Pinterest - Business Model Canvas

Pinterest certainly has the potential to bring in massive amounts of cash. After conducting research over Pinterest's source(s) of income, no definitive answer was found to describe precisely its formula for revenue generation. Several articles though, did mention the appearance of 'promoted pin' advertisements making their way into Pinterest boards in the near to present future. Promoted pins will function as marketing campaigns on Pinterest targeted to users based on their Pinterest social activities. Revenues will be brought in through CPC (cost-per-click) and CPM (cost-per-million-impressions) streams. The data in the modelled business canvas for Pinterest is based on data derived from CPC and CPM revenue streams for Facebook, applied to Pinterest's user base separated into its customer segments.

25% of Pinterest users today are accessing the application traditionally through desktop computer usage, while a whopping 75% of Pinterest users are mobile users. Another interesting point regarding Pinterest's user base is that only 15% of Pinterest users are men, while the remaining 85% are women. Estimates found in research conducted on Pinterest state that the current user base is either 35 million or 70 million users.  35 million was chosen to model the earning potential of Pinterest as it seems this would be the minimum amount of users as 35 million is on the lower end, therefore having the model represent the minimum amount of profit potentially derived for the company.

The results came in at a potential $350,000,000 profit generation for one year from the modelled user base. This means that Pinterest would be making $10 per user, per year. This certainly beats the $3.20 per user, per year that Facebook boasts. No wonder the company has had sky high, limitless valuations over the last couple of years; cheers to you Pinterest, you are the data king of the internet!

References:

1 - Pinterest gets serious about ad revenue with new ‘promoted pins’

http://venturebeat.com/2014/03/24/pinterest-gets-serious-about-ad-revenue-with-new-promoted-pins/

2 - Pinterest Advertisers Could Start Paying For Promoted Pins As Early As Next Month

http://marketingland.com/pinterest-advertisers-start-paying-promoted-pins-early-next-month-report-77645

3 – Facebook Now Making $0.80 Per Mobile User

http://marketingland.com/facebook-making-0-80-per-mobile-user-55592

4 – Pinterest Cut Costs from $54 to $20 Per Hour With Automatic Shutdowns | Hacker News

https://news.ycombinator.com/item?id=4993753

5 – Pinterest Salaries | Glassdoor.ca

http://www.glassdoor.ca/Salary/Pinterest-Salaries-E503467.htm

Trust not, share not

After reading an excerpt from 'The Numerati' I came to realize the extent to which our data is actually being tracked and digitized, it ranges far wider than I had previously thought prior to taking this course.

The internet is not the only mechanism out there being used to track one's information. As mentioned in 'The Numerati', numerous sources that we do not even consciously consider on a daily basis (but that I am consciously aware of now and also being mindful of on a day to day basis) are being used to track our activities, purchases, transactions, etc. For instance, credit card purchases, library borrowing histories, television shows watched, services subscribed, travel habits, preferences and history, gas purchases, etc. These are all examples of services that have been around for a considerable amount of time, prior to the great emergence of the internet. Perhaps it is only now in our current day and age, due to the processing power of the computers of the present time and perhaps with the explosion of social media all over the internet, that we are becoming more aware as a society and as individuals of the implications of the digital mechanisms out there and their potential to permanently invade our privacy and possess our private information as though it were a commodity (as exemplified in NPR's "On the Media" program, specifically in the segment titled "Off Target"). 

Is privacy a commodity? I am sure that the vast majority of human beings have never thought of their privacy as a commodity, but simply as a right. But do we really have a right to privacy as social beings? Or must we use it as a commodity for the exchange of wealth and other resources beneficial to our existence and our proliferation as human beings? If the latter is true, this means that in our present time, very high occurrences of commodity theft are being committed. I am sure that the majority of consumers are not even aware of every bit of information that is being recorded, digitized and archived on their personal happenings, similarly to how I was not aware of the many sources of personal information retrieval out there, prior to taking this course. 

The level of comfort that one has with the disclosure of private matters and personal information varies widely from individual to individual. There are currently no regulations, laws, or rules in place to govern or protect consumers' levels of comfort with privacy disclosure, it is either all or nothing on most social media sites, and it pretty much goes the same with everything else. One thing that I did notice though, after examining several social media websites through my studies in this course, is the emergence of new applications and websites that claim to not hold any consumer data. I say "claim" due to cases such as the messaging application WhatsApp that asserts its non-use or retainment of consumer data: "...the company’s privacy track record has been horrible: It’s been aggressively incompetent and careless with user data. It has also repeatedly failed to provide users with even the most rudimentary security measures. As a result, WhatsApp left its messaging data wide open for potential surveillance and interception by intel agencies, scammers and Internet lurkers with basic hacker skills." stated in: http://pando.com/2014/02/21/the-problem-with-whatsapps-privacy-boasts-theyre-not-true/. 

