Where Amazon, Google, and Meta Are Headed

Where Amazon, Google, and Meta Are Headed

Amazon Google Meta

Technology earnings week is always watched closely. The rising and falling fortunes of Alphabet (Google), Amazon, Apple, Meta, and Microsoft have a direct impact on adjacent industries such as retail, advertising, and marketing. During a topsy turvy year such as 2022, the most recent quarterly earnings announcements of the Big Tech firms were followed especially closely. And here are some of the highlights from the Big Three of online advertising – Amazon, Google, and Meta — with implications for online advertising:

  • Amazon beat analysts’ estimates and enjoyed a strong quarter with the exception of its core retail business. The big news was the continued strong growth of Amazon Ads, which is Amazon’s advertising business that has quickly challenged Google and Meta for leadership of the online ad market. Ad revenue climbed 18% in the period for its most recent quarter. All told, Amazon Ads raked in $8.76 billion in the second quarter. Notably, in its earnings announcement, Amazon highlighted the recent launch of Amazon Marketing Stream, which “automatically delivers hourly Sponsored Products campaign metrics to advertisers or agencies through the Amazon Ads API.” This is a sign that Amazon is developing ad tech data and marketing services, which is a direct challenge to Google. What it means: the success of Amazon Ads dovetails with the ascendance of a more privacy-focused era. Apple in particular has initiated privacy controls that make it more difficult for advertisers to target consumers with ads that use third-party data. Amazon Ads is beyond the reach of such privacy controls because Amazon Ads is based on first-party data that Amazon collects from its customers. Amazon is not the only retail business building its own ad network. But it’s the leader. We expect more businesses will choose Amazon Ads as an advertising platform, and we have developed services accordingly.
  • Meta suffered its first-ever revenue drop for the quarter. The reasons are complicated. First off, TikTok is threatening the popularity of Facebook and Instagram (both owned by Meta), and Meta’s response to TikTok, Reels, doesn’t generate money as efficiently as Instagram Stories and the main news feed. Meta has also reeled from the impact of Apple’s privacy controls. What it means: Meta is in a time of transition – but never count out Meta. The company is investing heavily into the emerging metaverse, which is dragging its profits down but may boost Meta over the long run. And although Reels are a work in progress, progress is being made. As analysts at JMP wrote, “With Meta making progress with Reels while AI improves recommendations across content and advertising, we expect growth to rebound from current levels while the company is more disciplined in its cost structure.” And, overall, the company’s base of monthly active users continues to increase. The real threat to Meta in the near term: how well the company can rebound from the threat of Apple’s privacy controls. The long-term threat: how well Meta can attract and keep Gen Z users.
  • Google is sitting pretty. Alphabet’s search ad sales grew more than 13 percent in Q2 2022 to $40.7 billion, beating analysts’ expectations of $40.2 billion. Search, of course, is Google’s bread-and-butter business, and Google’s investments into its core search ad units are paying off as advertisers lean into performance marketing tactics amid economic uncertainty. But life isn’t all rosy at Google. At YouTube, ad sales rose 0nly 5 percent after jumping 84 percent in the same period a year ago. This reflects the impact of TikTok’s popularity. What it means: Google is going to flourish in 2022 and 2023 especially as advertisers weather economic uncertainty. Google is a safe bet, and Google continues to develop new ad units that enhance its performance marketing capabilities. Watch for Google to continue to push artificial intelligence-related services and tools that automate online advertising — while managing the increasingly thorny challenge of developing alternatives to third-party cookies, which the company had said it would do by 2022 and now is rescheduling for 2024.

