Alibaba IPO Puts U.S. Sites on Notice to Speed Pace of Innovation

Don Tennant
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Top 10 Mobile Technologies and Capabilities for 2015 and 2016

Last week’s IPO filing in the United States by Chinese e-commerce giant Alibaba was a shot across the bow of U.S. digital properties like Google, Facebook and Twitter to step up their pace of innovation to remain relevant in a global digital marketplace.

That was my takeaway from an interview last week with Larry Weber, CEO of online marketing services agency Racepoint Global and author of the new book, “The Digital Marketer: Ten New Skills You Must Learn to Stay Relevant and Customer-Centric.” As the founder of Weber Shandwick, arguably the world’s largest PR firm, and chairman of the Massachusetts Innovation and Technology Exchange (MITX), Weber is one of the highest-profile experts on digital marketing around. It was just by chance that I spoke with him the day after Alibaba’s IPO filing, so I asked him for his  sense of the significance of the filing, and the impact that the rise of Alibaba might have on digital marketers and consumers in the United States. It was clear he had already given the topic a lot of thought:


First of all, I thought it was very smart of Alibaba to list here. It’s a well-run company; it’s got a huge base, obviously, just because of the size of the Chinese market. I think not just Alibaba, but other Internet properties like Tencent that integrate all their social media, where we Americans separate our social media, have a lot of potential to compete here with Google and Facebook and Twitter, especially as this whole globe gets smaller. But I think it’s going to be hard for them. I think they’ll obviously continue to dominate their market, but they’re not used to competing in the American market, and Americans are now very used to Google—it has sort of become addictive behavior. If Alibaba is smart, it’s going to try to do some different types of marketing things. Is it more visual search? Is it more social search, more review-based? We’ll have to wait and see. As far as the impact on marketers and brands, I think we have to wait and see what the audience is—that’s one thing that hasn’t changed for marketers.

I asked Weber for his thoughts on the Chinese digital marketplace in general, and how it’s likely to influence digital marketing in the United States going forward. He cited China’s focus on integration and visualization:

I really like what Tencent has done. They’ve integrated Weibo and WeChat, and also their search. So what they’ve done is very simple. In America, you’re separate on Facebook and Twitter and WhatsApp, etc. What the Chinese market has done is integrate all of those, so you don’t have to leave and go do something else, and I think there’s some power to that integration. I also think they’re very quickly getting to visualization, perhaps a little faster than us. With YouTube, Instagram, Snapchat, Vine, we’re definitely on the cutting edge of the visualization of social media and messaging. But the Chinese are rapidly doing it—they’re learning faster about what consumers there want from visual consumption. So marketers here really need to step it up—that’s why you’re seeing purchases for ridiculous amounts of money, like Facebook’s purchase of WhatsApp. It’s the attempt to try to keep young audiences, but also to integrate the next generation of social, which is going to be deeply visual, group sharing, and highly message-based, especially for younger people.

I mentioned to Weber that an article in Time said one lesson learned from the Facebook IPO was that ordinary individual investors should stay away from heavily hyped IPOs like Facebook. I asked Weber if he agreed with that, and whether the same holds true for Alibaba. He said he’s not in complete agreement with that:

I do think you have to be very pragmatic, and very careful with these over-hyped IPOs, especially when there haven’t been proven revenue models. Alibaba has some proven revenue models; Facebook had the beginnings of some. Facebook’s problem was its lack of a cohesive mobile strategy—I think that actually hurt them more than the hype. Facebook’s long-term prospects are precarious, because as the social media content world gets far more micro-segmented, they’re going to have to move more quickly. For the everyday person, my advice would be to wait and see on these kinds of things. If you waited on Google a bit, Google continued to rise and get stronger, and you could have bought in a little later. The same was true with Apple after [Steve] Jobs came back. So my advice would be to wait a bit. Twitter was a disaster, right? There’s one that was really overhyped—Twitter really isn’t an engagement tool, it’s still sort of a broadcast tool. That’s something that the everyday person probably wouldn’t think about—they were just thinking, “It’s sort of like Facebook, it’s going to take off.” Well, not necessarily. So I would be careful on all these new kinds of things—I would be more analytical. I do think all the categories are going to succeed. That said, you never know about the individual participants, where the banana peels might lie.



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