Walmart Takes Aim at Amazon, Facebook, and Google with Online Advertising

Walmart Takes Aim at Amazon, Facebook, and Google with Online Advertising

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When Walmart recently announced that it was joining Microsoft in a bid for TikTok, the news had many people scratching their heads. But the bid makes perfect sense in context of Walmart’s growing online advertising business, an aspect of the Walmart empire that is beginning to catch more attention among brands. Read on to learn more.

The Growth of Walmart Advertising

You might not know it, but Walmart operates its own digital advertising business under Walmart Media Group. Under CEO Doug McMillon, Walmart Media Group has been building an advertising business to compete with Amazon, Google, and Facebook (the Big Three of online advertising). As reported in The Wall Street Journal, “deep-pocketed companies with large amounts of data on their customers are in the best position to mount a challenge” to these competitors.

Walmart feels ready to play in that sandbox. The retail behemoth aims to tap into its own trove of shopper data (about purchases made both online and in brick-and-mortar stores), and sell advertising services to businesses with products in Walmart stores and across the entire digital world, on sites including Walmart.com. As Steve Bratspies, the chief merchandising officer for Walmart U.S., has noted, data can give advertisers a leg up by providing insight into what a consumer might really want and need.

For example, as noted in The Wall Street Journal, a customer might buy a bicycle in a Walmart store, then subsequently see ads for bike helmets on platforms like Facebook. The ads would direct the shopper back to Walmart.com to make the purchase. It’s a win/win, with consumer needs being anticipated and met, and brands making the connection to a motivated shopper.

Walmart’s Advertising Services

How does Walmart propose to make those connections? The retailer currently offers advertisers services such as:

  • Sponsored Products ads, which consumers encounter when they are browsing Walmart.com. These ads can take many forms:
    • A brand’s products can get premium placement on the first page of a shopper’s search results.
    • An advertiser’s logo might appear, along with a custom headline, at the top of relevant search results.
    • Products can appear as part of a product carousel of relevant alternate purchase options.
    • Items can be highlighted in a “Buy Box” as the most relevant alternate purchase option on a product detail page.

Walmart Sponsored Product Ad

  • Visually compelling display ads, which keep a brand in the forefront:
    • Across Walmart’s digital properties. Content and advertising can be seamlessly merged on Walmart.com, pickup and delivery, and Walmart apps.
    • Offsite, across the web and social channels like Facebook, Instagram, and Pinterest. As noted earlier, relevant ads will re-engage customers and send them back to Walmart for products.

Walmart Display Ad

Where Does TikTok Fit into All This?

Walmart’s motivation for acquiring TikTok probably has much to do with digital ad dollars. As Mark Sullivan of Fast Company points out, TikTok is a prime space for digital advertising. And Walmart clearly recognizes that, sharing in a statement that TikTok might represent “an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.”

Sullivan elaborates:

TikTok is itself in the early stages of selling ads on its app, and it has data on people’s video content choices, but it lacks data on the things people buy. If Walmart owned TikTok it could use its ecommerce user data to help advertisers put ads in front of the right TikTok users. And Walmart could be the exclusive seller of targeted ad space on TikTok.

One advertising industry insider told me that a brand—say a car company—might use a cookie to capture data on a consumer that came to its site to look at cars, then use Walmart’s ad-tech to show an ad to that same consumer on TikTok.

If Walmart had an ownership stake in TikTok, Walmart could connect its advertisers with TikTok’s young demographic, too. And let’s face it — TikTok is hot. In early August 2020, the video-sharing social networking service reported about 100 million monthly active U.S. users, a figure that is up nearly 800 percent from January 2018. Walmart clearly sees the opportunities inherent in connecting its brands with that audience.

