An Explanation of the 30 Percent Apple/Google Tax

An Explanation of the 30 Percent Apple/Google Tax

Apple Google

Twitter’s well publicized spat with Apple has highlighted an unpleasant reality for any business that operates an app: Apple and Google both enjoy a costly app duopoly.

The 30 Percent Tax

Twitter owner Elon Musk recently accused Apple of trying to destroy Twitter partly by putting Apple’s Twitter advertising on pause and partly by threatening to remove Twitter from the Apple app store.

Both parties apparently resolved their building tensions. Apple is advertising on Twitter, and Twitter remains on the App Store. Perhaps all is well between Apple and Twitter now. But not all is well for any organization, including Twitter, that needs the App Store to do business on Apple’s iOS operating system, which, of course, includes iPhone users.

The App Store provides access to more than 1.5 billion devices. It’s a top way for people to get the Twitter app and any app. What many journalists accurately reported in their coverage of the Twitter/Apple skirmish is that businesses on the App Store must pay Apple a 30 percent commission on all transactions processed via Apple, known as in-app purchases. As The New York Times noted,

Mr. Musk’s App Store allegation resurrects a potent charge against Apple: that it has used access to millions of iPhone and iPad devices as a cudgel to extract more money from app makers. A key part of Mr. Musk’s plans for Twitter is collecting more revenue from subscriptions — but under Apple’s policies, up to 30 percent of those sales from iPhone users would go to Apple itself.

The commission applies to all app developers who make more than $1 million through the ‌App Store‌ on an annual basis. For small developers who make less than the $1 million threshold, Apple has cut its fees to 15 percent through the Small Business Developer Program.

The commission also applies to “sales of ‘boosts’ for posts in a social media app,” meaning boosted content (i.e., posts that becomes amplified for a fee) on Facebook and Instagram.

Apple is not alone. Google also offers its own in-app billing system that charges a 30 percent commission or service fee for any payment made for an app or in-app payments or subscriptions. In 2021, Google began to enforce this requirement. After withering backlash, Google said it would cut the fee to 15 percent earned by a developer through their app on Play Store in a year and the 30 percent commission will apply for the revenue earned beyond $1 million.

Apple and Google effectively hold a duopoly. No business can bypass that duopoly; trying to process payments outside the App Store or Google Play would result in being kicked off both. (However, it should be noted that reportedly Elon Musk is figuring out how to design a closed payments system for Twitter.)

In the United Kingdom, the Competition and Markets Authority is launching an investigation that is taking aim at this duopoly. In the United States, reportedly the Justice Department is investigating Apple, and Epic Games has gone so far as to fight Apple legally.

But the wheels of justice may turn too slowly for the businesses that are operating under the thumb of Apple and Google. What steps can they take? Here are a few suggestions:

  • As with any tax, it’s important to budget accordingly. If you have not done so already, adjust you advertising and marketing plans to take into account the 30 percent commission. (We can help you with that.)
  • Boost your advertising and marketing to attract more sales. (We can help you with that, too.)
  • Make your voice known, as Twitter, Coinbase, and Spotify are doing. True, few businesses have the reach and visibility of those companies, but going on record leaves electronic breadcrumbs that increase the pressure on the duopoly, however slightly. Remember, backlash caused Google to back down on its fees as noted above.

Meanwhile, True Interactive continues to work with our clients to maximize the value of every dollar they spend via mobile advertising. Contact us to learn how we can help you.

Photo by Rami Al-zayat on Unsplash

Twitter Adds More Location-Based Marketing Features

Twitter Adds More Location-Based Marketing Features

Twitter

Twitter is making itself more appealing to businesses such as retailers and restaurants that operate physical locations. That’s because Twitter recently made it possible for businesses to update their profiles location, hours, and additional contact methods that make businesses more findable. This change may mean Twitter is trying to become a better destination for consumers looking for things to buy, whether they do so online or visit a physical location.

