Why Advertisers Claim Meta Owes $7 Billion in Damages


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According to a class-action lawsuit brought by Facebook and Instagram advertisers, Meta’s metrics flub owes them potential damages exceeding $7 billion.

In a ruling, the 9th U.S. Circuit Court of Appeals in San Francisco is letting advertisers pursue legal action against Meta for monetary damages, accusing it of inflating the social platforms’ Potential Reach metric (the number of people in an ad set’s target audience) by up to 400%.

Advertisers claim the metric measured the number of social media accounts—which could include bots and other fake accounts—rather than individual users, leading to artificially high premiums for ad placements.

“The claim is that [plaintiffs] made advertising spend decisions based on inflated reach,” said Jason Kint, CEO of the nonprofit trade group Digital Content Next. “Meta has argued the metric was meaningless as the advertisers mostly pay based on performance metrics. The metric matters, or it wouldn’t be presented to the marketers.”

The case, brought in 2018 by former Meta advertisers DZ Reserve and Cain Maxwell, encompasses potentially millions of advertisers that have run paid ads on Instagram and Facebook since Aug. 15, 2014. Here’s what you need to know.

Advertisers halting spend

Ads account for the majority of Meta’s revenue, which was $134.9 billion in 2023, up 16% compared to 2022. Much of those ads were bought by small to medium-size businesses.

Per the court document, DZ Reserve, an ecommerce business, invested over $1 million across 740 Meta ad campaigns. Maxwell operated an online firearm mount store and allocated approximately $379 to 11 Meta ad campaigns. Following the filing of the complaint, DZ Reserve ceased its Meta operations; it remains unclear whether Maxwell’s business is still operational.

The case is “at least symbolically significant because advertisers feel these companies often bully them because they have so much reach and scale,” said eMarketer principal analyst Paul Verna.

A Meta spokesperson told ADWEEK that “these allegations are baseless, and we will defend ourselves vigorously.”

Duplicates, bots and fake accounts

In the fall of 2017, an industry analyst found that Facebook’s Potential Reach exceeded the U.S. census count, which led to a response from Meta’s senior executives acknowledging the inflation and attributing it to fake and duplicate accounts.

Meta CMO Alex Schultz purportedly directed Facebook’s sales team to avoid discussing fake and duplicate accounts with advertisers. Yet, internally, according to the lawsuit, Schultz acknowledged that Potential Reach figures had to be inflated by at least 10%.

However, the lawsuit states that advertisers creating a new ad were provided a Potential Reach number that was inflated by at least 33%.

Meta’s senior executives, including former COO Sheryl Sandberg, were aware of the inflation driven by duplicate and fake accounts, including bots, the documents state, and took actions to conceal this information.

“Advertisers don’t like spending money if they don’t know where it is going. Another way to put this: [Potential Reach] is vital to 100% of our ads revenue,” the Facebook executive said.

What’s next?

Returning to the district court in San Francisco, the case will either proceed to trial or potentially be resolved through a settlement involving financial compensation for the plaintiffs.

“We look forward to continuing to litigate this case on behalf of Meta’s advertising customers and to presenting the evidence to a jury that Meta knew about its inflated Potential Reach and refused to fix the issue due to revenue concerns,” said Geoffrey Graber, partner at Cohen Milstein and lead counsel representing the plaintiffs in this class action. 

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Celebrity Cats Compete in Sheba’s March Madness-Style Tournament


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Mars Petcare’s Sheba is offering some adorable counter-programming to March Madness by enlisting eight felines with huge TikTok and Instagram followings in a bracket-style tournament where they’ll race to lick up the brand’s new Gravy Indulgence cat food.

Devised by agency AMV BBDO, The Gravy Race is a single-elimination competition featuring cats with a combined follower count of 55 million. CBS NCAA Tournament sportscaster Ian Eagle hypes up the event as “the greatest feline competition in the world” in a 30-second trailer introducing the contestants.

They appear in animated form, spinning around on robot vacuum cleaners, along with their social media follower count and favorite Sheba flavor.

Eagle is also providing highly enthusiastic play-by-play coverage of each round of the race, which begins March 29 on TikTok and Instagram, where viewers will be able to click through to buy the product. The final round will be livestreamed from Times Square in New York.

Besides March Madness, the contest is timed to the new Sheba Gravy Indulgence Entrées hitting shelves nationwide. “This felt like a great moment to add to the fun for sports and cat fans alike by hosting our own matchup to enjoy,” Mars Pet Nutrition North America chief marketing officer Jean-Paul Jansen told ADWEEK.

“It only made sense to tap veteran American sportscaster Ian Eagle to help bring the campaign to life. Cat parents and cats can bond over the new product while rooting for some of their favorite cats as they go head-to-head in The Gravy Race.”

The campaign is being supported by digital out-of-home, PR, and social and influencer marketing. Consumers can also enter a sweepstakes awarding a year’s supply of Sheba cat food and treats, and a $3,000 gift code by commenting on Instagram guessing which cat will win the competition or sharing a TikTok video of their own cat racing to lick up gravy.

