Today in Digital Marketing - Thanks, We Hate It: Meta’s Mandatory New Tax on Your Online Store

Starting point is 00:00:00 It is Thursday, April 27th. Today, in the end, everyone pays the zuck. Meta's aggressive new plan to tax your sales. Also, the bots are writing Amazon reviews now. Warehouses are feeling the hangover from drunken spending. And YouTube adds some welcome new ad placements. I'm Todd Maffin. That's ahead today in digital marketing. And yes, it's another episode of... Nobody asks for this. And yes, it's meta again, because it always is. Meta announced today that it will stop onboarding new shops without the ability to check out on Facebook and Instagram. And starting next year, shops without in-app checkout will no longer be accessible. All right, let's back up a little. There are really two ways to sell products on Meta's platforms. Either you link your own e-commerce store on, say, Shopify or something,

Starting point is 00:00:57 and customers check out on that site, or you create a kind of mini store on Meta's side by connecting your product catalog, and customers can buy right on their device without having to leave Facebook or Instagram. That's what Meta's calling checkout. And that sounds great, right? For conversion rate, it usually is. There's less friction than leaving the app there on and navigating some new website,

Starting point is 00:01:18 but that comes at a cost as Meta charges a small percentage of sales that use checkout. Until now, you've been able to use the product catalog, and then when people are close to a purchase, jump them over to your site. But starting in a few weeks, that won't be possible. Quoting TechCrunch's coverage of this today, quote, this means that shops that direct people to an e-commerce site to complete a purchase, rather than allowing people to make a purchase directly through Facebook or Instagram, will no longer be accessible, unquote. So starting on June 5th,

Starting point is 00:01:51 onboarding of any new shops in the US, mind you, via Commerce Manager and Shopify will only be allowed if checkout on Facebook and Instagram is enabled. Then, on August 10th, this restriction will be extended to newly onboarded shops from all other platform partners. While businesses with existing shops that don't currently enable in-platform checkout will continue to be supported until next year, but that will end in April of 2024. Meta is also removing features associated with shops for businesses without checkout-enabled shops, like organic product tagging in posts and creating new custom and lookalike audiences derived from consumers who visit a shop. Meta also added that starting in August, some businesses without checkout-enabled shops will no longer be able to tag their products via the content publishing API. Honestly, it's hard to

Starting point is 00:02:45 look at this as anything other than a blatant grab for free money. By making it mandatory to use their checkout platform, presumably we'll all be paying Meta a fee just for the right to sell there, to sell anything there. And that's something nobody asked for, except maybe Meta's accountants. We reached out to Meta for clarification of those rates and other details. They did not get back to us by deadline. As Meta forces its checkout on businesses, the company has also shared insights into how its AI-driven algorithm is taking over users' feeds and affecting brand reach. Over the last year, the tech giant has been pushing its plans to double the number of AI recommendations in users' feeds.

Starting point is 00:03:30 Last year, Meta said about 15% of the content shown on Facebook was via AI recommendations, and now it seems to be making more progress there. As of yesterday, Meta reported that more than a fifth of the content appearing in people's Facebook feeds comes from its AI recommendation systems, while Instagram's AI recommendations now account for 40% of the content shown. This is, of course, all about competing with TikTok, whose recommendation algorithm is widely accepted as the best in the business. So what does that mean for your social strategy? Quoting socialmediatoday.com, it should provide some level of advantage for

Starting point is 00:04:05 brands because while people are viewing more content on Facebook, they're also posting fewer updates themselves, with personal sharing increasingly shifting into DMs instead. That leaves more room for the best content to get greater reach in the app. But the challenge then is that you're no longer looking to maximize social engagement or interactive value as such. You're instead focusing more directly on entertainment value. Create good, entertaining content, especially in Reels, and you stand a good chance to get more reach in either app, with its algorithm now looking to showcase more content to people outside your direct audience, unquote. Meanwhile, a jump in revenue and user growth has shown that Meta is still alive and kicking. Yesterday, the company reported that

Starting point is 00:04:49 first quarter revenue jumped 3% from a year earlier, following three straight quarters of falling revenue. Profits, though, fell 25%, partly due to restructuring charges. The results exceeded both Wall Street predictions and Meta's own expectations and are attributed to a surge in its user base. The company added 37 million daily users to Facebook. That's up 4% compared to the previous year, which is a significant rebound from the first ever drop in users Meta reported in early last year. Well, you don't have to worry about fake customer reviews anymore. The robot overlords are getting in on it now too. CNBC reports that people are using AI chatbots to write Amazon reviews. According to the report, those reviews were found on a variety of products like waist

