TikTok Shopping Ads, Third Party Cookies, and Q2 Digital Results – The Catalyst with Brad Costella

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This is Brad Costella, Senior Director of Strategy at Adlucent, with August’s top takeaways in the digital advertising space. This month we will focus on third-party cookies, Q2 digital results, and TikTok shopping ads.

1. third party cookies

Google has announced another delay in their sunsetting of third-party cookies, and now we are looking at 2024 before this fully takes effect. This is the second time that Google has pushed back the deprecation timeline from when they originally expected to phase out cookies in Chrome. What’s even more interesting is the fact that advertisers and other platforms are already starting to test cookie-safe targeting methods, which means that at this point, it might not be up to Google when this sunsetting happens.

FLEDGE is now available for some advertisers to use as a testing methodology from Google that doesn’t use cookies and will instead bucket users into different interest categories. So far, this is Google’s attempt at trying to find a cookie-less way to target folks based on interests, but it’s still very nascent. With time, we will have to wait and see how FLEDGE performs compared to options from other platforms. It is particularly interesting that this is unfolding at the same time that the Department of Justice is discussing antitrust litigation against Google. Consequently, this could have a much bigger impact on some of their ad tech and ad servings. We are anxiously waiting to see how this plays out and how it might disrupt the status quo in the coming months.

2. Q2 Digital Results

Next, looking at this year’s Q2 results, it’s particularly noteworthy that this was not a good quarter for the major app platforms. Looking back at 2021’s year-over-year results, there was incredible growth for Google, Meta, Snapchat, and TikTok, but across the board, 2022’s year-over-year earnings and revenue growth were stagnant. While this comes on the heels of stellar results last year, it’s important to remember that inflation has increased, and as a result, we’ve seen a pullback in consumer spending. This makes for a perfect storm that left major app platforms seeing a considerable decline in revenue and spending.

In positive news, retail results for Q2 fared better. Retailers like Lowe’s and Home Depot saw positive year-over-year growth, particularly in digital ad spending. Despite inflationary numbers and shifting consumer behavior, they saw strong numbers due to folks investing in DIY home projects. Seeing this growth year-over-year is positive news heading into the back half of the year. Brands like Target and Walmart also saw digital sales increase, however, they did see a decline in earnings. Target, in particular, saw a 90% decrease year-over-year in earnings because they had to heavily discount stockpile inventory due to supply chain issues in 2021. Not only that, but consumer demand fell at the same time. We will keep an eye on industry-wide effects as the economic climate continues to take shape.

3. Tiktok shopping ads

Lastly, one of the more interesting takeaways from the month of August is TikTok’s announcement that there are plans to launch a new format of shopping ads on their platform. This new format is another iteration of their consistent goal to make their platform more accessible for advertisers. In addition to its focus on branding and engagement, TikTok wants to create a space where consumers can shop, find products, and convert so that advertisers who are more performance-focused can find success on their platform.

These new campaign types are similar to what we’ve seen on other platforms, where they’re starting to combine multiple ad formats and multiple options within one machine learning-driven campaign type. This will lower the barrier of entry for advertisers to get on the platform and broaden their reach simultaneously. Theoretically, this will allow for more types of shopping engagement with lower investment in terms of time spent and energy from advertisers. It will be interesting to follow this launch to see whether or not brands see strong ROI and if TikTok can get their platform to a place where the ad dollars spent on the platform are better matched to the time spent.

looking ahead

What’s important to keep in mind moving forward going into the month of September and the holiday season? Inflation. While I don’t have a crystal ball on the future, it’s pretty safe to say that we expect consumer demand and sentiment to be pretty dampened. As inflation numbers continue to evolve, they will continue to impact consumer and ad spend behavior. Ensure you understand what that means for your business and your vertical as you implement your Q4 strategy.

With the current economy, we expect several different trends in consumer behavior. Depending on your product set and vertical, you might see consumers spending more of the same goods that they were buying before, they might downgrade to a cheaper alternative, or they might buy less. And on the flip side of that, you could see more competition from brands as they try and steal market share. You might see CPCs start to increase as folks spend more, with advertisers pulling back, causing a little bit of whitespace in your markets. It is key to stay nimble and think critically about what’s happening in your space so you can take quick action going into the back half of this year.

Thank you for tuning in for this month’s key takeaways in the digital advertising space. Subscribe today to stay tuned for next month’s insights. Are you interested in how you can partner with us on your digital marketing performance endeavors? We’re ready to chat.

Brad Costella

Brad is a Senior Director of Strategy at Adlucent. He is a strategic, data-driven, solutions-focused marketing leader with 10+ years of experience in omni-channel digital marketing and customer acquisition. He has a passion for turning insights into actionable strategies that improve real world outcomes for advertisers and customers. He believes that success comes from finding and striking the sweet spot where customer's needs intersect with a brand's value and goals.