Amazon, Facebook, and Google Earnings: Takeaways for Advertisers

Amazon, Facebook, and Google Earnings: Takeaways for Advertisers

Advertising

The week of April 27 was especially important for the online advertising world. The three companies that account for nearly 70 percent of online ad spend – Amazon, Facebook, and Google – all announced quarterly earnings. Here was the first time advertisers would see the impact of the COVID-19 pandemic on ad spend. And the news was better than expected.

Amazon Advertising Surges

Amazon announced a rise in quarterly revenue as people sheltering in place increasingly relied on digital to manage their lives, including purchasing products. Amazon’s Advertising service saw a 44-percent increase in revenue (advertising is included in the “other” category in Amazon’s earnings). Why did Amazon’s advertising business do so well?

  • For one thing, consumers on Amazon are searching with intent to buy. And a lot of people are searching on Amazon. According to CivicScience, 49 percent of product searches start on Amazon, versus 22 percent on Google.
  • Amazon without question became a more attractive place to find things to buy as shelter-in-place mandates took hold. According to Learnbonds.com, Amazon’s monthly unique visitors for March, 4.6 billion, easily exceeded competitors such as eBay and Walmart.
  • Amazon was prepared to help advertisers build their visibility during the surge. As we have reported on our blog, over the years, Amazon’s advertising service has developed a number of products that have served Amazon and advertisers well. Those products include Sponsored Ads, Video Ads, and Display Ads, among others.

Amazon said it will plow its profits into COVID-19-related relief activities. As CEO Jeff Bezos said in a statement, “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”

Amazon’s steady development of an advertising service helped put the company in the position to be able to accommodate this expenditure.

Facebook and Google: Signs of a Turnaround

To no one’s surprise, both Facebook and Google saw a slowdown in revenue earned from online advertising, especially in March. But stock shares for both companies rose after they announced earnings. Why? Let’s take a closer look.

Facebook: More Users and Engagement

Facebook announced that even though ad revenue had dropped during the quarter, it was showing signs of turning around in April. Overall, quarterly revenue rose by $17.74 billion. As Facebook said in a statement, “After the initial steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April.”

In addition, Facebook said that monthly active users had increased 10 percent year over year to number 2.6 billion, and engagement was up as people sheltering in place increased their use of social media.

The advertisers who maintained their spending levels during the dip in March benefitted by being present during the surge in user engagement, as we discussed on our blog.

Google: YouTube Is the Star

Meanwhile, Google’s parent company, Alphabet, reported quarterly revenue of $41.16 billion, a 13-percent year-over-year increase. Revenue from advertising rose 11.6 percent, with advertising from YouTube surging by 33.5 percent.

Alphabet acknowledged that online ad revenue had taken a hit because of COVID-19. But in an investor earnings call, the company’s Chief Financial Officer, Ruth Porat, said that “We have seen some very early signs of recovery in commercial search behavior by users.”

Because Google is very active in the travel and retail – industries that have been rocked by the pandemic – its performance actually exceeded expectations.

As with Facebook, advertisers who maintained their levels of spending benefitted as the general population shifted its behaviors online during the first quarter. As we noted on our blog, many businesses adapted their tone and content to demonstrate empathy with ads running on Google sites such as YouTube. Those businesses positioned themselves well.

What You Should Do 

Amazon, Facebook, and Google will continue to dominate the world of online advertising for the foreseeable future. Here is what we suggest:

  • Don’t go dark. Businesses that maintained their visibility online during the March advertising downturn benefitted from the increase in online engagement. Even as states ease up their shelter-in-place orders, social distancing is not going away anytime soon. We’re living in a digital-first world now amid longer-term behavioral changes. Being present with paid media means taking a digital-first approach.
  • Mind your tone. As I blogged in March, businesses need to do a gut check on the tone of their content. Many businesses have successfully incorporated empathy into their advertising while others have changed their messaging to focus on health and safety. Taylor Hart shared some examples of successful social media advertising in this blog post.
  • Be open to different forms of engagement. It’s important that businesses be ready to adapt different forms of engagement to reflect changing user behavior. For instance, as Facebook CEO Mark Zuckerberg pointed out during Facebook’s earnings call, livestreaming on Facebook is a more attractive alternative to live events. Moreover, Facebook had already been seeing a marked increase in use of its Messenger app before the pandemic. Héctor Ariza recently shared examples of ad products that capitalize on the popularity of Messenger. Given the increase in Facebook’s monthly average users, now is a good time to try those products.
  • Capitalize on new ad products. Google is fighting hard to protect its turf amid the rise of Amazon Advertising. The company continues to roll out new products to make the Google universe more appealing to advertisers. For instance, I recently blogged about how Google has adapted the YouTube masthead ad format for the era of connected TV. As Mark Smith discussed in December 2019, Google has been developing some impressive location-based advertising tools.

