Facebook Post Strong Earnings in Q1’20, Exceeds Analysts Projections
Its earnings season and Facebook has some relatively good news on that for the investors. It has impressively beaten Wall Street expectations on revenue and earning per share (EPS). Facebook ad revenue grew by 17% Y-o-Y despite the instability in the digital ad market due to COVID-19.
Image Credit: Facebook
Why does it matter?
Interestingly, Facebook was able to beat top and bottom-line revenue expectations amid the coronavirus crisis showing how its business is strong and growing. However, the company didn’t provide specific revenue guidance for Q2 due to the ongoing uncertainty but offered a snapshot on the revenues of upcoming quarters.
- Meanwhile, Facebook said that the current rise in engagement will continue but the usage will come down once the stay-at-home orders are lifted.
- The digital advertising industry has taken a hard hit due to shelter-at-home orders globally. Facebook said in a statement, “We experienced a significant reduction in the demand for advertising, as well as a related decline in the pricing of our ads, over the last three weeks of the first quarter of 2020.”
Let’s talk numbers
- Earning per share (EPS): $1.71 vs. $1.75 per share forecast by Refinitiv
- Revenue: $17.74 billion vs. $17.41 billion forecast by Refinitiv
- Daily active users (DAUs): 1.73 billion
Image Credit: Facebook
- Monthly active users (MAUs): 2.6 billion
- Family Monthly Active people (MAP): 2.99 billion monthly users across its family of apps. This metric helps to measure Facebook’s total user base across its main app, Instagram, Messenger, and WhatsApp.
- The average revenue per user (ARPU): $6.95
- Other revenue: $297 million which is driven by sales of VR headset ‘Oculus.’
- Cash and cash equivalents: $60.29 billion
What lies ahead?
- Facebook is the third internet company that posted strong Q1 results after Snapchat and Google despite the hindrances in the digital ad market. This shows big internet companies will keep dominating the advertising ecosystem due to the pandemic.
- CCS Insight chief operating officer Martin Garner believes the impact of the virus will lead companies to use digital services from advertising to collaboration.
“………..Although Google and Facebook will take a hit from Covid-19, we expect them to be leading indicators of recovery, as digital advertising and other services show early growth in economies getting back to normal.”
Google Cuts Marketing Budgets by 50%, Freezes Hiring.
Key Points
- Budget cuts and hiring freezes across marketing and across Google.
- An internal document reveals Google is cutting its marketing budgets by as much as 50 % for the second half of 2020.
- The marketing budget cuts may be a way to combat reduced advertising earnings in the wake of coronavirus.
- The development comes in less than a week from where Google is scheduled to discuss Q1 2020 results on 28th April.
Google is doing what other big tech companies are or will be doing soon to mitigate the coronavirus impact – cutting marketing budgets. An email viewed by CNBC, sent to the marketing employees this week was about budget cuts and a new hiring freeze for full-time and contract employees.
The e-mail stated:
There are budget cuts and hiring freezes happening across marketing and across Google…We, along with the rest of marketing, have been asked to cut our budget by about half for H2.
In 2019, Google spent $18.46 bn which includes employee compensation. One important area that required advertising was Cloud, as it competes with Amazon and Microsoft by hiring more sales representatives.it is unclear how such areas will be affected that need wide consumer reach.
However, Google confirmed that some areas’ budgets are being cut but not every area will be impacted as it adjusts plans.
A company spokesperson said in an emailed statement to CNBC,
As we outlined last week, we are re-evaluating the pace of our investment plans for the remainder of 2020 and will focus on a select number of important marketing efforts….We continue to have a robust marketing budget, particularly in digital, in many business areas.
Sundar Pichai, CEO in his memo last week stated,
The clear lesson from 2008 is that preparing early is key to weathering the storm and emerging in a position to continue long-term growth…We are reevaluating the pace of our investment plans for the remainder of 2020. That starts with taking a more critical look at the pace of hiring for the rest of the year.
…we continue to invest, but will be recalibrating the focus and pace of our investments in areas like data centers and machines, and non-business essential marketing and travel.
Sundar’s announcement emphasized that the company will not cut back in areas where consumers needed Google’s support for their growth and success. It will also continue with digital advertising which is in line with the stay at home audience.
Travel advertising earnings plummets:
Recently, a search marketer who knows travel advertising well tweeted the collapse of travel-related advertising and one of the contributing factors to a negative impact on the earnings.
When nearly 10% of your business is as a performance marketing supplier to Expedia and Priceline, and they stop advertising, the knock on effects are strong: https://t.co/TKNFl3YgOs
— Martin MacDonald 🏴🇪🇸🇺🇸🇧🇧 (@searchmartin) April 23, 2020
Following the news, Google shares had dropped nearly 2%.
Facebook Rolls Out Video Chat Messenger Rooms To Beat Zoom And The Likes
- Facebook announced 50-person video chat rooms called Messenger rooms.
- Regardless of whether participants have a Facebook account, they can participate in the calls.
- Messenger Rooms are an answer to Zoom and Houseparty for Pandemic.
- Messenger Rooms will roll out this week in a few countries and the rest of the world next week including the U.S.
