TMW #046 | Platform dominance in the creator economy, Google’s cookie delay, and the multicultural future of Clubhouse
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Why are all of the major social platforms announcing products to support the creator economy?
How will Google’s delayed removal of third party cookies until 2023 impact online tracking?
Is Clubhouse dead?
This week I tackle these three questions and look at the 15 + other things that happened this week in Martech, including G2’s unicorn status, automating attribution analytics and an art project called Twisted Toys.
🎨 Platform dominance in the creator economy. Ten years ago Uber created the gig economy, and you could argue that COVID-19 brought us the creator economy, but you’d be wrong. The concept of the creator economy has been around as long as the internet (remember Myspace and Geocities) and people have been writing about it since the early 2000s. In 2020 the pandemic forced the majority of us to reconsider our career options, and do the majority of our socialization and shopping online, paving the way to a resurgence of an economy that would economically benefit the creator of things we consume online, like TikToks, newsletters (like this one), Youtube videos, and NFTs. Recently, there have been two diverging trends in this space, the first is the rejection of platforms for blockchain technologies and the other is to embrace big tech platforms as the central way that creators can build their niche businesses by driving awareness and engagement on platform.
Over the past 6 months, we’ve seen a swathe of big tech moves into creator-focused products, from Twitter's acquisition of Revue to Facebook’s newsletter clone to LinkedIn's creator mode. Now seems like a good time to review all of these new positions representing a significant shift in the positioning of big tech companies. There’s been some significant experimentation in this space to keep creators on platforms while recognizing that paying them in likes, reach and comments will not lead to sustainable outcomes for the people who are creating the content that powers advertising monetization. It’s clear that by now social media’s purpose has become less about connecting with friends and family, and more about providing entertainment that is crowd-sourced, optimized for engagement, and is 24/7. The creator economy is quickly becoming owned and controlled by major tech companies, hoping to clip the ticket of creator earnings, monetize their content with paid advertising, and all the while incentivizing them to keep their content and audience on their platform.
The problem, of course, is that algorithms are volatile and unpredictable, creating dubious feedback loops that ensnare younger people to create more and more outrageous content, leading to burnout, or what one 23-year-old TikTok creator, Luis Capecchi describes as “like getting demoted at a job with no warning.” Being a creator in our social media ecosystem means constantly trying to game the system, in a bid to capture eyeballs, somehow keep them interested and hopefully monetize that audience. And when you decide it’s time to leave the walled garden of Facebook, Twitter, or TikTok, you have no choice but to leave your audience, monetization avenues, and credibility behind.
But it doesn’t have to be this way, while creators on the internet are disproportionately informed by the platform itself (the means is the message), a novel concept, Vehicle thinking, is a perspective on how to build sustainable businesses on top of creating content online. The idea is that creating a business model around your content becomes a financial vehicle in which you build assets that benefit the creator and the community that’s formed around it. In other words “the platform of one.” Instead of Substack taking 10% of all sales or Twitter taking a big cut of your Super Followers, creators are becoming more empowered with no/low code tech products that help to create a direct relationship with their audience creating niche platforms and putting massive social networks in their rightful place of reach and traffic-driving platforms. Links: Creator burnout. Social media platforms and the creator economy. In-housing influencers. Vehicle thinking for the creator economy.
🤷♂️ Google delays cookie removal to 2023. I’m not surprised by this news. Google is an advertising business that saw the writing on the wall as Apple, Mozilla, and Microsoft slowly removed third-party tracking online and sought to pivot how they will collect web data in the future. Their gambit was FLoC (Federated Learning of Cohorts) which is basically a power-play to centralize anonymized data collection in the chrome browser and android devices to sell ad targeting across Google’s sprawling outlets. Turns out every other browser won’t join FLoC, the EU has opened an antitrust investigation into it and Amazon has also banned the technology. For Google, this isn’t a regulation, privacy, or safety problem, but rather a product and commercial problem for a business in which 80% of total revenue comes from online advertising.
Despite all of the wonderful products the company has shipped (including the Google doc used to write this paragraph), Google remains an advertising monopoly, which plans to create a walled system of user identification, tracking, and shipping to advertisers that would be extremely difficult to compete with. In Google's words, the push back of cookie removal to 2023 will "allow sufficient time for public discussion on the right solutions, continued engagement with regulators, and for publishers and the advertising industry to migrate their services." I’m reminded again that most of what drives significant change in the ad tech market is driven by commercial forces, and ethical considerations are mostly in the background. For Google, launching FLoC next year, and potentially losing some of that 80% to Apple and Amazon is far too great a risk, and while third party cookies will be around a little while longer, perhaps this is an opportunity for a privacy-focused and open source technology that doesn’t centralize online advertising to benefit Google alone. Links: WSJ breaking news ($). ARS Technica analysis. Privacy sandbox.
