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Q2 results hint at digital ads bounce back; Instagram expands subscription feature; Google debunks SEO myth; Best Ads of the Week & More

Welcome to this week’s Digital Discovery.

Each week we cover the latest developments and everything you need to know in the world of digital marketing. This week we cover:

  • Alphabet, Microsoft and Meta Q2 results hint at digital advertising bounce back.
  • Just Eat revenue down amidst marketing budget cuts
  • ITV profits plunge 60%
  • Instagram expands subscription feature to UK and more
  • New features for Threads app
  • UK consumers to cut back on Christmas spending
  • Google debunks SEO myth on linking to authoritative sites
  • Norwegian Meta behavioural ads ban comes into force
  • OpenAI shuts down flawed AI detector

Plus we look at some of the best ads discovered and look ahead at key content dates coming up in August.

Don’t forget to subscribe to this newsletter and follow me on LinkedIn.

Ok, let’s dive into this week’s update… 

Alphabet, Microsoft and Meta Q2 results hint at digital advertising bounce back.

Meta beats expectations, ad revenue up 12%

Meta’s ad revenue increased by 12% in Q2 2023 compared to the same period in 2022, reaching $31.5 billion.

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This was higher than analysts’ expectations of $30.8 billion. Meta’s total revenue also grew by 11% to $32 billion. The company’s daily active user count increased by 5% to 2.06 billion, and its monthly active user count was 3.03 billion, up 3% year-on-year.

Meta’s strong performance signals that digital advertising is bouncing back.

“We had a good quarter. We continue to see strong engagement across our apps and we have the most exciting roadmap I’ve seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall,” Meta CEO Mark Zuckerberg said in announcing the results.

On the earnings call Zuckerberg said that Reels is generating more than 200 billion daily views on Facebook and Instagram. In addition, he said Reels revenue is now on a $10 billion annual run rate, up from $3 billion last fall.

 

Google beats expectations with ad revenue growth, driven by AI innovations

Google’s parent company, Alphabet Inc., reported better-than-expected results for Q2 2023, indicating that ad spend is beginning to stabilise.

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Google’s search revenue rose 5% year-over-year, while YouTube ad revenue grew 4.4%. However, Google’s advertising network was down 5%.

The better-than-expected performance suggests that confidence and trust in digital advertising is finally stabilising following the economic downturn. This is great news for digital advertisers as it suggests ad spend is set to grow as we look toward the hugely important holiday period in Q4.

Google’s AI innovations are driving search and ad performance in Q2 2023 with nearly 80% of advertisers use AI-powered ads.

Alphabet’s latest earnings call also showed that generative AI is playing a key role in the company’s plans to evolve Search. CEO Sundar Pichai said: “User feedback [on the Search Generative Experience (SGE)] has been very positive so far. It can better answer the queries people come to us with today, while also unlocking entirely new types of questions that Search can answer.”

However, the positive feedback on SGE was disputed by leading SEO consultant Lily Ray in a LinkedIn post

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Either way, Alphabet sees significant potential to enhance search and ads with advancing AI.

 

Microsoft ad revenue up, but behind expectations

Search and news advertising revenue increased $86 million or 3% (8% when excluding traffic acquisition costs). The company attributed the increase to higher search volume and its acquisition of Xandr, the ad-buying platform it acquired from AT&T. However, Microsoft noted that these figures are “a bit behind expectations” due to lower ad spend.

Microsoft’s Q4 2023 earnings call also revealed that Bing AI Chat has surpassed one billion chat sessions and created over 750 million images. The company also announced that Bing search volumes and Microsoft Edge browser share have continued to grow.

LinkedIn revenue increased $197 million or 5% driven by a growth in Talent Solutions, offset in part by a decline in Marketing Solutions.

 

Other interesting revenues

  • Just Eat revenue down amidst marketing budget cuts – Just Eat Takeaway.com has cut its marketing budget by 28% in the first half of 2023. This equates to a reduction of over £250 million. The company cited “efficiencies in brand marketing spend” as the reason for the cut. Overall, revenue for the first half of 2023 was down 7% to £2.2 billion.
  • ITV profits plunge 60% – ITV’s profits have plunged by 60% in the first half of 2023, amid the “worst advertising recession since 2008”. The broadcaster’s advertising revenue fell by 11% to £811 million, while pre-tax profits dropped to £118 million.

 

Instagram expands subscription feature to UK and more

Instagram is expanding its subscription feature to 10 more countries, including Australia, Brazil, Canada, France, Germany, Italy, Japan, Mexico, Spain, and the United Kingdom.

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The feature was first launched in the United States in November 2022, and it allows creators to offer exclusive content and benefits to their subscribers for a monthly fee.

