Vertical Take-Off

Vertical Take-Off

More people than ever are watching Stories, but marketers are still obsessed with the Feed.

Originally featured in the December 2nd 2018 issue of Campaign Middle East magazine

In the not-too-distant past, the humble News Feed was the centre of all life on social media. Whether on Facebook, Twitter or Instagram, this was where the action happened. Snapchat shook up the scene with its vanishing person-to-person photos in 2012, but it wasn’t until the launch of the ‘Stories’ feature in October 2013 that the focus started shifting from scrollable feeds to more intimate and spontaneous sequences of videos that effectively let everyone cultivate their own personal reality TV channel. In August 2016 this format really started to hit the mainstream when Instagram introduced its version of Stories. It proved so successful that its parent company, Facebook, rolled it out across the Facebook and WhatsApp apps six months later. Because Stories disappear after 24 hours, they inspire an urgency that most forms of social sharing don’t. There’s nothing like a little FOMO to grab people’s attention.

Today, more than 1.2 billion users share Stories each day across Instagram (400m+), Facebook / Messenger (300m+), WhatsApp (450m+) and Snapchat (150m+). People can’t get enough of them. Facebook Chief Product Officer, Chris Cox has predicted that Stories will surpass feed posts as the top way to share by next year. Where eyeballs go, ad dollars are not usually far behind. But it seems that marketers are a little slow on the uptake in shifting their spend towards Stories from the News Feed. Mark Zuckerberg himself has has attributed some of the parent company’s slowing revenue growth to an explosion in Instagram Stories usage. Basically, proportionately fewer ads are being seen in the Feed because users are spending more time watching Stories, but advertisers haven’t yet made this leap too.

The ads on Stories are hard to ignore because they take over the entire screen of the phone, offering brands a large, interactive canvas to play with. Many brands that have taken the plunge with Stories have reported a higher engagement over Feed ads, seeing users swiping up to learn more about a product when compared to clicking on an ad in the Feed, and generally viewing these ads for longer. While the Feed’s biggest selling point has traditionally been a chance to reach more people, even this is about to change.

So why are advertisers seemingly hesitant to embrace Stories?

Advertiser demand for new formats can typically lag user engagement as marketers figure out how to take advantage of them. Because the way users consume Stories is so different than the way they consume content in the Feed, everything from the creative strategy, to the story you want to tell needs a fresh consideration. Not to mention creating the assets. The vertical ad format is still relatively uncommon outside of Snapchat so many advertisers have a decision to make over whether to adapt current assets for Stories, or create them specifically from scratch – a potentially expensive process. Either way, there is certainly a learning curve for brands to navigate to keep up with consumers’ evolving digital usage.

For those first mover brands, the benefits are real. In addition to a potential boost in viewability and engagement, a lack of initial demand can lead to lower prices in the auction-based ad environment, an opportunity for savvy marketers that are quick to dive in. According to marketing technology company 4C Insights, the CPM (cost per 1,000 impressions) on Facebook Stories, which only rolled out to the masses in September, is currently around 25 per cent cheaper than on the Feed, although this gap is expected to diminish over time.

As more and more platforms embrace Stories, and the vertical ads that go with the territory, it will gradually become more worthwhile for brands to create vertical advertising content. Both Netflix and LinkedIn are planning to introduce Stories-style video formats over the coming months, while YouTube and WhatsApp recently started rolling out vertical video ads within their apps. Similarly, Snapchat have recently launched another new format in the Middle East that features locally produced content, called Shows, which will also host vertical ads.

Facebook itself has been trying to make advertising in Stories simpler by allowing advertisers to easily modify their current assets for the vertical format at the click of a button on Ad Manager, as well as simultaneously rolling them out on Stories across both Instagram and Facebook for maximum reach. To boost uptake, the company has recently launched an initiative to educate SMEs and agencies on the benefits of Stories, a so-called Stories School.