“The Gravy Race has all the right ingredients to be one of the most famous competitions in the world: internet-famous cats, a top sports commentator and a track made of Sheba Gravy Indulgence Entrées,” AMV BBDO creative partner Andre Sallowicz said in a statement.

“With a reach of over 55 million cat lovers tuning in, it has the potential to be one of the most watched sports events in the U.S. The Gravy Race is sure to catapult the brand into the spotlight, adding a splash of fun and excitement to the product launch.”

CREDITS

Client name: Fernando Silva, Liz Franks, Brintha Renganathan, Kate Warburton and Sami Jones
Creative agency: AMV BBDO
CCO: Nicholas Hulley and Nadja Lossgott
Creative director: Andre Sallowicz
Creative team: Andre Sallowicz, Ant Eagle and Tim Riley
Social creative director: Ant Eagle
Creative design director: Mario Kerkstra
Social media manager: Carmelo Orofino
Agency planning team: Suzanne Barker, Kerrie Boyes and Brian Williamson
Agency account team: Laura Balfour, Richard Mitchell, Matt Henry and Nicholas Biggs
Agency producer: Alexander Warren
Production company: Red Studios & SpinCycle
Director/consultant: Nils Jacobi (FurryFritz)
DOP: Simon Fanthorpe
Production company (teaser ad): Zombie
Post-production company: Red Studios
Motion graphics: Tina Touli
Sound studio: Canja Audio
Sound design: Ben Leeves @ Jungle Studios
Audio post-production: ClearCut Sound
Media agency: EssenceMediacom
PR agency: Weber Shandwick
PR team: Caitlin Immel, Sarah Gore, Madison Miller, Madisyn Siebert and Jack Probst

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Reddit’s Jen Wong Has a Plan to Juice Post-IPO Growth


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Newly public Reddit has to level up its performance-driving products, and—after 20 years—figure out how to more fully monetize its signal-rich chat-based content.

Reddit’s long-awaited IPO values the platform at $6.5 billion on 2023 revenues of $804 million (98% driven by ads), with a loss of almost $91 million. While it’s growing, it missed its 2021 goal to hit the $1 billion mark in 2023. And its revenue is dwarfed by rivals like Snap (roughly $4.6 billion in 2023, per earnings), let alone giants like Meta (roughly $135 billion in 2023, per earnings).

“We have a lot of opportunity for growth,” COO Jen Wong told ADWEEK shortly after Reddit’s grinning mascot Snoo rang the opening bell at the New York Stock Exchange. “We’re always focused on the long term; we’re continuing to invest in the roadmap.”

On paper, Reddit looks to be in an optimal position to grab ad spend from X and TikTok—whose future in the U.S. could be shaky. Reddit has a contextual-based ad business that is safe from the tremors of cookie deprecation, and it’s making aggressive inroads with automation to make buying ads on its platform more efficient.

But ad buyers have often seen the platform as seasonal spend, and squeamish brands historically wary of appearing next to unsuitable content have stymied a flow of ad dollars. To get over those brand-safety fears and get that recurring spend, Reddit must prove its ads work throughout the funnel.

The growth roadmap

Reddit began this quest in earnest last year when it started offering pay-per-click ad products and got more competitive returns on click traffic. 

But Reddit still has a lot of work to do to catch up to powerhouses like Google and Meta. Reddit has historically been stronger in driving mid- and upper funnel activity, said Elizabeth Keefer, director of growth at Winclap, which helps brands attract users.

Clients, however, are pulling back their spend on these activities in favor of ads that drive more direct action from consumers. That’s pushing more ad spend to search channels and Meta, whose popular AI-powered Advantage+ shopping tool is sustaining marketer interest.

To catch up, Reddit is now building performance-driving formats and post-click actions, like app installs, purchase or add to cart. While it has developed some of these features, it’s early days, and advertisers are clamoring for more. 

Incremental audience attracts repeat business

About 70% of Winclap’s clients active on Reddit continue to spend with the platfrom year-over-year, said Keefer. But these are largely relegated to special occasions like product launches, seasonal moments and holidays.

“Brands overall are a little bit more hesitant to commit to joint business plans with Reddit because it is such a new platform, [but one that has] a lot of promise,” she added.

But for some ad buyers, Reddit has already proven itself ready to move out of the experimental ad spend bucket.

Ad agency Tinuiti’s client Liquid IV saw a 41% improvement in conversion rate and a 69% improvement in retargeting conversion rates on the platform. Another health and wellness client saw Reddit’s promoted ads drive more than a 13% lift in unique conversions.

That performance convinced Tinuiti to invest up to 15% of total media spend there for some clients. “They figured out how to tap into an incremental audience that’s beneficial,” said Jack Johnston, senior social innovation director at Tinuiti. More typically, advertisers who see success are scaling closer to 5% in the second year, he added.

