Five Lessons From the 2021 Ad Spending Surge

Five Lessons From the 2021 Ad Spending Surge

Advertising

Ad spending is surging. As reported in The Wall Street Journal, U.S. companies are expected to spend 15 percent more on advertising in 2021 year than they did in 2020. That’s because consumer confidence is increasing, and the pace of Covid-19 vaccinations is accelerating. And digital is getting a bigger share than ever of the advertising pie:

Digital Share of Ad Spending

Announcements from technology giants and social media apps in recent days underscore just how much businesses are investing into digital advertising:

  • As we reported on our blog, Amazon Advertising and Facebook reported strong year-over-year ad revenue growth in their most recent quarterly earnings announcements.
  • Alphabet announced 32 percent year-over-year ad growth for Google, demonstrating an impressive rebound from a slump triggered by the pandemic.

Amid this spending surge, we see some important lessons emerging:

  • Businesses that maintained their spending levels during the depths of Covid-19 in 2020 are at an advantage over those who pulled back and are now kickstarting their spending. Consumer behavior and sentiment are changing faster than ever. We predicted in 2020 that reducing ad spend during the pandemic would catch businesses flat-footed when consumer behavior shifted again – as it has done in 2021.
  • We’ve hit an inflection point with digital. As the stay-at-home economy takes hold, consumers are remaining online at higher levels than ever. As a result, online spending continues to accelerate. Businesses that asked, “But how long will the growth last?” in 2020 fell behind those that saw the surge for what it is: a behavioral change. The faster businesses adapt to those changes by boosting their online advertising, the sooner they’ll attract shoppers online.
  • The tech giants are experiencing a golden era. We’ve seen the tech giants – namely Amazon, Apple, Facebook, Google, and Microsoft – experience heavy criticism in recent years for reasons too numerous to summarize in a blog post. And of course the specter of antitrust lawsuits looms over Facebook and Google (and Apple in Europe). On top of that, they’re at war with each other, and the demise of third-party cookies calls into question how well advertisers will be able to target consumers across these platforms. But guess what? Amid the blowback, the tech giants continue to run the table, as noted above. Smart advertisers aren’t allowing negative headlines to scare them away from the tech giants. They’re watching how these platforms innovate with new ad units that monetize the surging online audience.
  • Retail ad platforms are on the rise. Savvy marketers are capitalizing on the fact that retailers such as Amazon, Dollar Tree, Kroger, Macy’s, Target, and Walmart are monetizing their first-party customer data by building ad businesses. Each retailer can give advertisers access to different types of consumers. We expect more of these platforms to emerge, contributing to robust ad growth.
  • Social commerce is going to fuel more ad spending. As we discussed on our blog recently, businesses should capitalize on social commerce advertising tools such as Pinterest Product Pins, through which a business can connect its product catalog to Pinterest, filter and organize inventory, create shopping ads, and measure results; or numerous ad units on Instagram that make it easier for businesses to turn advertising into shopping experiences.

We urge businesses to take a fresh look at how your customers’ journeys are changing amid the rise of digital-first living and spending. Monitor performance closely as consumer behavior fluctuates. Businesses that invest in strong real-time analytics tools will have the upper hand.

Contact True Interactive

At True Interactive, we know how to help businesses navigate the complex waters of online advertising. Contact us. Learn more about our work here.

Photo by Adem AY on Unsplash

Amazon Unveils New Ad Units Across Its Ecosystem

Amazon Unveils New Ad Units Across Its Ecosystem

Amazon

Amazon keeps giving advertisers more reasons to choose its advertising platform, Amazon Advertising.

We recently blogged about the fact that Amazon and Facebook are steadily chipping away at Google’s online advertising marketshare. As eMarketer reported, Amazon’s share of the online advertising market increased from 7.8 percent in 2019 to 10 percent in 2020. Amazon just reminded us why Amazon Advertising will keep growing: product innovations.