Video calling services have seen a sharp rise during the coronavirus crisis and the use of video calling on Facebook Messenger has doubled in the coronavirus affected areas. On Friday, Facebook CEO Mark Zuckerberg delivered a live stream to announce the company’s retooled video products for users to connect while at home under quarantine. The video update perfectly fits Facebook advertising plans that focus on e-commerce.
As many countries issued stay-at-home orders, rival apps Zoom witnessed a drastic growth in the active users to 300 million in April, and Houseparty, owned by Fortnite-maker Epic Games, was downloaded more than 2 million times in the start of March. Facebook has seen the success of Zoom, the video conferencing sites popular among the companies that have sent employees to work-from-home. The biggest product launch ‘Rooms’ will be created via Facebook Messenger which allows 50 people to hang out at a time. The company plans to add the feature to Instagram, Whatsapp and it’s portal-video calling devices soon.
Key features of Messenger Rooms:
- People will be able to keep their room private, block unwanted participants, and invite people who are not on Facebook.
- Participants can use AR filters and change the background real-time
- Discoverable rooms will be listed at the top of the feed.
Image Credit: BBC
However, messenger rooms are not end-to-end encrypted like Group Facetime or WhatsApp call. Stan Chudnovsky, VP of Messenger said on the blog,
Room calls are not end-to-end encrypted, but Facebook says it does not view or listen to calls. The creator of a room can remove participants at any time, and rooms where illicit behavior is taking place can be reported to Facebook. (WhatsApp video calls are end-to-end encrypted, offering an extra layer of protection to users.)
Summary of Other Updates from Facebook
- WhatsApp will accommodate from four to eight participants in the video group calls making it a suitable competitor to Zoom.
- Facebook Live and IGTV: Facebook is creating advertising that fits in this environment especially in the areas that are popular among consumers like home cooking, fitness, and others. It will be open for business and more e-commerce activities will take place. 800 million people watch live streaming on Facebook and Instagram.
- Donate Button on Live videos: This helps musicians, artists, people, and activists can raise funds for causes during the coronavirus outbreak.
- Live via Audio only: with more musicians doing live concerts on Facebook Live, you can listen in case you cannot watch it or want to save on data.
- Instagram Live On Web: You can watch live videos related to any activity or product from the desktop.
- Portal Live: One of Facebook’s hardware projects that have seen a slow adoption but with the COVID-19 crisis the sales increased tenfold. You can go to Live to the pages and Groups devices from Portal devices and can also create interactive content for customers and communities.
- Facebook Dating Video Chat: It is in the nascent dating service. Facebook dating is a virtual meet up and does a video chat with matches on Facebook first.
Facebook is going to report quarterly earnings next week and it has already said that the revenue has been negatively affected due to the coronavirus crisis as advertisers have pulled back on spending and online ad auction prices have been reduced. According to eMarketer Facebook ads and the amount it earns from each unit sold has decreased by nearly 50% in some categories.
Debra Aho Williamson, principal analyst at eMarketer, in her note said,
“Those losses will be made up for by gains in categories that increased their use of Facebook advertising at the end of March, either to market products or services aimed at people staying at home, or to take advantage of drastically lower ad costs.”
Snap’s Q1 2020 Report: Users and Revenue Increases, Ad Spend Declines
Snap Inc. the parent company of the popular social media platform Snapchat reported in its Q1 2020 earnings – strong gains in both users and revenues but a dip in advertiser spend despite the growing concerns about the coronavirus pandemic.
No Coronavirus Negative Impact on Earnings-Yet
The stock was up nearly 20 percent after the company reported a 44 percent (Y-o-Y) increase in its first-quarter revenue to $462 million. That was a far better performance than expected. The ad spend growth grew 58% in January and February, and fell to roughly 25% in March (when the pandemic grew rapidly), the gains from the first two months helping to end the quarter positively.
CFO Derek Andersen said during Snap’s earnings call,
“The economic environment has become challenging for many of our advertising partners.”
The company didn’t provide guidance for Q2 citing uncertainty related to the worldwide economic crisis but in an unusual step, provided revenue growth figures for the first week of April. The advertiser mix on Snapchat contributed to the Q1 performance and continues to help in Q2. Snapchat has a few small business advertisers unlike Facebook and Instagram, however many large advertisers are ready to commit on a regular basis.
Snapchat CEO Evan Spiegel said in a statement,
“We are grateful for the opportunity to serve our community and partners during this difficult time.” He added, “Snapchat is helping people stay close to their friends and family while they are separated physically, and I am proud of our team for overcoming the many challenges of working from home during this time while we continue to grow our business and support those who are impacted by COVID-19.”
Strong User Growth and increase in Engagement
Snapchat’s daily active user (DAV) base reached 229 million in the first quarter across all regions and on Android and iOS.This represents a 20 percent increase from last year.
Image Credit: Snapchat Earnings Slides
There is some concern over the divergence of Snapchat’s users’ growth. Snapchat added 2 million more users in North America- the most lucrative market but the majority of the growth was from the ‘Rest of the World’ category. Snapchat has witnessed significant growth in the Indian market since it revamped its Android app, a key contributor to the ‘Rest of the World’ category.
However, the key area of opportunity that Snap would prefer to boost growth in the US as it will get more 3.5x more revenue per user.
