Why Are Advertisers Pissed Off At Google This Time?

Rob Bettis -

Thanks for subscribing to Cache - a weekly summary of the most important stories, trends, & commentary in eCommerce marketing, curated by Rob Bettis. Last week’s issue had a 40% open rate.

Chances are you have a coworker who'd enjoy the Cache as much as you do. Share this issue with them.

This week’s newsletter is a few days late, as we celebrate Labor Day here in the United States. To my fellow Americans, I hope you had a great holiday weekend and enjoy the bonus 4-day work week.

🔎 Search

This tweet sparked a firestorm this week, as advertisers found out Google was removing valuable keyword data from Google Ads accounts:

Why is this important? From Search Engine Land:

With the constant expansion of close variants, advertisers have much less control over the queries that trigger their ads. Advertisers have had to shift from a positive keyword management to a negative keyword management approach to keyword optimization. That means search terms reports have become more important than ever.

Google’s statement:

“In order to maintain our standards of privacy and strengthen our protections around user data, we have made changes to our Search Terms Report to only include terms that a significant number of users searched for. We’re continuing to invest in new and efficient ways to share insights that enable advertisers to make critical business decisions,” a Google spokesperson told Search Engine Land Wednesday.

Blaming privacy for the change is...interesting. There is a constant tension between privacy and data collection. By its very nature, Google’s business is data collection. Perhaps there is something to be said for collecting data and not sharing it with anyone (not even advertisers), but that strategy seems to anger everyone involved. And as advertisers know, Google’s machine learning recommendations and reporting need a lot more work before anyone would be comfortable with them running in a black-box environment.

Pragmatically, I agree with Amalia Fowler’s take:

Moreso, I’m afraid this may be true:

[Updated] Is Google prepping to phase out ETAs?

Several search marketers reported Friday that the “Text ad” option is not available from the Ads dropdown for Search campaigns in the Google Ads interface.

Instead, the ad options from the Ads dropdown are limited to Responsive search ad (RSA) and Call ad.
You can choose the chain you want to promote to quickly create a location extension. Google will then review to make sure the chain is a good match for your business "using signals like its website domain and country," Google said. Later, you can use location groups to filter for specific locations within that chain. Google's curated location lists allow you to use the same location information that powers Google Maps.

Barr Ignores Lawyers’ Calls to Go Slow on Google Antitrust Case - The New York Times

The Justice Department plans to bring an antitrust case against Google as soon as this month, after Attorney General William P. Barr overruled career lawyers who said they needed more time to build a strong case against one of the world’s wealthiest, most formidable technology companies, according to five people briefed on internal department conversations.

Justice Department officials told lawyers involved in the antitrust inquiry into Alphabet, the parent company of Google and YouTube, to wrap up their work by the end of September, according to three of the people. Most of the 40-odd lawyers who had been working on the investigation opposed the deadline. Some said they would not sign the complaint, and several of them left the case this summer.

Some argued this summer in a memo that ran hundreds of pages that they could bring a strong case but needed more time, according to people who described the document. Disagreement persisted among the team over how broad the complaint should be and what Google could do to resolve the problems the government uncovered. The lawyers viewed the deadline as arbitrary.

While there were disagreements about tactics, career lawyers also expressed concerns that Mr. Barr wanted to announce the case in September to take credit for action against a powerful tech company under the Trump administration.

It certainly feels like Barr will rush this case, risking the passage of meaningful reform to score political points for the president.

🗣 Social

We begin with follow-up from last week’s newsletter, outlining Apple’s disruption of the Facebook Audience Network.

Apple to Delay iOS Change Roiling Mobile Ad Market — The Information

Apple plans to delay the enforcement of a controversial change to its next mobile operating system that would upend how ads are targeted on iPhones and iPads, according to people familiar with the matter.

The change in iOS 14, the next version of Apple’s mobile software, will require developers to ask users to share their device’s unique identifier for advertising purposes through a prompt. Many developers and advertisers rely on this identifier, or IDFA, to track the effectiveness of their ad campaigns in mobile apps, particularly for ads that prompt the viewer to download a specific app or game. Experts believe most people will not agree to share their IDFA when asked.