Contact True Interactive

We know how to create and manage online advertising that is appropriate for the times we are living in — don’t hesitate to reach out. We can help.

 

How Brands Are Succeeding with Social Media Advertising

How Brands Are Succeeding with Social Media Advertising

Advertising

There’s a disconnect between how businesses and consumers are behaving on social media during the coronavirus pandemic. As reported in The Wall Street Journal, people are spending more time on social apps such as Facebook, but businesses have scaled back their advertising during the first quarter (although in its latest earnings announcement, Facebook said that ad revenue had stabilized at the beginning of the second quarter in April). Companies that go dark on social create an opportunity for their competitors to engage with a growing audience. If you are one of those brands thinking of scaling back, perhaps you should reconsider. Let’s take a closer look at what’s going on.

Consumers Are Online. And They Are Receptive to Ads.

Life under lockdown has resulted in a spike of internet usage. The latest report from App Annie indicates that worldwide, average weekly time spent in games and apps on Android devices increased 20 percent year-over-year in Q1 2020. Significantly, consumer spending also ticked up: “In Q1 2020 consumers spent over $23.4B through the app stores, the largest quarter ever in terms of consumer spend.”

Increased time online also means an uptick in social media usage. According to TechCrunch, an April 2020 Kantar report reveals the extent of this uptick during the pandemic: Facebook, WhatsApp, and Instagram experienced a 40 percent+ increase in usage. Facebook usage has increased by 37 percent overall.

Not only are consumers online more, and still spending, but they are open to seeing ads. GlobalWebIndex research reveals that globally, approximately 50 percent of respondents approve of brands running “normal” advertising campaigns not linked to COVID-19. Strongest approval was reserved for businesses offering practical and informative tips to deal with the current circumstances.

As reported in Social Media Today, a recent Twitter survey provides some context as to this consumer openness to ads. One interesting finding: 52 percent of respondents said that seeing/hearing ads provides a sense of normalcy, even comfort. In other words, regular promotions are familiar. Anything familiar right now is welcome.

Brands That Are Doing It Right 

As we’ve already blogged, companies like Ford, Hanes, and Budweiser have all managed to strike the right tone in their coronavirus-era advertising. Brands that are specifically advertising on social media, and doing it well, include:

  • TOMS: in a recent Instagram ad, the shoe manufacturer acknowledges the fact that one’s workplace might look a little different right now. “Working from home?” the ad asks, over an image of cozy slippers from TOMS. The implication here is that times may be different, but TOMS shoes, familiar and comfortable, can help make these unfamiliar times better.

  • Dial: at a time when the CDC is recommending handwashing as a safety measure, antibacterial soap manufacturer Dial has created a 10-second spot for Facebook and Instagram that focuses on how to wash hands thoroughly. Dial’s name bookends the ad at beginning and end, but the focus is on customer safety. That’s a sound approach, given GlobalWebIndex research revealing 80 percent of respondents approve of brands running campaigns which demonstrate how they are helping their customers.

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The CDC recommends washing your hands as one of the best ways to help prevent you and your family from getting sick. Follow these 5 steps to wash your hands the right way every time:⁣ ⁣ Wet your hands with clean, running water (warm or cold), turn off the tap, and apply soap.⁣ ⁣ Lather your hands by rubbing them together with the soap. Lather the backs of your hands, between your fingers, and under your nails.⁣ ⁣ Scrub your hands for at least 20 seconds. Need a timer? Hum the “Happy Birthday” song from beginning to end twice.⁣ ⁣ Rinse your hands under clean, running water. ⁣ ⁣ Dry your hands using a clean towel or air dry them.⁣ ⁣ #Dial⁣ ⁣ #WashYourHands⁣ ⁣ #DialUpProtection

A post shared by @ dial on

  • Bones Coffee Company: in an Instagram spot that includes a coupon code, Bones Coffee Company encourages consumer engagement while speaking to our current quarantine situation head on. “How to self-quarantine,” the coffee company muses. “1. Stay Home. 2. Get Coffee.” The message is short, sweet, and to the point: small pleasures are still in our reach. They’re just enjoyed at home right now.

