#2: Holiday season

First of all thank you for all the emails on the first issue of this newsletter. Happy for any insights on your reading experiences, opinions and commentary. Now, let's start with Tiktok.

  • Tiktok makes the headlines on many an article now and not a few professionals are wondering, whether they need a strategy. A lot of the attention on Tiktok and not least its user growth stems from paid ads on a big scale. It's not exclusively an organic growth loop thus it's impossible for retention to be very good. Some say it's just an attention trap with no value in itself while others see it as the future school of mobile videography. Whatever. The stronger inhibitor for its growth in my view are future legal headwinds from regulators. In Europe or across the Atlantic they've all busied themselves with Facebook or big tech recently and Tiktok hasn't come to attention yet. But it will not enjoy such a long unchecked period as GAFA did. Regulators will not leave Tiktok unchallenged on content policy, Chinese censorship and data flows if it continues its success. What if Tiktok wants to start its own Libra?

  • Snapchat continues its comeback:

    Snapchat DAU Q3 2019

    After positive numbers for Q2, largely attributed to one successful filter and an app redesign, Q3 shows further user growth especially in rest of world and activity in stories. Stories viewership means ad views for Snapchat, hence good business news for them. Snap's other big asset is Discover which grew 40% yoy and needs to be built out further as Snap can't rely on ephemeral messaging (stories) only, now that Instagram came out with Threads (scroll down). For marketing Snap is sometimes seen as awareness placement, rather than website conversions, but now they've launched dynamic (product) ads. It might become very interesting (again).

  • Instagram launched a new app called Threads.

    threads app

    This is a spin-off of the regular Instagram app, focusing communication (Stories, videos, images) on users' close friends list, with dedicated inbox and notifications. This is aimed at Snapchat too or more broadly the user behaviour Snap tied down with its ephemeral stories/messaging and streaks. It might serve as a blueprint app for influencers too, who have already been charging users to list them on their close friends list, since the close friends-feature has been released late last year - but this is just my shy idea :)

  • There’s a study from Facebook on GenZ. While I think these generation-attributions are oversimplifications, this report provides insights like these:

    Clothing retailer ASOS created a youth-focused fashion line called Collusion, where everything is sustainable, animal-free and gender-fluid. Through a poll in an Instagram Stories ad, the brand discovered nearly two-thirds of respondents felt that clothes should not be gendered, providing insight into its customers and guidance for the retailer’s concept.

    Product and marketing might look completely different.

  • With the holidays season approaching, i.e. Black Friday and Christmas, CPMs are going to fly high. On a micro level, CPMs for target groups may be up for a rollercoaster ride. If you're plan is to power through with your own ecom-efforts, there are some pointers from Facebook [pdf] and Smartly. If you don't have to be live during these peaks, go small or off and come back on the 24th of December, when all of ecommerce is done and out for Christmas. Advertising after christmas and into January gets you the cheapest CPMs all year round.

  • As a companion to pixels/cookies on websites that are increasingly being blocked by browsers, Facebook is building up a server-2-server solution that sends signals from the advertiser's backend to Facebook's server via API calls. Together with regular pixels, this makes for a stronger signal which in turn helps to increase efficiencies, i.e. drive down costs. Only supported for advertisers working directly with Facebook as of now, however the roadmap “looks healthy". Every advertiser looking beyond platform KPIs like views and reach should get on top of this.

  • One of the reasons why people follow brands on Instagram is to keep up to date with things and discover new products – and ideally before anyone else. To help businesses keep people in the loop, Instagram tests a product launch sticker in Instagram Stories and product launch tag in feed that lets people set reminders for the launch date, preview product details and buy as soon as a product is available without leaving Instagram. This is part of the closed Instagram Checkout beta in the US:

  • With Snap’s comeback and Pinterest’s growth, attribution across mobile apps becomes even more difficult. How to attribute the success of your mobile Facebook/Snap/Pinterest campaigns and make them comparable with the ones on Google SEA? There is not one tool out there that successfully does this. The issue is that marketing platforms, which are operating in their own, closed ecosystems would need to explicitly provide features to infuse view-tracking-tags by third-party-systems, in order to track views from users, who are seeing ads on one of these platforms. This is not happening, so we are left with Google's cookie-based and Facebook's user-based tools.

