Today in Digital Marketing - Snap: Back to Reality. (Oh, There Goes Sanity!)

Episode Date: July 22, 2022

Thank you for supporting the work we do with your Premium Subscription! ❤️ If you want to reach Tod directly at any time, email [e-mail] Help?I need to update my credit card: todayindigital.com/updateccI need to cancel: todayindigital.com/cancelOur Sponsors:* Check out Kinsta: https://kinsta.comPrivacy & Opt-Out: https://redcircle.com/privacy

Today, is Snapchat's financial report a warning for us all? The four-letter word Twitter is blaming for low results? That four-letter word, by the way, E-L-O-N. Some updates to Google Ads and Google Analytics? Hey, welcome to 2017, LinkedIn. Nice new carousel post type you've got there. And order matters. Why you should never ask for a review before asking for a tip.

It's Friday, July 22nd. I'm Todd Maffin. Here's what you missed today in digital marketing. In the menu bar of my Mac at work, I have a little app that shows the current stock prices of the main social media and ad tech companies. got into the studio this morning to see red all across the board, and Snapchat's stock in particular was down almost 40%. A quick dive into the charts showed why Snapchat's parent company released its second quarter earnings, missing analysts' expectations so much that it dragged the rest of the sector down with it. And worse, the company warned that, quote, forward-looking visibility remains incredibly challenging, unquote. And worse, the company warned that, quote, Translation, dig in, we're in the stink and we'll be here for a while. To be fair, revenue was up 13%, comparing this Q2 to last Q2, but was down 25% compared to this year's first quarter.

The revenue hit occurring across both brand advertising and direct response advertising. The company's net loss rose to $422 million for the period, compared to $152 million last year. So while this is a revenue thing, it's not a user thing. The platform saw an increase of almost 20% in daily active users to nearly 350 million and said gains were also made in North America, not just globally. Quoting the report, While we are excited about the progress we've made in terms of community growth and engagement, demand growth on our advertising platform has slowed significantly. The combination of macroeconomic headwinds, platform policy changes, and increased

competition has limited the growth of campaign budgets. In some cases, advertisers have lowered their bids per action to reflect their current willingness to pay, unquote. Snap projected that daily active users would reach 360 million by the end of Q3, but declined to predict its future financial performance due to, quote, uncertainties related to the operating environment. Well, as Snapchat blames economic headwinds for its revenue miss, can you guess who Twitter is blaming?

The company released its Q2 results today. Revenue totaled $1.18 billion. That's down just 1% year over year, which Twitter attributes to advertising industry headwinds associated with the macro environment, as well as uncertainty related to the pending acquisition of Twitter by Elon Musk. The platform also revealed Musk's waffling acquisition cost the company $33 million in Q2. Even with Musk's takeover drama, Twitter's advertising revenue grew, although just 2% from a year earlier, while the platform's daily active users increased

by 17% year-over-year to $238 million. But both user growth and revenue fell short of analysts' estimates. According to an analyst from Insider Intelligence, the future doesn't look so bright as the company navigates its legal battles. According to the analyst, Twitter is now in the unenviable position of convincing advertisers that its ad business is solid, regardless of how its court battle with Musk ends, and its Q2 earnings show that the platform has its work cut out for it to do that, unquote. So while Twitter manages all that, they are, remarkably, still pushing out product at a pretty solid rate, and they appear close to launching a new status feature. Unlike a status on Instagram or Facebook that displays when users are online,

Twitter's status will be a little more closer to flares on Reddit. It'll let you add a small customizable status update to your tweet. Screenshots show several default status options like shower thoughts, spoiler alert, hot take, and a thread. By tapping on the status, you can view its discovery page, which lets people tweet with the same status as well as discover relevant content. So like a hashtag, but different. This could be useful for grouping a series of tweets together, like your brand's promotions. Twitter has not officially announced when the update will roll out. However, several users are noticing the option on the app.