📈Chart Of The Week
🌎 The multicultural future of Clubhouse The app we couldn’t stop talking about back in February seems to have had a significant decline in downloads and time on app particularly in the United States. This is mostly due to the app being geared to replicate conversational socialization during the pandemic, which has now dissipated as things open up again. But not in India. The app is just starting to take off and might find better cultural alignment outside of the western world. Link (sign up needed)
📰 Latest Developments
Twilio and Asana list on long-term exchange. In an interesting move, both companies are joining an ESG fund in Silicon Valley. The fund prioritizes sustainable business practices and long-term growth commitments from investors. It means things like aligning board compensation with long-term performance and explaining how the company is executing on a long-term vision. This is certainly a great branding move for both companies, but it’s also a sign of the times - public listing volatility causes chaos in fast-moving tech companies. Link
Sprinklr’s IPO. This comes off the back of the repositioning of the company from a social media management tool to a platform that creates “Unified-CXM” across all channels and business functions like customer care, sales, marketing, and research. They even used the ticker “CXM” Link
G2 is now a unicorn. As one of the most well-known marketplace platforms for SaaS and Martech, the company has completed a series D which raises the value of the company to $1 Billion. The investment includes contributions from LinkedIn, HubSpot, and Salesforce. I’ve always found G2’s monetization strategy slightly odd, in that they are positioned as an impartial guide for software research and selection, while directly monetizing through promoting these platforms. Link
Big tech: Online safety before monetization. This is one of the most insightful pieces I’ve seen on the tradeoffs large social media networks make when it comes to investing in the safety of young people online. The piece looks at the impact of encrypted messaging apps on bullying and a new policy to take down harmful content “around the sun” with a maximum timebox of 24 hours. Link
Loyalty as a growth engine. As the pandemic subsides, I’m seeing more, eCommerce sites, and startups that were launched or gained significant market share during COVID-19 now focused on loyalty. It’s telling when you have major VC firms doing thought pieces on the value of retention to fuel company growth. My view on this is that most brands coming out of the pandemic have a marketplace issue and not necessarily a retention one, but it’s worth looking into some of the new retention models that companies are using to keep their customers happy. Links: Sequoia, Forerunner
Personalization is about “connectedness.” An interesting perspective on how personalization is becoming shorthand for connected experiences, insights, tech, and teams with more CMOS. In the past, personalization was highly tactical and tied mostly to conversion goals, now it’s a significant part of how brands are organizing themselves to meet customer needs online and off. Link
🔢 Data & Insights
The importance of video advertising. New stats from the IAB in conjunction with PWC look at the value of video content in advertising and paid media. About half of display ad revenue is attributed to video inventories, making up a $1.9B segment. Link
Brand effectiveness in a post-pandemic world. New research from WARC looks at how the pandemic has changed how companies invest in brands. Over the past year, about 85% of budget cuts have been in the brand advertising space, as consumers prefer digitally native experiences and convenience over affinity with a brand message. Link
Ecommerce personalization benchmarks. In a way that email marketing benchmarks are fairly common in the industry, Netcore has done a similar thing here but for personalization practices. One interesting stat is how personalization influences product browsing and comparison, about 75% of retailers that employ onsite personalization increased site browsing to 10 pages per user. Link (sign up needed)
Saysom, a new perspective on video calls. A new app that looks at the ways we interact with each other offline and replicates many of the features (or bugs) of those experiences. Called digital networking spaces, you have an avatar, you can move around a digital space and serendipitously join conversations based on your proximity to others. Link
Automating attribution analytics. We all know that measuring attribution is notoriously complex, and depending on which agency you work with, you’ll get a wide variety of approaches. A new platform called Mutiny, lead by two ex ad agency CEOs is building a product that will somehow automate the way attribution is done and hoping to disrupt the industry. The name itself is a dead giveaway of the goal here. Link
Digital fashion. We are now living in a world where digital versions of real-life products are being sold at a higher price than the original. A fascinating breakdown of how the fashion industry is invading gaming and social apps like Roblox. Link ($)
✨ Weird and Wonderful
Real-world user stories. This Twitter handle writes user stories based on actual usage scenarios. You know, the whole “as a, I want to, so that” terminology that’s commonly used in product development? Exposing the flaws in products and services we use every day. Link
Twisted Toys. An art project imagining if all the harmful effects of the internet were features of kids' toys. It’s a statement about the nature in which data is collected on people who are under eighteen, and why it should stop. My first T&Cs is especially on point. Link
Cannes filters. It’s that time of year, where every digital, media, and advertising agency is posting their Cannes Lions wins on social media. This week it was literally every second post. Here’s a chrome extension that replaces every mention of “Cannes Lions” with “didgeridoo” whenever you come across those gushing, self-congratulatory posts. Link
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