Month: December 2022

Throughout 2022, major platforms have each had both collective and unique challenges. Along with increased pressure from legislation, regulations, investigations and lawsuits against tech giants, smaller startups and advertisers themselves, Apple’s app-tracking changes have cut into tech giants’ bottom lines and weakened targeting and measurement capabilities. Meanwhile, competition from rivals like TikTok and Twitter’s disarray under the ownership of Elon Musk contributed to the industry’s existential dilemma about where to appear and what to avoid.

“I wouldn’t want to be in the seat of a buyer right now,” said Ryan Anthony, CEO and co-founder of Dirt, a marketing neuroscience startup. “I can’t think of a single advertiser that hasn’t had to blow up their [lifetime value] models this year because of privacy.”

The tumultuous year has left marketers, agency executives, analysts and other experts rethinking everything from data practices to content strategies to e-commerce efforts. TikTok’s rise, younger users’ demands, a growing creator economy and brand safety issues have all further complicated the already complex landscape and prompted some companies to re-consider their usual tactics.

At the center of much of this discussion sits the importance of data. A survey of 6,000 marketing leaders conducted this summer by Salesforce found that 75% still rely at least partially on third-party data, but 68% said they plan to move toward first-party data. Meanwhile, 51% said their measures to protect consumer privacy go beyond regulatory requirements and industry standards, down from 61% last year.

“There might be a little bit of a gap year happening as marketers have been retooling around first-party data to be able to create the right context and the right targeting on those platforms,” said Jay Wilder, vice president of product marketing for Salesforce’s marketing cloud. “Some of that is also shifting audiences from one platform to another, and marketers are going to be catching up with that.”

The year of copycats

Social advertising still has the biggest budget allocation at 10.1%, down from 11.3% in 2021, according to Gartner research. But the massive audiences, evolving content formats and expanded ad tools across TikTok and Pinterest are still attracting advertisers of varying types.

Facebook, YouTube and Instagram have all been all racing to keep up with TikTok, which has led to a year of the platforms copying each others’ formats to try to keep users in their apps. And in September, Snap announced a major restructuring plan to refocus on Snapchat’s key differentiators including community growth and augmented reality.

“As TikTok and Instagram compete for audiences’ attention, the content differences between the two will continue to blur,” said Claudia Ratterman, director analyst at Gartner Marketing.

Some brands have found success with organic reach on TikTok after years of diminishment on Facebook and Instagram. Other companies have been moving beyond just social ads when it works with creators. For example, the online learning platform Skillshare has been using its own platforms and also wherever its teachers own audiences, which has led to it spending less now on influencer marketing now than two years ago.

“In theory, YouTube should be our biggest competitor, but it’s been our biggest promotor,” said Skillshare CEO Matt Cooper. “I know if one of our teachers is promoting their Skillshare class on YouTube or in their newsletter, we know they’re reaching people rather than bots.”

Creators, computers, and social beyond the content

The growth of video led marketers not just to think about what their creative assets look like, but also how to make more of it. User-generated content, the creator economy and artificial intelligence such as generative AI have all been a part of marketers’ content strategies in 2022 and will likely be an even higher priority in 2023.

“TikTok transformed social media advertising from brand-first to creator-led,” said Kelsey Chickering, a principal analyst at Forrester Research.

Content has been front and center, but how social networks are using it is also evolving in unexpected ways. Younger people have been using TikTok’s search engine to find information and research products, but some researchers have also found concerning and potentially dangerous misinformation in the results. (TikTok’s capabilities even have execs at Google — the ranking king of search — suggesting it might soon face more competition.) Elsewhere, people are also using Reddit to get advice from fellow Redditers or adding the word “Reddit” to search queries to uncover relevant results.

“While people may be shifting away from mind-making impulse buys, they’re doing research,” said Timo Pelz, Reddit’s vice president of business marketing. “They’re still spending. They’re just very thoughtful about how they do it and they need to justify their purchases more. A lot of places you go today will just advertise at you.”

