Month: February 2023

As Digiday reported last October, if the app didn’t move quickly to provide marketers with unique features that could pique their interests, BeReal would become a victim of its fleeting success and see attention spent elsewhere.

And it looks like that time is here.

In October, worldwide downloads reached an average of 15.2 million and has since decreased to around 4.2 million in February, according to data from Apptopia, a real-time mobile app insights company. Added to that, daily active users have also decreased by around 52% from an average of 14.7 million in October last year to around 7.7 million in February.

Marketers are taking notice. The only brands that appear to remain on the platform right now, are those that pride themselves on having a strong tone of voice across social media, not just an advertising presence. Other marketers have put BeReal on the back burner.

Tamara Littleton, CEO of The Social Element said her agency still isn’t backing BeReal for brands and is instead continuing to focus on more established social media apps.

“Platforms that are more mature, have all the metrics and APIs sorted to work with other tools to help large corporations engage at scale are just easier and have more success,” she added. “Don’t get me wrong, we love to experiment and help our brands get extra share of voice but we’re not rushing down this particular road with BeReal.”

Even Dean Cooman, head of talent at Boomerang FT noted that last year he advised clients to include it as an addition to social campaigns, but since then talk of the app has become very quiet. As such, he’s no longer pushing the app.

“BeReal is not on the radar for the majority of brands and honestly, that’s OK,” added Littleton. “It’s OK to leave some of the platforms to the community to use instead of trying to jump on every bandwagon.”

Still, there’s no certainty that marketers would see BeReal any differently even if it did have ads. There’s not a lot to keep people engaged once they’re there.

Nothing new to offer

Since the app caught the attention of Gen Z last year, users have still been sent the same daily notification at random times, in which they’re required to ‘BeReal’ and post their photos to their network on the app. And so far, that’s still all it does.

“BeReal’s early appeal hasn’t proven to be sustainable because the platform has failed to sufficiently diversify its model,” commented Ed East, founder and group CEO of Billion Dollar Boy. “A greater variety of formats and features would help to keep the platform feeling fresh, and increase engagement and user retention. But as it stands, the platform is already starting to feel a bit stale — there’s only so many times you can share a photo of your desk and computer screen!”

It’s a far cry from a year ago. Back then marketers were scrambling to get on the app. Despite the attention, none of it was necessarily stoked by the app. As East noted, it’s no real surprise that the app is fizzling out. It hasn’t got the proper resources going into evolving it beyond its original proposition.

Even if BeReal had made those changes already, the chances are they wouldn’t have extended to winning over marketers. BeReal just isn’t fussed about them right now.

Marketers aren’t a top priority

While the team still doesn’t respond to individual requests for comments, they have posted a statement on the website regarding the platform’s current priority. And apparently that’s still building the best product for its users.

“BeReal is free to use, and we don’t have ads. You may be wondering if we’ll have ads or how we think about monetizing the app,” stated the BeReal team. “First, we want to stick around for as long as you’ll have us, but working with brands is not our priority. There are a lot of cool things we want to build, and we’re very lucky to be able to prioritize our time this way.”

That’s as clear a stance on advertising as it can get.

For now, BeReal’s overlords are adamant they can erect a sustainable business sans ad dollars. Keep in mind that it’s still early days for a company that was founded in 2020. Clearly, the management team is busy laying down a lot of the internal infrastructure needed to fulfill their ambitions. After all, BeReal did already raise a $60 million series B round in early 2022, per Digiday reporting last November, so there is cash to use, or simply burn through.

According to LinkedIn, the company now has 108 employees, and its most recent notable hire is Twitter’s former chief privacy officer, Damien Kieran, who cited the product, the people, and the potential of the platform, as what lured him in. He joined as general counsel earlier this month, having resigned from Twitter in November, according to his LinkedIn profile, after Elon Musk bought the social network.

And there are still 10 vacancies across product and engineering roles, according to the BeReal website.

The problem is, other social media apps have already copied BeReal’s USP, no doubt making it even more tricky for the platform to beat the competition.

“If BeReal is to revive its popularity, it will need to increase its appeal to creators and brands,” said East. “Without that, the lack of regular external investment and the dearth of variation in content will gradually squeeze BeReal out of the social media landscape.”