With subscriptions, creators can share subscriber-only posts, stories, reels, and lives. They can also create subscriber-only highlights, broadcast, and social channels. Subscribers will also receive a badge next to their name when they comment on posts, making it easier for creators to identify them.

The subscription price is set by the creator, and Instagram takes a 20% cut of the revenue. Creators can also offer a free trial period to potential subscribers.

Instagram says that the subscription feature has been successful in the United States, with some creators earning thousands of dollars per month.

Meta plans to expand the feature to more countries in the coming months.

 

 

New features for Threads app

Threads, the new Twitter-like, or X-like, social media app from Meta, has released several new updates in response to user feedback. These updates include:

  • A feed to view posts from accounts you follow in chronological order
  • The ability to see who you are following in your followers list
  • Advanced notification filters
  • The ability to translate posts into your preferred language

These changes come as Threads attempts to enhance the user experience on the app. However, despite boasting the fastest app to hit 100 million users, Threads has struggled to maintain user engagement. Data from Sensor Tower and Similarweb indicates that time spent on the app has declined significantly since its launch.

The pattern of declining user engagement with Threads may warrant digital marketers’ reconsideration of the app as an effective marketing channel.

 

ADS OF THE WEEK

Lay’s | Goats for Messi

 

#BetterwithPepsi campaign targets rum cocktail

Rum and Pepsi is the latest iteration of the brand’s #BetterWithPepsi creative campaign, launched in 2021. The company said ““Rum has always been Better With Pepsi, and the proof is in the logos! Hidden in plain sight, once a bottle of rum has sat in an ice water cooler and the label gets wet and crinkles, the Pepsi Globe exists within the logos of some of the world’s most popular rum brands.”

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UK consumers to cut back on Christmas spending

A new survey has found that two-thirds of UK adults are planning to cut back on their Christmas spending this year due to the cost-of-living crisis.

The survey, carried out by the IPA, found that 64% of respondents said they would be reducing their spending on Christmas gifts, meals out, and other festive activities.

The hospitality sector is set to be particularly badly hit by these cutbacks, with almost a quarter of respondents saying they would be reducing their spending on meals out.

The survey also found that a growing number of consumers are influenced by a brand’s sustainability credentials when making purchases. Almost a third of respondents said they would prioritise brands that are environmentally friendly.

 

Google debunks SEO myth on linking to authoritative sites

Google Search Advocate John Mueller recently debunked the myth that linking to high-authority sites can improve the ranking of a smaller site.

In a response to a question on the r/SEO subreddit, Mueller stated that linking to sites like Wikipedia will have no impact on search rankings. He explained that search engines care more about the quality and relevance of content than the number of links pointing to a website.

John Mueller stated, “Nothing happens. Why should it?”. Mueller further illustrated his point with a humorous example, saying, “Here’s my affiliate site about handbags – and here’s a link to CNN & Wikipedia, please take me seriously now, k?”

Mueller’s comments remind us that the goal of SEO should be to provide users with a good experience, not to manipulate search rankings. When choosing links to include on your website, focus on those that are relevant and helpful to your users.

 

More news…

  • Google expands Site Names for subdomains on all devices in four languages – Read more
  • Norwegian Meta behavioural ads ban comes into force – Read more
  • OpenAI shuts down flawed AI detector – Read more
  • Universal Analytics still processing data one month after ‘sunset’ – Read more

KEY CONTENT DATES

01 August 2023: National Girlfriend Day, Respect for Parents Day, World Wide Web Day

03 August 2023: Cycle to Work Day

04 August 2023: International Beer Day

08 August 2023: International Cat Day

09 August 2023: Book Lovers Day

10 August 2023: World Lion Day, International Update Your Bio Day, National Lazy Day

11 August 2023: Son & Daughter Day

12 August 2023: International Youth Day, World Elephant Day, World Photography Week (12th-26th)

13 August 2023: International Left-Handers Day, National Prosecco Day

16 August 2023: National Rum Day

17 August 2023: National Non-Profit Day

19 August 2023: World Photography Day, World Humanitarian Day, National Potato Day

20 August 2023: FIFA Women’s World Cup Final

21 August 2023: World Entrepreneurs Day

24 August 2023: National Burger Day

25 August 2023: Reading Festival (25th-27th) Begins

26 August 2023: International Dog Day, Notting Hill Carnival (26th-28th) Begins

28 August 2023: Summer Bank Holiday, US Open (28th Aug to 10th Sept) Begins

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Thanks for reading!

I hope you enjoyed this week’s newsletter and found it useful.

Please follow me and subscribe to my Digital Discovery newsletter. I’ll be posting each week about the digital marketing stories that matter.

See you next week.

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