Image Credit: Snapchat Sides
Besides, the time spent on Snapchat has increased due to coronavirus. CEO Evan Spiegel reported that the average time spent in the last week of March vs. the last week of January was up more than 20%. On the other hand, markets like the U.K, France saw more than a 30% increase.
Mobile app tracker App Annie’s findings point out 54% growth in average time spent per user on Snapchat in South Korea from March1-14,2020, compared with Q4 2019. Italy marked a 36% increase and Japan was up 23%.
Image Credit: eMarketer
Additionally, this pandemic increased communication with friends and family on Snapchat, up more than 30% in the last week of march compared to the last week of January whereas in some other geographies there was an increase of more than 50%.
Games, TV, Chat, Calling are other highlighting points of group engagement.
Snapchatters watching Snap’s premium content hub ‘ Discover’ grew 35% Y-o-Y in Q1 2020 which represents the total time spent watching shows more than doubling this quarter. The company also mentioned hiring Hulu senior vice president of advertising sales Peter Naylor.
Chief business officer Jeremi Gorman said,
“As TV budgets migrate to digital, they move to places that carry the same advantages of linear, and we’ve been investing in those things for years. Peter is just the most recent investment in the strategy.”
Snap has also launched App Stories -brings its popular stories feature to the app. It also launched five new Snap games globally. With the use of videoconferencing and live streaming to connect with friends and family, Snap has seen more than 30 times increase in the daily download of Snap camera, a desktop app that allows people to add lenses to whichever video service they use. Besides, it added more than 120 partner app integration with its Snap Kit, and the numbers of Snapchatters using on a monthly basis is up 75% from the Q4 of 2019.
Direct-Response advertising budgets make up half of the revenues.
Snap continues to double down on direct response advertisers especially in games, home entertainment, CPG, and eCommerce. Direct response advertising now accounts for more than half of Snap’s revenue.
Speigel noted,
“In the short-term, we’re shifting sales resources and pulling forward some investments in direct response to better serve the advertisers who are trying to reach our audience during this time. For example, we can help movie studios pivot to digital releases by supporting them with a suite of products designed to track titles over a dynamic and flexible release window. We’ve also seen many large brands doing a lot of important things to help their community and the broader world, and we’re helping these brands communicate their efforts to our audience in a thoughtful and approachable way that inspires others to make a positive impact.”
Snapchat recently worked with Universal on the promotion of the animated film ‘Trolls World Tour’ released digitally incorporating Trolls AR masks into Snap Camera add-on a feature that gained significant momentum as more people work from home.
Snap has worked immensely hard over the past few years to build out measurement capabilities and ad products to interest the direct advertisers resulting in nearly double total ad revenues in two years.
So what has Snap done to get this?
Snap introduced conversion-optimized bidding- which allows advertisers to optimize toward their sales or app install gaols, conversion-tracking advertising pixels, and improved ad-targeting capabilities. This has attracted performance advertisers who already buy those types from other platforms.
Snap has focused on offering unique ad products like augmented reality platforms and easy self serve ad platform.
Chief business officer Jeremi Gorman said,
“Advertisers are looking for a way to make a dollar go further. “We have efficient pricing, and we’re a great place to come to get ROAS for the audience they’re looking for.”
There is also something for Snap’s brand advertisers. The company has doubled the amount of money committed via upfronts in 2020 vs. 2019. Snap is using its creative services to help brands distribute their PSAs related to COVID-19, like the filter from Adidas encouraging people across the United Kingdom and Germany to stay at home that was viewed more than 14 million times.
Snap has a lot of potential and capacity to reach a young audience. Although things look gloomy for the remaining year of 2020, Snap appears more stable and an attractive platform for advertisers and partners. If Snap manages to expand its market appeal geographically, it will be well-positioned beyond COVID-19.
Project Agora Co-founds the New EMEA Video Advertising Platform- Union
Union, the joint venture of five leading technology providers has now launched a new video advertising platform in London for Europe, Middle East and Africa(EMEA) to help local content providers access to video ad spend from global brands who want to support local media at a time when trusted content is the need of the hour for their readers. At the same time, it enables international advertisers to activate video campaigns on the sites that really matter to their local audiences.
Union empowers local publishers to cater to the premium inventory demand by global brands. With a total of over 300employees located in 34 cities, Union and its founding members – regional technology providers PlayAD, Project Agora, ShowHeroes, Video Intelligence and Viralize enjoy strategic relationships with thousands of local market websites across EMEA region providing video content, monetization and technology to publishers.
This strategic partnership helps Union bring a blend of pre-roll and out-stream video formats to the market for advertisers to target. This is achieved using a powerful combination of programmatic and contextual targeting to reach nearly 300 million users on relevant, brand safe and trusted publishers. Union’s publisher partners involve global brands like Marie Claire, Elle, Vanity Fair, and CNN, as well as leading local publishers such as Aller Media, Axel Springer, Stryia, Libero and Funke Media Group.
Steven Filler has been announced as Managing Director for Union and will lead the launch across EMEA focusing on London, Paris and Amsterdam agency buying hubs.
