Rabbbits Weeekly: Ranting About the Economy
The one where I pretend to be an economist. Plus, headlines and things about algorithms, ads, audiences, and attack vectors.
Who’s Left Holding the Bag?
The market is mixing signals like a middle school dance.
Housing prices and mortgage rates are up. Inventory and home sales are down. But the high end of the market seems unphased. Spec builds might decrease as builders race to catch up on fulfilling existing orders. Lumber and container prices are dropping. Along with the valuations of tech companies. And levels of VC funding. And capital in biotech. Digital prices didn't move much. But inflation and gas prices did. Crypto skipped fall and went straight from summer to winter. Travel is exploding, both in volume and infrastructure stability. Extra income is down, but consumer spending might go up.
When markets or sectors are running hot, I always wonder who will be left holding the bag. I'm still waiting for that one hotel or apartment project in the local market here to realize they were the one that marked the overbuilt point. I've been waiting for years. CNN+ marked that point in the Great Unbundling Race a.k.a. The Streaming Wars. (Let The Great Rebundling begin!) Substack is playing this game with...itself?
Being left holding the bag isn't always a bad thing though. In some markets that bag is full of money. Grocery delivery companies are scrambling to be the one that secures the bag. Social media platforms seem to take a misguided approach to this (believing they must all be TikTok now).
Everything is either in a phase of unbundling or rebundling (yeah, you'll have to stretch those terms a ways to make them fit plenty of areas).
Hey, I thought this was a newsletter about marketing and (tenuously) marketing-related news?
It is.
How can you plan your marketing if you have no idea what the larger market and economy is doing? (Tesla started with a luxury sports car because that's the market that could handle the prices required to manufacture an EV at that time. As scale could be reached, prices could drop, and vehicles with broader appeal (except Cyber Truck) could be launched.(I am not an Elon fanboy, but this is the best example I could think of off the top))
What makes everything so messy now is that the signals are all over the place and the causes are unprecedented. The housing market explosion wasn't toxic like 2008 (I think, we really won't know for a few years). It was driven by pandemic-induced lockdowns that had people spending more time in their homes than ever before and with very few other avenues to spend money. "I could really use a [insert: 'home office', 'play room for the kids', 'bigger kitchen', 'actual kitchen', 'second / third bathroom', etc.]. I know, I'll buy a house that has one!" Wash, rinse, repeat. Thousands of times.
That same pandemic messed up supply chains like a kid kinking the hose to get you to look into the nozzle.
And then a war was started by a country that exports a lot of oil.
And then we collectively got to a point where we were over the pandemic and decided, at the population level, to do things outside our homes again. Like roleplaying as sardines and getting the hell out of where we are for literally anywhere else and calling it a vacation.
The money that turned the housing market into Shark Week didn't disappear. It just went somewhere else. Substitute goods reappeared and people yelled "praise be the flying spaghetti monster." And they went and spent their money.
So, in conclusion: the market is up. But also down. And people don't have any money. But people are also spending money. Don't panic. Yet. But understand what's happening out there when you're analyzing your marketing. Or business performance. Or personal budgeting. Etc, etc, etc.
You think about yourself / your business more than you think about the market (probably). Others think about the market more than they think about your business / you (unless they're family, maybe).
Welcome to Hot Weird Summer.
Algorithms
Facebook claims to be the platform for small businesses. Small businesses are increasingly saying TikTok is the platform for them.
Speaking of, The Trend Machine™ is not a social network, according to themselves. And this is why they aren't worried about Meta. The argument does make sense based on what the platforms have prioritized to date and how difficult it has been for Zuck to remain top dog.
Tiking n’ Toking is for the dogs (and other animals), Reels is not. According to...themselves, the content types that succeed on Reels are: how-to, comedy, AR filters and special effects, and cultural moments.
Meta's new plan to remain relevant and attract creators? Bribe them! I mean, help them monetize their content.
