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Don’t waste another dime on bloated channel reporting and vanity metrics.
Tools like Advantage+ Shopping Campaigns are designed to help ecommerce and retail brands "do more with less data."
More than a year after the announcement of privacy-oriented changes to iOS 14 that reshaped the landscape for advertisers, platforms are working on new tools that make adjustments for the new digital marketing environment.
Few have more incentive to roll out fresh approaches than Meta. The Facebook and Instagram parent became the go-to platforms for brands looking to reach customers through performance marketing. In the wake of iOS 14’s full implementation over the second half of 2021, Meta said the changes would cost $10 billion in revenue in 2022. Factor in a pullback in spending due to macroeconomic headwinds and a dip in ecommerce demand, and the company reported its first-ever decline in ad revenue in the second quarter. Small businesses are seeing more pronounced impacts from the changes in 2022, and are pulling back marketing spending as customer acquisition costs go up, the Financial Times reported.
Facebook is seeking to answer all of this with new ad products. While recapping the most recent quarter, Meta leaders said they are focusing on developing AI tools that assist in advertising in response to the changes.
“Advances in AI enable us to deliver better-personalized ads while using less data,” Meta CEO Mark Zuckerburg told analysts on the July 27 earnings call. “So it powers automated messaging and creation tools to let businesses run better-performing campaigns, which is particularly important for small businesses that don't have big marketing departments and that have been hit hard by Apple's policy changes.”
This week brings news that new AI-powered tools for ecommerce and retail brands is set to arrive on Facebook this month.
Called Advantage+ Shopping Campaigns, Facebook said these tools eliminate many of the manual steps of creating campaigns, and automate up to 150 campaign combinations at once.
“We’ve found that 52% of consumers want to find brands and products they haven’t heard about, but align with their shopping preferences,” the company wrote in an announcement. “Through Advantage+ solutions, advertisers can tap into the power of AI to provide more relevant campaigns to the people who matter most to their businesses.”
Ecommerce and retail brands will get access on August 15. Small businesses will receive access, as well. The tool was previously announced earlier this year as Meta detailed its Advantage products, which include tools to expand the audience they can reach by taking advantage of opportunities identified in lookalike audiences and targeting preferences. Generally, the Advantage+ products are designed to allow advertisers to automate an entire campaign flow, or a key part of setup.
A screenshot of an Advantage+ Shopping campaign. (Photo via Meta)
On the earnings call, Meta leaders also detailed ads that send people who click on ads directly to a chat with the business doing the advertising. Zuckerberg said 40% of advertisers are using this click-to-messaging service.
“Click-to-Messaging ads is one of our fastest-growing ad formats,” said COO Sheryl Sandberg, a key architect of the company's advertising business who was on her final earnings call with the company before her announced departure on August 1. “It's already a multibillion-dollar business for us, growing at double digits.”
The ads benefit from creating an interaction between the consumer and a business.
“They help us move people from discovery to a direct relationship with a business,” Sandberg said. “In a world where we're trying to do more with less data, they give businesses and consumers a direct connection, so it's much easier to measure ROI. And so we're investing heavily.”
The company is also moving a focus on short-form video, including Reels. Executives were asked about how more ads would migrate to that product. Sandberg said creating new ad formats and measurements tools will be necessary, but there is also another layer required in helping small businesses to adopt video where they haven't in the past.
"Small businesses are better at static photos than they are at video. So this is a new format that we have to help them use. I think we have a number of tools that are working. We have a number of tools in development," Sandberg said. "But the idea is to help businesses really easily create those Reels ads, really easily test them so they can iterate and keep improving as we do this."
The solutions that help advertisers in the post-iOS 14 world may not only come from within Meta. Shopify, which saw direct-to-consumer brands flock to Facebook and Instagram advertising as an engine of growth in the last decade, rolled out its own tool called Audiences that helps brands create high purchase intent audiences, and export them to social networks for use as lookalike audiences. Platforms like Triple Whale and Northbeam are also stepping in to help solve attribution and measurement challenges presented by the iOS 14 changes, creating what Modern Retail called a "new battleground" in the ecommerce software world. And increasingly, brands are turning to a variety of other platforms like Amazon, Walmart, Google, TikTok and a growing number of retail media networks to find customers. Bringing things full circle, Apple itself is said to be building out advertising capabilities, including a demand side platform, as well.
It remains a phase of learning, as brands seek to figure out what works. But Meta’s latest release offers a sign that Facebook will continue to be a place to find new tools. Where the platform was once the first choice of many brands given its audience and data capabilities, they are now weighing a growing multitude of options.
At the same time, Meta isn't growing users at the same breakneck pace it once was. Facebook reported its first-ever decline in active users in the fourth quarter of 2021. Among teens, Facebook use plummeted from 72% in 2015 to 31% in 2022, Pew Research data found. That makes Meta's task all the more weighty.
Asked about how the company gained a sustainable competitive advantage, Zuckerberg said that building great infrastructure and emphasizing a culture that learns faster than others to stay ahead of competition is key.