Wong wouldn’t share how many advertisers renew each year, instead saying that a good litmus test is its growing number of annual partners. “That’s a strong indication that we are partners at that point, setting annual strategy together year after year. We have a strong retention rate in advertisers,” said Wong.

The search opportunity

Reddit is also working to make its ad placements more relevant to consumers. It plans to add more contextual and interest-based signals to its ad platform, beefing up existing placements in the home feed and conversations, plus adding more formats like video and ads in comment threads and on search pages.

It’s working on building out its search capabilities, as a large amount of intent-based search queries start with Reddit. Monetizing that is not yet in reach.

“There’s a big opportunity on the advertising side—search is driven by keywords and biddable traffic. We already have the foundations of that,” said Wong.

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NowThis Combines With Accelerate Change Portfolio to Become NowMedia


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Social publisher NowThis Media, which was acquired by nonprofit media organization Accelerate Change last April, is combining with the eight other publishers in the Accelerate Change portfolio to become NowMedia, according to NowThis CEO Sharon Mussalli.

The network will reach over 190 million people monthly—including web traffic, social audience and newsletter subscribers—with the majority of its audience stemming from NowThis, according to the company. The publishers—which include titles such as PushBlack, Pulso and ParentsTogether—all cater to specific identity groups and emphasize social content.

By combining, NowMedia aims to centralize its business functions, expand its total reach and position itself as a partner for brands looking to reach minority audiences.

“NowThis brings a great reputation and the gravitas for brand relationships, but all of these brands are social first, focus on video and have deep, meaningful engagement with their audiences,” Mussalli said. “When you combine everything, you get a very powerful platform.”

The early decisions from NowThis to commit to a mission-driven, video-centric commercial model has let it outlast the bulk of its digital publishing peers, such as Vice Media and BuzzFeed, which have found their business models increasingly unsustainable in a media landscape upended by shifts in social traffic and data privacy.

The strategy from NowThis reflects both the increasing need for social publishers to consolidate to reach audiences of meaningful scale, as well as the demand from advertisers for video inventory, according to FTI Consulting senior managing director Justin Eisenband.

For NowThis, which was spun off from Vox Media, the roll-up lets it tap into new advertising categories without expanding its editorial costs. It has, however, begun building out its revenue team, and in the past six week, it hired media executives David Spiegel and Catherine Schuler as senior vice president of sales and head of brand and creative development, respectively.

NowMedia eyes mission-based advertising

Like other ad networks, NowMedia will employ a hub-and-spoke model, centralizing commercial resources while operating its editorial brands as distinct hubs.

The core commercial team aims to expand to a full-time headcount of around 20 by the end of the year, according to Mussalli. NowThis, for comparison, has an editorial staff of around 65.

The revenue team will pitch brands both individually and as a run-of-network, using the unique selling points of the specific titles—such as their minority ownership or the demographic of their audience—to start conversations with advertisers that can mature into broader deals.

NowMedia also includes two creator networks—Gen-Z for Change and Influence Change—that it can use for influencer campaigns.

The network will generate the bulk of its revenue through advertising, such as the integrated editorial series it created with American Express, and through its work with grant-funded organizations, which it helps craft and deliver messaging on key topics, such as climate change and reproductive health. 

The company wouldn’t share financial projections for its first year, although in 2023, NowThis generated an eight-figure revenue.

Vox Media, which still owns a minority stake in NowThis, will continue to sell its advertising inventory, although it will no longer have the exclusive rights to do so, according to Mussalli. 

“Traditional media used to survive on a combination of sales teams and rep firms, and I think the world is going back to that,” Mussalli said. “The more avenues to create relationships with brands, the better.”

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From Then Till Now: Big Brands’ Enduring Love Affair With Product Placement


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Despite being over 100 years since the first documented example of product placement ran—a soap endorsement within the Lumiere brothers’ 1896 film Washing Day in Switzerland—the advertising technique remains popular.

If the reaction to a 20-year-old Cerveza Cristal integration appearing within the original Star Wars trilogy when aired in Chile is anything to go by—it can still prove a highly effective weapon in a big brand’s arsenal to capture public attention.

Despite originally running two decades ago, reportedly without the permission of Lucasfilm to add their beer brand and its accompanying jingle into key scenes within the movie, the clips quickly went viral across social media in early March.

According to data provided by Brandwatch, the beer brand owned by Heineken experienced a significant rise in mentions. Last year, the brand received 250 mentions per month on average, while between March 1-13 this year, it received 112,000 mentions. This marks a 5922% increase from the previous month. The hashtag #cervzacristal gained 19 million impressions through X, as fans shared follow-up parody videos that incorporated the brand into additional scenes across the Star Wars franchise.

Product placement continues to be popular with the world’s biggest brands. The Product Placement blog found that Apple was its most spotted brand of 2023 with almost 2,000 appearances on TV and films, more than double the second-place brand Nike which has over 750 placements. Other brands on its top 30 list included Microsoft, Adidas, Budweiser, Pepsi and Samsung. 

