How Apple Will Grow Its Advertising Business

How Apple Will Grow Its Advertising Business

Apple

Apple changed the advertising industry when the company launched an important privacy control in 2021, Application Tracking Transparency (ATT).  ATT asks iPhone users to decide whether apps can track them across other applications and websites. After the introduction of ATT, 62 percent of iPhone users opted out.

This has created a problem for advertisers and ad tech platforms such as Meta that rely on the ability to track user behavior across the web in order to serve up targeted ads to them. Without tracking user behavior via third-party cookies, their ads are less personalized. Meta said that ATT would cost the firm $10 billion in revenue in 2022. Apple, for its part, justified the new privacy control as taking a stand for consumer privacy.

Well, we now know Apple had something else in mind with ATT: taking a stand for Apple’s advertising business.

As Bloomberg reported recently, Apple is now earning $4 billion in revenue annually by selling ads on its devices, and the company plans to grow that amount aggressively. Granted, $4 billion is a far cry from the $209 billion that Google pulled down from advertising in 2021, but Apple’s newfound focus on ads sure casts its consumer privacy push in a different light.

How Does Apple Earn Ad Revenue?

Apple makes money selling ads on spaces that people see all the time on their iPhones and connected TVs as they navigate their screens to download apps, read the news, and watch content. Those include:

  • The App Store, as shown here:

Apple Ads

  • Apple’s own News and Stocks apps.

The additional ad revenue will come from:

  • The Today tab (the home page of the home page of the App Store, which includes content ranging from App of the Day to Game of the Day).
  • The You Might Also Like section of the App Store (this is found at the bottom of the App Store).
  • Third-party app download pages.

Does ATT Apply to Apple?

How will Apple sell targeted ads? By collecting first-party data, meaning the information that users of Apple devices cough up to Apple whenever they use the App Store, News and Stock apps, and so on. And, by the way, Apple will not make it easy for users to opt out of having their data tracked. You can disable the ad personalization feature, but you have to look for it under Apple Advertising in the settings app’s Privacy & Security menu. There is no pop-up menu asking you if you’d like to have tracking disabled as is the case with ATT, as shown below:privacy noticeBut shouldn’t ATT also apply to Apple? Not in Apple’s view. According to Bloomberg:

You may ask then, why don’t Apple apps have to ask permission to track users via a pop-up message? That’s what happens with other apps under ATT.

The reason, Apple says, is that the system “does not follow you across apps and websites owned by other companies.” That’s what ATT is designed to prevent. If a third-party app doesn’t track across outside apps and websites, it also doesn’t need to show a pop-up.

The “we are exempt from our own policy” rationale is how Google justifies its plans to kill third-party cookies on the Chrome browser. Google apps such as YouTube are exempt because technically they collect first-party data, not third-party data.

It’s easy to connect the dots and see what’s going on here: by attacking third-party cookie tracking, Apple bolsters its own ad program, which relies on first-party data collection.

Apple’s ad business is far too small to threaten the lead enjoyed by Amazon, Google, and Meta. But Apple has the muscle and money to grow its business quickly. ATT was a declaration of war.

What Advertisers Should Do

  • Understand the big picture. There is no going back: tech firms such as Apple and Google are undercutting the value of third-party cookies. Accept the reality that as third-party cookies crumble and technology companies enact privacy controls, your ads will be less targeted than they were. This does not mean you should stop advertising online. Online advertising remains the most efficient and cost-effective way to reach your audience. At the same time, first-party data is more valuable than ever to advertisers as a means to creating targeted ads. Consider ad platforms such as Amazon Advertising and Walmart Connect, which 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. Learn more about our services with Amazon Ads here and Walmart here. Apple and Google cannot undercut what these companies are doing.

True Interactive can help you navigate the ever changing world of consumer privacy and advertising.

