The Drum’s Daily Briefing: TikTok stands firm, Google’s AI update and Snap shares soar
Our quickfire analysis of the brand, marketing and media stories that might just crop up in your meetings and conversations today.
The Drum’s Daily Briefing: TikTok stands firm, Google’s AI update and Snap shares soar
ByteDance holds its ground
ByteDance, the Chinese parent company of TikTok, is standing firm against pressure to sell TikTok in the United States, despite new legislation demanding such action or facing a ban.
"ByteDance doesn’t have any plans to sell TikTok,” the company declared on its official Toutiao account. This declaration follows TikTok’s recent vow to legally challenge what it deems an “unconstitutional” law.
Responding to reports from The Information suggesting a potential sale of TikTok’s US operations without its defining algorithm, ByteDance refuted such claims as “false rumors.” It accompanied their denial with a screenshot of the article marked with Chinese characters denoting “false rumor.”
As the case comes to a head, it will have to keep tight control of comms, Chinese or otherwise.
Google’s AI search progress
Alphabet announced its Q1 results hours ago. It boasted strong performance. More of interest was Sundar Pichai's CEO remarks. Here are his views on the firm’s AI search developments:
“We’ve been through technology shifts before – to the web, to mobile and even to voice technology. Each shift expanded what people can do with Search, and led to new growth. We’re seeing a similar shift happening now with generative AI.
“For nearly a year, we’ve been experimenting with SGE in Search Labs across a wide range of queries. And now we’re starting to bring AI overviews to the main search results page. We are being measured in how we do this, focusing on areas where gen AI can improve the Search experience, while also prioritizing traffic to websites and merchants.
“We’ve already served billions of queries with our generative AI features. It’s enabling people to access new information, to ask questions in new ways, and to ask more complex questions.
“Most notably, based on our testing, we’re encouraged that we’re seeing an increase in Search usage among people who use the new AI overviews, as well as increased user satisfaction with the results.
“And with Circle to Search, people can now circle what they see on their Android screens, ask a question about an image or object in a video, and get an AI overview with Lens.”
It seems that after an initial shock, and arguably a slow response, Google is finally able to cash in on the AI buzz.
Ad spend up again in the UK
The latest Advertising Association/Warc Expenditure Report unveils a dynamic shift in the UK’s advertising landscape. In 2023, online ad spending surged by 11%, hitting £28.7bn, constituting a significant 78.4% of total UK ad expenditure.
Among traditional mediums, only out-of-home advertising saw growth, climbing by 9.7%. The decline in TV (8.9%) and direct mail (12.6%) starkly contrasts with this trend.
James McDonald, Warc’s director of data, intelligence and forecasting, characterizes 2023 as a “challenging year,” with minimal gains and a concentration of spending in online formats, particularly social media.
McDonald predicts that digital formats, led by search and online display, will soon command four-fifths of UK ad spending, a substantial increase from 51% just five years ago.
Despite this surge, the UK’s overall ad market reached £36.6bn in 2023, marking a 6.1% increase. However, adjusted for inflation, this growth amounts to a marginal 1.2% contraction.
McDonald contextualizes these findings within a challenging business landscape in 2023, where marketers, striving for efficiency, maintain performance marketing spend amid fierce competition for sales.
Snap shares finally soar
After the closing bell yesterday, shares in the parent company of Snapchat soared by 21%, riding high on the back of better-than-expected quarterly revenue and user growth, surpassing Wall Street’s projections.
Snap attributes its stellar performance to enhancements made to its advertising platform. The social media giant reported a surge in daily active users, reaching 422 million in the first quarter, outpacing analyst forecasts of 419.6 million. Concurrently, revenue for the same period spiked by 21% to $1.2bn, exceeding the analyst consensus of $1.12bn.
Snap has historically grappled with competing for ad revenue against industry giants like Meta Platforms, the parent company of Facebook and Instagram. However, its concerted efforts over the past year to refine ad targeting mechanisms and streamline user interaction with ads are paying dividends.
In a letter to shareholders, Snap credited heightened demand for features facilitating brand-driven sales and website engagement.
Off its trolley?
UK supermarket Morrisons is enhancing its retail media offerings with the launch of a new trolley (that’s carts for our American readers) advertising network across its nationwide stores.
Teaming up with Retail Media Group, the supermarket giant is rolling out trolley media across 300 of its largest stores, amplifying brand visibility within its retail spaces.
This retail media initiative is part of a series of moves by Morrisons to innovate its advertising platforms. It accompanies the introduction of digital screens to its Market Street food counters, enabling brands to showcase products that complement the counter range and engage with shoppers in an area traditionally devoid of their products.
According to IGD Research, trolley advertising stands out as one of the most impactful touch points during a supermarket visit, offering brands heightened visibility and effectiveness.
David Lambert, deputy chair of the Retail Media Group, said that each customer is exposed to 45 minutes of brand visibility, making it a valuable addition to the network. At the moment, the inventory will be printed but you could imagine a screen-based future...