What Advertisers Should Do

  • Keep a diversified ad portfolio across the Big Three: Amazon, Google, and Meta. If you are satisfied with the results you are seeing, don’t let Meta’s challenges scare you away. But do a gut check with your agency partner on how your ads are performing.
  • Work closely with your agency partners to understand the impact of privacy controls, especially from Apple.
  • If Gen Z is an important audience, take a closer look at TikTok. TikTok looms large as it challenges YouTube and Meta especially.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Streaming Services Embrace Ads: Advertiser Q&A

Streaming Services Embrace Ads: Advertiser Q&A

Advertising

Netflix sparked one of the biggest stories in the ad tech industry in April when the streaming company announced it was going to embrace advertising. This move was long anticipated from industry watchers who wondered how long Netflix could satisfy investors and recoup the costs of content creation based on subscriber growth alone. Well, Netflix finally relented after distancing itself from ads. That’s because Netflix’s subscribers are not growing at the rate Netflix once enjoyed when the company was challenged by few competitors. In its first quarter of 2022, the company actually lost subscribers. But Netflix is not the only company adopting an advertising-supported tier. Disney+ will also adopt advertising in 2022. The two platforms join streaming companies such as Hulu and HBO Max in doing so. Here are some questions advertisers might be asking:

Will people who subscribe to Disney+ and Netflix start seeing ads with their current plans?

No. Both Disney+ and Netflix have made it clear an ad-supported plan will cost less than the ad-free plans that exists now.

Netflix CEO Reed Hastings recently told investors, “If you still want the ad-free option, you’ll be able to have that as a consumer. And if you would rather pay a lower price and you’re ad-tolerant, we’re going to cater to you also.” Disney Chief Financial Officer Christine McCarthy said the same about Disney’s plans.

Why are Disney+ and Netflix running ads?

The obvious answer: advertising brings in revenue to offset the costs of content creation. But advertising also gives audiences more options. Recently, Hulu revealed that 70 percent of its viewers were on ad-supported plans with the remainder on the pricier ad-free tiers. Both Disney and Netflix expect that audiences will respond to having both an ad-free and cheaper ad-supported option.

“Based on our Hulu experience, we actually have more AVOD [ad-supported video-on-demand] than SVOD [subscription VOD] subscribers,” Christine McCarthy of Disney said, speaking at the 9th Annual MoffettNathanson Media and Communications Summit. “We expect about the same percentage for both Disney+ and Hulu, just based on the experience curve that we’ve witnessed.”

Reed Hastings of Netflix also cited Hulu’s success when he unveiled Netflix’s plans to investors. Hastings specifically called out Hulu as proof that ads are working for video subscription services: Hulu ended 2021 with 40.9 million paying subscribers, up from 35.4 million a year ago.

When do ads come to Netflix and Disney+?

Disney plans to launch an ad-supported plan in 2022 at some point; although Netflix has not specified a timeline, a leaked internal memo from Hastings indicated that an ad-supported plan could be coming before the end of the year.

What will the ads look like?

At the MoffettNathanson conference, Rita Ferro, president of Disney Advertising Sales, said that the Disney+ ad-supported tier will start with 15- and 30-second spots, but will expand to a “full suite of ad products” over time. The ads will have an average of four minutes per hour, which is fewer ads than at Hulu. That’s partly because 65 percent of viewing on Disney+ is movies, which has fewer ad breaks than series.

According to Variety, the ad-supported version of Disney+ will not accept alcohol or political advertising at launch, nor will it run ads from rival streamers or entertainment studios.

Nothing is known yet about Netflix’s plans. But since Netflix cites Hulu as a model for successful advertising, Hulu’s own ad units are worth learning more about. And there are many of them. Here are a few:

  • Standard video ads appear as a commercial break during the streaming of any of Hulu’s full episodes. Such ads can also appear as a pre-roll for clips hosted on distribution partners of Hulu or as companion banners.
  • Binge ads let advertisers deliver contextually relevant messages to the audience during a viewer’s binge session. These ads help businesses to engage with audiences in a non-disruptive way. Binge ads are for viewers who have watched three or more shows of the same series.
  • Sponsored Collection brand placements gives advertisers extended ownership of a collection sponsorship through logo placement adjacent to content in Hulu’s UI across devices.
  • Hulu’s Pause Ad is a non-disruptive, non-intrusive user-initiated ad experience that appears when a viewer presses pause when watching content.
  • The Ad Selector allows the user to control their ad experience by choosing the ad they want to see. The user will be presented with two or three video options. Once a selection is made, the user will be presented with the commercial of their choice. If no selection is made after 15 seconds, one video in the unit will be randomly selected to play.

Hulu shares its ad units in more detail here.