Contact True Interactive

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

Lead image source: https://pixabay.com/photos/apple-inc-mac-apple-store-store-508812/

 

 

 

The Most Popular Social Media Apps for Teens

The Most Popular Social Media Apps for Teens

Social media

How are teens spending their time on social media these days? This is an important question for advertisers. That’s because teens spend money. They talk about their favorite brands with each other. Their preferences influence the popular cultural trends that advertisers need to understand in order to stay relevant. And if advertisers play their cards right, they can, in turn, influence teen behavior.

A new survey of Americans aged 13-17 from Pew Research Center reports some eye-opening findings about where and how teens are spending their time online. Key findings:

  • YouTube reigns. 95 percent of teens use YouTube, followed by TikTok, Instagram, Snapchat, and Facebook.

Social Media Apps

  • Only 32 percent use Facebook, compared to 71 percent in 2014-15. Not only is there a smaller share of teenage Facebook users than there was in 2014-15, teens who do use Facebook are also relatively less frequent users of the platform compared to the other platforms covered in this survey. Just 7 percent of teen Facebook users say they are on the site or app almost constantly (representing 2 percent of all teens). Still, about six-in-ten teen Facebook users (57 percent) visit the platform daily.

Leading Social Sites

  • Many teens are always on. 46 percent of teens say they’re on the internet “almost constantly,” up from 24 percent in 2014-2015.  Roughy one in five teens are almost constantly on YouTube, which leads all platforms.

Social Media Usage

  • The vast majority of teens have access to digital devices, such as smartphones (95 percent), desktop or laptop computers (90 percent) and gaming consoles (80 percent). Since 2014-15, there has been a 22 percentage point rise in the share of teens who report having access to a smartphone (95 percent now and 73 percent then). While teens’ access to smartphones has increased over roughly the past eight years, their access to other digital technologies, such as desktop or laptop computers or gaming consoles, has remained statistically unchanged.
  • More affluent teens are particularly likely to have access to all three devices. Fully 76 percent of teens that live in households that make at least $75,000 a year say they have or have access to a smartphone, a gaming console and a desktop or laptop computer, compared with smaller shares of teens from households that make less than $30,000 or teens from households making $30,000 to $74,999 a year who say they have access to all three (60 percent and 69 percent of teens, respectively).
  • U.S. teens living in households that make $75,000 or more annually are 12 points more likely to have access to gaming consoles and 15 points more likely to have access to a desktop or laptop computer than teens from households with incomes under $30,000.
  • Habits vary by demographic. Teen boys are more likely than teen girls to say they use YouTube, Twitch and Reddit. Teen girls are more likely than teen boys to use TikTok, Instagram and Snapchat. Higher shares of Black and Hispanic teens report using TikTok, Instagram, Twitter and WhatsApp compared with white teens.

Implications for Brands

  • Short-form content on TikTok is popular, but so is longer-form content on YouTube. Within just a few years, TikTok has famously rocketed to popularity by featuring videos that are about 30 seconds in length (often shorter). But YouTube’s popularity demonstrates that teens also like more in-depth video content, as Mashable points out. Longer-form content lends itself to content marketing, such as “how to” topics and podcasts, as noted here. On the other hand, shorter-form TikTok videos lend themselves to catchy, engaging micro-moments. To use a television analogy, TikTok is the place for 30-second spots, and YouTube for advertorials. As one influencer on LinkedIn wrote, “If digital media is hunger, TikTok feels like McDonalds, and YouTube feels like [insert fairly decent quality restaurant]. TikTok gives you dopamine hits. It’s addicting, you can become consumed by it, but it doesn’t mean you’re satisfied with the quality. Each swipe is, ‘okay, now what’s next.’ Before you know it, it’s an hour. YouTube, even with most videos watched being through recommendations, provides a deeper connection with the viewer. If you watch a video for >1min, you’re truly invested. This also means that creators will build more meaningful viewer connections through YouTube. All data shows that Gen Z appreciates the quality and connections of YouTube.”
  • Teens are not all the same. Variances exist by income level and demographic, as noted above. It’s important to understand the differences depending on your audience. In addition to the statistics cited above, we also noticed the popularity of gaming consoles among more affluent teens. And overall, Hispanic (47 percent) and Black teens (45 percent) are more likely than white teens (26 percent) to say they use at least one of the five most popular social media online platforms almost constantly. And teen girls are most likely to be social media loyal than teen boys: teen girls are more likely than teen boys to express it would be difficult to give up social media (58 percent versus 49 percent). All of these nuances influence any company that wants to launch a credible multi-cultural marketing strategy.
  • Facebook still matters, but Instagram does even more. Even though it’s less popular among teens than it was in 2014-15, it’s still more popular with teens than Twitter, Twitch, WhatsApp, Reddit, and Tumblr. As teens get older, they may very well spend more time on Facebook. And Facebook the platform still enjoys widespread usage among adults, as seen in other recent Center studies. However, it’s clear that among Meta’s brands, Instagram is more important for reaching teens, especially as Instagram morphs into a social selling site.

