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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Twitch Is Hot: Here’s Why

Twitch Is Hot: Here’s Why

Marketing

As the COVID-19 pandemic roared across the globe in 2o2o, social distancing guidelines closed down stadiums and theaters everywhere. Suddenly Amazon-owned Twitch, already popular, took on an even greater resonance: the streaming platform represented a way to connect and experience, virtually, events and the sense of community that had been eradicated by the virus. Savvy brands understand the opportunities inherent in Twitch—a platform that’s currently filling a need, even as it continues to grow. Curious? Read on to learn more.

What Is Twitch?

Twitch is an online platform for livestreams, on which users can broadcast a livestream or watch other streamers. The platform was introduced in 2011, and while the focus has traditionally been on video games, Twitch is constantly evolving. It currently features music and lifestyle content, as well: Twitch users can watch anything from video gaming to music festivals, cooking shows, live tutorials of artists drawing (a la Bob Ross!) or professional sports. According to Ad Age, Twitch’s Just Chatting channel—essentially streamers chatting with the audience—has been the platform’s most-watched category in the second quarter. Sean Horvath, the chief revenue officer at StreamElements, notes, “We are starting to see a rise of streaming stars who don’t game at all . . . [T]hink of it like any talk show you watch on TV, but the difference is viewers can also make comments directly to the hosts.”

That’s right. Twitch’s interactive nature is supported by chat features; spectators can interact with one another and with the broadcasters (streamers), too. The platform has been described as a sort of virtual return to the social experience of arcade gaming. In the arcades, crowds would form around someone playing a certain game well, and people would talk about the game while they waited for their turn—and possibly pick up some tips and tricks from the player. Livestreaming on Twitch brings this interactive experience online, regardless of whether the point of discussion is a game—or a new recipe for chili.

Who Uses Twitch?

As Ad Age recently reported, Twitch hit a new milestone in spring 2020: Twitch exceeded 3 billion streaming hours in the first quarter of the year.

The audience skews younger. Kayla Carmicheal’s recent post on the Hubspot blog identifies users as teen gamers, with the largest group (22 percent) coming from the United States. Of the 28 million unique users per month in the U.S., she says, 80 percent are teen males. According to brand24.com, Millennial gamers also make up a significant portion of the Twitch audience. To be specific, Twitch reaches 50 percent of Millennial males in America.

Furthermore, Twitch users have been described as socially conscious and passionate about important causes. This year, the platform made headlines when it became a hub for social activism, with users creating Twitch channels for the express purpose of livestreaming Black Lives Matter protests. As Brielle Villablanca, a Twitch spokeswoman, told the New York Times, “[W]e’ve seen creators livestreaming content from the protests and engaging their communities in open conversations around race, inequality and how to effect change.”

And the platform attracts an audience open to advertising. According to brand24.com, 82 percent of Twitch users believe sponsorships benefit gaming. And 80 percent are receptive to brands sponsoring gamers and teams.

Advertising Options on Twitch

In short, the platform provides fertile ground for advertisers who want to connect with passionate, driven consumers. Marketing exposure on Twitch can take several forms, including:

  • Partnering with an influencer. A streamer might include a brand in a sponsored stream title or on a tile on their channel page.
  • Brand placement on the stream itself, or behind the streamer on their webcam.
  • Branded emotes, like the “DoritoChip,” which between November 2, 2017, and January 8, 2018, was used by viewers an average of 17,330 times a day.
  • Pre-roll ads, which can run before a stream.

What Brands Use Twitch?

