Tag Archives: TradeCoinClub

Investors Who Missed Bitcoin Rally Go for Ether, Monero, Litecoin

Investors Who Missed Bitcoin Rally Go for Ether, Monero, Litecoin

  

Investors Who Missed Bitcoin Rally Go for Ether, Monero, Litecoin

There seems to be a trend in cryptocurrency investment. Traders of Bitcoin often leap from one digital currency to another, spreading their investments across popular currencies such as Ethereum’s Ether (ETH), anonymous currency Monero (XRP) and Litecoin (LTC). With the exception of some timeframes, Bitcoin price is usually stable and significantly less volatile in comparison to other digital currencies. At a market cap close to $20 bln, the volatility rate of Bitcoin has substantially decreased over the past few years.

However, Bitcoin price fluctuates upon the emergence of major market and industry-affecting events. For instance, when the discussion of hard fork contingency intensified and the market began to panic, Bitcoin price plunged, stabilizing in the late $900s. Traders usually attempt to pinpoint certain timeframes that Bitcoin price could either go up or down. Most recently, the acceptance of Bitcoin by major Japanese electronics retailer company Bic Camera and the legalization of the digital currency in Japan led to a surge in Bitcoin price, moving it from around $980 to $1180.

Investors who miss these short and mid-term rallies of Bitcoin tend to bet on the performance of alternative cryptocurrencies such as Ether, Monero and Litecoin that have demonstrated a significantly higher level of stability in comparison to the rest of the digital currencies on the market over longer periods of time. More importantly, crypto assets like Ether have drastically increased in price because of the rising interests of corporate investors and financial institutions. Specifically, the formation of the Enterprise Ethereum Alliance increased the market cap of Ethereum by around 4x, as it jumped from $1 bln to over $4 bln within a span of two months.

The back and forth movement of Bitcoin investors and their diverse portfolio of cryptocurrencies explain the ratio of trading pairs in major assets like Ethereum. More than 50 percent of trading in the Ethereum exchange market is processed with the ETH/BTC pair. Therefore, there exist more domestic traders within the cryptocurrency community purchasing alternative crypto assets such as ETH than conventional investors trading altcoins.

Rising interest in altcoins

Bitcoin dominance index is currently at one of its lowest points. But, the 69.2 percent dominance index of Bitcoin does not represent a declining interest in the digital currency. Rather, users are simply gaining more interest in altcoins that supplement or make up for the missing links of Bitcoin. Specifically, Ethereum represents a Blockchain platform designed for developers and decentralized applications. Many developers have expressed their concerns over Bitcoin’s limited development framework. What Bitcoin lacks in flexibility is supplemented by its high-security measures and robust infrastructure.

Monero, Dash and Zcash provide anonymity to cryptocurrency users, which Bitcoin does not. Litecoin is a unique currency in the sense that it represents nearly identical philosophies, structure and monetary policy of Bitcoin. Traders or investors who feel like they missed out on Bitcoin or the recent rally of Bitcoin price still have accessible altcoins like Monero, Litecoin, Zcash, Dash and Ether to profit from.

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

How Deloitte’s Bitcoin Bistro Was Built

How Deloitte's Bitcoin Bistro Was Built

 

Deloitte's Bitcoin Bistro

While Deloitte has long been an advisor on blockchain and cryptocurrencies, it took a step toward to practicing what it preaches earlier this month. After installing a bitcoin ATM in its Toronto office last fall, the consulting giant is now accepting bitcoin payments at a restaurant in its office complex – providing a hands-on opportunity for patrons to experience bitcoin.

Iliana Oris Valiente, strategy leader at Rubix by Deloitte, explained that such first-hand experiences are instrumental toward educating people about the greater potential underlying blockchain technology. Despite her firm's focus on distributed ledger applications, she said that understanding the technology in any of its many variations often starts with a walk through its historical origins.

She told CoinDesk:

"What we've consistently realized is that when we’re starting to educate our clients, that journey typically starts with understanding bitcoin."

"It's very difficult to skip over that part of the historic line and say, 'Oh by the way, now we’re going to talk to you about this really complicated distributed ledger technology'," she continued. With the bitcoin ATM becoming more popular with clients and employees, Oris Valiente said it was logical for her firm to look for other ways to expand on its support for the digital currency. "But the question we often received was, 'So, where do I use the bitcoins that I've acquired?'" she said, adding:

"The answer is usually online merchants, but there aren't as many brick-and-mortar venues. That's when the idea came up: 'What about our bistro downstairs?'"