Netflix is renowned for using analytics to personalize content for its audiences around the world. Its own ad units may skew toward the Ad Selector option cited above, tailored to global audiences. But the company will need help.

“Netflix already has a trove of first-party data that can deliver a variety of audience segments for advertisers, and relevance for consumers,” said Adam Helfgott, CEO at MadHive, the programmatic ad tech firm. “In order to sell that inventory in context with TV overall for advertiser objectives, they will need to integrate into the ecosystem and partner with DSPs, SSPs, and infrastructure providers.”

Netflix may also step up product placements in its shows such as Stranger Things. Netflix has not really actively monetized product placements even though its shows are not shy about integrating real products into their plotlines, as Stranger Things does with businesses ranging from Cadillac to Eggo.

Meanwhile, competitors Amazon Prime Video and Peacock will literally drop products into actual shows. These received less attention than the news from Netflix from Disney+, but they are also intriguing. At the 2022 NewFronts, Amazon and Peacock demonstrated new ad formats that use similar virtual product placement (VPP) tools, a post-production technique for inserting a brand into a TV show or movie scene.

Amazon’s VPP tool, operating in beta, lets advertisers place their branded products directly into streaming content after they have already been filmed and produced. Peacock’s new “In-Scene” ads will identify key moments within a show and digitally insert a brand’s customized messaging or product post-production so that the brand is showcased in the right TV show/movie and at the right time. These function very similarly to in-game ads.

It’s going to be an interesting and exciting year for advertising.

What should advertisers do?

  • Understand the growth of advertising on streaming platforms in context of the rise of connected TV. If you’ve not done so already, take a closer look at why connected TV is growing and how it could expand your audience. (True Interactive can help you with that.) Connected TV is enjoying 60-percent growth, driven by a public’s appetite for streaming that continues unabated, Netflix’s slowdown notwithstanding.
  • While you await more clarity on available ad units, get to know the audiences on each platform. Which is right for your brand?

Contact True Interactive

True Interactive can help you navigate the connected TV landscape. Our services range from media strategy and planning to automated performance reporting. Learn more about our services here, and contact us to learn more.

Photo by Souvik Banerjee on Unsplash

For Further Reading

Google Analytics 4: Advertiser Q&A

Google Analytics 4: Advertiser Q&A

Google

If you use Google Analytics, by now you are probably aware that a new version known as Google Analytics 4 is coming. By July 2023, Google Analytics 4 will replace the current version of the popular web analytics service, known as Universal Analytics (UA). This news has sent shock waves throughout an ad tech world that has grown dependent on UA to track and report website traffic. Here are some questions you may have – and some answers:

What exactly is happening to Google Analytics?

UA – the current version of Google Analytics — is going away. UA will stop processing hits in July 2023. That’s because Google is replacing UA with Google Analytics 4 (GA4). If you want to continue using Google to track and report website traffic, you’ll need to transition to GA4. Google actually began to introduce GA4 in 2020, as noted in this blog post. But in July 2023, Google is making GA4 mandatory, as Google said in March 2022. While standard UA properties will stop working July 2023, Universal Analytics 360 properties will receive an additional three months of new hit processing, meaning these will stop working come October 1, 2023.

Why is Google Replacing Universal Analytics with Google Analytics 4?

Google says that GA4 is coming for three primary reasons:

