Tag Archive: social media

1. Is it game over for TikTok?

   April 5, 2023 19:26 Comments Off on Is it game over for TikTok?

   It’s a rite of passage for all social media platforms: the scrutiny that comes with increasing size, power and revenue. National and supranational bodies in the US, the EU and others are constantly probing Meta and Google, handing out fines before apparently starting the process all over again. But the scrutiny that TikTok is seemingly more serious. Thanks to its Chinese ownership and concerns around whether the Chinese government has access to TikTok user data, the social platform has already been completely banned in India, and the governments of the US, the UK, Belgium and Australia have banned staff from using it on work devices – as have the three main institutions of the EU. Some countries including, crucially, the US, are considering a total ban. This would have significant ramifications for the ad industry and for marketers who rely on access to TikTok’s passionate, engaged, Gen Z audience.

   TikTok is big – and it’s getting bigger

   TikTok is a major player in the digital ad industry globally and particularly in the US. In 2022, its share of US digital ad spend – 2.4% – was comparable with YouTube’s. That share is expected to grow to 3.1% in 2023 and 3.5% in 2024. Its net ad revenues could double in two years, to $11bn in 2024. Three in four US advertisers expect to increase their spend on TikTok in the next year. There’s no denying TikTok’s growth is impressive. It has surpassed Twitter and Snapchat, but it isn’t even in the same ballpark as Google and Meta. However, what it does have over these two tech titans is cultural cachet. That’s what makes it so exciting and so important for advertisers.

   Should advertisers continue to invest in TikTok?

   As suspicion of TikTok increases, particularly in the West, advertisers will need to consider if it’s worth the risk to their brand safety. Even if there isn’t a ban in the US or other major countries, advertisers will need to monitor the situation. Theoretically, negative rhetoric alone could translate into a drop in the number of users. There’s also a possibility that the US administration will stop short of a ban, but will pressurize advertisers to divert their ad dollars, in a similar way in which brands adhered to the trade embargo on Russia after the latter invaded Ukraine in 2022.

   However, there is one crucial factor to consider; how much TikTok users love TikTok, especially Gen Z. 45 million American Gen-Z-ers use TikTok, and it’s their most-visited site. They will not give it up easily, doubtless claiming that a ban would violate their right to freedom of expression. For that reason, it’s safe for brands to continue investing in the platform, at least for the time being. Just look at the #StopHateforProfit Facebook boycott – when things had quietened down, brands re-instated their spend on the platform, without any backlash, because people still wanted to use Facebook.

   What are the alternatives to TikTok?

   But even if it is safe for brands to continue investing their ad dollars in TikTok, it’s wise not to rely solely on one platform – even less so when its future is in question. So where else can marketers reach the lucrative Gen Z audience?

   These younger audiences love TikTok – there’s no doubt about it. But it’s not the only digital platform they use, and short-form video isn’t the only media they consume. Advertisers don’t have to invest in like-for-like media to reach them. If TikTok is banned, the war for attention – both from consumers and advertisers – will be intense. That’s especially the case for Instagram and YouTube, who have developed copycat products (Reels and Shorts respectively) with the sole aim of replicating TikTok’s success. These products also have the advantage of more capabilities such as retargeting. Instagram’s parent company Meta will be rubbing its hands in anticipation. It was only last year that it paid a consulting firm to create a US-wide campaign to turn the public against TikTok.

   Snapchat, the other ‘challenger’ social media network, will also be hoping to seize the opportunity. There may even be new players rushing to fill the vacuum left by TikTok by creating a platform that mimics the Chinese app’s virality and rapid rise in popularity.

   But there are alternative approaches to simply reallocating budget that was previously invested in TikTok. Investing in a diverse range of channels that align with a brand’s marketing goals helps build resilience. This is especially true given that Gen Z is as diverse as any other generation and not 100% obsessed with TikTok and short-form video. It is also worth taking the opportunity to build up first-party data, with the death of the cookie approaching quickly and regulators closing in on Big Tech. This isn’t straightforward, but the long-term gain would be significant.

   An uncertain future for TikTok and the advertisers who love it

   No one knows whether TikTok will be banned outright in the US. It’s working hard to highlight its contribution to the US economy, to culture and to the success of US businesses. It’s also created a $1.5 billion initiative called Project Texas, which will ensure that American data is stored on ‘American soil by an American company overseen by American personnel’. The idea is to give the US government confidence that their Chinese counterparts cannot access US user data.

   There’s also likely some reluctance among the Biden administration and the wider Democratic party to ban TikTok. After all, Gen Z is a key demographic for them in the upcoming Presidential election. Banning TikTok would ostracize them and remove an excellent means to engage with them.

   If TikTok is banned, however, there are plenty of competitors who will happily absorb any ‘spare’ ad dollars. In any case, whether it is banned or not, it would be wise to diversify – into other social platforms, yes, but also into strategies that build first-party data and make brands less reliant on the Big Tech walled gardens. The scrutiny that TikTok is under could be a sign that how all the Big Tech firms collect and use data could come under the cosh. Being less dependent on them can only be a good thing.

   value@ecimm.com

2. TikTok: the time is now

   January 18, 2023 10:10 Comments Off on TikTok: the time is now

   For nearly a decade, the Google-Meta duopoly raked in more than half the money invested into digital advertising in the US. And while they still dominate, 2022 was the first year since 2014 that that wasn’t the case. Their joint market share was 48.4% last year, and is expected to drop to around 44.9% in 2023. They’re still growing, just more slowly than the rest of the digital ad market. This slowed growth is likely down to the increasing number of formats available, the fact that people are spending less time online than they did during the pandemic and, of course, Apple’s infamous privacy update which requires apps to ask users if they want to be tracked.

   So who’s receiving the other half of US advertisers’ digital ad dollars? There’s Amazon, of course, whose ad business is powered by its ability to target users based on their purchase and browsing history. It commanded 11.7% of digital ad spend in the US in 2022, and that’s expected to rise to 12.4% in 2023. The streaming services are also getting a bigger share, with advertisers shifting spend from linear to connected and streaming TV. Roku, Hulu, Pluto, Paramount+, Tubi and Peacock combined made up 3.6% of the digital ad market in the US in 2022 – that percentage will rise significantly now that Netflix and Disney+ have launched ad-supported tiers.

