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Facebook Reports Record Revenue and Warns of Apple’s Privacy Changes

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Facebook reported record revenue as marketers boosted ad spending during the holidays, while also warning about the possible negative effects on ad targeting from Apple’s stricter privacy measures. CEO Mark Zuckerberg said in a Wednesday earnings call that his company increasingly sees Apple “as one of our biggest competitors.”

In Q4 of 2020, Facebook’s profit climbed 53% to a record $11.2 billion as revenue increased 33% to about $28.1 billion, per its quarterly earnings report. The company ended the year with a 22% gain to $86 billion in revenue, including a 21% rise in ad sales to $84.2 billion.

Facebook. (2020). “Facebook Reports Fourth Quarter and Full Year 2020 Results”. Retrieved from Facebook Quarterly Earnings Report.

The user base for its family of apps, including Instagram, WhatsApp, Messenger and its main social network, grew 10% to 2.6 billion for the period, per its earnings presentation. The strong results may indicate that companies like Amazon, Google, Pinterest, Snap and Twitter also will report significant gains in digital advertising for the holiday quarter.

Facebook’s strong revenue growth suggests marketers ramped up their ad spending on its social network and Instagram to reach consumers during the holiday shopping season. The company’s earnings confirm Socialbakers’ platform data that found worldwide spending on social media advertising continued a “meteoric rise” in Q4 as marketers targeted homebound consumers during an uncertain holiday season. Along with the rise in ad revenue, Facebook’s strongest growth was from its “other” category that includes its Oculus virtual reality unit and Facebook Marketplace for classified ads, with revenue surging 156% year-over-year to $885 million during the quarter.

However, the company also warned that Apple, which also reported record revenue on strong iPhone sales, is becoming a bigger competitive threat. David Wehner, CFO of Facebook, said the company expects Apple to update its software with stricter privacy controls this quarter.

Apple hasn’t backed down from its plan to update the software that runs its devices with new privacy protections. After the update, Apple customers will see a pop-up warning when an app asks for permission to access the Identifier for Advertisers (IDFA) that the company puts on its devices. The identifier helps to track online activities of Apple users and improve ad targeting. Apple CEO Tim Cook today will speak about data privacy at the Computers, Privacy and Data Protection virtual conference.

“Many small businesses will no longer be able to reach their customers with targeted ads,” Zuckerberg said Wednesday’s call. “Apple may say that they’re doing this to help people, but the moves clearly track their competitive interests.”

Facebook last year warned that Apple’s updated privacy settings would trigger a 50% drop in revenue for its Audience Network that lets developers use the social network’s detailed consumer data for in-app ad targeting. Apple has countered Facebook’s argument, asserting that the changes to its privacy settings still allow consumers to grant permission to be tracked. Apple’s plan has faced opposition from advertising community, with more than half (56%) of marketers saying they expect to see a negative effect from Apple’s planned privacy changes, an October survey by AppsFlyer found.

Facebook also is among the companies that have criticized Apple for its dominance in app distribution with its App Store, which charges a variety of fees on paid downloads and subscriptions. Epic Games, the maker of “Fortnite,” online dating company Match and streaming app Spotify have lined up against Apple over its fee structure. During Wednesday’s call, Zuckerberg singled out Apple’s messaging app iMessage as a key competitive threat.

“iMessage is a key linchpin of their ecosystem. It comes pre-installed on every iPhone and they’ve preferenced it with private APIs and permissions, which is why iMessage is the most used messaging service in the U.S.,” he said. “And now, we’re also seeing Apple’s business depend more and more on gaining share in apps and services against us and other developers. Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own.”

While the daily active user (DAU) base for Facebook’s main social network grew from the prior quarter by 25 million users to 1.85 billion worldwide, it lost 1 million users in the U.S. and Canada. The decline may have been the result of greater competition from rivals like TikTok, eMarketer analyst Debra Aho Williamson told the Associated Press.