What Twitter Announced, and What Businesses Should Do

Twitter announced that professional accounts (which are designated for businesses, brands, creators, and publishers) may capitalize on a new Location Spotlight feature. Location Spotlight allows a professional account to display their location, hours of operation, and additional contact methods. Features of Location Spotlight include:

  • Business location: this is listed and shown on a small map in the profile spotlight. People can tap on the location map/listing to open Google Maps, or their default map app, for easier navigation to the business’s space.
  • Hours of operation: this field is optional but can be customized to showcase the days and times businesses want people to visit their location.
  • Methods of contact information: when the contact button in the spotlight is enabled, it can kick off one or more of the following directly to the business: phone call, text message, direct message, or email.

This news demonstrates Twitter’s intent to capitalize on the rise of location-based marketing which uses both paid and organic content to generate business at the local level. (This post and this post contain more detail defining the concept.)  Twitter’s ad products include geo-targeting by location, and the company has launched shopping options that make it easier for people to buy from businesses through Twitter, which is a boon especially for retailers (including those that operate local storefronts).

Twitter also offers to qualifying professional accounts a feature known as Shop Spotlight. This is a dedicated space to showcase products at the top of a Professional Account where businesses can showcase their products. When this spotlight is enabled, potential customers can scroll through the carousel of products and tap through on a single product to learn more and purchase – in an in-app browser, without having to leave Twitter.

The launch of new content features can mean that a platform is priming the pump for more advertising products, and this is probably the case with Twitter especially as Amazon Ads expands into local advertising. Online commerce is a trillion dollar industry, and digital platforms such as Twitter, Amazon, Google, Facebook, Instagram, and TikTok want to capture more revenue from this booming market. Location-based marketing is one way of doing so – while integrating with offline commerce, too.

We recommend businesses activate this feature if it applies to you. Twitter explains how to do so here. We also recommend that businesses with physical locations watch for an uptick in ad services from Twitter, as the company seeks to find more sources of ad revenue from businesses with multiple locations. We will do all the monitoring for our clients at True Interactive!

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.

Lead image source: https://unsplash.com/@alexbemore

 

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/

 

Twitter Goes 3D with Advertising — Should You?

Twitter Goes 3D with Advertising — Should You?

Twitter

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

The What

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

 

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

In Good Company

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

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

Our Advice to Brands

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

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

Contact True Interactive

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

Photo by Alexander Shatov on Unsplash

Why Twitter Launched Twitter Shops

Why Twitter Launched Twitter Shops

Twitter

Twitter gets it. Brands want to drive sales. And shoppers are more motivated to buy if the process is a positive one. Enter Twitter Shops, the platform’s latest bid to foam the runway for consumer purchases. The feature, which ups the number of products brands can display at the top of their profiles, also aims to make the buying transaction even more seamless.

What Is Twitter Shops?

Twitter wants to support businesses; it also aspires to be consumer-friendly. Twitter Shops, which allows brands to display 50 shoppable products, is meant to check both those boxes. Shoppers need only click on “View shop” to scroll through the items a brand has uploaded, then click on a product to open an in-app browser and wrap up their purchase on the brand’s website. Easy!

The new feature is part of a concerted effort Twitter has been making to make shopping on the platform that much friendlier. Shop Module, announced last year, allowed businesses to display up to five products on their profile. Twitter Shops builds off that development. And notably, Twitter will not be taking a cut of revenue from purchases made on Shops.

Bruce Falck, revenue product lead at Twitter, puts it this way: “We know that shoppers come to Twitter to interact with brands and have conversations about products . . . Our growing shopping ecosystem is designed to leverage the power of that shopping conversation and create a pathway for people to go from talking about and discovering products to browsing and purchasing them.”

Why Did Twitter Launch Twitter Shops?

As Falck notes above, Twitter wants to bolster its social commerce functionality. It’s a smart move. 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, morphing to meet the needs of users inspired by what they find online. That’s a growing demographic: as Retail Dive points out, a jaw-dropping 87 percent of Gen Z will be looking to social media for shopping inspiration.

Of course, Twitter isn’t the only platform to see the writing on the wall. They have competition: Meta (Facebook and Instagram) and TikTok have also made inroads with social shopping. As we’ve blogged, Facebook’s Shops in Groups is intended to “make shopping and buying better on our apps.” Meanwhile, TikTok has partnered up with Shopify to make it easy for TikTok users to shop directly in the TikTok app.

