Here’s your latest Last Week in Digital Media.
The debate about political advertising hit fever-pitch during the week. The opening gambit came from a Facebook OpEd on USA Today, defending their position and that “it shouldn’t be the gatekeeper”. Only to be overtaken by an announcement by Twitter CEO Jack Dorsey that they would end political advertising globally come November 22nd (joining Pinterest, LinkedIn, TikTok who have reached similar conclusions). This resulted in open challenges to Facebook to follow Twitter’s lead (#YourMoveZuck) but instead, Facebook publicly doubled down its decision to retain political advertising.
All of this is an issue now, and not 4-5 years ago because political parties are taking full advantage of all the digital tools at their disposal. It’s standard for political advertising in digital channels to have sophisticated tactics with highly precise and narrowly defined people-based segments. Political advertising has raised concerns about predatory and discriminatory use of data (ethical data use), what is a fair and reasonable audience size, and genuine concerns about how to manage privacy and sensitive information.
What does this all mean for marketers and non-political advertisers? If you exclude “fact-checking” and “misinformation” (to de-politicize the debate), all of the latter issues (ethical data use, audience size, privacy) should be of concern to those in the advertising industry. These are key issues we need to resolve and answer. As marketers, we are also in a position to set the agenda on the political advertising debate. The blending of misinformation, data, and money is weaponizing advertising in a way that not only puts both democracy and democratic institutions at risk but has opened the entire advertising ecosystem to criticism.
Over the past few days, I have had direct high-level conversations with senior people at each of the platforms, with industry groups, and directly with clients about concerns with political advertising. The conversation inevitably turns to “responsibility” – as everyone grapples with what is the responsible course of action. Expect “responsibility” to factor into a lot more conversations in the year ahead from how to collect and use data; to where should advertisers invest their money.
In regards to political advertising, the consensus across everyone I speak with is that this is an environment where regulators need to step in and provide guidance. We need this so that there is a consistent, transparent, and procedural fair processes for all: the public, political leaders, marketers, and even the platforms.
Now onto the digital media news you may have missed.
- it’s unlikely any client is still actively using Flash, with most browsers deprecating support but as a further nail in the coffin, Google will stop indexing Flash at the end of this year.
- Facebook is rolling out a preventative health tool to the US in partnership with health organizations. The tool will help people “find affordable places to receive care, set reminders to schedule tests, mark when tests are completed, and more“. You can see how the preventative health tool would work in this video.
- Snap is bringing a 3D painting tool to the Snapchat app (iOS only for now) enabling you to effectively create 3D doodles on objects.
- Spotify’s CFO has said podcasting will be as important to Spotify as original shows and movies are to Netflix.
- in other Spotify news, the company is testing Spotify Kids a standalone app for… well… kids. In beta in Ireland and coming to the rest of the world in the coming months it will only be available to Premium Family Plan subscribers.
- TikTik owner Bytedance has announced its mobile phone the Nut Pro 3. Available in China only and designed for the Chinese version of TikTok (Douyin) the device will retail from ~US$385.
During the week several Q3 2019 results were released, so here are the highlights:
- Facebook Q3 earnings were upbeat (PDF link) with Monthly and Daily Active User Numbers (MAU/DAUs) up as to were ad revenues. One of the more hidden away highlights is that non-advertising revenue was up 43% (PDF link) compared to a year ago which during the earnings call (PDF link) Facebook attributed to Oculus suggesting that Facebook’s VR business is starting to pick-up.
- Pinterest had a mixed Q3 with user growth (322MM) and revenue up (US$280MM) but revenues missed analyst forecasts (PDF link). The company remains upbeat on growth going forward but the share price fell 20% off the back of the Q3 results
- Alphabet (Google’s parent) Q3 results (PDF link) saw revenues up (US$40.5B) with advertising over 80% of revenue (US$33.92B). One notable conversation was about rumors that Alphabet might acquire Fitbit, which was confirmed at the end of the week.
- Google’s acquisition of Fitbit values the company at US$2.1B and is expected to close in 2020 and it marks Google’s entry into the healthcare space. Although it’s interesting to note and shows how much attitudes to data and privacy are shifting when called out in the Google Fitbit announcement is the explicit statement “The company never sells personal information, and Fitbit health and wellness data will not be used for Google ads”. As an FYI, Facebook also looked at buying Fitbit.