  • Provide more user-centric data. UA is built on a session-based data model that is 15 years old. Google built UA to measure independent sessions, or groups of user interactions within a given time frame on a desktop device. This measurement approach has become obsolete. GA4 does not measure goals by user, only by session. For instance, if someone watches four videos in one session, the interaction can only count as one conversion. By collecting user data as events, GA4 seeks to provide businesses with more accurate insight into user activity.
  • Work across platforms. UA was built for a desktop experience. GA4 is designed to work across platforms, including mobile. According to Google, GA4 provides a complete view of the customer lifecycle with an event-based measurement model that isn’t fragmented by platform or organized into independent sessions. Google cites the example of UK-based fitness apparel and accessories brand Gymshark, which is already using an iteration of GA4 to measure user activity across its website and app. This allows the Gymshark team to better understand how users move through the purchase funnel. Google says that as a result, Gymshark has reduced user drop off by 9 percent, increased product page clickthroughs by 5 percent, and cut down their own time spent on user journey analysis by 30 percent.
  • Transition to a privacy-centric world. Google is under tremendous pressure to adapt to a world in which user privacy is a much bigger priority than it used to be when UA was introduced. GA4 does that. For instance, GA4 4 will also no longer store internet protocol (IP) addresses. GA4 also offers a workaround for when users reject cookies. UA works by setting cookies on a user’s browser when visiting your website. But more people are opting out of sharing their data via cookies. So, UA cannot report on all the people who visit a website. GA4 will rely on a technique known as conversion modeling to provide results in a cookie-less world. Conversion modeling uses machine learning (a form of artificial intelligence) to enable accurate measurement while only reporting on aggregated and anonymized data. GA4 will still collect data from first-party cookies, but conversion modeling makes it possible for GA4 to continue collecting user data when cookies are rejected by users.

In short, Google is changing website tracking and reporting to adapt to a more privacy-centric world in which people use multiple devices to interact with brands.

How does Google Analytics 4 differ from Universal Analytics?

GA4 is a replacement, not an update. It’s a completely new way of tracking and reporting website traffic. The key difference is the adoption of more user-centric data as discussed above. This post from the Google Help Center explains in more detail how the more user-centric data model differs from Universal Analytics. Don’t read it until you’ve had your morning coffee.

There are many other differences too numerous to describe here. For instance, with GA4, you can choose to retain data for two months or 14 months. And GA4 offers custom reporting templates (whereas UA favored the use of pre-built reports).

What will happen to Universal Analytics?

UA will go away. It will not be possible to track and report website traffic with UA as of July 2023 for standard accounts, and October 2023 for UA 360 accounts.

After UA properties stop processing new hits, all previously processed data will remain accessible for at least six months. In the coming months, Google will provide a future date for when existing Universal Analytics properties will no longer be available. After that date, users will no longer be able to see UA reports in the Google Analytics interface or access UA data via the API.

What should I do to prepare for Google Analytics 4?

If you rely on a marketing and advertising agency to manage GA4, it’s highly likely that they are managing the transition for you. Just the same, contact them to understand how they are going to make the transition and how your website tracking and reporting will change. True Interactive uses UA in our client work. We’re doing all the heavy lifting for our clients by transitioning them to GA4.

If you manage GA4 yourself, it’s important to start your transition now. Don’t wait until 2023. For example, right now you’ll need to start building historical data so that you can do a year-over-year analysis in 2023.

In addition, we recommend downloading historic data from your UA account and storing it for future reference before Google shuts off access to it via both the web interface and its reporting API as mentioned above.

Make no mistake: the learning curve is steep. You’ll need to understand how GA4 conducts event reports, conversion reports, and many other details. We recommend that businesses review resources such as:

It’s going to take an effort from an integrated team to pull this off. You’ll need to make this effort a high priority managed with a project timeline to get it right.

Contact True Interactive

To succeed with online advertising, contact True Interactive. We design and develop successful marketing and advertising campaigns and know how to track results, including the use of Google. Read about some of our client work here.

Twitter Goes 3D with Advertising — Should You?

Twitter Goes 3D with Advertising — Should You?

Twitter

Three-dimensional advertising can create an immersive encounter for users, and Twitter clearly understands this: the social networking service recently announced the launch of a new advertising unit, Product Explorer Ads, which displays content in a 3D format. No, special glasses are not required to view these ads! Product Explorer Ads display merchandise through a 3D-like experience within a promoted tweet.

The What

This is the first time Twitter has facilitated a way for products to be shown off in 3D, and it’s turning out to be an interactive experience: users can swipe and rotate an advertised item in order to see it from different angles, and click a “Shop Now” button to make a purchase at the brand’s website. Advertisers are already spiking an interest: New Balance is among the brands currently testing Product Explorer Ads.