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Why Microsoft Wants to Buy TikTok

Why Microsoft Wants to Buy TikTok

Microsoft

A couple of months ago, I mentioned on our blog that dark clouds were on the horizon for TikTok because of lingering concerns over the app’s security. Those dark clouds are here. On July 31, President Trump said he planned to ban the app in the United States because the U.S. government is concerned that TikTok poses a national security risk. TikTok’s detractors say that the popular app, owned by China-based Bytedance, could have personal data from its American users fall into the hands of the Communist Chinese government – a form of foreign espionage. But just as the issue reaching a crisis point, on August 2, Microsoft confirmed a rumor that it intends to buy the U.S. operations of TikTok. President Trump gave Microsoft and TikTok until September 15 to work out a deal, which would pave the way for TikTok to have a future in the United States. The drama is intriguing especially to the many businesses that have a presence on TikTok either through organic content or advertising. In addition, TikTok stakeholders are asking: What does Microsoft get out of buying TikTok and taking on the headaches of securing user data? Here are two reasons why:

1 TikTok Gives Microsoft a Social Media Card to Play Against Big Tech

Google has YouTube. Facebook has Instagram (and many other cash cows). But Microsoft lacks a go-to social app on which to build an advertising business. And this is a major drawback especially in 2020 as social media usage surges. Facebook’s recent quarterly earnings announcement underscored this reality: with people turning online for safer ways to pass the time during the COVID-19 pandemic, Facebook’s monthly average users across all its apps has risen to 3 billion. Microsoft is missing out on a consumer-focused social app. True, Microsoft owns LinkedIn, but LinkedIn is not a business-to-consumer ad powerhouse. TikTok gives Microsoft an instant platform.

Granted, TikTok is still in the early stages of earning revenue from advertising and in-app purchases. And the app shows promise as well as challenges. According to the Financial Times, one 24-hour TikTok campaign ran by Guess logged a CTR of 16% compared to a 4% average. Kroger, which ran a #TransformUrDorm challenge, attracted close to 477 million views across hundreds of videos over the course of approximately one week. But in November 2019, The Verge said TikTok ads were the Wild West. Self-serve ads on the platform deliver CPM of $10 (compared negatively to Instagram’s $8).

TikTok has plenty of room to grow, and Microsoft sees the potential. If TikTok were fully developed as an advertising powerhouse, it’s possible the U.S. assets would have been too expensive to buy – so now is the right time to make a deal.

It’s all about Gen Z

Microsoft has been trying to build a presence with the surging Gen Z population for the past few years, and with good reason: Gen Z is set to overtake Millennials as the largest age cohort in the United States. Thus far, Microsoft has relied on gaming to connect with Gen Z, as witnessed by its development of Xbox, a Gen Z favorite. TikTok gives Microsoft another powerful way to connect with Gen Z: 60 percent of TikTok users are Gen Zers. TikTok also gives Microsoft a way to cross-promote Gen Z friendly products such as Xbox. As The Verge notes:

Microsoft could take advantage of that direct access to TikTok users with ads for Surface, Xbox, and other products, or even as another base for its game-streaming ambitions. Google is planning to leverage YouTube to integrate its Stadia streaming service, and TikTok would give Microsoft a response with xCloud game streaming. Microsoft had been planning to use Mixer for Xbox game streaming, but the service never gained enough traction, and the company was forced to strike a deal with Facebook for xCloud integration instead. It’s not hard to imagine watching a Call of Duty video on TikTok and then being able to click and instantly play the game as it streams to your phone via Microsoft’s xCloud service.

Microsoft, in addition, could reap the benefits of revenue gained when businesses tap into TikTok to advertise to Gen Z, as well – something that businesses might be reluctant to do while TikTok’s future remains in limbo.

What’s Next?

In addition to giving Microsoft and TikTok a deadline of September 15 to work out a deal, President Trump has said the U.S. government should get a financial cut of the transaction, which complicates an already tricky process. Microsoft is taking on a risk with this political hot potato, to be sure. The company has put its reputation on the line by stating that it will “ensure that all private data of TikTok’s American users is transferred to and remains in the United States.” But there is also potentially strong reward for Microsoft. With an American owner, TikTok may become a more attractive place for American businesses to build their brands with advertising and other forms of activity that would enrich Microsoft’s bottom line.

Meanwhile, as if to underline TikTok’s importance, Instagram launched on August 5 a feature, Instagram Reels, that competes directly with TikTok. Instagram Reels benefits from Instagram’s cachet and Facebook’s muscle. The pressure is on for Microsoft to land the TikTok deal.