With 20+ years of experience in the digital industry, Filler has held major commercial roles across a range of leading companies including The Guardian, AOL, and upon his appointment, he said:
“The current global crisis has highlighted the continued importance of local quality media in providing the truth and guidance to readers, so that they can be informed citizens. At the same time, advertisers demand more quality, brand safe video inventory and Union makes this possible through a single-entry point while also allowing brands to support the publishers that really matter to their local audiences.”
Odysseas Ntotsikas, founder of Project Agora, said:
“The launch of the Union is further reinforcing and expanding the reach of Project Agora’s mission to Keep the Open Web Open. Local Publishers so far unable to attract advertising budgets from international advertisers and trading desks can now see an uplift in such revenues by working with Project Agora, Union’s founding partner in Central, SE Europe and MEA. For local advertisers looking to advertise out of their home market there is now a unique opportunity to see their brand in the top local sites of every European market that people trust for their news and entertainment”.
11 Global Brands Create Epic Ads Entirely From Home During Covid-19.
Just weeks into global lockdown, advertising production has changed. It is now confined to homes with shoots canceled or postponed for the foreseeable future. Out of adversity, now comes creativity as advertisers are overcoming the hurdle of not being able to venture out with ads made remotely or entirely from home.
Video advertising isn’t stopped amidst the pandemic but is showcasing creativity in lockdown.
We have handpicked the best ads produced remotely in the COVID- era from around the world.
1. Apple: Creativity goes on
Apple is one of the top names of all brands creating ads from home. The tech giant has captured how consumers are creative amid the COVID outbreak and are using its products for drawing pictures on the iPad, produce video content on Macbook or Facetime with near ones. The film is produced in over two weeks starring many celebrities from their homes and ends with a line reading “Creativity Goes On.”
2. Women’s Aid: The Lockdown by Engine
Engine and Knucklehead created a campaign ‘The Lockdown’ – uses video shot during the daily excursions in London to capture the empty roads and emphasize that domestic abusers are no longer on the streets and are locked inside with their families. Women’s aid has set up a coronavirus advice page to help victims of domestic abuse.
3. IKEA: Making Home Count
An absolute delight to watch the video advertisement and beautiful creative ad in coronavirus outbreak. Ikea Singapore released ‘Making Home Content’ – a short ad made remotely by a team of creatives from TBWA to give thanks to those abiding the lockdown rules. It covers simple ‘joys’ like pets, cooking, and playtime with children and family, using the footage shot by the team who captured their lockdown lives.
4. Vodafone Italy: Importance of Connectivity
Vodafone Italy launched an ad campaign made remotely by the crew to demonstrate the importance of connectivity and raise funds for the Italian Red Cross during the pandemic. The ad features the strapline “Even when we can’t be close, we can be together”.
5.Honda Civic: #StayHome
The 35-second spot is the latest video ad made from home entirely for the Dubai region with Memac Ogilvy Dubai. A classic example of creative video advertising where it started like any other sheet metal commercial but with a twist. Honda uses a full-scale miniature car and the camera shots managed to trick the viewers for some time and feel like watching a real car. The ad ended on a hopeful note reading” Until we drive again” with the hashtag #Stayhome.
6.Porsche: Let it Not Tempt you
Another automobile ads made remotely is Porsche for Poland which created a film overnight with a series of graphics to encourage viewers to stay home despite the beautiful weather. It inspires Porsche owners to share photos of the parked cars on social media and comply with safety recommendations.
7.Nike: Play for the World
Next on ads made remotely is Nike’s inspiring campaign where it is paying a tribute to all the athletes who are training indoors due to quarantine.
8. Birds Eye: So, What’s For Tea?
This creative video advertising ad was made to help families cope with the coronavirus crisis presenting life hacks like entertaining families that include coloring pages and word searches. Families can download the life hacks on the brand’s website or social media page.
9.Ad Council: #StayHome, Save Lives
The Ad Council has joined hands with Google, the ANA, and other advertising, media, marketing trade associations, on a wide movement that pleads to the people of America to #StayHome Save Lives in order to slow the spread of coronavirus.
10. The BMW: Contactless Experience
The highly affected sector due to these unprecedented times is automotive. A unique and creative corona ad introduces the BMW India Contactless experience with a digital-purchase experience that gives the feel and benefits of a brick and mortar dealership at a click of a button and from the comfort of the home.
11. Audi: The Drive
Audi is offering a pleasant and innovative experience to house-bound Australians through the freedom of open roads. Audi Australia created a 4 hour long long-slow TV film, a masterpiece of creativity in lockdown for the viewers to experience the soothing nature of the road trip from the comfort of their home.
The creative ads in coronavirus pandemic show that it has not put a damper on the creativity of the people and will inspire audiences to StayHome, StaySafe to win over these tough times.
IAB GCC Report: Ramadan Budgets Shift Towards Performance based Ad Spends
Advertisers are changing their digital ad spend due to the ongoing coronavirus crisis affecting the businesses and the economy. The Dubai based Interactive Agency Bureau(IAB) that empowers GCC based media and marketing industries surveyed the marketing teams of nearly 30 Agencies and Clients between April 6 to April 12, 2020, for the impact of COVID-19 on Advertising.
