Today in Digital Marketing - Make No Mistake. TikTok is Not F***ing Around Any More.

Starting point is 00:00:00 It is Tuesday, August 23rd. Today, TikTok shopping play is set to lose a half billion dollars. So why have they started banning some of their biggest commerce partners? Social's back on top as marketers see more clear ROI skies ahead. Pinterest is getting a well-funded, if buzzword-laden competitor. And on the ad-free premium podcast, which you can learn more about by tapping go premium in the show notes. Keeping your ads away from kids on Google's platform. It's not as easy as checking a box. I'm Todd Maffin. That's ahead today digital marketing. It's the season for new styles and you love to shop for jackets and boots.

Starting point is 00:00:45 So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more. It's super easy. And before you buy anything, always go to Rakuten first. Join free at Rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal. Get the Rakuten app or join at rakuten.ca. R-A-K-U-T-E-N dot C-A. Do you have business insurance? If not, how would you pay to recover

Starting point is 00:01:20 from a cyber attack, fire damage, theft, or a lawsuit. No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. Just how much money is TikTok prepared to lose in pursuit of its e-commerce domination? How many merchant partners? More than you think. The information today reporting its sources say the company expects to lose more than a half billion dollars in the U.S. this year alone on the attempt. Most of that money spent on hiring, building out its own delivery network, and subsidizing merchants for discounts and free shipping. But don't shed too many tears. TikTok's parent company ByteDance

Starting point is 00:02:10 ended the year with $18 billion in profits, quoting theinformation.com. Still, the enormous investment shows how the Chinese tech giant is continuing to pour money into a U.S. expansion despite the longstanding threat of a government ban. While the prospect of a ban may have receded from the headlines, the threat hasn't disappeared. The expansion, particularly if it succeeds in making TikTok a retailer with the scale to compete with Amazon, is likely to reinforce anxieties about ByteDance's influence in the U.S.

Starting point is 00:02:45 TikTok shop does exist right now in the U.S. Unquote. TikTok shop does exist right now in the U.S. and it is growing, but the numbers are comparatively small. Less than $4 million in daily sales in the U.S. Still, that's up from the $1 million a day just this past June. Sources inside the company say they expect daily volume to reach about $10 million by the end of the year. That's a lot closer to the numbers in Southeast Asia, where TikTok's shop daily volume is expected to reach around $90 million by the end of the year. Again, quoting theinformation.com, quote, TikTok is banking on merchants considering shop important enough that they'd be willing to pay up for it in the future. But TikTok Shop, which replies on

Starting point is 00:03:25 videos to drive sales, is also a relatively high-effort sales channel, requiring merchants to pay an additional commission to TikTok creators or invest in creating videos themselves. Early on, TikTok had trouble signing up US-based merchants, both because those merchants wanted to focus on expanding into bricks-and-mortar location and because they feared regulators could ban the app. Some merchants have also balked at signing up because TikTok requires them to submit their social security number and passport information, unquote. Also related, the company today announced it will shut down its Storefronts feature, which lets merchants connect their third-party shopping workflows into the TikTok UI. Storefronts started as a way to link Shopify stores to TikToks and expand it to other commerce platforms.

Starting point is 00:04:18 Now, TikTok wants retailers to use its own TikTok shop exclusively. Quote, storefront will be officially discontinued and unavailable for use. This means your storefront products will no longer be visible on your TikTok profile or be eligible for inclusion in short videos, lives, and ads. You'll also lose access to your storefront on store manager.

Starting point is 00:04:41 It's important to migrate from your storefront to TikTok shop as soon as possible. Unquote. Marketers are increasing their investments in social media, with 51% of media decision makers from brands and agencies now planning to boost their spending in social media this year. That is a significant jump from April's 44%. The numbers come from the research firm Advertiser Perceptions. Their study of 300 executives from both brands and agencies found most polled say social media is pulling better ROI compared to last year. The sample size only included executives whose firms spent more than a million dollars in ads in the previous month. There is a split, though. It's the brand side, client side people

Starting point is 00:05:31 who prefer social. The agency folks say they're more likely to ramp up their digital and linear TV investments. As Marketing Dive reminded us today, quote, agencies have typically acted as key intermediaries in the types of upfront negotiations that drive the TV business and are an increasingly important piece of brokering advertising deals with streamers. Meanwhile, entrenched heavyweights like meta platforms have seen growth return in recent months, unquote.