Contact True Interactive

We deliver results for clients across all ad formats, including social mediavideo, and mobile. To learn how we can help you, contact us.

Photo by Rami Al-zayat on Unsplash

What’s Next for Advertisers on Twitter with Elon Musk as an Owner?

What’s Next for Advertisers on Twitter with Elon Musk as an Owner?

Twitter

Will advertisers leave Twitter under Elon Musk’s ownership? That question is getting bandied about a lot these days. That’s because of widespread speculation that Musk will relax Twitter’s content moderation policies. This, in turn, could conceivably create brand safety issues by making controversial content more prevalent on the app, which has nearly 400 million monthly active users. For example, Advertising Age reported that “Marketers are worried that Musk will reopen the floodgates on uncivil behavior on the platform.” Ad agencies consulted by Ad Age said that their clients are increasingly asking about the risks of staying on Twitter. Here’s what I think will happen:

  • Some advertisers will flee Twitter and never return.
  • Some advertisers will put Twitter advertising on pause but eventually return to Twitter.
  • Most advertisers will do nothing.

The fact of the matter is this: advertisers have shown by their actions that they have a higher tolerance for social media controversy than news media reports might have you believe. We have seen time and again controversies erupt on platforms such as Facebook, Instagram, Twitter, and YouTube. Most recently, Facebook became the target of widespread public scorn after whistle blower Frances Haugen, an ex-Facebook employee, shared internal documents that showed Facebook executives knowingly allowed its algorithm to publish harmful and divisive content on users’ news feeds.

The resulting expose, published in The Wall Street Journal, also sparked speculation that advertisers would leave Facebook. Some did. But most did not. Why? Because the fact that a publisher and aggregator of news content (which is what Facebook does) knowingly shares divisive information was not exactly shocking news to advertisers. Mainstream news media have been attracting audiences by publishing divisive content for decades, long before the internet existed. And they’re doing so today. As a result, advertisers have a higher tolerance for conflict than Facebook’s critics did.

What really hurt Facebook was Apple. Facebook’s parent, Meta, disclosed recently that the company would suffer a $10 billion revenue hit in 2022 because of the impact of Apple’s iPhone privacy controls launched in 2021. Meta’s stock tanked dramatically so as a result. Why? Because privacy controls would likely make ad targeting more difficult on Facebook. It was ad targeting, not a Wall Street Journal expose about the company’s culture, governance, and content policies, that hurt Facebook.

The real concern among advertisers is not whether controversial content will appear on Twitter. The fact is that controversial content already does appear on Twitter. Advertisers are more concerned that their ads could appear alongside controversial content. This is more of an issue with how an app manages its algorithm. YouTube, for instance, landed in hot water recently because advertisers’ content was appearing alongside hate speech, but most advertisers understood then (and understand now) that it’s impossible to stamp out hate speech completely. Many more also understand that controversial content is not necessarily hate speech. These realities are part of being a brand on social media – and they always have been.

Twitter has been down this road before, too, such as when a major hack involving a crypto currency scam embarrassed the platform and cast a spotlight on how easy it is for bad actors to exploit Twitter to commit crimes. Or when the proliferation of trolls and bots threatened Twitter’s reputation. Advertisers were concerned, to be sure, but for the most part they reacted by pressuring Twitter to improve its algorithm as opposed to demanding wide-scale changes in how Twitter operates fundamentally.