   And then, of course, there’s TikTok. While the Chinese-owned short video app is still a relatively small player, with just 2% of the digital ad market in 2022, it’s the one that everyone is watching and packs a far bigger punch than its market share suggests.

   TikTok has a highly engaged, younger audience

   TikTok is taking up more space in marketers’ minds and media budgets thanks to its audience and how effectively it engages them. Insider Intelligence estimates that 61.3% of Gen Z in the US uses TikTok at least once a month, and adults in the country spend an average of 46 minutes on the platform – significantly more than the 28 minutes they spend on Instagram. These audiences are highly engaged – one study showed that the standard engagement rate of ads on TikTok is 6% – 10 times higher than Instagram’s 0.6%. Much of TikTok’s success in engaging its audience comes down to how it has shifted how social media is used, from finding things you like to discovering new things. It also allows its audience the opportunity for self-expression and to be authentically themselves. And the clincher? TikTok users are 1.7 times more likely to buy products they discover on TikTok compared to other platforms; TikTok’s commerce-focused hashtag, #TikTokmademebuyit, has been viewed more than 30 billion times.

   Lowering CPMs to attract investment

   TikTok is riding a wave just as advertisers are looking for ways to rein in their spending. It has responded to the economic downturn by reducing the cost of its ads in a concerted effort to appeal to marketers. The result is extremely attractively priced advertising, with CPMs half that of Instagram Reels, a third cheaper than Twitter’s and 62% less than Snap’s.

   How are advertisers responding to TikTok?

   In a word: enthusiastically. While a year ago, many would have viewed TikTok as an experimental platform, its popularity amongst young audiences and very high levels of engagement mean that it is now considered to be at least close to mature – but perhaps without the scrutiny that more established channels are put under. Some brands are prioritizing TikTok as much as Meta’s platforms on their media plans: the top 1000 advertisers in the US increased their spend by 66% to $467m from September to October of last year. Although TikTok has not been immune to the downturn in online spending – it slashed its revenue targets for 2022 by 20% – it is estimated to have made more than $10bn in ad revenue in 2022. Not bad for an app that launched worldwide less than six years ago…

   Fortune favors the cautious

   It’s very easy to get excited about TikTok, with its impressive reach and engagement – but there are reasons to be careful when advertising on the platform. As it grows it attracts, along with the other tech giants, increased scrutiny from national and international bodies. Washington DC is sufficiently alarmed about national security to ban government employees from using the Chinese-owned app on government-owned devices. India has banned the use of TikTok permanently, while several other countries, including Indonesia, have placed temporary bans on its use. Towards the end of 2022, an internal risk assessment conducted by TikTok’s parent company, ByteDance, found systemic issues with fraud and inappropriate data management. One employee familiar with such issues apparently said that it is impossible to keep sensitive data from being stored improperly on Chinese servers.

   These privacy and security concerns have the US government worrying about whether they should take the Indian route and restrict access to the app altogether. The Democrats are very reluctant to do so as it could alienate young people – an important part of their voting demographic – but are also aware that the platform could be used to spread disinformation in the presidential election next year.

   As things stand, there is no inherent risk of reputational damage for advertisers investing in TikTok ads. However, it would be wise to monitor the situation. While it is currently difficult to imagine tearing young people away from their favorite app, consumers are becoming increasingly aware of privacy and security. Things can turn quickly (just look at Twitter) and – teamed with the imminent and final demise of the cookie – brands should certainly be seeking to build robust audiences and communities and first-party data practices away from third-party platforms, for future-proof online marketing.

   value@ecimm.com

   Image: Shutterstock/Kaspars Grinvalds

3. Advertisers boycott Twitter as Musk unleashes chaos

   November 17, 2022 09:59 Comments Off on Advertisers boycott Twitter as Musk unleashes chaos

   ‘

   We have written at length on ECI Thinks about Big Tech, especially Meta, Amazon and Google. What goes on at these companies often has a huge impact on the advertising industry, and it is therefore important to understand and reflect on their actions.

   While the likes of Meta, Amazon and Google sometimes seem a bit dysfunctional because they are ‘moving fast and breaking things’, to paraphrase Meta CEO Mark Zuckerberg, Twitter seems to have operated more under the radar. Although there have been issues with trolling and links to major events such as the insurrection on January 6^th, there were rarely any scandals to do with the company itself and it was a solid, safe option for advertisers.

   And then Elon Musk came along, moving very fast and breaking lots of things.

   What happened when Musk bought Twitter?

   As suggested above, Twitter always used to be a relatively safe social network. The focus was on famous people, brands and institutions connecting with their fans and supporters, and political figures with the public and media. While it never attracted the same kind of advertising investment as rivals Meta, it was a great way for brands to capitalize on cultural moments and create meaningful connections with consumers. However, it was never on stable ground financially – 2019 was its last profitable year, and one of only a few in its history.

   It was against this background that the world’s richest man, Elon Musk, announced in April 2022 that he had launched a hostile bid for Twitter. Over the following months, there was a lot of seesawing, with Musk withdrawing from the purchase several times, only to then forge ahead again. The takeover was confirmed on October 28^th of this year.

   As the New York Times put it, ‘If you thought Elon Musk’s will-he-or-won’t-he approach to buying Twitter was chaotic, the two weeks since Musk took the helm of the social media company have been downright anarchic, with his plans for Twitter flipping and flopping as furiously as a fish on a hook.’ Musk’s escapades have been covered in depth across the press, but involved laying off half of the workforce, scrapping the ‘blue tick’ verification feature and rolling out an alternative, before scrapping the new version very shortly afterwards.

   How are advertisers reacting?

   Musk assured advertisers early on that he valued their business and was worried about social media spreading partisan hate – indeed, he promised that Twitter would not become a ‘free-for-all hellscape’. However, his pledges to restore free speech have worried some that this will be a difficult line for the social network to tread and that it will indeed descend into a hellscape.

   Unsurprisingly, the threat to brand safety and the fact that investment in the platform is unlikely to be a major feature in their budget plans anyway means that many advertisers have chosen to boycott Twitter, at least for now. These brands taking a safety-first approach include major players such as General Motors, Pfizer, United and VW. Automotive advertisers are especially nervous about the fact that Elon Musk owns Tesla, and whether this means that their data will be less safe, or whether they will be at a disadvantage.