TikTok deal to sell U.S. business could come as soon as Tuesday

TikTok has chosen a bidder for its U.S., New Zealand and Australian businesses, and it could announce the deal as soon as Tuesday, according to people familiar with the situation.

Microsoft, in partnership with Walmart, and Oracle are the two top contenders. The sale price is expected to be in the range of $20 billion to $30 billion, CNBC reported last week.

However, even though TikTok has selected a bidder, the deal could be slowed or derailed by the Chinese government, which updated its technology export list on Friday to include artificial intelligence technology used by TikTok. TikTok’s Chinese parent company, Bytedance, said over the weekend that it would need a license from the Chinese government before it can sell to a U.S. company.

Spoiler Alert: It wasn’t announced on Tuesday.

Secondly, but much more interestingly, we have largely overlooked China’s role in the sale.

TikTok sale: ByteDance says it will abide by amended China export rules

One addition to the list was technologies for “recommendation of personalized information services based on data analysis,” which could related to ByteDance’s TikTok app.

TikTok, without its feed algorithm, is no TikTok at all.

Zooming back out to the macro view, I thought this insight from HBR was on point:

The TikTok Ban Should Worry Every Company

If data collection by a company with overseas connections comprises a threat, there are threats all around. The data that TikTok collects pales in comparison to, say, what most American tech companies (as well as banks, credit agencies, and hotels) collect, both visibly and less so. Many institutions that collect sensitive data have already been hacked — it is estimated that there is a cyber attack every 39 seconds — and much of that information is for sale on the Dark Web. If the Chinese government wanted the kind of information TikTok could collect, it could be obtained in many other ways.

What will likely prove a more pressing threat to U.S. customers is much more low-tech: Setting a precedent of banning everyday technologies could quickly spiral out of control and seriously disrupt almost all international trade.

This is the App Store Cold War I’ve previously written about.

Making It Easier to Shop and Sell on Our Apps - About Facebook

In the coming weeks, all eligible sellers in the US will be able to start using checkout on Instagram. Checkout makes it easy for people to make a purchase in just a few taps, without leaving the app. To use checkout, businesses must have Shops and use Facebook Commerce Manager or our partners Shopify and BigCommerce. We’ll support more platform partners soon.

We’re also waiving selling fees for businesses through the end of the year to reduce the cost of doing business online, especially given the current economic crisis.

Instagram is joining the Facebook Shops world as a first-class citizen.

Snapchat had a big August amid TikTok uncertainty | TechCrunch

The continual uncertainty around TikTok’s future may have provided a big boost to Snapchat in August. Or maybe it was just the Disney eyes filter that went viral. In any event, preliminary estimates from app store intelligence firm Sensor Tower indicate that Snapchat’s mobile app across both iOS and Android saw approximately 28.5 million new installs last month — its single largest month for first-time downloads since May 2019, when it had then seen 41.2 million new installs.

May 2019, however, was an outlier in Snapchat’s history. The only other month, besides May 2019, where Snapchat had seen more monthly downloads than it did in August was December 2016, Sensor Tower data indicates.

Based on the firm’s findings, Snapchat downloads were up 29% year-over-year in August 2020, compared with 9% growth in July.

Don’t sleep on Snap.

📈 Reporting & Revenue

IAB: US digital ad spend will grow 6% this year amid broader slowdown | Marketing Dive

Advertising executives expect spending on digital advertising in the U.S. will grow 6% this year, contrasting with an 8% decline for the broader ad market. Spending on traditional media that includes linear TV, out-of-home, standard radio, print and direct mail will plunge 30%, the Interactive Advertising Bureau (IAB) found in survey results this week.

Among the digital ad categories, paid search is the fastest-growing with a 26% estimated gain, followed by social media (25%), connected TV (19%), digital video (18%) and digital display (15%). Spending on several digital outlets will dip this year, including a 43% drop for digital OOH, 8% decline for podcasts and 5% slide for digital audio.

Media buyers who have a "very clear" or "somewhat clear" idea of their 2021 budgets said their ad spending will increase 5.3% next year. Only 30% of advertising executives have a clear idea of their budgets, leaving 70% with vague or nonexistent estimates for 2021, the survey found. The IAB surveyed 242 professionals with insights on media spending.
With such big players as Amazon, Walmart, Target and Best Buy growing so fast online, it would be easy to assume that smaller online retailers are suffering as a result. But that’s not the case.

