March 10, 2020: COVID-19’s impact on the tech industry; Influencers use tv-style ad breaks in Instagram Stories; FTC fines skinny tea company; Quibi announces its launch lineup; Abercrombie & Fitch adds special occasion to its assortment
Here’s what’s worth knowing this week:
The Tech Industry’s Response to the COVID-19 Outbreak
As the coronavirus,the virus that causes the illness COVID-19, continues to spread, many of the world’s largest tech companies have responded by restricting unnecessary employee travel, cancelling events and conferences, as well as opening up its platforms to help the flow of factual information and prevent the spread of the virus.
Facebook… Facebook has expanded its initial response to the outbreak, which included increased fact-checking and removal of misinformation, along with dedicated News Feed notifications for users in affected regions. Now, Facebook is taking additional steps to combat the outbreak by providing the World Health Organization with as many free ads as it needs, blocking people from running ads to exploit the situation and providing anonymized FB data (i.e., mobility data and population density maps) to help organizations better understand how the virus is spreading.
Pinterest… Pinterest has introduced a “custom search experience” when users seek information about coronavirus on the platform, as a way to “connect Pinners with facts and myth-bust what’s not true with authoritative information from the World Health Organization.”
Google… Google has announced that it will make its advanced group video calling tools available to all G Suite users for free, in order to provide more options for those looking to reduce in-person meetings.
Now, for the events.
For the first time in 34 years, South by Southwest (SXSW), the annual gathering of interactive, tech and music festivals in Austin, Texas has been cancelled. The cancellation has been dubbed a “local disaster,” as the cost of the cancellation is set to be a significant blow to the local economy. In 2019, SXSW added $355.9 million to the city’s bottom line from attendance, sponsors and consumers.
Other tech event cancellations, postponements or events moved to virtual-only include: Facebook’s Global Marketing Summit and F8 Conferences; Mobile World Congress; Game Developers Conference; and Google News Initiative Global Summit; Coachella and Stagecoach may be postponed until the fall.
COVID-19 is now in more than 100 countries and millions of people are in lockdown. Social media platforms continue to take on the responsibility of sharing and promoting factual information and sources, as well as preventing the spread of misinformation and making it easier for those to profit off mass hysteria.
As the number of industry event cancellations continues to increase, it may cause corporate marketing budgets to shift away from in-person events to digital marketing, including influencer marketing.
TV-Style Ad Breaks, Meet Instagram Story
Instagram influencers are starting to put their own placeholders before and after their sponsored posts, similar to an ad break on TV.
Take DIY & home improvement blogger Medina Grillo of Grillo Designs, for example. Whenever she shares a sponsored Instagram Story there’s a placeholder titled “Ad break” that runs before the video starts. Underneath the title is a message from Grillo that explains how the upcoming sponsored Story that viewers are about to watch funds her content.
What’s her reasoning?
There’s a few. The first, of course, being transparency. Second, Grillo says it also helps with the story flow. “Sometimes I record stories in advance for a collaboration and because stories are often shared in real-time, it always felt odd flipping back and forth between the past and present without a warning.” Last, it gives followers a choice to swipe away if they’d rather not watch.
You said influencers – plural.
Since Grilllo ran her first version of an ad break five months ago, the format has caught on and other influencers have started following suit. While some of these influencers have designed these ad break placeholders to share the same look as the rest of their posts to not interrupt the aesthetic flow of content, others have been more straight-forward with ad breaks — using blank, black screens with the word “ad” on it.
As the FTC and other government entities continue to demand transparency from brands and influencers producing sponsored content, the response has been somewhat two-sided. As seen above, some influencers have leaned into being transparent, while others have decided to opt out of disclosing all-together (see story below).
For the influencers who are adding TV-style ad breaks in Instagram Stories, the added transparency could foster deeper engagement. With the influencer explaining the deeper “whys” of the partnership and how that brands aligns/supports their business, followers could feel more engaged, brought in, and more likely to engage with the ad deliberately.
All in all, it’s the responsibility of the brand to ensure that the influencers they are working with are appropriately disclosing the nature of the partnership. That being said, it’s important for brands executing influencer marketing campaigns to partner with technologies, like Mavrck, that can automatically detect and flag influencer posts that do not have the appropriate FTC-mandated disclosures. For more details on appropriate disclosures, check out our Best Practices for Incentivized & Sponsored Content Disclosures Guide here.
Not Unrelated: The Tea on Skinny Tea FTC Fines
The FTC has alleged that “detox tea” company Teami misled consumers with outrageous health claims and advertisements from influencers who failed to clearly disclose they were being paid.
What’s the tea?
Teami earned more than $15 million in sales for its products, which it claimed would cause weight loss or treat diseases “without reliable scientific evidence,” according to the FTC complaint. Additionally, Teami paid influencers to promote these products, and the influencers failed to clearly disclose the nature of the partnership to their followers. The FTC issued warning letters to numerous influencers, including Cardi B., and also ordered Teami to stop these practices and return $1,000,0000 to “consumers who were harmed.”