Starting point is 00:06:04 Digital streaming TV, sometimes called connected TV, is indeed doing very well. The sector hit a record $1 billion in ad spend this past June, thanks to the continued shift away from cable TV. Household supplies and beverage brands quadrupled their spend, but some categories like pets and beauty sectors didn't trend as strong. But while all that's good, Connected TV's growth rate is still three times slower than retail media at a similar stage. Analysts say this is because so much of the CTV market is fragmented, and money that comes in comes from existing budget pools, not from new budgets. Group M forecasts that globally, CTV advertising is expected to grow

Starting point is 00:06:47 by more than 13% this year. In the US, insider intelligence pegs that growth at 21%. Lots of sites have their share of competitors. Be Real came for Instagram. Everyone's coming for Twitter. But not many have tried to compete with Pinterest, at least until now. The app Crate launched today. Like everything these days, it talks incessantly about how much AI is in it. In truth, from my short testing of it, the AI seems a little weak. Basically, you add pictures and TikTok videos and

Starting point is 00:07:23 products and stuff from the internet to a board, which they call a crate, and it will recommend more content to you that's similar. Am I crazy here? Or is this what Pinterest and Instagram and all these platforms have been doing for years now anyway, and just not wearing a big Captain AI cape? Well, one thing the mention of AI probably did help was funding, the app receiving more than $5 million in venture capital. The founder used to work at Pinterest in partnerships. They have seven employees in Los Angeles right now. As for how marketers can play here, the company says it'll start by charging brands to suggest their products to users.

Starting point is 00:08:01 They also might try a subscription plan for users down the road. But are we starting to see the end of the AI ride? Quoting theinformation.com, Consumer AI startups trying to ride the OpenAI and stable diffusion waves have floundered a bit. AI image editing app Lenza, for instance, saw a rapid rise and fall in popularity, and even OpenAI's ChatGPT has experienced slowing usage in recent months. Unquote. Do you have business insurance? If not, how would you pay to recover from a cyber attack,

Starting point is 00:08:39 fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. LinkedIn is rolling out its own version of brand partnership tags as part of a program to move more toward collaboration with B2B influencers. Some people are starting to see a new section in the post setting screens indicating an on-off toggle for brand partnership. When a user toggles it on, LinkedIn will add the words brand partnership in the headline bio of the person posting, not in their profile bio, mind you, just

Starting point is 00:09:21 the bio you see in the feed. You've probably seen these before on LinkedIn's feed, the person's name and a summary of what they do. There's an example of what it looks like in today's newsletter, which you can subscribe to for free by tapping the link in the show notes. I'll be honest, it looks a little too blended in for me. I don't think many people read or even really see that text under someone's name in the feed, which I guess is a good thing if you'd rather not draw attention to the financial transaction that went into that post. This is one of a few updates LinkedIn's made to make the platform more friendly to influencers. Earlier this year, they added shared analytics so brands could peer in on the performance of content they sponsored. Also,

Starting point is 00:09:59 as socialmediatoday.com wisely noted, quote, the update also likely relates to the coming EU Digital Services Act, which includes a range of provisions around transparency in advertising in social apps. LinkedIn also notes that, in accordance with the law, any posts labeled as brand partnerships will be publicly searchable

Starting point is 00:10:18 by members and visitors. Searchability of ads is a key requirement of the new DSA regulations, unquote. These new brand partnership tags are rolling out now, should be available to all accounts by the end of the week. Also with LinkedIn, the company today said it would update its newsletter editing and publishing workflow, specifically improving the creation of issues. This is very welcome news indeed. We have a daily LinkedIn newsletter, which you can find at todayindigital.com slash top story.

Starting point is 00:10:52 But it's editors always been a little gummy. They say they'll be rebuilding the editor's UI, letting you save drafts, tweet metadata, and so on. They're also letting brands or creators host multiple newsletters on the site in case you have different markets or segments you want to reach out to. You can now have up to five newsletters, each with different designs and posting frequencies.