   Back in May, Twitter had 3,900 users, which decreased to 2,300 in August – before rising again in September when it temporarily seemed that the Musk deal was off. Musk reacted to news that advertisers were electing to boycott Twitter by threatening to ‘thermonuclear name and shame’ them, presumably not making a return to Twitter any more alluring.

   Perhaps attempting to smooth things over, Musk hosted a Twitter Spaces live audio discussion last week to address advertiser concerns and explain his vision for the future. Many left the session no clearer about what that vision is. Indeed, some even question whether Musk himself is certain. What does seem clear is that Twitter will move towards a subscription model – he has said that he wants half of Twitter’s future revenue to be from subscriptions. Many advertisers will be wondering whether this model will dilute the size and quality of audiences available to advertisers on the free tier.

   What’s next for advertising on Twitter?

   If advertisers are to return to Twitter with confidence, Musk will need to prioritize demonstrating to them that the platform is a safe place in which they can be sure of their brand safety. Advertisers will want to be confident that Twitter has clarified new policies for content moderation, that those policies will be consistently enforced, and that they align with industry standards. Lou Paskalis, the CEO of MMA Global, recommended in a thread on Twitter that Musk steps back from the day-to-day running of the company and hires a CEO with an understanding of how advertising works. He also said that Musk should publicly apologise for the damage he has done to the social platform. Musk has since said that he expects to reduce his time at Twitter and eventually find someone else to run the company – presumably in the hopes that this will have an impact on advertisers’ boycott of Twitter.

   The chaos at Twitter couldn’t have come at a worse time for the digital advertising industry, which is going through a period of unusual volatility. With a recession looming, advertisers are looking for certainty, and Twitter – with all its self-inflicted instability – just can’t offer that right now. With an upcoming recession that will likely lead to significant budget cuts, advertisers want to find easy places to pull spend from. If there is any uncertainty in a particular channel, that makes the decision easy. Other players in the online marketing sphere will be happy to step in.

   value@ecimm.com

4. Instagram faces a backlash against ‘TikTokification’

   September 1, 2022 11:32 Comments Off on Instagram faces a backlash against ‘TikTokification’

   ‘

   For many years Instagram was the undisputed leader of the social media platforms. Just 12 months after launch, it had acquired 10 million users, and it had 1 billion users by June 2018. By 2021, Instagram had generated around $25bn in ad revenue for parent company Meta. It has helped build influencer careers and activist communities, as well as helping people stay connected with their friends and family and the brands and influencers they like.

   Despite that success, Instagram has recently been making changes in order to address the threat posed by TikTok. However, those changes are proving deeply unpopular with users, provoking a backlash against Instagram. Is it losing touch with what made it so popular?

   The TikTok-shaped elephant in the room

   It won’t come as a surprise that TikTok has enjoyed spectacular growth over the last four years. Just four years after its launch, it had 1 billion active users – not far off Instagram’s 1.3 billion. Many experts believe that it will soon overtake Instagram in this respect. In terms of engagement, TikTok is far ahead of its rival: users spent an average of 25.7 hours a month on TikTok in 2021, compared to just 7.9 hours on Instagram. TikTok is also the favored social platform of teens: 33% said it was their preferred platform in 2021, compared to 31% for Snapchat at 22% for Instagram.

   And while Instagram still dominates in terms of ad revenue – $47.6bn in 2021 compared to TikTok’s $4bn – TikTok’s is projected to raise to nearly $12 billion this year, making it bigger than Snap and Twitter combined. It’s on track to become a serious threat to Google/Meta duopoly of digital advertising.

   Reeling them in with Reels

   Meta is clearly flustered by TikTok’s continued growth. Its response has been to significantly increase its focus on video on both Facebook and Instagram. Indeed, Mark Zuckerberg said on a call to investors that Reels is a major part of Meta’s TikTok defence strategy. Instagram launched Reels – short, snackable videos – back in 2020, and have given them increasing prominence ever since. In 2021, Instagram CEO Adam Mosseri announced that the platform would be pivoting to video because ‘we’re no longer a photo-sharing app. People are looking to Instagram to be entertained. We have to embrace that’. Instagram started adding slots for recommended videos from accounts users didn’t follow into their regular feeds. In summer 2022, it announced that all videos posted onto Instagram would become Reels.

   A backlash against Instagram

   This approach, whilst understandable given the wider move towards video, has thrown up a number of problems for Instagram. Chief among them is the effect that it has had on user experience. A large proportion of users’ feeds is now content from people they don’t know, usually in the form of Reels. Posts from their friends and people they follow are drowned out by a cacophony of video clips and sponsored content. Testing of a full-screen feed, similar to TikTok’s, has exacerbated the issue.

   Instagram has suffered a significant backlash, with highly influential users such as Kylie Jenner and Kim Kardashian, who each have more than 300 million followers, criticizing its new strategy. Other users have commented that Instagram no longer feels like somewhere to share photos and videos, but more like a ‘chaotic hub for Meta to build relationships with brands’. The danger is, of course, that by neglecting the user experience, Instagram is deterring the very audiences that those brands are paying to access.

   Why do users love TikTok but hate Instagram’s move into video?

   It’s not the move into video per se that is behind the Instagram backlash. There is a clear movement into video by creators. Users are lapping it up on many platforms, including – and particularly – TikTok. So why has TikTok got it right and Instagram wrong?

   A key factor in TikTok’s success is its superior algorithm, with its remarkable ability to suggest content that users love. An effective algorithm relies on high-quality data, and TikTok is pretty aggressive in how it harvests data from its users – much more insistently than Facebook or Instagram. This means that good content on TikTok reaches millions of users, even if the creator has no followers. This makes it a very attractive platform for creators, and therefore brands.

   Another factor in the discrepancy between TikTok and Instagram is the simple fact that Instagram appears to be trying to be TikTok – but users want it to be Instagram. Its huge popularity grew from sharing photos and stories. This allowed users to connect with their friends as well as the brands and public figures they liked. Right now, Instagram seems to be actively pushing against that original mission by suppressing content from people you follow in favor of suggested Reels from people you don’t. And in following this path, it is losing sight of what made it so popular in the first place.

