By David Bressler, Net Conversion Director of Advanced Analytics
No one asked for these predictions, but here they are. Are they farfetched? Yes. Will I say “I told you so” if one of them comes to fruition? You bet.
Facebook will pay its users.
Apple’s new privacy changes in the recently introduced iOS 14.5 are starting to impair advertising efficiency and will continue to worsen as more Apple users upgrade to the latest operating system. As of this writing, iOS 14.5+ makes up ~40% of iOS traffic and is expected to climb to 80+% next month.
Before iOS 14.5, users had to opt out of apps tracking you across other apps and websites. Now, users have to opt in. We’re in the third month since iOS 14.5 launched and, according to Flurry.com, only 6% of US users have opted in to allow app tracking (15% globally). Advertising dollars account for 98% of Facebook’s revenue. Facebook needs people to opt into tracking, or it can run the risk of losing billions of dollars in advertising spend. How can they offset those potential losses? Incentivize its users to opt-in by paying them. Crypto is popular right now. Facebook plans on rolling out their own cryptocurrency, Diem. I can see them being the first social media to pay its customers a variable-based payment, based on time consumed using the app.
Mobile apps will become extinct.
In 2008, Apple launched their Apple Store — a revolutionary application that connects app developers and consumers. What started as an innocent mobile app search engine eventually lead to anti-trust investigations and finding itself in the middle of a debate around censorship and monopolistic practices. Policy aside, I believe mobile applications will follow a similar pattern to blockchain and become decentralized. For any app you’ve ever installed on your phone, you’ve had to go through either the Apple Store or Google Play Store. There are millions of mobile apps, but they all run through Google and Apple. That’s centralization.
Many people don’t know this, but both Google and Apple charge a 30% commission (I’d call it a tax) for in-app purchases within the first year of someone downloading the app, then a 15% tax for purchases after the first year.
Fortnite, an online video game that’s accessible via video game consoles and the app stores, has paid Apple a whopping $237M from 2017–2020. They paid them so much that they eventually became frustrated enough to create a workaround on how its users make purchases — circumventing Apple’s in-app payment processing. Fortnite even offered discounts when its users purchased through them. Apple (and Google) caught wind of this workaround and eventually (still to this day) removed Fortnite from the app stores due to them violating the terms of service.
You don’t have to look at the evolution of graphics in video games to know that technology has come a long way over the past ten years. Web technologies have also had tremendous advancements over the years, specifically around Progressive Web Apps or PWAs. PWAs are websites that have the same look, feel, and speed of a mobile app, except it’s a website. PWAs will be the new “workaround.” If consumers want to use your “app,” they won’t have to go through Google or Apple. Instead, they’ll do directly to your website.
Companies will benefit from no longer having to pay out 30% of their revenue, but there’s another hidden financial incentive. The same mobile app for Android and Apple might look the same to the user, but the backend code couldn’t be any more different. Android apps are coded in Java, iOS apps are coded in Swift. That means companies typically hire resources to support development and maintenance for both versions of the same app.
Guess what? The functionality of websites like PWAs are built on the backbone of only a single programming language — javascript.
Google Ads will change from opt-in to opt-out for optimizations and operations.
Google Ad’s automated/smart bidding uses machine learning to optimize towards driving the most efficient conversions. This feature has been around for several years but has drastically improved over time. Google’s model to determine who and how much to pay for a click takes into account thousands of data signals, like seasonality, the searcher’s gender, age, search query, time of day, day of the week, device, previous websites visited, etc. You get the point.
Despite the advancements, advertisers and agencies are still hesitant to hand over the keys to Google to manage their accounts.
In a perfect situation for Google, every advertiser hands the keys over-relying on Google’s automated bidding. Google may be able to maximize every advertiser’s profits through 100% of advertisers on automatic bidding, but they’d definitely be able to maximize their own revenue by knowing who should see which ads and how much each search should cost.
Google has been promoting automated bidding since its inception, but I think they’ll follow Apple’s approach — shifting from opt-in to opt-out. Currently, Google Ads users need to opt-in to smart bidding, as well as manually checking a box to enable operational features like adding new keywords for expansion, recommended budgets, and recommended ads. In order for Google to strive for 100% automation (thus maximizing its search revenue), I wouldn’t be surprised if Google defaults all new accounts or campaigns into all features being enabled upon launch.
Ever try deleting your Facebook account? In doing so, Facebook shows you pictures of your connections and reminds you that you’re not just leaving a platform, you’re leaving your friends and family. In a few years, Google will do something similar — “Are you sure you want to no longer use automated bidding? We’ve estimated that your conversions will decrease -20% on flat spend”.
Second-party data sharing is about to be so hawt.
Due to where we’re heading regarding third-party cookie tracking and privacy regulations, companies will want your email address to provide you with personalized experiences on their website and app, and to target you via owned and paid channels. Oh, and to sell your information to other companies.