Expanding appeal

With this lightbulb lit, Deloitte teamed up with Benchmark Hospitality (which operates Bistro 1858 inside Deloitte’s Toronto complex) and bitcoin processor BitPay to kick off the concept. The idea was that users could download a wallet, purchase bitcoin from the ATM and then buy a meal from the bistro – with the end result being that they could see the changes to their balance reflected immediately.

Benchmark initially viewed the opportunity as a chance to cut costs and test out a new technology, but the appeal has expanded much more widely. "We've had a positive reaction from the bistro staff," said Oris Valiente. "They've just said: 'This is flat out cool.'" For Deloitte, the initiative has served as a means to inform even more people about bitcoin and blockchain, while generating more organic interest in the subject internally.

"We have a lot of our internal employees who are excited to get their first bitcoin wallet, buy their first fraction of a bitcoin and perhaps invite their clients in and have a conversation about what this technology means," she said.

Organic interest

But Deloitte is quick to concede that rolling out such an endeavor – as straightforward as it may seem – is far from an easy task. There were a plethora of financial and technological hurdles to overcome. These included determining how Bistro 1858 would handle end-of-shift reconciliations, calculating the implementation costs and deciding which payment provider would be the best fit.

At the end of the day, Oris Valiente explained that introducing the new payments system was ultimately a change management exercise. While simple in aim, it involved retraining management and front-line staff, along with communicating to all stakeholders why the exercise was being undertaken in the first place. "I think those conversations, and trying to understand what motivates all of the parties and how we address all of their needs, that was probably the most time-consuming aspect," she said.

Future visions

However, she argued that the exercise has been useful in helping to explain that blockchain solutions are similar to other types of enterprise applications: While the nuts and bolts get fundamentally reworked, the experience for the end-user oftentimes remains unchanged. "The user experience is pretty straightforward; what's changed is the complex back-end. That story is actually in parallel to what we often see when we develop enterprise applications," she said.

Oris Valiente also emphasized that the exercise has been instrumental in helping to facilitate the flow of creative juices internally. "A lot of the use cases that we’re working on today could not have been possible if it were a small group of people sitting in a board room talking to one another," she said, adding:

"For me, the more people we can expose to this technology, the more smart people you have looking at it, the more creative ideas you’ll come up with."

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

No, you can’t avoid taxes by investing in Bitcoin

No, you can’t avoid taxes by investing in Bitcoin

“Crypto-Currency” may be a good method for hiding Income?

If you think investing in bitcoin or a similar “crypto-currency” may be a good method for hiding income from the tax man, you’d better think again.While many bitcoin aficionados tout the new virtual currency as a promising alternative to so-called “fiat” currencies like the US dollar, the IRS considers investments in bitcoin as property deals — requiring that capital gains or losses in this usually volatile medium of exchange be considered like stocks or bond sales and reportable on Form 8949.

But compliance with this requirement is virtually nonexistent, at least if you go by numbers reported by the IRS. The agency began going after Coinbase, the largest bitcoin exchange operating in the States, in November 2016, requesting that the San Francisco-based company turn over data and complete transactions on every one of its more than 14 million accounts from 2013 to 2015.

But in court papers filed by the IRS this month — after Coinbase refused to honor the request, complaining that it was “overly broad” — the tax-collecting agency reported that only “802 individuals reported a transaction on Form 8949 using a description likely related to bitcoin” for 2015, the most recently concluded tax year. And this is apparently no fluke, with only 807 of the Form 8949s filed for 2013 and 893 for 2014.

This low level of reporting occurred during the same period (2013-2015) that the value of the currency (in dollars) went on a bumpy ride, skyrocketing from less than $20 to more than $1,100, presumably generating significant capital gains for many investors. “In my view, 800 reports per year of profits and losses in virtual currency transactions is ridiculously low,” says Martin Mushkin, an attorney specializing in bitcoin law.

“The given publicity to this proceeding now and the forthcoming enforcement actions would result in a substantial amount of tax collections,” he adds. “The anonymity of bitcoin should not be allowed to foster tax evasion.” Coinbase, for its part, blames the IRS itself for this underreporting, and its chief executive has called for a creation of a Form 1099-B to be issued to each of its clients participating in a potentially taxable transaction — a proposal that the IRS has called low priority because of cuts to its budget.