Socialmediatoday.com

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Tarte Influencer Marketing kritiserad 2023-01-31

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Tarte Influencer Marketing Criticized 01/31/2023

With consumers obsessed over the price of a dozen eggs, could conspicuous consumption-driven influencer marketing falling out of favor? That is the question brands might be considering after the
backlash that cosmetics brand Tarte is receiving after a sponsored trip to Dubai. “Influencers were called out for appearing not …

Read the whole story at Marketing Brew »



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Twitter ansöker om amerikanska licenser för att underlätta betalningar i appar

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Twitter Applies for US Licenses to Facilitate In-App Payments

Twitter has taken its next steps towards facilitating payments in the app, with The Financial Times reporting that the company has begun applying for regulatory licenses in US states, the next legal requirement for providing payment services in the app.

Payments, which Elon Musk has a long history in, could be another way for Twitter to generate revenue, by enabling transactions between users, from which it would then take a small percentage. Musk has repeatedly flagged his vision for payments as part of his broader push to make Twitter into an ‘everything app’, which would provide more functionality and usage benefits.  

As reported by FT:

In November, Twitter registered with the US Treasury as a payments processor, according to a regulatory filing. It has now also begun to apply for some of the state licenses it would need in order to launch, these people said. The remainder would be filed shortly, in the hope that US licensing was completed within a year, one of the people said.”

From there, Twitter would also look to establish agreements with international regulators to enable payments in all regions.

As noted, payments are a part of Elon’s broader plans for a more functional app, which would replicate the utility of China’s WeChat, which is used by Chinese citizens for everything from ordering groceries, to buying public transport tickets, to paying bills, etc. WeChat has become such a crucial connective element, that it formed a key part of China’s COVID response, with authorities using the app as a means to manage COVID positive citizens and restrict their movement.

Musk isn’t ideally looking to use Twitter as a control device (I don’t think), but the broader concept is to add in more and more functionality, in order to both generate more income for the company, and make the app a more critical element in the interactive landscape.

Twitter’s already exploring several options on this front.

Several app researchers have uncovered mock-ups for Twitter Coins in the back-end of the app.

Via Twitter coins, users would be able to make donations to creators in the app, through on-profile tipping, but beyond that, Twitter’s also exploring options like unlockable tweets, paywalled video, and more, as it seeks to embed broader usage and adoption of in-app payments.

A big opportunity also exists to facilitate remittance, or sending money to family and friends, which is a key use case in many regions. Remittance payment services often charge processing fees, and various social apps have been trying to find new ways to facilitate such without the same costs, with the idea being that once people are moving their money in-app, they’ll then be more likely to spend it in the same place.

Thus far, social platforms that do offer payments haven’t been able to embed this as a use case – but maybe, with Musk’s experience, knowledge and connections, he might be able to make this work in tweets.

Elon, of course, got his start in payments, with his first company, an online bank called X.com, being bought out by PayPal in 1999, his first big business win. And while his focus has since shifted to electric cars and rockets, Musk has keen understanding of the digital payments space, and how it can be adapted for varied usage.

According to reports, Musk told Twitter investors in May last year, that his aim was to see Twitter bring in about $1.3 billion in payment revenues by 2028.

That would give the company a sorely needed boost. After Musk’s cost-cutting efforts, which have resulted in the reduction of around 70% of Twitter staff, the company could be on track to potentially break even this year, or close, but a lot has to go right to get the platform back on track. And with advertisers continuing to back away from Twitter spend, it’s not looking good, while subscriptions to Twitter Blue are unlikely to provide much relief, at least at this stage.

As such, the shift into payments can’t come fast enough, though it’ll still be some time before we see the possibility of in-app payments.

Also, while Musk has made it clear fiat currency will be the main focus of this push in its initial phase, cryptocurrencies could also, eventually, be included. The price of Dogecoin, Musk’s favorite crypto offering, rose to a 24-hour high after news broke of Elon’s expanded payments plan.

Will payments be the answer to Twitter’s revenue woes? Maybe, if Elon’s vision for billions in payments revenue comes to fruition – and with his previous track record, you can’t dismiss the notion entirely.

But it’ll take time, many approvals, and many more steps before we reach the next stage.

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Socialt ansvar och etik i Influencer Marketing

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Social Responsibility And Ethics In Influencer Marketing

Chief Growth Officer (CGO) at HypeFactory, a global influencer marketing agency.

It’s no secret that influencer marketing popularity has skyrocketed over the past couple of years, and partnering with influencers isn’t a new concept. Just over the past year, the industry was valued at $16.4 billion and still keeps growing, with a whopping revenue forecast of $143.10 billion in 2030.