Here are some main points from the report:
The findings suggest a huge downturn with 48% of respondents expect less than 30% of budget cuts in April and 41% of respondents see a decline in ad-spending or paused post-June.
With the Holy month of Ramadan expected to begin within weeks, there are still 34% of respondents who are yet to take decisions on Ramadan budgets while 51% are unsure about the directions of second-half budgets in this unprecedented period. This suggests that the majority of marketers are in ‘wait-and-see’ mode.
The report also states that 59% of respondents are suggesting that they will significantly increase the ‘Performance-based’ ad spend. This indicates marketers are in favour of Performance media in the second half.
Even though advertisers might be working on leaner budgets but are opportunistic to see 17% growth in Digital display in the second half. They also expect a rise in the audience and programmatic buying.
Lastly, 77% of respondents see COVID-19 will have a significant impact on the MENA advertising market than the 08/09 financial crisis.
Take a look at the pictorial images of findings and methodology from the report.
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There is a wave of optimism about the second half right now and are looking ahead of a post-pandemic world whenever it is possible. Definitely, there is a pendulum swing in the minds of advertisers whether to decrease ad spend or pause it entirely to what we hope for a clear picture very soon.
The 5 Digital Advertising Trends That Matter in 2020.
It’s funny how wide the gulf is between December and January. The final month of the year is often spent looking back, analyzing the good, the bad and the ugly, trying to predict what will come next, whilst in January we regularly yo-yo between being overly enthusiastic and looking shell shocked. New years are like that, but 2020 is more special than most; it’s a new decade, which means we all need to redouble our efforts to forecast far into the future to see what lies ahead. As much as I’d like to declare myself the ‘Digital Oracle’ when it comes to the big digital advertising trends shaping media today, much of what we see now is an evolution of the changing landscape. The digital media machine has been transforming at a rapid rate for the past 10 years, with video fast becoming the centerpiece for generating consistent engagement and a decent ROI.
Clearly this isn’t exactly new news. We currently spend some 84 minutes a day consuming video content online and according to Cisco, by 2022 video content will account for 82% of all online content – so yes, this is not a medium we can afford to dismiss lightly. There’s always a knowing smirk whenever marketers declare that ‘video is the future’ but given these figures and the growing popularity of platforms like TikTok edging it further up the priority list, I’d say the video is firmly for the here and now as well.
Of course, video is only a part of the larger digital media story. Granted, it’s a fairly big piece of the puzzle, but there are other factors at work when it comes to deciding our priorities for the coming 12 months. So, with this in mind, here’s my take on what I think will be important for digital media in 2020…
1. Lights, Camera, Action!
It won’t come as a shock to anyone that video content is rising up the ranks in terms of importance, winning the hearts and minds of advertisers and consumers alike. It’s already a medium we’re spending vast amounts of time and money on, with Zenith forecasting online video ad spend to reach $61 billion by 2021. World domination sounds inevitable, doesn’t it? What will be interesting to see is how platforms adapt to this, pivoting to focus more on long and short-form video content as standard, and not as an afterthought. TikTok has a huge advantage here given it started life as a video platform and will continue to capture market share on a global and regional level in 2020, leaving the likes of Facebook and Instagram playing catch up. We saw last year how TikTok created a much-needed point of difference to the online filtered reality we had become accustomed to, highlighting a growing trend for creative expression that focuses on users, and it is this ‘unpolished’ approach that will influence future brand content. Advertisers will now have to think about both mobile and video-first when it comes to executing their campaigns, which will prove a game-changer over time. And, as we all get more comfortable becoming amateur videographers, shooting quick and unedited content on our smartphone, the raw, unfiltered look will grow even further in popularity, challenging the influencer dominance still present across most digital mediums.
2. Playing The Influencer Game
Speaking of influencers…this kind of content has almost done a 360 in terms of how we have come to view it. Once upon a time, it was the golden goose of marketing, only to be challenged and criticized for lack of transparency in measurement and effectiveness, landing to where we are today; influencers are accepted, but with conditions. Given that this is a global industry said to be worth $8bn and growing, it’s clear that influencer marketing is going nowhere anytime soon, with brands keen to invest in the right kind of people. In 2018 there were 3.7million brand-sponsored influencer posts on social media and that number looks set to almost double this year. Transparency has been the buzzword of the digital advertising space for the past few years and this extends to the influencer market too; everything must be upfront and tagged as a paid promotion or advertisement if they are to get user buy-in and earn their trust. Brands in response are now shifting their strategies to work with a range of niche influencers that will resonate more with their target consumer, aiming to make an authentic connection above all else. This is part of a broader trend too; the move to relevancy over-reach – it’s no good hitting loads of eyeballs if they’re not the right ones. On the back of more influencer guidelines and accountability, I predict we’ll also see a rise in User Generated Content (UGC) appear in the marketing mix as standard. Anyone can now create content, be it written, visual or video through a touch of a button, so why not leverage this potential to create a viral campaign? We’ve seen it take off with YouTube in the past (cat videos, anyone?) or more recently though user-created filters on Instagram (I’m the Genie from Aladdin, how about you?) and of course, moving to TikTok, where the focus from day one was on real people, AKA, the ‘content creators’ of tomorrow. In 2020, we’ll see social media, and in particular platforms like TikTok, become more & more widely utilized by everyone, experimenting for fun whatever their age.