Some savvy brands have already recognized the potential Twitch offers to connect with a young, engaged audience. And they’ve done so in creative ways. For example:

  • Totino’s Pizza Rolls created an attention-grabbing game within the game during a sponsored stream. After each win, streamers rewarded themselves by eating pizza rolls live.
  • Monster Energy Drinks sponsored Jaryd “Summit1G” Lazar, who streams with a stocked Monster mini fridge situated right behind him. During streams, viewers have asked him about his favorite drink flavors, and new flavor releases, calling even more attention to the brand.
  • 1,000 Dreams Fund (1DF), a non-profit dedicated to providing 1,000 university women with grants, partnered with Twitch to give financial assistance to female streamers currently attending college. The aid could be applied to conventions like TwitchCon, or even new hardware, and the campaign introduced the non-profit to a completely new audience (the campaign also highlighted that Twitch doesn’t exclusively draw a male demographic).
  • Nissin Foods partnered with influencer Pokimane, who demonstrated how noodles are a clear fit to the gaming lifestyle when she made Nissin instant noodles during a stream. Pokimane, who draws more than four million followers to her channel, added a layer of whimsy by incorporating a “Slurp Meter” graphic onscreen to measure how loudly she ate her meal.
  • Career search engine Indeed used a pre-roll ad to demonstrate how a Twitch streamer and a digital artist used Indeed to connect—and ultimately collaborate.

Contact True Interactive

Eager to reach out to a Millennials audience? Interested in incorporating Twitch into your next campaign? Contact us. We can help.

New Report Underscores Importance of Google My Business

New Report Underscores Importance of Google My Business

Google

Software provider Moz has released its 2020 State of Local SEO industry report, and the insights are revealing. The report, which surveys the priorities of website owners across several industries, focuses on organic content, but it’s still a useful tool for advertisers. That’s because a brand’s priorities for organic content are usually a good indication of its advertising priorities; in short, the Moz report provides insights into digital marketing that can influence online advertising. Two headliners, according to Moz? Google My Business (GMB) and Maps. Read on for more details about these tools, and how they might support your business.

The Growing Importance of Google My Business

One of the big take-aways of the report is the growing influence of businesses’ GMB listings. In fact, according to Moz, businesses are increasingly viewing GMB listings as critical to their local search result rankings: “75% of marketers believe that the use of Google My Business profile features impacts rankings in the local pack.” The report recommends keeping abreast of GMB features and management, making sure details such as categories, and descriptions, are up-to-date. In short, more businesses are investing time in their GMB page, and you should, too.

Google Maps: More Than a Wayfinding Tool

Another recommendation: mind your presence on Google Maps. The report casts a spotlight on Google Maps’ rise, describing it as “a go-to tool for how consumers navigate their community.” And as consumers find their way around an area, it behooves brands to position themselves front and center. The benefits of learning the nuances of Maps, and keeping one’s map intelligence accurate, cannot be overstated.

These findings underscore how significant GMB listings and Google Maps are to businesses. Google continues to dominate the online landscape even if it is having a down year in the advertising sector.

What You Should Do

  • We recommend that you maintain a strong strategy for maximizing GMB as a platform for paid and organic content. As we have blogged here, more than half of search queries on Google result in no ensuing clicks to brand sites. That’s because users frequently find what they need on GMB pages—when businesses have taken the time to make them rich and informative, that is. Make sure your GMB page has substance, from compelling images to accurate location data. As we recommended earlier on our blog, it’s important that you link your GMB account to your Google Ads account. As Google discusses in this tutorial, linking your GMB account to your Google Ads account makes it possible for your ads to appear with location extensions, which encourage customers to visit your storefront. Through location extensions, customers can see your ads with location information such as your address. And then they can get more information about your location by clicking on location extensions.
  • We also suggest that you have a plan for maximizing Google Maps as a platform for paid and organic content. As we blog here, Google has managed to effectively accommodate advertising without corroding user experience on Maps. That’s good news for brands and users alike. A satisfied user will continue to use Google Maps—and subsequently see content, such as promotions, posted by savvy advertisers.

Note the mention of organic and paid content in both suggestions above. The rationale is this: if you are going to spend more time building up your Maps and GMB organic content, why stop there? Google makes a plethora of advertising tools available, tools that can increase your visibility even more—and attract more customers. Get to know those tools.

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Through offerings like Google My Business and Maps, Google can help your brand achieve the visibility you desire. Not sure how to make the most of these platforms? Contact us. We can help.

