eComm's Favorite Ad Tech Goes Down To Washington

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Last week’s issue had a 44% open rate. Share this issue with your crotchety old neighbor.

A housekeeping note: Next week I will be taking a much-needed vacation - my first travel since January.  I’ll be monitoring the news, as always. But I may be a week delayed in summarizing and sharing it.  So keep an eye out for an extra-juicy issue on 10/25.

The headline story from this week is undoubtedly the House Judiciary subcommittee’s Big Tech antitrust report. Quoting from Morning Brew:

House Judiciary Subcommittee on Antitrust Says Facebook and Google Enjoy Monopoly Power | Stories

Yesterday, the House Judiciary subcommittee on antitrust released its Big Tech monopoly investigation findings after a long 16 months. The committee's recommendations represent the most dramatic proposed changes to competition law since the time you beat your whole family at Monopoly.

Here's what the report had to say about the digital ad duopoly, beyond the general idea that Facebook, Alphabet, Amazon, and Apple have monopoly power.

Facebook: The investigation cited Facebook’s acquisition of Instagram as potentially anti-competitive. The report also concluded that Facebook enjoys monopoly power in the online advertising and social networking markets—to which marketers say “It took you 16 months to figure that out?”

Google: As one might have expected, Google was found to have monopoly power in online search and search advertising markets. What does that mean? I don’t know, Google it.

Just kidding. The report specifically noted that Google functions as an “ecosystem of interlocking monopolies” that it reinforces by linking together user data across platforms to increase its power.

The report brought up concerns with Google’s ad tech stack, but it didn’t cite it as a point of monopoly power.

Bottom line: If approved, the House Judiciary subcommittee’s recommendations could lead Congress to break up parts of both Google and Facebook—but GOP lawmakers will likely push back on certain recommendations.

So the microscope on eComm’s two biggest ad channels is starting to look more like:

The WSJ takes a look at Facebook’s defense:

Facebook’s acquisitions of Instagram in 2012 and WhatsApp in 2014 were examined by the Federal Trade Commission, which closed its reviews without issuing an objection. The company made big investments to boost growth on those platforms and they now share numerous operations that are integrated. In the paper, Facebook says unwinding the deals would be nearly impossible to achieve, forcing the company to spend billions of dollars maintaining separate systems, weakening security and harming users’ experience.

“A ‘breakup’ of Facebook is thus a complete nonstarter,” the paper declares.

Facebook’s contention that past government inaction on the acquisitions should limit current action is “surprisingly weak,” said Tim Wu, a Columbia University law professor, tech critic and author who has said Facebook should be broken up. A government antitrust case against the company would likely rely on the argument that Facebook made serial acquisitions to reduce competition, a question that wasn’t considered when the Federal Trade Commission originally chose not to oppose the Instagram and WhatsApp deals, he said.

“There’s no way a decision on one merger would be preclusive,” he said, noting that the FTC’s reviews of both acquisitions had reserved the right to revisit the deals at a later time.

Facebook’s claim regarding the difficulty of a potential breakup would also be unlikely to carry legal weight. “There is no ‘it’s too hard’ defense,” Mr. Wu said.

In recent months, advertisers have been overwhelmed dealing with the fallout of new ad network policies surrounding the election, fair housing, fair lending, and fair employment.

It seems stability is nowhere on the horizon.

🗣 Social

Remember last week’s issue when we unpacked the new Facebook attribution window change?

Yeah, in typical Facebook fashion, they quietly canceled that change...for now.

The rise of Social Commerce and its impact on eCommerce | Superb Media | Open Mic | The Drum

It is too soon to predict if these platforms will thrive or fail. One thing is for sure; consumers search for products on Instagram and Facebook. In a recent survey, 54% of respondents said they bought something after seeing it on Instagram, while 87% said they took some kind of action after seeing product details on Instagram. It is, however, difficult to predict when a user will purchase, it could be immediate or part of a longer multi-channel brand journey, which could lead to deeper levels of engagement on the brand's site.