We’ve already talked about how Amazon keeps launching ad units such as Sponsored Products and Sponsored Brands that make it possible for businesses to place ads on Amazon, which functions as a powerful search engine for people looking to purchase things. As reported in Advertising Age, Amazon is rolling out new products that extend beyond the Amazon site:

  • Amazon will expand advertising opportunities on Fire TV, which competes with devices such as Apple TV and Roku to stream content on connected TVs for millions of viewers. Fire TV is more than a device. It’s a way for advertisers to reach people as they browse and discover new entertainment. One new ad unit, Sponsored Content Rows, is designed for businesses to promote content such as new shows and movies in the form of a row (or carousel) of sponsored content while people browse for shows on their connected TVs (akin to sponsored search results in a Google search engine results page).
  • Amazon also expanded the places where it will show display ads across the Amazon network, including Fire TV, Prime, IMDb TV and Twitch. “We’re making it easier by introducing sponsorship opportunities paired with high-quality content from Prime Video, IMDb TV, Twitch, and third-party content,” Amazon said. This is an important development because it shows that Amazon is expanding its advertising reach beyond the core Amazon site. Many consumers are not aware that Amazon’s network of brands includes sites such as IMDb and Twitch – but indeed they’re part of Amazon’s empire. Amazon is figuring out more ways for advertisers to monetize those popular sites. (Twitch ranks 32 among the world’s 50 most popular websites, with Amazon ranking 13.)

This news comes on the heels of a huge week for Amazon. On April 29, The company announced quarterly earnings that exceeded analysts’ expectations. Although Amazon does not disclose revenue results for Amazon Advertising, it’s estimated that Amazon Advertising realizing revenue growth of 77 percent year over year to achieve $6.9 billion in the first quarter alone.

Earlier in 2021, Amazon scored a huge advertising coup when Amazon Prime Video became the first streaming service to secure an exclusive NFL national broadcast package, which will begin in 2022. The agreement will open up more advertising revenue streams as Amazon monetizes the value of the audience that relies on Amazon Prime Video.

It’s important that advertisers keep their options open by capitalizing on the power of platforms such as Amazon that are harnessing the value of their first-party data to create ad units. (We’re seeing the emergence of more similar platforms such as the Macy’s Media Network.) True Interactive works with brands to capitalize on these offerings such as Amazon Advertising and Walmart Connect, along with our longstanding work with advertising partners such as Google, Facebook, and Microsoft.  To succeed on these networks, contact us. We can help!

Why Advertisers Should Never Bet Against Facebook

Why Advertisers Should Never Bet Against Facebook

Facebook

Facebook has done it again. On April 28, the company announced quarterly earnings that crushed Wall Street’s expectations, demonstrating a remarkable resilience. Facebook continues to ascend as a premier advertising platform, too, second only to Google in terms of online ad marketshare. Let’s take a closer look.

What Facebook Announced

Facebook’s quarterly results were impressive by any measure:

  • Earnings: $3.30 per share vs. $2.37 per share forecast.
  • Revenue: $26.17 billion vs. $23.67 billion expected.
  • Daily active users (DAUs): 1.88 billion vs. 1.89 billion forecast by FactSet.
  • Monthly active users (MAUs): 2.85 billion vs. 2.86 billion forecast by FactSet.
  • Average revenue per user (ARPU): $9.27 vs. $8.40 forecast by FactSet.

The increase in active users is key. Demonstrating that it can continue to grow its user base helps Facebook attract more advertisers.

Why Facebook Is Succeeding

Why is Facebook continuing to grow quarter after quarter even amid controversies and threats from legislators and competitors? Here are some reasons:

  • Advertisers remain loyal to Facebook. Facebook said its impressive revenue growth came from a 12 percent increase in the number of ads delivered – and a 30 percent year-over-year increase in average price per ad. Even as businesses were being rocked by the pandemic and faced an uncertain year, they were willing to pay more for ads on Facebook. And why not? Social media platforms such as Facebook enjoyed tremendous growth in 2020 as the pandemic drove more people online. Advertisers wisely went where their audience was.
  • Facebook is monetizing its user base beyond ad targeting. This is important. By its own admission, Facebook’s ability to deliver targeted ads is being threatened by Apple’s app tracking transparency privacy initiative in which users of iPhones will now need to agree to allow a business to collect information about them – known as an opt-in policy. The world’s largest social network is upset because its advertisers will have a harder time tracking its users off Facebook and serve up personalized ads to them. But Facebook has been steadily finding different ways to monetize its app (and Instagram’s) beyond ad targeting. For instance, in its earnings announcement, Facebook CEO Mark Zuckerberg discussed how the company continues to build social commerce features. And Facebook’s Marketplace service, where users can buy and sell goods, continues to grow. These features keep businesses and people engaged on Facebook, generate more ad revenue for Facebook, and give Facebook a stockpile of first-party search and purchase data to deliver more personalized experiences.

