How To Lose Market Share?📉💸💸
The affect of advertising pauses on a brand, new search ads & some interesting ways to pay for your coffee.
Hello hello,
It’s me again.
A big shoutout to all the new subscribers who joined us last week. 🎉 I'm delighted to have you on board! I put a lot of effort into each issue of the Marketing Dojo, making sure it's packed with all the marketing goodness you need in an easy-to-read format. I hope you find it engaging and valuable.
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In today’s issue, we will cover:
🚫 A surefire way to lose market share
💰 New social media platform made for crypto bros
🔍 TikTok stakes its claim on search
🤩 Two emojis, much excitement
And lots more.
Penny Wise, Pound Foolish: Ad Spend Freezes Do More Harm Than Good.
"Budget freeze" - most marketers are too familiar with this term.
When a company faces reduced profitability or growth, it often reduces or pauses advertising spending. But what happens when brands stop advertising? Is it the best solution?
A study called "When brands go dark" was published in the latest issue of the Journal of Advertising that answers some of these questions. The study analyzed the market share of 365 consumer goods brands that stopped advertising.
The findings are pretty interesting and shed some light on the effects of an advertising winter:
If a brand stops advertising, it tends to lose around 10% of its market share in the first year, 20% in the second year, and a whopping 28% in the third year.
Larger brands tend to do better than smaller ones. Smaller brands can lose up to 33% of their market share if they don't advertise for three years.
Things worsen if a brand experiences declining market share before it stops advertising. In that case, the decline is even steeper, with a loss of 39% of the market share in just three years.
Products that aren't used as frequently tend to suffer more if they aren't advertised. These brands could lose 9%, 21%, and 34% of their market share in years 1, 2, and 3, respectively.
Niche products in specific categories, such as pet food, cookies, coffee etc., tend to perform better than smaller brands. They lose only 19% of market share if not advertised for over 3 years.
The study has a few limitations, including not spending on search and social ads and focusing mainly on B2C brands. The effect of an advertising pause in B2B might look different.
However, the overall sample size, data source and methodology make it a helpful result.
So, whether you are a small or big brand, growing or shrinking, the costs of a budget freeze far outweigh the benefits of not advertising. "When brands go dark" might be an excellent piece of research to print and slide it under your CFO's door!
New Social Media In Town: Friend.Tech
Friend.tech is a by-invite-only decentralized social media platform built on Coinbase's Layer 2 blockchain, Base.
The app has been driving much attention, especially amongst the former crypto-bros.
The platform allows users to buy and sell "keys" or shares of themselves to their followers. You can tokenize your identity and make money based on your popularity and influence.
Friend.tech has gone viral since its launch, with over 1.8 million transactions and 100,000 users in less than a month. But with all things crypto, this one is riddled with many questions and red flags & might be quite a distance away from mass adoption.
Vying For The Search Dollars.
TikTok is ready to claim a share of the $150 Billion search business.
Last week, the platform unveiled its search ads products. The ads will be tagged as sponsored and appear alongside the organic feed.
TikTok is popular with younger generations, and nearly 40% of Gen Z prefers searching for info on TikTok and Instagram over Google. The platform is making strides towards social eCommerce dominance, allowing users to be entertained, discover new brands and shop.
No doubt, the new revenue stream from search ads is bound to bring in significant revenue for TikTok.
Brewing a Seamless Checkout Experience.
A "zero-friction checkout experience" -Golden words for those trying to aim for the best customer experience.
Amazon and Starbucks are both taking different approaches to improve the in-store experience. Just last week, Starbucks started testing a "Scanless Pay" option where you can order your coffee without even taking your phone or wallet out! All you have to do is opt in for the feature in the Starbucks app and let your geolocation do the rest.
With this new technology, Starbucks can serve more customers and make its customers happier with the noticeably faster service.
Starbucks's new experience is based on Amazon's Just Walk Out cashierless technology.
Amazon also recently launched their version of friction-free shopping with Amazon One, where you can pay just by using your hand.
Amazon One and Starbucks' Scanless Pay sound like they are from a sci-fi movie, but it's incredible to see how tech can drive a perfect customer experience.
Emojis Speak Louder Than Words. 🎃 + ☕ = 😱
Two emojis, one tweet, 1.6 Mn views and tonnes of incoming cash!
Starbucks announced the return of their famous Pumpkin Spice Latte in style. No words, just two emojis that elicited many excited responses from customers.
Pumpkin Spice Latte is a Starbucks bestseller with sales upwards of 20 Mn cups annually. A fan favourite combined with unbeatable marketing - I won't be surprised if 2023 is this drink's best year yet.
Short Stuff
Pinterest’s new teenage safety updates include wiping out followers of under-15 users (Get ready for a meltdown).
Motorcycle taxi drivers in Indonesia are becoming TikTok content creators to supplement their income (Stories that give a warm, fuzzy feeling).
Meta is offering up to $200,000 in ad credits to boost advertising (It’s raining discounts).
YouTube answers some questions about Shorts (Understanding the algorithm).
That’s a wrap for this week. Thank you for your time and attention. If you found this issue interesting, please remember to leave a like. It helps drive the discoverability of this newsletter.
Once again - thank you for the privilege of your time. I will see you in your inbox next week.
Regards,
G
P.S: I was in Bangkok last week for a work trip and witnessed how powerful social media and influencers can be!
After a long day, I decided to visit the flagship store of a well-known Thai brand called Gentlewoman. This brand is famous for its canvas bags with their name in a bold serif font.
At least ten people were making short TikTok videos inside the store!
It was surreal to see how much of a crowd-pleaser this store is, especially in a city full of fast fashion brands.
Here's a TikTok to demonstrate what shopping at this store feels like!
Tiktok failed to load.Enable 3rd party cookies or use another browser
P.P.S: I bought nothing. Fast fashion is a big no-no for me.