Tone Is Key

Brands do need to tread carefully to build trust. As reported in eMarketer, a March 2020 Kantar survey finds 75 percent of respondents saying businesses “should not exploit [the] coronavirus situation to promote the brand,” and that brands need to be careful with their tone. The Dial ad works because Dial is sharing useful information. The TOMS and Bones Coffee Company ads work because they discuss products that people would naturally want to use at home. Although the TOMS and Bones Coffee Company ads strike a lighter tone, they fall short of outright humor, which would have made them potentially tone deaf.

In short, not all ads work in a COVID-19 world. It’s also important to remember who your audience is: age group and quarantine status are bound to shape what that audience wants to hear.

Contact True Interactive

Do you need help making decisions about advertising on social? Contact us.

Facebook’s Growth Highlights Importance of Messenger

Facebook’s Growth Highlights Importance of Messenger

Advertising Facebook

Facebook is having a good year financially. In its recent third-quarter 2019 earnings announcement, the company bested analyst expectations for growth in not only revenue but also membership: monthly active users now number 2.45 billion. Facebook isn’t going anywhere even though its problems have brought upon itself the threat of government regulation and even break-up.

What is Facebook doing right? Well, here’s one answer: Messenger.

What Is Facebook Messenger?

Facebook Messenger is an app that people and businesses use to communicate with each other. Users can send messages, react to messages from others, and exchange photos, videos, and audio files. Facebook operates Messenger as a separate app. And it’s an extremely useful tool for brands, which can share all sorts of things, including ads. Through Facebook Messenger Ads, companies and users enjoy real-time text conversations—with the click of a button.

Currently, Facebook offers a number of different types of Messenger Ads:

  • Destination ads, which employ a lighter touch to engage customers. Rather than the usual “Shop Now” call to action, a “Send Message” button allows users to “get their feet wet,” as it were, and grow acquainted with a brand.
  • Sponsored messages, which deliver specially created messages (a sale coupon, for example) directly to a consumer’s inbox.
  • Home section ads, which crop up in the home dashboard of the messaging application and allow users and brands to engage in organic conversations.

Brands embracing tools like Messenger Ads stand to benefit: according to Facebook, 53 percent of users are more likely to make a purchase if they can message you. And because Facebook Messenger Ads don’t target non-brand-aware users, companies connect with people who have already interacted with their ads previously—an audience that is likely to be receptive (brands also gain points for not invasively reaching out to . . . everyone). Finally, it’s worth noting that Messenger Ads offer local targeting options, allowing brands to touch base with a specific audience based on where the business is located.

What Does Facebook Have to Say About Messenger?

During a recent conference call with investors, CEO Mark Zuckerberg and COO Sheryl Sandberg returned to the topic of Messenger, and its importance, several times. Some key points stand out:

  • Businesses are already using Messenger to drive sales. According to Sheryl Sandberg: “Messaging is one of the fastest growing areas for online communication–especially between businesses and people. We’ve seen businesses use Messenger to reach customers, generate new leads and even sell cars. For example, French auto manufacturer Renault used a combination of Instagram Stories and Click-to Messenger ads to drive sales of a limited-edition vehicle, the Captur Tokyo. Facebook was their only advertising channel, and over the span of 30 days, they sold 100 cars—20 directly through Messenger. This quarter we added a Click-to-Messenger feature in Stories so businesses can grab someone’s attention in Stories and then continue the conversation.”
  • Messenger and Stories Deliver a 1-2 Punch. As noted above, Renault is using Messenger in conjunction with Stories. In the investor earnings call, Zuckerberg and Sandberg underline how businesses can maximize the value of features like Messenger through this type of imaginative pairing. To make it easier for more brands to create ads for the Stories format, Facebook has launched customizable templates for Facebook, Instagram, and Messenger. Advertisers can upload existing photos and videos, then augment them with different layout, color, and text options. The end result? More engaging Stories. And the Click-to-Messenger feature Sandberg references makes it possible for businesses to capture a user’s attention on Stories and then continue the conversation via Messenger.

