March 5, 2019: Amazon to launch new grocery store brand; three takeaways from last week’s Mobile World Conference; Reddit tests option to pay platform creators; Facebook introduces premium ad program; FTC announces first-ever case challenging fake reviews
Here’s what’s worth knowing this week:
Amazon’s Hungry for More of the Grocery Market
On Friday, The Wall Street Journal reported that Amazon plans to launch a new chain of grocery stores with dozens of locations around major US cities later this year. The goal, according to the report, would be to expand Amazon’s grocery footprint to better penetrate the traditional grocery market.
Another grocery store?
You betcha. However, these stores would be different from both the company’s existing Whole Foods footprint and its cashier-less Go convenience stores, with entirely separate branding and likely a broader product range at lower price points. Although it’s currently unclear whether these new stores would use the Go stores’ cashier-less technology, the report does state that Amazon plans to heavily invest in its customer service, pick-up capabilities, and delivery offerings in order to compete with similar services.
Any word on which cities?
Leases have already been signed for locations in Chicago, San Francisco, and Seattle, where the e-commerce giant already has existing Whole Foods and Amazon Go stores.
Another day, another expansion in the Amazon universe. While Amazon has yet to comment on this story, what we do know is that the company has been aggressively expanding its private label offerings to more than 7,000 products, and the new chain may be more private-label driven than its other physical properties.
If Amazon’s new stores push its private-label products, it would make sense on a few fronts. On the one hand, we know that the negative sentiments around private-label products being ‘less than’ are no longer true. Consumers’ preferences for private label brands and products have been steadily increasing over the past few years and is a proven business model, especially among younger consumers who tend to be driven more by product benefits and prices than by brand name. Secondly, as mentioned above, Amazon has been steadily expanding its private-label offerings for quite some time now, and by bringing the products offline and into the physical world, Amazon will be able to further gauge the equity and value of these products in a new context.
Bending and Snapping Towards 5G
At last week’s annual Mobile World Conference, much of the conversation revolved around the impact of 5G networks. With 5G expected to account for 50 percent of U.S. connections in five years, marketers looking to be first-movers in the 5G space have the opportunity to start planning now. Here are three of the biggest takeaways from last week’s conference:
1. IoT will drive richer experiences and richer data.
The number of global IoT connections is expected to triple to 25 billion by 2025. The result? How, when, where, and why consumers use voice is changing due to tech such as connected vehicles and smart home systems. The data captured via these devices will then allow brands to create a more connected customer experience.
When considering the rise of IoT devices, both influencers and brands are going to need to understand that, if their content is being delivered via smart devices (voice, appliances, cars), the types of content and the ways that they create that content have to keep pace (think fridge-friendly content). If influencers are going to continue to be the new sources of content for marketers, they also need to keep pace, which likely won’t be a problem considering that they’re usually the first to try (and have access to) new platforms, devices, and channels.
2. 5G phones will open up new ad formats.
5G is uber fast – at least 10 times faster than 4G, and up to 100 times faster at its full potential. Consumers will be able to stream live video with almost zero lag time, and download full-length movies in seconds. Additionally, speed will not compromise quality, as high-res visuals will be dramatically improved. For brands, 5G represents new possibilities for mobile marketing and interactive content, like long-form video content via MMS.
The ability to deliver long-form content at much higher quality and speed requires as much science as it does nuance (i.e., makeup application), as there’s a bit of a learning curve with any uncharted territory. With the proliferation of any and all new formats and styles, creators and influencers will likely be the ones to figure it out first and exacerbate these large production shop crises. Brands have the opportunity to tap these 5G influencers to learn insights and best practices around the new format.
3. Foldable phones reimagine screens.
The new era of phones won’t just come with 5G, they’ll also fold. Bendable screens are about to completely change the game. Soon, it will no longer be enough to design for the mobile experience. Instead, marketers will need to think about designing for the folded vs. unfolded mobile screen. It’s not even mobile responsive; it’s literally “bend and snap.”
Before you freak out entirely about what bendable screens mean for your content strategy, it’s important to note that these technologies are never going to work if no one can design content for them. The responsibility is going to fall on device makers to make it easy for content creators (marketers included!) to create screen-agnostic content that is optimized for any display – it’s one of the reasons why Apple is making it easier for app developers to design for any screen size.
Reddit’s Tipping Its Hat to Creators
Reddit is testing a tipping option to pay platform creators. Specifically, the new option would enable users to offer monetary “tips” to creators, providing a whole new motivation for Redditors to post.