Going forward, Facebook will continue to monetize that user base in creative ways – an example being the launch of several audio features that will generate revenue for creators and inevitably create a more engaged user base – which generates more advertising revenue.

 What Advertisers Should Do about Facebook

  • Continue to capitalize on tools to help you connect with your audience on Facebook. For instance, as Mark Zuckerberg mentioned to investors on April 28, Facebook launched Shops in 2020 to help businesses more easily conduct online commerce, and there are now more than 1 million monthly active Shops and over 250 million monthly Shops visitors.
  • As always, balance your advertising among the major platforms that continue to deliver value, including Amazon Advertising, Facebook, Instagram, Google, and Microsoft Advertising.
  • Monitor expected privacy legislation and the impact of Apple’s ATT initiative, but don’t overreact. Facebook continues to show a remarkable aptitude for managing threats from competitors and legislators.

Whatever you do, don’t count out Facebook regardless of what you read and hear about the headwinds the company faces. Facebook is not going away. It’s the world’s largest social media network for a reason. Follow your audience and engage with them.

Contact True Interactive

At True Interactive, we help businesses capitalize on social media advertising to build their brands. We can help you, too. Contact us to learn more.

 

Why the Rise in Zero-Click Searches Matters – to You and Google

Why the Rise in Zero-Click Searches Matters – to You and Google

Google Search

Google has become so powerful that it’s the subject of anti-trust lawsuits at the federal and state levels. That’s probably one reason why Google is feeling a bit touchy about a recent SparkToro report that 65 percent of all Google searches don’t click through to a website. Instead, people are finding answers to what they need on Google’s search engine results pages (SERPs) without needing to click anywhere else. Let’s take a closer look.

What Exactly Is a Zero-Click Search, and Why Does It Matter?

A zero-click search happens when someone searches for answers to a question – say, “Where is the closest car rental?” or “When is Earth Day 2021?” – and then finds the answer to their question on a SERP without clicking on a website for further information. For example, let’s say I find an answer to “Where is the closest car rental?” with the following local pack search result:

Google Local Pack

If I don’t bother clicking through to a website in the above local pack, and instead find what I need from the local pack itself, I have performed a zero-click search. And a SERP may display answers in many other ways, such as a featured snippet, image carousel, Google Ad, Google News, featured video, and more.

The term “zero click” was coined by SparkToro’s Rand Fishkin after SparkToro reported in 2019 that half of searches on Google do not result in a click on a website. Two years later, that number has climbed to 65 percent. Here’s what SparkToro said:

From January to December, 2020, 64.82% of searches on Google (desktop and mobile combined) ended in the search results without clicking to another web property. That number is likely undercounting some mobile and nearly all voice searches, and thus it’s probable that more than 2/3rds of all Google searches are what I’ve been calling “zero-click searches.”

This chart illustrates the findings:

SparkToro Zero Click chart

Industry watchers follow the zero-click phenomenon because it underscores the importance of complementing your website content with Google Ads, featured snippets, and many other types of search results that make your brand more visible on Google Search, Google Maps, and other elements of the Google universe.

Why Do Zero-Click Searches Matter to Google?

The rise of zero-click searches is a two-edged sword for Google. On the one hand, the SparkToro report shows why businesses need to choose Google as their home base for creating paid and organic content. More eyeballs on Google SERPs means a bigger audience for advertisers.

But the downside is that Google looks too powerful. This kind of attention does not serve Google well at a time when the company is fighting anti-trust lawsuits. In fact, Google has voiced opposition to the research. In a recent blog post, Google said,

This week, we saw some discussion about a claim that the majority of searches on Google end without someone clicking off to a website — or what some have called “zero-click” searches. As practitioners across the search industry have noted, this claim relies on flawed methodology that misunderstands how people use Search. In reality, Google Search sends billions of clicks to websites every day, and we’ve sent more traffic to the open web every year since Google was first created. And beyond just traffic, we also connect people with businesses in a wide variety of ways through Search, such as enabling a phone call to a business.

Google went on to knock the research SparkToro used. Among other things, Google said that SparkToro did not properly account for people navigating directly to apps or refining their queries after what appears initially to be a zero-click search.

In addition, as we have blogged, Google is trying to encourage businesses to adopt Google’s tools (under development) to maximize the value of their first-party data on their websites. If 65 percent of searches are not resulting in clicks on websites, the value of first-party data may get called into question.