What You Should Do

 When using Messenger as part of outreach:

  • Consider how Messenger will serve your brand in the context of the entire customer journey. Messenger Ads can spark interest, for example, and the Messenger the app can be a brilliant customer service tool.
  • Combine Messenger with Stories for an engaging and ultimately personal customer experience.

Contact True Interactive

Want to learn more about Messenger and how it will elevate your outreach? Contact us.

 

Three Big Trends Shaping How Businesses Use Social Media

Three Big Trends Shaping How Businesses Use Social Media

Social media

Paid social on the rise. Facebook is king. And Instagram is the crown prince. Those are some of the take-aways from a recent Social Media Examiner survey of marketers’ social media spending priorities in coming months. The survey offers a useful snapshot of social media trends that cut across industries. Here are some of the principal findings:

Paid Social Is on the Rise

According to the Social Media Examiner report, social media ads are fast becoming indispensible to social media marketing strategy. This development is due to the fact that social media platforms like Instagram are offering more sophisticated tools that help businesses create content that targets specific audiences. One example: Instagram’s new feature, Branded Content Ads. As we recently discussed, the Branded Content Ads feature makes it possible for businesses to use Ads Manager to promote branded content as an ad in their Instagram feeds, and to target a specific audience when they do so.

Facebook Has Fans—A Lot of Them

According to the Social Media Examiner survey, Facebook is the most popular platform for advertisers, with 94 percent of marketers polled choosing it as their first option. On the surface of things, this might be surprising, given the knocks Facebook took in the wake of the high-profile privacy scandals that plagued the social media giant in 2018. And yet, Facebook membership keeps rising: according to the company’s Q4 2018 earnings report, approximately 1.52 billion people used Facebook every day in December 2018. That’s a nine percent year-over-year increase. Also noteworthy is the fact that Facebook tends to be popular among Baby Boomers and older millennials: that’s significant to advertisers who want to use a social platform to reach this audience, which tends to have more discretionary income.

Another reason Facebook remains popular with advertisers is that the company has always provided strong targeting tools, and continues to do so. As this WordStream article discusses, the company makes it easy to launch ad campaigns that target specific audiences with different ad formats and literally thousands of ad targeting parameters. Finally, Facebook is popular for all kinds of content, including video, which expands its usefulness to advertisers. According to the Social Media Examiner report, Facebook is right up there with YouTube as the most well liked video channel for marketers.

Instagram Is the Crown Prince

Though perhaps not as popular as Facebook, Instagram is still a valuable resource for advertisers. And advertisers are intrigued by it: the Social Media Examiner report indicates that when marketers were asked about the social media platform that they’d like to learn more about, a whopping 72 percent chose Instagram. Maybe that’s because the app’s strengths in visual storytelling present a golden opportunity to capitalize on the fact that increasingly, people are using images as a means of communicating. We take trillions of photos each year. And not surprisingly, we’re sharing those photos on platforms such as Instagram, which is also showing a marked increase in membership.

These takeaways paint a compelling picture. Interested in learning more about how social can serve your business needs? Contact us.

https://pixabay.com/photos/twitter-facebook-together-292994/

Advertiser Q&A: What Is a Micro-influencer?

Advertiser Q&A: What Is a Micro-influencer?

Social media

As we discussed in a recent blog post, celebrities are not the only game in town when brands want to include influencers in their advertising campaigns. Micro-influencers are also useful and usually less expensive. Increasingly, our clients are reaching out with questions about them. We thought we’d take a moment to answer some of those questions—and help clarify who these micro-influencers are and why they are important.

What is a micro-influencer?

A micro-influencer is someone who commands a smaller audience — anywhere from 2,000 to about 50,000 followers— on a social media channel like Facebook or Instagram.