 

For Twitter, the new format constitutes one more way to support advertisers’ outreach to consumers. As reported in Social Media Today, Twitter is looking to “boost usage and revenue significantly over the next two years,” and seems to be hoping 3D will help do so. It’s also an interesting learning curve: “As we kick off early experiments, we’ll aim to understand how the new formats resonate with consumers and drive results for advertisers,” Twitter said on its business page. “We’ll test, learn, and iterate based on performance and customer feedback.”

In Good Company

Twitter isn’t the only platform diving into 3D formats. Meta is also building up its 3D advertising capabilities. In a new partnership with 3D modeling provider VNTANA, Meta is exploring ways for brands to run 3D ads on Instagram and Facebook. The idea is that brands will be able to upload 3D models of their products to either platform and convert them into ads.

This embrace of 3D certainly makes sense. According to eMarketer, 3D and mobile augmented reality advertising revenues are on the rise; one ARtillery estimate hints at 134 percent growth over the next three years.

Our Advice to Brands

If your product lends itself to creating 3D ads, by all means now is the time to explore these types of formats.

But don’t treat 3D technology like a shiny new toy—or embrace it just because it’s new. Three-dimensional advertising is a promising format for sure, but remember first that your ad campaign needs to target the right customers with the right message at the right time—and on the right platform for your brand. If your customer base is not using Twitter, for example, no amount of cool 3D technology will have much impact, and advertising there may not make sense, period. Don’t embrace 3D for 3D’s sake; do so because it serves your brand and the story you are trying to tell.

Contact True Interactive

New technology is undeniably exciting. Wondering how to make sense of what’s out there, and what best supports your brand? Contact us. We can help.

Photo by Alexander Shatov on Unsplash

True Interactive Named a 2022 Google Premier Partner

True Interactive Named a 2022 Google Premier Partner

Google

You might have noticed that we blog about Google a lot. There are good reasons for that, starting with Google’s enormous influence on the advertising industry. Not only is Google the largest platform for online advertising in the world, but the company also shapes the direction of the industry. We also discuss Google because we work closely with the company. We’re a partner. We advocate on behalf of our clients to maximize the value of their ad spend on Google, and doing that gives us deep knowledge of Google – which we share with our readers on our blog.

And I’m proud to say that our partnership has been recognized by Google. Google just informed us that True Interactive has been recognized as a 2022 Premier Partner and for being in the top 3 percent of the company’s partners. (Being included the top 3 percent depends on a number of factors such as client growth, client retention, product diversification, and annual ads spend.)

What does being a Premier Partner do for us? Our clients? The marketplace at large? Well, we enjoy a number of benefits that will make us a stronger advocate for our client, such as:

  • Product betas: ongoing access to the most current product betas through quarterly, summarized reports.
  • Insights briefings: the latest insights from Google each month to stay ahead of changing consumer behaviors and industry trends.
  • Advanced Google Ads support: 24-hour advanced ads support to help us quickly and efficiently resolve clients’ issues.
  • Executive experiences: invite-only industry events, such as roundtable discussions with Google leaders, sessions with other Premier Partners, and opportunities to hear from industry thought leaders.

And more!

All this means we’ll not only be a stronger client advocate, but also a better thought leader. The knowledge we’ll accumulate through our closer partnership with Google will certainly enrich the ideas we share with the marketplace.

We are honored to be Premier Partner. Thank you to our Google, our clients, and to the incredibly talented team at True Interactive that turns insights from Google into a better experience for our clients.

Contact True Interactive

We help our clients succeed with online advertising. Learn more about our services here and our work here. And contact us to learn how we can help you.

Why Google Launched Topics, and What Advertisers Should Do

Why Google Launched Topics, and What Advertisers Should Do

Google

Google’s FLoC didn’t float. Will Topics fly?

On January 25, Google said it is killing FLoC (Federated Learning of Cohorts), which was Google’s alternative to targeting consumers with cookies based on third-party ads on Google’s Chrome browser. Instead, Google is introducing a new alternative, Topics. Topics is the latest twist in Google’s attempt to gain a competitive edge through consumer privacy.