What Should Brands Do?

It’s always been a good idea to balance the content you publish on your website with content across the digital world ranging from your Google My Business (GMB) listing to social media. That principle does not change in a zero-click world. We suggest:

  • Keep close tabs on your website data. Are you satisfied with visits, views, and click-through rates on your website? Are they staying at a level you want, going up, or going down? If your site is not performing where it should, first examine what needs to be fixed using tools such as website audits. You may need a tune-up, anyway.
  • Do build up your GMB listing. Why? Because according to Moz, your GMB listing is the biggest local search ranking signal (followed by reviews and proximity). If organic queries are increasingly going to your GMB and staying there, then make sure you’ve optimized your GMB content – including images, customer ratings/reviews, and location data – to be found.
  • Link your GMB account to your Google Ads account. Linking your GMB account to your Google Ads account makes it possible for your ads to appear with location extensions, which encourage customers to visit your storefront. Through location extensions, customers can see your ads with location information such as your address. And then they can get more information about your location by clicking on location extensions.
  • Make sure you’re capitalizing on Google ad products throughout the Google ecosystem. With Google keeping more searchers on Google and its properties, it behooves advertisers to capitalize on where that search activity is occurring.

Finally, it’s always a good idea to watch how Google develops its tools for maximizing the value of paid and organic content. Don’t be surprised if Google doubles down on the importance of personalizing content with first-party data.

Contact True Interactive

At True Interactive, we know how to help businesses navigate the complex waters of online advertising, including advertising on Google. Contact us. Learn more about our work here.

Photo by henry perks on Unsplash

Clubhouse: An Exclusive New App Powered by Audio Chat

Clubhouse: An Exclusive New App Powered by Audio Chat

Mobile Social media

Oprah Winfrey is a fan. So is Drake. But the new social media app Clubhouse, developed by Paul Davison and Rohan Seth, is not just for celebrities. Why does Clubhouse matter to brands invested in digital? Read on to learn more.

What Is Clubhouse?

Clubhouse, an audio app that facilitates live conversation, is self-described as “a new type of social product based on voice [that] allows people everywhere to talk, tell stories, develop ideas, deepen friendships, and meet interesting new people around the world.” Conversations are not recorded or saved; when a Clubhouse cyber “room” ends, the conversation is done and gone. Participants can opt to just listen in, or they can spontaneously host their own rooms. And the topics under discussion are eclectic, ranging from talks about music to chats about film, beauty, culture, tech, and more.

Clubhouse is distinguished by the fact that it is an audio-only app. There is no feature for private messaging, and there are no written comments. It’s a conversation that just happens to take place online.

What Is the Clubhouse Experience Like?

As Michael Stelzner describes in Social Media Examiner, when you enter a room you hear the conversation going on. Participants can “raise their hand” (using the raised hand emoji) to participate, and might subsequently be invited “on stage” to join the discussion. Those who contribute to the conversation may even become moderators, which allows them to call others up on stage.

Some users find Clubhouse to be like a podcast: something they can listen to while doing other things. Some liken it to a panel discussion. The rooms cover a wide range of topics, something like AOL chat rooms from back in the day. Depending on your interests, you will find rooms devoted to, say, investment strategies for Bitcoin or daily habits for high performers, film talk, writing sessions, mindfulness tips, and much more.

Like any interactive experience, certain protocols are observed and expected. The understanding is that participants will mute themselves until they are called upon, or until they have something germane to add to the dialog. Moderators control the conversation, and rooms can run for hours.

Who’s in the Club?

The app brings a wide range of individuals—and interests—to the table. Celebs like Kevin Hart, Oprah, and Drake are already on board, drawn by the relative privacy the app affords. The app is currently invite-only; each participant is granted limited invites to extend, though the more active a participant is on the platform, the more invites they are able to share. Stelzner recommends downloading the app and setting up your account, then . . . waiting patiently. As he notes, “Someone who knows you might be notified in-app automatically and grant you access.”

Why Clubhouse Matters

Stelzner has asked other Clubhouse members to highlight reasons the app keeps drawing them back (he notes that “[n]early everyone I interviewed was a creator, marketer, or business owner”). Among the responses:

  • It’s viral. When someone you follow goes onstage, the app sends you a notification. You can click on the notification and immediately join the room as a passive listener.
  • You don’t have to be ready for your glam shot. There’s no camera; it’s just your avatar and your voice. So you can join the conversation with that shaggy Covid hair, or even while you are running errands.
  • It helps build business connections. Think the conversations that start at business conferences; this is the same thing, but online.
  • It’s a place to test ideas. Got an idea for a podcast? Clubhouse is a forum to throw stuff at the wall and see what sticks.