What Brands Should Do

What do these developments mean? We recommend that you:

  • Understand your audience. Are you reaching out to a demographic that works and plays on platforms like Twitter? The answer to that question will help you decide if it makes sense to lean into a feature like Twitter Shops.
  • Learn how to use the tools available to you. Every platform has its own requirements for creating content. Moreover, working confidently on these popular sites demands a strong grasp of how to use visuals. If you are going down this path, you must know how to create powerful, effective imagery.
  • Make sure you are ready to handle the demand. As we’ve blogged, some brands have struggled to keep up with the surge in demand that happens when more shoppers are inspired to buy. Online fulfillment must be up to handling an uptick in sales.
  • Keep an eye on the competition. How are your direct competitors leveraging digital to build bridges with consumers? What can you learn from their strategies?
  • Don’t put all your eggs in one basket. Balance an online presence between the major platforms that offer value in advertising—and shoppability.

Contact True Interactive

Eager to explore how platforms like Twitter can elevate your marketing plan? Contact us. We can help.

Why Twitter Is Succeeding

Why Twitter Is Succeeding

Social media Twitter

Twitter never got the memo that predicted its failure.  As far back as 2016, pundits have been forecasting the demise of the microblogging service, citing, among other things, a lack of direction and a stagnant user base. Even when Twitter’s stock value rose in 2020, detractors dismissed the news and said the company was simply benefiting from the sudden rise of the digital economy. But this phoenix continues to rise from the ashes, and it’s time to give Twitter its due. The company has made an impressive turnaround, as evidenced by its latest earnings announcement. In fact, the company’s performance beat Wall Street expectations in many important categories.

In discussing its growth, Twitter has credited a jump in advertiser demand. Moreover, it appears as though Apple’s much-discussed privacy controls launched in 2021 are not hurting Twitter to the degree expected. Let’s take a closer look at why Twitter is succeeding.

Strong Advertising Growth

What exactly gave rise to the bump in advertising demand? The growth happened at least in part because Twitter is rolling out more features for advertisers. One example: a video tool. Per their shareholder letter, Twitter has launched a prediction model that projects the likelihood a viewer will watch a video to completion, a feature meant to meet the needs of advertisers who prioritize video completion rates. A “15-second (15s) view” bidding unit powered by the prediction model gives precedence to engaged views; according to Twitter, “Early testing has shown that [the bidding unit] drives Twitter’s highest video completion rates yet.” The data does look good: advertisers using the 15s view bid unit are seeing an 89 percent higher completion rate, at an average 25 percent lower cost per completed view.

Strong User Growth

Of course, advertisers don’t want to be on a platform unless they know a lot of people are going to congregate there; they want those eyeballs. Twitter, like any company, has to roll out new features to entice people to visit—and linger. Twitter understands this, and their actions reflect that understanding. Per CNBC, “In the [second] quarter Twitter introduced its first subscription service, which gives users access to an Undo Tweet button and other features.” Named Twitter Blue, the subscription service is meant for “power users” who are happy to pay a monthly fee in exchange for exclusive features.

Taking a cue from the success of Clubhouse, Twitter also released its Spaces live-audio chat feature on mobile devices for all users with at least 600 followers. On Spaces, users can join virtual rooms and engage in real-time audio conversations with others. In addition, a new Tip Jar feature will enable users to send money to creators on Twitter.

Notably, the new features have the potential to appeal to brands as well as individuals: consider the fact that Twitter recently signed a deal with the NFL to use Spaces commercially. The league has committed to producing content: more than 20 Spaces, or rooms, that will air around events like the draft and Super Bowl. Per Marketing Dive, the NFL “is the first sports league to offer sponsored Twitter Spaces to brands.”

