Morning Brew Daily - Temu's $2B Marketing Blitz & Campaigns Take to TikTok

Episode Date: February 13, 2024

Episode 256: Neal and Toby get into why politicians are using TikTok to engage new voters...and new users such as President Biden. Then, Beyoncé shocks the world with the announcement of her country album, but she isn't the only one who's jumping on the bandwagon. Next, Temu looks to attract US customers by doing what it knows best: spend millions on advertising. Plus, Toby examines an age-old trend of men paying for the first date. Lastly, the January gym rush is nonexistent and a radio tower mysteriously goes missing. Get your Morning Brew Daily Merch HERE: https://shop.morningbrew.com/products/morning-brew-daily-sweatshirt?utm_medium=multimedia&utm_source=podcast&utm_campaign=mbd&utm_content=shownotes Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Options are not suitable for all investors and carry significant risk. Certain complex options strategies carry additional risk. Options can be risky and are not suitable for all investors. See the Characteristics and Risks of Standardized Options to learn more. For each options transaction, Public Investing shares 50% of their order flow revenue as a rebate to help reduce your trading costs. This rebate will be displayed as a negative number in the “Additional Fees” column of your Trade Confirmation Statement and will be immediately reflected in the total dollars paid or received for the transaction. Order flow rebates are only issued for options trades and not for transactions involving other assets, including equities. For more information, refer to the Fee Schedule. All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Open to the Public Investing, Inc., member FINRA & SIPC. See public.com/#disclosures-main for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning, Brew Daily Show. I'm Neil Fryman. And I'm Toby Howell. Today, why Beyonce and every other musician is putting out country albums. Then you might be seeing a familiar face on TikTok soon, the president of the United States. It's Tuesday, February 13th. Let's ride. So we got the Nielsen numbers in, and unsurprisingly, Super Bowl 58 was the most watched Super Bowl ever. a hundred and twenty-three million U.S. viewers tuned in to see the scriptwriters hand the Chiefs victory across TV and streaming platforms, shattering last year's mark of 115 million. That means the game will also go down as the most watch broadcast in U.S. TV history, which means that now Super Bowl's account for all 10 and 29 of the 30 most watch U.S. broadcast ever. The finale of mass is the lone non-super Bowl holdout. Neil, what is going to be the next event to break this Super Bowl dominance? Well, it's going to be tough, but I think the only thing that could break the NFL's stranglehold is if Messi rounds up all of the best athletes in the world.

Rinaldo, Namar, Serena Williams, Travis Kelsey, LeBron, Tom Brady, Djokovic, Simone Biles, and organizes a 100 meter dash for $1 billion sponsored by Emirates. I think that could get at least 200 million viewers. That is the only thing that could bring the Super Bowl stranglehold. I literally had no. Would you watch that? Absolutely not. It's the most uneven event ever. You would have to have divisions or something like that. I think Mr. Beas already did something like that too. I'm a lot more practical. I think it's going to be the next moon landing because we haven't had a moon landing in decades now. And I think one's on the horizon. So I think if we all have a collective stream of that, that could do it. Also, the World Cup's coming up. It's going to be in America. If the U.S. plays England on July 4th, that will easily do it. No imagination. You can take your weird bizarro event, but yeah, I'm keeping it more on earth.

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but the very app that is banned on government phones now counts the president of the United States as one of its members. Biden posted his first TikTok with a caption, LOL, hey guys, during the Super Bowl on Sunday night. In it, he answered questions relating to the game and even got into which Kelsey brother he liked more, racking up over 6 million views in the process. Now, yes, this is weird when you consider the years-long

friction between the Chinese-owned company and the U.S. government, but it appears POTUS decided to bite the bullet in order to reach who else, the youths. Recent poll numbers from NBC News found that of the 18 to 34-year-olds, they surveyed who used TikTok. Biden holds only a 23% approval rating, and 44% they say they'd vote for Trump versus 42% for Biden. So it's clear his campaign thinks that by jumping onto the platform, security risk be damned, they can sway some voters in this upcoming election. This is the sign of our media times. Previously, you could buy TV ads.