The incredible popularity of the Stories format is even further proof that we are well and truly in an era of visual communication and Facebook knows how important it is to get ads on Stories right. Mark Zuckerberg admitted as much back in April – “one of the interesting opportunities and challenges over the coming years will be making sure that ads are as good in Stories as they are in Feeds. If we don’t do this well, then as more sharing shifts to Stories, that could hurt our business”. With Facebook’s platforms accounting for over 1 billion of the more than 1.2 billion daily Stories users, they sure have more skin in the game than most.

Posted by Rob in Campaign Magazine, Snapchat

What next for Instagram?

With Instagram’s co-founders both quitting Facebook, are we about to see a more aggressive pursuit of ad dollars on the platform?

Originally featured in the October 21st 2018 issue of Campaign Middle East magazine

Seemingly out of the blue on Monday, September 24, Instagram’s two co-founders Kevin Systrom and Mike Krieger, who had both remained with the company since being acquired by Facebook in 2012, both abruptly resigned from the social media giant. The reason seems to be that Mark Zuckerberg had become overbearing in his control of the company, wanting to take the app in a direction that the founders disagreed with.

While this is a bombshell in-and-of itself, the fact that it comes hot on the heels of the two WhatsApp co-founders, Jan Koum and Brian Acton also quitting Facebook back in April for similar reasons, points to a broader movement. Despite Zuckerberg being traditionally quite facilitating to the founders of the companies that have been acquired by Facebook over the years, it seems that he is gradually starting to exert his influence and take a more active role in the business side of things with these companies.

So what has changed?

While Instagram initially relied on Facebook to help launch and scale its advertising offering, now it is Facebook that relies on Instagram for future growth. While revenue and user growth on Facebook is flagging, Instagram is booming. In the latest earnings call in July, the company forecast a continued slowdown in revenue growth and a slimming of profit margins, but disclosed that the growing number of ads on Instagram is an increasingly significant contributor to Facebook’s overall revenue. They also emphasised an intent to secure more ad dollars from Instagram going forward. It is this fixation on perpetual growth that is worrying for Instagram users. As Instagram becomes more-and-more important to Facebook’s bottom line, there is a continued risk that we will see the platform being overly commercialised.

Users have been drifting away from Facebook recently, not just because of ‘fake news’ or privacy breaches, but also because much of the recent growth in ad revenue has come from smaller companies that have clogged the Newsfeed with spammier content. While early corporate advertisers tend to be big brands or smart startups with relatively high quality ads, over time that quality tends to dip. As a platform matures, there is a clear trade-off between making it more accessible to smaller advertisers, and maintaining the quality of ads, a compromise that can affect the aesthetics of the platform in general.

The worry for Instagram is that something similar could happen to it too, and that this could be more strongly felt as lower quality ads could jolt the user out of the polished, picture perfect world of the Instagram feed. We are already starting to see this in effect in Dubai, with ads for massage parlours and furniture-moving companies that look like they were created by an eight-year old on Microsoft Paint. Not to mention the raft of wannabe influencers that pay to promote their own posts in a bid to grow their following, and subsequently, their ‘influence’.

Interestingly, the Stories format is relatively untapped from a monetisation point of view so far. In fact, Facebook has attributed some of the company’s slowing revenue growth to increased Instagram Stories usage. That is, more and more users are watching Stories at the expense of scrolling through the feed. But you can be sure that Facebook are eyeing this up as prime real estate for growth, and have recently launched an initiative to encourage SMEs to run ads there. Expect to see your local dog walker or handy man popping-up in an Instagram Stories ad in the not-too-distant future.

Ultimately, an increase in ads combined with a reduction in the quality of these ads affects the user experience and the overall quality of the platform. If Instagram too becomes chock-full of trashy ads, the people that moved from Facebook to Instagram to get away from the bombardment might just move on to somewhere else again in time. Generally speaking, this has been one of the more successful acquisitions in tech history, with Facebook playing it excellently so far, waiting for just the right moment to introduce ads to Instagram. It’s only been three years since Instagram opened up their self-service ad platform to a broader market in September 2015. While this certainly is not a long time in the grand scheme of things, they still have to play it carefully or risk turning Instagram into an inhospitable wasteland.