Since the beginning of influencer marketing, people have talked about how influencers and social responsibility fit together. It stands to reason that influential people would use their large fan bases to help others. However, when influencers and businesses collaborate, they each have specific responsibilities to the communities in which they operate.

Sponsorship Transparency And Gender Stereotypes

One of the most critical skills for an influencer is honesty. Influencers base their marketing strategy on being genuine and sharing personal tales and thoughts with their target audience. They are not celebrities living in a bubble of fame that very few of their followers will ever reach; instead, they live lifestyles that are reachable and use items that their viewers would find helpful. This approach has significantly contributed to their immense level of success.

However, many influencers don’t play by the rules, especially when it comes to impressing brands they’ve made deals with, even though transparency is essential to the sustainability of an influencer’s career. Because of this, many people would think that the most important ethical issue in influencer marketing is sponsorship disclosure.

The United States Federal Trade Commission (FTC) and the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) in the United Kingdom have all put out rules about how influencers should be honest in their posts and about their relationships with brands. If you disobey the regulations, you risk facing penalties, fines and legal bills. You also risk losing the trust of your customers for good.

Moreover, when doing influencer marketing, it’s essential to consider gender stereotypes and how people usually think men and women will act in different situations. The Committee on Advertising Practice (CAP) has said that since June 2019, marketing materials could no longer show men and women in ways that are based on stereotypes. These rules state that ads “must not use gender stereotypes that are likely to hurt or offend a large number of people.” Great campaigns, like Nike’s “Dream Crazier,” have challenged gender preconceptions.

Improving Influencer Marketing’s Reliability And Authenticity

Authenticity is essential in influencer marketing. People listen to influencers who are honest and relatable. In addition to the moral problems I mentioned above, brands and influencers must also follow FTC rules, community guidelines and terms of service on social media platforms.

Based on my experience as a chief growth officer at a global influencer marketing agency, here are some things brands must consider for influencer partnerships that are authentic and reliable.

Outline—and stick to—the ethical principles that your brand stands for.

Before you can begin your search for the ideal influencers, you must first understand the core principles of representing your business. Most businesses start by determining their values and ethics early on. They then use these to build their brand identity. It’s up to each company’s brand to decide where they will draw the line and how they will show their core values on social media.

However, consumers place a high value on consistent honesty. Customers are likely to call out your company for being hypocritical if it says it wants to fight racism but then partners with an influencer who has a history of making small slights against people of color. Or if your company promotes equal pay yet pays female influencers less than it does male influencers, contributing to the continuation of the pay gap between male and female influencers.

As a result, you will likely lose the trust of these customers.

Collaborate with real influencers.

One of the most effective ways to stick to influencer marketing principles is by collaborating with real-life influencers. Choosing the right influencers is crucial for building consumer confidence in your product.

Determine which influencers are authentic and have credibility with your intended audience. Specifically, it would be best to look at how many people engage with their content and how good it is. Even though engagement numbers are essential, they only tell part of the story about an influencer’s reliability. Please pay close attention to their writing style, the brands they’ve worked with, the accuracy of their reviews, etc.

Develop a long-term partnership.

When you’ve found a group of genuine, influential people with whom you can collaborate successfully, it’s crucial to keep in touch with them over time. Even if they are paid to review a product, genuine influencers always give honest opinions. Because they follow all the rules, the spectator can have more faith in them.

Consequently, after a shortlist of influencers has been compiled, you should perform authenticity checks. Check their content feed for branded articles. Make sure that any disclaimers you find adhere to the first point’s disclosure guidelines. Consistently partnering with the same influencers demonstrates to customers that you value their brand’s success just as much as they do, which can increase consumer confidence in your business.

Slutsats

Authenticity serves as the cornerstone of the influencer marketing strategy. Influencers earn the trust of their followers and become successful when they always provide high-quality, authentic, relatable content.

In addition to the concerns over the morality of influencer marketing, brands and influencers must follow the criteria established by the FTC and the community guidelines and terms of service based on social media platforms. You can shield your brand from potential ethical and legal difficulties and still enjoy success with influencer marketing if you are aware of the expectations and follow certain best practices.


Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies. Do I qualify?


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