Everyone was watching TV. Now only people watch the Super Bowl on TV. But to reach the use which Biden needs, you have to be on TikTok. It does seem very incongruous because they banned the app. on government phones. They might even ban the app overall. Government agency is looking into that. They've warned of privacy risks, but Biden really needs the youth vote to come out and where they are is on TikTok, and so he has to be on TikTok. Yeah, I will say, too, he is leaning into some of the internet culture and the memes around him. His profile picture is the dark Brandon meme of him

with kind of laser eyes, which is something that the right has used to kind of attack him. So he's kind of trying to co-op these narratives. And it's a fine line because if you do, do it right, then yes, you seem very internet native. But if it's clear that it's kind of his team doing it, then you can come off as a little inauthentic. So it's definitely a fine line he's walking. But so far, a few posts in, he's doing all right. Yeah. And we should say this is certainly not a U.S. phenomenon. Politicians all over the world are leaning into TikTok, maybe even more so than they are in the U.S. because TikTok is, you know, more embrace there. There's less government scrutiny. Let's talk about the Indonesian election, which is happening tomorrow.

There's three presidential candidates. All of them are going all in on TikTok. In Indonesia, which is the TikTok's second largest market, 57% of the electorate are Gen Z and Millennials. So you have these presidential candidates doing these funny dances on TikTok leaning into penguin memes and embracing K-pop in an effort to connect with the use. So this is a global phenomenon that TikTok has asserted its power as a major political platform where elections are going to be won and lost.

And I think it's so interesting how the candidates are using TikTok because the leading candidate right now, he's won a previous election by being very macho, like showing him as kind of this person riding on horseback, but now he's a little older. And on TikTok, he's appealing to almost a more emotional side of him where he's posting videos of him getting attacked at a debate and almost tearing up and people are posting videos in solidarity with that.

So it is so interesting to see how this medium can have this, create this much more authentic and emotional connection with candidates and how people are leaning into that versus the more bravado we've seen in other political elections. Yeah. In Indonesia, they're saying 2019 was the Instagram election, which is this more polished view of yourself. And 2023 is, or 2024 is the TikTok election. Moving on, in the music business these days, all roads are leading to Nashville.

country music, which dominated the airwaves in 2023, is set to only tighten its grip on the charts this year. And if you don't believe me, well, I'll just say one word, Beyonce. During the Super Bowl, Beyonce announced a country album called Act 2 of her Renaissance project and dropped two Twangy singles I have been playing on repeat. This wasn't a big surprise. For years, she signaled her interest in revisiting her southern roots from going up in Houston and exploring its black cowboy and cowgirl culture. Beyonce is not the only major non-country artist dialing up the steel guitar this year. Post Malone said he'll release a country album and Lana Del Rey is planning to drop a country record in September. At an event recently, Lana said, if you can't already tell by our award

winners and our performers, the music business is going country. We're going country. It's happening. And Toby, I have to agree with her. At least for now, the music business is going country, so you better learn how to two-step. I cannot do step. I can kind of line dance, though, so I give myself some credit there. I mean, if we go back to last year in June, the number one and number two songs on the Billboard Hot 100 chart, were country songs, not just the country chart, just the overall chart. That was last night by Morgan Wallen and Fast Car cover by Luke Holmes. And it's Gen Z driving the listening to 36% of streams on Spotify's top 50 songs were country songs. And Spotify is by far the most kind of Gen Z-centered platform. So I say just

skate where the puck is going. Like it's clearly that the writing is on the wall and it's clear that the country twang is kind of taking over music. So go where people are listening. Yeah. It's very curious to see why, to understand why country music is booming, but it is interesting to see Beyonce and other black artists kind of dabble into country music. She did perform with the Dixie Chicks in 2016 at the CMA Awards. That was a very buzzy performance after which she was criticized by some people who said, you know, she's been more politically active and got some criticism for it. Her fans pushed back.