- Spotify’s Q3 2019 results saw them beat expectations with MAU growing 30% YoY to 248MM (113MM are premium subscribers). Family and student plans were attributed as the reasons for the growth in premium subscribers. Ad revenue grew 20% YoY underperforming expectations due to “self-inflicted integration issues” as the company moved away from Google’s Doubleclick Sales Manager.
VIDEO AND OTT
- PlayStation Vue, Sony’s streaming service, is shutting down January 30, 2020, making it possibly the first casualty of the streaming wars. Sony will instead focus on PlayStation’s core gaming business.
- There are rumors that Walmart may be looking to sell its streaming service Vudu. Walmart neither confirmed or denied, just saying they are constantly open to and having discussions about the service.
- in potential disruptive streaming news, NBC is looking to make its streaming service Peacock free to everyone. This is for the ad-supported version, ad-free would come at an additional fee. If true, this could be a big shakeup to the category and reset the public expectations of how ad-supported streaming should operate.
- Data analytics firm Jumpshot claims Disney+ already has 1MM+ subscribers. The report (paid subscription) claims 31% of the Disney+ subscribers already stream on at least one existing over-the-top platform, like Hulu (9.1%), Netflix (18.5%), or Amazon (19.4%).
- In other streaming related research, Hub Entertainment Research claims Disney+ had the highest intent-to-purchase scores with close to a quarter saying that will “definitely” or “probably” sign up for the service. Apple TV+, HBO Max, and NBC’s Peacock scored lower but also have generally less awareness in the market.
- Forrester has predicted that marketers will double the amount of money spent on product placement or other marketing integrations on Netflix. Netflix downplayed Forrester’s predictions, but it’s not the first time there have been predictions Netflix will get involved in the ad business.
- a friendly reminder that Apple TV+ is now live. If you have recently purchased a new Apple TV or iPhone (or know someone who has) then you get access for free.
PRIVACY, TRUST, and SAFETY
- revisiting the opening comments on political advertising, Facebook is banning ads from a candidate running for Governor who also has the expressed intent and purpose to run false and misleading ads.
- about 100+ Facebook employees sent a letter to Zuckerberg with concerns about Facebook’s policy of not fact-checking paid political posts. You can read the letter here.
- Cognizant, a company that does content moderation for Facebook (and possibly others) is exiting the content moderation business. Cognizant has stated that it’s working through transition options with partners.
- data protection and sovereignty, linked to the rise of China social platform TikTok, will be the subject of a Nov 5 hearing by the US Senate Judiciary crime and terrorism subcommittee titled “How Corporations and Big Tech Leave Our Data Exposed to Criminals, China, and Other Bad Actors”. It’s also reported that the Committee on Foreign Investment in the United States has started a national security review of TikTok something that could spill over into a risk for advertisers.
- the NY Times reported on streaming hardware and the data collection practices. There are also allegations that researchers found that when you turned off data collection on Roku and Amazon’s Fire TV Stick either data or no difference was made to the amount of data collected.
- Australia’s competition regulator (the ACCC) alleging Google made false and misleading representations about the location data Google collected. There is a comprehensive write up on the ACCC’s claims against Google on the ACCC website or you can read the actual court documents here (PDF link).
- on political advertising, it’s worth knowing that according to reports political ads represent less than 0.5% of Facebook and twitter’s revenues.
On a happier final note, there’s a challenge going around that started on YouTube called #TeamTrees with the goal to plant 20MM trees by Jan 1, 2020. The challenge started thanks to a YouTube Creator Mr. Beast and prompted by Reddit. #TeamTrees is legitimate and the money goes to the Arbor Day Foundation. Something positive to get behind given all the other noise in the world at the moment.
Have a great week and I’m always happy to hear from you.
PS. And a bonus! If you have an Android Phone, Google released an experiment called “PaperPhone” that makes a printable planner you can use each day to help ditch your phone. If you don’t have an Android phone (or even if you do) you can view a video of what PaperPhone offers here and Android users download PaperPhone here.