   It’s not just TikTok that Instagram copies

   Meta has form for copying or acquiring innovative products. Some critics suggest that this is because innovation at the company is lacking. Just last week, Meta announced that Instagram is testing another feature which appears to be copied directly from a competitor. Candid Challenges mimics the BeReal concept, which prompts users to post an unfiltered photo of themselves once a day. It has tapped into a desire for authenticity, which allowed it to push Facebook out of the Top 10 apps on the App store. However, Instagram faces a challenge thanks to its user interface. Candid Challenges risks getting lost in the myriad Instagram features. Meanwhile, BeReal is designed around this single purpose – much like TikTok with snackable videos.

   However, Meta had much more success with Stories, which took Snapchat’s disappearing photos as inspiration. Their success came from a desire for realness and authenticity – people were beginning to feel that their everyday lives weren’t ‘Insta-worthy’, so they stopped posting every day. Stories – which delete after 24 hours – meant that they required less thought. In two years, Stories attracted 400 million daily users and changed the way that people share and consume online.

   After the backlash, what does Instagram’s future hold?

   To see off the backlash, Instagram needs to sort out its user experience. Mosseri has recognized that the full-screen feed is ‘not yet good’, and said that ‘I want to be clear: we’re going to continue to support photos, it’s part of our heritage’. But he still maintains that videos are the future. ‘More and more of Instagram is going to become video over time. We see this even if we change nothing’. Clearly users will engage more with video if video is what they are fed, but Mosseri is right that video is undoubtedly the future. It makes sense for Meta to continue its drive towards video, so that it maintains a key role in the creator ecosystem.

   Another factor that Instagram has in its favour is that it is by far the largest platform for influencer market. Furthermore, its wide variety of content formats are almost all shoppable, which is a big draw for advertisers.

   It’s not over for Instagram. It is so much bigger than TikTok that it shouldn’t need to mimic what the Chinese social platform is doing. In doing this, it risks losing sight of what made it popular in the first place, and alienating its users. It needs to find a way to hero what users want from it – namely, sharing and seeing photos – and integrate Reels seamlessly, in a way that works for users, creators and advertisers.

   What does it all mean for advertisers?

   First things first: despite the backlash, Instagram isn’t going anywhere, so don’t pull your social spend from the platform.

   Advertisers should remember to follow buying power and respond to demographic characteristics. The belief that users stay with the platform they have grown up with appears unfounded: teenagers, for example, seem to migrate to Instagram as they enter early adulthood. They are moving to Instagram as they accrue buying power, making Instagram a wise choice for media investments. What’s more, younger people – on TikTok – learn faster and require less frequency to remember an ad or brand, which means less investment is required on TikTok.  Even Instagram seems not to have realised this.

   However, TikTok should still play a key part in any advertiser’s marketing strategy, especially those seeking to target a younger audience. And the very fact of TikTok’s success and Instagram’s pivot to video should point the way to a video-first future. Social content can no longer just be about photos – it needs to feature short, engaging video too. Brands need focus on their video game and optimize their content for the platform on which they are publishing.

   value@ecimm.com

5. Meta versus TikTok: the battle for our attention

   April 25, 2022 12:34 Comments Off on Meta versus TikTok: the battle for our attention

   ‘

   For years, Facebook and Instagram have dominated our social media lives and, indeed, how we behave and interact across the internet. Facebook Meta has come to shape our online lives, and its influence is so vast that bodies such as the European Union and the US congress spend huge amounts of time and money working out how to exert control over it. But for all Meta’s dominance of our time and attention – and the ad dollars of millions of advertisers worldwide, its confidence appears to have been wobbled by an ‘upstart’ – TikTok. The Chinese-owned video-sharing platform soared in popularity during the pandemic and has morphed from a lip-synching and dancing app to one that creates trends and forges deep connections between creators and users, keeping the latter engaged video after video. And now, the cracks are starting to show at Facebook, which has just reported its first-ever decline in daily active users (DAUs). The battle between Meta and TikTok is on.

   Meta – the reigning monarch

   Facebook’s dominance of the social media industry is still undisputed. In Q4 of 2021 it boasted 2.9bn monthly active users – not far off half the Earth’s population. Meta, Google and Amazon together accounted for more than 74% of global digital ad spend in 2021 – which is more than 47% of all money spent on advertising in that period. Meta’s share of the digital ad market is 23.8%.

   But there are signs of trouble ahead for the social media giant – and signs that it is nervous too. It is facing a challenge in terms of both user numbers and advertising, reporting their first-ever quarterly decline in DAUs in the fourth quarter of 2021. Facebook lost around 500,000 daily users in the last three months of 2021. The number of monthly active users on Facebook stayed relatively flat, while growth across Meta’s other platforms – WhatsApp, Messenger and Instagram – was modest. Furthermore, Buzzfeed found that audiences are spending less time on Facebook. This decline in time spent on Meta’s platforms puts direct pressure on ad spend. That pressure is exacerbated by the economic pressure that many small businesses are facing as the world emerges from the Covid-19 pandemic; these small businesses make up a large part of Meta’s advertiser base and, if they are having to cut down on their ad spend, Meta’s ad revenue will inevitably suffer. Insider Intelligence has lowered its forecast or Meta, predicting that the company’s revenue will decrease by $2.5 billion in 2022 and 2023. The company’s share of digital ad spend will fall under 22% by 2023 – down from 25% in 2020.

   TikTok – the pretender to the throne

   The fact is, those daily users and ad dollars are going somewhere. In a rare direct nod to competition (quite possibly because of the various antitrust lawsuits that Meta is facing), Mark Zuckerberg emphasized the threat Meta faces from platforms such as TikTok and YouTube, as people are increasingly drawn toward short-form video content.

   YouTube has been big for a long time, but TikTok’s ascendancy over the last few years has been meteoric. It got its billionth user in 2021, just four years after its global launch; that’s half the amount of time it took Facebook, YouTube or Instagram, and three years faster than WhatsApp. TikTok was the world’s most downloaded app in 2020, and in 2021 it became the first app not owned by Meta to cross the 3 billion app download mark. Also in 2021, the typical TikTok user spent an average of 19.6 hours on the app every month – more or less equalling Facebook.

   And it’s not just user figures that suggest that TikTok is the one to watch. It is also the most lucrative app globally for in-app purchases. Users spent $850 million on TikTok’s virtual ‘Coins’ currency in the first quarter of 2022. What’s more, the company’s unique approach to social commerce, which involves pairing marketers with content creators, drives huge demand for products: the #TikTokMadeMeBuyIt hashtag has had over 11.5 billion views.

