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Google’s antitrust lawsuit allows for a lot of cynical theater.
Microsoft CEO Satya Nadella is, of course, testifying about exactly what Microsoft wants from the trial. Sridhar Ramaswamy, a former Google search product manager who launched an ad-free search engine, explains why ad-supported search is bad.
But one thing happened, Digiday reports, this is how search ads have distinguished themselves from other digital advertising channels – the other major channel being social media – as the essential medium with the power to dictate advertiser behavior.
At the height of social media in 2021, Snapchat’s market capitalization reached a peak of $130 billion, while Facebook was briefly a billion dollar company. Meanwhile, Google has been mocked for trying and failing with its own social media (apart from YouTube).
But Google search has proven itself, even if social media hasn’t stood the test of time.
A year ago, a investor asked Alphabet CEO Sundar Pichai to explain his confidence in Google’s advertising business as Meta, Snapchat, Pinterest, TV channels, news and other ad-supported media (except ‘Amazon) were hammered.
The DTC Growth Paradox
Many DTC brands exploded in popularity and collaborations with name brands, but sizzled like a match when that goodwill never translated into profit.
Underwear brand Parade found itself in liquidation despite high growth rates and deals with companies like Coca-Cola and Swarovski, Information reports.
Revenues increased well, but 60% of these net revenues went paid media. The company spent as much on ads to convert a sale as it did on the average purchase price.
Clearly, this situation was not sustainable for Parade. However, many DTC startups find themselves in similar situations due to investors betting on potential outside gains in the future, which can come at the expense of a sensible business model.
Often, too, a DTC brand takes a strong philosophical stance on topics such as sustainability (Allbirds, anyone?), accessibility (Parade presents itself as underwear that is not Victoria’s Secret) or fairness (like women’s shaving brand Billie). But then they must beat traditional brands on their home turf – store shelves – while rationalizing runaway online acquisition costs.
In a pickle
TikTok Shop is a blessing and a curse, Insider reports.
Adding e-commerce to a platform known for viral videos makes sense for the bottom line. When 42,000 people decide to buy the same pickle-themed sweatshirt that they see reposted over and over again, for example, that’s a big sum for TikTok and individual sellers like Bad Addiction Boutique.
But creators are struggling to meet the platform’s strict three-day shipping policy. TikTok can’t compete with Amazon if it can’t deliver items quickly and guarantee quality, but the sellers are almost all local creators or businesses who have to package and ship themselves. Add to that the unpredictability of social media virality, and creators can easily find themselves with more orders than they can fulfill.
TikTok takes a hard line on refunds and shipping guarantees (Amazon’s table stakes). But that means advertisers and marketers risk being kicked out if they create customer service problems.
But wait, there’s more!
Google agrees to reform its data conditions after German antitrust intervention. (TechCrunch)
Snap receives an enforcement notice from the UK’s privacy watchdog over its chatbot technology, My AI. (Bloomberg)
Campbell Brown’s departure from Meta provokes no response from publishers facing a deterioration in their relations with Facebook. (Digiday)
Adalytics: How much does Procter & Gamble pay per ad impression? (Blog)
You are engaged!
Agency vet Deirdre McGlashan joins brand governance platform BrandGuard as CMO. (MediaPost)