Posted by Rob in Advertising, Campaign Magazine, Facebook, Mobile, Snapchat
Trading Places

Trading Places

Originally featured in the August 12th 2018 issue of Campaign Middle East magazine

Facebook might be the undisputed king of social media when it comes to the scale of it’s digital advertising machine, but for how long? It’s a well worn trope over the last few years that younger users are eschewing the platform in favour of photo and messaging apps like Instagram and Snapchat, but more concrete evidence of this continues to come to the surface.

A Pew Research Centre survey released earlier this Summer has shone some more light on this trend with a study on the social media habits of users between the ages of 13 and 17 in the US. In 2018, the most popular social media platform for this group is Instagram with 72% of users claiming to use it. Snapchat was close behind at 69%. Further down the field was Facebook with just over half of this group (51%) claiming to use it, and only 10% admitting to it being their most-used platform. This is in stark contrast to the results from a corresponding study in 2015. Since then, Facebook and Instagram have almost perfectly switched places; Facebook down from 71% to 51%, and Instagram up from 52% to 72%. Quite a staggering role reversal in just three years.

Mark Zuckerberg last year announced a shift in focus from ‘passive consumption’ of news and media to ‘meaningful interactions’ between friends and family. But it seems that Facebook is losing ground on both fronts: YouTube being preferred for passive consumption, Instagram and Snapchat for social interaction and self-expression. The Facebook News Feed, and it’s focus on a never ending cycle of ‘news’, seems to be a diminishing pull for younger users, and they are voting with their feet, more interested in pictures of their friends’ lunch and pets.

Teens leaving Facebook en masse is indicative of a wider trend. Over the last couple of years, the company has had to battle with scandals involving ‘fake news’ and privacy breaches, and it seems that many users have used this as an excuse (or an opportunity) to leave the network. In Europe alone, 3 million daily active users have left in just the last quarter (likely as a result of the implementation of GDPR), while daily users in the US have remained flat. In the Middle East in particular, Facebook usage declined by 20 percentage points between 2013 and 2017 according to research conducted by the Northwestern University in Qatar (94% in 2013 down to 74% in 2017) with the UAE, KSA and Qatar accounting for the biggest declines. In the grand scheme of things, this is just a drop in the ocean, but as new user sign-ups slow down (monthly active user growth is down from 13 per cent to 11 per cent year-on-year), users that visit the platform less, or even leave it altogether, will be more strongly felt. Meanwhile, Instagram’s user numbers continue to skyrocket, doubling from 500 million MAUs to 1 billion in the last two years.

Where eyeballs go, ad dollars eventually follow. Facebook’s stock price plummeted by over 20% in one day last month following a weak earnings announcement, the largest one-day loss in market value by any company in US stock market history. Not because of a fall in revenue (ad revenue was up 42 per cent year-on-year), but simply because this growth had slowed (down from 49 per cent). Facebook’s Chief Financial Officer, David Wehner, said that revenue growth would likely continue to decline for the rest of the year, partly because Facebook is planning to give users more options with their privacy settings, including letting them limit the kinds of ads they see.

Enter Instagram to save the day. In 2012, Facebook paid $1 billion to acquire the photo-sharing app, a price that many people balked at at the time. While Facebook doesn’t break out revenue from Instagram individually, data marketing technology company 4C estimated a 204 per cent growth in Instagram ad spend year-on-year during the last quarter, and the unit is expected to generate $8.06 billion in revenue in 2018 according to research firm eMarketer. By 2020, Instagram could contribute $20 billion to Facebook’s revenue according to some analysts, accounting for roughly a quarter of total revenue. In hindsight, it looks like that was $1 billion very well spent.