Yes, up to $100 real-world dollars, as opposed to “Karma,” Reddit’s current on-platform credit system (which holds no monetary value). The tipping option is, essentially, a CPA-based model. Creators don’t get any compensation up-front, but the ceiling is unlimited. It’s worth noting, however, that the option is very early in the trial stage and is currently only available on a single subreddit for a single user. TBD if this rolls out more widely.
Talk to me about why Reddit is doing this.
It could strengthen Reddit’s communities and increase the amount of content on its platform, while also encouraging more users to promote their on-platform presences, expanding Reddit’s reach. But, there are various elements that could also be problematic.
There are a lot of content repurposing and reposting on the platform, which isn’t a problem for users right now, but adding a financial incentive could change the game (think FuckJerry’s recent stolen content scandal).
We’ve said it all along: 2019 is going to be the year of the influencer experience (iX). In the same way that Facebook, YouTube, and Pinterest are embracing creators, Reddit is now finally starting to embrace creators in its own way. Along these lines, it makes sense that Reddit would begin testing this tipping option user-to-user, instead of platform-to-user. If the platform is going to eventually compensate creators, it’s important to first understand how the community adapts to this new economic system – observing what norms, patterns, and types of behaviors arise – before developing its own payment system.
With tipping, Reddit is essentially introducing a new norm: performance-based creation. Although Reddit isn’t the only platform to test a tipping system (Facebook, YouTube, and Twitch have, as well), it will be interesting to see if the idea of users incentivizing creators based on content value will begin to cascade to other platforms.
For Your Coworker Who Won’t Stop Talking About Last Week’s Red Table Talk
Last Tuesday, Facebook introduced Showcase, a new “premium” video advertising program. As part of the launch, the company bundled three of its existing ad products: In-Stream Reserve, In-Stream Reserve Categories, and Sponsorships.
Tell me more.
While the actual ad products that make up Showcase aren’t new, Showcase changes things by combining video advertising with the ability to run ads on a specific content category (including sports, fashion/beauty, and the new additions of food and news), and to exclusively sponsor individual shows. Advertisers can now buy those ads for the 2019-2020 broadcast year.
Give me the stats.
Facebook is positioning Showcase as a premium video advertising program aimed at helping advertisers to reach younger audiences. Facebook reported that nearly 100 million U.S. viewers are watching In-Stream Reserve content on Watch each month, with 43% of these individuals between the ages of 18-34 years old, compared to the 29% of the TV universe in that age demographic. Additionally, brand-lift studies showed that In-Stream Reserve drives positive ad recall lift, with a median 10-point incremental lift. And of those studies, 69% saw an absolute average incremental lift in ad recall that outperformed their vertical benchmarks.
For Facebook, as we know, it’s all about revenue (last week’s Red Table Talk was a HUGE Watch win). So, with minimum-viable user adoption, it makes sense that a premium ad product would soon follow. Knowing that a premium Watch subscription is likely on the horizon, influencers will want to be creating In-stream Reverse eligible content.
FTC Fights Fake Reviews
The FTC has announced its first-ever case challenging a company’s use of fraudulent, paid Amazon reviews to falsely advertise an online product.
The company in question, New York-based Cure Encapsulations, paid the third-party website amazonverifiedreview.com to write and post positive reviews that appear to come from consumers for a weight-loss supplement product on Amazon.com. The supplement is widely mischaracterized as contributing to weight loss, but is actually known to cause acute liver failure. Definitely not five stars.
What’s the FTC saying?
“People rely on reviews when they’re shopping online. When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.” – Andrew Smith, Director of the FTC’s Bureau of Consumer Protection.
What’s Amazon saying?
“Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers. Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies.” – Amazon spokesperson.
This may be the first, but it certainly isn’t the last case in which the FTC challenges a company’s use of fraudulent reviews, especially reviews on Amazon. As such, it’s important for marketers and influencers to responsibly source verified ratings and reviews, especially if supporting any product claims.
You know it, we know it, and the FTC knows it: online reviews are tremendously influential for online (and offline) purchases. And, although the majority of consumers read a rating or review before making a purchase, most don’t stop to consider the person behind the rating/review. We predict this will soon change. In today’s world, where even reviews can be gamified, consumers will begin looking for additional layers of social proof on top of ratings and reviews to verify their credibility. We’re calling it now: influencer-generated ratings and reviews will soon become table stakes.
For marketers executing influencer marketing programs, ratings and reviews generation should be an efficient value-add opportunity (with proper disclosures, of course, if the product was gifted) to close the gap between consumers’ product discovery and decision to buy. By prompting influencers to submit product ratings and reviews after content creation, marketers will be able to better integrate consistent social proof at every touchpoint of the customer experience.