What We Recommend

Clubhouse, currently in beta, is only available to iPhone users; the invite-only protocol also limits availability. That said, according to wfmynews2.com, “Clubhouse claims it will eventually open up for everyone, but is attempting to ensure it takes the proper steps in doing so. They also want to make sure they can incorporate features that will be able to handle large chat rooms.”

In the meantime, the app’s very existence is a reminder of the myriad ways brands can plug into culture, understand the trends, and stay connected, even as the pandemic continues to minimize in-person contact. Clubhouse demonstrates yet another way to engage—and the importance of staying current and thinking outside the box—not just during Covid, but beyond.

What can be learned here? We suggest that you:

  • Stay abreast of the opportunities apps offer to connect with a new, diverse audience.
  • Don’t forget the power of audio in digital.
  • Understand the power of crowdsourcing new ideas or feedback on your brand.
  • Get involved. Download the app and request membership individually. Then start exploring the app in your role as your company’s brand ambassador. Network with experts in other industries. Never underestimate the value of learning from diverse startups, CEOs, tech giants—whether on an app like Clubhouse, or in other venues.

Contact True Interactive

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

2021 Advertising and Marketing Predictions from True Interactive

2021 Advertising and Marketing Predictions from True Interactive

Advertising

If 2020 had a few surprises up its sleeve, the year certainly set the stage for 2021. In the months ahead, businesses are poised to transition more boldly to a digital-first economy, which includes a more seamless approach to e-commerce and increased opportunities for engaging with people through immersive experiences such as e-sports. At the same time, businesses will continue to navigate an increasingly complicated consumer privacy landscape. All those trends, and others, will influence the uptake of digital advertising and marketing in 2021. Read on for our fearless predictions for the year:

E-commerce Grows Up

We’ve all heard the same statistic bandied about: in 2020, the pandemic accelerated the shift to e-commerce by five years, according to IBM. But that doesn’t mean the acceleration went smoothly. As we saw during the holiday season, the surge in online commerce has exposed cracks in the seams for many retailers. Sellers struggled with a variety of issues ranging from stocking items properly to following through with orders. Going into 2021, these challenges are forcing companies to integrate all their processes (online, in store, shipping logistics, etc.) more seamlessly. Larger retailers such as Target and Walmart have already successfully expanded services such as curbside pick-up, which make it possible for shoppers to buy online and pick up merchandise at the store without needing to go inside. Going forward, they’ll follow Amazon’s lead and invest more in their own shipping and delivery services to own the order fulfillment process (Target and Walmart already have them – they’re still refining them, though). As we have seen during the holidays, the strain on shipping services such as FedEx and UPS is becoming unacceptable to retailers, and if they lack the resources to build out their own delivery services, they will partner with businesses such as InstaCart.

In addition, learning from the events of 2020, retailers will likely become more nimble in their approach to advertising and supply chain management in order to adapt to quickly changing shifts in consumer demand. They’re going to do a better job using tools such as Google Insights to adapt their campaigns to consumer behavior. The key will be to ensure their supply chain processes are as nimble.

— Kurt Anagnostopoulos, co-founder

Rough Sledding for Facebook

It may be rough sledding ahead for Facebook in 2021. Do a quick Google News search for Facebook and you will see a slew of articles depicting the challenges the social media giant currently faces. At the top of the list? News that more than 40 attorneys general and the U.S. government are expected to sue Facebook for alleged antitrust violations. And while Mark Zuckerberg has routinely appeared at congressional hearings addressing concerns of privacy, misinformation, and censorship, this latest lawsuit might be a final awakening for businesses who use Facebook as an ad platform.