Micro-influencers tend to be everyday people (as opposed to celebrities). But they know a lot about a specific topic. That expertise inspires loyalty in their community of followers, who look to them for recommendations, likes, and dislikes.

Take The Brothers Buoy: Brooklyn-based Jackson (who writes the copy) and Graham (who shoots the photos) have taken it upon themselves to turn people on to good places to eat in New York and beyond. Their sass and humor have earned them about 8,000 followers, along with some healthy respect (e.g., they’ve worked with Condé Nast Traveler).

Why do micro-influencers matter?

In short, they have street cred (see the Condé Nast Traveler reference, above). And micro-influencers tend to enjoy high levels of engagement. They may not be breaking records in terms of the size of their audience, but the followers they do have really love them and interact, a lot.

In fact, a smaller following makes it possible for micro-influencers to maintain a personal connection with their fans: as Adweek reported, engagement usually dips the more followers an influencer attracts. Perhaps because of the high levels of engagement, micro-influencers project an authenticity—and inspire a level of trust—that is sometimes hard for celebrity influencers to sustain.

Another bonus: micro-influencers tend to be less expensive for businesses working on a budget, and may give a business more bang for its buck. Smart Insights notes that micro-influencers are 6.7 percent more cost effective than their higher-profile colleagues. And as IZEA points out, a business might reach more people working with several micro-influencers who charge less but enjoy a powerful connection with loyal followers, as an alternative to maxing out the entire budget on a single post from one celebrity influencer.

What are some tips for working with micro-influencers?

  • First identify the goals for your campaign, then begin researching potential micro-influencers. Influencers have different personalities and communication styles; look for someone who feels like a good fit. Consider factors such as their audience and how the influencer connects with that audience. Are their tone and approach suitable for your own brand?
  • Once you’ve found an influencer who seems like a good match, establish a connection. Follow them on their social channels, leave comments, and engage meaningfully before reaching out about a collaboration.
  • When you do reach out, contact the micro-influencer via their direct email, and demonstrate that you are indeed familiar with their work—and a fan. Since you’ve already established a connection, that familiarity, not to mention the admiration, will likely come naturally.
  • Finally, don’t micromanage the micro-influencer. Remember, one reason micro-influencers are popular is because their audiences trust them to be real. Feeding micro-influencers lines or opinions defeats the purpose of the collaboration—and can backfire if followers suspect inauthentic content.

Interested in learning more about micro-influencers and how a collaboration might benefit your business? Contact True Interactive.

Instagram Creates Its Own Customer Journey with Checkout

Instagram Creates Its Own Customer Journey with Checkout

Social media

Instagram describes itself as a platform for people to “experience the pleasure of shopping versus the chore of buying.” It’s designed for people to browse for ideas and then shop as opposed to visiting with an express intent to buy and leave. On March 19, Instagram took one step closer to making itself a strong shopping destination by launching a checkout function.

Available on a limited basis, Instagram checkout makes it possible for Instagrammers to buy what they want on Instagram. As Instagram said in a blog post, “Checkout enhances the shopping experience by making the purchase simple, convenient and secure. People no longer have to navigate to the browser when they want to buy. And with their protected payment information in one place, they can shop their favorite brands without needing to log in and enter their information multiple times.”

Charter businesses participating in checkout include Burberry, Nike, and Revolve. In coming weeks, more businesses will participate, including Adidas, H&M, KKW Beauty, Kylie Cosmetics, MAC Cosmetics, Michael Kors, NARS, Oscar de la Renta, Prada, Uniqlo, and Warby Parker. (It’s interesting to note the number of upscale brands creating shoppable experiences on Instagram – a comment on how luxury brands have adapted to the times by becoming more accessible via digital.)

Checkout seems like a natural move for Instagram. As Vishal Shah, Instagram’s head of product, told The Wall Street Journal, “People were already shopping on Instagram. They were just having a hard time doing it.” The platform previously launched shoppable features such as product stickers in Stories. Vishal Shah  told Bloomberg, “Over time, as we are creating value for people, this could be a significant part of our business.”

The launch of checkout positions Instagram against Amazon as a platform for searching and shopping although Amazon clearly has an advantage with its scale. Enabling commerce on Instagram also makes it possible for businesses to create more integrated advertising experiences that connect the customer across the entire purchase journey, from awareness to conversion – with the entire journey occurring inside Instagram (instead of sending customers to an advertiser’s website to make an actual purchase). This is the kind of experience Amazon is creating – a self-contained customer journey where you can search and buy on one platform.