My advice to advertisers is:

  • Keep advertising on Twitter if you are satisfied with your results so far.
  • Monitor brand safety closely, but that’s true whether you are advertising on Twitter or any other social media app.
  • Watch where your audience goes. There is a very real possibility that ongoing controversy at Twitter could cause a drop in users. The question is whether your audience will leave Twitter. It’s a question. It’s not a certainty. Work with your agency partner to keep tabs on the situation, but don’t make assumptions based on news headlines.

True Interactive monitors developments on social media all the time as part of being a well-informed partner to our clients. Keep watching this blog for updates.

Contact True Interactive

To maximize the value of your social media advertising, contact True Interactive. Our expertise in this area delivers measurable value to our clients.

Twitter image by Alexander Shatov on Unsplash

Elon Musk image by https://pixabay.com/illustrations/elon-musk-space-elon-spacex-tesla-6222396/

 

Meta Misses the Mark; How Should Advertisers React?

Meta Misses the Mark; How Should Advertisers React?

Facebook Meta

Over the years, Facebook has been a Teflon brand. No matter how many controversies and setbacks the company has faced, it has seen its stock price and market capitalization soar. But all that changed on February 2 when Facebook’s parent company Meta announced earnings for the fourth quarter 2021. The company:

  • Missed its earnings estimates.
  • Reported that Facebook’s global daily active users declined from the previous quarter to 1.929 billion from 1.930 billion. Although Facebook has experienced drops in the United States before, this was the first time the world’s most popular social platform had experienced a decline in its user base.
  • Forecast weaker-than-expected revenue growth for the next quarter.
  • Said that the company would suffer a $10 billion revenue hit in 2022 because of the impact of Apple’s iPhone privacy controls launched in 2021.

Investors were stunned. The next day, Meta suffered a 26 percent drop in its stock price – the largest single-day drop in history. Not just for Meta. For any company.

Companies can have a bad quarter. But why did Meta suffer a historic drop in its stock price? There is no single, clear-cut answer. But a few factors no doubt played a role:

  • The drop in users, although not massive, stoked concerns that Facebook is finally beginning to feel the impact of its ongoing brand safety controversies and indifference from the growing Gen Z population. Losing members can be a red flag for advertisers, and Facebook needs advertising revenue to succeed.
  • Meta surprised investors by saying it still has not recovered from the impact of Apple’s consumer privacy controls. In 2021, Apple altered its operating system to require apps to get a person’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers. This move curtailed the ability for advertisers and ad platforms such as Facebook to target digital ads across the web. Ad platforms such as Snapchat and Twitter said that the restrictions were either not hurting them or that they had figured out satisfactory ways to keep creating effective ads despite the existence of the privacy controls. It was alarming to hear that Meta had not figured out a solution yet.
  • Meta’s big bet on the next generation of the internet, the metaverse, is costing the company – a lot. Meta said that the company spent $10 billion in 2021 on various products that form the building blocks of the metaverse. That spend hurt profits. And the metaverse is still many years away, which has made investors ask: just how much is the metaverse going to cost Meta?

Even still, Facebook achieved $33.67 billion in ad revenue for the quarter, which was better than expected. Should Facebook’s advertisers be concerned? As an agency that helps many businesses build their brands and convert customers through Facebook advertising, we believe that if you advertise on Facebook, you should:

  • Keep advertising on Facebook if you are satisfied with your results so far. Based on our client work, Facebook continues to drive conversions even though the cost per conversion has increased and conversion rates are lower. Facebook remains an efficient and cost-effective alternative to competing platforms.
  • Adapt to the new reality of Facebook advertising. One of the challenges with Facebook advertising under Apple’s privacy controls is having access to less user data for targeting various audience segments with ads. We’ve been working with Facebook to develop workarounds such grouping our clients’ target audiences together to give the Facebook algorithm more data to work with a (as opposed to breaking up audiences into separate groups). We’ve also removed audience exclusions from campaigns. After we aggregated audience data and removed exclusions, we gradually began to see an improvement in ad conversions following a drop resulting from the privacy controls.
  • Keep an eye on the decline in users. Understand where they’re going when they leave Facebook. In particular, Facebook said that TikTok has emerged as a much stronger competitor. TikTok is especially red hot with the Gen Z generation. In addition, monitor sentiment among your audiences, foremost your customers. In light of Facebook’s ongoing controversies over privacy and the publication of harmful content, are your customers expressing concern? Is your brand safety at risk? (This may or may not be the case. As we’ve blogged before, social media will always be a messy place to live, and many brand have learned to live alongside that reality.

Advertisers have more choices than ever – emerging apps such as TikTok, retailer ad platforms such as Amazon Advertising, to name a few. The well-established ad platforms such as Google continue to launch new products. As always, we urge advertisers to stay on top of the evolving market. At True Interactive, we advocate for our clients by understanding how the ad industry is changing so that we can maximize clients’ return on ad spend. Contact us to learn how we can help you.

Photo by Dima Solomin on Unsplash

2022 Advertising and Marketing Predictions

2022 Advertising and Marketing Predictions

Advertising

Welcome to a new, adventurous year of advertising and marketing. The traditional tech giants are going to continue to fight each other for dominance – while TikTok will tap into the burgeoning creator economy to challenge them all for a slice of the advertising pie. Retailers everywhere are creating ad networks, but Amazon and Walmart have already established strong leadership early on. For the most part, businesses will be spending more – more on TikTok, more on Amazon, more on Google, and probably more on Apple’s fledgling ad business. But will they spend more on Meta? Read on for our insights into the year ahead.

Retailer Media Networks Proliferate – and Meta Loses Ground

One of the big stories of 2021 was the proliferation of media businesses operated by retailers such as Amazon, Macy’s, Target, and Walmart. In 2022, we’ll see more of them. Retailers are under great pressure to squeeze more margin out of their core businesses as the industry endures uncertainty. The most well established networks – Amazon and Walmart – are thriving because they tap into the data they collect about their customers (first-party data) to sell targeted advertising on their sites. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site, too, as an antidote to Apple’s privacy controls. In addition, non-retailers with large troves of first-party data, such as TikTok, will expand the same way.

I also believe Meta’s ongoing push into immersive reality will lose momentum. Meta has made an even bigger push into immersive reality (e.g., virtual reality and augmented reality) as part of its attempt to become the builder of the metaverse. Meta also intends for immersive reality to help the company maintain a dominant hold on social media and to squeeze upstarts such as Roblox out of the market. But the horse is already out of the barn: there are just too many players such as Roblox and Snapchat developing immersive reality applications for Meta to play copycat and use its size as an an advantage. And Meta has faced so much public blowback over its size and reach that squeezing out smaller players makes Meta more of a target for anti-trust regulation. Meta will lose ground, and gaming platforms such as Roblox will ascend in power.

— Tim Colucci, vice president, digital marketing

TikTok Dominates

TikTok is the world’s most visited site in the Internet in 2021, toppling Google, according to Cloudfare. TikTok will become the leader in paid social. Videos and fast-breaking cultural trends are becoming more prominent factors across all social media marketing, and TikTok has mastered both. Oh, and TikTok has another big trump card to play: the site is a magnet for Gen Z and Millennials, who together comprise about 42 percent of the U.S. population. As a recent New York Times profile noted, advertisers “are present like never before, their authentic-seeming advertisements dropped in between dances, confessionals, comedy routines and makeovers.” But TikTok is just beginning to monetize all that interest from advertisers. TikTok will follow the example set by Amazon Advertising and roll out more ad units that capitalize on the customer data the company is collecting. And look to TikTok to become a social commerce giant. If you thought 2021 was the year of TikTok, you ain’t seen nothing yet.