The Top 1000 retailers ranked Nos. 501-1000 collectively increased their online sales by 15.7% in 2019, which was above the North American ecommerce market growth of 15.1%, though slower than the 16.3% collective growth of the retailers ranked Nos. 1-500. But take out Amazon’s 19.1% growth—which skews the results because of Amazon’s huge sales—and the other 499 top retailers only grew by 14.9% in 2019 over the year before.

And a few more thoughts on why digitally-native brands are avoiding Amazon:

That helps explain why 56.4% of the 268 Top 1000 consumer brand manufacturers sell on Amazon, versus 42.8% for the Top 1000 as a whole. Even with Amazon taking an average commission of 15% and the cost of advertising to boost search results on Amazon.com, the brands can make good money on a big shopping portal like Amazon.

But the 69 brands that got their start selling online—often referred to as DNVBs for digitally native, vertically integrated brands—are much less likely to sell on Amazon. Only 39.7% of them offer their products on Amazon, versus 60.8% for the other 199 Top 1000 consumer brand manufacturers.

Amazon restricts sellers on its marketplace from directly contacting shoppers who buy from them on Amazon.com, which makes it hard for a seller to build its own base of loyal customers from Amazon shoppers. Many digitally native brands try hard to be distinctive—whether by selling apparel made from natural fibers or healthy foods or in some other way—and their future rests with attracting consumers who will come back and buy again.

Most of them are trying to do that by drawing shoppers to their own websites, often via aggressive social media marketing. Putting Amazon between them and their buyer is a strategy most of them are avoiding, at least for now.

🎄 Black Friday / Cyber Monday

Most Consumers Will Not Shop In Stores This Black Friday 08/31/2020

U.S. consumers are so worried about COVID-19 that 62% say “no amount” of safety measures will persuade them to shop in stores this Black Friday, according to a study by Emarsys.

Indeed, only 4% plan to shop in stores, and 28% will do their holiday buying entirely online.

Despite safety measures, only 14% say social distancing will persuade them to visit stores, and only 10% would be convinced by contactless pay.

Still, 19% will be willing to shop in-store if the discounts beat those offered online.

But Richter warns that “the planning needs to start now. Retailers must ensure they have their website, apps, and backend technology infrastructure up to scratch, first so there are no glitches on the day, and second so they can capitalize on gathering customer data.”

Richter notes that, “after Black Friday, they can use this customer data to drive real business outcomes with personalized targeting over Cyber Monday and Christmas.”

🛍 Marketplace

How Lands' End refocused its product assortment to stave off inventory problems – Glossy

The fashion industry has moved away from high-trend pieces with short shelf lives, thanks to pandemic-induced skittishness and a reluctance to commit to large orders of inventory. Instead, brands have been putting more emphasis on basics and core lines that aren’t as closely tied to the seasonal model.

Lands’ End is one such brand. Chieh Tsai, Lands’ End’s chief product officer, said the company has been leaning into basics in the last few months.

“We’re planning a little further ahead now, and there’s going to be a heavy focus on neutrals and basics,” Tsai said. “We do have some trend stuff planned for the back half of the year, but it will look different than how we usually design. In the meantime, T-shirts and sweatpants in basic colors have been selling really well since everyone wants comfy, at-home clothing. Focusing on that has let us be a bit more reactive and flexible with our inventory orders, which is incredibly important right now.” She said the trend pieces will focus on timeless patterns in seasonal colors like burnt orange.

Basics have become a lifeline for a number of brands. On Thursday, Gap said Athleta, which makes basics and activewear, was its best-selling subsidiary brand in the second quarter.

Walmart+ launches September 15 to compete with Amazon Prime - Vox

Walmart’s much-anticipated membership program, Walmart+, will finally launch nationwide September 15, the company announced Tuesday, about six months after the Covid-19 pandemic pushed the retailer to delay its original timing. The brick-and-mortar retail giant needs the program to be successful in order to stop top-spending customers from fleeing to Amazon Prime.

