January 14, 2020: Casper files for IPO; YouTube makes policy changes to children’s content; Instagram AR filters go viral and its @shop account reaches 200k followers; Target leans into private-label strategy
Here’s what’s worth knowing this week:
Casper Looks to Avoid Influencer Nightmares En Route to IPO
Casper, the startup mattress retailer, has filed to go public on the New York Stock Exchange. The S-1 filing includes a customary list of “risk factors” that could affect the company’s value, one of which is the network of influencers that it uses to advertise.
Casper warns that its reputation could take a hit if any of its influencers engage in behavior that “adversely” reflects on the company or fails to comply with the FTC’s rules on influencer ad disclosures. The company writes that it is “not possible to prevent such behavior, and the precautions we take to detect this activity may not be effective in all cases.”
It sounds like there’s some history here.
In 2016, Casper sued three popular mattress review sites, claiming that they wrote about Casper’s competitors without disclosing that they received the products for free and earned affiliate revenue for driving sales to these companies, which is #illegal. Casper claimed that the incident had cost the mattress company “millions of dollars of lost sales,” but all three sites settled with Casper in the end.
This isn’t the first time that we’ve seen influencer impact extend far beyond social feeds and to stock tickers (think: Pinterest, Revolve). Although Casper’s IPO filing does highlight some of the risks of influencer marketing, many of these flagged “risks” can be mitigated (i.e., help with FTC compliance) with the right influencer marketing technology partner in place.
The various mentions of influencers in Casper’s S-1 filing also shows just how dependent the brand is on influencers and favorable influencer reviews to drive business value – especially because it generates the majority of its sales online. The S-1 filing also validates just how important ratings and reviews are for this increasingly competitive social proof landscape.
YouTube Grows Up with Changes to Children’s Content
Following YouTube’s most recent settlement with the FTC, the platform has rolled out new policy changes around children’s content on the platform.
What exactly are the changes?
YouTube now requires all creators to label their channels and videos as “made for kids” if the primary audience for their content is children. Content that has a “mixed audience,” but is still directed at children, still falls under this label.
If the entire channel is designated as “made for kids,” YouTube will deactivate the channel’s stories, notifications, community posts, and memberships feature. If only a specific video is labeled as “made for kids” (and not the entire channel), comments, live chats, notifications, playlists, donations, and other interactive features are turned off on that content.
The biggest change of all, arguably, is that YouTube will no longer serve personalized ads based on users’ viewing histories (only on children’s content). This is because the platform is no longer collecting these users’ personal data – something that was already illegal to do in the first place.
Why is YouTube making these changes?
Back in September, YouTube was charged with violating the federal Children’s Online Privacy Act by harvesting children’s personal information and using it to profit by targeting them with ads – not a good look. As a result, Google was fined $170 million and agreed to make privacy changes to the platform that are now being rolled out.
While the majority of these changes don’t necessarily impact creators who aren’t creating content for children, evidently there are some creators who are still upset – specifically around YouTube no longer serving personalized ads on children’s content (which, again, was illegal in the first place). A small subset of other YouTube users are also upset because now they can’t comment on their favorite kid shows… but tbh, there are countless subreddits and FB Groups for adults to comment on kid shows.
While these changes are certainly a step in the right direction, they don’t solve YouTube’s original problem: designating inappropriate content for children. However, these new rules around the collection of children’s data, specifically, do send a warning to other platforms offering children’s content (think: TikTok) to not break the same children’s online privacy law that cost YouTube $170 million.
Instagram Creators Lean Into AR Filters
Instagram creators are rapidly building huge audiences simply by creating their own viral AR effects for Instagram Stories.
Tell me more.
If you’ve been on Instagram in the last month, it’s safe to assume that you’ve probably seen or used the viral AR effects that have taken Instagram by storm. They range in topics from “Which Disney character are you?” to “2020 Predictions,” and appear as interactive quiz boxes above a user’s head. Our personal fav moment? Zelda Williams, the daughter of Robin Williams, recently shared her own Disney filter quiz with her followers and was coincidentally matched with Genie from Aladdin, one of her father’s most iconic movie characters. Cue the waterworks.