To learn more about TikTok, check out this treasure trove of statistics.

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Why 2020 Is TikTok’s Year

Why 2020 Is TikTok’s Year

Mobile

TikTok is having quite a year. And so, by association, is American Eagle Outfitters. According to Mobile Marketer, the clothing and accessories retailer enjoyed a Q1 sales surge online, driven in part by TikTok campaigns that connected with a young target audience eager to spend money online. The headline is this: TikTok is helping businesses benefit from massive shifts in consumer behavior in 2020.

TikTok, which is owned by the Beijing-based ByteDance, give brands a great platform for creating awareness, and more businesses like American Eagle are enjoying increases in online sales because of that platform. Read on to learn more about how TikTok is evolving rapidly in 2020.

What Is TikTok?

A free video-sharing social networking app that launched in the international market in 2017, TikTok was once predominantly dedicated to lip-synching. But now the platform, which features short looping videos of three to 60 seconds, and music and lip-sync videos of three to 15 seconds, has evolved into a short-form video content hub. And it’s becoming something of a powerhouse: according to Adweek, App Annie’s Q1 Global App Market Index identifies TikTok as the most-downloaded app in Q1 2020, as consumers continue to go online to find things to do and to express themselves at a time of social distancing.

Mobile-first 18- to 34-year-olds are the dominant market for TikTok, and one need only take a look at user numbers to recognize the platform’s significance—even beyond that primary market. Datareportal, for example, reports that  TikTok enjoys 800 million monthly active users. Those users are engaged, too: Oberlo notes that on average, they spend 52 minutes per day on TikTok.

Brands Getting in on the Action

Brands, particularly those catering to younger consumers, are taking an interest in TikTok. The platform is an ideal place to engage audiences and demonstrate a lighter side through funny videos or challenges. And during the COVID lockdown, TikTok has become a pressure valve for people cooped up inside. Examples of the wildly diverse brands who have already invested in a TikTok presence include:

  • NBA: the NBA uses TikTok to show off a lighter side, posting videos of players working out to music, for example, or the adventures of team mascots. The app’s musical features help the organization lighten up its branding; the videos still promote basketball, even as they fit in well with other quirky or musical posts on TikTok. Though the 2019-20 season was disrupted by COVID-19, the NBA has kept fans engaged by posting exciting plays from NBA stars. And players like Shai Gilgeous-Alexander, who plays for the Oklahoma City Thunder, and Los Angeles Lakers megastar LeBron James, are turning to TikTok to keep fans amused with coordinated dances and funny moments.
  • elf Cosmetics: the cosmetics brand used TikTok to face COVID head-on, releasing a remix of an original song that had originally appeared in fall 2019. Changing the title of the song from “Eyes. Lips. Face.” to “Eyes. Lips. Face. Safe.,” elf paired the rebranded song with a new TikTok video demonstrating hand washing and social distancing.
  • San Diego Zoo: capitalizing on the fact that many people love cute animals, the San Diego Zoo’s TikTok account posts videos of adorable animals with fun music. It’s a simple strategy that has earned the account more than 50,000 fans. Even during the downtime brought about COVID-19, the zoo has kept up interest among its followers by posting amusing and sweet videos of animals going about their day.
  • Mucinex: Mucinex might not seem to lend itself to playful TikTok videos, but last fall the sinus relief brand successfully leaned into a popular TikTok theme: that of transformation. In the Mucinex spots, quick video edits showed influencers changing from zombie-level “too sick” to fashion-forward “so sick” after taking their medicine. The campaign generated nearly one billion views. 

So how does one become part of the TikTok revolution? The platform offers a variety of advertising options. If you are new to TikTok, we suggest reviewing this beginner’s guide courtesy of TikTok.

TikTok and Influencer/Brand Collaborations

As for what’s next, look for TikTok to increasingly help brands find influencers to work with. In the TikTok Creator Marketplace, brands can already search through the app’s top creators, a list of more than 1,000 TikTok stars including Zach King and CJ OperAmericano. The marketplace allows interested brands to gain insights into the audience demographics of a given creator/influencer, and germane details like engagement rate over time.