Starting point is 00:05:38 trainers, children's textbooks, car batteries, video game controller accessories, and a bunch more. Also, kind of hilarious, these reviews don't make any effort to hide. They were created with AI. They are the laziest reviews you've ever read. In fact, most of them begin with the phrase, as an AI language model, which is a common response generated by ChatGPT. Here's an example of what I mean. Quote, as an AI language model, I don't have a body,

Starting point is 00:06:04 but I understand the importance of comfortable clothing during pregnancy. If you're looking for comfortable and stylish shorts for your pregnancy, these maternity shorts over belly pockets might be a great option for you. Amazon recently told media that it has a zero tolerance policy for fake reviews and that it bans and takes legal action against users who violate it. But as Gozmodo pointed out today, there is a huge market for fake Amazon reviews, and AI chatbots could make generating false reviews one heck of a lot easier. Thanks to tax reform, American businesses have opened doors throughout our communities. Investing in U.S. manufacturing, workers, and innovation.

Starting point is 00:06:51 Spurring half a million new jobs with higher wages and better training. And setting a new record high in corporate taxes paid. Tell Congress to extend and strengthen the Tax Cuts and Jobs Act. Paid for by Business Roundtable. 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.

Starting point is 00:07:26 Get customized coverage today starting at $19 per month at zensurance.com. Be protected. Be Zen. So with Amazon for a moment, the company today confirming it has discontinued its on-site associates program. That's the program that matched top-rated products with editorialized blurbs from publishers, and they've replaced that section now with more ad units. Modern Retail reported today that for many sellers, this is actually a welcome change, as it could lower the cost of ads and make the search experience a bit less cluttered. The move, though, will affect content publishers. According to the report, the company has been deprioritizing the program since August of 2021,

Starting point is 00:08:06 which has led agencies to focus on growing other areas of their businesses. While the on-site associates program is discontinued, publishers are no longer paid commissions for editorial content posted on Amazon. But one agency executive noted that publishers can still receive affiliate fees for their own native content. As a result, some agencies may want to rethink their editorial strategies, as the focus won't anymore be on getting a spot on a list at the top of the search results, instead on the editorial placements that are known to drive organic traffic. While on the seller side, the change is seen generally as good news,

Starting point is 00:08:41 as some analysts suggesting it could lead to reduced advertising costs and provide more ad opportunities. We'll move over global recession. A freight recession is upon us. A surge in purchases made by retailers during the pandemic has led to an overburdening of warehouses, resulting in a freight recession that is affecting the transportation of goods across the U.S. This, according to a report from Business Insider yesterday. And this has led to a decrease in the number of trucks delivering products, impacting the prices of commodities like diesel. An analyst quoted in the piece added that the destocking process for retail inventories has been longer than expected, further contributing to this

Starting point is 00:09:25 freight recession. These factors have also affected freight rates, with the American Trucking Association's index dropping to its lowest level since August 2021. And it's not just an American issue, but a global problem affecting Europe and Asia as well. Demand is also being weighed down by what some say is still an impending recession. Some new advertising options are coming to YouTube that will let brands display ads alongside popular music. The first option, called Gen Zed Music, uses AI-powered signals to identify the latest trending songs among the nation's youth so that advertisers can target them with the music they're listening to. The Gen Z music package is available now for long form and audio. YouTube is also developing a new trending music on shorts feature, which will provide the same placement opportunities, but within shorts clips.

Starting point is 00:10:19 No official launch date for this offering yet, but the new options will be available across devices and formats. And finally, Google Meet now supports 1080p video calls. But, of course, some conditions apply. That feature is only accessible through the web-based version of the platform for now. Also, sending 1080p video, of course, requires more bandwidth. The platform will automatically adjust depending on that bandwidth. And worst of all, it's only available to those on their paid plans.

Starting point is 00:11:04 I cannot believe how many people downloaded the first episode of our brand new podcast yesterday. Thank you so much. Almost a thousand of you did, which was remarkable. Or maybe you got promoted somewhere else that I'm not aware of. My thanks to Sean, who is the first person to review it. Sean writes, quote, Todd has done it again with this show. And by that, I mean, another podcast I look forward to with every episode release. And by that, I mean, this is a nice compliment to his OG podcast today in digital marketing. Thank you, Sean, for that. If you have not yet heard our new podcast, it is called Behind the Ad with Todd Maffin. The episode up right now is about Apple's iconic 1984 commercial.

Starting point is 00:11:42 You can find it everywhere you find podcasts or go to the web forwarding link that we've created, which is called BehindTheAd.page. Why.page? Because.com was like 60 bucks now. When did.com get so expensive? Anyway, go check it out if you have the time. I'm Todd Mappin. Thanks for listening. See you tomorrow.

Today in Digital Marketing - Thanks, We Hate It: Meta’s Mandatory New Tax on Your Online Store

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