Podcast Summary
The Future of Advertising: Streaming Platforms Win: Embrace the consumer shift towards streaming and invest accordingly to stay competitive in advertising.
The future of advertising lies in streaming platforms like Disney Plus, Netflix, and Hulu. Consumers are increasingly multitasking and using connected TVs while on social media, making OTT and streaming the clear winners in the ad space. Traditional media companies and businesses that cling to outdated models and refuse to invest in streaming risk losing out. Fortune 500 companies and CEOs who prioritize short-term personal gains over long-term innovation will be left behind. Instead, those who embrace the consumer shift towards streaming and invest accordingly will reap the benefits. As Gary Vee puts it, "The winners are the ones who can or are or are empowered by being historically correct." It's essential to recognize the current trend and act on it now.
The Future of Advertising: OTT and Social Media: Small businesses can succeed in OTT and social media advertising by effectively executing strategies, with LinkedIn and TikTok being top options for organic reach.
The future of advertising lies in Over-The-Top (OTT) streaming platforms and social media, as these two sectors continue to dominate digital ad spend. However, the success of these platforms is not guaranteed, and execution is key. Smaller companies may find social media more accessible due to lower costs, but even they must execute effectively. OTT ads are becoming biddable, which could open up opportunities for small businesses. With my experience spanning various industries, I am bullish on OTT and social media, and I believe this trend is not a result of the political year or COVID-19, but rather the beginning of a significant shift. For small businesses looking to allocate their ad dollars, LinkedIn and TikTok are currently the best options due to their organic reach capabilities. It's essential to understand that social media platforms like Facebook offer proven capabilities to drive business results, despite common misconceptions. Organic reach is a crucial aspect often overlooked, and companies must learn to adapt their strategies to these platforms rather than treating them like traditional media.
Facebook's Unique Position for Targeting Older Demographics: Facebook is a top choice for businesses targeting older demographics (55-90), making it a prime platform for ad spend, while Fortune 500 companies shift budgets towards digital platforms, potentially surpassing traditional TV advertising.
While Facebook may not be the most talked-about platform in the social media landscape, it holds a unique position as the go-to platform for businesses looking to target older demographics, specifically those aged 55 to 90. This demographic represents a significant market, and Facebook's ad product is a monster for reaching this audience. Meanwhile, TikTok excels in app downloads, and Instagram and YouTube dominate the middle demographic. LinkedIn is the top choice for B2B advertising. However, many marketers continue to overlook social media's potential and view it as an afterthought. Fortune 500 companies are starting to shift their ad budgets towards digital platforms, with Facebook poised to receive a significant portion of this spend. Traditional TV advertising, which has long been a staple for brands, may soon be surpassed as a less effective use of marketing dollars. The past year has accelerated this trend, as decision-makers have become more hands-on and gained a better understanding of the impact of their marketing efforts.
The Shift to Digital Marketing is Permanent: Consumer behavior and education drive the permanent shift to digital marketing, despite traditional agencies' incentives to focus on TV ads. The digital content market, fueled by scale and a power law distribution, will continue growing.
The shift towards digital marketing is permanent, driven by consumer behavior and the education of decision-makers. Agencies, often owned by publicly traded holding companies, may not be incentivized to push digital marketing due to higher margins in television advertising. However, the sheer scale of consumption on digital platforms like YouTube, Facebook, Snapchat, and Spotify has made it a necessary reality for businesses. The content creation market, fueled by the influx of money and aspiring creators, follows a power law distribution, meaning a small percentage creates the majority of high-quality content. As long as the internet remains the foundational infrastructure of society and is not over-regulated, the digital marketing and content creation markets are expected to continue growing in perpetuity.
Social media platforms democratize content creation: Social media platforms offer unique features that make content creation accessible and user-friendly, with TikTok's latest addition of music in short-form videos further breaking down barriers.