Posted by Rob in Campaign Magazine, Facebook
The paradox of long-form vertical video

The paradox of long-form vertical video

Originally featured in the July 8th 2018 issue of Campaign Middle East

Not content with pick-pocketing Snapchat in 2016, Instagram seems determined to muscle in on YouTube’s turf as well by launching a video hub and standalone app that they’re calling IGTV. And for good reason too. According to a recent Pew Research survey in the US, Instagram is trailing only YouTube in usage among teens. 85 percent of Americans aged 13 to 17 say they use YouTube, with Instagram coming in second at 72 percent, and Snapchat close behind at 69 percent. While Instagram could definitely do with a better ‘home’ for its video content outside of users’ Stories or Feeds, their emphasis on catering to the longer-form video that YouTube currently dominates clashes somewhat with their insistence on using vertical video.

The vertical format that currently features on Instagram and Snapchat lends itself well to shorter content; an impromptu piece to camera, a quick glimpse around a quirky cafe, a short makeup tutorial etc. But the type of video that typically garners a following on YouTube, the kind that Instagram wants to attract to its platform, is a fundamentally different type of content altogether; longer, better structured, with a higher level of production value, and more importantly, horizontal in format.

Viewers on these ‘vertical’ platforms have been primed for brevity and, because of this, the big question for Instagram is whether users will spend as long watching vertical videos as they already do with horizontal videos. The average YouTube viewing session on mobile is an impressive 40 minutes according to Google. But for Instagram, the average mobile session duration is a mere 3.05 minutes. Instagram hopes that, by increasing the maximum time limit for its videos from 1 minute to 60 minutes, it will enable longer-form quality content to flourish and keep users on the app for longer. But will users really watch 10, 20, even 30 minute vertical videos on their phone? Instagram clearly thinks they will, but there will need to be a change in current viewing habits for this to happen, especially as these platforms currently appeal to short attention spans with quick-fire content that is easy to jump through.

From a creation point of view too, there is a chicken-and-egg challenge of trying to encourage longer-form content creation without evidence for creators that it will find an audience on these channels. Instagram must try to both convince their current top content creators to fundamentally change the type of videos they make for the longer format, while also trying to attract YouTube creators to the platform, which would in turn require them to drastically adapt their content for vertical video. For these creators, the vertical format is a restrictive one in comparison, with valuable screen real estate at the sides being sacrificed for length, and a heavy trade-off in the amount of information they can show on the screen at any one time. For YouTube content creators, this could be a serious stumbling block.

At the moment, Instagram has said that they will not show ads on the new IGTV, although this will inevitably change over time once the platform finds its feet. But by shutting off a potential revenue stream for creators at the beginning, and by not making direct payments to stars either, they could initially struggle to attract the talent that they want to come to the platform. It seems like a stretch to expect YouTube’s most popular creators to jump ship to a format that doubles their workload without cutting them in on the ad revenue. Ultimately, the old cliche is true, content is king, especially for video. Facebook has already found this out the hard way over the past couple of years by not being able to take market-share from YouTube due to a lack of exclusive quality content on the platform. Can IGTV succeed where Facebook ultimately failed? Stranger things have happened, but it’s certainly a tall order.

Posted by Rob in Campaign Magazine, Mobile, Snapchat, Social Media
The Louvre Abu Dhabi “Highway Gallery” wins at Cannes

The Louvre Abu Dhabi “Highway Gallery” wins at Cannes

This was one of my favourite campaigns in the region over the last year so it was great to see it flying the flag for the Middle East at Cannes last week picking up a Gold Lion in Outdoor and a Bronze in Radio & Audio.

The campaign by TBWA/RAAD Dubai placed 10 billboards showcasing some of  the masterpieces on display at The Louvre Abu Dhabi along the 100km road between Dubai and Abu Dhabi, syncing them up with local radio stations so that drivers could hear stories about each masterpiece as they drove by. An excellent use of multiple mediums.

Posted by Rob in Advertising, Location, Tech