skills, marketing spend, Featured

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The level of press coverage is growing. Committees are forming left and right to discuss options. Financial reform? No, we’re talking about standardized marketing metrics – a movement that’s getting more press, but not much traction. The idea of standardizing metrics makes sense when viewed through the lens of the financial community: If we could rate all marketing organizations on some common set of metrics, we could compare their performance side-by-side and see which ones are doing a better job, right?

Wrong.
 

Putting aside for the moment the relatively low state of readiness with in the marketing world to enact any concerted effort at improving metrics (standardized or otherwise), there are two huge obstacles to standardized marketing metrics that will take many years to overcome.

First, even finance has only a few high-level metrics in common – and most of those can be calculated in enough ways to make your head spin. One company’s definition of “revenue” isn’t the same as another’s. And forget about “profit”. There’s EDIT, EBITA, EBITDA, “cash flow”, and “net cash flow from continuing operations”. They nearly defy comparison for all but the most financially literate insiders.

If you think the finance world is creative with their proliferation of “standardized metrics”, just wait until the marketing community gets into the act. The footnotes sections of annual reports will expand dramatically, updated with PURLs and real-time flashing links to the latest YouTube commercials.

Second, who really wants this to happen? The only constituents clamoring for standardized metrics are A) the marketing consultants who would like to position some aspect of their proprietary methodologies at the center of this standardization; B) the academics who always enjoy a good debate and the challenge of anything as-yet unsolved; and C) a few Wall Street analysts who cover marketing-intensive industries. CMOs don’t want it. They value flexibility so they can rely on their powers of rapport and persuasion with their CEO. CFOs don’t want it. While they’d appreciate the value from an internal management control perspective, the LAST thing they want is another series of reports they have to make public and be held accountable for.

In reality, we measure companies not just on their financial results per se, but on two factors: their actual results compared to their target results, and the boldness of their targets. Why should marketing be any different?

To that end, there is some benefit to standardization, but mostly in accelerating the adoption of metrics for INTERNAL use. The more companies use good metrics, the faster knowledge will improve and the more effective marketing will become as a weapon in the CEO’s arsenal.

If we are really most interested in accelerating the professionalism and economic value creation of the marketing discipline, we might have more impact more quickly by standardizing a set ofQUESTIONS every marketer should be able to answer credibly. These might include:

1. What are the specific goals for our marketing spending and how should we expect to connect that spending to incremental revenue and/or margins?
2. What would be the short- and long-term impacts on revenue and margins if we spent 20% more/less on marketing overall in the next 12 months?
3. Compared to relevant benchmarks (historical, competitive, and marketplace), how effective are we at transforming marketing investments into profit growth?
4. What are appropriate targets for improving our marketing leverage (dollars of profit per dollar of marketing spend) in the next 1/3/5-year horizons, and what key initiatives are we counting on to get us there?
5. What are the priority questions we need to answer with respect to informing our knowledge of the payback on marketing investments, and what are we doing to close those knowledge gaps?

These five questions have tremendous power in three ways.

First, a CEO or CFO can ask them tomorrow. No preparation required and no forms to fill out.

Second, they can be used to gauge the extent to which the company’s marketing is focused on the right outcomes. Is marketing strategically aligned with the rest of the organization and focused on measuring the shareholder value created by their efforts? Do we really know where to invest and where to harvest?

Third, this framework can be used as a performance improvement guide. Over time, more effective outcomes inevitably emerge as it’s virtually impossible for any marketing executive to adequately answer these questions without demonstrating the following “price-of-entry” capabilities:
 

• Clarifying links between the company’s strategic plan and the role marketing plays in realizing it;
• Connecting every tactical initiative back to one or more of the strategic thrusts in a way that makes every expenditure transparent in its intended outcome, thereby promoting accountability for results at even the most junior levels of management;
• Defining relevant metrics to gauge success, diagnose progress, and better forecast outcomes;
• Developing a more methodical (not “robotic”) learning process in which experiments, research, and analytics are used to triangulate on the very types of elusive insights that create competitive advantage; and
• Establishing a culture of continuous improvement that seeks to achieve quantifiably higher goals year after year.

If we could achieve just these things, we would succeed at dramatically elevating the professionalism and contribution of marketing, without trying to herd marketers into a box they don’t want to be in.

What I am reading about this afternoon and hoping like anything can translate into some meaningful way to address this age old problem!