   All this is propelling TikTok’s ad revenue: in 2022, it is expected to bring in $11.64 billion – that’s triple its 2021 figure and more than Twitter ($5.58 billion) and Snapchat ($4.86 billion) combined. It’s still small in terms of share of the digital ad market – but Meta evidently still feels threatened.

   Meta and TikTok: A play for the crown

   TikTok’s huge growth in the last few years, its clever social commerce strategy and the fact that it is winning the battle for the hearts, minds and attention of under 25-year-olds (and indeed under-18s) – which happens to be where Facebook is suffering its most significant declines – means that Meta is paying attention and reacting accordingly. The tech giant needs to maintain its ad revenue until the metaverse – into which it has invested heavily – takes off (if it takes off). It does not want an ‘upstart’ like TikTok snapping at its heels.

   Meta’s reaction to the TikTok threat seems to be “if you can’t beat ‘em, join ‘em”. Its Reels product is a direct rival to TikTok’s short-form video format. Mark Zuckerberg admitted in an earnings call that Reels is a major part of Meta’s TikTok defence strategy. They are also exploring the introduction of virtual coins on Facebook and Instagram, nicknamed ‘Zuck Bucks’. It is, however, interesting that Meta’s investment in these projects has been limited – especially given that Zuckerberg has form for investing in projects that he does believe in, such as the metaverse.

   However, Meta is not just using product innovation or imitation in order to keep the TikTok threat at bay. It was revealed recently that it hired a Republican consulting firm in the US to seed public distrust around TikTok. Op-ed and letters to the editor in various local publications have expressed concern that TikTok poses a danger to American children – particularly in relation to the fact that it is Chinese-owned and holds an extraordinary amount of data on teenagers across the world. Meta has defended the campaign and its actions, saying that it believes that all platforms should face scrutiny consistent with their size and success. The eagle-eyed have noted, however, that the thought-pieces in question have criticized trends that have gone viral on TikTok – but originated on Facebook and Instagram.

   The political angle

   Given Meta is a huge American tech company, and TikTok a huge Chinese one, it’s impossible to discuss this matter without touching on global politics. There is a tendency in the West to see the West as a bastion of democracy, free speech and freedom – and to see the ‘rest of the world’ but particularly China and Russia as restrictive, non-democratic and, in the case of Russia, outright aggressive. The fact that TikTok is Chinese owned may well have an impact on its future in the West. The app is already banned in India, and many other countries have considered banning it; the Trump administration in the US toyed with the idea of forcing the sale of the American business to an American company, but this idea was dropped after Trump lost the 2020 election. TikTok collects an enormous amount of data – it is, for example, using facial and voice recognition, even in the US. The fear is that the governing Chinese Communist Party (CPC) will use this very private data to its advantage – and given that they are closely involved in all major Chinese companies, it’s naïve to believe they are not doing this.

   That said, the West also has access to a staggering amount of data. The US can access all data that passes through servers in the US, and the data offered by data brokers from cookie and app data gives anyone who wants it far more intelligence on our behavior than we could reasonably expect them to have – and both the West and the East can use and abuse that data.

   These data flows are likely unsustainable in the long-term – individuals and regulatory bodies will demand more privacy in the future, even if market changes are slow to catch up. We are already seeing increased scrutiny on Meta in the US, the EU and beyond – TikTok will undoubtedly not be immune to it.

   So – is the future TikTok’s?

   While Meta is still by far the biggest social media company, and has a huge percentage share of the digital ad spend market, dwarfing TikTok’s, it is obviously flustered by TikTok’s success, especially when compared to its own stagnating and even declining figures. Facebook has more users, but TikTok has the attention of the demographic that advertisers most want to target and form a relationship with. Both companies will continue to be scrutinized for how they handle data and privacy – we all know the level of scrutiny that Meta faces, and TikTok – being Chinese-owned – will need to get used to a similar level of enquiry.

   For the last couple of decades, Facebook has had huge influence on how people across the world behave on the internet and even off it. It has changed how we interact, how we discover news, brands and products, even how we speak. But with young people devouring short-form video, interacting with creators and buying socially, it looks like the next two decades could well belong to TikTok. And marketers – particularly, but not exclusively, those who want to target a younger audience – should make plenty of space in their marketing plans for the Chinese-owned platform.

   Header image: Kaspars Grinvalds/Shutterstock

6. TikTok: would a US ban spell the end for the video-sharing platform?

   July 27, 2020 13:06 Comments Off on TikTok: would a US ban spell the end for the video-sharing platform?

   You’d think that an app best known for dance crazes and lip-sync comedy would be about as apolitical as they come – but you’d be wrong.

   TikTok caught up in US-China tensions

   TikTok, the short-form video sharing social network, has been caught up in the increasingly tense relationship between the US and China, with President Trump considering a nationwide ban of the app. TikTok is owned by ByteDance, a Chinese organisation which is thought to be the most valuable private company in the world. Many lawmakers across the world are concerned about the security of user data and risks around potential foreign interference. India banned TikTok (and 58 other Chinese apps) at the beginning of this month, saying they posed a ‘threat to sovereignty and integrity’, while Australian Prime Minister Scott Morrison has said that his government is ‘having a good look’ at the platform. It should be noted that all three countries with ongoing concerns about TikTok have difficult relationships with China.

   TikTok is hugely popular with the critical younger audience

   TikTok was formed in late 2018 as a result of a merger between two other big Chinese apps – Musical.ly, an app for lip-sync music videos, and Douyin, a short-form video platform. It has since grown enormously, reaching the 2 billion download milestone in April this year, making it the most downloaded non-gaming app ever – surpassing even Facebook and WhatsApp. It was downloaded 315 million times in the quarter that ended on March 31^st, the highest number of downloads for any app in a quarter. This is a reflection of its huge popularity as the world went into lockdown during the coronavirus pandemic, and consumers sought light-hearted entertainment and engagement. TikTok’s userbase skews very young: 65.3% of its users in the US are under 29, and 31% of 13-18-year-olds in the UK used the app during lockdown. This youthful, highly engaged audience is a huge lure for advertisers: TikTok is on track to earn $500m in ad revenue in the US alone this year.