Social media platforms have been revolutionizing content creation over the past decade by providing users with increasingly accessible and user-friendly tools. From Twitter's character limit that fostered concise, hot-take content, to Instagram's filters that transformed amateur photographers into pros, and Snapchat's stickers and AR that encouraged creativity, each platform has offered unique features that have democratized content creation. TikTok's latest addition, infusing music into short-form videos, has further broken down barriers and allowed more people to create engaging content. YouTube, which once dominated the video space, has failed to innovate and keep up with these trends, missing out on opportunities to expand its offerings and remain competitive. As for the future, it's likely that we'll continue to see platforms that provide the most tools to help users create and improve their content, potentially leading to a more Adobe-like suite of creative tools integrated into social networks. Regarding the topic of texting replacing email, while it's true that texting has become more prevalent and convenient for quick communication, email still holds its place for more formal and lengthy correspondence. The shift towards texting may make email seem less relevant, but it's not likely to completely replace it anytime soon.
Texting Commerce: A Major Sales Channel: Texting eliminates friction and captures attention, making it a promising sales channel for businesses. Provide value to consumers and adapt to texting's unique challenges to succeed.
Texting, specifically in the context of commerce, has the potential to become a major sales channel in the next 5 to 10 years. This is due to the elimination of friction, as seen in the success of services like WineText. The UI of these services allows consumers to easily reply with their desired purchase amount. Texting, like email, captures our attention, but the key to success lies in providing value to the consumer rather than just asking for a sale. The limitations of texting are similar to those of email, but the potential rewards are significant. Texting is particularly effective for goods that can be sold as-is and don't require much additional information, such as wine. However, even for goods with more complex purchasing requirements, the prize is likely to be so lucrative that innovations will be made to eliminate limitations. Platforms like Slack may also come into play as texting evolves, offering new opportunities for businesses to engage with customers. In summary, texting commerce has the potential to become a major sales channel due to its ability to capture attention and eliminate friction. By providing value to consumers and adapting to the unique challenges of texting, businesses can succeed in this exciting new frontier.
Innovative business models in Chinese retail market: Amazon's vertical integration in retail and tech leads the way for social commerce and live streaming sales, with potential for full-stack ownership and human arbitrage and optimization.
The integration of retail and technology, particularly in the Chinese market, has led to innovative and game-changing business models, such as social commerce and live streaming sales. Companies like Amazon have already demonstrated the power of this vertical integration, and it's only a matter of time before others, such as Facebook, follow suit. The next stage of this evolution may involve ownership of the entire stack, from attention to hardware to retail, creating a full-stack monster. The human element, rather than the platforms themselves, will likely play a key role in this evolution, as they continue to arbitrage and optimize these systems. Ultimately, the success of social commerce will depend on which company can effectively integrate all aspects of the stack and provide a seamless, convenient shopping experience for consumers.
Tech companies expanding into new sectors for vertical integration: Amazon and Microsoft are leading the trend towards vertical integration in tech, aiming to control the entire consumer journey and gain a competitive edge by expanding from core businesses into hardware, retail, and social media.
The tech industry is witnessing a trend towards vertical integration, with companies expanding from their core social media or e-commerce businesses into hardware, retail, and other sectors. This strategy allows companies to control the entire consumer journey and potentially gain a competitive edge. Amazon, for instance, is already a major player in e-commerce and cloud computing, but acquiring a social media platform like Twitter or a gaming company could help it complete the loop and solidify its position as a dominant player. The success of such a move depends on the vision and leadership of the CEO. Microsoft, another tech giant, has shown smart moves in this direction with its acquisition of LinkedIn and potential interest in the hardware market. The future landscape may see a few key players emerging as winners, with Amazon, Microsoft, and possibly Facebook leading the charge. The social media-hardware-retail ecosystem has winner-takes-most characteristics, and companies that can master all three areas stand to gain significantly.
The trillion-dollar war for user interface control: Apple missed an opportunity with Apple TV remote, but companies dominating user interfaces will have a significant advantage, and the speaker plans to write a book about it.
The future of technology and business lies in the control of user interfaces, specifically remote controls. The market for these interfaces is a trillion-dollar war, and companies that can dominate them will have a significant advantage. Apple, for instance, missed an opportunity by not building on their control of the Apple TV remote. The ultimate goal is to be at the front of the screen and construct the underlying infrastructure. This concept is so important that the speaker plans to write a book about it, titled "$1,000,000,000,000 wars with the 7 logos." The speaker also expressed gratitude to listeners who leave reviews of the podcast, as they provide valuable feedback and exposure. One particularly kind review from a listener named Gary was highlighted in the episode. The review praised the consistency, applicability, and uniqueness of the content, and the speaker expressed appreciation for it. If you leave a review, you might be featured in a future episode.