“We’re very serious about complying with the laws and we actually support the idea that people who ought to pay their taxes do so,” says Michael Lempres, Coinbase chief legal and risk officer. “But the demand for three years’ worth of transactions conflicts with privacy interests.” Mushkin and others familiar with the case say they expect Coinbase to cut a deal with the IRS. “I suspect that, as we speak, Coinbase is preparing an answer to the anticipated Order to Show Cause and negotiating the terms of the summons,” he says. “The papers show the parties have been talking, and Coinbase will try to cut this down.”

Coinbase is already registered with FinCEN, the Treasury’s Financial Crimes Enforcement Center, obliging the exchange to report transactions in excess of $10,000 per day and suspected transactions to be structured to avoid the $10,000 reporting threshold (such as multiple $9,750 transactions). The Coinbase response, Mushkin predicts, “will be to initially limit the subpoena to FinCEN reporting accounts and smaller accounts with large turnover volumes.”

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

From groceries to fine art, blockchain finds widening appeal

From groceries to fine art,
blockchain finds widening appeal

  

 

Chronicled CEO Ryan Orr attends a daily briefing with employees at their office in San Francisco, Calif. on Thursday, April 6, 2017. Chronicled has developed blockchain authentication and chain-of-custody technology using small chips embedded into products, pharmaceuticals, and artwork.

Walmart is on a mission to forever change what people know about their groceries. The retail giant began in October to collaborate with IBM and Tsinghua University in Beijing to trace an array of food products moving through its vast global supply chain with an emerging technology known as blockchain.

The experiment, which will wrap up next month, will help Walmart understand how to make use of blockchain — a secure system of recording data that, many believe, could have a transformative effect on the world’s economy. The technology is already creeping into everything from supply chain management to banking to health care. “I’ve yet to come across an industry where it won’t have an impact,” said David Treat, a managing director at Accenture who leads the consulting firm’s financial services and blockchain practice group.

At its core, blockchain refers to an accounting system known as a distributed ledger. That ledger lives on a network of synchronized computers that communally capture and verify when a transaction takes place. Any time something of value gets exchanged, the data surrounding that exchange are recorded, encrypted and placed into a “block” visible by anyone granted access to the network.

Those blocks are then “chained” together chronologically, creating a timeline that can be traced to an initial transaction. That chronology is key to blockchain’s security since no individual block of data could be successfully altered without affecting all the other blocks in the chain. The technology would replace methods of accounting and tracking transactions.

“Whether you’re talking about a commodity or anything else, it’s a secure road map of where it’s been and who’s held it,” said Grant Fondo, an attorney, and co-chairman of the digital currency and blockchain practice at the law firm Goodwin Procter in San Francisco.

Blockchain technology emerged in the shadow of bitcoin. From the outset, a big appeal of the trendy digital currency was its ability to let users transfer funds without the need for a designated third party — like a bank, credit card company or other payment network operator — to verify the details of the transaction. But in recent years, even as the hype surrounding bitcoin has fizzled, blockchain’s secure ledger system is expected to endure by virtue of its versatility.

Chronicled, a San Francisco startup (unrelated to The Chronicle), is using blockchain technology to tackle counterfeiting. By placing microchips onto or inside of virtually any physical object, Chronicled can register critical identifying data about that object onto the blockchain, authenticating it as the original and tracking each step in its purchasing history.

“We don’t realize how bad the problem of copies and counterfeiting and clones really is,” said Chronicled CEO Ryan Orr. “But fake license plates, fake bottles of Champagne and spirits, fake Louis Vuitton handbags — we’re talking about a $2 trillion counterfeit market today.”

Chronicled’s anticounterfeiting technology has a particular appeal with the art world. In January, Chronicled teamed up with 111 Minna Gallery, a San Francisco art gallery and event space, for an event that was equal to parts art exhibition and tech expo. Each piece of art was assigned a chip that registered it on a blockchain. Equipped with a special app on their phones, gallery-goers could access a wealth of information about the works, and even purchase them, if they chose to do so.

“This is a secure system of identification and identity verification that’s never existed before,” Orr said. “So we can potentially solve this problem, and we can do a lot more on top of that once we can synchronize the physical and digital world identities, which was never possible before.” Walmart’s blockchain pilot program is limited to China, but Frank Yiannas, vice president of food safety, said that the company is considering expanding it.

So far, Walmart is offering scant details about precisely what types of foods are being tracked on its blockchain system, but Yiannas said the goal is to bring transparency into the food supply chain and to get the myriad players in that chain to harmonize the ways they keep track of products moving through it. The tracking device can be on a small sticker.

“Imagine if you could capture data at the farm level on a digital system, how something was produced, where it came from — any relevant information to a consumer,” he said. “What that allows for is a new insight that could provide a new era of transparency and insight we just don’t have today.”