3. The Rise & Rise Of Social Commerce
Last year was where social commerce really started to gain traction, with platforms like Facebook, Instagram and Pinterest linking awareness and consideration with the actual conversion. Since the explosion of social media, brands have been looking for a way to embed their products into a narrative, easing the consumer in with creative posts that have a shoppable element; in other words, an ad that isn’t an ad. If the goal is to engage with consumers on a platform and device that makes sense to them, then this could be the year that we see conversions start to happen in a big way through mobile. According to data from eMarketer, in 2020 the time spent on these devices will surpass time spent watching television, with social media referral traffic growing over 100% in the last two years – more than any other channel; if that isn’t a clear signal that we need to pay attention to the power of social mobility, then I don’t know what is. As online platforms begin to up their presence on key social channels, adding exploration and entertainment into the mix, brands will be able to deliver a more seamless and integrated experience overall, especially as visual search increases in popularity. From a business perspective, this new layer to social media helps underscore its value to the C-suite decision-makers, showing them how spending on these channels can generate leads and increase sales too.
4. Say Hello To Elevated AR/VR Experiences
There’s the filtered reality of carefully edited images and then there’s a different kind of reality that cleverly merges fantasy with our real life, making the online experience that much more enjoyable. Whether it’s Augmented, Virtual or Mixed Reality concepts, last year we saw this technology really begin to take off as brands leveraged custom filters and digital-heavy campaigns to place ‘the experience’ at the heart of their engagement and retention strategies. AR resurfaced, at least as far as the newer generation was concerned, within the gaming world thanks to the popularity of Pokémon Go, but it’s also now a very credible means to reach your consumers on various levels. Fun filters can go viral in seconds, but don’t discount how this technology can be useful too. Take IKEA’s AR-enabled app that allows consumers to ‘place’ furniture directly in their living room, giving a whole new meaning to ‘try before you buy’, or how about TikTok’s Diwali campaign? Successfully merging the online and offline experience, the platform gave its users a way to record interactive greetings in a mall setting, customize with different effects and then share to their network and family members. As this kind of technology becomes more widely available and adoption increases, we’ll see more ‘one-off’ experiences like this pop-up, largely guided by social trends, as creativity shifts up a gear with 5G enabling fast, fearless and on-the-go campaigns to be enjoyed at a time and place of a consumer’s choosing. By 2025, Statista estimates that the AR market size will be worth $198bn – so if you don’t already have plans for this, I’d suggest now is the time to make some inroads in understanding what this technology has to offer.
5. Brand Voice 2.0
Try not to roll your eyes when I say this one word: purpose. I hold my hands up that this is so overused in brand communication today, almost eclipsing everything else that the industry stands for. Let me break it down. In the race to appear ‘conscientiously conscious’ (go on, try saying that 10 times) about everything that matters to the consumer today, brands have almost unwittingly backed themselves into a corner, trying to instil a sense of identity, and yes, purpose to set them apart from their competitors. Here’s the thing though, if you try to latch onto the latest trend without context, consumers will waste no time in calling you out publicly. Instead, brands need to rediscover their voice to cut through the clutter, producing content that is appealing, useful and engaging. Sounds easy right?! In essence, consumers don’t want convoluted campaigns. They don’t want to be preached or talked down to and they don’t want to be underestimated either – in short, they want something authentic and real. Brands have the unenviable job of balancing long-term loyalty with ‘in the moment’ quick wins that connect with users at any given time. To do this, they’ll need to listen to their audience, anticipate their needs and then create tailored 1-1 messaging that will resonate. The technology that will truly enable this kind of personalization is coming, giving brands the key to unlocking sustained success built on an authentic offering.
So, there you have it – my view in a nutshell, and full disclosure here: I’m not claiming to be a fortune teller of any kind, gifted with foresight on what will be an absolute certainty for years to come. Ultimately though, we live in a perfectly imperfect world and If we could accurately predict everything that’s ahead then we’d be laughing, but then again… where would the fun in that be?
Wassim Mneimneh
Business Director – DoubleVerify
Wassim Mneimneh is a Business Director at Double Verify, MENA specializing in Strategic Media Management, Digital Marketing Strategy, Mobile Marketing & Technology, Media Planning, Procurement & Sales.
How Companies Like Snapchat Are Saying ‘NO’ To Targeted Ads
Do social media sites track you? In recent years, we have seen social media giants being fined multi-million dollars for breaching privacy.
A simple click, a like, a plain share, used in measuring the effectiveness of the advertising campaign kept users in the dark about how their data was being tracked. And all this began with the need for targeted ads.
Targeted Advertising is a means of advertising where consumers’ online activities are analyzed through cookies and data-mining, and in doing so, intrudes the privacy of the consumer.
Snapchat, the ‘on-the-go’ platform for users, started gaining in popularity amongst the top social network marketing platforms due to its organic, unfiltered, and real-life content.
(Image Credits: Michael Cohen/ Getty Images for New York Times)
Why is Snapchat is continuing to say NO to targeted Ads?
