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.

Amazon’s Next Frontier: Local Advertising

Amazon’s Next Frontier: Local Advertising

Amazon

Amazon recently announced for the first time just how big Amazon Ads has become. And the number is very big. As in $31.2 billion. Amazon said in its in 2021 earnings announcement that Amazon Ads had achieved 32 percent year-over-year growth, which includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.

$31.2 billion is not quite the size of Meta’s and Google’s ad businesses. By comparison, Google achieved $209.5 billion in ad revenue for its most recent fiscal year, and Meta achieved roughly $115 billion for the same time period. But Amazon Ads eclipses Microsoft, Pinterest, and Snap, and the company has earned a place alongside Google and Meta as one of the big three online advertising platforms.

And now, it looks like Amazon plans to get bigger in an untapped market: location-based advertising. Business Insider reported recently that Amazon is building a local ad business by advertising positions for a Local Ads team in major cities such as Chicago and New York. Apparently Amazon Ads will offer a slate of ad units, including streaming TV ads and a demand-side platform that sells ads off Amazon’s website. (Note that Amazon generates the lion’s share of its ad revenue from search ads that appear on the Amazon website; but Amazon has invested more in ad tech to get bigger ad budgets from advertisers.)

This is an intriguing development, to say the least. Location-based advertising capitalizes on the fact that local searches by consumers are wildly popular. This is a big reason why hyper local sites such as Nextdoor have achieved strong growth: people typically look for things to buy at stores close to their homes. So, businesses have a strong motivation to rank well in those “near me” searches, and of course advertising can amplify their presence. Meta and Google both offer strong location-based ad services, but lately Meta has taken a financial hit because of the impact of Apple’s Application Tracking Transparency privacy controls, which limit the effectiveness of ad targeting, including location-based ad targeting.

According to a Deutsche Bank report from 2021, 75-percent of Meta’s advertising revenue came from small businesses. Meta could be vulnerable if Amazon’s plans are rolled out. And Amazon doesn’t have to worry about Apple’s privacy controls. The company can sell ads based on first-party data, or data that people on Amazon share when they search and purchase (Apple’s privacy controls do not affect first-party data). Now, consider the fact that Amazon operates brick-and-mortar businesses such as Whole Foods and Amazon Fresh, which rely on location-based advertising. An Amazon location-based ad service could benefit the company’s own stores.

But that’s not all. Just as Amazon sells online ads to merchants, the company is apparently banking on the ability to do that for retailers, automotive dealers, restaurants, and other merchants that need to be present in local search results.

For now, Amazon will continue to grow its ad business mostly through Amazon.com, where companies pay to be listed as a “sponsored product” high up in the search results. Amazon also offers video commercials and ads on Amazon’s FireTV device. Amazon Ads also helps brands with online advertising on sites that it does not own. And Amazon has developed advertising in devices and platforms such as Twitch.

It will be interesting to see how this development plays out especially with Walmart leveraging its own small but growing ad business that capitalizes on the company’s online/offline presence. Walmart could be a strong alternative to Amazon.

We recommend that advertisers manage the online ad solutions that are most relevant to their own customers’ journeys from awareness to purchase. Keep an eye on Amazon. The company has built incredible momentum, and an increasingly privacy-centric landscape favors the growth of its ad business.

Contact True Interactive

At True Interactive, we monitor new ad products all the time and help our clients prosper amid the evolving landscape. Contact us to learn how we can help you. Learn more about our Amazon Ads services here.

Celebrating 15 Years of Growth at True Interactive

Celebrating 15 Years of Growth at True Interactive

Advertising

2022 marks a big milestone: True Interactive celebrates our 15th birthday. We’re now old enough for a learner’s permit to drive a car in Illinois.

Our story, and the story of the internet, has been shaped enormously by the actions of a few influential companies:

  • Google organized the world’s information online and taught everyone how to find it.
  • Meta connected people through social media.
  • Thanks to Apple, we took the internet with us on our mobile phones.
  • YouTube changed how we consume content with video.
  • Amazon made the world comfortable conducting commerce online.