Understanding the news requires a bit of a refresher on Google’s journey with privacy. So, here goes:

  • January 2020: Google said it would phase out support for third-party cookies on Google Chrome, which is the most popular browser in the world. Advertisers rely on third-party cookies to track user behavior across the web in order to serve up personalized ads. Google said it wanted to make the web more private. Google said it would work with advertisers to create alternatives to third-party cookies through its Privacy Sandbox Google later delayed its plans to 2023 in the face of pressure from U.K. regulators.
  • January 2021: Google announced it was developing an open-source program that would ease the pain of businesses eventually losing access to third-party cookies. This open-source program was known as FLoC. FLoC was supposed to make it possible for businesses to group people based on their common browsing behavior instead of using third-party cookies.
  • March 2021: Google doubled down on its campaign against cookies. Google said that once third-party cookies were phased out of Chrome browsers, Google would not build alternative identifiers to track individuals as they browse across the web, nor would Google use them in its products. Examples of those alternative identifiers include Unified ID and LiveRamp IdentityLink. Instead, Google pushed advertisers to – you guessed it — adopt FLoC.

But FLoC caught plenty of flak from consumer privacy advocates who believed Google was overplaying its hand, as well as advertisers and agencies who accused Google of strong-arming them into playing by Google’s own rules. Now, Google is returning with an alternative the company hopes will be more acceptable: Topics.

Topics will track people on Chrome and assign them a set of advertising categories (such as travel or fitness) based on the sites they visit. When a person goes to a site with ads, Google will share three of those topics with advertisers on the site, which will allow the advertise to show them to show a relevant ad.

 

In a blog post, Google said, “Topics are kept for only three weeks and old topics are deleted. Topics are selected entirely on your device without involving any external servers, including Google servers. When you visit a participating site, Topics picks just three topics, one topic from each of the past three weeks, to share with the site and its advertising partners. Topics enables browsers to give you meaningful transparency and control over this data, and in Chrome, we’re building user controls that let you see the topics, remove any you don’t like or disable the feature completely.”

Topics

Google will launch a developer trial of Topics in Chrome that includes user controls, and enables website developers and the ads industry to try it out. The final design of the user controls and the other various technical aspects of how Topics works will be decided based on feedback and what Google learns in the trial.

Meanwhile, Google is feeling the heat from the rise of retailer-operated ad networks such as Amazon Advertising and Walmart Connect. These networks leverage their own first-party customer data to sell ad units. Advertisers, sensing the demise of targeting based on third-party cookies (from Google and Apple as well), are increasingly working with ad networks whose first-party data is beyond the reach of Google. And retailer-based networks give advertisers access to consumers who share the same interests and habits.

What Advertisers Should Do

  • Do your homework. Stay on top of Topics by following Google’s public blog posts and explainers (such as this one and this one).
  • Work with your advertising agency to understand what’s happening and how you may be affected. That’s exactly what our clients are doing with True Interactive. That’s what we’re here for.
  • If you are succeeding with Google Ads, stay the course. Google is enduring an imperfect transition right now toward a privacy-world. But Google Ads? They’re not going away. Far from it – Google Ads are alive and well based on our experiences helping clients succeed with them.
  • Do invest in ways to leverage your own (first-party) customer data to create personalized ads. We can help you do that.
  • Consider ad platforms such as Amazon Advertising and Walmart Connect, which, as noted above, give businesses entrée to a vast base of customers who search and shop on Amazon and Walmart. True Interactive offers services on both platforms in addition to our longstanding work on Google, Bing, and other platforms.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

The 2021 Holiday Shopping Season: Four Lessons Learned

The 2021 Holiday Shopping Season: Four Lessons Learned

Retail

The 2021 holiday shopping season was a qualified success – all things considered.

Consumers entered the season amid uncertainty. Would Covid-19 spike again? And yes, it did – later in the season. How bad would the supply chain crisis get? It was a problem – holiday inventory shrank 2 percent because of shortages – but it was not a big problem for the big-box retailers who possessed the resources to plan ahead. Would inflation hurt spending? Yes, rising inflation played a role, especially in December.

The good news is that overall, U.S. holiday sales overall rose 8.5 percent according to Mastercard SpendingPulse. Online spending in the United States rose 8.9 percent in the United States, according to Salesforce. The bad news is that in both cases, the growth rates were lower than expected. MasterCard had predicted an 8.8 percent increase. Salesforce had predicted a 10 percent increase. But keep in mind that no one was predicting inflation to spike, and inflation definitely hurt sales as December wore on.