So how do these applications and websites actually make money if they are not legally selling your data? What are their interests and intentions in the social media game? Is everyone really trying to track what we are doing on the internet? My initial thoughts after reading the excerpt from 'The Numerati' would have led me to an answer of "yes" to this question, but after some keen thinking and analysis, my answer is "no". Mathematical models for categorizing information into systems that allows us to live and work and thrive have been around for ages. The internet and the digitization of our information is simply an extension of this. We do have the capabilities now to process enormously huge quantities of data, but there is no need to fear or loathe what is coming. The purpose of the contriving of these systems is to allow us to live better and to understand ourselves more as human social beings through the identification of patterns. The purpose of all of this should not solely be seen in a negative light. Marketing is just one small aspect of this, and as stated in 'The Numerati', this marketing aspect is only in it's infancy.

Why else would we be witnessing a paradigm shift in the world from a private to a more public existence among societies and individuals? Is it because, as human beings we are intuitively aware of the benefits associated with all of this "sharing". We have been programmed with a need to connect to others and the internet is capitalizing on this and is enabling humans in new, exponential ways to fulfill this need. Contrary to the stigma associated with this phenomenon, we are becoming more trustful, rather than fearful in today's new digitized society. 

Amazon Prime - Business Model Canvas

The above is a proposed business model canvas for the Amazon Prime service. Amazon Prime is a service that was introduced in 2005 by its parent company: Amazon. Amazon Prime provides unlimited free 2-day shipping to its customers, as well as free streaming of an enormous collection of online content such as: movies, TV shows, and books through Amazon's Kindle device. The service is presently available at a cost of $99 annually. Customers have the option of a free 30 day trial of Amazon Prime, before subscribing to the service on an annual basis. 

In my opinion, Amazon Prime's value proposition is that it is easy and convenient. I determined that sales would mainly be driven by the accessibility of online content and the convenience that the service provides through its unlimited free 2-day shipping to customers. 

Research was conducted online to determine that the current amount of Amazon shoppers to date is roughly 200 million, of these 200 million, 4% are Amazon Prime subscribers. Research was also conducted online to determine the amount of Kindle owners and the amount of individuals streaming online content to date, and the percentages of each as subscribers of Amazon Prime's services. 

According to the metrics generated in the business model canvas, Amazon Prime is a profitable operation. The annual revenues are estimated at 1,168,695,000, while the expenses are estimated at 1,021,000,000. This gives an annual profit of approximately 147,695,000 for Amazon Prime. 

Social media and marketing: Why it works, and why there presently is no 'Dislike' button on Facebook

Today there is an extensive amount of social media sites online for marketers to peruse and dig for details on consumers. But why do social media sites provide so much value to marketers and businesses? Why are they so popular nowadays and massive generators of information with a high price attached to them? These are all questions that I asked myself as I made my way through the materials for the third week of the course.

Various types of blogging sites have been abundant on the web since perhaps the dawning of the web itself. Blogging sites provide information concerning consumer habits, interests, points of view, etc. But why are they not as valuable or popular to marketers as sites such as Facebook, Twitter, Instagram, Pinterest, etc.?

The explosion of interest in social media sites by marketers is due to the availability of information concerning the emotions and the feelings associated with the interactions and behaviours expressed on these sites by individuals. This is what is valuable. Why else would we have so many options on these sites to 'like' something? To 'pin' something? To 'retweet' something that is of interest to us or to 'hashtag' it? These items are all becoming common, everyday terminology for us. It is literally becoming (or has always been) in our second nature to express our likes and dislikes, our preferences, and our tastes.

Have you ever wondered why there isn't a 'dislike' button on Facebook? The answer is because marketers are simply not interested in what you do not like. Knowing what you like is much more valuable to enterprises that are trying to attract your business.

It is in our human nature to have tastes, to want to express these tastes, to share them, and to become socially competitive based on our personal tastes. The internet has encapsulated this experience with the abundance of social networking sites on the web today.

So what's next for this? How about a machine that obtains information from your activities online and runs this information against a database containing associations based on likes and dislikes linked to text, words, and activities online? Will we have the potential to predict human behaviour, particularly buying behaviour, and perhaps even create it? Is this what the capabilities of big data will provide us with?

Are marketers solely concerned with what consumers 'like'? They certainly should not be. Likes and pins are an easy way to obtain data on consumer interests, but we are still missing a great wealth of information here, with dislikes and other actions associated with emotions that should be represented in social media sites. With the prevalence of big data we will be able to gain even more insight on consumer interests based on emotions.

Emotions drive buying behaviour. There must be a better way to model and encapsulate the emotional experience online. The social media sites of the present time are simply the beginning of a new era.

The disestablishment of wealth and its re-establishment globally

Two weeks ago I studied the materials in the 'Empowering the Customer' part of the course. I had heard about Crowdsourcing and online forms of anonymously outsourcing work and small tasks about a year ago during a lecture for a course on managing information technology that I was enrolled in at McGill University, roughly one year ago. I did not know or understand the full extent of the resources available online to creative people though, until reading, listening, and viewing the materials outlined in this section of this course.