Yiannas said the level of detail he hopes to capture with blockchain gets down to “an individual apple. You pick up an apple and you know where that apple came from,” he said. “Imagine the consumer, who is mostly removed from food production, being able to scan a food product and know the things they want to know about it,” he added.

Capturing data on a blockchain about a particular product as it moves “from farm to fork,” Yiannas said, will also allow Walmart to better respond to food safety recalls. Currently, it can take weeks to trace a tainted product back to its source — a process that, with a blockchain, could take seconds, since growers, packing houses and distributors would all be placing their data in the same place, where all parties can see it. Beyond supply chains, blockchain technology has also made significant inroads in the banking industry, one that has a constant need to quickly authenticate and record transactions.

Ripple, a blockchain developer in San Francisco, specializes in systems that allow banks to send payments to one another. Banks can save money by transacting directly with one another, rather than relying on a clearinghouse or other third party to verify and process payments. This month, a consortium of 47 banks in Japan announced they would be implementing Ripple’s technology after a successful pilot program.

Blockchains are also beginning to reach into health care. In January, IBM, a major vendor of blockchain software, announced that it is working with the Food and Drug Administration to research how blockchains could be used to securely and efficiently transfer large amounts of patient data pulled from electronic medical records, clinical trials, and even wearable devices.

And officials in Cook County, Illinois, said last year that they intended to start a blockchain experiment for tracking the transfer of land titles. “Distributed ledgers are a paradigm shift in how we process transactions,” said Jesse Lund, the head of IBM’s blockchain market development. “It saves businesses money and it empowers consumers. I definitely think that it’s a shift with global implications, from a human perspective.”

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

IBM Spells Out Its Views On Blockchain In Three ‘Key Elements’

IBM Spells Out Its Views On Blockchain In Three ‘Key Elements’

 
IBM Spells Out Its Views On Blockchain In Three ‘Key Elements’

IBM has outlined three “key elements” of Blockchain technology which senior executives should “evaluate” when considering exploring its benefits. In a post from its Newsroom this week, the computing giant specifically highlighted “potential to transform trade, transactions, and business processes,” “value in the ecosystem as the Blockchain network grows” and Blockchain’s ability to “significantly improve visibility and trust across businesses.”

The praise is the latest in a series of pro-Blockchain moves from IBM, which is actively partnering with global corporations to explore how the technology can improve processes such as trade deals. “Speed, cost efficiency, and transparency are among Blockchain’s most significant benefits in the enterprise and within ecosystems of companies conducting trade,” the company reports. Marie Wieck, the general manager of IBM Blockchain, the bespoke product through which IBM aims to deliver its own Blockchain services built on Hyperledger, added:

“The visionaries adopting Blockchain today are using the technology to reinvent many fundamental business practices. Working with clients to develop open source and permissioned Blockchain solutions for the enterprise, we are seeing firsthand how the technology is revolutionizing the way organizations recognize values and do business with one another.”

Most recently, IBM took its Blockchain ideas to China, partnering with Energy-Blockchain Labs to develop a proof-of-concept for cleaning up the country’s air. Carbon asset development and management could both significantly improve with the help of the new tools, it said.

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

Hong Kong Launches Blockchain Trade Finance Platform With Deloitte, Top Banks

Hong Kong Launches Blockchain Trade Finance Platform With Deloitte, Top Banks

  
Hong Kong Launches Blockchain Trade Finance Platform With Deloitte, Top Banks

With Deloitte as one of the Big Four auditors, the Hong Kong Monetary Authority (HKMA) and the region’s top five banks have officially launched a Blockchain platform for trade finance. Earlier this month, HSBC, Bank of China, Bank of East Asia, Hang Seng Bank and Standard Chartered co-introduced a proof of concept Blockchain platform for use with trade finance operations which include lending, issuing letters of credit, factoring, export credit and insurance.

Joshua Kroeker, the senior product manager for global trade and receivables finance at HSBC, stated that the Hong Kong government along with Deloitte and partner banks launched the Blockchain platform to demonstrate the technology’s potential in the conventional finance industry. More importantly, Kroeker emphasized that HKMA and the five participant banks are aiming to utilize Blockchain technology to increase efficiency, transparency, and security in trade finance while eliminating the possibility of fraudulent activities by automating most processes.

The vast majority of operations in trade finance are handled or settled manually due to their sheer complexity. Because multiple parties can be involved in a single operation or the settlement of a contract, companies within the trade finance industry manually approve the settlement of each operation. In addition, the wide range of services offered within the trade finance industry forces companies to maintain several servers and databases that each handles different operations.