— Bella Schneider, digital marketing manager

The Creator Economy Gets Real

The creator economy refers to a class of businesses comprising millions of independent content creators and influencers. We are reading more about them partly because apps such as TikTok have given them more power and influence. The creator economy will become even more powerful. That’s because collaboration networks are proliferating. These networks give creators an all-in-one platform to create communities and build influence. In addition, gaming sites such as Roblox and Twitch offer creators opportunities to monetize their work with potential partnerships with brands, and crypto currency sites such as Rally.io make it possible for creators to mint their own currency. The big social networks such as Meta are responding by making themselves more attractive to creators. More businesses will tap into niche networks to partner with emerging creators who are lesser-known but possess tremendous street cred. Big-name partnerships with stars will still thrive, but the social media icons will need to make room for the new kids in town.

— Mark Smith, co-founder

Tech Titans Roar

We hear a lot about the big technology firms facing increased scrutiny from Congress and legislators around the world. But to me the more intriguing story is how the tech titans keep trying to outmuscle each other for advertising revenue, an example being Apple enacting privacy controls to hurt Facebook’s ad business. 2022 will ratchet up the fight:

  • Apple will start leveraging and monetizing the data they are collecting (and not allowing others to collect) in the form of some type of advertising platform. This is the culmination of Apple’s stricter privacy controls.
  • Google will remove more visibility and targeting options in the name of advances in machine learning and automation, thus protecting its core ad business by taking more control of it.
  • An increasing number of platforms will emerge that use first-party data to target and track and savvy advertisers will take advantage of this and diversify their advertising spend
  • Amazon will grow with even more ad units for Amazon Advertising and marketing offerings such as livestreamed commerce for businesses of all size, especially smaller ones. Google and Meta will lose market share.

Unfortunately, we can count on CPCs to rise across all platforms as they attract more businesses competing for ad inventory and keywords. It’s going to be a more expensive 2022, but also a more interesting one with more ad units proliferating.

— Kurt Anagnostopoulos, co-founder

Google Ads Become More Powerful

Given the evolution of keyword matching (now AI-powered to serve ads based on the meaning of a search query), and the simplification of the ad product offerings (as Google deprecating Expanded Text Ads next summer), we will see Google Ads become leaner but more powerful. Advertisers will be forced to rely more and more on Google’s algorithm to drive results – all this, at the expense of reduced control advertisers have over campaign settings (ad content, keyword matching, targeting choices, etc.). I believe the biggest changes will continue to happen on Google’s back end as it seeks to make the algorithm (automated bidding strategies used in ad campaigns) smarter. Thus, we will see increased focus on cookie-less conversion tracking and an expansion of first-party data collection capabilities in Google Ads (i.e., scaling up enhanced conversions).

— Héctor Ariza, digital marketing and analytics manager

Social Media Ad Dollars Get Redistributed

Lush Cosmetics recently said it is quitting Facebook, Instagram, Snapchat, and TikTok over concerns that those platforms have a negative impact on teens’ mental health. (The company will remain active on LinkedIn, Pinterest, Twitter, and YouTube.) Lush said it will happily lose $13 million in sales because of the digital detox. It remains to be seen whether Lush will reactivate the accounts it quit (Lush quit some social sites in 2019 before returning), and of course a big question is whether more businesses will take such a drastic approach. I don’t think we’ll see more businesses take the Lush approach – social media is just too important – but they will shift some of their ad dollars away from Facebook and Instagram. In the past, businesses have remained loyal to Facebook (now known as Meta) because the site is critical to their advertising and marketing strategies. But the whistleblowing activities of ex-Meta employee Frances Haugen have raised the stakes. She asserted that Meta has kept internal research secret for two years that suggests its Instagram app makes body image issues worse for teenage girls. Businesses will monitor what their customers, investors, and employees say about Meta especially in this era of purpose-driven branding. Some will shift their advertising to Snapchat and TikTok while Meta takes the heat for brand safety issues. But this shift may be temporary. Meta will probably mollify brands with some updates to its products to create more brand safety, as it is already doing with its news feed to address concerns over lack of user control over their news feeds. In addition, Meta faces the ongoing threat of regulatory oversight. More accountability will come to Meta in 2022.

