This Week in Social is a weekly digest of some of the biggest stories in social media marketing news. These stories are the show notes for the Brave Ad World Podcast. Each story is discussed at a deeper level on the podcast.
Facebook Sees Engagement Uptick
Way back in 2016, context collapse was cited a potential cause in the decline of Facebook users creating original content for the platform. Well, here we are three years later, and Facebook has some good news to share.
Facebook’s actually seen an increase in engagement on its platform in terms of the median number of comments, likes and ads clicked. Facebook’s use of machine learning and algorithms have been cited for the uptick in user interaction as users are seeing more relevant content in their feeds. The success of Stories, which now has more than 500 million daily users, may also be playing a significant role in getting users engaged on the platform.
Engagement is a big concern for any platform as everyone from YouTube to Twitter is working to tweak their platforms just enough to get users to interact on them more. That makes this good news for Facebook, which has faced speculation that it is on the decline with younger users looking to other platforms to spend their time and users spending less time there. Facebook, from an engagement standpoint, looks very strong.
Snap Gets Its Groove Back
Snap Inc. had a surprisingly strong Q2 earnings report, showing that daily user growth was up 7% over Q1 hitting 203 million. It was also able to increase revenue 48% over the previous year, which beat expectations.
The report gave the platform a much-needed reprieve from disappointing quarterly results since the company went public. After consecutive quarters marked with user growth declines and stagnation, decreasing number of downloads, other platforms duplicating core Snapchat features and a redesign hated by existing users, Q2 showed that Snap Inc. may be starting to snap back.
The biggest reason for Snap’s return to grace has been a renewed emphasis on younger users. Snap’s botched redesign was intended to bring older users onto the platform, but after that effort failed, Snap’s refocused on younger users. It now reaches 90% of U.S. 13-to 24-year olds.
That effort paired with improvements to its ad tech has made Snap a more reliable platform for advertisers because they can more easily implement and track campaigns.
One final piece that has helped Snapchat is its focus on Lenses. Snapchat’s face swap function and other filters increased user engagement along with the April launch of Snap Games that lets users play games seamlessly through Snapchat lenses.
It’s too early to call Snapchat’s recent success a comeback, but it is showing signs of life as it focuses more specifically on a core user base and features that keep that user base engaged. Snapchat appears to have abandoned its plans to be a broad appeal platform like Facebook, which seems to be paying off.
Facebook Rolls On in Earnings While FTC Fine Gets Put in Place
Facebook released its Q2 earnings this week, reporting $16.6 billion in ad revenue, a 28% increase over last year and beating expectations. But that wasn’t the only news we got this week.
While Facebook probably isn’t a fan of any of this, none of its core business model is required to change, and Facebook wasn’t required to admit any wrongdoing. But that doesn’t mean Facebook is out of the woods. Last week we saw an increasingly skeptical Congress grill Facebook over its desire to launch a cryptocurrency. It was also revealed that Facebook is under another investigation, this one focused on antitrust, from the FTC.
Facebook had another stellar quarter, despite all that it’s been going through, but we’re starting to see oversight catch up to the social network as it attempts to emphasize a future with a greater emphasis on privacy. Facebook is clearly feeling some heat, but overall, it’s gotten through all of this pretty cleanly. Now, we’ll see if any of this has any effect moving forward.
News Quick Hits
The FTC reached a settlement with Google over YouTube and its mishandling of data privacy laws in regards to children’s videos. The settlement states that Google did not adequately protect children enough to meet COPPA standards. Google will pay a multi-million dollar fine, and the FTC stated that it plans to update internet privacy rules for children.
Google has closed a loophole that let publishers detect users in “incognito” mode to get around paywalls using the Chrome browser. Google is joining the likes of Apple in limiting user tracking. Up until this point, publishers could still detect users in incognito mode and raise paywalls accordingly. This update protects users, but it comes at the cost of limiting the tools at publishers’ disposal to monetize their content. We can expect new approaches to paywalls in the near future in response to this update.
The Justice Department announced plans to investigate the market power of major internet companies. This will be joining existing investigations underway by both Congress and the FTC. While the Justice Department didn’t name any companies specifically, it did say that it plans to look into search, retail and social media categories.
Pinterest is giving advertisers more tools. A new beta program allows ad buyers to share conversion data with Pinterest to better measure ad performance on the platform. It’s also letting advertisers automatically create promoted pins based on their product catalogues.
Amazon’s Alexa audio ads are getting a few more details. As Amazon pitches the opportunity, it’s guaranteeing a million listeners for brands. Amazon’s positioning the units as significantly more interactive than what advertisers can get from the likes of Spotify and Pandora. Users can respond to the ads with their voices to add items to shopping carts, for example. This is just an expansion of a test Amazon has been running, so it’s unclear when the units will expand even more.
YouTube is now selling masthead ads on a CPM basis. Advertisers can also use Google’s robust targeting offering to determine who sees those ads. The feature is available for all advertisers willing to meet the minimum spend requirements. This is pretty prime real estate that was limited to only the highest spending advertisers until now.
Amazon reported a a 20% jump in revenue, reaching $63.4 billion in Q2, but profits weren’t up to snuff for investors. That sent shares down 1.6%. One of Amazon’s biggest revenue drivers is cloud computing, and while it did bring in strong numbers once again this quarter, its growth is slowing as competitors like Microsoft step up.
Alphabet went up 9% after it was able to beat revenue and earnings expectations. Google also announced $25 billion in stock buy backs, so that probably had something to do with the jump as well. The news came after a disappointing report for Q1, so investors were happy. But for Alphabet and other tech companies, talk of regulation and investigations loom on the horizon.
Facebook is moving Instant Games to its new ‘Gaming’ tab inside of Facebook from Messenger. Now, when users activate Instant Games within Messenger, they’ll open the Facebook application to play. The goal is to create a unified destination for games within the Facebook platform, which will now be the Games tab.
Twitter had a great Q2 earnings report, beating Wall Street expectations in revenue by 18% over last year and adding 5 million daily users. Now, the platform has 139 million users. Twitter did warn investors that its revenue will likely come in lower than the analysts’ projection of $872 million in upcoming quarters. This is because Twitter will be retiring some of its less successful ad formats.