Starting point is 00:11:15 Finally, they're adding auto-follow for newsletter subscribers. So when someone joins your newsletter, they'll also start automatically following your regular LinkedIn updates as well. As the major platforms like Meta continue to move away from broad interest targeting, one platform this week jumped even deeper into it. Reddit has expanded its interest targeting category, saying, quote, interest targeting is our most popular form of targeting.

Starting point is 00:11:51 That's why we're expanding the number of interests available to target from 66 to 152. We'll be rolling this update out over the next few weeks, so be sure to check on your campaigns to implement any targeting updates, unquote. It's certainly easier to give Reddit a category like parenting rather than try to research and input every parenting-related community on the platform. The update comes as Reddit rather forcefully squashed a site-wide protest against its sudden and massive API price hikes, which forced some of the most popular Reddit mobile apps offline. Many community moderators essentially went on strike, and Reddit responded by threatening, and then delivering on that threat, to remove those moderators. Reddit's user base has almost certainly declined since the whole dust-up, though Reddit, of course, hasn't revealed any updated user numbers. The new interest categories

Starting point is 00:12:35 should be in your ad manager by the end of the week. Incidentally, side note, some people reported today that comments were not loading on the site properly, so if you noticed that too, it wasn't just you. Expect your work on X, the former Twitter, to become more expensive soon. The company this week announcing it will shut down some of its older API endpoints. This would mean third-party tools that marketers use, like Agorapulse or Hootsuite or Sprout Social, will need to change their code to align with the new API version. Many already made that change when the new version came out, but the closure of the older API means that some parts of accessing the platform will become more expensive for those third-party tools.

Starting point is 00:13:23 The issue is that accessing some of the old API didn't count toward the monthly limits you pay for when you buy access to the stream, notably the retrieval of tweets. But now tweets that a third-party tool pulls through the API will count toward the limit, and that could be very costly. Those third-party tools would, of course,

Starting point is 00:13:44 have to pass on the costs to their customers, usually marketing managers or social media managers at brands and agencies. Some tools already went that route when the first price increase happened. Agora Pulse, which has always tried to be budget-friendly for its marketing customers, had to add a special Twitter add-on product to try to recoup some of the new fees. The least expensive plan, other than their free and extremely limited plan, costs $42,000 a month. Why 42? Because Elon thinks that the number 420 is funny because of its association with cannabis. No, really, that's actually why it's $42,000. Beyond that, tiers cost upwards of $210,000

Starting point is 00:14:28 a month. And two quick items to wrap up. YouTube is testing a new display for its subscriptions feed. The feature groups multiple uploads from a single creator. It aims to make content discovery easier and reduce upload pressure on creators. They're also experimenting with a song discovery feature where users can hum or record a song and find it on the platform that is currently limited to a limited number of Android users. And marketers are reducing their use of growth marketing strategies, according to a report by the digital agency Dept. The study shows a 40% decline in growth marketing usage compared to last year. The report also indicates a decrease in investments

Starting point is 00:15:11 in strategy planning and data analytics. Spending on creative processes has seen a smaller decline. And finally, a shout out for my friend Barry Hott. If you are looking to understand your meta ad and creative performance, you should check out Barry's new newsletter. It's called Have a Clues. You'll get his weekly insights. You'll learn about how ugly ads perform better, how to understand the complicated data surrounding meta advertising. Barry is a legitimate legend in the meta media buying and ad creative space. He's been at it for more than 15 years.

Starting point is 00:15:44 Do yourself a favor. Drop everything and subscribe right now to Have a Clues. legend in the meta media buying and ad creative space. He's been at it for more than 15 years. Do yourself a favor, drop everything and subscribe right now to have a clues. It's at have a clues.com. As many of you know, I do the cooking in the house. It's just me and my wife, unless you count the dog and the cat. Although I am cooking the dog's food now.

Starting point is 00:16:06 That was a change. We're making our own homemade dog food. Turns out she likes it better and it's way cheaper. So, hooray. But this week, you know, I usually do themes, sandwich week, Cuban week, Mexican week. This week, it's like, I don't know what to call it, like comfort food week. It's chicken strip, frozen chicken strips and fries, frozen peas, macaroni and cheese. Honestly, I'm so excited.

Starting point is 00:16:30 See you tomorrow. Now we cook it. Now we cook it.

Today in Digital Marketing - Make No Mistake. TikTok is Not F***ing Around Any More.

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