Liz Cole, head of social at VMLY&R, said the continued overlapping of platforms and their capabilities have also evolved platforms from separate islands to collectively become part of the social web as a whole. The way she sees it, platforms’ users are in many ways all part of the same audience, which requires content that transcends platforms. The changes are also evolving how agencies are planning content.

“Instead of thumb-stopping where you try to get people to be interested in content when they weren’t, we’re wondering whether to make content for people who are looking for content,” Cole said.

Elon Musk, Twitter and the ‘blue bird in the room’

When it comes to how platforms have changed marketing in 2022, perhaps the biggest shakeup is also the most recent. Since Elon Musk acquired Twitter two months ago, many marketers have grappled with pausing advertising with the platform, how to handle organic content or whether to leave the beleaguered blue bird entirely. On the other hand, some still seem to like it even in the new era.

The true impact of Musk’s ownership on Twitter and its advertisers might be murky for a while, but some say the upheaval will collectively cost the company tens of millions in lost ad revenue.

It’s not just about the ads. Many companies use Twitter for customer service channels, social listening, announcements or other efforts that either isn’t as feasible on rival platforms or even the same fit elsewhere. The dynamics have also created a catch-22 situation for brands.

“You can no longer even just advertise on Twitter,” said Gali Arnon, chief marketing officer at Fiverr. “By even advertising on Twitter, that’s taking a stand. Whether you are removing your ads, that also says something about you as a brand. We actually hear from customers that either like or don’t like the fact that we are actually still on Twitter, but the funny thing is those customers are complaining on Twitter.”

The widening cracks in social media’s legacy walled gardens have also made room for brands looking to find fresh ways to grow new audiences and foster conversations with consumers. Beth Tripaldi, vice president of connections strategy at Huge, said some brands have begun shifting budgets into “really unique pockets” such as Reddit and Discord. (Discord doesn’t allow ads, but many brands have formed their own servers as a way to connect directly with fans.) Although breaking larger audiences into niche communities can be challenging compared to traditional social media marketing, she thinks it also comes with new creative opportunities.

“Those that are actually driving the conversations around it aren’t really empowered or set up in order to scale from that,” Tripaldi said. “That’s where brands can come in. They can really be more facilitators that can help with adding value.”

From shopping carts to social commerce

Marketers’ efforts to integrate online shopping strategies with their social media strategies have also led to the growth of “social commerce.” Facebook and TikTok have been testing live video shopping, Pinterest is building out new and long-awaited tools and even Musk said he’d like to make Twitter more of a commerce platform.

For the e-commerce platform MikMak, social commerce traffic was 19% higher in 2022 than it was in 2021. And from January through November of this year, MikMak’s social commerce traffic based on purchase intent clicks grew by 531%. Where the traffic is happening is also shifting. For example, TikTok was seventh in 2021 when it came to the total share of social commerce traffic, but in 2022 it was third. (Facebook accounted for 56% of the share in 2022, followed by 32% on Instagram, 3.6% on YouTube and 2.3% on Snap, 1.3% on Pinterest, and .15% on Twitter.)

Rachel Tipograph, founder and CEO of MikMak, credited a number of factors to altering the landscape including the rise of retail media networks, weakening ad attribution and the convergence of brand and performance marketing. It’s been especially challenging for companies that rely on driving traffic from a social app to a retail app because most people have opted out of tracking on Apple devices. Although attribution has been harder in some places — including certain apps and specific categories such as groceries — Tipograph said MikMak still has seen strong results for others such as product categories people research more such as toys and electronics.

“It’s not because of technology. It’s because companies don’t want to play nice with each other,” Tipgraph said. “Apple woke up in 2019, realized people were building multi-billion dollar business in their hardware and wanted a piece of the pie. They’ve effectively undone ad-tech as we know it.”

