Today in Digital Marketing - The Subtraction Principle

Starting point is 00:00:00 It is Wednesday, August 7th. Today, two prices, one answer. Where do you put your discount? Media buyers rethink X after the platform sues an advertiser coalition. Questions about how effective the latest brand safety tech really is. And what Shopify sees in the forecast for the months ahead of consumer spending. I'm Todd Maffin. That's ahead today in digital marketing. When you're advertising at scale, even the tiniest changes can make a big difference. Just ask Google, which once tested 41 different shades of blue for its search engine links. The same goes for copywriting. The placement of words, offers, calls to action.

Starting point is 00:00:46 They've all been studied and tested and debated for decades. Now, research has been unearthed about one of those elements, the offer. The marketing science newsletter Ari this week focused on where to place the discounted price. To the left of the original price or to the right? For example, which is more effective? Was $45 now $30 or now only $30 was $45? The answer? It depends.

Starting point is 00:01:17 Researchers found that when offering a moderate discount of around 30%, writing the discounted price to the right of the original price, for example, was $45, now $30, is most effective. Why? Well, people perceive the discount as bigger compared to when the new price is on the left, making them more likely to buy the item. But this effect disappears when the discount is only about 10%, or if the discount is clearly presented as a percentage. It also reverses for very low discounts, for example 4%, which the study said people find opportunistic, and very high discounts, like 85%, which make people question the product's quality. So why does this happen?

Starting point is 00:02:06 The researchers speculate that consumers find it easier to calculate the difference when the larger number appears before the smaller one, matching the typical format for subtraction. For moderately sized discounts that aren't easy to calculate mentally, we often skip the math and assume the discount is around 10%. So for your product with a 33% discount displaying was $45, now $30 should yield the best results, making the deal seem more attractive to potential buyers. The research was published in the Journal of Marketing. The paper is called Consumer Evaluations of Sale Prices,

Starting point is 00:02:47 The Role of the Subtraction Principle. We have a link to it in today's email newsletter, which you can sign up to for free by tapping the link at the top of the show notes or going to todayindigital.com slash newsletter. Usage of the beleaguered platform X is at an all-time high. Also, X's ability to thrive in the future is threatened. Both of these conflicting statements came in a video by X's CEO, Linda Iaccarino, this week, after the company sued an advertising trade group. X says the Global Alliance for Responsible Media conspired with its industry members

Starting point is 00:03:22 to boycott X, depriving the platform of ad revenue. So they're suing them, along with former advertisers like CVS Health, Mars, and Unilever. People are hurt when the marketplace of ideas is constricted. No small group of people should be able to monopolize what gets monetized. Clever alliteration aside, this case is likely a long shot. Of course, there's no requirement for advertisers to buy ads on any platform.

Starting point is 00:03:52 And X's majority owner, Elon Musk, himself earlier this summer told an advertising audience at Cannes that, quote, advertisers have a right to appear next to content that they think fits with their brand, unquote.

Starting point is 00:04:05 So will this backfire? It might have already. Adweek is reporting that, quote, two buy side sources who have advertised on X this year said X's new lawsuit makes them reconsider future investment in the platform. A large brand that advertised on X around the 2024 Paris Summer Olympic Games said the lawsuit would make the brand reconsider whether to even post organically on X. The source said, quote, why would I want to be in any way, shape or form involved in a place that wants to sue individual advertisers and the bodies that authentically represent them for choosing to

Starting point is 00:04:42 not advertise there, unquote. Axios reports that X will make $2 billion in ad revenue this year. The last year in which X reported earnings publicly, 2021, that number was $4.5 billion. A new report from Analytics claims hundreds of brands appeared next to unsafe content on user-generated content websites, despite using new AI brand safety technology from providers like DoubleVerify and Integral AdScience. A piece on Digiday today reports that industry players believe the firms may be over-promising and under-delivering. Sources quoted in the piece were puzzled by inconsistencies in how the AI tools categorized web pages for risks. Quoting that piece, quote, the analytics report showed wiki pages with racist, violent, or sexual content labeled as low risk, while pages from the Washington Post and Reuters