For more insight into how to create successful digital advertising on Instagram, contact True Interactive. We’re here to help.

Image source: Instagram

Instagram Explodes as an Influencer Outreach Platform

Instagram Explodes as an Influencer Outreach Platform

Marketing Social media

Influencer outreach is alive and well. Recently, Adweek reported on Instagram’s Ashley Yuki, Instagram’s interests products lead, who said that 69 percent of Instagram users come to the app to interact with celebrities, and 68 percent visit Instagram to interact with influencers.

Instagram’s Growing Presence

This is major news, given the growth Instagram has been enjoying. According to statistics portal Statista, the number of monthly active Instagram users exploded between January 2013 and June 2018, from 90 million to 1 billion. And as digital marketing agency Omnicore reports, as of September 2018, daily active Instagram users had reached 500 million. Other telling stats from Omnicore include:

  • Six in ten online adults have Instagram accounts.
  • 6 million Instagram users are from the United States.
  • 80 percent of Instagram users come from outside the United States.

When you do the math, one thing becomes clear: Instagram users represent a large market. It’s a market with an interest in celebrities. And that’s a powerful endorsement for the practice of influencer outreach.

Bad Press

The revelation is especially timely given the black eye influencer outreach suffered early in 2019. Twin documentaries about the disastrous Fyre Festival, Fyre Fraud, which aired on Hulu, and Fyre: The Greatest Party That Never Happened, on Netflix, discussed how influencer outreach was used to promote the festival as a cool, sexy event, only for the Fyre Festival to fall apart due to poor planning and unprofessional, unethical behavior. The strategic campaign ramping up to the event included spending millions on flying celebrity models down to the Bahamas so that the influencers could take pictures of themselves frolicking in paradise and post about the upcoming Fyre Festival. Additionally, on December 12, 2016, 63 influencers simultaneously posted an orange tile graphic to social media with the hashtag #FyreFest. That effort earned more than 300 million impressions in 24 hours.

The influencers were paid well for their troubles. Kendall Jenner, for example, earned a $250,000 fee, and no influencers brought in less than $20,000. But model Emily Ratajkowski was one of the only influencers to designate her post as an #ad, drawing criticisms that Fyre was misrepresented from the get-go. Post-festival, the backlash was fierce. Wired published a piece in May 2017—“Blame the Fyre Festival Fiasco on the Plague of Celebrity Influencers”—and The New York Times predicted “The Rise and (Maybe) Fall of Influencers.”

On the Rebound

FTC crackdowns, however, have subsequently had a positive impact on the credibility of influencer outreach. In a survey of 287 U.S. marketers, Influencer Marketing Hub found a huge change in attitude following the Fyre Festival debacle: “Less than half of our group (132 people) admitted they hadn’t paid much mind to the Federal Trade Commission’s regulations [regarding transparency of paid endorsements or other “material connections”] before Fyre Fest. In the wake of the fallout, though, and with the FTC already cracking down before Fyre Fest imploded, every single one of them stated that maintaining compliance will be a top priority.”

The Power of Micro-Influencers

The bottom line? Influencer outreach isn’t going anywhere. We recommend that businesses take a serious look at influencer outreach as a way of building their brands. The good news is, you don’t necessarily have to pay celebrities to build excitement: many brands are now turning to micro-influencers to drum up awareness. Well-known locally but not necessarily nationally for fitness, lifestyle, and other interests, micro-influencers typically enjoy more than 1,000 but much less than 100,000 followers, and hold sway in specific cities or regions. Consider individuals like Brendan Lowry, a Philadelphia-based micro-influencer with about 30,000 Instagram followers: his feed bursts with photos of the city beside sponsored posts endorsing local companies. If you can connect with people like Lowry, who maintain a high profile in a specific market, you may not get as much reach nationally, but you can get significant reach in specific markets that are of interest to you.

Influencer outreach is still relevant. And by doing some smart, targeted research, companies can find influencers across different markets who will be most effective for their needs. For more insight, contact True Interactive.