According to Influencer Marketing Hub, the influencer marketing industry is expected to grow to $9.7 billion in 2020, but only 14% influencers are currently “fully compliant with legal guidelines” from the FTC or its British equivalent, the Competition and Markets Authority.
That being said, it is still the responsibility of the brand to ensure that the influencers it’s collaborating with are fully compliant. In the case of Teami, the FTC has confirmed that, right now,it is primarily focused on punishing the advertiser, but haven’t ruled out additional action against the influencers. Notably, this comes on the heels of the FTC unanimously voting to update its Endorsement Guides so that undisclosed influencer marketing posts on social media trigger financial penalties. With this policy just passed last month, the FTC continues to be on the prowl to find cases, like Teami, to serve as building blocks for such policy changes.
Have No Fear, Quibi Is Here
Short-form video service Quibi has officially announced its full launch lineup, exactly one month before launch.
WTF is Quibi?
The platform, founded by Hollywood executive Jeffrey Katzenberg and former eBay CEO Meg Whitman, stands for “quick bites” and is built on the premise of shorter content segments (10 min or less) designed for small screens (your phone). One of the unique aspects to Quibi is that it created what it calls “turnstile” videos, so that the viewer can rotate the phone from vertical to horizontal and it plays in full screen in either direction.
Talk to me about the launch lineup.
Set to launch on April 6, Quibi’s content will include “movies in chapters,” scripted shows, docuseries, and daily news/entertainment briefs. The lineup includes a total of 50 shows and movies that includes a lineup of A-list celebs like Liam Hemsworth, Chrissy Tiegan, Zac Efron, Steph Curry and more.
High quality, celebrity-level content is the name of the game for Quibi, which plans on releasing three new hours of content every weekday as part of its bid to make watching Quibi a daily habit. In its first year, this will amount to more than 175 original shows and over 8,500 episodes. While Quibi will start by giving all users a free, 90-day trial, after the trial ends, Quibi will cost $4.99 with ads, and $7.99 without. For context, that’s more expensive than Apple TV Plus and Disney Plus, both of which run ad-free.
However, as the battle for short-form attention heats up, Quibi isn’t necessarily in direct competition with Netflix, Disney+, HBO or any other streaming services, but instead with social media platforms that are currently capturing consumers’ on-the-go attention. As Katzenberg puts it, “[Quibi] is competing against free.” When there’s already so much free content from, arguably, equally talented creators on social media platforms, will consumers even be willing to pay Netflix-subscription prices for content from “celeb” creators? Too soon to tell, but we’ll be watching — literally.
Abercrombie Just Wants To Be With You on Your Special Day(s)
As part of a larger strategy to keep up with the millennial consumer’s lifestyle, Abercrombie is adding special occasion apparel to its assortment.
Give me the deets.
After talking to customers on social to figure out where to go next, the brand decided to focus on apparel that can be worn to weddings, bridal showers, office parties and engagement celebrations. The line is set to launch online first, at the end of March, and will move into all stores in the next few months. The line will be promoted across social media, through both paid and organic posts, from influencers who will be paid or given product.
What’s Abercrombie saying?
“We know [wedding] weekends are a significant part of [our customers’] lives. This collection came from us looking at our customers and getting direct feedback that they need and want us to make these products.” – Carey Krug, SVP of Marketing at Abercrombie & Fitch
We said it once (#Shameless Plug) and we’ll say it again: Abercrombie’s entrance into the highly competitive and special occasion category is not surprising and could be a significant driver of new revenue if done right. There’s a significant, yet competitive market opportunity for affordable bridesmaids dresses women will actually want to wear again (or not, in the rise of bridesmaid-targeted rental companies), that’s also immune to the instability of the current retail climate.
Independent of the economy, people will always be getting married and right now, that demographic is the Millennial sweet spot. The other difference is that those special occasions are now equally massive marketing opportunities. Wedding content is shared across every major social network and publication, and that’s amplified even more when the bride is an influencer. When you consider that weddings are a highly communal planning process of six months to two years, that inherently gives brands the frequency of exposure and organic word-of-mouth velocity (the question “what are your bridesmaids wearing?” is one of those everyone-asks questions) to be discovered and/or re-introduced by a larger, highly valuable target audience. It all translates to increases in day-to-day purchase consideration.
“Influencers are pioneers who were accountants, marketers and teachers, among other jobs, before they became self-taught entrepreneurs. Even the name influencer itself shows a total lack of respect for the complexities of the job. They are the creatives, producers, editors, talent and media all in one. And they are responsible for a movement in advertising that’s reshaping how the modern generation of brands speak to consumers.” – Vickie Segar, CEO of Village Marketing
Segar speaks the #truth. Despite persuasive advertising fraud and waste, the industry has escaped the scathing scrutiny experienced by the influencer industry.