Adding to Facebook’s already uphill battle is the release of the Netflix documentary, The Social Dilemma, which explores the dangerous human impact of social network platforms as told by tech experts who expose secrets behind their own creations. Many media outlets reported a wave of people canceling their social media accounts after viewing the documentary. Of course, Facebook has slammed the documentary, claiming it’s full of misinformation, but is the damage already done? Even if the documentary did not get all the details right, it has undeniably affected public perception of social media platforms. And if even a fraction of current users de-activate their accounts, this will absolutely have a negative impact on audience size available to advertisers. More importantly, with the continued negative publicity surrounding the biggest social media platforms, are businesses really going to want to ramp spend on Facebook and Instagram? My prediction is no. After a crazy year filled with pandemic fears and general social unrest, I do not believe businesses are looking to invest in platforms embroiled in controversy. And if media spend is pulled from some of the social media giants, it may leave the door open for other search engines or community-based ad platforms to emerge. Stay tuned!

— Beth Bauch, director, digital marketing

Walmart Gains Ground as an Ad Platform

The Walmart marketplace is still very much in its infancy. I believe that 2021 will lead to exponential growth of Walmart’s advertising services, and the company will become more competitive with Amazon in this regard. The current platform is still very small scale and, technically, still in beta or just out of it. Many larger advertisers have not been invited to join the Walmart marketplace because it is still so brand new. I believe that Walmart will enjoy a large jump in advertising on their app and site Q1-Q2 2021.

— Tim Colucci, vice president, digital marketing

Augmented Reality Takes Hold

I think in 2021 we will see more brands invest money into creating virtual experiences for their customers. Augmented reality (AR) was already becoming popular before the onset of COVID-19, but now, given the urgency to shop online during the pandemic, consumers are missing the in-store experience of physically trying on items. And retailers are responding with AR: Warby Parker, for example, has created a virtual try-on for their glasses via their app. My glasses broke this weekend, and instead of going to a Warby Parker store to try on different frames, I could use their app to see what the glasses would look like on me, and felt more confident ordering online. Another brand capitalizing on the opportunities inherent in AR? A make-up line called NARS. They allow you to experiment with their products, such as blush and eye shadow, through a virtual try-on feature. Overall, I think more retail brands will create virtual shopping experiences for their customers in 2021.

— Taylor Hart, senior digital marketing manager

E-sports Dominates

The world of e-sports is never one to stop changing. With e-sports accumulating a total revenue that reached more than $1 billion in 2020 (a $150 million increase from 2019), we can only expect that to continue to rise in 2021. Given the ongoing global pandemic and application of stricter stay-at-home rules, more and more people will turn to e-sports as another form of entertainment. It all starts with streaming services that allow e-sports players to become household names in the gaming industry. Giving these players an opportunity to reach tens, potentially hundreds of thousands of viewers without leaving their home is something advertisers can only dream of. Players will do sponsored streams, with designated ad reads to be presented at certain points during the broadcast. The NFL is also getting involved with Twitch (the biggest live streaming platform), getting some of the big name streamers (e.g., NICKMERCS and TimTheTatman) to watch Thursday Night Football on stream with various advertisers as sponsors. Watch for more professional sports and entertainment services to follow in the footsteps of the NFL and try to reach this large, somewhat untapped market.

— Max Petrungaro, digital marketing associate

Privacy Dominates the Executive Agenda

For years, CEOs and CMOs have treated consumer privacy as a problem for their information technology teams to worry about. No longer. Privacy is rapidly becoming a C-level problem that can damage a company’s reputation if managed poorly. A variety of forces have elevated the importance of privacy in the United States. First off, the state of California rolled out a tough privacy act, the California Consumer Privacy Act, in January 2020, and then made the law more strict in November. Because California is one of the world’s largest economies and is a bellwether state, what happens there will influence how other states treat consumer privacy. In addition, the big technology firms are already under close scrutiny, and the new presidential administration is likely to take an even closer look at their privacy practices.

Speaking of the tech giants – their actions are casting a spotlight on privacy. As widely reported, Facebook has launched a public campaign attacking Apple’s privacy iOS 14 updates, which are going to make it harder for Facebook and other platforms to target users with ads. Meanwhile, Google continues to move forward with its plans to stop supporting third-party cookies on the Chrome browser by 2022 – an action that continues to reverberate across the ad industry. In 2021, businesses will face a year of transition as they navigate an increasingly complicated consumer privacy landscape. The challenge involves more than reacting to changes in legislation and cookie tracking technology; advertisers also need to stay on top of emerging tools such as Verizon Media’s ConnectID, designed to manage ads without the use of third-party cookies. School will be in session constantly.

— Mark Smith, co-founder

More Social Shopping

With the world of online shopping expanding in 2020 due to the pandemic, I predict that 2021 will bring new ways to shop across social. Instagram has already released its e-commerce store to elevate shopping online. I predict that the platform will continue to refine its online shopping tools, even as more social networks follow Instagram’s lead and create additional opportunities for shopping right from consumer smart devices.