What do spending patterns in 2021 say about how advertisers might approach 2022 seasonal campaigns?

  1. Getting a head start is more important ever. Everyone should brace themselves for the launch of seasonal campaigns even earlier. That means Memorial Day campaigns starting sooner. Fourth of July, Back to School, Christmas 2022 – all sooner. That’s because the supply chain crisis is casting a permanent shadow over retail for the year and possibly beyond. During the 2021 holiday shopping season, retailers were launching holiday promotions in September to get out in front of the possibility of shortages hurting inventory availability. By Thanksgiving, 30 percent of consumers had made their holiday purchases, according to Salesforce. Even though the supply chain crisis proved to be less disruptive than many had feared, few retailers lack the scale and resources that the big box retailers possess to offset the effects of inventory shortages. In addition, retailers learned a lesson about the value of getting an earlier start, and now they are all feeling the pressure to get a jump on the seasonal sales before a competitor does. With uncertainty continuing, retailers will to advertise sooner.
  1. Big-tent events may have less impact. A byproduct of launching campaigns earlier is that they can dilute the actual impact of an event-oriented sale (Memorial Day, July 4, Labor Day, etc.) In 2021, Black Friday and Cyber Monday sales were subdued. But muted sales were only a problem for businesses that defined Black Friday or Cyber Monday as a single-day event. In fact, for the past few years, big retailers have been redefining Black Friday in particular as a series of events throughout the month of November. As a result, they may have expereinced strong “Black Friday sales” over a period of days, while sales from the actual Black Friday may not have been as strong. This is all OK. It just means that retailers need to adapt to changing shopping patterns and more creatively combine day-of sales with smaller flash sales that occur near the day-of sale.
  1. Adaptability is essential. Advertisers should be ready for the unexpected. For example, typically as December 25 approaches, we see a slowdown in online retail sales as consumers avoid taking the risk of buying a gift and missing the cutoff day for having a gift arrive by Christmas Day. But according to Salesforce, “Retailers nabbed 23% of their holiday sales during the final two weeks of the year, up 11% from the previous year, even though the shipping cutoff date had long passed by then.” Why? Likely because the surge in Covid-19 with the Omicron variant made shoppers more cautious about buying in-store. Interestingly, Salesforce reported a surge in buy online, pick up in store shopping during this period, which suggests that however they shopped, people just wanted to stay away from browsing in a store. Flexibility also means being adapting to different shopping formats online. Salesforce said that over the 2021 holiday season, 4 percent of global digital sales on a mobile device were made through a social media app; and 10 percent of mobile traffic originated from consumers browsing through social networks. Social commerce will be an increasingly part of the advertising and marketing mix in 2022 especially for any business whose customer base is composed of Gen Zers and Millennials.
  1. Promoting flexible financing options is important. With inflation worsening, consumers are looking for ways to ease the strain on their budgets, but they may be leery of racking up big credit card bills. These are reasons why, according to Salesforce, “Buy Now, Pay Later (BNPL) services in the U.S. during the holiday season increased 40% compared to 2020. Consumers turned to these offerings throughout the holiday season to offset the higher price tags. Alternative payment forms, including PayPal, Apple Pay, and Google Pay, also increased by 15% YoY in the U.S.” In fact, the rise of BNPL is one of the hottest topics in retail now. Retailers should make BNPL an important part of their advertising strategies for 2022.

In 2022, advertising will be an adventurous industry with so many fascinating formats arising and trends coalescing around changing consumer behavior. One thing is clear: wise businesses are going to advertise, both during lean times, prosperous times, and uncertain times. We’ve learned time and again that scaling back because of uncertainty is always a bad strategy, as we have discussed on our blog here and here. Get ready for an exciting ride!

Contact True Interactive

At True Interactive, we’ve helped a number of businesses develop and execute seasonal holiday campaigns. Contact us to learn how we can help you.

Image source: https://pixabay.com/photos/background-bauble-celebration-21658/