Welcome to the TL;DR Roundup, Mindstream Media’s (almost) weekly recap of the biggest stories in digital media, marketing and advertising. We know there’s too much going on to read everything, so we break down the most important stories for you.
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Facebook’s data dump
The biggest news this week in social media was the ongoing controversy surrounding Facebook, Cambridge Analytica and the reported misuse of data belonging to 50 million Facebook users. CEO Mark Zuckerberg provided a much-awaited response to the situation on Wednesday in a post on his Facebook page.
We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you. I’ve been working to understand exactly what happened and how to make sure this doesn’t happen again. The good news is that the most important actions to prevent this from happening again today we have already taken years ago. But we also made mistakes, there’s more to do, and we need to step up and do it.
If you’re looking for a quick recap of how we got to this point, Robinson Meyer of The Atlantic did a solid job of summing it up in three paragraphs, including this one about how it all started:
In June 2014, a researcher named Aleksandr Kogan developed a personality-quiz app for Facebook. It was heavily influenced by a similar personality-quiz app made by the Psychometrics Centre, a Cambridge University laboratory where Kogan worked. About 270,000 people installed Kogan’s app on their Facebook account. But as with any Facebook developer at the time, Kogan could access data about those users or their friends. And when Kogan’s app asked for that data, it saved that information into a private database instead of immediately deleting it. Kogan provided that private database, containing information about 50 million Facebook users, to the voter-profiling company Cambridge Analytica. Cambridge Analytica used it to make 30 million “psychographic” profiles about voters.
The good, bad and ugly of the fallout
The public response, understandably, hasn’t been great for Facebook or Zuck, but it’s not all bad.
The (relatively) good:
Facebook hasn’t experienced a mass exodus from advertisers (for now). But the company is on shaky ground with marketers according to a report from Digiday:
No advertiser has openly spurned Facebook yet. Instead, advertisers will wait to see how the threat of regulation develops, according to eight agency executives interviewed by Digiday. In the meantime, they are likely to investigate how their own campaigns and apps are using Facebook’s data.
Update: Since the Digiday article, Mozilla, the maker of the Firefox browser, decided to press pause on their Facebook advertising. Germany’s second-largest bank, Commerzbank, also decided to suspend their Facebook ads. Both companies left the door open to restarting campaigns in the future.
The hashtag “#DeleteFacebook” appeared tens of thousands of times on Twitter this week as Facebook faced blowback from users upset their personal information had been compromised. But, as this report from CBS News showed, ditching Facebook entirely can be tricky.
The controversy delivered a serious hit to Facebook’s market value this week. Now, I don’t know much about the stock market but based on this chart from the BBC, it looks like this week’s news hit the company hard.
Google wades deeper into e-commerce
A report from Reuters this week detailed Google’s efforts to expand their reach in the e-commerce world.
Google routinely fields product queries from millions of shoppers. Now it wants to take a cut of their purchases, too. The U.S. technology company is teaming up with retailers including Target Corp, Walmart Inc, Home Depot Inc, Costco Wholesale Corp and Ulta Beauty Inc. Under a new program, retailers can list their products on Google Search, as well as on the Google Express shopping service, and Google Assistant on mobile phones and voice devices.
According to Reuters, this move is likely to help Google compete with the growing threat of Amazon’s ad business (more on that later) and influence shopper’s purchase decisions. Google also hopes “the program helps retailers capture more purchases on desktop, cell phones and smart home devices with voice search – the next frontier for e-commerce.”
Google’s new news initiative
This week, Google announced the launch of the Google News Initiative (GNI) to “effort to help journalism thrive in the digital age.”
Here’s a sampling of what the search company had to say about the GNI in a blog post on Tuesday:
The GNI signifies a major milestone in Google’s 15-year commitment to the news industry, and will bring together everything we do in collaboration with the industry—across products, partnerships, and programs—to help build a stronger future for news. The GNI will build on these efforts and deepen our commitment to a news industry facing dramatic shifts in how journalism is created, consumed and paid for.