Starting point is 00:05:42 were marked as medium or high risk, despite lacking such content. Most of the sources reached for this story had the same question. Is the tech not working as it should? Or has it been pitched as something better than the systems are currently capable of offering? One noted it works well enough to, quote, give people just enough ick reduction, unquote. However, the findings now have them wondering

Starting point is 00:06:05 if the expenditure, which can range in the millions per brand, is even worth spending, unquote. For its part, Double Verify accused Analytics of selectively searching for problematic terms without proper context. One of the websites studied, Fandom, a large user-generated content site,

Starting point is 00:06:24 said the examples were from old, low-traffic wikis, and that's, quote, why it was not flagged via our current moderation systems or Google's ad server, both of which monitor our active wikis, unquote. Heads up if you sell through Amazon, the company has set an October 19th deadline for third party sellers to send their Black Friday inventory to its fulfillment centers. This is one week earlier than the deadline last year. The company says it needs the extra time to ensure they meet prime delivery promises during Black Friday's ordering rush. Amazon warns that sellers who miss this deadline may have difficulty finding space at Amazon's fulfillment centers. It added it will have limited slots to accept shipments in November and December. One bit of good news? Sellers that exceed capacity limits this peak season won't have to worry about an inventory storage overage fee. Amazon eliminated that fee last month. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit?

Starting point is 00:07:35 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. Uber's advertising business is growing faster than expected with its annual revenues expected to hit $1 billion by the end of the year. Uber sells ads across its ride-hailing and food delivery apps, Uber and Uber Eats. In June, it began selling in-app ads programmatically through partnerships with major ad platforms. One of those formats is called a journey ad, which runs in its mobile app while a user is on a trip.

Starting point is 00:08:17 Quoting Paul Wright, the head of international markets for Uber advertising, quote, journey ads appeal to brands that really want to get some long-term engagement and aren't chasing a performance-based, programmatic, lower funnel type approach. The ad unit is only one ad per journey, so you're not competing with anyone else, unquote. The company also has digital screens inside some cars, often just an iPad, with T-Mobile selling ads there. Uber's global scale is attracting advertisers, particularly large consumer packaged goods brands interested in multi-market campaigns.

Starting point is 00:08:52 Uber Eats has seen strong momentum in that area. In addition to restaurants, Uber is attracting advertisers from categories like financial services, social networks, tech, entertainment, and luxury. L'Oreal, for example, ran a successful campaign on Uber's platform, targeting travelers at London airports with a perfume ad. The campaign outperformed benchmarks for view time, swipe rate, and click-through rate.

Starting point is 00:09:20 And finally, Shopify's revenue grew 21% year over year in the second quarter, beating the company's own outlook of high team's growth. The strong performance sent Shopify shares soaring more than 20% this morning. Shopify's CFO told analysts the company expects to end the year with minimal headcount growth compared to the approximately 8,300 employees it had at the end of last year. When asked if the company had been seeing any signs of a downturn in consumer spending, he said the company, quote, didn't see any significant deterioration or improvement.

Starting point is 00:10:04 I still haven't really found a game, a video game to get back into. I've been trying for a couple of days, but I don't know. Does this happen to other gamers? You just kind of like lose interest for, I mean, who knows how long this is going to last. So I've been spending my time doing two things. One very productive, one not. The productive thing is I've been doing more chores around the house, making the bed and cleaning things. So I have spare time. I guess that's good.

Starting point is 00:10:26 And then whatever remaining time I have, and I'm not proud to admit this, get sunk into TikTok. Like maybe a couple of hours a day. It's not all consuming content. I am making content, making really bad content. For instance, I'm telling wheelchair jokes to my wife, who's paraplegic.

Starting point is 00:10:43 It doesn't go over well in most cases. And you can watch the cringe for yourself. My TikTok account, my personal one is at Todd Maffin, T-O-D-M-A-F-F-I-N. And of course, we have one for the podcast as well. It's just at Today in Digital Marketing. All of our social media is at the top of the show notes. That's it for today. Thanks for listening. I'll see you tomorrow.

Today in Digital Marketing - The Subtraction Principle

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