Meanwhile, T. Payne has also expressed that he has experienced racism while writing country songs. So, you know, this genre has a history of being hostile towards black musicians. There's only three black artists in the country music Hall of Fame, including Ray Charles. But Beyonce wants to sort of reclaim that and say, black people, like, were an integral part of creating country music, Slaved Africans were playing the banjo They combined with European immigrants

Who were playing the fiddle and then it merged to create Country music not as we know of today But the origins of country music And so she's going back to her roots there And I think just from the two songs that we heard It's going to be super successful Yeah, we were both listening to them this morning And you said give people a little sample

And try to sing him absolutely not going to do that But they were very good And yeah this is what you've always seen in music People have always kind of pushed back against boundaries And try to explore This is why music is an awesome medium. So I, for one, am fully aboard the Beyonce train and also all these other artists jumping in as well. Let's move on.

So I know the Super Bowl was two days ago at this point, which is about 100 days in news years. But forgive me because we have to circle back and talk about TAMU and its ads once again. The dust is settled after it sold out the big bucks to pay for its commercials to air six times on Sunday to go along with $10 million in giveaways. and it turns out that it's all-out marketing blitz was hiding some shaky U.S. sales growth. Sales fell 12.5% month over month in December and 4.8% in January, which is a major turnaround from the more than 50% growth it was seeing in mid-20203. That's against a backdrop of growing overall U.S. retail sales, too, so it can't even blame the macro environment. Even though web searches for the app jumped when its ads aired, Google Trends Data shows that searches have been. steadily declining overall since early July. Neil, some analysts estimate that Tamu has spent

over $1 billion on advertising last year alone outside the Asia-Pacific region. Can it possibly keep this up? This is the craziest thing I've seen in business in a while. It is a totally absurd strategy. The concept of word of mouth for this company does not exist. They are going to bombard you with ads forever and spend billions on it until you say, okay, I can't take it anymore. I can't see any more of these ads. I have to go shop on Tamu where they sell everything from, you know, $2, $5 apparel items. So this is truly one of the craziest things in advertising that we've seen in recent history. Experts are saying they've never seen a strategy like this. It is, quote, breathtaking and totally surreal.

How about this insane stat? Tamu and Shien represented 10% of Meta's revenue last year. That's how much money they spent on the platform. Meta brought in 100. $34 billion last year and just two fast-fashioned kind of e-commerce outlets accounted for 10% of that. I literally cannot wrap my head around the fact that they're kind of propping up meta's bottom line. Yeah. So how are they being able to spend so much money? Well, Temu is owned by a Chinese e-commerce giant, PDD holdings, which is going toe to toe with Alibaba in the mainland over there. So those are the two giants over in China and PDD. has this, TAMU, which only launched in the U.S. in 2022, and it's trying to go after Amazon.

The ambition is truly wild, and they're spending up to $3 billion this year alone on marketing to make it happen. We'll see if the U.S. consumers resonate or it's sticky at all. It does seem like they went for cheapness over speed. Amazon did everything to build up its logistics. So you might pay a little bit more on Amazon, but you'll get it quicker. On TAMU, you will pay less, but it takes longer. And it looks like right now, consumers have eventually kind of sided with Amazon. They just want their stuff as quickly as possible. Okay, let's hear a quick word from our sponsors, and we promise it's not TAMU. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get

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and today's trend is all about how Gen Z is navigating this tricky situation about who should pay for the first date. And New York Times article broke down the age-old issue. And what they found is that Gen Z pretty much behaves like past generations when it comes to dating. Men tend to foot the bill at a much higher rate than their female counterparts do. A 2023 paper published in a peer-reviewed psychological journal that surveyed 552 heterosexual couples found that young men paid for all, or most of the dates around 90% of the time, while women paid about 2% of the time, splitting the bill accounted for the other 8%. And a surprising follow-up to that study was that a couple's views on gender norms didn't really make much of a difference.