Advantages

Blockchain technology enables organizations like trade finance companies and banks to handle various operations on a single platform. Using tokens and cryptographic signatures, banks can embed data onto the immutable Blockchain. Once data is broadcasted throughout the Blockchain network, every participant within the network can access updated data in real time.

This unprecedented level of transparency and the security of Blockchain technology allows banks to handle operations autonomously. Instead of recording the flow of transactions and settlement of contracts across various platforms, banks can embed all of the data in one Blockchain platform for autonomous processing.

In an interview with the South China Morning Post, Kroeker stated:

"As the largest trade finance bank in the world … we were interested in assisting corporates to track transaction flows, reconcile transactions through invoice or purchase order matching, and reducing the risk of duplicate financing for the participating banks. This development puts Hong Kong at the heart of a global effort to digitise trade, making it easier, faster and cheaper for businesses.”

Free of regulatory hurdles

Since the financial authority of the Hong Kong government is the initiator of the project, banks involved with the development and implementation of the trade finance Blockchain platform will not be required to pass the hurdles of regulatory conflicts.

In fact, HKMA Executive Director Li Shu-pui noted that local authorities will continue to collaborate with private companies and banks to test Blockchain technology’s applicability in the finance sector. Analysts including Paul Haswell, a partner at international law firm Pinsent Masons, praised the efforts of Hong Kong authorities to work with local banks to experiment with the technology. “HKMA’s work with the major banks is potentially groundbreaking and shows real commitment to use financial technology for the benefit of the market and consumers. this is encouraging for Hong Kong’s many fintech start-ups.”

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

Blockchain Low Among Corporate Investment Priorities, PwC Finds

Blockchain Low Among Corporate Investment Priorities, PwC Finds

   Business, Data

'Big Four' consulting firm and accountancy PwC has published a detailed report on the current state of blockchain at large companies. The report provides unique insight into the blockchain industry in a very specific sample-set: companies with 500 employees or more but from the legacy banking sector and financial technology startups. If you read between the lines though, the message is clear: it's go, time. While investment last year was at an all-time high, future plans to invest show other technologies taking precedent. The technology is moving out of the lab, and dividends will likely be expected soon.

From the report:

"The technology is moving from hype to reality and we will likely see business use cases becoming more common."

Seventy-seven percent of respondents said they expect their companies to incorporate blockchain into their production by 2020. But a separate section about upcoming investment plans paints a different picture. While half of all financial technology companies intend to focus on blockchain in the next 12 months, only 19% of large banks made the same claim.

On a list of future investment areas related to technology among the same-sized companies, blockchain was near the bottom, with only 20% of respondents saying they would invest in the next 12 month. At the top of the list was 'data analytics' with 74% of respondents expecting to invest during the same period, followed by 'mobile' with 51% and 'artificial intelligence' with 34%, respectively.


PwC blockchain investments

Other interesting takeaways from the report include that 90% of payment companies are "heavily invested" in blockchain and plan to adopt the technology as part of a production system by 2020. Twenty-four percent of the respondents identified as "very or extremely familiar" with blockchain, an increase of 7% since last year, with North American respondents being the most familiar across regions. While 77% expect some sort of live implementation of blockchain by 2020, 55% say it could happen as soon as 2018.

As with the other so-called 'Big Four' accounting firms, PwC has been positioning itself as a leader in the blockchain industry. In November, the firm released details about Project Vulcan to study bitcoin, and last month, it joined the Crypto Valley Association in Switzerland. Going forward the report finds that the most likely business use cases for early blockchain implementations were payments infrastructure, fund transfer infrastructure, and digital identity management.

The report concluded:

"We have also seen growing interest in the technology from insurance companies in areas such as personal and marine insurance, including claims processes."

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

Music Groups Band Together to Build Blockchain Rights Solution

Music Groups Band Together to Build Blockchain Rights Solution

Drums, Instrument, Music

Three societies tasked with protecting the intellectual property rights of musicians, writers, and other content creators have joined forces to build a blockchain solution to prevent piracy. Powered by Hyperledger's open-source Fabric distributed ledger, and managed by IBM, the nascent platform is being designed to create a tangible connection between the time content is created and the time it is consumed.

Founded by the American Society for Composers, Authors and Publishers; the Society of Authors, Composers and Publishers of Music; and PRS for Music, the joint project has the potential to help prevent online piracy by tracking more sophisticated data about music content on the blockchain.