More Developments

Ever evolving, TikTok is also looking to live broadcasts and educational content to expand its reach and net more ad dollars. But as c|net reports, the platform won’t be nixing the familiar dance and lip-syncing videos that put TikTok on the map. Bryan Thoensen, who oversees content partnerships at TikTok, perhaps puts it best: “It’s adding more legs to the stool,” Thoensen says.

 A Caveat

There is a dark cloud on TikTok’s horizon, as the platform faces security concerns. Last fall, Senate Minority Leader Chuck Schumer and Senator Tom Cotton asked U.S. intelligence officials to investigate the security risks posed by TikTok. In a letter addressed to acting Director of National Intelligence Joseph Maguire, the senators wrote, “With over 110 million downloads in the U.S. alone, TikTok is a potential counterintelligence threat we cannot ignore.” The concern that the app could be used for intelligence-gathering and foreign influence campaigns by the Chinese Communist Party was also voiced.

To date, however, the negative coverage has not appeared to deter brands.

Contact True Interactive

Want to learn more about what benefits TikTok might bring to your business? We can tell you more about the options and how to get started. Contact us.

Consumer Spend on Mobile Hits Record Levels in Q1 2020

Consumer Spend on Mobile Hits Record Levels in Q1 2020

Mobile

On April 1, I blogged about some trends in mobile behavior based on a 2020 App Annie State of Mobile report. As if on cue, App Annie then revised its report to note the incredible surge in mobile usage during the first quarter of 2020 as people have practiced social distancing on a widespread scale. These numbers should convince businesses to invest in mobile advertising now more than ever:

  • Q1 2020 was the largest-ever quarter in terms of consumer spend on apps: $23.4 billion.
  • The number of new app downloads in Q1 totaled 31 billion, a 15 percent increase over the fourth quarter of 2019. As Tech Crunch reported, “That’s notable, given that the fourth quarter usually sees a big boost in app installs from holiday sales of new phones, and Q1 managed to top that.”
  • The United States and China were the largest contributors to consumer spend on the Apple iOS operating system.
  • Users of the Google Android operating system spent the most on games social, and entertainment apps, in large part due to Disney+ and Twitch.
  • The Top Five apps worldwide for Q1 based on downloads and consumer spend: TikTok, WhatsApp Messenger, Facebook, Instagram, and Facebook Messenger.

All of that time people devote to managing their lives with mobile devices creates opportunities for businesses to engage with customers. The key is to create a sustained presence and to be mindful of using tone appropriate for the times we’re living in right now.

At True Interactive, we have deep experience helping businesses thrive on mobile. For instance, for Snapfish, we launched a digital media campaign that combined major platforms such as the Google Display Network with mobile-centric display networks that serve up ads to consumers on mobile devices. Revenue from mobile app installs grew 343 percent year over year during the holiday season. Mobile app installs grew 23 percent during the same period. Overall, Snapfish saw a 756-percent return on ad spend. Meanwhile, Snapfish saw a 56-percent decrease in costs per install.

For more insight into our work with Snapfish, read this case study. For more insight into responding to the surge in mobile activity, check out my recently published blog post, “Why Mobile Will Power Your Marketing Future.”

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Photo by Rob Hampson on Unsplash

Why Mobile Will Power Your Marketing Future

Why Mobile Will Power Your Marketing Future

Mobile

For businesses, engaging with mobile should not be a matter of if, but when. And according to App Annie’s The State of Mobile 2020 report, sooner is better than later. The report underscores how important it is for businesses to connect with their customers on mobile. Here are some stats that resonate:

Mobile Is a Way of Life

  • According to the report, consumers downloaded a record 204 billion apps in 2019. Annual downloads have grown 45 percent in the three years since 2016, and six percent year over year. As App Annie points out, this growth is especially impressive because it excludes re-installs and app updates.
  • Also of note: in 2019, people spent roughly three hours and 40 minutes a day on mobile, a 35 percent increase over 2017.