On average, both those with traditional views of gender norms and those with more progressive views expected the man to pay. Neil, the traditional pattern is still there despite young people being more progressive in general. Traditions die hard. I've been thinking about and reflecting why this has persisted. Maybe one reason is why a first date is already so awkward that you just get into this choreography of what you know at the end. And, you know, you just go back to what has been instilled in you and you saw your parents do and your grandparents do. Even if you have very progressive views on equality and gender equality and think men and women should split responsibilities, it just has stuck for what. whatever reason. I know. It definitely is. First dates are awkward enough as is. So it is much easier. You

don't want to ruin the date either by like haggling at the end. So yeah, typically you just default to what has been the default. There's also a few other reasons you can point to whoever did the asking should probably pay for the date. It also generally costs more money and takes more time for the girl to get ready than the guy. And it also costs more for women to pay for reproductive care than men. So all those factors have also combined, even if you do have a more progressive look at gender norms, those are some reasons why this is stuck around. Yeah. In LGBTQ relationships, we should say these, maybe these gender norms don't necessarily exist and there are other dynamics at play about who should pay, but I'll just speak candidly.

I mean, on first dates in the city, I pay, you know, 100% of the time. There is this dance where you put your car down and then the woman goes and does a little, you know, hand gesture towards the purse. Yeah, it is a dance. And then they're like, I got it. And then they're like, okay and then you just pay and it's totally fine but in subsequent dates that's when you start talking a little bit more about sharing and I think that I generally expect a little more sharing of the of the bill in after the first day yeah absolutely and then like the New York Times did kind of illustrate how this norm can be co-opted and something that's not good thing and in another study I generally expect a little more sharing of the of the bill in after the first day

yeah absolutely moving on some of y'all have been skipping leg day, plus every other day at the gym, and we've got the receipts to prove it. Fitness centers in the U.S. are reporting a stagnant January in terms of visitors, putting the brakes on a post-pandemic recovery and raising concerns about a tough year ahead. January is, unsurprisingly, the busiest month for gyms, with people trying to follow through on their New Year's resolutions to get fit. In each of the past two years, January visits to 10 major gym chains have jumped 40%. But this January, foot traffic was flat.

And it's not just one segment of the gym market feeling sore. The pain is across the board. At the high end, Exponential, which owns Pure Bar and Rumble, is on track to report its slowest quarterly sales growth since going public three years ago. And on the budget end, Planet Fitness will post its second worst quarterly sales growth since 2021. Toby, help us make sense of this. Jim's head stage a remarkable recovery coming out of COVID until last month when, for some reason, people have decided to stop going.

Yeah, there's definitely a few factors. contributing to this. Weight loss drugs can help people meet their goals a whole lot easier with a whole lot less sweat equity. There's also just a plethora of home devices still. I mean, you've got pelotones that don't require membership. You can do it in your basement. Also, it's just been cold outside.

It's been a relatively cold winter. And sometimes that can really squash your desire to end up putting on your clothes and going to gym as we both know. So I think it's just a lot of factors combining to make this kind of a, a less gym for January than we've been expecting. Yeah, maybe February would be better, but this is really dire for their financial outlook. Planet Fitness gets over a quarter of its yearly signups in January alone, 400,000 out of 1.7 million.

Plus, they're not being able to raise prices. So they have a $10 per month membership. They have floated increasing that in the face of inflation because their costs are rising as well for their franchisees. But they've had to dial that back and keep it at $10 a month. So the fact that they're paying more, keeping it at $10 a month and also seeing fewer members does not bode well for their performance this year, which I mentioned their quarterly results are going to be pretty trash. Yeah, but it's also, so gyms operate under the idea that we're going to get people to sign up for a membership that they won't actually use. Jim's get super crowded early January than most people kind of filter out later.