“Please be aware of its many deficiencies and sorry in advance,” read Snap’s blog post. “All conversations with My AI will be stored and may be reviewed to improve the product experience. Please do not share any secrets with My AI and do not rely on it for advice. While My AI is designed to avoid biased, incorrect, harmful, or misleading information, mistakes may occur.”

Although the feature is only for paying subscribers, the number of Snapchat+ users isn’t necessarily small. According to Snap, there are now 2.5 million users paying for early access to features such as My AI who will also help provide feedback as the company builds its AI capabilities.

Integrating ChatGPT into Snapchat could give users another reason to spend time in the app — and maybe even another reason for others to try using the app. Snap also worked with OpenAI to train the chatbot to have a tone based on Snapchat’s personality as an app and also to adhere to the platform’s trust and safety guidelines.

Although marketers praised Snap for being early with rolling out a new AI-generated feature, there still doesn’t seem to be any clear uses brands might want to tap into — at least not yet.

“Until they get to some audience, I’m not sure if brands are going to be clamoring to get in there,” said Brian Yamada, chief innovation officer for VMLY&R. “There’s plenty for brands to explore on their own outside [of Snapchat].”

The news comes just days after Meta provided a glimpse of how it is thinking about generative AI. But rather than announce any features for everyday Facebook and Instagram users, Meta’s news has more immediate potential for researchers. On Friday last week, the social giant announced its latest large language model called LLaMA, which is short for Large Language Model Meta AI. It’s also smaller than some others. For example, OpenAI’s GPT-3 has 175 billion parameters, but Meta’s LLaMA includes models that range in size from 7 billion to 65 billion.

In Meta’s blog post and about LLaMA, the company also acknowledged there’s still more work to be done when researching and addressing risks of bias, toxic comments and wrong answers. It also said the plan is to allow access on a case-by-case basis to academic researchers and others that are affiliated with governments, civil society organizations and industry labs.

Alex Olesen, vp of vertical strategy and product marketing at Persado, a marketing AI company, said Meta’s new large language models and the bots used to train them to have the potential to help resource-strapped companies. Others point out that Meta’s news doesn’t really help businesses yet with their own AI efforts.

“It’s critical that businesses ensure that generative AI is trained on trusted, pre-qualified enterprise data before using it for marketing or customer service,” Olesen said via email. “In the past few weeks, there have been numerous reports about generative AI bots serving up content that is wildly off.”

There’s still a question of whether businesses and everyday users want this type of AI functionality. In a survey by the Morning Consult earlier this month, just 10% of consumers said they thought generative outputs were “very” trustworthy, 42% thought AI tech can’t be easily controlled and 44% didn’t think it’ll be developed responsibly. And when asked about their specific concerns, 74% mentioned being “very” or “somewhat” worried about their personal data privacy while 70% mentioned being wary about misinformation being included in AI-generated search results.

Marketers and AI experts say Meta is wise to limit the size of its large language model. For example, it could help Meta mitigate other risks that some warn of when it comes to generative content — and thereby avoiding a repeat of some of the mistakes it’s made in the past with data privacy and misinformation.

By allowing limited access to its large language model, Meta is making it “a bit more of a controlled substance than a street drug,” according to Steve Susi, director of brand communication at the brand strategy firm Siegel+Gale.

“Imagine a tennis court the size of the universe and the referees are really only at maybe one certain section of it,” Susi said. “And all the rest of that tennis court, that whole real estate, is where new cool weird games are being made that don’t follow tennis rules. There’s no one there to watch, but it’s still an incredibly powerful AI apparatus that could be misused.”

“We’ve definitely seen movement and momentum. But without question, I think that they have fallen very short from the promises that they’ve made. And even this year, with all the talk about the recession and with all of the cuts, I think even their desire to deliver on those commitments are even smaller,” said Detavio Samuels, CEO of Revolt on the latest episode of the Digiday Podcast.

As a Black-owned media company that was founded by Sean Combs and operates a TV network as well as streaming and digital properties, Revolt has worked to address one of advertisers’ top complaints: “That there was not enough inventory in Black-owned media in order to deliver against the commitments,” Samuels said. Among those efforts have been Revolt’s launches of free, ad-supported streaming TV channels across services including most recently Vizio’s WatchFree+.