    Try Facebook's free Attribution tool for a starter - another option is to work with a lift test calibration method across platforms. With lift tests you generally measure the ratio between attributed and incremental conversions. You can then take this ratio and turn it into a multiplier. Whenever you collect new attributed results, the multiplier is applied to convert the attributed conversions into estimated incremental conversions per channel.

  • Speaking of holidays season price hikes, cost cap-bidding may help. Or target cost or bid cap. I had the chance to talk to the responsible Menlo Park product-team recently and my takeaway was that these cap-strategies are underappreciated.

    Facebook Introduces Cost Cap Bidding to Maximize Cost-Efficiency

    Most advertisers are going with lowest cost though and yes, who doesn't want lowest cost? But there are products/offers no one buys online or where the consideration cycle is too long to be effectively captured by a single link ad magically appearing in newsfeed. One thing is using lead ads to take the sales cycle offline and another thing is to work with a cost cap. If your product is a Steinway or Audi and you are utilising lead ads, you could set a cost cap of say 500€ for a lead and still be profitable. It's valuable information for Facebook if you are willing to pay as much, rather than lowest cost for a lead which I would naively assume to be somewhere between 1 and 20€ CpL. Facebook optimises delivery within target groups depending on bids. Also, it might be worth testing cost cap once you’ve exhausted your audience, because the superior information that you are willing to pay 500€ a lead will give you a different slice of the target group.

As this will be the last issue for the year 2019, I wish you a merry christmas and a happy new year :)

Cheers,

Johannes

Share The Attribution of ROAS

#1: Commercialising Social

Hello,

And welcome to the first instalment of The attribution of ROAS on paid social and beyond. Let me know any feedback, wishes or questions on any of the points below and I’m happy to get back!

  • Instagram has successfully tested hiding like counts and Facebook is preparing to test this too. While users potentially feel bad about not getting enough likes for a post and may not post at all because of this, hiding like counts could increase users’ well-being and hence time spend. Together with the ever smaller prevalence of follower counts plus checking out directly on Instagram, this will move Instagram away from vanity metrics towards a real community around product revenue and video.

  • Facebook and Instagram are testing new shopping features. Instagram is testing the ability for businesses to promote organic shopping posts as ads and Facebook is testing to tie together dynamic ads (product catalog ads) and checkout on Facebook. Facebook says this will remove friction, true, but what it also does is removing those pixel-website-integration GDPR headaches. Facebook pitches this as zero friction future.

    More and more lights are coming on that Facebook is closing the loop on the blue app and on Instagram. Discover and shop products without leaving the app. Influencers were door openers for businesses in the past, they will lose that role to Instagram features and will have to evolve around product and video as the big number game of follower and like-counts will slowly dissolve.

  • In February, the Bundeskartellamt decided it’s time to unbundle Facebook. Well, said the Oberlandesgericht Düsseldorf, the processing of user data and competition law are two pair of shoes. Also, from a user’s standpoint, the processed data can easily be duplicated and handed to a different platform without weakening the user’s welfare. The rebuke of the OLG most probably is the end of this attempt, even though the Bundeskartellamt now appeals to the Bundesgerichtshof.

    Facebook, or Google for that matter, are not Volkswagen. If they need to change due to regulatory or user behaviour changes, they can roll out app updates within a couple of days. Volkswagen still has no competitive electric vehicle and is still in the process of finding/fixing those cars driving around with illegal Abschaltvorrichtungen.

  • For Instagram Stories, Facebook has begun rolling out templates, royalty free music as well as effects that draw attention to the call to action. Facebook and Messenger stories to follow. This will increase complexity for success while it creates competition at the same time.