In the face of generations-old concerns for the compensation of musicians and composers, however, it is worth noting that the blockchain solution currently being developed only has potential to help artists according to the rights granted by their contracting companies. The chief executive of PRS for Music, Robert Ashcroft, explained in a statement how real-time reporting of data about the digital consumption of content could empower a diverse set of stakeholders and lead to new business models.

Ashcroft said:

"If blockchain can help us achieve this, it will unlock opportunities for developers of new digital applications, increase accuracy of royalty payments and release value for rightsholders."

Similar to blockchain consortia in other industries, the goal of this joint music initiative is to create and adopt a shared, decentralized database that streamlines the flow of data. Unlike those consortia, however, the information the group wants to track is metadata about artistic works with real-time updates and more advanced tracking capabilities.

Although still in the early stages of development, the improved ability to track the ownership of legally protected creative works could eventually help confirm the legal owner of a work and the origin of disputed works.

Boosting artists

The formation of the joint initiative is the largest movement yet by what might be considered members of the legacy creative infrastructure providers. Since 2006, earnings for the US music industry alone have declined by about $5bn, largely due to the shift to the online streaming of music, according to The New York Times.

Of the total industry revenue, musicians earn on average about 20%, and one study found that 77% of the recorded music revenue went to just 1% of musicians. To help even that disparity, a number of blockchain startups have already responded to calls for a shared, distributed ledger to track artists' intellectual property and give them more control over their creations.

Startups like dotBlockchain Music (dotBC), Mycelia, MusicChain and Ujo Music have all, in their own way, set their sights not just on preventing piracy, but cutting out unnecessary middlemen.

Growing interest

However, based on today’s announcement, it would appear the music industry has come a long way since the early days of blockchain adoption. Once considered to be largely resistant to the transparency afforded by blockchain development, industry firms are now openly exploring the technology.

In April of last year, PRS for Music hosted a debate about blockchain technology, and two months later, SACEM was one of several legacy music companies to join the Open Music Initiative – aimed specifically at using blockchain to better serve musicians.

The least active of the three partners appears to be the historically litigious ASCAP, which has an online presence mostly limited to linking to articles about blockchain's dubious potential. Back in March, though, the group’s newly appointed CEO made a provocative statement first intimating at a potential change in tone. Describing her interest to increase international collaboration on technological solutions, Elizabeth Mathews concluded:

"If we work on these proof of concepts in areas like blockchain technology and others, the benefit will far outweigh the status quo."

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

Reasons Why Social Media Marketing Is Still Underrated

Reasons Why Social Media Marketing Is Still Underrated    

So what’s the deal?

The numbers on social media marketing are impressive. More than half of small businesses in the United States are planning to increase their social media marketing budgets in 2017, and the number of businesses using social media marketing has increased, year over year, for more than a decade.

Still, social media marketing remains underrated. Business owners and marketers frequently treat it as a second thought—something for an intern to handle, rather than a strategically deep mode of building your reputation and attracting new traffic. Some have even abandoned the idea altogether, refusing to spend any time or money on a strategy that nets a positive ROI for up to 92 percent of businesses that use it.

Why isn’t everyone on board with the strategy?

The "fad" angle.

Believe it or not, some people still believe that social media—or its use as a marketing strategy—is still a fad just waiting to fizzle out. This is an argument I could have understood back in 2007 when social media platforms were only in use by a small percentage of the population. But now that Facebook has reached more than 1.2 billion users and is still growing, with a corporate foundation that rivals those of Apple or Google, it’s a hard argument to defend. Users have gotten used to the idea of socially interacting online, and platforms keep evolving in new ways to maintain their interest.

You get what you pay for.

Psychologically, people tend to place more value on things that cost more money. For example, in a blind taste test of identical wines whose only difference is price, people claim that the more expensive (yet compositionally identical) wine tastes better. Take this principle to social media marketing; it’s free to claim and build a business profile and to post regularly (as long as you aren’t leveraging paid advertising). Because of that, people don’t value it as much as they do paid advertising. They’re also less likely to pay a professional to work on a social media campaign, knowing that—technically—anyone could do it for free (even if they never actually do it).

Unmeasurable effects.

The return on investment (ROI) of social media is hard to measure, and I’ll be the first to admit it. One of your biggest goals is attracting a large following of people who are enthusiastic about your brand and improving both your brand’s reputation and brand awareness. These aren’t as objectively measurable as on-site conversions, but they can and do lead to greater consumer interest, which manifests as sales eventually. Trying to pin down an exact value for all these benefits is next to impossible, even for the pros, so the value of a social media campaign is almost always underreported.