These and a handful of other companies rewrote the rules for how businesses and people discover each other and build relationships.

Online advertising is at the center of this change. At True Interactive, we are grateful to the clients who have trusted us to help them figure out how to succeed in the digital age, and to our own people who’ve brought to our client relationships a spirit of hard work, collaboration, transparency, and a commitment to results. Businesses like to say that their people are their strongest assets, but people are more than that: they form our culture. Both the people who work for us and the people who work with us.

And we are proud of that culture. The magic that happens when great people and clients collaborate has produced remarkable results, such as triple-digit returns on ad spend and a dramatic reduction in costs. (You can read more about our work here.) And from our experiences, we’ve developed services ranging from search engine marketing to social media advertising that create a foundation for our team to innovate.

The next 15 years will evolve differently than the last. We’re probably nearing the end of an era when single companies could wield such enormous impact. The industry has become far too diversified for one business to change consumer behavior in far-reaching ways as Google did with its founding in 1998. And the fast-moving digital world still has few barriers to entry, which opens up the playing field.

Consider TikTok, which didn’t even exist until 2016 and has now challenged YouTube’s dominance with inventive short-form video. Or Snapchat, which keeps nudging the marketing world to embrace augmented reality even though its main rivals such as Meta had a long head start. The connected TV space still feels wide open.

And then there’s the metaverse. It’s just too vast and far-reaching for any single company to dominate. In fact, the fundamental notion of the metaverse is predicated upon the development of a decentralized web, Web 3.0. We’re only six months into 2022, and we’ve already seen just how much of a free-for-all that this emerging world feels like right now. Some of the building blocks of the metaverse, such as cryptocurrencies and nonfungible tokens (NFTs), sounded so fresh and exciting at the beginning of the year. Now businesses and people everywhere are learning (sometimes the hard way) how far those technologies still have to go before they redefine the landscape the way search, mobile computing, and video did.

We’re as bullish on emerging technologies and forms of computing as we were 15 years ago when we figured out how to help businesses build powerful brands even as human beings were learning how to search online. We can promise you that regardless of how the digital world evolves, we will always:

  • Not succumb to hype. We’re on the forefront of change, but everything we need to do must be grounded in reality, not wild speculation.
  • Deliver measurable results. If we can’t deliver measurable value, we won’t do it.
  • Be totally transparent. Our clients know what they’re getting from us. And they know how we deliver value. Trust is a wonderful thing. It must be earned through openness.

What excites us most? The unknown. The next wave of change that no one sees coming. The unknown creates a level playing field. The unknown is a vast well of opportunity. Much of the digital world was unknown when we were founded, and look where we are now thanks to our people and our clients. Whatever happens next, our culture of hard work, collaboration, transparency, and commitment to delivering results will ensure that we thrive. Together.

Happy 15, everyone! 

— Kurt Anagnostopoulos and Mark Smith

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/

 

What Does Meta’s Big Move with Horizon Worlds Mean to Brands?

What Does Meta’s Big Move with Horizon Worlds Mean to Brands?

Meta

Meta, the parent company of Facebook and Instagram, has announced that the company will help individual creators generate income in Meta’s Horizon Worlds platform. This is a significant sign that the so-called metaverse will open up ways for people to monetize the metaverse as it takes shape.

What Is the Metaverse?

The metaverse is a shared virtual world where people can work, play, and live through digital twins, or avatars. Aspects of the metaverse are here already: every time we use a digital currency, every time we hang out on Fortnite or Roblox (gaming is currently a big slice of the metaverse), we’re engaging with parts of the metaverse. They’re just not connected seamlessly yet.

Businesses such as Meta aren’t waiting for all the details to get sorted, though: they are staking a claim to this nascent world by building their own virtual worlds.

What Is Horizon Worlds?