Online Shopping and Advertising Continue to Converge in 2020

Online Shopping and Advertising Continue to Converge in 2020

Advertising

One of the big stories of 2020 is, of course, the surge in people going online. It’s not just that people are spending more time online watching movies and connecting on social media. They’re also making purchases: as consumer behavior moves online, we’re seeing a surge in eCommerce. As reported in Forbes, the latest research suggests that COVID-19 has accelerated the progress of ecommerce adoption by four to six years—within a matter of months. What does that mean for your brand? A look at what the tech giants are doing provides some clues:

Instagram Shop

Instagram is embracing the online shopping trends with its July roll out, in the United States, of Instagram Shop. The online shopping feature allows consumers to view products on Instagram: personalized recommendations drawn from brands you as a consumer follow, plus recommendations suggested by Instagram’s @shop team.

Businesses can also add hashtags to product descriptions to make those products more likely to be featured. On Instagram Shop, shoppers can save items of interest, contact businesses, and place orders directly using Facebook Pay. In short, the feature allows brands to set up a single online store consumers can access via Instagram. Instagram Shop is set to go global in coming weeks.

Google’s Shoploop

Meanwhile, Google is making its own bid to snag the attention of online shoppers with its video shopping platform, Shoploop. Introduced by Google’s experimental Area 120 division, Shoploop spotlights products in short videos of 90 seconds or less. The videos illustrate how to use the product, and interested shoppers can make purchases online, directly from the app. They can also like, share, and save videos.

As reported in MediaPost, Shoploop “helps brands get product reviews from real people who know and use the products.” One of the beauties of Shoploop is that it streamlines a process that used to involve several apps or websites. Consumers can now discover products, see how they are used in real life, and make a purchase—all in one place. Currently, most Shoploop clips highlight skincare and makeup, but plans are already underway to expand reach to products including clothing, jewelry, and electronics.

What This Means for Brands

Store closures/state lockdowns during COVID-19 undoubtably spurred development of shopping experiences like Instagram Shop and Shoploop. But there’s a good chance that consumer habits formed during lockdown will persist indefinitely. “We are seeing signs that online purchasing trends formed during the pandemic may see permanent adoption,” notes Taylor Schreiner, Director, Adobe Digital Insights, in the Forbes article cited above.

And because companies like Google and Instagram are making it even easier for people to buy things online by giving them more access points, shoppers will have more reasons than ever to continue those habits forged during the pandemic. The headline for advertisers is this: online advertising not only creates visibility for a brand, it is becoming an increasingly important, even mandatory, strategy for brands to draw shoppers directly to their commerce engines.

The Challenge for Advertisers

The challenge for advertisers is to capitalize on all these access points, while understanding what types of advertising work best to attract engagement online. That is, what kind of ads does a brand now need to create in order to draw shoppers to their Instagram page, as opposed to their website? How should a business build an advertising presence on Instagram that complements the organic content it posts, especially for brands that sell products on Instagram? Different access points can mean different audiences: online ads will not necessarily all be the same.

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Businesses Balance Risk with Reward on Social Media

Businesses Balance Risk with Reward on Social Media

Facebook Social media YouTube

One of the more interesting aspects of the ongoing Facebook advertising boycott is the concern over brand safety. Advertising Age reports that boycotting advertisers want assurance that the ads they place on the Facebook News Feed will not appear next to objectionable content such as hate speech. And who can blame them? But advertisers may not get everything they want. And they may have to live with an ongoing reality: so long as your brand lives on social media, you will always need to manage risk (whether you advertise, manage organic content, or both) against the ROI of having a presence on the world’s most popular digital destinations.

