Black Friday Is Dead, Consumers Cautious Optimism, and TikTok the Search Engine

In a world full of constantly changing technology and information, this monthly newsletter keeps marketers up-to-date on the latest trends that will impact their business. I hope you enjoy it!

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Let's start with a?30,000-foot view?of where we are right now. While recession remains a risk, many recent forecasts suggest a period of flat growth vs. a full-out recession is more likely. US consumers keep spending, and the?personal consumption expenditures index?rose 0.4% month over month (MoM) in August, following a 0.2% MoM decline in July. Post-tax personal income increased up 0.4% MoM, slightly above 0.3% inflation. Consumers also state they are cautiously optimistic about their finances, with the University of Michigan's?consumer sentiment index?and the Conference Board's?consumer confidence index?increasing. However, we aren't out of the woods yet. Savings are down YoY; the?personal savings rate?was just 3.5% in August, down from 9.5% last year. Consumer confidence is also down YoY, with?62%?of consumers saying they have less confidence in the economy. Some of these YoY trends are affecting shopping behavior, with consumers?saying?they are cutting back on luxury goods, toys and games, apparel, and dining out.??

So what does this mean? While some recent positive indicators exist, consumer sentiment remains uneasy. For marketers, you need to give the consumers a reason to buy this holiday season, which means offering value with consumers waiting for sales and discounts before even considering a purchase.??

The other?fun thing?marketers are dealing with this Q4 is the intersection of political and holiday seasons, making media planning challenging.?So marketers should expect higher than normal CPMs because of the increased demand. Some marketers will wait until after the mid-term elections to start investing, which could be a mistake given that Prime Day has already kicked off holiday shopping. You must remember that the holiday shopping season has extended, and if you are waiting for Black Friday to kick off your season, you are missing out. In the past, Black Friday was the big shopping day, but that is no longer the case, with only?20%?of consumers saying they will shop on Black Friday compared to 60% in 2015. If you wait, you must understand that you will miss a good chunk of holiday dollars. Even if you wait, you won't necessarily be met with cheap inventory costs. If your holiday budget won't stretch that far, look at efficient and less expensive channels for growth now (TikTok?) and double down on organic growth tactics and owned media.??

So the long-awaited second Prime Day is in the books (recap coming soon), and retail media continues to grow at a rate we are all jealous of. GroupM has?reported?that retail media is just around 10% of global ad spending, with the expectation that it will grow 60% by 2027.?That tracks how advertisers are investing in retail media. It should also show you why we hear about advancements from retail media networks weekly - they are following the dollars.

Sam's Club partnered with Pacvue to provide brands access to its search ads. Best Buy is expanding its retail media network to run ads on third-party websites. Uber-owned alcohol delivery service, Drizly, has also launched its ad network called Drizly ads.?While they already offered display offerings, the purpose of?Drizly ads?will offer a more extensive selection of self-service products, including search ads, product detail pages, and sponsored listings. Finally, Macy's?launched?its third-party marketplace in time for the holidays allowing Macy's to carry a wider variety of products.??

Even the more prominent players continue to innovate and provide new opportunities to capture the increased retail media demand.?Walmart's?retail media business announced it would partner with Snap and TikTok (among others), enabling advertisers to buy ads on those social platforms through Walmart.?Advertisers will be able to layer on everything Walmart knows about its shoppers to help target their buys and then report on how the TikTok and Snapchat campaigns influenced both in-store and online sales. Walmart is pushing to extend its reach as part of a broader effort to distinguish its advertising offering. While Amazon is trying to keep everything in-house, Walmart sees that consumers are in many different places online, and much of product discovery comes outside the Walmart ecosystem. So why not leverage it? Consumers are using TikTok as a product discovery tool, and the impact TikTok had on the first Prime Day this year was huge- videos tagged with #primeday2022 were viewed 52 million times on TikTok. Walmart can then connect the dots between ads seen on TikTok and in-store and online purchases. With the increased focus on?Phygital, connecting the dots between a social platform and how it influenced online and in-store sales has significant implications. Considering the focus on performance marketing and the increased interest in Snapchat and TikTok, this is a clear play to ensure that Walmart stays in upcoming media plans and gets an even more significant chunk of the pie than before. If they can provide access to not only highly sought-after platforms but also make attribution a simple solution, why wouldn't you want to test this out?