According to PQ Media, the total amount spent on product placements by 2026 will reach $41.4 billion, with over half coming from the U.S. Over 70% of that spending will be in TV.

BenLabs’ State of Product Placement report from last year, 86% of marketers who weren’t using it were considering adopting it, while 81% of those who have tried it felt it was an effective marketing channel.

The evolution of product placement

In this era of technological innovation and artificial intelligence (AI), product placement is evolving beyond simply placing a brand or product in the hands of an actor and holding it toward the camera. With the increasing use of ad blockers, marketers see media integration as an alternative and trustworthy alternative, and that is becoming more personalized with the addition of first-party data from subscribed streaming viewers.

That’s what works in a 2024 environment, not just following the playbook of what the architecture of what a 30-second spot should be.

—Kaylen McNamara, chief business officer, VaynerX

BENlabs research discovered that four out of five marketers felt that AI would prove important when it came to their company promotion decisions, with the technology being used to predict results when exploring new channels to adopt.   

“The biggest challenge brands have faced in product placement is inherent human bias and subjectivity,” explained Ricky Ray Butler, the CEO of BENlabs, as brands vie to appear in the biggest audience engagement opportunities.

Butler’s organization has created AI technology and data systems to support brands as they aim to overcome the challenges of ad avoidance and decentralization in media consumption habits.

“By leveraging predictive AI models, brands can optimize for ROI, getting inside content before they become hits, when the cost to partner increases exponentially,” he explained.

In the age of the creator, product placement and branded entertainment are no longer the sole domain of media companies, with individuals able to agree to major brand endorsement deals to showcase products within their content and further amplify existing integrations.

“The newest creator on the block is creating the most virality because they understand the platform,” claimed Kaylen McNamara, chief business officer at VaynerX.  “They may not have the experience in brand building or in coming up with big ideas, but they intimately understand the behaviors happening on the platform. And that’s what works in a 2024 environment, not just following the playbook of what the architecture of what a 30-second spot should be.”

McNamara added that product integration deals can also be amplified alongside creators with behind-the-scenes content now being filmed on set during production involving the actors. Creators can also research, test and explore the audiences that already have an affinity with the brand.

She cited a TikTok post for the sandwich chain Jimmy John’s, the response to which led to the development of a three-minute spoof of the reality series The Batchelor, using red velvet cookies instead of roses.

“Out of that shoot, we got 100-plus pieces of creative that were natively built for the platforms. And it allowed the brand to not only market their limited-time offers (LTO) but it let them drive engagement and show that they’re on top of these trends that are happening on TikTok,” explained McNamara.

With zero paid media behind the campaign, “MILF and Cookies” organically received 267.7 million impressions across social platforms. Meanwhile, the cookies sold out nationwide in less than four weeks, setting a record for January sales.

The use of programmatic to embed personalized content into content is also emerging with virtual product placement now offered by streaming services and emerging tech companies. Add on A.I. and data to automate those positions in a similar vein as digital ads, and the potential for driving a more personalized viewing experience is clear.

However, according to YouGov’s Dominic Prince who developed its Placement Quality Score (PQS) to measure the effectiveness of such integrations, AI still struggles with context and how brands feature within a narrative.

“Once you have the ability to programmatically advertise to consumers, you can break those billion eyeballs down into fractions of however many you want, and set them up separately. And so it allows a lot more brands to enter the space,” added Prince.

Measurement and Attribution

One issue in the product placement space that has been apparent over the years is attribution. Previously, research was conducted using custom costly surveys asking viewers what they noticed. That cumbersome approach is now being overcome through technological means.

Research firm YouGov’s Placement Quality Score examined how much a branded piece of content was viewed alongside the value of that media over the length of time the brand appeared or was mentioned on screen.

Prince, who devised the PQS, explained that he still goes through each integration personally, citing the use of JIFF peanut butter within Stranger Things as one example reviewed in 2022, valuing the delivery at over $27 million.

Meanwhile, with supporting social media activity around a brand deal, it is also possible to attribute sales uplift during the period in which it is released, tied directly to when the product placement itself takes place, explained VaynerX’s Kaylen McNamara. She added it can also validate creative concepts, using them in a meta environment to test and tweak depending on the sales response before investing more in further media.

With further progress, the mystery of product placement’s return on investment is looking more feasible to determine.

“I would encourage brands to truly take a step back and leverage all the data and technology available at our fingertips today to ensure that they are reaching the right audiences, with the right messages, at the right time—in this way, leveraging data-driven systems and processes, a brand like Cerveza Cristal can have the impact of a viral campaign not just once, but consistently to drive efficient ROI,” said Ray Butler.

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https://www.adweek.com/convergent-tv/from-then-till-now-big-brands-enduring-love-affair-with-product-placement/




Public officials can block haters—but only sometimes, SCOTUS rules

Public officials can block haters—but only sometimes, SCOTUS rules

There are some circumstances where government officials are allowed to block people from commenting on their social media pages, the Supreme Court ruled Friday.