Regardless of the website — advertisers or publications, companies will incentivize you to provide them with your email address. Want to read that article? Give up your email address. Want a 20% discount on your first purchase? Give up your email address.
Your email address is the holy grail of first-party data since it’s the most widely used, and the same email is typically used across all owned devices. If the first party is king, then the second-party data is queen. Second-party data is simply another company’s first-party data that you can purchase from the other company. For example, a hotel can partner with an airline to share information about customers that just booked.
Sure, companies can find suitable partners to find new customers or enrich the data on their current customers, but I’m expecting to see growth in second-party data marketplaces that place heavy emphasis on transparency. Want to target someone that is traveling to Orlando? Instead of just selecting “Orlando Travelers,” it would be “Orlando Travelers — People that booked a flight to Orlando on AmericanAirlines.com.”
Twitter acquires Reddit.
I know this sounds like we’re going backward in time, but given where we’re headed, I foresee contextual and interest-based targeting being the future of how digital marketers reach their target audience.
You log onto Facebook to see how your high school friends are doing, even though you haven’t talked to them in ten years.
You log onto Instagram to feel guilty about eating that midnight ice cream last night, as you compare yourself to Insta-models you don’t know. Or post that picture that took you seven snaps to perfect.
You log onto Twitter because it has replaced your TV as your news source and to follow thought leaders for your interests. Nearly all of the people I follow on Twitter talk about one of the following: digital marketing, finance, cryptocurrency/blockchain, sports, entrepreneurship, analytics, or home renovation (that’s what watching HGTV with my wife has done to me).
You log onto Reddit to watch the viral videos for entertainment purposes, sift through all of the cute puppy photos and to read or engage in conversation about…your interests.
Propelled by the popularity of meme stocks like Game Stop ballooning in the beginning of the year, one of Reddit’s most popular subreddits — WallStreet Bets, went mainstream and more than doubled from 4 million subscribers in January to 10.2M in May. Months later, Reddit was most recently valued at $6B.
I like the idea of Twitter acquiring Reddit. Twitter can afford it. It helps that their stock price has more than doubled since the beginning of the year, as they started talking about rolling out a paid subscription model.
Twitter would be able to expand their total reach and ad inventory, as well as append additional interest-based information to the Twitter users that also use Reddit (assuming the user’s email login is the same).
Blockchain will engrain itself in digital marketing and benefit content creators the most.
At its core, blockchain enables transactions between two parties without the need for third-party verification – decentralization. Most of the use cases for blockchain have been around finance, but the underlying technology could be a game-changer for digital marketing. Blockchain gives power to the people. Think of the quote, “If you are not paying for it, you’re not the customer; you’re the product being sold.”
Facebook and Google have profited from the data they have on their users without ever offering to reimburse them.
Enter Brave Browser.
The Brave browser is changing how users interact with digital advertisements. The browser strips all ads on a website, just like a typical ad blocker plug-in would. Instead, the browser delivers notification-like ads (like when your computer notifies you of an update to your operating system) that come across your screen. For every ad you see, Brave gives YOU 70% of the ad revenue. You can control the number of ads you’d like to receive, capping at five ads per hour. The revenue you receive comes in the form of the browser’s cryptocurrency – Basic Attention Token (BAT), which can be exchanged for US dollars or other cryptocurrencies like Bitcoin.
While you can make a few bucks a month for simply using the internet, you can also support the content creators of the websites you visited. Brave tracks the websites and content you view, then can proportionately “tip” based on the time spent. Brave provides the ability to remove sites you do not want to support.
Financially supporting content creators directly is a core feature of Brave’s browser, but they are not alone. Twitter recently rolled out Tip Jar, a new feature that allows Twitter users to tip/support their favorite content creators — journalists, experts, non-profits, etc. Twitter does not rake in a percentage of the tip, as 100% goes directly to the content creator.
With such a clear incentive to create your own content, compounded with recent changes in Apple’s changes to third-party cookies/tracking, I’m predicting that affiliate marketing will grow in popularity. Affiliate marketing, a click-based, direct response medium, involves a middle-man that connects an advertiser/brand and a publisher/content creator. Both the advertiser and publisher pay a fee to the affiliate network. Blockchain has the potential to link the two sides directly and provide transparency of data, clicks, and interactions, preventing fraud and removing the middle man via smart contracts.
Smart contracts are an agreement between two people in the form of computer code, which runs on the blockchain. Because it runs on the blockchain, all transactions/contracts are stored in a public database and run by many computers (called ‘nodes’) instead of one central party (like a bank!). This is what makes the blockchain decentralized.
In simple terms, an agreement would look like this: “WHEN David buys $150 worth of camping gear on PackXGear.com, THEN PackXGear.com will receive $15 with a contract in place to receive 15% commission.”
Currently, publisher payouts and advertiser’s media attribution are based on pixels/JavaScript. Smart contracts can replace tracking pixels. When someone clicks an ad or referral link, a smart contract would be created. An example of the process is shown below.
