MarketingDojo #18: From Scrolling 📱 to Spending💸
Social media primes you up for impulsive purchases, AI is confusing your customers, TikTok's shaking up eCommerce in Asia.
Hello everyone,
Happy hump day!
I, for one, am glad that we are leaving April behind. My entire month was spent taking care of others and myself as we battled one viral attack after another. Damn.
Anyway, off to better days!
Here’s what we will cover in this week’s edition:
🛒How social media drives impulse purchases
👶 A.I.’s growing pains
🛍️TikTok’s foray into eCommerce in its second-largest market
😬Marketing budgets are about to blip
And a lot more. Let’s dive right in.
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Why do we buy (more) on social media?
I am more likely to cheat on my diet after I have wrapped up a long day at work. Too tired to think straight and my self-control mechanisms at their weakest- I gobble up any desserts that happen to be available.
I am sure you have experienced this too. The correlation between impulsive decisions and mental fatigue is well established.
Matthew Pittman, an assistant professor of advertising and public relations, conducted three online studies on Americans aged 18 to 65 to test how people under various mental loads respond to ads differently.
His study found:
Social media puts people in a state of cognitive overload, making them frazzled and excited, leading them to hit the "buy" button without thinking.
Media-rich environments like TikTok, Instagram Reels and YouTube are more mentally taxing because they have text, photos, videos, animations and sound – often all at once and overlapping.
As of Q1 2023, 4.8 Bn social media users spend an average of 2 Hrs 24 Minutes on over 6 social media platforms.
Social media advertising spending has been growing by double digits since 2017.
As marketers, it's important to remember the power of social media to influence impulsive behaviour. With billions of users spending hours daily scrolling through media-rich feeds, we have a unique opportunity to capture their attention and drive sales. But with great power comes great responsibility.
A.I. Adoption’s Teething Troubles.
AI-powered applications are sprouting up daily. Apps published to the app stores with the term "A.I. Chatbot" or "A.I. Chat" in either their app name, subtitle, or description have increased 1480% year-over-year in the first quarter of this year.
However, two recent articles have highlighted some early challenges in the widespread adoption of this technology.
A study conducted in the U.S. by Morning Consult found that A.I. buzzwords can be confusing. Customers do not fully understand the phrases and buzzwords such as "powered by A.I.," "made with A.I.," and "A.I. image generation".
The study also found that men and Gen Z individuals were more confident in understanding these phrases than women and Gen X individuals.
Snapchat’s new A.I. chatbot received a unanimous negative review. Snap is an early adopter of GPT4 integrations and recently launched the MyAI chatbot to a- broader audience.
Snap got review bombed in a big way. In fact, according to data from app intelligence firm Sensor Tower, over the past week, Snapchat's average U.S. App Store review was 1.67, with 75% of reviews being one-star.
I peeked into the Google store, and the first two reviews were savage.
TikTok Shop is Changing eCommerce in Indonesia.
TikTok continues to thrive despite the threat of a ban. Its eCommerce feature is experiencing impressive growth in Indonesia- TikTok's second-largest market after the U.S.
An article from Rest of the World showcases the increasing adoption of TikTok Shop through data and storytelling.
TikTok Shop enables merchants, brands, and creators to sell products directly on TikTok through in-feed videos, LIVEs, and product profiles. Notable highlights include
TikTok Shop's gross merchandise volume reached $4.4 billion in Southeast Asia in 2022.
The growth is fueled by a network of agencies managing livestream presenters and shopfronts, along with partner training and account managers to assist sellers.
Due to its popularity among Indonesian youth, it seems unlikely for the government to ban TikTok.
Indonesian users spend an average of 29 hours per month on the app, 23% higher than the worldwide average.
By 2023, eCommerce revenue is predicted to reach $127.70 billion across Southeast Asia, with 65% of the region's sales originating from Indonesia.
The rapid growth of TikTok Shop in the country is a credible threat to Shopee's regional dominance.
Pinterest charts its unique path to eCommerce success.
The growth of TikTok Shop is impressive, but it is backed by abundant resources that not all social media platforms can match.
That's why Pinterest's partnership with Amazon for advertising is such a smart move! This will help level the playing field.
Although the partnership details are not fully disclosed, users can find new brands on Pinterest and purchase them directly from Amazon through ads.
Studies show that 83% of Pinterest users have purchased based on content posted by brands on the platform. By partnering with Amazon for eCommerce, Pinterest can focus on enhancing its discovery and engagement features without worrying about the selling process.
Meme-Time: The “Snap” is coming.
With a looming recession, there’s no surprise that many companies are pulling back on their marketing spending. A World Federation of Advertisers survey found that nearly 30% of major advertisers are cutting their ad budgets in 2023.
This week’s meme reminds me of my marketing budget. That should get snapped to half anytime now.
Short Stuff
According to the latest earnings report, Amazon’s ad business grew 23% y-o-y to reach $9.5Bn. (Retail media is booming).
A glitch in Meta’s ad delivery system caused overspending for various accounts (Refunds awaited).
ByteDance’s Lemon8 became the second most downloaded lifestyle app in the U.S. in the last 30 days (Plan B activated)
So that’s a wrap on all things marketing for the week. I hope this week’s newsletter was worth your time. If you think a fellow marketer might benefit from it, please consider forwarding it.
Regards,
Garima
P.S: I am planning a week-long trip to Taiwan towards the end of May. Been there? Share your recommendations, please.