Anecdotes.

People also use anecdotal evidence as a basis for their opinions about the strategy. For example, they may know of another business who used social media and didn’t see any results, so they stay away from it in the present. However, these anecdotal examples often don’t examine the types of tactics these businesses used, and they certainly don’t represent the average across multiple businesses.

Apples and oranges.

Ironically, these same business owners often cite the fact that anecdotal evidence can’t prove a strategy’s effectiveness for everybody. They point to major influencers or big businesses in the social media world, and explain that social media works for them because it fits naturally with their industry, or because they have the resources to invest in a heavy campaign. It’s true that some industries may be naturally inclined to perform better on social media than others; tech companies and consumer-facing businesses are two good examples. However, social media marketing can be used by practically any company—it may just require an adjustment to your approach.

Poor targeting.

Some businesses look at their own results and use those results as a gauge of the long-term potential of their campaign. But they may not realize that their strategic targeting is interfering with their results. For example, if you buy 1,000 followers using some super cheap follower-adding service, but only 4 or 5 of them ever interact with your posts or visit your site, it could be that the remaining 995 don’t belong to demographics relevant for your business, or that you haven’t been using the right engagement strategies to cultivate interest. Don’t underestimate the potential of a well-researched, strategically focused campaign.

Lack of investment.

Effective social media marketing can’t be done on a whim. It needs to be planned, researched, and strategically executed. That means you’ll need to spend a significant amount of time or a significant amount of money to see results; and since many business owners aren’t willing to make that investment, they never see a fraction of their potential results. By that point, they’ve seen what a small investment does, and they’re unwilling to make the jump to a larger investment.

Social media marketing isn’t an “underground” strategy; it’s talked about heavily (and I should know), and there’s no shortage of content covering its feasibility and best tactics. But the perceptions of marketers and business owners are still lagging behind the evidence, and they’re only hurting themselves in the process. The more you learn about the effective implementation of social media marketing, the more plainly beneficial it seems—but you have to treat it as a legitimate marketing strategy if you want to research it appropriately.

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

Components of a Magnetic Inbound Marketing Strategy

Components of a Magnetic Inbound Marketing Strategy

 

Email marketing, SEO, content creation, social media, influencer outreach, lead nurturing. Yes, inbound marketing encompasses them all. And let’s face it – that’s enough to inspire fear in the steeliest and most seasoned of digital marketers. With so many tactics to consider and too many leads to deliver it’s easy to lose focus of what you’re trying to achieve. That’s where a well-crafted plan comes into play. Below we’ll reveal the strategic 7 step process that will help you deliver a customer-warming, boss-pleasing, prospect-loving strategy that’s achievable, realistic and bang on target.

Define Your Personas

Inbound marketing is all about your customers – you have no business in the um… business, if you center your plan around any other silly tactics, tricks or gimmicks. The first step of your plan should, therefore, focus on understanding what makes your customers click, tick and get excited. Get to the heart of your customers’ thoughts, behaviors, problems, needs, and desires by creating well-fleshed-out, fully-defined and real-to-life personas.

Use HubSpot’s (free) Make My Persona Tool to create personas worth referencing. Your entire inbound marketing strategy should be built around your core personas – you’ll storm ahead of your competition if you consult these fictional customers at every stage of your planning process. This includes when you’re creating blog posts, crafting email campaigns and conducting keyword research – you can even bring them into your brainstorm meetings to add real insight and depth to your ideas.

Discover Your Customer’s Triggers

Pain Points – You need to understand at which points your customers interact with your messages. It is important to identify the pain points your customer's experience and the problems they encounter to make them search for your product or service. This core insight alone can add true depth to your messages.

Think about it – identifying your customers’ pain points enables you to target people with both reason and emotion at a time that makes sense to them. You’re basing your messages on real solutions rather than assumptions. And make no mistake about it – your competitors will assume rather than take the time to identify real solutions for real persona problems. That way you’ll win.

Different Needs for Different Stages – You’ve probably heard many digital marketers talk about the concept of context. Not all of your customers have the same needs – some arrive at different points of the buying funnel. When mapping out your pain points it’s essential to add context by considering the needs and desires of your different customer types at each separate stage of the operation.

Set Your Inbound Marketing Objectives

You will need to determine from the outset which inbound marketing objectives you would like your strategy to achieve. These should support and help you achieve both your digital marketing objectives and your business objectives. For example, if lead generation is the most important objective for your business, your inbound marketing plan should be centered around generating leads. And every tactic you employ should support your lead generation mission.