And that's what gyms are counting on. They want you to sign up, have a sticky membership that's difficult to cancel and just kind of pay them. for not doing anything. So I do think that it's throwing off kind of the calculus of how these gyms operate that if people aren't signing up to begin with, then that whole calculus gets out of whack. Still, it's, I just got to say, gyms have been extremely resilient. We all thought they were going to be dead in 2020 and 2021. But Planet Fitness grew its membership from 14.4 million pre-COVID to 18.7 million now. And revenue in the third quarter of last year was two-thirds higher than the same period of 2019. So they've showed incredible resilience. Maybe they're hitting some headwinds now.

I think people are going back in February. Our gym is packed. Yeah, shout out to everyone who's getting it done still. Let's just say that. Like, the people who are going to gym, we see you. Good job. All right. Finally, you got to hear about the wildest mystery in America right now. A 200-foot AM radio tower in Alabama is gone, stolen without a trace. And it's silenced a radio station that helped deliver important news to the small town of Jasper. The theft was discovered a week and a half ago when a landscaping crew was doing routine maintenance in the area, and they discovered the 200-foot tower was not there. They called up the station's general manager, Brett Elmore, and told him the tower was gone,

and he goes, what do you mean the tower is gone? It's not exactly hard to miss, which is why it's hard to understand how it went missing. While authorities pursue leads, the station WJLX has been forced to go silent, plus it might never financially recover from this. The station's property was not insured and replacing the tower could cost up to $150,000. Elmore said people have reached out and asked how they can help, but he says, I don't know how you can help unless you have a 200-foot tower and an AM transmitter. Does anyone have Benoit Blanc's number?

It's actually insane. It is probably easier to steal than you think because once you cut the guywire, which is the thing kind of holding it up, it just falls to the ground. and then you can chop it up into smaller pieces. Oh, yeah, Toby. It's so easy. Well, I am just desperate to know how someone pulled this off, though. Ours Technica kind of wrote this article where they looked around to see how other thefts like this may be occurred.

And there was one recently in Nigeria where a tower similarly just vanished. And in that case, it was kind of snatched by people pretending to be government officials that turned out to be officials working with a scrap metal dealer where they say, oh, we've got to come seize this for maintenance. So potentially there's some sort of like inside job angle. here, maybe one of the maintenance crew. So I started going down the rabbit hole and thinking about maybe there's more to this story than we're letting on, and it's not just a small town theft. But we do think that they're just selling it for scrap metal.

Right. I mean, what else would you do with it? Are prices of scrap metal just skyrocketing right now? Well, we'll put a pin on that. But here's what I want to know, why, how the heck do you not know it goes down by the signal going off? It's an AM radio tower. wouldn't you figure out that it was missing before the before a maintenance crew went in visually

saw it. So that's why I think, I don't know, maybe there's something going on here because wouldn't the signal cut out or is, do I just have a misunderstanding of how radio? Next episode on Morning Group in Daily Investigates, but it does, it does kind of highlight the importance of AM radio because the people in the town are worried that they're not going to get emergency communications. And this debate is actually playing out in cars right now because automakers want to get rid of AM radio because it interferes with electric vehicles. Lawmakers are pushing back and saying

AM radio is actually very critical to emergency communications. We can't really get rid of AM radio. We have to keep it in your cars. Automakers. Maybe it's big AM radio who is saying, look it, how do you like us now when we're gone? So I don't know. I was putting the tinfoil hat on, but yeah, let's find this tower. All right. Well, listeners, let us know if you have any leads on this. And that is our show for the day. If you're in the Northeast, definitely stay safe. and dry because we are getting absolutely walloped with snow right now. Hot chocolate is your friend. And as always, you can write in with any feedback to Morning Brew Daily at Morningbrew.com.

Let's roll the credits. Bryce Belloff is our editor and producer. Raymond Liu is our associate producer. Yuchinawa Ogu is our technical director. Billy Minino is on audio, hair and makeup is going country. Devin Emery is our chief content officer and our show is the production of Morning Brew. Great show, Daniel. Let's run it back tomorrow.

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