We have moved from an era where corporations control business and economics to an era where businesses are run out of the home, by households, individuals, and groups, all connected online. Is there any point in working out of a physical office these days? I would have to say that there isn't. Not only are employees not needed to have a physical presence in an office anymore in order to make a living, but they are barely even required to work in an organization to generate an income these days. It used to be the case that if you wanted to do something, you had to join an organization that would give you access to the tools, as in physical resources and people, that would assist you in getting your job done. Nowadays, there is a multitude of tools available online to accomplish any type of creative task or work that needs to be done. Not only are the tools readily available online, but existing and emerging online communities are emanating from all corners of the internet. Never has there been a better time in history for individuals to gain access to outlets for their creativity. 

What will become of this? Potentially the downfall of huge, monopolistic organizations and the uprising of individuals and societies that were once thought of as inaccessible, destitute, and hopeless for the attainment economic success. We have already seen this phenomena occurring with the several success stories of start up businesses that have been abundant over the past 25 years or so, and with the insurgence of emerging markets in the world. These are all examples of opportunity and the reallocation of resources spreading around the world, which is how things should be. The internet has done much more for us than providing us with a tool to check our emails and to search for answers on Google. It has created a worldwide network, enabling us to spread the resources that we have more evenly around the globe by giving more people the opportunity to compete in this world. 

How have businesses been changed by the internet and what does the future of online marketing look like?

The internet has dramatically increased the playing field for all businesses. 

How dramatic has this increase been and what its capabilities?

It all depends on what online tools businesses and marketers have at their disposal, in order to optimize their operations. 

There are certainly an extensive amount of tools available on the internet. Some of the most powerful and useful tools for marketers have been those falling under the category of social networking technologies. 

Social networking sites have not only done the job of changing the way the consumers behave, but they have also become a powerful tool in providing insight to marketers on consumers interests, needs, behaviours, locations, family life, future projections, etc. Social networking sites grant marketers almost instant access to models of consumer social behaviour. The websites have done the job of mapping out social interactions and making them readily available through online portals. The information retrieved by observing the patterns and interactions of consumers online is paramount to marketers. What better source of information on consumer behaviour existed prior to the internet? None. 

Not only are online portals a massive source of data and knowledge for marketers, they are also a machine enabling, and persuading consumers to de-privatize their lives. The de-privatization of our lives can be seen as a worldwide cultural shift in thought and behaviour. The cultural shift has occurred worldwide as the internet exists online and in no actual physical space; having the power to seamlessly cross through continents and countries. The internet is connecting us all and is connecting marketers and businesses to us as well. 

With all of the readily available information pooling around the internet, marketers have had the opportunity to strategically shift their business models and create new ones. New business models are able to exist as marketers are able to target small groups of consumers and target them intimately. With the de-privatization of our lives, consumers are sharing an abundant amount of information online, giving marketers the chance to classify individuals into much smaller groups than they have ever been able to before, leaving little room for a mismatch between the product targeted to the consumer and the consumer's need. 

This all gives way to an increased efficiency in marketing and the customization of business models based on the needs of the consumer. This is what I believe is the future of online marketing. Customized, granular business models, that are able to cater intimately to the needs of the consumer, not only by retrieval of instantly up-to-date: profile data, status updates, posts, etc., but by generation of predictive models based on the current consumer database available on the internet. 

Does the Internet Make You Smarter or Dumber?

Yes to both!

It definitely goes both ways. The internet has the potential to make all of us smarter or dumber. It all depends on what you use it for. I think the wrong question is being asked here.

The concern over whether the Internet is making us dumber or smarter is based on comparing the Internet to traditional forms of media such as print (books and newspaper) and the television. In my opinion, the Internet is not a pure form of media in itself. It's a communication tool. Similarly to print and the television, the Internet can be used as a means to spread and share information, and as a vehicle for advertisements and transmitting other types of information to the public, but it does not simply end there.

The Internet has granted us with capabilities far greater than its comparable predecessors.

The Internet, like anything else, can make us dumber if we are using it for the wrong things. The same can be said for the television and print. It depends what your interests are and what types of materials you chose to pursue with these forms of media.

The thing that worries people about the Internet is its vast capabilities. The Internet has far greater potential than anything we have ever seen or hear of from the past in human history. Given the inherent capabilities of this network (I will not refer to the Internet as a form of media) - naturally concerns such as 'can this vehicle make us smarter/dumber' arise.

We should not be asking ourselves whether the Internet will make us smarter or dumber. We should be concerned over how the Internet can grant us capabilities in connecting with others, increasing our networks, opportunities, our worldview, and essentially our evolution as human beings to a new era of digitally operational beings.

If you are concerned over whether the Internet is making you dumber or smarter then you are either not using the Internet correctly, you are living in fear, or you are not aware of the Internet's capabilities.