According to the Supreme Court, the key question is whether officials are speaking as private individuals or on behalf of the state when posting online. Issuing two opinions, the Supreme Court declined to set a clear standard for when personal social media use constitutes state speech, leaving each unique case to be decided by lower courts.

Instead, SCOTUS provided a test for courts to decide first if someone is or isn’t speaking on behalf of the state on their social media pages, and then if they actually have authority to act on what they post online.

The ruling suggests that government officials can block people from commenting on personal social media pages where they discuss official business when that speech cannot be attributed to the state and merely reflects personal remarks. This means that blocking is acceptable when the official has no authority to speak for the state or exercise that authority when speaking on their page.

That authority empowering officials to speak for the state could be granted by a written law. It could also be granted informally if officials have long used social media to speak on behalf of the state to the point where their power to do so is considered “well-settled,” one SCOTUS ruling said.

SCOTUS broke it down like this: An official might be viewed as speaking for the state if the social media page is managed by the official’s office, if a city employee posts on their behalf to their personal page, or if the page is handed down from one official to another when terms in office end.

Posting on a personal page might also be considered speaking for the state if the information shared has not already been shared elsewhere.

Examples of officials clearly speaking on behalf of the state include a mayor holding a city council meeting online or an official using their personal page as an official channel for comments on proposed regulations.

Because SCOTUS did not set a clear standard, officials risk liability when blocking followers on so-called “mixed use” social media pages, SCOTUS cautioned. That liability could be diminished by keeping personal pages entirely separate or by posting a disclaimer stating that posts represent only officials’ personal views and not efforts to speak on behalf of the state. But any official using a personal page to make official comments could expose themselves to liability, even with a disclaimer.

SCOTUS test for when blocking is OK

These clarifications came in two SCOTUS opinions addressing conflicting outcomes in two separate complaints about officials in California and Michigan who blocked followers heavily criticizing them on Facebook and X. The lower courts’ decisions have been vacated, and courts must now apply the Supreme Court’s test to issue new decisions in each case.

One opinion was brief and unsigned, discussing a case where California parents sued school district board members who blocked them from commenting on public Twitter pages used for campaigning and discussing board issues. The board members claimed they blocked their followers after the parents left dozens and sometimes hundreds of the same exact comments on tweets.

In the second—which was unanimous, with no dissenting opinions—Justice Amy Coney Barrett responded at length to a case from a Facebook user named Kevin Lindke. This opinion provides varied guidance that courts can apply when considering whether blocking is appropriate or violating constituents’ First Amendment rights.

Lindke was blocked by a Michigan city manager, James Freed, after leaving comments criticizing the city’s response to COVID-19 on a page that Freed created as a college student sometime before 2008. Among these comments, Lindke called the city’s pandemic response “abysmal” and told Freed that “the city deserves better.” On a post showing Freed picking up a takeout order, Lindke complained that residents were “suffering,” while Freed ate at expensive restaurants.

After Freed hit 5,000 followers, he converted the page to reflect his public figure status. But while he primarily still used the page for personal posts about his family and always managed the page himself, the page went into murkier territory when he also shared updates about his job as city manager. Those updates included sharing updates on city efforts, posting screenshots of city press releases, and soliciting public feedback, like sharing links to city surveys.

https://arstechnica.com/?p=2010572




What Would a TikTok Ban or Sale Mean for Advertisers?


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TikTok’s future in the U.S grew more uncertain after the House passed a bipartisan bill Wednesday that would force China-based ByteDance to sell TikTok within 165 days or face a nationwide ban. This comes on the heels of escalating concern in Washington over China’s access to Americans’ data.

Introduced last week, the bill still needs to be cleared by the Senate. Meanwhile, President Joe Biden—who recently joined the app ahead of the 2024 presidential election—said he would sign the bill if passed.

Mounting privacy concerns have sparked a years-long battle over TikTok in the U.S. In 2020, then-president Trump issued an executive order to ban the app over national security concerns. This prompted software giant Oracle to bid for hosting TikTok’s user data as its “trusted technology partner” in the U.S.

“If history tells us anything, it’s very unlikely that a ban will happen,” said Jack Johnston, senior social innovation director at performance marketing agency Tinuiti. “Massive private equity firms in the U.S. have invested into TikTok and ByteDance. If any big action happens, it would be a forced sale.”

It’s ridiculous for Congress to single out one app while failing to act on this huge problem that’s prevalent across all social media.

Jenna Ruddock, policy counsel, Free Press Action

Some brands continue to spend on TikTok, while others are exploring rival platforms such as Meta’s Reels, YouTube Shorts and Snapchat. Still, lingering questions about TikTok’s brand safety, investment requirements, digital audio rights and the possibility of future bans deters brands from spending on TikTok.

