Rabbbits Weeekly: Meta's Holy Quadrangle
Facebook spills the secret sauce. Plus, the usual headline roundup for ads, algorithms, audiences, attack vectors, and an assorted bit.
Mo’ Meta, Mo’ Problems
Zuck’s Baby™ is deep in midlife crisis mode. It’s being forced to evolve by the privacy landscape but it still doesn’t know what it wants to be when it grows up (but probably something like your conspiracy theorist uncle that says…questionable things at every turn). Back in April, Zuck shared his vision for the future of the platform, fittingly, as a Facebook post. In it, he disclosed Meta’s Holy Trinity™:
Reels (short form video (a.k.a. TikTok)) + AI + The Metaverse
First, the challenges:
The pivot to less monetizable (for now) short-form video
“Signal loss resulting from Apple's iOS changes”
Macro trends: e-commerce slowdown & Ukraine + Russian retaliation
The general gist of the next few paragraphs (yeah, it was long):
Business growth is slow
The Metaverse is really expensive, but it will totally be worth it. Trust me. Definitely. But also business is slow so probably not gonna look so great this year.
At this point he mentions ads as one of the top three investment priorities, so I guess it’s Meta’s Holy Quadrangle™
Reels (short form video (a.k.a. TikTok)) + AI + Ads + The Metaverse
Reels are real important. They are 20% of time spent on Insta and video, as a whole, is 50% of Facebook time.
And your friends are important, but not, like, really important. Because TikTok. So we’re going to try to mix some Trend Machine into our social graph and see what happens. We’ll call it: The Discovery Engine.
Social content from friends and people and businesses you follow will continue being a lot of the most valuable, engaging and differentiated content for our services, but now also being able to accurately recommend content from the whole universe that you don't follow directly unlocks a large amount of interesting and useful videos and posts that you might have otherwise missed.
To stem the bleeding on the ads side and crank our money machine back up we’re going to build higher walls around our garden. Also, token mention of privacy. Also also, we’re doing all this via AI (I think we should be nearing bingo on someone’s buzzword card).
And now, The Metaverse™! It’s coming to an internet near you soon! (But it’s definitely better on a VR device. And totally better on our VR device. Did you know Graduation, Eid, Mother’s Day (at the time it was posted), Father’s Day, Diwali, Feast Day of Saint Nicholas, Hanukkah, and Christmas are coming up?)
Part of our efforts include building a virtual economy, and we expect to be way better at monetizing it than others (because we will take a 50% cut of everything).
Our next VR headset will let you do your work via a battery-powered eye mask, so toss that computer in the trash and get ready to #hustle. (Translation: Zuck is pissed he hasn’t owned a hardware platform previously.)
end of post
The timing of that post coincided with some Facebook News agreements not being renewed. It appears Facebook wants publishers to “lean in” to short form video while the platform leans out of news. (More 4chanification of the internet?)
Since it was posted, it’s been announced that Sheryl Sandberg is leaving MetaBook and I feel like this can only be a good thing. (Here's an in-depth listen on why I think this.)
And no, their Metaverse™ dreams aren't getting any less nightmarish. (trigger warning: sexual assault)
They did manage to release an interesting study on the impact of Covid on SMBs, if that’s something you’re interested in.
Ads
Facebook ads, now with less data! In order to toe the privacy line, Big Blue is testing "Basic Ads"; or, ads without any real targeting options. Direct response and performance ads these are not. But they could work for awareness and brand ads, the more engagement the ad generates the cheaper it is.
According to Newspapers.com, 342 newspapers have had "Advertiser" in the name. So maybe there is truth in advertising. I mention this because there is a lot of tension between news sites and digital giants these days that seems to be couched in "journalistic duty" and the "right to news", but all these places got their start as advertising platforms that created content to give their ads a place to live. It may just be a lot of whining over being replaced.
TV makes us spend money. A paper compared American counties with and without TV access and found:
total retail sales increased by 3–4% more on average with access
the effect was concentrated in the automobile sector
TV advertising led to higher sales growth only for durable goods (basically conspicuous consumption)
Amazon is taking ads off-property, and there are some mixed feelings about it. Specifically, they will start delivering ads targeted to show on other product pages on-platform via third-party sites, so the targeting crossover is a bit of a mystery. This may be our first solid peak at the potential future of contextual advertising leveraging insane first party data.
If you run Google Ads you're familiar with the ad review process that can keep your ads offline for a bit. This is now coming to keywords (at least I think it's new, there isn't a timestamp on the page but it was recently mentioned as if it's new.)
Have a loyalty program? You can now add the deets to your Google Shopping Ads. (What's with the weird wording though, Google?)
If you want to really dive in on potential CPA improvements for your paid search accounts you can give this strategy a go. tl;dr: a whole lot of single keyword ad groups to see what does well. I'm not sure the effort is worth it in these days of always improving AI algorithms, but if you're playing at the margins maybe it'll pay off.
Algorithms
Fidelity gave many tech stocks a valuation trim as the sector continues to get hammered. High valuations are easy when money is basically free.
Apple Search may be coming to a device near you soon. Feels like this has been inevitable for a while now as it helps play their privacy game better than getting paid to make Google the default and it allows for deeper integration with the future of keyboard free products. Siri may be the next AppleOS, but it will need a lot of help to get there.
TikTok gives the app the ol’ Kondo hoping to spark joy for users. (They’re testing a new clear mode that seems to hide everything but the content. No username, likes, etc.)
Twitter is testing a new feature that allows users to subscribe to search results. Which sounds like a terrible idea but their advanced search is actually pretty powerful so this may be useful. Their new corporate motto is: Just Keep Shipping.
Pinterest is bringing in the bots to help supercharge their social commerce dreams.
Audiences
You may have noticed that home prices are soaring, and higher interest rates aren't slowing them down. March prices were 20% higher than last year.
Attack Vectors
Reddit took an interesting approach to trolls: it fed them. Kind of.
Assorteds & Alternates
Japan is testing an underwater turbine that generates power from the currents. I've been waiting for something like this for a while (probably because I'm a sucker for a Clive Cussler adventure).