Today in Digital Marketing - Price Check on Aisle Doubt

Starting point is 00:00:00 It is Wednesday, May 24th. Today, pricing placebos was our best pricing strategy wrong all along. More delays to get your hands on TikTok search ads, more cuts at meta as the platform shows the strain, and who needs human podcasts anymore when AI bots can just... Wait, what? I'm Todd Mathen. That's Ahead, today in digital marketing. New research has exposed a myth. Price placebos aren't as effective as we thought. There's a longstanding belief that higher prices will lead to a higher perception of quality of a product. This phenomenon is referred to as the marketing or pricing placebo effect. Previous research found that higher prices generally

Starting point is 00:00:45 improve product experience, including people's perception of taste. Consumers judge products based on characteristics like price, packaging, country of origin, and so on. If it's more expensive, they typically assume it's higher quality to justify the price. But new research suggests this is not the case. The study found that high prices can make your product more attractive by increasing consumer expectations, but only until it's experienced. And thus, if your product does not meet the high expectations generated by its price, you risk disappointing customers. As a result, the study's researchers advised caution when setting prices. As expectations go up, so should your quality. The paper was recently published in Psychology and Marketing.

Starting point is 00:01:31 It's called Pricey, Therefore Good? Price Affects Expectations, But Not Quality Perceptions and Liking. Don't hold your breath when it comes to search ads on TikTok. Digiday reports today that the platform is testing the ad format, but doesn't seem satisfied with the results. Despite more and more users using the app for search, a company for the spokesperson said it doesn't have a format that can be sold against search, and it's currently not even a focus anymore for the platform.

Starting point is 00:02:04 The report notes that while advertisers can buy ad inventory that appears alongside searches, it's not as robust as Google's keyword bidding system. Instead, marketers can only create a block list of keywords to avoid letting the algorithm, video descriptions, and content match ads with audience searches. Quoting Digiday, simply put, search advertising on TikTok is an abstract concept, one that has almost come as an afterthought to a natural evolution in the way people use the app. Sure, TikTok is known for entertaining the masses via its viral dance video and comedy skits, but for younger people, the video app is increasingly a search engine too. They're using the algorithm, which personalizes the videos they see based on what they watch,

Starting point is 00:02:48 to source information attuned to their tastes. Selling ads on the back of those searches can be a profitable game, as Google has shown over the years. It's only natural that TikTok would want to try its hand at it, unquote. Search ads are listed as part of TikTok's 2023 platform priorities. It is possible the ad type will launch later this year, but so far, doesn't look like it. As Meta braces for yet another round of layoffs, the cracks in its operational framework are widening, with ad ops, content moderation, and other areas showing signs of strain. The tech giant has already cut 11,000 roles, accounting for 15% of its workforce,

Starting point is 00:03:32 with another 10,000 expected in the coming months, starting this week. The Washington Post reported that sources within the company fear these latest cuts will impede its content moderation and safety processes. Quoting the report, at least a half-dozen current and former Meta employees who've worked on trust and safety issues say severe cuts in those divisions could hamper the company's ability to respond to viral political misinformation, foreign influence campaigns, and regulatory challenges. They say they worry that the layoffs, which are expected to hit the company's business division harder than engineering, could make Facebook, Instagram, and WhatsApp more dangerous at a time of particularly acute geopolitical concern. Ad buyers are also reporting ongoing issues with Meta's ad systems following a major Facebook ads error last month that caused significant campaign overspend, which we previously reported on.

Starting point is 00:04:25 Apparently, Meta is still working to correct the glitch. Although most users may not be experiencing external problems due to staff reductions, social media today points out that internal problems are stacking up, causing reduced performance for some paid campaigns. It's the season for new styles, and you love to shop for jackets and boots. 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.

Starting point is 00:05:02 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.C-A. Do you have business insurance? If not, how would you pay to recover 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. The future of podcast advertising may be in the hands of our AI overlords.

Starting point is 00:05:48 Spotify is reportedly developing technology to create AI-generated ads for podcasts trained on its hosts' voices to create targeted ads. Bill Simmons, founder of The Ringer, revealed the news on his podcast, quoting Simmons, I don't think Spotify is going to get mad at me for this, but we're developing that stuff. There is going to be a way to use my voice for the ads. You obviously have to give approval for the voice, but it opens up, from an advertising standpoint, all these great different possibilities, unquote. Simmons outlined the potential of AI advertising in customizing ads for individual listeners. For instance, a ticketing company could use this technology to geo-target listeners and promote events in specific cities. He also discussed how AI could enhance podcast accessibility by using translation. An AI bot trained on his previous podcasts and written content could recreate a podcast that encompasses all the topics and aspects he covers in his own recordings.

Starting point is 00:06:54 Which means my retirement might be closer than I thought. Three years after George Floyd's murder and the start of the Black Lives Matter movement, black content creators are experiencing a significant decline in paid opportunities. Digiday reporting today that content creators like Amanda Wicks, who were previously flooded with brand partnerships and sponsorships, now face silence in their inboxes. Wicks, who has been sharing art, fashion, and lifestyle content for eight years across Instagram, TikTok, and YouTube, saw her business thrive after George Floyd's murder prompted a push for increased support of Black employees, minority-owned agencies, and creators. But as the momentum behind diversity, equity, and inclusion waned, so did brand opportunities. And she's not alone. Several other Black content creators report brand partnerships and sponsorships drying up following the events of 2020. And when opportunities do arise, creators of color say they're not offered the same financial compensation as their counterparts.

Starting point is 00:07:53 This highlights a strained relationship between creators of color and the brands that made promises regarding diversity and inclusion three years ago. Despite these promises, the report notes that media companies are still primarily hiring white people, while media agencies are still developing initiatives to quantify diversity progress. And that will bring us to a very quick lightning round. Shopify launched its point-of-sale hardware in Canada today. The company's mobile selling device for bricks-and-mortar stores is called POS Go. It was first rolled out to retailers in the U.S. last year. LinkedIn is bringing verification to job posts.

Starting point is 00:08:34 With this update, the professional network will now display verified information about the company or job poster. And TikTok users can apply to make $1,000 for just watching videos on the app. A marketing agency is offering $100 an hour to scroll through TikTok for 10 hours straight, searching for emerging trending content. Based on that rate, I should be a billionaire by now. A thousand people, other digital marketers just like you in our Slack community. It is free to join. Just go to todayindigital.com slash Slack or tap the link in the show notes. Thanks for listening.

Starting point is 00:09:42 See you tomorrow. Outro Music

Today in Digital Marketing - Price Check on Aisle Doubt

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