What were some of the top stories from the world of marketing and video? Each week with Render Perfect Productions, your video marketing experts in Baltimore and beyond, we’ll take a look at marketing news this week. In this edition, we are covering some of the top stories from the week of April 18th to April 22nd 2022.
Netflix Open to Ads
On a Tuesday call about its Q1 2022 earnings, Netflix executives announced the company would begin looking into how to bring advertising to its platform. The move reverses the company’s longtime aversion to ads and comes after the streamer lost subscribers for the first time in over a decade. Now, Netflix could finally open itself to advertising as it faces stiff revenue growth headwinds and has seen its stock plummet nearly 30% since the April 19 earnings announcement.
“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription,” co-CEO Reed Hastings said on the earnings call. “But as much I’m a fan of that, I’m a bigger fan of consumer choice.”
Hastings said Netflix will look to figure out how to implement low-end, ad-supported plans over the next year or two. The course correction comes just weeks after CFO Spencer Neumann said advertising was not currently in the company’s plans, but seemed to open the door to a change by warning, “never say never.” The abrupt shift could reflect Netflix’s recognition that the streaming space it has dominated for years is developing, and that the company needs to change with the times if it is to remain a key player.
After years of growth, Netflix faces a panoply of problems that advertising could help it solve. In a letter to shareholders, the company noted the pandemic-related boost had obscured underlying issues that are impeding growth, including increased competition from other streaming platforms and the high number of households that share accounts — a number it estimates at over 100 million. And while tough earnings results have spurred the decision, experts have been pushing Netflix to adopt ad-supported video on demand (AVOD) for years.
“Netflix’s move to offering an AVOD tier to keep and gain subscribers is way overdue. Most major content players already offer an ad-supported tier or are heading in that direction,” Marcella Milliet Sciorra, CMO of healthcare demand-side platform DeepIntent, said in emailed comments.
The move will put Netflix at parity with competitors including HBO Max, Amazon’s Freevee (the company’s recently rebranded IMDb TV offering) and Disney+ (which announced it will introduce an ad-supported tier later this year), and reflects growing consumer demand for cheaper, ad-supported content. Two-thirds of CTV viewers in the U.S. prefer to see ads if they can pay less for the service, according to a recent survey conducted by DeepIntent and LG Ads Solutions. It could also be attractive to advertisers who have followed consumers to CTV and AVOD channels.
Snaps Ad Business Challenged
- Snap Inc. saw revenue grow 38% year-over-year to hit $1.06 billion in the first quarter of 2022, per an earnings statement. The results missed analyst expectations.
- The Snapchat owner continues to feels the impact of “platform-related headwinds” — namely privacy tweaks made by Apple that affect user tracking — along with supply chain disorder, labor shortages, inflationary pressures and geopolitical unrest stemming from events like the war in Ukraine.
- The company forecast revenue growth between 20% and 25% in the second quarter, which also fell short of Wall Street’s targets. Snap’s disappointing earnings potentially tee up a tough reporting period for the tech sector, where rivals are grappling with similar challenges.
Snap’s Q1 report showed macroeconomic factors like rising inflation and operational chaos stemming from the invasion of Ukraine compounding on existing problems. Discussing the results with analysts, Snap CEO and Co-founder Evan Spiegel said that the period “proved more challenging than we had expected.”
Social media companies have seen campaign measurement and performance take a hit since Apple made its Identifier for Advertisers (IDFA) — a key way of keeping tabs on iPhone users for advertising — an opt-in feature by default last year. The Q1 results still mark a bit of backslide for Snap, which appeared sturdier through the second half of 2021 despite the IDFA challenges. It beat Wall Street expectations and reported its first-ever net profit in the fourth quarter.
Snap is working on first-party data solutions that will help advertisers better navigate the IDFA headwinds. Getting partners to sign on still sounds like a work-in-progress.