Social Media Controversies

I’ve been following how brands have managed occasional controversies on social and have commented on them in posts such as “Twitter’s Troll Police Struggle to Separate Humans from Bots” and “Social Media Remains a Messy Place for Brands to Live.” Many of the issues I’ve been writing about remain today, and Facebook is not the only platform wrestling with them. They include:

  • The inherent tension that exists when businesses exist on platforms designed to give people and organizations an open forum. An open forum means that anyone can have an opinion, which means that fringe content will always make its way on to social.
  • The reality that malicious parties are actively looking for ways to game the platforms and disrupt them. Twitter is reeling from a major hack July 15 in which the accounts of high-profile individuals such as Jeff Bezos and Elon Musk were hijacked as part of a Bitcoin scam. Of course, the bad guys out there are also going after brands’ websites, too, but on social media, your account is only as secure as the platform where you are renting space.
  • The difficulty of combating malicious content. As I discussed in a post about Twitter trying to combat trolls, social platforms continue to struggle with the fact that they can employ only so many people to monitor and combat inappropriate content. And when the platforms use automated tools to root out trolls, those tools make mistakes by overreaching and going after innocent accounts, too.

But brands simply cannot decide to ignore social media. Facebook, Instagram, LinkedIn, Twitter, and YouTube are among the Top 20 most visited sites in the world according to Ahrefs. And as online traffic has surged across the board in 2020, businesses continue to succeed with social media advertising.

What You Should Do

So what’s the answer for brands wanting a safer experience? Well, there is no easy one. But:

  • Artificial intelligence is going to get better. Remember, we’re still in the early stages of AI’s development. As AI improves, social platforms are going to do a better job rooting out objectionable content.
  • Social platforms can and should be more transparent about how they monitor and react to objectionable content. It’s unrealistic for any social media platform to promise brands that their ads will never appear alongside offensive content. But according to Advertising Age, Facebook is figuring out how to more proactively report to brands how it monitors content and responds to flare-ups. This is a step in the right direction. It’s just not a good idea to leave advertisers in the dark. Being candid and including them in a solution goes a long way.

Advertisers should demand that social media platforms work with them to manage their brands. But social media more than ever will always be a risky place for brands to live. I suggest that businesses:

  • Have a strategy for how social media attracts and keeps customers both with advertising and organic content.
  • Measure success – but also measure your risk tolerance. Assign a numerical scale to assess the level of risk you are willing to accept on each platform and for various types of incidents ranging from security breaches to your content appearing alongside inappropriate content.
  • Monitor your ROI as well as incidents you experience. How much ROI are you getting? How frequent are the violations you experience? Does the ROI outweigh the costs of dealing with negatives? (Your mileage will vary.)
  • Keep applying pressure to the major social platforms to hold themselves accountable.

What have your experiences been on social media? I’d love to hear from you.

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Photo by dole777 on Unsplash

 

Advertiser Q&A: Microsoft Digital Marketing Center

Advertiser Q&A: Microsoft Digital Marketing Center

Advertising Microsoft

Microsoft has been in the news lately. The tech company has expanded its Microsoft Digital Marketing Center, which provides small-to-medium-sized businesses (SMBs) with a central site on which they can manage, online, both advertising campaigns and organic content. Read on to learn more about the Microsoft Digital Marketing Center and what it might offer your brand.

What is the Microsoft Digital Marketing Center?

The Microsoft Digital Marketing Center is a product from the company’s experimental project lab, Microsoft Garage. When it came onto the scene in October 2019, it empowered SMBs to use one interface to manage digital campaigns across multiple networks, from Microsoft to Google and Facebook, Instagram, and Twitter. In late June 2020, Microsoft announced a major expansion of the product, with additional features such as:

  • Social management inbox, which serves as a central hub for managing likes, direct messages, and replies on platforms such as Facebook, Instagram, and Twitter.
  • Image ad suggestion, which allows brands to easily create their own effective image ads by choosing from suggested ads.
  • Improved tools for ads, such as a field for an extra headline. The benefit? Advertisers can include more information in their ads and subsequently enhance location targeting.
  • The ability to appeal disapproved ads from Bing and Facebook.
  • A new home page experience that combines social and ad metrics into one user-friendly dashboard view.
  • Twitter support, which is now enabled.

Who is the target audience?

SMBs are the target market. SMBs have captured even more attention during the COVID-19 pandemic. As McKinsey points out, SMBs face an even tougher road to economic recovery. They need all the help they can get.

Who are Microsoft Digital Marketing Center’s competitors?