Two of the most important parts of a service transaction, other than the sale, of course, are how much a customer feels compelled to tip and what sort of review they give the service. Knowing what's in consumers' brains during these parts of the purchase is something marketers have tried to decrypt for ages. One recent study tried to determine whether marketers could change these consumer actions by switching up the order. For instance, how does asking for a review first affect how much consumers leave as a tip? Does the order even matter? Review, then tip? Or tip, then ask for the review? JJ Chen is the author of that paper. He is an assistant professor of marketing at City University of Hong Kong. I spoke with him recently and asked him what they learned.

What would you guess? I guess you read the paper, but what was your intuition? I wasn't sure. You know, I thought about it as I was reading through and I didn't read the abstract first, which gave away the answer. But I actually thought that if you asked for the review first, that that would indicate we care about what you're thinking, we value your opinion, and therefore it would increase the tip. That was my gut feel. Yeah, that's what I think a lot of our consumers thought. We actually ran a pre-test. We asked consumers and actually people with service experiences, which way do you think you're going to get more tips?

The majority of people say, hey, reading first would actually give you more tips because, you know, for whatever reason, maybe it highlights how good, as you said, the service is. We don't really know why, but we know people expect that way. However, that's actually not what we found. So why do people tip? There are a lot of reasons why people tip from a psychological and social standpoint. One of that is actually to, you know, it could be to reward the service professional. I got fantastic service. I want to reward that person. The other reasons involve social norms. You don't want to be seen as a stingy person, right? Bad tipers normally get a bad rap too. So you don't want to do that. But at the same time, you want to save money because money is a limited resource. So there is this tension going on between how much to tip and how much not to tip.

Then rating comes into play here. When you have not rated the service professional, you feel an obligation to actually tip that person to reward or to conform to social norms. However, rating is very valuable nowadays to service professionals. For example, you know, better readings on Yelp is going to get you better businesses. Bad readings on Uber is actually going to get you terminated from the platform, right? So reading is being seen as extremely valuable to service professionals. Once you have read it, you could tell yourself, say, hey, I've already given something valuable to that person. Right. So I don't have to give you as much money.

I have at least partially fulfilled my obligation to either reward you or conform to social norms or whatever reason I have to tip you. Interesting. So it's like beyond the actual purchase transaction, there is a social transaction and consumers are considering that the tip and the rating are kind of a singular unit of that part of the equation. And therefore, if they provide a high level of rating, they feel like they have achieved most of what they need for and the tip just kind of gets caught out, I guess. I think you perfectly explained it. We call that basically motivated categorization. Our full conversation covered how specifically marketing managers should change the purchase flow to maximize tips. Also, whether the reverse is true. Does asking for a tip first

reduce the rating a consumer gives? Some more details on an interesting experiment they did using a Chinese restaurant and much more. You can hear the full interview exclusively on the premium feed tomorrow, which you can find it today in digital.com slash premium feed or just tap the link in the show notes. You can also find the study abstract online by searching for order matters. Rating service professionals first reduces tipping amount. JJ's co-authors on the paper were Allison Shiu, Maria Rodas, and Xiaofeng Liu. 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 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. All right, it occurred to me after I put the podcast episode to bed yesterday that my snark about Meta's announcement may have caused me to gloss over some of Instagram's announcement details. I stand by the snark, but this is, after all, a newscast first,

so let's review the three updates to the app that they announced in more detail. In addition to the whole, every video will now be a real thing. So there are three things actually announced other than that. First, in the coming weeks, you'll be able to remix public photos.

Yes, that's right. Okay, a little bit of snark. Grant me just this tiny moment. Can we just notice that they're now turning even photos into reels? That's how desperate. Okay, never mind. Number two, expanded remix layouts. So you'll be able to choose between a green screen or a horizontal or vertical split screen or a picture-in-picture reaction view to add your own video commentary to existing reels.