In October 2019 talks at GS, Snap Inc. Co-Founder and CEO Evan Spiegel aptly discussed how social media and digital marketing have transformed the way people communicate. He has rightly touched upon the debate surrounding the privacy of social media users.
In spite of NO targeted ads, why are companies keen to use Snapchat to market their products?
The answer lies in their statistics –
– By December 2019, Snapchat reached 218 million active daily users (Statista Report – 2019).
– Snapchat users, open the app over 20 times a day and spend an average of 30 minutes creating 3 billion snaps a day on the platform.
– Of the Snapchat users, the millennials and Generation Z, almost ¾ of them are under 25.
– Snapchat has more than 14 billion video views per day
– 18% of all social media users also use Snapchat.
– 76% of Snapchat users are also online shoppers.
What Marketing goals do marketers aim with Snapchat?
- Brand awareness
Almost 4 out of every 10 Snap chatters discover brands through Snapchat celebrity endorsements and online posts by expert bloggers or via vlogs (as per Global web index, July 2018).
- Lead Generation
For those trying to expand the top of your marketing funnel, Snapchat advertising lets you create ads within Ad Manager to drive users to download, form fill, or register.
- Driving local traffic to your website
Custom audiences are a success on Snapchat’s platform. The smaller the audience size, and the more specific the user types, it is easier to reach them. You can choose audience sizes and specific cities/countries to target.
- Increase Video Ads
Since ads are video-based, Snapchat provides a platform on its site for creating and editing video ads. This means without expensive outside or third-party editing services you can utilize the budgeted amount to increase the number of ads on Snapchat.
- New audiences
If your product can appeal to a younger demographic but you are unable to connect with them on other platforms, then Snapchat could be your best bet.
- Website views and conversions
A Snapchat ad encourages the user to swipe up, read more, or check out the website leading to a direct conversion through Snapchat advertising.
- App Installs and Engagement
Snapchat advertising is uniquely targeted to mobile users in a way that Facebook, Twitter, Pinterest, and others can relate to but never quite imitate. The target audience is only a touchscreen away from the app store – or a tap away from a deep link placing them right where you want them in-app.
What are the available ad formats on Snapchat?
Snapchat offers three different kinds of ad formats.
i. Snap Ads: Snap Ads appeal to the widest range of advertisers. They come in three forms. Long-form video, website traffic, and app install.
ii. Filters: Filters show up when you take photos on the app. They are designed for brick-and-mortar locations or for large live events.
iii. Lenses: Like filters, lenses show up on selfie shots and are best reserved for wide-spread brand-awareness campaigns.
How will my marketing campaign work on Snapchat if there are no targeted ads?
Like on every social media platform test the waters. The advantages of Snapchat are,
a. Assess if your target market uses Snapchat
Depending on your product/service and the profile of your users, you can have a fair indication, if your target audience uses Snapchat. Or how about asking your Twitter followers if they are on Snapchat? Don’t simply conclude basis demographics that your product/service may not be fit to be marketed on Snapchat. CNN would not be on Snapchat if it thought youngsters are not really interested in world news.
b. Compare Snapchat data to your own demographic data on current customers
According to eMarketer, 6.4% of Snapchat users are going to be between the ages of 45 and 54 which is up more than 2% from 2017 and will be growing in numbers. Further 70% of users are women. Of these, 71% are less than 25 years old, and 38% of them enjoy an income of over $50,000.
Once your product fits the age, gender and lifestyle demographics of your current audiences, Snapchat may turn out to be a good place for your product.
c. Spend a small amount
As per Hootsuite, filter-based Snapchat Ads are as low as $5. The price only increases with the size of the reach. For example, Hootsuite found that an entire city cost $3,000 for them, while the immediate area around their office was only $13 for two days. This gives a first time advertiser to try out the platform without major spending
Conclusion
One of the reasons for the stupendous growth of Snapchat is the position it holds in terms of augmented reality. (Just launched Snapchat’s AR filters that are turning the floor into lava). Universal Pictures wasn’t the first company to place an advertisement on Snapchat, but it was the first to pay Snapchat for an ad. Taco Bell recently told Adweek.com that about 80 percent of its followers open its snaps and 90 percent of those people view the messages in their entirety. It’s easy to understand why brands might be willing to overlook some of Snapchat’s weaknesses when you compare it to the low single-digit engagement averages for organic posts.
How disruptive Blockchain is for the Digital Advertising Industry?
If the Tata group has employed 1000 persons in its’ blockchain unit, it is time to sit up to ask what Blockchain is and is Indian advertising ready to embrace blockchain?
The global blockchain technology market has almost doubled from USD 1.2 billion in 2018 to 2.2 billion in 2019. Further by 2023, it is estimated to reach USD 23.3 billion
In keeping with this changing scenario, in 2019, the number of companies worldwide offering Blockchain solutions for ad-buying also rose to 290 from a mere 22 in 2018. With clients like Unilever, Toyota, Kellogg’s, Pfizer, Disney, and Kimberly-Clark exploiting ad-buying blockchain solutions to eliminate middlemen in advertising, these 290 blockchain companies are successfully offering Programmatic & Decentralized Advertising, Content Marketing, and Social Media Marketing. The trend continues to rise as advertisers who are spending millions have begun to recognize the wasted advertising dollar spending due to the current programmatic advertising that automates buying, selling and placing advertising.