In fact, according to Aaron Kessler, an analyst at Raymond James, “Facebook Shops and Instagram Checkout could be a multi-billion revenue opportunity (...) Facebook can address ~50% of global eCommerce with penetration ranges of 0.5% - 5%.” In reality, we have to see how the performance & Conversion Rate (CVR) is delivered on a broader scale for the right audience. When we tested for a beta client, we have seen minimal purchase intent compared to spending the same amount elsewhere and a much lower CVR.

I have seen very little data on the conversion rates of social ‘Shops.’ In my mind, it would need to be significantly higher to justify missing out on the customer data. And, at least for now, it is not.

Snapchat Announces New First Commercial Ad Offering

True to its name, First Commercial is...the first commercial any user sees when they watch Snap's premium shows in Discover. It's an unskippable six-second spot.

Marketers can access the ad unit via Snap's Ads Manager.

First Commercial is tailored to mobile videos, and they will run exclusively within curated, brand-safe programming.

While Google & Facebook exist under a microscope, Snapchat continues to be the ad network who is doing everything right, but who no one is talking about. ¯_(ツ)_/¯

Speaking of Snapchat:

New Report Finds Snapchat, TikTok Outpace Instagram in Teen Popularity | Social Media Today

The report looks at several elements, but on favored social media platforms, respondents indicated that:

Snapchat is the most popular, with 34% of respondents indicating that it's their top preference

TikTok came in second, with 29% of the popular vote

Instagram was the top pick among 25% of respondents

Despite IGTV and Reels, Facebook’s grip on the next generation is slipping. And antitrust pressure will not let them buy another Instagram.

Meanwhile, October continues to be a rotten season for most Facebook advertisers:

Instagram expands shopping on IGTV, plans test of shopping on Reels | TechCrunch

Instagram this morning announced the global expansion of its Instagram Shopping service across IGTV. The product, which lets you watch a video then check out with a few taps, offers creators and influencers a way to more directly monetize their user base on Instagram, while also giving brands a way to sell merchandise to their followers. Instagram said it would also soon begin testing shopping within its newer feature and TikTok rival, Reels.

If only anyone cared about IGTV...

📈 Reporting & Revenue

Ad Tech Could Be the Next Internet Bubble | WIRED

We live in an age of manipulation. An extensive network of commercial surveillance tracks our every move and a fair number of our thoughts. That data is fed into sophisticated artificial intelligence and used by advertisers to hit us with just the right sales pitch, at just the right time, to get us to buy a toothbrush or sign up for a meal kit or donate to a campaign. The technique is called behavioral advertising, and it raises the frightening prospect that we’ve been made the subjects of a highly personalized form of mind control.

Or maybe that fear is precisely backwards. The real trouble with digital advertising, argues former Google employee Tim Hwang—and the more immediate danger to our way of life—is that it doesn’t work.

Hwang’s new book, Subprime Attention Crisis, lays out the case that the new ad business is built on a fiction. Microtargeting is far less accurate, and far less persuasive, than it’s made out to be, he says, and yet it remains the foundation of the modern internet: the source of wealth for some of the world’s biggest, most important companies, and the mechanism by which almost every “free” website or app makes money. If that shaky foundation ever were to crumble, there’s no telling how much of the wider economy would go down with it.

A fascinating read.

🎄 Black Friday / Cyber Monday

What have your distribution folks told you?  If you don’t mind sharing with the group, let me know.

🛍 Marketplace

The Pandemic Depression Is Over. The Pandemic Recession Has Just Begun. - The New York Times

Over all, even if you exclude the sectors directly affected by the pandemic — air transportation; arts and entertainment; hotels; restaurants; and both private and public education — the number of jobs in America was 4.6 percent lower in September than in February. That is not far from the 5.3 percent contraction in total employment that took place during the entire 18 months of what is now known as the Great Recession, and around three times worse than the job losses in the 2001 recession.