I want in.
You’re in luck – whether you want to use pre-existing filters or create your own, the process is relatively straight-forward. To use the effects, users have to go to each creator’s profile, swipe across to the listing of created effects and tap the “Try It” button. The process of creating your own is also relatively easy – if, of course, you know how to use Facebook’s Spark AR Studio. Chipotle sure does.
What’s Facebook’s MO here?
The creation of AR content. More AR content = more user engagement. With the addition of Facebook Spark, Facebook has essentially democratized the creation of AR content, making it as easy as possible for the “average” user to create AR content that has the potential to go viral. Similarly, we’ve also seen Faceook democratize the video creation process – most recently with the addition of new boomerang modes and editing features on Instagram. As seen with the widespread adoption of both boomerangs and AR filters, Facebook’s ability to lower the barrier to entry for content creation has resulted in an always-on flow of engaging and interactive content for the platform.
In typical Instagram fashion, the platform is taking a page out of Snapchat’s playbook – that is, building relevance based on AR filters and graphics (think: Snapchat’s baby and gender swap filters). With AR Filters emerging as the new “Instagram Presets,” it’s also worth considering if one day creators will monetize their AR filters and graphics, similar to how some creators charge for presets now. More so, the viral adoption of AR filters also highlights yet another datapoint on the overwhelming shift to Stories – and how Instagram is working to make the creation of stories and AR effects as easy as possible to do well.
Instagram’s @Shop Growth
Instagram’s @shop account has reached 200,000 followers through “totally organic growth” since its launch in May 2019.
Refresh me on @shop.
@shop features fashion, beauty, and home brands, all chosen by an internal team from Instagram based on what’s trending among the Instagram community. The account spotlights one brand per day, typically a digitally native or direct-to-consumer (DTC) brand, while also providing insight into the people behind the brand, including quotes from the owners and background on how they got started. Every product featured on the account includes shopping tags, enabling users to tap and purchase the items – all without ever leaving the app.
With consumers becoming savvier about where and what they’re spending their money on, small, digitally native brands often struggle to gain the credibility and awareness needed to drive the bottom line. For these brands, the biggest benefit @shop can provide is the public stamp of approval from Instagram, in addition to the added traction and visibility that the brand receives as a result of being featured on the page.
Inside Target’s Private-Label Strategy
Target continues to invest in its private-label business, most recently with the launch of All in Motion, an activewear brand for men, women, and kids hitting stores later this week.
Talk to me about Target’s private-label strategy.
All in all, the retailer has 41 private-label brands, 19 of which are found in the men’s, women’s, and kids’ clothing and accessories categories. Additionally, 75 percent of the apparel on Target.com is private-label, highlighting the retailer’s commitment to the development of these brands, which, of course, wouldn’t be possible without widespread consumer demand.
What’s driving this demand?
It’s more than just physical products. While the company is analyzing consumer data (i.e., what people are buying and not buying) in Target stores and online to build around these trends, products don’t drive demand alone. For each of Target’s private-label brands, the retailer builds a story and identity – both of which are designed to be optimized and shared on and offline. In addition to creating a clean and easily recognizable logo for each brand, each brand’s products are promoted on its Target Style Instagram account. The account, which has 2.2 million followers, regularly re-posts IGC and UGC, and uses a hashtag in the caption to signify which posts contain Target-owned brands, such as #AllInMotion.
Private-label brands are having a moment. While Amazon is arguably leading the pack, big-box retailers such as Walmart, Kohl’s, and Target are all continuing to invest in their own development of private-labels.
Target, specifically, continues to show that it’s investing time and resources into building brands that go beyond just filling a white space in the market at a lower price. Not only does Target already have an identity and story for each brand (before it goes to market), but it also relies on ratings and reviews and repurposed IGC to drive demand for these products in-store and online. Contrast this with Amazon, which is specifically looking to compete at the lowest price points, placing the most importance on being first-to-market and then building out brand identity and affinity second.