“The first step was to drive broad availability of these solutions, which we’ve largely achieved,” Chief Business Officer Jeremi Gorman said on the analyst call. “Now we are working toward achieving broad utilization of and full confidence in these measurement solutions.”
This year is clearly primed for further disruption, as Snap offered a cautious forecast for Q2. Rivals like Meta are could display the same pinch when they release earnings later this month.
In terms of strengths, Snap emphasized continued traction for bets in augmented reality (AR), a core part of its positioning as a “camera company.” Executives said over 250 million users engage with AR features daily while content creators have built over 2.5 million Lenses. Users played with Lenses more than twice as much in Q1 compared to the year-ago period. Snap’s daily active users increased 18% YoY, or by 52 million, to reach 332 million.
Video remains the largest driver of Snap’s ad revenue growth. Spotlight, a TikTok lookalike, has shown promise and intersects with other areas like AR. Spotlight posts applying creative tools or lenses were up 350% YoY in Q1, according to Snap.
As Snap builds out its capabilities in AR, video and other fields, it’s focused on deepening relationships with advertisers and agencies. Snap has partnerships in place with several ad holding groups, including one centered on performance media with Dentsu and an AR Lab for social commerce products with WPP. Both relationships formed last year.
Snap’s upfront advertising commitments for 2022 are already over 60% higher compared to its total commitments last year, Gorman said on the analyst call. That could provide some stability during an otherwise bumpy period. Snap plans to host its Partner Summit later in April, as well as present at the Interactive Advertising Bureau’s NewFronts in May.
Instagram Testing Pinned Posts
Instagram’s been hinting at it for a while, and now, it’s launched a live test of a new option to pin images on your profile for selected users.
Which you can kind of do already, by posting your images in Stories, then using the Stories Highlights option. But that’s not the same, as being able to pin specific feed posts enables you to highlight things differently, with a top listing of three posts then shown to all profile visitors, enabling you to highlight key elements, like special offers, product displays, your best performing posts, etc.
As noted, Instagram’s been working on the option for some time, with an initial variation spotted in testing back in January, then updated a month later.
Instagram’s also testing an ‘Edit Grid’ option, that would enable you to re-arrange your profile gallery as you choose, regardless of when each was posted.
That could provide even more creative capacity and control, which could be of major benefit for Instagram marketers.
Instagram hasn’t provided a timeline for a full rollout of these new options, but Instagram chief Adam Mosseri has noted that they are in the testing phase, which could see them coming to your profile shortly.
We’ve asked Instagram for more info on its plans for both pinned posts and ‘Edit Grid’ and we’ll update this post if/when we hear.
Twitter Tests New Closed Caption Button
Twitter is making it easier to use closed captions in the app with the addition of a new ‘CC’ button on videos where captions are available.
The new button essentially serves a double purpose, in both enabling you to switch captions on (where possible) while also letting you know which clips actually have captions available.
Twitter’s been working to improve its accessibility options over the past year, which has also included upgrades to its alt-text description display (including a similar ‘ALT’ button on tweeted images where descriptions are available) and auto captions on video clips.
Which should mean that captions are available on every clip, right? So the ‘CC’ button should be present on all videos uploaded, not just those ‘where captions are available’.
I mean, captions certainly aren’t available as an option on all clips as yet, but eventually, with the combination of auto captions and the ‘CC’ button, there’ll be more capacity to view all Twitter videos with text accompaniment, improving accessibility, and enabling more users to engage with tweets.
It’s an excellent addition, which will no doubt come in handy for many users.
The new CC button is first being tested on iOS before making its way to Android.
About Render Perfect Productions:
Render Perfect has been built from the ground up to service growing businesses and help them realize their full visual storytelling and digital marketing potential. We’ve created a service offering and skill-set that spans video production, post-production, motion graphic design, 3D animation, web development, and video marketing strategy. Our insight and experience allow us to help clients make better planning decisions and get more out of their video production effort.
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