The Friday Five: Amazon Cuts 18K Jobs, Meta Faces Another Historic Fine, And, Could TikTok Really Be Banned in The U.S?

Welcome back to the Friday Five, happy new year! We hope you had a wonderful Christmas and a happy New Year. We're starting 2023 as we ended 2022, with five of the most interesting digital marketing news stories of the week to keep you up to date with the latest developments in the industry.

From issues around Meta to Youtube's 2023 predictions, we've got it all covered. So sit back, relax, and catch up on the latest happenings in the world of digital marketing.

Here's what made our list this week!

1. €390 Million Fine for Meta over Targeted Ads

We all like to kick off the new year in the best way possible, whether it's going for a run, eating more healthily, or avoiding historic fines. Sadly for Meta, they've been unable to do the latter, and have been fined £346m by the Irish Data Protection Commission (DPC) for violating EU data rules.

The DPC stated that Meta's methods for seeking permission to use people's data for ads on its platforms were unlawful. Meta has three months to alter its approach to obtaining and using data for targeted ads.

As you can imagine, privacy advocates have welcomed this historic fine and hope it will force Meta to give users 'real choice' over how their data is used. Unsurprisingly, Meta has expressed their disappointment over the fine and stressed that certain decisions don't affect advertising.

The company has said it will appeal the decision, which it claims does not prevent personalised advertising on its platforms. The DPC's decision follows a complaint made in 2018 by privacy campaigner Max Schrems on behalf of two users in Austria and Belgium. The DPC's investigation was prompted by the introduction of the EU's new data and privacy law, the General Data Protection Regulation.

Max Schrems, a privacy campaigner, stated that the decision by the Irish Data Protection Commission (DPC) to fine Meta €390m for breaking EU data rules is a "huge blow to Meta's profits in the EU." Schrems added that individuals should be given the option to choose whether or not they want their data to be used for ads, and should be able to change their minds at any time.

For more on this, head over to the below article.

2. Once Unthinkable, Tiktok’s US Future Now in Serious Doubt as Ban Looms

TikTok's parent company, ByteDance, is facing questions about its practices after an investigation revealed that it spied on US journalists and accessed their commercially sensitive information.

Four members of ByteDance's internal audit team accessed the personal data of Financial Times journalist Cristina Criddle to determine if she had been in contact with any ByteDance employees.

The investigation also targeted a BuzzFeed journalist and TikTok users connected to the reporters. ByteDance's actions violate user privacy and press freedom and contradict TikTok's claims that its Chinese staff do not have access to US user data.

It's hard to overstate how big of a deal this is. For months it has been widely thought that, while TikTok might have sketchy ethics, banning them outright in the US would be impossible. Now though, with these new revelations that it's been used as a device to spy on people, there is a real mandate for the US, and other western countries, to ban the app outright.

TikTok is currently under investigation by the Committee for Foreign Investment in the United States (CFIUS) over its potential links to the Chinese Communist Party (CCP).

Could we really be witnessing the death of TikTok? Learn more here.

3. Stagnant or Slashed Marketing Budgets the Theme of 2023 for Majority of SMBs

Marketers look away, a new study from the unified customer platform Klaviyo has found that 67% of UK SMBs will prioritize acquiring new customers in 2023, despite the high cost of acquisition compared to retaining existing customers.

At the same time, 60% of the same respondents said they were looking to slash or keep their marketing budgets the same.

All of this creates an unusual paradox, and problem, for marketers who still have to hit targets yet face more stringent measures.

The study, which surveyed over 1,000 decision makers at small to medium-sized businesses across the UK, also found that only 10% of SMB budgets will be increased in 2023.

In the report, around a third of respondents said Facebook would be part of their strategy, while 15% will focus on LinkedIn, 6% on Twitter, and 5% on TikTok. Only 1% will prioritize SMS marketing, while 21% will focus on email marketing.

With many businesses looking to cut costs, Klaviyo's senior director of marketing, Gemma Banks, is quoted in the Marketing Tech News article (linked below): 'SMB leaders have to be smart about their spending. In times like these, it’s best to prioritise the channels that give a better return vs those that take years to see any form of payback.'

If this report is indicative of the wider marketing industry then expect a turbulent 2023 where lofty ambitions clash with hard financial realities.

4. Sign of Something Bigger? Alphabet and Meta No Longer the Biggest Pieces of the Ad Pie

Google and Meta's dominance in the advertising industry is starting to fade as newer platforms like TikTok and Netflix gain popularity.

Google's share of the global digital advertising market has declined from 31.1% in 2017 to 29.7% in 2020, while Meta's share has dropped from 21.7% to 20.8% over the same period.

It's thought that, for Meta in particular, Apple's new privacy regulations caused huge disruption as it stopped them from tracking user behaivoir and providing personalised ads. This alone caused a 3.3% reduction in their market share.

Meanwhile, TikTok's share has increased from 0.9% to 3.1% and Netflix's share has grown from 1.7% to 2.1%. The wider shift is due in part to the increasing popularity of streaming services and social media platforms, as well as the rise of e-commerce and the impact of the COVID-19 pandemic on traditional advertising channels.

While it may seem alarming it's important to know that Google and Meta's ad businesses are still growing, it's just that the pace of it has slowed, because of the aforementioned reasons. Essentially, these two once, unshakable behemoths are suffering from the fact that marketers have more choices about where to put their budget.

Get more insight from the Wall Street Journal here.

5. 2023 Tech Purge Continues as Amazon and Salesforce Axe a Combined 26,000 Jobs

January is already looking like a pretty bleak month for the global tech industry, with cuts and saving measures already taking control. In the latest purge, Amazon is to cut 18,000 jobs, while Salesforce is to axe 8,000 employees.

The cuts will be the largest by a tech firm in the past year and the largest by Amazon in its history. Andrew Jassy, Amazon’s CEO, said: 'These changes will help us pursue our long-term opportunities with a stronger cost structure.'

The cuts will mostly affect the company’s brick-and-mortar stores, its PXT organisations, which handle human resources and other functions, and the rest of the company’s corporate workforce, equivalent to about 1.2% of Amazon’s global workforce of more than 1.5 million.

The layoffs represent about 10% of Salesforce’s workforce. The company’s founder, Marc Benioff, blamed himself for the cuts, which followed a shake-up at the top of the firm. He also sighted the fact that the Covid-19 pandemic accelerated the use of Salesforce, and the drop off since people have returned to 'normal life' had also contributed to these issues.

In a letter to employees, he said: 'As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,'

These swathes of job cuts come after Facebook's cull of 11,000 jobs, the drop in Tesla's shares, and concerns at Apple over its stock due to outbreaks of Covid at its Chinese supply chain.

For more on this, head over to The Guardian.

Thank you for joining us for this week's Friday Five, the first of 2023! We hope you found these updates informative and helpful. Remember to check back with us next week for more news and insights from the tech industry. As ever, if you think there is a story that should be in the Five, let us know! In the meantime, have a great weekend!