“There are thousands of FAST channels that exist today. But when you look at those FAST channels, most of the platforms that have FAST channels have somewhere between zero to maybe two Black content-focused channels. And so we see that as a massive opportunity,” Samuels said.

Despite advertisers’ DE&I shortcomings and the overall shrinking of the traditional TV business, Revolt’s revenues have continued to grow, and its digital revenue has surpassed its linear TV revenue despite the latter revenue stream continuing to grow.

“Now our digital revenue is much larger than our linear revenue. Over the last few years, we’ve seen our digital revenue growth about 9x to 10x, whereas our linear revenue has probably grown closer to 4x to 5x. And so streaming and digital is without question the biggest portion of our business right now,” Samuels said.

Here are a few highlights from the conversation, which have been edited for length and clarity.

Digital revenue dominance

Streaming and digital is without question the biggest portion of our business right now. When you look at [Revolt’s overall revenue] last year, let’s call it five-eighths digital and three-eighths linear.

Streaming subscription saturation

We see subscription as an opportunity. But as you know, the subscription market is just highly saturated. And for those people who know the difference between a red ocean and a blue ocean, I very much see the subscription business as a red ocean where you have several massive players competing. It’s no longer about growing the market; it’s about stealing share.

Keeping score of advertisers’ commitments

What most advertisers haven’t done is come up with a scorecard. There’s no transparency. And so we are working with third parties to come up with some sort of scorecard that can showcase whether brands have been increasing their spend with Black-owned media over the last few years or not.

DE&I dollars in an economic downturn

My business training always taught me that, when you need to make cuts, you go for the biggest piece of the pie. And so I don’t understand how advertisers and brands — even if they are having to do cuts — still can’t get to 2-3-4-5-6-7-8% [of their budgets being spent] on Black-owned media. And so that is absolutely a concern. And so we’re going to keep the pressure on advertisers and brands to make sure they deliver against the commitments that they made.

More than three-quarters of both agency pros and publisher pros said that AI will have the biggest impact on their businesses over the next few years, making it the No. 1 emerging tech to watch in both industries. Specifically, 76% of agency pros chose AI as the tech that will have the biggest impact on them, while 79% of publisher pros did the same.

These results from Digiday’s survey make a lot of sense, considering that AI is a huge topic in experimentation this year for both publishers and marketers, especially as OpenAI’s ChatGPT tool continues to gain momentum.

On the buy side, marketers and agency execs are finding ways to incorporate ChatGPT specifically into their brainstorming processes, or to help cure writer’s block. So far, there’s no indication the technology will replace human copywriters, but an increasing number of marketers are thinking beyond ChatGPT’s free version about how the tool’s subscription version could fit into their creative processes.

And on the sell side of the coin, media executives are encouraging their editorial teams to experiment with ChatGPT and become familiar with how it works. It doesn’t appear that newsrooms are actually integrating the tech into their workflows just yet. But editors are starting to think about the applications of ChatGPT and the implications it could have on different parts of their businesses, like SEO-driven content and freelancing, for example.

ChatGPT has even found its way into search, powering Microsoft’s Bing search engine and accompanying the tech’s Edge browser. It’s clear why AI is top of mind for agencies and publishers, alike.

To really bring the point home, Digiday compared agencies’ and publishers’ anticipation about the impact of AI with other emerging technologies. And the anticipated impact of these other technologies absolutely pales in comparison with AI’s anticipated impact on marketing and publishing.

For instance, while 76% of agency pros said they think AI will have the biggest impact on their businesses in the coming years, the technology that accounted for the next-highest percentage was the metaverse — which only 9% of respondents said would have the biggest impact. And, very interestingly, metaverse actually tied with the response “none of the above,” which 9% of agency pros chose.

“None of the above” actually ranked second among publisher respondents after AI, with 15% of publisher pros saying none of the offered technologies would impact their businesses. And the third-place choice among publisher pros was blockchain, cryptocurrencies and NFTs, which a mere 3% of publisher pros said would be the emerging tech with the biggest impact.

“Everyone is hoping the spring is really the spring,” said Brandon Rhoten, CMO of visitation data platform GroundTruth. “There are signs that it might be a soft landing. People are hoping for spring, they’re hoping we can get back to business and not worry so much about inflation or a recession. There’s more hope than a month ago, certainly.”