   Security concerns
   

   However, it’s not all been smooth sailing for the social platform. The current and threatened bans aren’t the first problems it has encountered. TikTok was fined $5.7m in 2019 by the US Federal Trade Commission for illegally collecting personal information from children under the age of 13; as part of the agreement it was also required to delete all videos and data relating to under-13s, something which it is now alleged it failed to do. Just last month, TikTok was one of 53 apps that Apple security researchers flagged were regularly seeking access to a handset’s clipboard. These security breaches have made many uneasy: some government entities in the US have banned staff from using the TikTok app on government-issued phones, while Amazon told employees to delete the app – although it rescinded the instruction later that day.

   TikTok will remain popular with advertisers

   Some advertising industry figures are wondering aloud whether the threat of a ban will affect advertisers’ attitudes towards the platform, ultimately making that $500m ad revenue target harder to achieve. The general consensus seems to be that it will not. TikTok’s core appeal is its huge, youthful audience: the ability to reach them on a meaningful level is critical for many advertisers. What’s more, it may well benefit from the Facebook boycott. Many brands who normally spend most of their social dollars on Facebook and have chosen to pause their spend with the tech giant in the support of the #StopHateForProfit campaign will be looking to spend their social budgets elsewhere. TikTok’s young audience and recent launches – its self-serve ad platform and TikTok for Business – will make it an attractive alternative. The self-serve ad platform, which allows advertisers to buy and manage ad campaigns directly and access creative tools, flexible budgets and performance targeting could lure small and medium businesses in particular – Facebook’s core revenue driver. TikTok has also pledged $100m in ad credits for small businesses suffering as a result of lockdown.

   There will always be an appetite for platforms with a youthful audience

   The future is uncertain for TikTok, and its success undoubtedly hinges on the US government’s decision. However, no matter which way the decision goes, TikTok’s very existence and its enormous success show that there is a huge appetite for platforms that appeal to a young audience. If they fall, then the space that they leave will no doubt be filled rapidly.

   Image: Marmolejos / Shutterstock

7. The Facebook boycott: what are the implications for brands and for Facebook itself?

   July 2, 2020 17:07 Comments Off on The Facebook boycott: what are the implications for brands and for Facebook itself?

   Facebook has faced significant challenges over the last few years, notably since 2016, which saw the tech giant embroiled in controversies relating to the election of President Trump in the US, and to the UK’s Brexit referendum. 2020 is not proving to be any easier.

   The world’s largest brands boycott the world’s largest social media platform

   The current controversy was sparked when President Trump reacted to the Black Lives Matters demonstrations in a post on Twitter and Facebook, which he ended with the phrase ‘when the looting starts, the shooting starts’. Twitter reacted by hiding the post behind a warning that it ‘glorified violence’; Facebook, on the other hand, did nothing, with Zuckerberg saying that it was “better to have this discussion out in the open”.

   Shortly after this debate, a consortium of civil rights groups started urging advertisers to reduce or even halt their spending on Facebook throughout July, under the #StopHateForProfit hashtag. The campaign gathered momentum, peaking with Unilever’s announcement last Friday (June 26^th) that they would cease all their US advertising on Facebook until the end of the year. Within two hours of the announcement, Mark Zuckerberg released plans to prohibit hate speech ads and to better protect groups such as immigrants on Facebook. He also said that the platform, undoubtedly with one eye on President Trump, would label posts that violate their policies but need to remain published ‘in the public interest’.

   Facebook’s changes weren’t enough

   But Zuckerberg’s pledges weren’t sufficient to stem the flow: over the weekend and into the beginning of this week, more and more brands announced they would be joining the boycott. Facebook is now facing the loss, at least temporarily, of income from 150 brands as large as Verizon, Starbucks, Adidas, Coca-Cola and Honda – as well as Unilever of course. To give an idea of the amount of money this means, Unilever and Verizon spent $850,000 and $504,000 respectively on Facebook in the first three weeks of June alone. The World Federation of Advertisers claims that a third of the world’s biggest brands will, or are likely to, suspend advertising on social media, while an additional 40% are undecided.

   What are the implications for Facebook?
   

   The loss of income because of the boycott will undoubtedly be a real blow for Facebook – but by no means a fatal one. The majority of its income comes from the longtail: eight million small and medium-sized companies who are priced out of TV and therefore can’t afford not to advertise on Facebook. However, Facebook’s share price was affected by the boycott, down by 10% to $212.50 over the course of the week to June 28^th. They have no choice but to closely consider their next steps, particularly ahead of what is sure to be a contentious presidential election in November.

   The Facebook boycott was catalysed by the Black Lives Matter movement, but came amid a context of haphazard policing of the site. Facebook’s stance on hate speech has long been less clear than its position on other controversial content such as nudity; this is partly because it believes that it shouldn’t be responsible for this content, and partly because it’s so much more difficult to automate this work. It has made significant progress in this area: according to its Community Standards Report, in 2017, Facebook identified just 25% of hate speech removed from the platform itself, relying on users to flag the other 75%. By the spring of this year, however, 88% of the hate speech removed was found with its own tools, meaning it could remove or restrict four times as much as it had two years earlier.

   Facebook, and many of the other social media companies, continue to maintain that they are tech platforms, not media platforms, with the limited responsibility for content that that status implies. However, in introducing measures such as those described above, they are arguably de facto admitting that they are publishers and therefore have a duty to ensure that their content abides by local and international laws.

   What is motivating brands to boycott Facebook?

   Facebook has long been a key advertising platform for brands, giving them access to billions of users across the planet. Boycotting the company as part of the #StopHateForProfit campaign is a very sound PR move, and a great example of the world’s largest corporations using their power for good – in this case, holding social media companies to account. Advertising budgets for many brands, especially travel and consumer goods brands, are shrinking as the world faces an almost certain recession following the coronavirus pandemic. They will be seeking to make cuts and the #StopHateForProfit campaign may have presented an opportune moment to start making those cuts whilst simultaneously spurring change. What’s more, media cost deflation for most traditional media types and lower-than-expected inflation for digital channels mean that advertisers may feel they are in a strong position regarding where they place their advertising spend, allowing them to boycott a previously key channel. However, it’s important to remember that, while this move by advertisers may have been partially instigated by the fall-out from Covid-19 crisis, digital is a key channel and has become even more so during the pandemic as billions seek entertainment and information at home – this is a big move. Some brands will also undoubtedly use their break from the platform to evaluate the impact that Facebook activity has on their marketing results. In short, the move by marketers to boycott Facebook is both altruistic and strategic: it will be fascinating to see how it pans out.