TikTok has been spending a lot of time and money creating a platform that can drive performance, which is especially important as brands are being more cautious about where they spend their dollars. Even DTC brands that are notoriously performance focused are spending pretty significantly on TikTok as DTC brands diversify their media mix away from Meta.?DTC?ad spending on TikTok increased by around 60% from Q1 to Q2 of 2022, according to Triple Whale. So why are DTC brands growing so fast on TikTok? Yes, because of the need for diversification. However, it's also because it is working, and DTC brands have been known to pivot and capitalize on trends faster than larger, more traditional marketing organizations.???

If TikTok is more focused on performance marketing - what's more performance than search? It's become increasingly clear that TikTok will become a search engine.?TikTok?just increased the character limit in posts to 2,200, up from 300.?This has actual search implications since an increased character limit will allow you to tell TikTok more about your content (i.e., keywords). Increased keyword targeting will allow users to discover relevant content while searching. This will also enable TikTok to broaden and improve its ad targeting, which is especially important given the increased focus on privacy and challenges in targeting. Even if no one is reading the entire post, their algorithm will. If you are creating new content, keep this new character limit in mind and consider having your social team partner with SEO to ensure you are optimizing for search and possible future discoverability. Also, TikTok has some fulfillment ambitions as they have recently posted job openings for individuals looking to launch their fulfillment centers.? If they are building this from the ground up, it’s going to take some time.? Also, is it really smart to go after both Google and Amazon at the same time?

Just like TikTok is trying to steal market share from Google, Google is doing the same to TikTok. One of the keys to TikTok's success is its creator base. This is why YouTube has been spending a lot of time building out its creator platform and now will give creators an option to monetize their content even earlier. YouTube creators can now become part of the rev share program with just 1,000 subscribers and 10 million Shorts views in 90 days. YouTube is making big bets on the creator economy and ramping up its pitch for why creators should be on YouTube shorts vs. TikTok or other competitors. They are removing barriers to earning on YouTube, hoping that woos creators to come their way. Consider YouTube is a real serious contender with its Shorts offering. For marketers, this means yes, make sure you are on TikTok but also don't forget about Reels or Shorts just because TikTok is the new platform in town.?

Outside of trying to woo creators, Google is also launching several new features that will make search a more visual experience. This comes on the heels of the report that around 40% of younger consumers use Instagram and TikTok as search engines as the younger generation over indexes for interest in visual search. If you want the complete list of updates, you can check them out?here, but there are a few I want to call out specifically which have significant implications for e-commerce brands. When a user types in the word "shop," followed by another search term (shop comfy fall boots), a visual feed of products will appear with buying options vs. text results. This will allow for a more engaging search results page that Google hopes will keep people scrolling and shopping on Google. The Shop the Look tool lets users find complimentary pieces and where to buy them all without leaving Google. Google is also adding more 3D product imagery, leading to better engagement, higher purchase rates, and lower returns. Overall, Google is trying to give users a more personalized and visually focused experience based on their shopping history. They are even adding filters as you would see on a more traditional eCommerce site allowing you to filter out things within Google shopping that you are not looking for (price, color, brands, etc.)

So, is text-based search dead? No, but we are moving into a more visual arena, and this is probably the first of many updates Google will be making to focus on a more visually fueled search results page. Start thinking about the implications this could have on your search presence and how consumers engage with your brand elsewhere. If consumers are more interested in consuming visual content vs. text-based then how does that affect your owned media? Are there other ways you should think about optimizing your existing consumer touchpoints that are more in line with how consumers like to consume???

Meta?is making a slew of new spaces available for advertisers.?It's a potential new source of ad revenue for Meta and increased revenue for the creator's Meta is trying to acquire. So more ads should mean lower CPMs which is a good thing, but I'm concerned it will again become oversaturated with ads, leading to lower ad engagement and less time spent on Meta overall.??

LinkedIn is also introducing several?upgrades?for advertisers, including Document Ads and offline conversion data integration. With Document Ads, longer-form documents like white papers can now be promoted directly in members' feeds without leaving LinkedIn. Why that's so important is that around half (47%) of US B2B marketers?find long-form content effective. It's also proven effective; according to?SocialInsider, native documents and Carousels generate 3x more clicks than any other type of content on LinkedIn. With offline conversion data integration, you can upload CSV files to Campaign Manager and connect offline conversions to give a more holistic impact on marketing.?

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Megan Conahan is a 17-year veteran of the digital marketing industry. Over the last 17 years, she’s consulted with fortune 1000 brands on how to best negotiate the ever-changing digital marketplace demands and create unique solutions to set them apart. Megan is an EVP at Direct Agents, an independent and minority-owned digital marketing agency.?