People Are Spending on Mobile Apps

  • Consumers are opening their pocketbooks to engage with mobile—and not just with games. App store consumer spending hit $120 billion in 2019, up 2.1 times from 2016. Although games comprise 72 percent of all app store spend, subscriptions in non-gaming apps leapt from 18 percent share in 2016 to a solid 28 percent in 2019.

Mobile Is Where People Go to Be Entertained

  • Time spent on sports apps such as ESPN grew by 30 percent from 2017 to 2019.
  • Mobile gaming is, hands down, the world’s most popular form of gaming. In 2019, mobile games enjoyed 25 percent more spend than all other gaming combined.
  • New entrants like Disney+ are heating up consumer interest—and competition—in the streaming industry. For right now, consumers seem happy to double-dip: close to 25 percent of Netflix’s iPhone users also used Disney+ in Q4 2019, for example. That’s the highest overlap of users among top video streaming apps in the United States.

YouTube and TikTok Are Exploding

  • YouTube enjoyed a staggering 980 percent growth in worldwide active users from December 2017 to December 2019. And as we recently blogged, the platform is an advertising giant, to boot.
  • App Annie calls it the “TikTok Tidal Wave”: time spent on TikTok, which as a social networking app and entertainment source poses a double threat, grew 210 percent year over year in 2019. TikTok is also drawing interest from brands; as we have noted, the platform is an ideal place to demonstrate a lighter side through funny videos or challenges.

Social Media on Mobile Is as Strong As Ever

  • Social isn’t going anywhere. App Annie notes that 50 percent of time on mobile is spent on social and comms apps like Snapchat. As a result, apps like Snapchat are thriving: as we recently blogged, Snapchat continues to grow, even in a competitive landscape.
  • Meanwhile, use of Nextdoor has grown 65 percent from December 2017 to December 2019 in the United States, demonstrating an interest in social networking at a local level.

Gen Z Is Rocking Mobile

  • Gen Z are digital natives, and as such lead all other demographics in terms of mobile use. According to the App Annie report, Gen Z has 60 percent more sessions per user in top apps than older demographics. And 98 percent of Gen Z own a smartphone.

Implications for Businesses

  • If you are advertising on mobile already, don’t put your advertising on pause during the coronavirus pandemic. Phone carriers such as AT&T are reporting a surge in mobile usage as more people work from home.
  • That said, you may find yourself adapting your mobile campaign at this time: say, by discussing community building activities that will keep your brand front of mind when the crisis subsides. Sensitivity to the current crisis is key. And patience. Elijah Whaley, the CMO influencer marketing agency Parklu, notes of brands who proceed carefully and wisely through the coronavirus era, “When [consumers] start spending again they are going to spend with you.”
  • Capitalize on YouTube and TikTok. These apps are only going to increase in popularity as more Gen Zers come of age. TikTok is just sorting out its ad products, but, as we’ve noted, YouTube already offers strong advertising options.

Contact True Interactive

Mobile is where the action is. Are you getting in on it? Contact us.

Photo by Daan Geurts on Unsplash

Why Brands Are Flocking to TikTok

Why Brands Are Flocking to TikTok

Social media

Brands used to creating awareness via social networks like Instagram and Facebook now have a new option to consider: TikTok, which is owned by Beijing-based ByteDance. Read on to learn more about a platform that is gaining currency through a blueprint involving music, quirk, and innovation.

What Is TikTok?

A free video-sharing social networking app that launched in the international market in 2017, TikTok was once predominantly dedicated to lip-synching. But now the platform, which features short looping videos of three to 60 seconds, and music and lip-sync videos of three to 15 seconds, has evolved into a short-form video content hub. And it’s becoming something of a powerhouse: in 2019, TikTok was declared the seventh most downloaded mobile app of the decade spanning the years 2010 to 2019.

Mobile-first 18- to 34-year-olds are the dominant market for TikTok, and one need only take a look at user numbers to recognize the platform’s significance—even beyond that primary market. According to Search Engine Journal, the app boasts more than 1.5 billion users. Adweek reports that “[i]n the U.S., Messenger was the top app of 2019 by downloads . . . followed by TikTok and Instagram.” Those users are engaged, too: on average, they spend 52 minutes per day on TikTok.