“Banning a single platform will not address the problem at the root of the entire tech landscape,” said Jenna Ruddock, policy counsel for media-focused advocacy group Free Press Action, in a statement. “It’s ridiculous for Congress to single out one app while failing to act on this huge problem that’s prevalent across all social media.”

What TikTok divesture entails

If ByteDance agrees to sell TikTok, it’s likely that another technology company will acquire the platform. Former Activision boss Bobby Kotick reportedly expressed interest in buying TikTok earlier this month, and in 2020, Microsoft was in talks to purchase the U.S. operations of the platform.

As a result, TikTok could benefit from the technological capabilities of that company, and vice versa, especially if the platform contains an existing DSP (demand-side platform).

“What that would mean for advertisers is increased inventory and opportunities to buy that media,” said Johnston. “You will probably see decreased costs come onto the platform from direct buys, but more premium ad units and more autonomy.”

Conversely, if users leave the platform and ad buyers pull ad dollars from TikTok, CPMs become more efficient and auctions would be less competitive, said Johnston.

Meta’s Reels and YouTube Shorts are runner-ups

TikTok remains a key focus for brands, driving performance and boosting influencer marketing efforts alongside brand messaging. Ad spend on TikTok reached $1.2 billion in Q4 2023, 43% more than the $805 million spent during Q1 2023, per MediaRadar.

Brand partners at Tinuiti have increased its investment in TikTok by between 10% and 15% year-over-year for the last two to three years.

However, in the event of a renewed call for a nationwide ban, advertisers are expected to shift their ad dollars to platforms where TikTok’s 170 million active users migrate. Meta’s Reels and YouTube Shorts could emerge as alternatives, according to Johnston.

As a result, creators whose primary audience is on TikTok may find themselves in a difficult position if brands decide to allocate their marketing budgets to creators with larger audiences on other platforms.

At media agency Collective Measures, brands are already testing identical ad units offered by Snap, YouTube Shorts and Reels. According to Lauren Beerling, the agency’s director of performance media, Meta emerges as the top performer, as Reels run across Instagram and Facebook, resulting in higher reach.

“There’s been a lot of hesitancy in the marketplace, even with our clients to use TikTok, because of the ever-growing privacy era,” Beerling said. About 4% to 6% of digital ad spend for 2024 is allocated to TikTok.

“TikTok just keeps a lot more under lock and key. They’re willing to share less about how they’re using data,” she said.

Still, no platform quite works like TikTok with its built-in editing tools and unique algorithm, according to Ryan Enoch, svp and director of strategy at Momentum Worldwide.

“While YouTube can have similar effects, the process to create content is more arduous and relies more on search functionality vs. discoverability. Instagram on the other hand requires quite a bit more strategic thought and creative polish in how to connect with and reach audiences vs. TikTok,” he said.

Call for federal privacy law

A ban on TikTok could lead to more market share for American social media companies despite having nearly the same brand safety and data accessibility issues as TikTok.  

Many social media services make their money in part by harvesting user data, and so—to some degree—many of these services present some of the same concerns for misuse of user data as TikTok does, according to Kate Ruane, director of the Center for Democracy and Technology’s Free Expression Project.

“The ultimate solution is to pass strong consumer privacy protections that also create strong protections against any government’s access to data collected by companies like TikTok and beyond,” she said.

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How These 2 Social Media Growth Opportunities Will Transform Business in 2024

Opinions expressed by Entrepreneur contributors are their own.

As we move into 2024, two trends are reshaping how businesses engage with their customers. The first is the shrinking gap between awareness and purchasing, which is evident in the skyrocketing popularity of social commerce, which merges social media discovery with e-commerce. The second is the growing consensus nationwide that businesses should contribute to the well-being of their local communities. This expectation transcends traditional notions of corporate responsibility and asks companies to take the lead in building strong local economies and more resilient communities.

Both trends present opportunities for businesses to generate competitive advantages and growth opportunities, and why an organization’s social platforms should be a strategic priority in the year ahead.

Related: How to Create a Stellar Social Media Marketing Plan for Under $100

Bridging the discovery-purchase gap

With a growing demand for convenience and immediacy, consumers are moving through the consideration phase of the traditional awareness-consideration-purchase journey online and at lightning speed. This shift requires businesses to focus on converting customers in real time. Social media is quickly becoming the first option for consumers to engage with their favorite brands, shop for the products they love and discover new ones. Because digital discovery often leads directly to purchase, integrating shopping experiences into consumers’ social media feeds is essential to satisfying their desire for convenience and immediacy. This approach caters to the shift in consumer behavior by emphasizing seamless and personalized interactions with brands in familiar online spaces.

Social media platforms regularly roll out new features and functionalities. For example, last year, TikTok launched its TikTok Shop, and Instagram replaced its “Live Shopping” section with the “Buy Now” and “Add to Cart” buttons to make it easy for users to purchase products as they scroll through their Feed and Reels interfaces.