Across the board, King employees emphasized that their work on Candy Crush prioritizes entertainment over potential revenue. Monetization is an important aspect of Candy Crush, King staffers told Digiday, but players should never feel pressured to spend money inside the game.

Candy Crush has always been free-to-play, and King has gone back and forth on the inclusion of ads in the game. Early versions of Candy Crush featured ads, but King removed all ads in 2013 to focus on in-game purchases, which have always been present in the game. King quietly re-introduced rewarded ads to Candy Crush in 2018, but company staff have continued to refer to in-game ads as a “test feature” as recently as November 2022.

“I would argue that any time you have a really great product, people are more interested in investing in it — so that’s the key,” said Abigail Rindo, a narrative design director at King. “Part of the charm of Candy [Crush] is that anybody can play it, no matter where they are or what their situation is.”

Indeed, Candy Crush’s greatest asset is its massive user base. So far, the game has been downloaded over 3 billion times across platforms, boasting over 240 million active players every month. This stunning growth is a reflection of the Candy Crush’s high entertainment value — not its incorporation of ads or in-game purchases.

Focus on fun notwithstanding, King is still a business that needs to make money to survive. Beginning in 2020, Activision Blizzard has gradually implemented more potential revenue streams into the game, including both traditional ads and partnerships with brands such as “Space Jam” and “Sonic 2.” The integrations are relatively simple, with in-game candies transforming into brands’ logos or mascots and characters such as Lola Bunny and LeBron James cheering the player on from the top of the screen.

In Candy Crush, players who watch ads — which are usually between 30 and 60 seconds long — are “rewarded” with in-game bonuses, such as “boosters” that make levels easier to beat — which means workers at Activision Blizzard Media, the corporation’s in-game advertising arm, must regularly coordinate with King’s level designers to make sure ad-rewarded boosters don’t make any levels too much of a breeze.

“Every single one of these decisions is very considered and conscientious, and done in a very data-and-insights-forward way. Not to be a broken record, but it’s all with a bent towards making sure that it’s a good experience for the player,” said Jonathan Stringfield, vp of global business research and marketing at Activision Blizzard Media.

One element of King’s player-prioritizing strategy is for Candy Crush to partner only with brands and intellectual properties that fit naturally into the game. This is why Candy Crush’s brand integrations thus far have been intellectual properties, such as games, movies and celebrities, that fit the game’s target demographics of commuters, parents and other nonstandard gamers — not consumer goods or other traditional advertisers.

King CMO Fernanda Romano told Digiday that the company is “exploring” more direct consumer brand integrations, but did not provide further details.

The specific level of brand involvement and advertising in Candy Crush can also be cranked up and down depending on individual players’ activity or personal preferences. The game waits until players have made it relatively far to serve them ads, and eschews ads entirely for players that are already spending a significant amount of money within the Candy Crush ecosystem. Exactly how far, and how much money, depends on a secret algorithm cooked up by the developers at King. In a mobile gaming industry that wants to squeeze as many impressions as possible out of every consumer, this kind of variable experience is uncommon.

“Many studios want to maximize the number of ads they show to their audience, so they can maximize the monetization,” said Jobie Tan, global head of gaming business development for the mobile advertising company InMobi. “Some studios are definitely more protective of their users, so that’s why they like to differentiate and be selective as to who they show their ads, especially if in-app purchases are built into the game.”

As Candy Crush enters its second decade, its designers have a long-term vision for the game. They are fully aware of the integral role that advertising and brand partnerships will play in the future of Candy Crush, but are unified in their belief that, if the game is genuinely fun, revenue will inevitably come in.

“We’re looking ahead for the next 10 years, and this here is one of our main focuses: how do we keep the player learning?” said King senior level designer Vanessa Malmberg. “We do this by introducing new game elements, like new blockers and new game modes — and then we use these to create new combinations and patterns, new variations of interesting puzzles, so no level looks or feels the same.”