Bi-Weekly News Digest on Digital Marketing – 08/02/20
The Digital Marketing Landscape Keeps Shifting in the Second Half of 2020
In the 2nd quarter, the U.S. economy declined at a historic rate. Unsurprisingly, the economic turbulence, looming hurricane season, and uncontrolled pandemic have many Americans bracing for an uncertain August. Amid the changing times, Adlucent continues to guide its partners in adjusting to and managing the ecommerce and digital marketing landscape. To remain up-to-date as we publish the latest news, sign up for our email newsletter.
The CEOs of Big Tech (Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos, Google’s Sundar Pichai, and Apple’s Tim Cook) met virtually with House lawmakers this Wednesday. Representatives probed the CEOs about their dominance over the marketplace and their competitors.
The CEOs defended their companies, and the following points are key moments from the hearing:
Amazon was grilled on whether it quells its marketplace competition by propelling Amazon products and services to the forefront of its platform. Amazon has long been criticized for this, and Bezos could not guarantee that Amazon has never used independent seller data to make competing products.
Google was pressed on advertising and search and whether it favors Google pages and products in its results. Pichai was also asked if it steals content from services like Yelp.
Facebook’s line of questioning focused on acquisitions, particularly the $1 billion deal for Instagram and a related email stating Facebook wanted to “neutralize a competitor.” Another charge against Facebook claimed it bought an app company to monitor users’ phones to identify other apps to “poach.”
Apple had to defend its use of the Apple Store and if it punishes app competitors. A lawmaker detailed Apple’s decision to remove a parental control app after introducing the competing Apple Screen Time.
Democratic lawmakers hammered in antitrust points such as reducing competition and the lack of choice for consumers. At the same time, the Republicans focused on the bias against conservatives on social media platforms.
Back-to-school marketing takes a different tone amid coronavirus fears. Some retail advertisers have pulled back on spending. In contrast, others have acknowledged the seriousness of our times and chosen to address issues like mental health awareness, activism, and different distance learning environments. The latter is seen to be more appealing to cause-driven consumers like Gen Z. Although ad spending is down this back-to-school season, it gives brands leaning into the times the chance to stand out – even if they have to improvise video shoots.
In a break with tradition, some large retailers have announced their holiday plans early, stating that they are closing stores on Thanksgiving Day. Walmart initiated the announcements, and Target, Dick’s Sporting Goods, Best Buy, Kohl’s, and Academy have since followed. Since many retailers do not wish to draw crowds under the current environment, more Thanksgiving store closures are expected.
The mishandling of social injustices and the COVID-19 crisis has negatively influenced how others, particularly Europeans, view America and American brands. The failed responses have led consumers to call on companies to take a stand where the government does not. Now, American consumers embrace brand activism and leadership. Consumers also welcome brand marketing to support racial justice, but many prefer to see tangible actions within the organizations – not just ads – to address racism. Furthermore, although companies are also facing economic pressures, some have stepped up to relieve the financial strain of COVID-19 on employees by extending sick leave, dependent care, etc. Finally, as the U.S. shifts, many brands move toward an image of inclusion and empathy.
To better compete with Amazon, Google has made changes to its platform that enrich its marketplace and increases the participation of smaller retailers. In addition to its Shopping Tab, Google will expand free product listings to Google Search results and house them in the product knowledge graph panel. Additionally, commission fees for Buy on Google will be eliminated, and sales will be supported via Paypal and Shopify.
The California Consumer Privacy Act (CCPA), a landmark law aimed at protecting California consumers, became effective January 1, 2020, and enforceable July 1, 2020. CCPA provides California residents with consumer privacy rights. These include the right to know how their personal information will be used and shared and the right to delete (with some exceptions) said information or opt-out of its sale to a third-party, etc. Furthermore, businesses that collect customer data must provide California consumers a notice on how it will be utilized.
While some organizations are exempt, those which should comply are companies that do business with California residents and have:
$25 million+ gross annual revenue;
the personal data of 50,000+ California customers, devices, or households;
more than half of the yearly revenue from the sale of California customers’ personal information.
Fees for violating the CCPA vary based on severity and type (i.e. willful vs. non-willful violation), but range from $2,500 – $7,500 per instance. Extreme violations could rack up thousands, even millions of dollars in penalties; however, fines may be forgiven if the violations are remedied within thirty days. The enforcement of CCPA is still developing, but California consumers may sue if their data has been abused, sold, or unknowingly gathered.
Facebook, known for its comprehensive user data, has protected itself from CCPA by implementing a new feature, Limited Data Use, which puts the onus of compliance on Facebook advertisers. However, it’s too early to know the effect of CCPA on Facebook (or Instagram) advertising.
The above overview highlights essential news amid the changing digital marketing landscape as concern over COVID-19 and other industry shifts continue to affect business nationwide. Visit the Adlucent website for ongoing info and news updates every other week.