The Great Advertising Reshuffle: What’s Truly Behind the Tech Giants’ Alleged Decline in Ad Demand?

First, the blame went to the loss of signals. A pretty name for the aftermath of the April 26, 2021 introduction of the iOS App Tracking Transparency feature. Since that day, Apple users can opt-out of being tracked. Both the breadth and depth of data app builders and advertisers could access took a hit. That loss of signal diminished the stalking prowess of advertisers big and small, as well as the big tech. 

But during the recent earnings reports, Facebook, Snap, Twitter, YouTube, and Microsoft (Q4 results were announced in July) all blamed revenue decline on a decrease in ad demand due to “macroeconomic uncertainty.”  Not on Apple. 

 Is it really “the economy”? Or is it people closing the door on their data being collected? 

 “Digital ad spend in the U.S. reached $23.5 billion [in Q2], an 11.7 percent increase from Q1 2022,” according to Pathmetrics. In fact, until these earnings reports, the ad spend numbers have been consistently said to be growing. Standard Media Index's U.S. Ad Market Tracker did report a 3% decrease in overall ad spend in June 2022 vs June 2021. “Among media, the erosion was mostly among traditional media, which contracted 16.6% from June 2021, while digital expanded 8.6%.”

All data points to ad demand declining for those who are claiming a decline, not for ALL digital advertising. Overall, ad dollars are both being spent and cut. But where the ad dollars go has changed significantly. 

Why? Nothing is certain except change. And the way we’ve been doing advertising is becoming obsolete. Even a relatively young medium, such as the Facebook ad, is out of date. 

If you want to see both declining and increasing ad revenue in one company, let’s look at Microsoft. How is that possible? Well, Bing ads revenue went down, LinkedIn went up. They announced (Q4 2021 was only reported now) a 26% increase in revenue from LinkedIn Marketing Solutions.

I’m a fan of LinkedIn as a business because they make bold moves quietly. Here’s what they’re doing when all others’ ad revenues are hurting: 

1. Pushing to become a B2B agency of the future
2. Positioning itself as a leader in Account-Based Marketing (alongside Salesforce)
3. Partnered with a number of technology providers to bring in intent data without collecting it from you through their app (I think that’s a brilliant move).

In July, Netflix announced that Microsoft became Netflix’s first advertising partner for its soon-to-come paid subscription tier. 

It’s not just a matter of innovation. There are also more places to advertise than ever before. 

1. OTT and CTV ad spend is growing at a rapid rate (I shared data on this in an earlier newsletter)
2. Brands of all sizes are shifting budgets to influencer marketing. Years ago, our data started showing 3x the return from influencer marketing vs paid. What’s your data showing?
3. New advertising options have popped up: every new network or rising network like Twitch, Discord, or Spotify will pull budget away from an established network. 

In their hubris, the tech giants thought they could keep making money and not change a thing. In digital marketing, we can’t stick with a channel or a strategy for very long. Agility and adopting a test-and-learn model are key.

Here are a few ideas to consider as part of your digital marketing plans:

• Think three times before you cut your budget and think three times about where the budget should go.
• Advertise on the network that lost money. If it’s true that demand is lower, that means less competition and more bang for the buck (if and only if your audiences are spending time there). Test it out against another established option. And if you’re going to do it, stay away from the old static image Facebook feed ad. Give stories and reels a test. May the best ROAS win. 
• If you are looking for branding and visibility and have large budgets, test OTT and CTV. They will be more expensive than YouTube and network TV in cost per thousand. But some networks will only charge for full views, not just the first 3 seconds. 
• Podcast advertising is becoming more accessible, and the targeting, placement, and tracking options are growing.
• Do your research and find those niche networks. P2P networks (private groups, apps, chatrooms) are on the rise. 
• Carve a place in your budget for smart, genuine influencers. And carve time to find them, to find those gems. They’re out there. 

When I recommend that you test, I’m not just talking about A/B testing. That’s not enough. The best results come from always-on champion-challenger models. In sports, champions are continuously challenged. Your marketing should be designed to have its own championships and Olympics. 