So, what exactly is Meta trotting out? Horizon Worlds (formerly Facebook Horizon) is a free virtual reality, online video game that allows people to build and explore virtual worlds on the metaverse. In short, Horizon Worlds is one potential access point into the metaverse via a gaming platform.

Meta first published the game on its virtual reality Oculus VR headsets in the United States and Canada on December 9, 2021. This approach meant that the audience for Horizon World was necessarily limited to people who could afford a virtual reality headset (specifically, Oculus VR). But Meta is now making Horizon Worlds available even if users do not have virtual reality headsets.

What Did Meta Announce about Horizon Worlds?

Mark Zuckerberg said Meta is testing new tools that allow creators to expand their reach—and create some lucrative opportunities—within the worlds they build on Horizon Worlds. In a video, he said, “The ability to sell virtual items and access to things inside the worlds is a new part of [the] e-commerce equation overall. We’re starting rolling this out with just a handful of creators and we’ll see how it goes but I imagine that over time we’ll get to roll it out more and more.”

If there’s anything Meta wants you to take away from this development, that would be:

  • Meta is testing a way for creators to sell virtual items and experiences within their worlds.
  • Meta is also testing a Horizon Worlds Creator Bonus program.

While Meta is currently working with a handful of creators to get feedback on this initiative, the long-term plan is to create an environment in which creators can earn a living in a world of digital goods, services, and experiences. The overall vision is that the metaverse will crack possibilities for entrepreneurs—wide open. And it’s not a matter of creators being thrown into this world without a safety net or guide: a $10 million Horizon Creators Fund, announced last October, is meant to provide resources to Horizon Worlds creators.

The opportunities are certainly compelling: Meta is rolling out a test with a few creators that facilitates the selling of virtual items within their worlds. This might manifest as attachable accessories entrepreneurs create for a fashion world, say, or paid access to a new part of a creator’s world.

Meanwhile, the Horizon Worlds Creator Bonus program, meant for participants in the United States, offers bonuses in the form of goal-oriented monthly programs that reward creators with a pay-out at month’s end. The bonuses honor progress made towards the creator’s goals, and are not subject to fees (read: creators will be paid in full). While rewards may evolve, creators are currently rewarded (in the limited test) for building worlds that attract the “most time spent.”

What Does All This Mean?

This is how we read this news:

  • Horizon Worlds is yet another sign that the metaverse is getting bigger with extraordinary speed. For confirmation, one need look no further than JP Morgan, which says the metaverse is a “trillion dollar industry” in which it acknowledges “explosive interest.” They aren’t just talking the talk: the investment bank has opened a lounge in the blockchain-based virtual world Decentraland. The Onyx lounge, named for JP Morgan’s Onyx blockchain unit, includes a roaming tiger that greets visitors and a portrait of CEO Jamie Dimon, not to mention a suite of Ethereum-based services. JP Morgan’s claim to fame? That it is the first major lender to enter the metaverse.
  • It’s also an example of how businesses are empowering the so-called creator economy, a class of businesses comprising millions of independent content creators and influencers. We’re hearing about creators more partly because apps like TikTok have granted them more power and more influence.

But the creator economy stands to become even more powerful. That’s because collaboration networks are proliferating, networks that 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 brand partnerships, even as crypto currency sites like Rally.io empower creators to mint their own currency.

It’s a rich vein to mine, and big social networks such as Meta are responding by making themselves more attractive to creators (that brings us back to the news about Horizon Worlds and the resources Meta is making available). Going forward, more businesses will tap into niche networks to partner with emerging creators who are lesser-known but possess tremendous street cred. Will big-name partnerships with stars still thrive? Sure, but the social media icons are going to need to make room for the new kids in town.