   Brands have long been uneasy about advertising on Facebook, thanks to historical brand safety issues and because they are worried about contributing to the consolidation of the Facebook-Google duopoly. No matter what the reasons or motivations for the boycott, perhaps now is the time that Facebook will be forced to implement fundamental change to the platform, including allowing marketers to better control where their ads are placed, and making the algorithms that control content more transparent.

   Image: BlueSkyImage / Shutterstock

8. Facebook: the changing fortunes of a tech titan

   November 27, 2019 11:47 Comments Off on Facebook: the changing fortunes of a tech titan

   It is not so long ago that Facebook’s halo shone brightly. It was apparently created with the most laudable principles in mind: to connect people and to create communities around issues that people care about. For advertisers, it provided the holy grail of being able to create highly targeted ads and deliver them to the right user at the right time.

   But then it all went wrong. The company has been buffeted by a series of major privacy and security scandals on a seemingly almost monthly basis. Its reputation has plummeted in inverse proportion to the number of negative headlines it has received. Is this the beginning of the end for Facebook? And is it still a brand safe platform for advertisers?

   What’s gone wrong for Facebook?
   

   What hasn’t? The real troubles started in 2016, when Facebook faced accusations that it had allowed external forces to interfere in the UK’s Brexit referendum and the US presidential election, as well as allowing the spread of misinformation. Then, of course, came the Cambridge Analytica scandal where a whistle blower claimed that the data analytics firm working with Donald Trump’s election campaign had been given access to the personal information of up to 50 million individuals in order to target them with personalised political ads.

   That saw the opening of the floodgates: in the last 18 months there have been multiple scandals, including claims of sensitive data being given or offered to third parties such as Spotify, Netflix and a Russian email service linked to a close associate of Vladimir Putin; the spreading of fake news; the enabling gender and racial discrimination in job and housing ads; the hacking of 30 million accounts; the inflation of video view metrics; and a smear campaign to silence or discredit prominent Facebook critics. Most recently it emerged that Facebook is still leaking data to third parties, and last week it was in trouble for refusing to follow rival Twitter’s lead and limit or ban political ads.

   A sharp decline in corporate reputation

   This scandals and controversies have had severe reputational ramifications for Facebook. It now has an exceptionally low reputational score in the Reputation Institute’s US RepTrak ranking, below even a cigarette company. This, according to the Reputation Institute, is because of Facebook’s response to these crises, rather than just the crises themselves: Mark Zuckerberg and his leadership team have always focused on trying to protect their image, rather than their reputation.

   Is Facebook still a good option for advertisers?

   Of course, many of these issues are rooted in the fact that Facebook makes the lion’s share of its revenue from its advertising business: last year, 98% of their global revenue was generated from advertising. User data is at the heart of the product it offers advertisers. But will their problems have any impact on marketers? There are queries around a decrease in the number of active users, as well as in the quality, effectiveness and reliability of consumer data – and, of course, whether continuing to use Facebook’s advertising products insinuates that you are ok with their behaviour. However, it would be safe to assume that the many people who still use Facebook – and their number is in fact increasing – aren’t unduly bothered by the scandals that the platform has faced. Furthermore, while Facebook is taking steps to improve privacy and security, they will always ensure that their product offering – their core income – stays useful and relevant to advertisers. Marketers should focus on ensuring that their advertising stays relevant, diverse and emphasises the brand’s commitment to data security and privacy. It is also worth thinking deeply about what targeted advertising contributes to your marketing strategy: are you actually accessing new customers, or just those who would already buy your products?

   Thanks to Facebook’s reliance on advertising revenue, advertisers are in a position of great power. They could use this to great effect: by teaming up with agencies and advertising bodies they could make it clear to advertising platforms such as Facebook exactly what they expect in terms of privacy and data usage. In the face of such a unity of strength, could they refuse to comply?

   How can Facebook win back the trust of its advertisers and users?

   As for Facebook themselves, they must continue to focus on the issues of trust that currently surround its brand: it must be honest and transparent with both users and advertisers, and identify effective ways to eliminate the preponderance of fake news that still litters its platform.

   Facebook has undeniably played a key role in the targeted advertising revolution, but to maintain its status it has a lot of soul-searching to do.

   Image: Shutterstock

9. Is Snap really a threat to the Google-Facebook duopoly?

   November 13, 2019 10:15 Comments Off on Is Snap really a threat to the Google-Facebook duopoly?

   A few weeks ago we wrote about how Amazon poses a serious threat to Google’s search dominance. But Amazon is just one of a few companies snapping at the heels of the Google-Facebook duopoly that has for so long dominated digital advertising. Third quarter results, released in the last few weeks, revealed that the ad businesses of Amazon, Pinterest and Snap all grew more rapidly than that of the industry giants in Q3. Amazon is the biggest disruptor in terms of size, but it’s Snap – owners of Snapchat – that is enjoying the fastest growth.

   Snap’s growth is remarkable
   

   The latest round of quarterly results were not a resounding success for Facebook or Google. While Facebook’s results were better than expected, it recorded its third consecutive quarter of sub-30% expansion; meanwhile, Google’s growth is languishing below 20%, at 17.1%.

   Things were much brighter for Snap: its ad business grew 50% year on year in Q3, and its stock price surged by over 175% this year as advertisers increasingly look to the platform to provide a return on their investment. Why?

   What is behind Snap’s success?

   Snap’s CEO, Evan Spiegel, has credited two major changes at the company for their success. The first is an initially poorly received redesign which Spiegel says boosted time spent watching premium content by 40%, thereby increasing ad revenue; the second is their adoption of a self-serve ad platform over the last two years, which has made it easier for brands to buy ads on the platform and expanded Snap’s ability to sell ads.

   Those ads are increasingly popular as Snap is good at leveraging its hard-to-reach audience and building innovative, intuitive ad products that increase ROI for advertisers. Its core userbase is the often hard-to-engage youth audience: 90% of 13-24 year-olds in the US say that they use Snapchat, and they’re highly engaged – they open the app on average 20 times a day, and dwell time is around 25-30 minutes, significantly longer than that of other social networks. All this gives brands plentiful opportunities to reach their audiences at the right time, with the right message – and that amounts to increased ad revenue for Snap.