If there was a paid advertising network Olympics, who would win? Let me know in the comments. 

As I was writing this, Disney+ announced an ad-supported subscription tier. 

ABM (Account-Based Marketing) Spend Predicted to Increase

A survey by the IT Sales and Marketing Association (ITSMA) found 27% of marketing budgets dedicated to ABM in 2021, with 75% of those surveyed saying they planned to increase spending on ABM in 2022.

According to a study by the ABM leadership alliance: “72% of companies reported greater ROI from ABM than other types of marketing, and 70% said that ABM principles influence the way they do all marketing today. However, ABM programs continue to struggle in several key areas, including aligning with sales, customizing content and campaigns, and measuring business impact.”

ABM is the future of the B2B commercial engine. I love it, and I don’t love how the concept has become the next “content marketing.” It’s a big concept, hard to execute without a structural shift from working in siloes to unifying disciplines. If you’d like to explore how that could transform your results, drop me a note. Nothing makes me happier than to help organizations bring together marketing, sales, UX, and tech, to accelerate growth. 

TikTok Names Themselves an Entertainment Canvas and May Take On Spotify

A canvas “where sound is always on.” And to stress this point they released a guide to the effective use of audio for marketing campaigns. 

Not surprising since sources revealed they may have ambitions to take on Spotify. Sources reported that TikTok filed an application with the US Patent and Trademark Office for “TikTok Music” in May. In addition to music and videos, the filing says that the new app would also support podcasts and digital radio content.

Instagram’s Boss Faces Backlash and Responds, but Da People Got More to Say

After both Kylie Jenner and Kim Kardashian showed support for a campaign that calls for Instagram to stop trying to be TikTok, Adam Mosseri posted a response video where he stressed they are just testing things (such as the full-screen feed). And that he stands firm that video is the future (he’s not wrong, but he was also redirecting because that's not the core of the issue). 

And so that influencers can prove their point, while Mosseri’s post got 85K “likes,” there’s this top comment from the mega influencer James Charles, with 39K likes at the time of this writeup. 

BTW, did you hear the social media term “ratioed” or “ratio’d”? It’s when the reply to a post gets more engagement than the original post. Not quite the case here, but close.

Why should a marketer care about the Kardashians? Bear with me...  

Have you watched For All Mankind? If you haven’t, the Apple series does something unique and crazy in this American land. It asks: what if the Russians had been the ones landing on the moon first? What if the Russians kept being “first” at this and that in the space race? How would that affect the trajectory of America? ALL of it, from politics to technology and the role of women in society? 

So, what if Instagram didn’t try to be TikTok? What if they made their own fans feel heard and appreciated? What if they truly partnered with influencers not through a new format but through an existing format?

What would your marketing look like if you set your own rules and put your audiences first in a platform-agnostic way? It's an exercise worth trying.

Instagram Affiliate Is Coming To An End This Month

We can't blame people for shouting at Instagram enough! While Mosseri is claiming Instagram is focusing on how to deliver more value to creators, it's actually delivering whiplash.

Here’s what Instagram had to say about killing the affiliate program: “Based on the feedback creators and brands have shared over the last year, we believe we can generate the most value for both parties by prioritizing a single solution for creator and brand partnerships. We’re excited to focus on the creator marketplace as the primary destination for creators to partner with brands on Instagram. Because of this focus on the creator marketplace, we will bring our native affiliate test to an end on August 31, 2022.”

What Else We’re Reading:

• Discord And Brands—How Marketing Strategies Are Evolving On The Chat Room Platform
• How B2B Brands Should Start Advertising on Connected TV
• How Tiktok, Facebook And Pinterest’s Social Commerce Strategies Are Performing
• Trade Desk revenue grows 35% amid surge in CTV, open internet advertising
• New Report on Teen Social Media Use Underlines the Rise of TikTok, and the Fall of Facebook
• Google delayed third-party cookie deprecation: Why and what’s next?