Twitter is going long…form content that is. 280 characters is so… ::waves vaguely:: whatever year that was. They’ve remembered they bought a newsletter platform and are rolling it in with what might be a Medium clone and trying to bring blogging back.
Shopify, now in Twitter! The David to Amazon's Goliath has rolled out a bunch of other features, like: Pre-orders, B2B (wholesale), new APIs, and more.
If you run an ecomm site and want your products to show rich results, make sure you check out the product variants requirements.
A bunch of wannabe metaverse companies have created a standards body. Not in the club (yet?): Apple and Roblox.
You know what's hot like Hansel right now? Subscription / premium tiers for content platforms. Just ask Snap.
And messaging app Telegram (where privacy meets crypto) is getting in on the trend with Telegram Premium. They announced this with the reveal that they hit the 700m active user mark (compared to Snap's 300 something million, probably). That's a lot of eyeballs and a new push to upgrade users to an ad-free experience. Opportunity?
It's a Brave new search. Privacy browser Brave's search engine has exited beta after generating 2.5 billion queries over the last year. Peak search day was 14.1 million queries. That's faster than Google or DuckDuckGo. The truly differentiating thing for Brave Search is they use their own index. Most non-Google engines use Bing's.
The race to become Netflix’s advertising partner is on. I wonder what this means for the rumored Roku purchase. Or what would happen to this race if the purchase happens.
Ads
People want brands to be funny (we see you Wendy's), or at least humorous. But brands are scared (cowards!). So maybe add some levity.
Also, this is bleak:
The report found that 45% of people globally have not felt true happiness for more than two years.
The report found that 45% of people globally have not felt true happiness for more than two years.
Give your marketing the gift of compounding. Instead of trying to massively improve one metric, try to incrementally improve many related metrics and do that every month. It should be easier to achieve in the short run and lead to greater returns in the long run.
LinkedIn's CEO says the advertising industry is lacking creativity. Or creative skills. Standing out is usually better than blending in.
Some Connected TV (any content delivery mechanism to a TV that isn't a cable box) impression metrics got the Facebook treatment, counting an impression when the TV was actually off.
Walmart is opening a new store near you: inside your TV. A partnership with Roku will allow viewers to click on an ad and buy the product via Roku Pay.
Click an ad, get cash back. Ok, it's not that simple. But Microsoft has launched Cash Back promotions for ads in Edge. More bribery for user growth?
Audiences
What are your product's or service's trigger events? That is, what events trigger your customers to buy your...thing? If you can figure those out, you've figured out your messaging strategy.
The shopping revolution will be live-streamed. Apparently. App download growth in this segment knocked on the Door of Doubling last month. It's QVC for a new era as entertainment fractures further. Cut the cord and open an app to fill the time.
Returns are a major problem for ecommerce. AR might be the answer, at least according to Snap. Their research suggests customers that use their virtual try on features are less likely to return the product(s).
Sales are slowing for the home goods sector, which isn't surprising. Summer could be slow with the travel boom and real estate slow down. But I'm interested to see if people who were previously looking for a new home might revisit their current home (a la early pandemic) and ramp this sector back up.
Attack Vectors
The newest Apple software feature: CAPTCHA be gone! Guess that means no more inadvertent interning as a robot trainer (let's be honest, that's what they're really for at this point).
TikTok has moved all US user data to Oracle servers stateside to address privacy concerns (what with sending US data to China and all). Except maybe it won't actually make a difference. Whoops.
The platform will now place nice with EU rules geared towards consumer protection as well. Some seem pretty basic, some seem like major headaches in the making ("If a user has more than 10,000 followers, their videos are reviewed by TikTok against its Branded Content Policy and Community Guidelines to ensure that the content is appropriate;").
First Brexit, now GDPR-xit. The UK is going their own way with digital privacy regulation. Calling out the burdens it causes for businesses (especially small businesses) in the process. This is what happens when you write a regulation targeting a certain group of businesses (tech giants in this case) but enact it to apply to everyone.
Why wait for government regulation when you can voluntarily not be sketchy with location and other sensitive data?