Retailers are realizing that social commerce platforms like TikTok Shopping, Instagram and YouTube Shopping have become vibrant marketplaces. This is not a fad; Statista projects social commerce will generate $3.37 trillion by 2028 at an annual growth rate of nearly 30%!

Walmart tapped into the power of social commerce last December with our innovative “Add to Heart” shoppable series that combined the holiday season traditions of shopping and watching holiday movies. This first-of-its-kind shoppable commercial series featured over 330 products featured in the series available for real-time purchase, including furniture, holiday décor and clothing items the cast members wore. Customers could watch “Add to Heart” on TikTok, Roku, YouTube and Walmart’s social media channels, and TikTok’s Video Shopping Ads and Roku’s “Ok to Text” feature enabled them to shop whether they were at home or on the go.

The applications and benefits of social commerce are not limited to consumer retail. LinkedIn’s native lead generation is a short hop to something like in-video actions to bridge the gap between discovery and B2B sales. Social commerce is also a viable sales platform for service providers. An insurance company may not offer products its customers can add to a virtual shopping cart, but it can distribute engaging content via social commerce to generate leads and sales.

For now, capitalizing on this trend requires businesses to create interactive, entertaining content that engages audiences who may never set foot in their physical locations. But with the ever-changing social platforms and the tools they provide, what works today might not work tomorrow. That’s why it’s essential to regularly review customer engagement and social media strategies and adapt to and take advantage of them.

Make community building a business priority

While social commerce platforms are transforming traditional sales models, an equally important shift is occurring in how businesses interact with their communities and the role social media platforms play in those interactions.

Organizations of all sizes should make fostering the well-being of their local communities a top priority in 2024. Companies can achieve higher visibility and create positive change by gaining an understanding of what matters most to their community. Demonstrating a commitment to communities, employees and customers is a strategic choice and a key driver for long-term success.

At Walmart, we know that applies to us too. Walmart is a big company, but we are also a collection of businesses in more than 4,600 communities committed to being good stewards of the places our associates and customers call home. We aim to:

  • Create value for communities by providing convenient access to affordable, quality goods and services through our omnichannel business model and everyday low prices.
  • Contribute to economic vitality by providing quality jobs, training and career paths, investing in local suppliers, and contributing to local economies.
  • Strengthen community resilience by supporting local organizations and causes that matter to our customers and associates, increasing food access, and preparing for and responding to disasters.
  • Build more inclusive and engaged communities by advancing equity, supporting caring and connected communities, and deepening engagement between our stores and clubs and their surrounding communities.

Consider how your social media strategy can help you optimize your approach. Social media platforms are great tools for “listening” to ongoing conversations to understand what is important in your community. They also identify opportunities to get involved and make meaningful contributions to the things that matter to your community. Humbly sharing a business’s involvement on social media will help increase awareness and favorability, strengthening its reputation.

https://www.entrepreneur.com/growing-a-business/how-these-2-social-media-opportunities-are-transforming/470118




Exclusive: Reddit Debuts Organic Social Tools Ahead of IPO


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Reddit is rolling out a suite of organic social strategy tools today as the discussion platform prepares for its initial public offering (IPO), ADWEEK can exclusively report.

This is the first time the company has offered free tools for businesses, a move that aims to generate more organic activity from brands, potentially turning them into paying advertisers.

The product, Reddit Pro, includes social listening tools to understand where members of Reddit’s communities are talking about a brand or its category, as well as tools for brands to analyze activity and create posts.

“Reddit Pro has native social listening,” Reddit chief marketing and consumer experience officer Roxy Young told ADWEEK. “Right now, if you want to get any insights around Reddit, you have to do that all on your own [through] just being active on Reddit … using another third party tool.”

The social listening tool distinguishes the suite from other platforms’ organic tools around posting and analytics, which are table stakes for social media managers, said Kendall Dickieson, an independent social strategist.

Reddit can be seen as a bit of a maverick despite its two-decade history, and brands haven’t felt the platform’s members have been the most receptive to marketing messages. It only submitted initial filings to go public in February of this year. The company posted revenue of $804 million in 2023, a 21% increase from the previous year, according to filings, but a drop in the bucket compared to Meta’s nearly $135 billion in revenue in 2023. Plus, the company generated net losses of $90 million.

Still, the company, which earns the majority of its revenue from advertising, says it is in the “early stages of monetizing” its business, according to Reddit’s S-1. Reddit Pro can act as a flywheel to turn more brands into advertisers: more than 200 brands, like Taco Bell, Wendy’s, the NFL and The Wall Street Journal, participated in its test phase.

Turning insights into action

Unilever-owned skincare brand Kate Somerville was looking for ways to rejuvenate the 20-year-old brand when it turned to Reddit to try and join in on conversations with customers, said director of brand activation Jaclyn Sepulveda. The brand joined the Reddit Pro test phase in October 2023, having never used Reddit before, either as an advertiser or organically.