    A good starting point to increase stickiness of story ads are interactive elements for story ads, i.e. the poll sticker, with more stickers coming soon. These stickers are added in ads manager when setting up the ad, so leave space for them during the creative planning phase.

  • On that note, video poll ads are rolling out this month globally. This increases interactivity and can optionally combined with a website link (watch - poll - browse) or an app install (watch - poll - install). This is cool! But even better:

  • AR ads are now in open beta. Two types of applications: Effects on people (faces, movement) and effects on/with objects. Try out lipstick, shoes, clothes, destinations, furniture - all in real life (well, is it?). It seems difficult to pull off, I know, but Spark AR Studio works like Photoshop. To take part in the beta talk to your account manager.

  • How to solve 9:16 content creation? Have a look at out how Chinese media companies like Tencent and Baidu are experimenting with vertical narrative: https://thenextweb.com/world/2019/07/17/chinese-vertical-dramas-made-for-phone-viewing-show-the-future-of-mobile-video/

  • To help measure offline Store Visits, Facebook is rolling out Store Visit-metrics for every campaign, not only those optimised towards store visits. And even though accuracy and statistical significance of the absolute number is in question without testing for increments, you can still compare creative assets or campaigns on a relational basis, to see what format/asset drove more store visits.

  • With some past client projects I had, businesses were going to great lengths fussing about targeting options on social, splitting up interests, gender and age groups into myriads of adsets. These days are long gone. Now I work a lot with a simplification and flexibility-strategy, namely:

    1. Dynamic Ads/Dynamic Creative - to not only trust your luck with 1 or 2 creatives/products but many more and quickly learn what drives results.

    2. Automatic placements - to deliver on all available placements, not separating out Instagram and Facebook or newsfeed and right-hand-side.

    3. Campaign Budget Optimisation - to automatically spend budget across adsets where it is most effective for a given goal instead of doing this manually.

    4. Simplified account structure - to let Facebook optimise within bigger audiences instead of having lots of niche targetings causing overlaps and friction.

    This is all about auction flexibility (and machine learning) to lower costs and increase efficiency. I have seen great success combining campaign budget optimisation with dynamic creative and automatic placement.

    What’s more, you remove a lot of technical campaign blabla from your internal conversations and have more and deeper conversations about products and goals.

    Let me know if you have questions on this.

  • I’ve met with Pinterest the other day to talk about roadmaps and their pitch towards advertisers. They will be offering a pin academy to help foster knowledge and at some point during Q4 shopping ads (product catalog ads) will become available in Europe. Apart from that it’s still early days for them, as half of the DACH-team hasn’t even started. Let’s spend all the marketing budgets we have to help them grow and professionalise ;)

  • Also they are testing Stories with selected businesses. Sounds like Instagram and Facebook Stories, but are more like Facebook’s Instant Experience (Canvas). People spend more time in Instant Experiences than they are spending on video views. So if you are looking for brand metrics it makes sense to tell your story and showcase your products not only through video but through these instant experiences too. Be it on Facebook, Instagram or Pinterest.

  • Shopify announced its most ambitious expansion yet, a network of fulfillment centers across the USA that will offer two-day shipping by the end of the year. In other words, Shopify is evolving from a software company to a software and logistics company with Amazon Prime-like capabilities. This might prove a relevant alternative to Amazon.

    I generally recommend Shopify for anyone with a low to mid-level setup. It has a strong integration with social and is a partner on Instagram’s Checkout beta too. However small businesses may find out they can have success with an Instagram-only strategy, i.e. no website. There a multiple small businesses in India that operate solely through Whatsapp (and Facebook is about to launch FacebookPay to make it even easier for these businesses to handle payments).

That’s it! I hope this newsletter provides value to your business - let me know :)

And please don’t hesitate to forward this to someone who might find it useful.

Best,

Johannes

p.s.: As an entrepreneur for future my office is closed today as I’m joining the global climate strike.

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