Walmart+ will cost $98 a year, or $12.95 a month, and focus mainly on unlimited delivery of groceries and other general merchandise from Walmart stores that, for orders more than $35, will be delivered as soon as the same day. Members also get fuel discounts at Walmart gas stations and those of partners, as well as access to “Scan & Go” technology, which allows shoppers to use smartphones to scan goods at Walmart stores. The company says it will add more perks in the future. Recode previously reported these may include a branded credit card, early availability on product deals, and, potentially, access to a popular streaming video service.

And, most importantly for Walmart, more than half of Walmart’s top-spending families are now Prime members, as Recode previously reported. Which leads to the question: Will they really subscribe to both membership programs?

Walmart has the 'secret sauce' to turn profits online, ex-CEO says

Online profits continue to elude Walmart, but the company said it is making progress. Walmart reduced its losses in its e-commerce operations in the quarter ended July 31, and the company’s scale is critical to boosting profitability, according to Atlantic Equities research. The firm also thinks that Walmart+ would help the discount retailer retain new customers and foster customer loyalty.

Why Studs Opened a Depop Store to Sell Extra Inventory

Studs is also rebranding the process of offloading excess inventory. Most retailers take their deadstock to off-price vendors—and lose control of how it’s presented along the way. With a storefront on a resale app, Studs can reassert control.

📦 Distribution

Amazon wins FAA approval for Prime Air drone delivery fleet

Amazon received federal approval to operate its fleet of Prime Air delivery drones, a milestone that allows it to expand unmanned package delivery, the Federal Aviation Administration said Monday.

The approval will give Amazon broad privileges to "safely and efficiently deliver packages to customers," the FAA said. The FAA certification comes under Part 135 of FAA regulations, which gives Amazon the ability to carry property on small drones "beyond the visual line of sight" of the operator.

Amazon isn't the only company seeking to expand commercial drone delivery. Last April, Alphabet-owned Wing became the first drone delivery company to receive FAA approval for commercial deliveries in the U.S. UPS last October won approval from the FAA to operate a fleet of drones as an airline.

What is the goal?

FAA Gives Amazon Air Carrier Certification

Amazon wants to create an autonomous drone service that will deliver packages up to five pounds in 30 minutes or less. Company technologists are developing its aerial workhorse in-house.

Introduced last summer, the latest Prime Air drone is electric, autonomous, and capable of vertical and horizontal flight. It can travel up to 15 miles in half an hour, which makes it slightly faster than Usain Bolt and significantly more long-distance.

YSK that Amazon has a serious problem with counterfeit products, and it's all because of something called "commingled inventory." : YouShouldKnow

Most recently, I bought a bottle of shampoo that seemed really odd and gave me a pretty serious rash on my scalp. I contacted the manufacturer, and they confirmed it was a fake. Amazon will offer to give your money back if you send it back, but that's all the protection you have as a buyer.

Since I started noticing this issue, I've gotten counterfeit batteries, counterfeit shampoo, and counterfeit guitar strings, and they were all sold by Amazon.com. It got so bad that I completely stopped using Amazon.

The bigger question is "what the hell is going on?" This didn't seem to be a problem, say, 5 years ago. I started looking into why this was the case, and I found a pretty clear answer: commingled inventory.

🔒 Security

California Attorney General Targets “Low-Hanging Fruit” for CCPA Non-Compliance

The California Consumer Privacy Act enforcement period began July 1, and two months later, numerous firms have received letters from the attorney general’s office about noncompliance. Multiple major companies, including Walmart, Sephora, and Ring, have been hit with class-action lawsuits.

But there’s no great mystery or nefarious agenda tied to the companies that have been targeted as this point, says Dan Clarke, president at IntraEdge. To avoid meeting the same fate, companies need to adhere to the fundamentals of the nation’s first major statewide privacy law.

🛠 Tips & Tools

P2 — The New Working

Automattic is an office-less, globally distributed company, and P2 is our lifeblood. We built it to give everyone a place to see all of their projects and files, collaborate transparently, and to do it all without constant distractions.

P2 organizes all your files, projects, and conversations on one screen, so your team can collaborate from anywhere. It’s perfect for remote teams, digital nomads, extended families — anyone who doesn’t like email or meetings (i.e., everyone).

Wordpress has opened its internal project management tool, P2, to the public.

👋 Holla!

Questions, comments, inquiries? I’d love to hear from you! Email newsletter@robbettis.com.