— Bella Schneider, digital marketing manager

Online Video Explodes

Online video is going to explode as the number of streaming services expands. I believe we are also going to see a cheaper, monthly subscription option (akin to the base Hulu subscription) that includes video ads as a way to subsidize lower-cost services. It is rumored that HBO Max will offer this option, but I believe we will see similar offerings from Peacock, Disney+/Hulu (which I believe will be combined at some point . . . in 2021?), and Amazon Prime. I think the opportunity for more ad space is going to be too good to pass up as more and more consumers cut the cord OR sign up for multiple streaming services. In addition, I believe we will see other live TV options becoming available from streaming services: cord cutters will still have the opportunity for live TV . . .  plus the ad space that goes along with it.

— Tim Colucci, vice president, digital marketing

Contact True Interactive

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

Photo by Ian Taylor on Unsplash

Why Facebook Acquired Kustomer

Why Facebook Acquired Kustomer

Facebook

Facebook continues to turn itself into an advertising and commerce destination. On November 30, Facebook announced the acquisition of Kustomer, a customer relationship management platform that specializes in conversational commerce, or forms of commerce derived from chat, messaging, and other interactive channels. The acquisition is clearly intended to beef up Facebook’s messaging and chat features as revenue generators.

We’ve been blogging about Facebook’s growing role as an advertising powerhouse for quite some time. Facebook is now the second-largest online advertising platform behind Google, according to eMarketer. Despite some occasionally bad publicity (and ad boycotts) Facebook’s ad revenue just keeps climbing in 2020, as I discussed on our blog in August.

Meanwhile, Facebook has been steadily building out messaging services as ways for brands to build and manage customer relationships. Businesses regularly use Facebook Messenger to engage with customers (as Spotify does) and manage transactions (as Paypal does). Developing Messenger as a form of conversational commerce is important to Mark Zuckerberg and COO Sheryl Sandberg. As Sandberg told investors in 2019,

Messaging is one of the fastest growing areas for online communication–especially between businesses and people. We’ve seen businesses use Messenger to reach customers, generate new leads and even sell cars. For example, French auto manufacturer Renault used a combination of Instagram Stories and Click-to Messenger ads to drive sales of a limited-edition vehicle, the Captur Tokyo. Facebook was their only advertising channel, and over the span of 30 days, they sold 100 cars—20 directly through Messenger. This quarter we added a Click-to-Messenger feature in Stories so businesses can grab someone’s attention in Stories and then continue the conversation.

In fact, Kustomer already helps businesses manage apps such as Messenger and WhatsApp effectively. It’s the software that makes it possible for business to aggregate and respond to customer inquiries via Facebook Messenger. Kustomer must be doing its job well. By purchasing the company, Facebook will provide capital and resources to scale Kustomer’s platform across Facebook’s global business. As Bloomberg tech reporter Kurt Wagner wrote on LinkedIn:

Facebook has a vision to turn its messaging services into de facto websites for businesses. In Facebook’s perfect world, a business could post its product catalogue, process payments, and handle customer service requests — all within WhatsApp. Buying Kustomer should help Facebook with that third part.

Indeed, in announcing the acquisition, Facebook said more than 175 million people contact businesses via WhatsApp. By acquiring Kustomer, Facebook will certainly become even more appealing to advertisers. Why? Because Facebook will be able to own both awareness building (via advertising) and customer conversion (via conversational commerce). As CNBC noted,

By bringing Kustomer into the fold, Facebook will be providing small businesses that use its service to advertise and sell goods more features to close sales through the social network’s services. This should seemingly lead these businesses to spend more on Facebook advertisements. That’s key for the company, which makes nearly 99% of its revenue from advertising.

What Businesses Should Do

  • Take a closer look at Facebook’s conversational commerce features such as Messenger and WhatsApp. Messenger Ads can spark interest, for example, and the Messenger the app can be a brilliant customer service tool. And combine Messenger with Stories for an engaging and ultimately personal customer experience.
  • Watch how competitors such as Amazon Advertising and Google respond. Google especially has a huge opportunity to help businesses build out their Google My Business listings with conversational commerce tools such as chat.

Contact True Interactive

How can your brand benefit from digital advertising? Contact us. We can help.