“I'm confident that if we invest in building the new infrastructure that we need, then we're going to come out of this downturn with even more superior ad products and a meaningful technology advantage over other industry players,” Zuckerberg said.
Zendesk CTO Adrian McDermott discusses the role of AI, conversation and personalization in CX for brands and retailers.
Brands’ primary goal is to sell products, but that’s not the only way they differentiate themselves.
The experience a consumer has with a brand can be just as important when it comes to standing out and influencing the decision to buy, especially when people have to choose between similar products. That experience can also have a big role in determining whether people will buy from a brand again, helping the brand to live beyond an individual product’s consumption in a consumer's mind.
As commerce becomes more digital, the experiences that can be offered to consumers is evolving rapidly. Digital channels for selling and marketing are only expanding, and the way a customer experiences a brand matters at each point. Meanwhile, technology is advancing to create new ways of communicating with customers and serving them that feel less rigid, and fit into their lives. According to customer experience-focused software company Zendesk’s 2023 CX Trends Report, 61% of customers are excited about experiences that are natural, convenient and fluid.
Within brands and retailers, Zendesk said it’s all pushing toward two trends: A bigger role for CX, or customer experience, and more investment in creating immersive experiences for consumers.
At the NRF Big Show 2023, The Current spoke with Zendesk CTO Adrian McDermott about three components of immersive CX that were highlighted in the report. Here’s a look:
Given all of the attention and wonder that was inspired by the release of generative tools such as the chatbot ChatGPT and image-generating DALL-E-2, AI is at or near the top of any conversation about technology to start 2023.
While AI is not new, the outpouring underscores how quickly AI is evolving, and the readiness of consumers to use it. In ecommerce, AI is familiar in the form of chatbots. They are often deployed in customer service to triage and answer questions. Business leaders have harnessed the technology for years, and see it advancing, as well. According to Zendesk’s survey, about three-in-five leaders say AI and bots have become more natural and human-like, while also improving performance. Looking ahead, 57% of leaders expect AI and bots to replace some human agents in the next few years.
But even as the ability to harness tools like large language models to perform human-like tasks gains promise, it must be adopted and become part of an organization’s operations before it can reach customers. According to Zendesk, 64% of leaders say they believe their organization is lagging in the use of AI and bots, even as the same percentage say expansion is an important priority.
At the same time, consumers are gaining higher expectations of AI. When it works, there is recognition that it can be a tool to improve their lives. The arrival of new features like ChatGPT serves to highlight not just how quickly the technology is advancing, but also how AI is capable of more as it gets better.
This means they will look to the places where they interact with AI to do more. Chatbots currently triage and answer questions. Could they also provide something that consumers weren’t considering when they started a chat?
“People are looking for high quality, AI-based interactions, and accepting of those. So the shift is from, this is a way for me to save money, to, this is a way for me to innovate on experience,” McDermott said.
For the companies building technology and the brands and retailers using it, the question is: What will you build with it next?
Text messages. Chats. Voice commands. Messaging is becoming the center of our digital lives.
“Whether it's Facebook Messenger, it's embedded messaging in your application, it's WhatsApp or it’s Google Business messaging, the messaging window has become the new browser window,” McDermott said.
Those can quickly become places of business, as well. While chatbots are already familiar, these spaces are not just for customer service. In messages, retailers could add product carousels, coupons or delivery tracking. These are some of the uses of Zendesk Sunshine, which is a product that normalizes the APIs of different messaging platforms into a software development kit that brands can use to create experiences for customers.
Yet not all businesses are built for this shift at this time. According to Zendesk’s survey, about half of leaders said their agents are able to access conversations and respond across all support channels in one place. Additionally, 61% said they are not built for conversational experiences at this time.
But there is interest. About two-thirds of leaders surveyed are rethinking the entire customer journey to build a more fluid experience that is available to assist a customer “in any way they need at any time,” Zendesk said.
Meeting customers where they are is always a good bet. More and more, they’re messaging, and they’re willing to carry out more of their lives in the chat. Brands can provide the tools to do so.
Increasingly, the convergence of data, conversations and machine learning tools that help to match preferences with customers are enabling shopping experiences to be more tailored to the individual.
That’s the promise of personalization, and business leaders see how it can drive growth. According to Zendesk’s survey, 77% of leaders say personalization increases customer retention, while 59% say it reduces customer acquisition costs.
The data that in part powers personalization plays a unique role in commerce. Customers provide key data like their address and size to make a purchase. That’s purely for utility. But they also want better experiences. The data can be harnessed to provide them.
Instead of tracking numbers and rote lists of options, brands can leverage personalization tools to use real names in communication and provide recommendations for products.
The access methods may change. With the decentralization offered by web3, identity data may be stored in a digital wallet, and order data may only be available for a few weeks via an ephemeral key. Looking out ahead, McDermott sees “consumers controlling both what you could know about them, and how long you can know it.”
But the insights that are gleaned from the data in aggregate can live on, with consumers benefiting from experiences that are made for them. With further development and investment, they will only continue to grow better over time.