Twitter bugs hurt sales; a humble TikTok; and Nielsen splits from ratings-based past.
Twitter’s ad-targeting system has caused problems for the social media platform’s sales growth and may continue to do so. Two glitches limited Twitter’s precision in targeting users for ads and may have shaved three or more percentage points off of its sales growth for the third quarter.
The problem still isn’t fixed, and the damage may get worse. Company officials think the problems will cost Twitter four percentage points of ad revenue in the fourth quarter. The bugs had to do with Twitter’s ability to target users and share data back to advertisers and those that measure such things.
Both problems were disclosed in August. Twitter is attempting to fix the problem for the long-term in order to increase performance, stability, and scale.
Facebook has started using machine learning to provide additional personalization to dynamic ads.
Multiple text optimization options can be included when brands are creating ads. Machine learning models developed by Facebook will automatically provide personalized variations of the text in the delivery of the ads. The social network tested this capability and found it drove “lift” in content views, add-to-cart, purchases and sales. And it improved incremental return on ad spend by 34 percent. It also generated a 10% boost in life and a 6% drop in cost per incremental purchase.
TikTok is learning it pays to be nicer and not make the same mistakes social media competitors did in working with media buyers.
TikTok is new to the arena but it has chosen to build strong relationships with buyers first along with a clear sales pitch. TikTok feels Facebook, Instagram, YouTube, and Snap all focused on audience growth over advertising opportunities at the outset and it may have hurt them in the marketplace. TikTok instead is focusing on working closely with media buyers along with better customer service.
Buyers are giving TikTok kudos for having ad products that are both unique and easy to buy and for being professional and easy-to-work with, as opposed to Snap, which built a reputation for being cocky and expensive when it first approached buyers.
The recent decision by Nielsen to split into two companies is being welcomed by clients and analysts, but comes with a bit of skepticism as to whether two companies will innovate better than before.
The hope is the split gets Nielsen gets up to speed on media metrics with the rise of streaming video and its customer’s desire for more detail in understanding audiences on top of gender and age. Analysts have felt Nielsen needs to push faster and harder from its ratings-based past towards an audience-based future.
For its part, Nielsen says the new companies will have a clear direction and will indeed move faster. It readily acknowledges that the nature of being a “referee” means that not everyone is happy all of the time. Nielsen intends to spin off its Global Connect business, which offers services to packaged-goods manufacturers.
The consolidation of digital media, which has been predicted for some time, is happening at a feverish pace these days. Several purchases of online companies have been executed recently and more than 100 such companies are expected to be sold this year.
The online media world has become subservient to a newfound profit imperative as Refinery29, PopSugar and New York Magazine have all been sold as of late. The days of owners propping up unprofitable digital media companies appear to be over. Reality is hitting hard but it’s become obvious that ROI is much smaller than what was expected. The trend is to join up with larger entities in order to drive greater shareholder value.
A few media entities have decided to sell items direct-to-consumer and, hopefully, that will augment the ongoing expectations in the marketplace for digital publishers to produce high-quality editorial, visually impressive products, and impactful brand integrations.
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