This is what TikTok calls a duet, by the way. And third, if you have your own hot take rather than having your remix appear at the same time as the original reel, you can now add your clip after the original so it plays sequentially. Well, here's your reminder to upgrade to Performance Max before Google does it for you. The company confirming yesterday it will begin automatically upgrading smart shopping campaigns to Performance Max. This is something they've been warning about us for ages now. It strongly recommends using the one-click upgrade tool in Google Ads to upgrade your campaigns and not wait for the automatic updates. Google says you'll have access to the self-upgrade tool for about

two months on average if you use smart shopping campaigns before automatic upgrades begin. A notification will also be sent to you in Google Ads about two to three weeks prior to your campaigns automatically getting upgraded. There will be some exceptions, such as smart shopping campaigns using features not yet available in Performance Max, which will be automatically upgraded in early 2023. Advertisers who are not yet eligible for automatic upgrades will receive more information later this year. Google also noted that once your campaigns are self-upgraded using the tool or automatically upgraded, learnings from your previous smart shopping campaigns will carry over to your new Performance Max campaigns. LinkedIn announced yesterday

that it is testing a carousel post type option. Until now, brands and businesses have had to create makeshift carousel posts using PDF attachments to create individual frames. But now the professional network is finally making it its own post format. When you tap on create a carousel, you'll be taken to the creation process, which, like other platforms, lets you choose multiple still images and or video clips to add

to your posts. A couple of nice updates to Google Analytics were released this morning. First, anyone with access to a property can now apply filters to a detail report to see a subset of the report data. For example, you can now apply a filter to see only the data from Android apps while filtering out data from iOS apps. Google Analytics removes the filter when the person who applied the filter leaves the report. And second, anyone with permissions of editor and above in a property can now create filtered custom reports. It'll let you create a more guided reporting experience. For example, you could create two filtered custom reports. In one report, you display only mobile data. And in the other report, you display only mobile data. And in the other report, you display only web data. It's going to happen, folks.

Next week, my wife and I will attempt camping again. You know, when we first started dating, like, 11, 12 years ago, and in the little dating app, you know, the profiles where you put your hobbies and stuff, we both listed camping. But I think that's because we're from Vancouver, and that's what everyone claims that they're into, you know, like hiking. And neither of us were into camping. We didn't tell each other that.

Maybe we didn't even know deep down. So we went camping, one of our first dates, and it was a disaster. Neither of us enjoyed it, but we both put on faces like, oh, yeah, no no i'm totally enjoying this but we did it again years later last year went for camping a little older a little wiser i feel like we enjoyed it at about maybe a 70 level last year so we have made some bug fixes and performance improvements to our setup and are aiming for a 90 rate this time around we have officially given up on the whole sleep in the back of the SUV thing and have rented a teardrop trailer, which I'm actually really excited about.

All of which means our associate producer, the intrepid Steph Gunn, will be in the hosting chair for me next week. Hey, if you've got a marketing position you're trying to fill, or maybe you've got an app or a service that you want people to know about, or maybe a plug for your agency consider a classified ad right here it's just 20 bucks you can book it online tap the advertising link in the show notes or go to todayindigital.com slash classifieds today in digital marketing is produced by engage to digital on the traditional territories of this dynamic first nation on vancouver island our associate producer is steph gunn production coordinator Sarah Guild, podcast music licensing by Source Audio, ad coordination by Red Circle, and our theme composer, my good friend Mark Blevis,

flew out here the other day to hang out. Then Air Canada kind of imploded and Toronto Airport was a mess, so we took him to the train station. It was sad to see him go. The evening had turned to rain. Watched the water roll down the drain as we followed him down the train station. It was sad to see him go. The evening had turned to rain. Watched the water roll down the drain as we followed him down to the station.

And though he could never wave goodbye, you could see it written in his eyes as the train rolled out of sight. Bye-bye. I'm Todd Mappin. Steph will be with you most of next week. I'll be back Friday with a special episode. Have a restful weekend, friends. And I'm on my way.

And I'm on my way.