   Snap’s range of ad products come in a range of different formats, including Snap ads which allow users to swipe up to visit the advertiser’s website or app and can be optimised against reach, clicks and sales; and commercials, a more premium offering which are unskippable and appear within premium content. They feel more like a TV buy for advertisers and have high viewability and completion rates. In October, Snap launched a new product to target direct-response advertisers, for whom Instagram – their historical home – is starting to feel a bit crowded. Its new dynamic ads allow advertisers to create ads linked directly to their product catalogues and can be served to users based on their interests, using a variety of templates created for mobile. This new product brings Snap’s offering more in line with that of its bigger competitors, and is one of a range of features that has helped to make Snapchat more shoppable, engaging and effective for marketers.

   Snap’s focus on the development of effective advertising formats is commendable, and will be key to its future success; indeed, it will be key to the success of the digital advertising industry as a whole. Traditional channels continue to have the upper hand when it comes to the price-effect ratio, and digital players must aim to emulate their success.

   AR is key to Snap’s future success

   While Snap’s star is certainly in the ascendant, there is still plenty of work to be done: it is still unprofitable and it only has 210 million daily active users – mediocre compared to the 500 million who use Instagram’s Stories product every day. CEO Spiegel stated on the quarterly earnings call last month that augmented reality (AR) will be crucial for the company’s future: each daily active user interacts with a Snap AR product, such as lenses and filters, an average of 30 times per day. This month the company is launching Spectacles 3, a redesigned version of its augmented reality sunglasses, and in the next seven to 10 years plans to integrate other AR wearables into its range. Snap has historically led the way in AR and has had viral success with some of its AR filters, but Instagram and Facebook are moving into the space, so Snap will need to move quickly to retain its first mover advantage and remain the dominant AR platform.

   So, is Snap a serious threat to Google and Facebook?

   Snap’s product development and innovation are turning it into a serious contender for advertisers’ ad dollars, and its growth rate means that the digital advertising giants – Google, Facebook and increasingly Amazon – need to pay attention, particularly as Snap has such high access to the millennial and Generation Z audience. It does however have a lot of work to do if it is to grow exponentially and become a real threat.

   Image: Shutterstock

10. Apple is retiring its iconic iTunes in a move reflective of a changing industry

    June 10, 2019 10:48 Comments Off on Apple is retiring its iconic iTunes in a move reflective of a changing industry

    Apple is retiring its iconic iTunes in a move reflective of a change in industry

    Back at the beginning of the millennium, the music industry was in a serious state. CDs were in decline as consumers digitised the way they consumed music: but they were doing it for free via Napster and other pirate websites.

    And then, in 2001, the industry’s knight in shining armour appeared, in the shape of Steve Jobs. He announced the birth of iTunes at the Macworld Expo, heralding a music revolution. The era of MP3 music was here, and over the next six years Apple would sell more than 100 million units of the iconic iPod with which to listen to those MP3s. Apple was at the pinnacle of its success, having redefined what music ownership looked like: no longer physical records, tapes or CDs, but a world of songs in your pocket.

    In the 18 years since its launch, iTunes has become a media behemoth, a one-stop shop for users to consume not just music, but movies and TV and, latterly, podcasts too. But over the last few years, downloading has been eclipsed by a new kind of access: digital streaming.

    A new contender in the market

    In 2008, just a year after the launch of the first iPhone and when iTunes was at the height of its powers, a small Swedish start-up called Spotify launched its music streaming service across eight European markets. Its two-tier model – free to the consumer ad-funded, and a premium subscription option – gave users on-demand access to stream millions of tracks. Music streaming was still in its infancy, accounting for just 1% of global music revenues in 2007, and Spotify’s initial growth was good but unremarkable. By 2013, they had 30 million active users and 8 million premium subscribers.

    It is the six years since 2013 that have seen a seismic shift in how music is consumed. By March of this year, Spotify’s user base had skyrocketed, with 217 million active users and 100 million premium subscribers around the world, a number which looks set to continue growing. By opening up the streaming market and persuading users to give up ownership of their music, Spotify has arguably redefined the music industry, just as Apple did when it persuaded users to give up physical ownership.

    The consolidation of Apple

    iTunes’ download model was starting to look clunky and old-fashioned. In 2015, Apple launched Apple Music, its streaming service which it hoped would compete with Spotify and other broadcasters with its three distinct components – on-demand streaming, radio and Apple Connect, which allows artists to upload songs, videos and photos for followers. Since then, as streaming has increasingly become the norm, there have been rumours that iTunes would be wound down.

    That finally came to pass this week, as Apple announced at its annual Worldwide Developers Conference in San Jose that it would replace iTunes with standalone music, television and podcast apps. This will align Apple’s media strategy across the board: iPhones and iPads already offer separate apps for Music, TV and Podcast, and Mac/Macbook users can expect the same.

    However, the move is symbolic as well as practical. As Amy X Wang says in Rolling Stone, “by portioning out its music, television and podcast offerings into three separate platforms, Apple will pointedly draw attention to itself as a multifaceted entertainment services provider, no longer as a hardware company that happens to sell entertainment through one of its many apps” – and that’s increasingly important as iPhone sales have started to slow. Garden Tower 2 can be used inside or outside. However, most people use theirs indoors. The reason is that the composter was originally marketed for those living in cities with small homes and no private outdoor space. It’s the perfect solution to having your own garden in an urban apartment environment. Read our detailed Garden Tower 2 review to decide if this innovative kitchen composter is right for you. The composting container’s rotating design ensures each plant gets adequate sunlight. The rotating feature also makes it easy to access all of your plants.

    Consolidation moves reflecting the wider market

    This move towards entertainment services is being seen across the technology and communications sector: we’ve seen the tech giants buy up rights to live sport, while AT&T acquired Time Warner for $85bn and Disney bought most of the 21^st Century Fox empire, fending off an offer from Comcast. This trend is of course being driven by changing consumer behaviour as internet connections over 4G and now 5G accelerate – allowing for uninterrupted streaming of music, TV and films. We’re seeing the effects of technology on the media and communications industries, and lines between these sectors will continue to blur. This blurring of boundaries will then pose another issue on how they can all be monitored & assessed both separately and in totality.

    Image: Shutterstock