As with every digital marketing plan, your inbound marketing metrics need to be SMART. That means strategic, measurable, achievable, realistic and time-bound. If in doubt, identify the information your CEO would want reported back to him/her in the boardroom – you need to answer the ‘what’, ‘how many’ and ‘when’ of your plan. For example, ‘We’re going to generate 200 new leads in a quarter.’ Each KPI needs to be realistic and achievable based on the success of past campaigns along with the predicted success of your inbound plan.

Define Your Content Strategy

Content is an integral part of inbound marketing. You will, therefore, need to create a content marketing plan to form the beating heart of your inbound marketing strategy. This is how you will keep your customers engaged with your brand and nourished with rich and valuable information. This is how you will keep your name on their minds at the point when they’re ready, willing and able to buy.

The Objectives – Your content strategy objectives should be SMART and need to support your inbound marketing objectives. Maybe they’ll be similar. If your inbound marketing objective is lead generation, for example, your content strategy should certainly support this.

Competitor Analysis – The purpose of this phase is not to copy your competitors but to define how you can be better. Research your competitors content marketing and investigate what they get up to on social media using a social media monitoring tool like Hootsuite. Sign up to their newsletter so you can partake in their lead nurturing campaigns and use a tool like Moz’s Open Site Explorer to track backlinks and discover how your competitors score on their overall SEO performance.

The Content – First it’s important to define how your content will help your customers. Will it educate them? Inspire them? Entertain them? Then you can decide on the types of content you’ll create and the topics you’ll tackle. For example, will you concentrate solely on blogging or will you try video marketing and webinars? Will you create long form posts or opt for shorter but more regular features? Will you seek industry expert opinions?

More questions to consider at this phase include: Is lead generation important for your business and if so will you create gated whitepapers to help you generate new, quality leads? If you have a shoe company will you stick to writing about shoes or will you venture into the area of fashion and lifestyle?

Distribution – It’s equally important to create a plan for distributing your content. Will you enlist the help of industry influencers or will your trial paid promotion options like LinkedIn advertising, Facebook and Twitter ads or third party platforms?

Define Your Lead Nurturing Plan

Sometimes your customers will discover your website when they’re not quite ready to buy yet. Maybe they need more questions answered, maybe they need more time to decide whether it’s the right product/service for them, maybe they want to research competitor offerings or maybe they don’t have the money saved at that point in time. Whatever their reason for stalling, it’s your job to keep them warmed up for the sales team to prospect or until they’re ready to buy.

Automated email trigger campaigns provide the perfect means to nurture leads. It gives you the ideal opportunity to keep prospects engaged with your content, your brand and your mission. You can segment your lead database based on the action your prospects took to give you their details. You can then set about creating a series of tailored and relevant messages.

Establish Your Influencer Outreach Agenda

Building quality relationships with key industry influencers is one of the most important components for inbound marketing. That’s because these people hold significant reach and authority in your industry. They have already established trust and have hundreds of thousands of social media followers – followers who look just like your customers.

The Target List – Use a tool like BuzzSumo to help you identify and create an outreach list of potential influencer targets. Then you can set about creating mutually beneficial relationships with these industry influencers. Always give more than you take – offer value and lots of it well in advance of asking for anything back. Once you have established a true connection with these influencers you can ask for a quick quote and a potential share in the politest and most humble manner possible.

Guest Blogging Plan – It’s also important to define your guest blogging approach at this stage. Research potential relevant and influential blogs in your niche and read the submission guidelines. You’ll can create a pitch at this stage if you wish but you will have to make sure it’s customized and relevant for every publication you approach. Read this guide ‘Influencer Cheat Sheet: How to Connect, Engage & Get What You Want’ for more tips on how to perfect your personal approach.

Decide How to Analyse & Report

Now that you have your inbound marketing plan in place you will need to decide upon the tools you’ll use to report on the progress of your objectives and the success of your KPIs. Will you, for example, use Google Analytics to track your goals and conversions? Will you use BuzzSumo to track the success of your content marketing and break down your shares by platform? Will you use Moz’s Open Site Explorer to monitor your SEO progress?

Want to become an Inbound Marketing Specialist? Our Online Professional Diploma in Search Marketing is created, validated and accredited by industry experts and will give you the specialist knowledge needed to thrive in the field.

Chuck Reynolds
Contributor

Alan Zibluk Market Hive Founding Member

The Social Media Expert