Levi’s Launches Its Own Recommerce Site and Buyback Program, Levi’s Secondhand | Vogue

Finding the perfect pair of vintage Levi’s used to require hours at a thrift store, endless eBay searches, and often a few visits to the tailor. For some of us, it was among the most noble of fashion pursuits; for others, it was just too much work. Today, Levi’s is making it a little easier with the launch of Levi’s Secondhand, a recommerce site for previously worn Levi’s jeans and denim jackets. Some of it will be handpicked vintage, but most of the garments will be sourced directly from Levi’s customers: Starting now, anyone can turn in any Levi’s denim item—even if it’s damaged—for a gift card towards a future purchase.

It marks a significant turning point, both for Levi’s and the fashion industry as a whole. Levi’s is the first denim brand of its size to create a buyback program like this and effectively take responsibility for the full “life cycle” of its garments. It’s an example of true circularity: You could buy a brand-new pair of Levi’s tomorrow, and you’d know exactly what the “end use” might be, should you tire of them in a few years. For conscious shoppers, that’s often the difference between buying something or… not.

🏬 Brick & Mortar

Customers Still Like to Shop in Person, Even if They Get Only to the Curb - The New York Times

what started as a coronavirus stopgap is likely to have a permanent impact on the way people shop, along with giving them a new reason to continue to visit beleaguered physical stores.

The popularity of curbside pickup reveals that the future of retail is not just more packages piling up on people’s doorsteps. Beyond satisfying the need for contactless shopping in the pandemic, it taps into Americans’ desire to drive to a store, a pull that can be just as strong as, or even stronger than, the convenience of home delivery.

“Americans are used to their cars and actually do like stores, so this is kind of a hybrid where you’re getting the best of both worlds,” said Oliver Chen, a retail analyst at Cowen.

As of August, about three-fourths of the top 50 store-based retailers in the United States offered curbside pickup, according to Coresight Research, an advisory and research firm that specializes in retail and technology. Anything from a sweater to a book is now as easy to pick up as a sandwich.

🛠 Tips & Tools

Shogun raises $35M to help brands take on Amazon with faster and better sites of their own | TechCrunch

Today, a startup that has built a platform to help individual companies and brands design better websites is announcing a round of growth funding to help them step up to that challenge with faster and better designed interfaces.

Shogun, which lets companies build sites that sit on top of e-commerce back-ends like Shopify, Big Commerce or Magento to let them sell goods and services, is today announcing that it has raised $35 million in funding after seeing its business grow 182% over the last year, with 15,000 companies — including Leesa, MVMT, Timbuk2, Chubbies and K Swiss, as well as household Fortune 500 brands that it declines to name — now using Shogun’s tools, up 5,000 in the last eight months.

Introducing Automatic Platform Optimization, starting with WordPress

Today, we are announcing a new service to serve more than just the static content of your website with the Automatic Platform Optimization (APO) service. With this launch, we are supporting WordPress, the most popular website hosting solution serving 38% of all websites. Our testing, as detailed below, showed a 72% reduction in Time to First Byte (TTFB), 23% reduction to First Contentful Paint, and 13% reduction in Speed Index for desktop users at the 90th percentile, by serving nearly all of your website’s content from Cloudflare’s network. This means visitors to your website see not only the first content sooner but all content more quickly.

With Automatic Platform Optimization for WordPress, your customers won’t suffer any slowness caused by common issues like shared hosting congestion, slow database lookups, or misbehaving plugins. This service is now available for anyone using WordPress. It costs $5/month for customers on our Free plan and is included, at no additional cost, in our Professional, Business, and Enterprise plans. No usage fees, no surprises, just speed.

🤷🏻‍♂️ Just For Fun

Cole Haan x slack | Collaboration

Our limited-edition collab isn’t just two great brands coming together—it’s a vibrant example of how Slack is everything you need to get your work done. Nearly everything we at Cole Haan do happens on the world’s favorite channel-based messaging platform. We’re celebrating this integral partnership with four exclusive color schemes—designed with the Slack crew, over Slack.

Just in case you needed more Slack in your life.

👋 Holla!

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