That hope is tentative, per Rhoten, who said marketers are hedging their bets and spending on more performance marketing rather than brand building efforts. While marketers are cautiously optimistic for a better second quarter than they anticipated a month ago, the focus continues to be on flexibility, as marketers are hoping for the best but making sure their plans won’t set them up for the worst.

Marketers’ current focus is on short-term planning, spending closer to campaign launches rather than inking long term deals, explained Stacey Stewart, U.S. Chief Marketplace Officer at UM, who added that “flexibility continues to be top of mind.”

“Everyone’s primary concern is not in the spending itself but in the unknown,” said Stewart. “Everyone wants to hold onto their dollars until they’re confident that they’re not going to need to return those dollars to someone’s bottomline.”

Even as some marketers are staying cautious, others have a “keep calm and carry on” mentality and are continuing to spend and accepting lower profits for higher revenues, according to Jason Harris, CEO of Mekanism. 

“More brands are recognizing that by not spending and competitors spending they could gain share of voice when economy picks back up,” said Harris. “The playbook of stopping spending [during a downturn has been] debunked. Smarter brands will take less profit to be in a better position.”

Harris noted that while there’s a focus on flexibility with ad spending, that flexibility push also seems to be trickling into new business pitching.

“The new thing we’re seeing is that clients want to do a project first and then if it goes well then it’s an [agency-of-record],” said Harris. “It used to be an AOR or project. Now we’re seeing this crawl before you walk situation, let’s get rid of AOR and do the pitch for the project. If we like who wins then it’ll convert to AOR.”

Even with this shift in the request-for-proposal process, the fact that new business pitching is happening has Harris hopeful that the second quarter and second half of the year will be better than expected. 

“Pitch activity tells me clients are planning the back half of the year to be busy,” said Harris. “I think this year will turn into a good year.”

3 Questions with Karrie Sanderson, CMO at online survey platform Typeform

You said you believe 2023 will be the year we see more B2B brands replicate branding tactics that have worked well for B2C brands. Why is that?

Companies have to be really mindful, whether it’s an employee or using a tool. What experience are they having? They’re humans and they are a customer. B2B brands, they’re starting to learn and understand that that experience that you give to the human on the end, whether they’re the person who wants to use the software or it’s the customer experience that they ended up having in the end through a Typeform, or whatever software they’re using, is very important. It’s how you show your customers or employees that you invite them to give you feedback. Customers these days expect the companies that they interact with to be open to and take their feedback.

Why does this shift matter and why is it happening? 

Consumer behavior is spilling over into the workplace. There’s been a trend that employees and people feel like they have a right to have a voice of what they want, how they work. It’s this blurring of lines. In the business world, where the employees have a, in a good way, a bit more voice about how they work and how they want to work and what makes their job easier, and their ideas. 

What does that look like for Typeform’s marketing strategy?

For us, how it shows up in our marketing is we are explicitly calling out this trend, and telling people how you show up matters, because there is so much more digital online interaction that you have to be open and not afraid to get that feedback from your customers, [and] think about it to incorporate it. — Kimeko McCoy

By the numbers

Marketers are seemingly prioritizing customer retention, both in terms of efforts and dollars, this year, as shoppers have more choices. According to new research from customer engagement platform company Braze, there has been a 36% increase in the percentage of companies investing the bulk of their marketing dollars toward customer retention strategies. Find a breakdown from the report below:

• Despite economic uncertainty, 90% of surveyed brands will be increasing their marketing budget in the next 12 months.
• 45% of brands spent more than half of their marketing budget on retention last year.
• 80% of companies say that they are collecting too much data, resulting in information that they can’t use effectively. — Kimeko McCoy

Quote of the week

“I’ve definitely felt a lot of pressure from myself to be more active on social media. I am sure that if I posted more, and if I became viral, that that would boost company sales … but ultimately during the day, I’m like, ‘This is just my bandwidth as a founder.’”

— Sahra Nguyen, founder of Nguyen Coffee Supply, on the how being a founder and an influencer can be difficult to navigate, in our sister publication Modern Retail’s story on the founder-influencer phenomenon.

What we’ve covered

• Quarterly ad spending recap: Green shoots of ad spending growth will take time to bloom
• How Supreme Court cases related to Google, Twitter could shape the future of advertising
• When it comes to the talent working on TikTok, more agencies are eying personal profiles