— Beth Bauch, director, digital marketing

Contact True Interactive

To succeed in the ever-changing world of online advertising, contact True Interactive. Read about some of our client work here.

Image source: https://pixabay.com/photos/year-2022-track-new-year-calendar-6786741/

 

Why Retailers Are Launching Ad Businesses

Why Retailers Are Launching Ad Businesses

Advertising

Best Buy recently announced the launch of Best Buy Ads, a new in-house media company. Best Buy Ads offer a range of ad units including paid search ads, onsite and offsite display ads, onsite and offsite video ads, social ads, and in-store ads. According to Best Buy, Best Buy Ads capitalizes on the fact that Best Buy interacts with its customers three billion times a year. From those interactions, Best Buy learns about the search and shopping habits of its customers. This makes it possible for the retailer to sell ad units that target a specific demographic: people with a strong interest in consumer technology.

Best Buy is the latest retailer to launch an ad business. Other examples include:

  • Walmart Connect, the leading ad business run by a brick-and-mortar retailer.

As with Best Buy, they offer services ranging from display to media buying. They all have one thing in common: they monetize their customer data.

Why an Ad Business Appeals to a Retailer Like Best Buy

An online advertising business is appealing to Best Buy for a number of reasons, including:

  • This is a proven model. The growth of Amazon Advertising (Amazon’s own in-house ad operation) speaks for itself. Amazon Advertising is so successful that Amazon is now challenging Google’s and Facebook’s dominance of online advertising. In light of this, we’ve witnessed a slew of retailers jumping into the ad business. For example, Walmart Connect (Walmart’s ad operation) has enjoyed strong growth.
  • Customer data is a competitive weapon. Retailers such as Best Buy collect a treasure trove of data about their customers, starting with their search and shopping preferences. This data gives each retailer an edge because they can promise advertisers access to a targeted audience with intent to buy. As noted, Best Buy targets consumers in the market for home electronics. By contrast, the recently launched ad platform from retailer Macy’s targets a fashion-conscious consumer. Walmart promises entrée to grocery shoppers and price-conscious consumers. Of course, retailers must know how to mine all this data and then develop attractive ad units. But the data provides a built-in advantage.
  • Retailers’ customer data is getting more attractive to advertisers. Businesses are looking for alternative ways to reach consumers amid the demise of third-party cookies, which are crucial for third-party ad targeting, and the advent of stricter consumer privacy controls on Apple’s iOS, which has also made it harder for businesses to target consumers with ads. With third-party ad targeting across the web threatened, platforms that give advertisers entree to shoppers within retailers’ walled gardens are more appealing. Basically, retailers are using their own customer data to do what Apple and Google won’t do for advertisers anymore.
  • e-Commerce is booming. Online ad businesses in particular are catching fire because of the e-commerce boom. According to S&P Global Market Intelligence, “The e-commerce industry is expected to hold on to pandemic-elevated sales into 2022, with big retailers including Amazon.com Inc. and Walmart Inc set to benefit as consumers stick to new, hybrid shopping patterns.” S&P Global Market Intelligence says U.S. e-commerce sales are on track to exceed $1 trillion for the first time in 2022. Businesses want to reach those shoppers, which creates a demand for online advertising. The surge in online commerce also means more people are using retailers’ sites to search and shop, which creates more valuable customer data that retailers’ ad businesses can monetize. This also means advertising.

What Advertisers Should Do

  • Consider retailer-based ad networks as a complement to your existing digital ad strategy, not as a replacement. If your strategy focuses on Facebook and Google, for instance, don’t move your ad dollars over to a retailer network. Remember that Facebook and Google also already offer proven advertising products that capitalize on their vast user base. For example, location-based digital advertising tools help strengthen Google’s advertising services at the local level.
  • Do, however, monitor the effectiveness of your advertising on Facebook and Google amid the demise of third-party cookies and the onset of Apple’s App Tracking Transparency, which includes more privacy controls that may make Facebook ads less effective (which remains to be seen).
  • Work with an agency partner that knows the terrain. For instance, at True Interactive, we complement our history of helping businesses advertising on Google and social media with expertise across retailer ad networks such as Amazon and Walmart.
  • Learn more about the ad products that might apply to you – and those products are evolving. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site – meaning advertising across the web, as well as via connected TV.