What Brands Should Do

What does this mean for your brand? As you consider the opportunities inherent in the metaverse, we recommend that you:

  • Remember your audience. Do they care about the immersive worlds that the metaverse makes possible? That is, will marketing and advertising in the metaverse even matter to them—much less reach them? The biggest audience for the metaverse currently skews young, although some brands are making a concerted effort to reach out to older consumers. Ask yourself who your audience is, and if you have the resources and energy to reach out to them if their engagement with the metaverse represents a tougher sell.
  • Reflect on your appetite for experimentation. This is a new frontier that is already evolving. Are you ready to pivot—and pivot again—as conditions change?
  • Learn from businesses that have already found their marketing access point in immersive gaming worlds, which are, as noted, a popular segment of the metaverse.

Contact True Interactive

Want to learn more about the metaverse? Eager to dip a toe but looking for some guidance? Contact us. We can help you map a way in this new world.

What Does the Redesigned Instagram Content Feed Mean to Brands?

What Does the Redesigned Instagram Content Feed Mean to Brands?

Instagram

Instagram is giving more power to the people. Meta, Instagram’s parent, has announced that the social networking service will now give users two new ways to view their feeds: “Following” and “Favorites” (the standard “Home” experience, based on by the Instagram algorithm, is still an option too). Let’s take a closer look at these alternatives and what the development means for brands.

Following vs. Favorites vs. Home

So, what are these options, exactly? Essentially, Instagram wants to give users more control over what they see. For context, let’s review the experience Instagram users are accustomed to getting: the Home experience. This is an algorithm-based feed by which Instagram presents content that Instagram thinks users will be most interested in, based on their viewing habits. Notably, the Home experience is not purely chronological—it’s grounded first and foremost in user interests.

Instagram’s hunch is that the Home experience will remain the preferred go-to for users, so they’ve made it the default. As an Instagram spokesperson explained to CNET, “people have a better experience on Instagram with a ranked feed, so we won’t be defaulting people into a chronological feed.”

But now, based on a March 23 announcement from Meta, users also have the choice of a chronological experience with the Following and Favorites options:

  • The Following option presents a steady feed of posts from all the people one follows.
  • Favorites gives users the ability to further curate what they see by allowing them to designate up to 50 accounts they want to view higher in their feeds.

Users can make changes to their Favorites list at any time (people are not notified when they are added or removed).

Both Following and Favorites show posts in chronological order, making it easy to catch up on recent posts.

How Might Brands Adapt?

According to Ad Age, the chronological feed (for both Following and Favorites) may prove advantageous to advertisers and facilitate more real-time marketing opportunities. Amber Gallihar Boyes, director analyst at research firm Gartner, notes, “On the brand and creator side, there is an excitement and optimism about [the new structure]. I’ve seen creators just really feeling beaten down by lack of reach on Instagram and this gives them some element of control because they can make sure they’re connecting with their most loyal fans and followers.”

Live situations already lend themselves to Instagram, but the chronological feed, by creating a sense of immediacy, could prove especially beneficial to marketers during events like the Oscars or the Super Bowl.

“If you play it right [as a brand] you can almost . . . give people the experience that ‘if you’re not there when it happens, you’re missing out,’” Shawn Francis, head of creative at social media marketing company We Are Social, explains. He adds that it behooves brands or creators to ask “what content can you put out that makes people say, ‘I have to follow this brand in real-time.’”

In other words? Brands can lean into that FOMO.

They can also lobby to be on the coveted Favorites list: some creators are even putting out tutorials to teach fans how to add to their Favorites feed, presumably with the hope that their brand name will place high on the list when it’s created.

But achieving Favorites status is no slam dunk. “With 50 spots, people will be selective,” Nicholas Stoeckle, executive director of strategy and innovation at advertising and production company PPK, points out.

Competitive as it is, the Favorites list will certainly give brands a clearer sense of who their most loyal fans are, based on whether the brand makes it into a given Favorites section. Brands and creators will also get the opportunity to experiment with different posting times, to see if there are “sweet spots” for them in the chronological feed.

Contact True Interactive

Social media platforms are constantly evolving to meet users’ needs, and Instagram’s recent announcement is just one example. Trying to stay abreast of —and to leverage — these changes? Contact us. We can help.

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