News Source

It’s also worth noting the connection between Twitter and the news. In fact, brands interested in the news-oriented world are wise to consider Twitter as part of their paid social strategy. As reported by Black Bear Design, Twitter is one of the most popular platforms on the planet: 24 percent of online adults use this microblogging service. And a whopping 86 percent of Twitter users indicate that they visit the network to get their news fix, with almost three quarters of those individuals doing so every day.

Contact True Interactive

In short, Twitter keeps on finding ways to stay relevant. Is the platform a good partner for your brand’s reach? Contact us. We can advise. Learn more about our expertise with social media platforms here.

Why Twitter Spaces Matters to Brands

Why Twitter Spaces Matters to Brands

Social media

Social audio is here. In an era of social isolation brought on by the constraints of Covid-19 living, the sound of the human voice has become a profound balm. And the resultant success of live audio apps like Clubhouse has inspired other platforms to create their own alternatives to voice-based connection. Twitter’s take on the audio phenomenon? Spaces.

What Is Twitter Spaces?

Described by Twitter as “a small experiment focused on the intimacy of the human voice,” Spaces is similar to Clubhouse in that it allows users to create their own audio chat rooms and be part of rooms created by others. Conversation topics run the gamut, covering everything from popular culture to tech.

How does Spaces distinguish itself? It could be argued that some differences are purely semantics: users join “Spaces” rather than “Rooms,” for example. But Spaces has also emphasized the fact that anyone and everyone can join the app, a contrast to Clubhouse’s invite-only model. In a given Space, hosts make the choice of who to invite to a conversation. Each Space allows up to 11 people (including the host) to participate in the chat; the number of listeners allowed is unlimited.

At the moment, Spaces remains in beta mode, but Spaces is expected to open up for general use soon.

Why Twitter Spaces Matters

Twitter Spaces matters because it’s part of a larger trend: the rise of social audio. When a big player like Twitter leaps into the field with its own contribution, that’s a sign a movement has legs—that social audio is being viewed as more than a passing fad. In fact, social audio has been steadily gaining traction for a while now: according to a Nielsen report, audience use of streaming audio jumped from 50 percent to 64 percent between the first quarter of 2019 and the first quarter of 2020. Then Covid-19 happened, and social distancing. Voice-based connection became even more welcome.

Twitter Spaces is important for another reason: it could threaten Clubhouse as the reigning king of social audio. Consider Twitter’s slate of new resources, like direct payment service SuperFollows, that might be particularly attractive to business owners. SuperFollows makes it possible for Twitter users to charge to view special tweet content, and also serves as a way for users to sell books, how-to videos, and other media. As noted in CMSWire, “These features can be combined to entice people with a consolidated platform that favors Spaces over Clubhouse for their own business.”

How Might Brands Get Involved?

Because social audio platforms are a relatively new phenomenon, the opportunities for brand involvement are still evolving. But it’s already clear that apps like Twitter Spaces create a favorable place to:

  • Gain audience feedback on your brand. The digital format reaches a wider audience, even as the audio component facilitates a genuine back-and-forth exchange.
  • Host discussions on topics relevant to your industry. Using apps like Twitter Spaces, you might invite a group of people to conversations that position you as a thought leader. (It’s also worth noting that creating a Space is easier and more cost-effective than organizing an in-person gathering.)
  • Network with other experts in your industry. By participating in conversations germane to your industry, you’ll be rubbing shoulders with other experts, in so doing enjoying an opportunity to share information and generate leads.

What Brands Should Do

Like any new app, Twitter Spaces reminds brands of what they can do to maximize digital potential. We recommend that you:

  • Treat Twitter Spaces as a focus group to learn from.
  • Get your own people involved in the platform—creating their own conversations and also understanding what topics are trending in other Spaces. (While Spaces is in beta mode, people cannot create conversations unless they have access to Spaces, but they can listen to them. However, Spaces will open up for general use soon.)
  • Take this opportunity to get your Twitter house in order. Make sure you are engaging on Twitter and building your brand there. Your involvement in Spaces will likely draw attention to your own Twitter account. Make sure your Twitter is ready for increased attention.

In short, be ready for when brands can really play on Twitter Spaces!

Contact True Interactive

Interested in social audio but not sure where to start? Contact us. We can help.