Brands Getting in on the Action

Brands, particularly those catering to younger consumers, are taking an interest in TikTok. The platform is an ideal place to engage audiences and demonstrate a lighter side through funny videos or challenges. Examples of the wildly diverse brands who have already invested in a TikTok presence include:

  • Guess: the clothing brand and retailer worked with TikTok to promote its Fall ’18 Denim Fit Collection during the back-to-school shopping season. The #InMyDenim Hashtag Challenge on TikTok, which invited users to show their fashion style in Guess denim with an overlay of Bebe Rexha’s “I’m a Mess,” exhorted consumers to “Transform your outfit from a mess to best-dressed! All you need is denim!” The six-day campaign was the first branded challenge on TikTok to go viral.
  • NBA: the NBA uses TikTok to show off a lighter side, posting videos of players working out to music, for example, or the adventures of team mascots. The app’s musical features help the organization lighten up its branding—and make the athletes seem more relatable. The videos still promote basketball, even as they fit in well with other quirky or musical posts on TikTok.
  • The Washington Post: the newspaper was one of the earliest brands to adopt TikTok, and uses its account to post comedic behind-the-scenes videos and newsroom skits. Serious in other arenas, on TikTok The Washington Post demonstrates its quirky side, taking advantage of TikTok’s weirdest special effects to create funny, musical videos. The cheeky installments, meant to entertain TikTok’s young viewers, present The Washington Post’s journalists as real—and trustworthy.
  • San Diego Zoo: capitalizing on the fact that many people love cute animals, the San Diego Zoo’s TikTok account posts videos of adorable animals with fun music. It’s a simple strategy that has earned the account more than 50,000 fans. And the zoo has “dueted” with other animal-friendly accounts, like the Monterey Aquarium, to cross-promote using TikTok features, thus introducing zoo followers to the aquarium, and vice versa.

There’s still an opportunity to get in on the ground floor with TikTok: as noted in the 2019 Sprout Social Index, 89 percent of marketers are adding Facebook to their social media marketing plans for 2020, while only four percent are adding TikTok. But those numbers are likely to change. As Search Engine Journal opines, “Getting your brand or business on TikTok does not have to be difficult. But at some point, it is going to become a must.”

Advertising Options on TikTok

So how does one become part of the TikTok revolution? The platform offers a variety of advertising options, but in terms of a quick overview, note that:

  • Costs start at an average of $10 per CPM, and can go up to $300,000 total budget for larger campaigns.
  • TikTok campaigns require a minimum investment of $500.
  • TikTok ads are still in beta so you must fill out a form to set up an account.
  • The platform offers video creation tools.
  • A couple different ad formats/types, audience targeting tools, and placements and optimization objectives/goals are available.

In addition, this article from Social Media Examiner contains more insight on getting set up.

TikTok and Influencer/Brand Collaborations

As for what’s next, look for TikTok to increasingly help brands find influencers to work with. In the TikTok Creator Marketplace, brands can already search through the app’s top creators, a list of more than 1,000 TikTok stars including Zach King and CJ OperAmericano. The marketplace, launched last year and still in beta testing mode, allows interested brands to search using filters like topic, the number of followers a creator has, and location by state.

A Caveat

There is a dark cloud on TikTok’s horizon, as the platform faces security concerns. Last fall, Senate Minority Leader Chuck Schumer and Senator Tom Cotton asked U.S. intelligence officials to investigate the security risks posed by TikTok. In a letter addressed to acting Director of National Intelligence Joseph Maguire, the senators wrote, “With over 110 million downloads in the U.S. alone, TikTok is a potential counterintelligence threat we cannot ignore.” The concern that the app could be used for intelligence-gathering and foreign influence campaigns by the Chinese Communist Party was also voiced.

To date, however, the negative coverage has not appeared to deter brands.

Contact True Interactive

Want to learn more about what benefits TikTok might bring to your business? We can tell you more about the options and how to get started. Contact us.