Welcome to Katalys Connect - your weekly shortcut to the latest in performance marketing.
What’s in this issue? Each week, we pack the latest trends, actionable insights, and industry breakthroughs into a quick read - ensuring you're not just keeping up, you're staying ahead.
- Monetization: From Perplexity’s AI payouts to Snapchat’s streamlined creator earnings, publishers and creators are finding new ways to bring in revenue.
- Growth: Shopify’s ad expansion and TikTok’s uncertain future are reshaping strategies, while AI video ads struggle to win over consumers.
- The Future of Commerce: Higher PayPal fees, TikTok Shop’s rapid rise, and winning holiday strategies are driving the next wave of e-commerce innovation.
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💸 Monetization
Perplexity’s AI Payouts • Perplexity’s revenue-sharing model rewards publishers for cited content but raises concerns about revenue limits and long-term growth potential.
- Publishers receive a capped revenue share of up to 25% when their content is cited in Perplexity’s AI-generated responses, with payouts increasing for multiple links. However, the cap and single-digit offers have sparked negotiations for better terms.
- While revenue remains small for now, execs see the program as a “transparent” step forward compared to other AI companies, acknowledging its potential as Perplexity grows and more users adopt AI-driven search tools.
Google’s AI Agents Arrive • Google’s Project Mariner introduces AI-powered agents that navigate websites for users, signaling a major shift in how people — and machines — interact with the web.
- Project Mariner completes tasks like shopping and trip planning within Chrome, raising concerns for publishers as users may become less engaged with on-page content and ads.
- Google calls this a “UX paradigm shift,” with AI agents potentially bypassing traditional web interactions, signaling that publishers may need rethink experiences optimized for both users and AI tools.
Snapchat Unifies Creator Earnings • Snapchat is combining Stories and Spotlight monetization into one streamlined program, offering creators more opportunities to earn.
- Starting February 2025, eligible creators with 50k+ followers and 12k+ watch hours can monetize both Stories and Spotlight videos through mid-roll ads.
- By simplifying its revenue tools, Snapchat aims to drive creator engagement, encourage exclusive content, and build on Spotlight’s 500M monthly active users.
📈 Growth
Shopify’s Big Ad Bet • Shopify expands Shop Campaigns to all merchants, helping brands acquire new customers through Meta, Google, and its own platform.
- Shop Campaigns, previously available only to Shopify Plus users, now allow all merchants in the U.S. and Canada to set budgets and pay only when an ad drives a sale, reducing risk and boosting customer acquisition.
- Shopify claims Shop Campaigns contribute up to 24% of new customers, signaling a strategic push to grow its consumer-facing Shop marketplace amid competition with Amazon and other e-commerce giants.
Time is Tik-ing • With a TikTok ban looming, brands are preparing alternative strategies - but leaving the platform too soon could mean missing valuable opportunities.
- With uncertainty about TikTok’s future, Brands should maintain their presence while diversifying video content with Instagram Reels and YouTube Shorts to capture migrating audiences.
- TikTok’s aggressive focus on social commerce sets it apart, but competitors like Meta and YouTube have yet to drive similar adoption. We can expect these platforms to double down on shoppable features if TikTok disappears.
AI Video Misses the Mark • New findings from NielsenIQ (NIQ) suggest that consumers find AI-generated video ads more “annoying” and “confusing” than traditional creative, raising concerns about AI’s effectiveness in ad campaigns.
- Even the most polished AI ads fall short, causing cognitive dissonance and failing to make lasting impressions, ultimately risking brand trust and authenticity.
- While AI tools can help reinforce brand associations, marketers may need to focus on lower-risk applications like storyboarding and creative ideation as the technology improves to deliver more realistic, engaging results.
🚀 Future of Commerce
PayPal Ups Merchant Fees • PayPal will increase U.S. merchant fees for buy now, pay later (BNPL) services and other payment options starting in January.
- Brands must prepare for higher costs, however PayPal Pay Later costs remain under those from key BNPL competitors like Klarna and Afterpay.
- As consumer demand for BNPL continues to surge, merchants will need to weigh PayPal’s updated pricing against its broad customer reach and convenience to maintain seamless payment experiences.
TikTok Shop Takes the Lead • After launching in 2023, TikTok Shop has overtaken Shein and Sephora among US online shoppers, signaling a major shift in e-commerce dominance.
- A consumer trends report found that 80% of monthly TikTok users are aware of TikTok Shop, and 45% of Americans have made purchases, particularly in fashion, beauty, and home goods.
- TikTok Shop has driven a projected $15 billion in revenue for small businesses in the US, with a March report estimating TikTok reached $16 billion in US sales earlier this year.
Winning Cyber 5 Strategies • Promotions, personalization, and AI-powered tools fueled a massive jump in online sales during the 2024 holiday kickoff.
- Early access deals, gifting-focused strategies, and free shipping incentives drove higher conversion rates and boosted average order values across the board.
- Retailers leaned on AI tools, with chatbot-driven traffic surging 1,950% year-over-year and AI-powered recommendations driving engagement and conversions at unprecedented rates.
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