Microsoft Digital Marketing Center is competing with platforms such as:

  • HubSpot, which is already positioned as a one-stop shop for SMBs. Though Microsoft Digital Marketing Center doesn’t have all the CRM features of a HubSpot, it brings its own advantages to the table. (It’s currently free, for one thing.)
  • Google, to some degree. As Search Engine Land explains, “Similar to Google Smart campaigns, which aim to simplify campaign set up and management for SMBs, Digital Marketing Center uses Microsoft AI to power ad keyword and audience targeting and bidding.”

But Digital Marketing Center gives customers more autonomy. Advertisers can build their own ads. They can also use automated ad copy or modify auto-suggestions.

Why did Microsoft launch this product?

Microsoft probably launched Digital Marketing Center to gain a toehold with the market of small-to-medium-sized businesses, which have more aggressively embraced digital advertising to acquire customers amid the spread of COVID-19. And as noted above, they are not alone in their efforts to win the hearts of this group.

What should I do next?

If you are interested in trialing the Digital Marketing Center, start here. The beta is open to U.S. businesses only at this point.

Is there a “gotcha”?

As with many free products, be aware that you get what you pay for. Digital Marketing Center is totally self-service: you’ll be on your own in managing this tool. In short, it invites self-sufficiency! Also, just because it’s free now doesn’t mean the features will remain free.

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Do you want to learn more about the Digital Marketing Center and what it might offer your business? Contact us. We can help.

Photo by bruce mars on Unsplash

It’s Amazon Advertising’s Year — So Far

It’s Amazon Advertising’s Year — So Far

Amazon Facebook Google

Good news for Amazon. Bad news for Google. According to a new report from eMarketer, Amazon’s share of online advertising continues an upward trend. Google, by contrast, continues to lose marketshare. Read on to learn more.

The What

Amazon’s share of online advertising, which has been rising every year, will reach 9.5 percent in 2020, eMarketer says. Google’s share will drop to 29.4 percent, as Google reports its first-ever decline in advertising revenue since eMarketer began tracking advertising revenue in 2008. Meanwhile, Facebook’s share of online advertising is predicted to rise to 23.4 percent (note, however, that eMarketer published its analysis before an advertising boycott of Facebook took hold—those numbers will likely be re-evaluated).

The Why

Why is Amazon Advertising increasing its share, while Google sees its marketshare drop?

  • Amazon’s advertising unit, known as Amazon Advertising, is probably benefitting from people shifting their purchasing online during the COVID-19 lockdown of 2020. As we have blogged, Amazon without question became an especially attractive place to make purchases as shelter-in-place mandates took hold. And Amazon was prepared to help advertisers build their visibility during this surge, with a tool kit including products such as Sponsored Ads and Display Ads.
  • Meanwhile, eMarketer principal analyst at Insider Intelligence, Nicole Perrin, explains that “Google’s net US ad revenues will decline this year primarily because of a sharp pullback in travel advertiser spending, which in the past has been heavily concentrated on Google’s search ad products. Travel has been the hardest-hit industry during the pandemic, with the most extreme spending declines of any industry.”

What the News Means

The news creates some nice press for Amazon Advertising, but as we have blogged, Google’s ad business remains healthy and solid. And as eMarketer points out, Google is being hit by the economic downturn in travel. There is nothing inherently wrong with Google’s ad products, however.

In fact, Google continues to make its ad products better. We have blogged about some of its innovations lately:

Facebook likely has more to worry about than Google. An advertising boycott is gaining traction with big brands such as Unilever and Starbucks pulling their ad business because they believe Facebook is not doing enough to police hate speech, among other grievances. As reported by cnbc.com, the big names already responding to the #StopHateForProfit campaign have the potential to influence more companies to join the boycott.

Our Recommendations

We suggest that regardless of your platform of choice, businesses continue advertising online. Despite the turbulence among the big online ad players, we know that businesses that continue to have an online ad presence are best positioned for success.

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Do you need help sorting your digital ad presence? Contact True Interactive. We can help.