What is a blockchain?
Blockchain stores and secures data to be shared across networks and users. It is a decentralized, distributed digital ledger used to record transactions across many computers so that the list of records (called blocks) linked using cryptography, cannot be modified retroactively, without the alteration of all subsequent blocks/consensus of the network majority.
How does blockchain work?
Every blockchain has three parts:
- people/ companies dealing with one other,
- a relationship/common interest between all parties, and
- rules that form the basis of all transactions.
The blockchain technology system:
i. Every new transaction generates a hash which is a combination of numbers and letters eg. 263fb1aa85489991a2ef832ef10308a0. A cryptographic hash function is an algorithm that provides a hash value to the data.
ii. Transactions get entered in the exact order in which they occur.
iii. Every new transaction hash depends on the previous transaction’s hash.
iv. Any transaction away from the rules will create a completely new hash.
v. The nodes (computers in the network of participants) check to make sure a transaction has not been changed by inspecting the hash.
vi. Every node has its own copy of the general ledger (the blockchain) and with consensus algorithms like Proof of Work and Proof of Stake that allow limited fault tolerance.
vii. Once the transaction is approved by the consensus mechanism of the nodes then it is written into a block.
viii. The Blockchain updates itself every 10 minutes.
Why blockchain in Digital Advertising?
Advertisers have now started to realize that programmatic digital advertising is not able to provide them with adequate and precise information on what they’re buying and how much they’re paying for the viewed ads. In this ad buying, the product/ brand advertiser pays an ad agency to create the ad content and to distribute it on different platforms to reach the target audience/customers. According to IAB Programmatic Fee Transparency Working Group, 55 percent of programmatic ad revenue goes to ‘ad tech’ services, while publishers receive only 45 percent. Which simply means,
i. The advertiser’s ad dollars are being transferred diminishingly
ii. The advertiser is not aware of how much is the cost at every stage in the system.
Image Credits: Craig Adeyanju
With the worldwide digital ad spending reaching close to $333.25 billion in 2019 (50% of the global ad market), the blockchain solution is being viewed as an intelligent answer to maximize the spending on digital advertising and to form a direct connection between advertisers and consumers.
Image Credits: eMarketer
Will blockchain reduce mistrust in digital advertising?
A digital ad campaign includes video ads, banner ads, social media posts, blogs, podcasts, influencer marketing, etc. Today there are at least 23 participants in the ad ecosystem that get an ad from the Marketer à to the Publisher à to the Consumer à to return data from the advertisement campaign à back to the Marketer. Each of these 23 points can pose a point of loss of data or potential fraud, making it difficult to measure the true effectiveness of the ad campaign. Also, adding to the risk is leaving sensitive data open to misuse or theft.
As per Statista, digital advertisers have lost close to USD 19 billion in fraud in 2018 which is estimated to reach USD 44 billion in 2022 since the bulk of advertising ends up being served to bots instead of the targeted potential customers.
Blockchain’s core technology in digital advertising is a distributed digital ledger used by participants like the digital agency, ad networks/sellers, advertisers (with demand-side platforms like Amazon DSP, Spotad, Verizon Media DSP, Adobe Media Optimizer DSP, etc.) who collaborate together to measure ad impressions and related data. Blockchain runs algorithms called consensus mechanisms to detect any anomalies and do not record such data.
Advantages of Blockchain in Advertising:
(a.) To the digital advertiser
i. It reduces the markups as it cuts down the intermediaries in the advertising chain.
ii. Advertisers have access to shared pools of relevant data, already vetted by other participants and proven with the chain, making target ads more accurate and less expensive.
iii. Instead of paying for a general ad space basis user browsing history, the company can contract ad buying solutions for conditional space to show their ad specifically to potential buyers based upon their data-sharing preferences.
iv. Blockchain’s ledger-like system offers ad companies accurate key performance indicators like clicks and likes.
v. It separates bots (56% of all website traffic is bots) from genuine customers to publish ads directly in the users’ browsers than on the site.
vi. It offers complete transparency between advertisers and publishers.
vii. Since charges are on the block sheet it creates an ecosystem to reduce fraud
viii. Since every transaction is recorded, it provides complete transparency even with anonymity.
ix. Once a transaction is recorded and updated on the Blockchain it cannot be altered.
x. No one person or organization can turn off a Blockchain.
xi. Blockchain solutions are used for smart contracts where they automatically enforce obligations, rules, and penalties around the specific agreement.
(b.) To the Consumer
i. Since blockchain distributes shopping/search history data to the entire network and does not save it on a single company server, user information cannot be misused or sold to other parties.
ii. It facilitates target customers participation by rewarding them for viewing the ads (often in the form of tokens)
iii. Time stamping of date and location help certify the backstories are genuine.
iv. It provides complete anonymity to the user.
Conclusion:
The blockchain technology is setting new standards and changing the world of digital marketing. The decentralized peer-to-peer network platform between advertisers, publishers and users offer better opportunities to tackle excessive markups and ad frauds in the digital advertising industry. By tracking everything and eliminating middlemen, it simply means goodbye to confusing online ad spend and welcome trusted ad buying.