Contact True Interactive

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

For More Insight

Walgreens Doubles Down on Its Advertising Business,” Tim Colucci, May 19, 2021.

Amazon Unveils New Ad Units Across Its Ecosystem,” Kurt Anagnostopoulos, May 4, 2021.

Why Macy’s Launched an Advertising Platform,” Tim Colucci, March 3, 2021.

Walmart Asserts Its Leadership in Advertising,” Tim Colucci, February 8, 2021.

Why Facebook Launched Shoppable Groups

Why Facebook Launched Shoppable Groups

Facebook

We all need a little help from our friends, and Facebook is leaning into this reality with its Shops in Groups. The social networking behemoth has announced that it will be making it easier to shop for products on the app, using connections with friends and trusted creators to gain inspiration — and find just the right gift. This development underscores how important social media is becoming as the holiday shopping season ramps up.

Facebook Announces Shoppable Groups

Facebook describes its mandate this way: Facebook wants to introduce new tools to “make shopping and buying better on our apps.” And Shops in Groups allows users to support the communities they are interested in by buying products from them. One example? Shops in Groups makes it possible for members of OctoNation, an octopus fan group on Facebook, to directly purchase stickers, mugs, and apparel related to their passion for the eight-limbed mollusks.

TechCrunch describes the new feature as follows: admins of Facebook groups can essentially set up an online store on their associated Facebook Page, and the admins can determine where the money goes. In the case of OctoNation, mentioned above, profits go straight to OctoNation’s nonprofit. And as Yulie Kwon Kim, Meta’s VP of Product Management, notes, the shops can offer a revenue stream to group admins, who tend to be volunteers. She says, “The money goes to the group admin, and they can decide how they want to use it. This is a great way for people to sustain and keep the group going.”

The feature appears to have legs: Ad Age reports that after testing on a smaller number of groups, Facebook is opening up shoppability to another 100,000 groups. And it’s worth noting how flexible the setup can be: groups can link to sites such as a Facebook Shop, Shopify store, or BigCommerce store. Making Groups shoppable is important because, as Facebook points out, more than 1.8 billion people are using Facebook Groups every month.

Facebook Shoppable Groups in the Context of Social Shopping

Facebook is tapping into the rise of social shopping — also known as social commerce. As we’ve blogged, social shopping accelerated in popularity during the pandemic — and it’s showing no sign of slowing down. Social media has evolved along with this trend, working to meet the needs of users who are inspired by what they see online.

The numbers are telling. According to ChannelAdvisor, 57 percent of people aged 26 to 35 had researched a product on Facebook. People on Facebook are not only receptive to social shopping, they are actually doing it. And according to Retail Dive, a whopping 87 percent of Gen Z will be looking to social media for shopping inspiration.

chart showing Instagram usage

Facebook is determined not to miss out on this trend. Moreover, the tech giant wants to give people more reasons to stay engaged with Facebook and use its advertising products.

What Brands Should Do

What does this mean for your brand? We suggest:

  • If you sell products online, consider Facebook as more than an advertising platform. Learn more about features such as Shops in Groups.
  • Master Facebook advertising products that appeal to people on Facebook (or find a partner who can do the heavy lifting for you – we manage Facebook advertising for our clients). The platform is clearly committed to making itself more engaging and useful to users: consider how that investment might benefit your brand.
  • As ever, don’t put all your eggs in one basket. Balance your online presence between the major platforms that offer value in advertising — and shoppability.

Contact True Interactive

Eager to explore what Facebook — and other platforms — have to offer your brand? Contact us. We can help. Learn more our social media expertise here and our experience with shopping tools here.

Photo by John Schnobrich on Unsplash