Using insights from Reddit Pro, Kate Somerville launched a paid Ask Me Anything activation where users could pose questions about skincare to the brand’s education manager.

“This pro tool has been so helpful on what people are talking about and what’s driving the conversation and what’s getting the community hyped around skincare and trends,” Sepulveda said. “Prior to this, we didn’t have access to any of that sort of functionality. Even other tools from Instagram and TikTok don’t have trendspotting.”

The campaign generated 2.9 million views and a 90% upvote rate, above Reddit’s internal benchmark, according to Reddit. Sepulveda said Kate Somerville can use Reddit Pro not only to learn what people are talking about but to respond to the right communities in real-time.

“You can get a sense of what people are talking about,” Young said. “That gives you around how could you contribute and add value.”

Dickieson said getting social insights from Reddit seems like a useful trove for new clients. But that doesn’t necessarily translate into ad dollars.

For Breanne Morrison, practice lead at Publicis Canada, investment in Reddit has mostly stayed flat over the past year after increasing by more than 70% over 2022, ADWEEK reported previously. The agency has its own audience tools to learn which communities are best to engage within Reddit, and the new organic offerings might not move the needle toward more investment, she said.

“The listening tools are nice. We would see this mostly with the creative agencies or content teams,” Morrison said. “Historically, these tools, even if it’s a third-party tool, have been useful for brands to curate the topics they want to talk about or build those content calendars. From a paid perspective, we don’t put a lot of weight on it.”

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Reddit admits more moderator protests could hurt its business

Reddit logo on website displayed on a laptop screen is seen in this illustration photo taken in Krakow, Poland on February 22, 2024.

Reddit filed to go public on Thursday (PDF), revealing various details of the social media company’s inner workings. Among the revelations, Reddit acknowledged the threat of future user protests and the value of third-party Reddit apps.

On July 1, Reddit enacted API rule changes—including new, expensive pricing —that resulted in many third-party Reddit apps closing. Disturbed by the changes, the timeline of the changes, and concerns that Reddit wasn’t properly appreciating third-party app developers and moderators, thousands of Reddit users protested by making the subreddits they moderate private, read-only, and/or engaging in other forms of protest, such as only discussing John Oliver or porn.

Protests went on for weeks and, at their onset, crashed Reddit for three hours. At the time, Reddit CEO Steve Huffman said the protests did not have “any significant revenue impact so far.”

In its filing with the Securities and Exchange Commission (SEC), though, Reddit acknowledged that another such protest could hurt its pockets:

While these activities have not historically had a material impact on our business or results of operations, similar actions by moderators and/or their communities in the future could adversely affect our business, results of operations, financial condition, and prospects.

The company also said that bad publicity and media coverage, such as the kind that stemmed from the API protests, could be a risk to Reddit’s success. The Form S-1 said bad PR around Reddit, including its practices, prices, and mods, “could adversely affect the size, demographics, engagement, and loyalty of our user base,” adding:

For instance, in May and June 2023, we experienced negative publicity as a result of our API policy changes.

Reddit’s filing also said that negative publicity and moderators disrupting the normal operation of subreddits could hurt user growth and engagement goals. The company highlighted financial incentives associated with having good relationships with volunteer moderators, noting that if enough mods decided to disrupt Reddit (like they did when they led protests last year), “results of operations, financial condition, and prospects could be adversely affected.” Reddit infamously forcibly removed moderators from their posts during the protests, saying they broke Reddit rules by refusing to reopen the subreddits they moderated.

“As communities grow, it can become more and more challenging for communities to find qualified people willing to act as moderators,” the filing says.

Losing third-party tools could hurt Reddit’s business

Much of the momentum for last year’s protests came from users, including long-time Redditors, mods, and people with accessibility needs, feeling that third-party apps were necessary to enjoyably and properly access and/or moderate Reddit. Reddit’s own technology has disappointed users in the past (leading some to cling to Old Reddit, which uses an older interface, for example). In its SEC filing, Reddit pointed to the value of third-party “tools” despite its API pricing killing off many of the most popular examples.

Reddit’s filing discusses losing moderators as a business risk and notes how important third-party tools are in maintaining mods:

While we provide tools to our communities to manage their subreddits, our moderators also rely on their own and third-party tools. Any disruption to, or lack of availability of, these third-party tools could harm our moderators’ ability to review content and enforce community rules. Further, if we are unable to provide effective support for third-party moderation tools, or develop our own such tools, our moderators could decide to leave our platform and may encourage their communities to follow them to a new platform, which would adversely affect our business, results of operations, financial condition, and prospects.

Since Reddit’s API policy changes, a small number of third-party Reddit apps remain available. But some of the remaining third-party Reddit app developers have previously told Ars Technica that they’re unsure of their app’s tenability under Reddit’s terms. Nondisclosure agreement requirements and the lack of a finalized developer platform also drive uncertainty around the longevity of the third-party Reddit app ecosystem, according to devs Ars spoke with this year.

https://arstechnica.com/?p=2005526