The GNI will focus the initiative on three main objectives:
- Elevate and strengthen quality journalism
- Evolve business models to drive sustainable growth
- Empower news organizations through technological innovation”
Can Amazon take on the duopoly?
On Wednesday, Amazon’s stock rose 2.7 percent to close at $1,584.91 bringing the e-commerce giant’s market capitalization to $768 billion. And with that, Amazon’s leapfrogged Alphabet (Google’s parent company) as the second most valuable publicly traded company in the United States, according to a report from Quartz.
Don’t feel too bad for Alphabet (or Google for that matter). The company is still neck-and-neck with Amazon and both companies have enjoyed an upward trajectory over the past year.
Amazon’s rising value could have something to do with the ascension of the Amazon Advertising Platform (AAP). Ad spending on AAP is still nowhere near the type of money Google and Facebook rake in, but companies like Amazon and Snap are starting to chip away at the duopoly.
Share of U.S. digital ad revenue (% of total)
It still looks a lot like winter
This week marked the official start of Spring, which the Northeast celebrated with their fourth Nor’easter in less than a month. Toby – which is, objectively, a pretty lame name for a storm – dumped up as much as 19 inches of snow on the east coast, cutting off power to almost 90,000 people, canceling thousands of flights and prompting countless memes featuring the oft-criticized HR manager from The Office.
With Toby hammering a good chunk of the eastern seaboard with winter weather, it’s easy to see how people could think it’s still holiday season rather than the first days of spring. Which is why it was so fitting to see eMarketer’s Holiday Shopping Preview drop this week.
The report requires a subscription, but here are some highlights from eMarkter’s review of the U.S. 2017 holiday season:
- Retailers posted their best holiday season since 2011. Total retail sales climbed 5.5 percent in November and December, aided by a 17.8 percent increase in retail e-commerce sales.
- Consumer confidence is at its highest level since 2000, according to some measures. With low unemployment and rising wages, the immediate outlook for consumer spending remains solid.
- Mobile continues to be a driving force for e-commerce growth. Retail m-commerce sales were up more than 40 percent in the fourth quarter of 2017, according to comScore Inc. eMarketer expects total retail m-commerce sales to grow almost 33 percent in 2018.
Check out these new ways to advertise on social
There were a couple big announcements from social media platforms for advertisers this week.
Pinterest Shopping Ads
Pinterest announced their “next shopping milestone” in a blog post on Monday:
We’re expanding Shopping Ads from a couple dozen retailers to hundreds of businesses. With Shopping Ads, businesses can seamlessly turn their product catalog into visual, actionable ads. Since Shopping Ads pull automatically from an existing product feed, they’re especially useful for brands that want to scale their Pinterest advertising.
According to a recent study from Pinterest, 70 percent of “Pinners” use the platform to find new product and 90 percent use it to help them make purchase decisions. Here’s an example of what the new ads will look like:
Image source: Pinterest
Facebook introduces retail solutions
On Monday, Facebook announced three new solutions to help businesses drive retail sales.
Store sales optimization
“Leverages the power of machine learning to help retailers show ads to people most likely to make an in-store purchase, even if they are not an existing customer.”
Personalized catalog experience (tabs for Canvas)
Facebook is “making the catalog experience on mobile even more effective by personalizing it through tabs for Canvas. Shoppers will see a collection ad in feed and when they click on the ad, they will be taken to a fullscreen experience and will see pages of a personalized catalog organized according to their interests.”
Categories for dynamic ads
This new feature allows advertisers to reach people early in the buying journey. “For example, let’s say someone is generally interested in new furniture but has not shown interest in a specific product yet. Businesses can use categories for dynamic ads to display images corresponding to that category of product, such as couches or tables, and inspire the person to take the next step in their shopping journey.”