Amazon's "Secret Algorithm" Revealed in Court Details

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In This Issue:

📉 Agencies question the value of Meta's platforms.

🛒 Amazon allegedly manipulates prices with secret algorithm

🚫 Meta considers ad-free subscription or tracking ads choice in EU.

📱 TikTok tests ad-free subscription tier outside the US

🤖 Meta uses public brand Instagram and Facebook posts to train AI

 🎨 Bing integrates DALL-E 3 for free text-to-image creation

📉 BeReal sees decline in active users, despite company's claims

🎁 Amazon sends puzzling gift card scam warning emails

Agencies Slow Down on Meta Platforms

The number of agencies posting to their clients’ Facebook and Instagram accounts has fallen sharply, according to a Digiday study of 200 agency executives.

The Organic Side

This year, 65% said they’ve posted to Instagram. In the previous two studies, that number was 84%.

That is, of course, a big drop.

But it’s even bigger on Facebook. Last year, 81% of agencies posted to Facebook for their clients — this year, only 50% did.

For those who are still posting, they’re doing so less frequently. Previously, 40% of agencies posted daily on their clients accounts. Now, that’s down to 17% for Instagram and 14% for Facebook.

The numbers are even more dire when you look at how many agencies are investing in original content for Meta’s platforms. Last year, only 4% of agencies told Digiday they didn’t create any original content. Now, that number is 31% for Instagram and 40% for Facebook.

The Advertising Side

So if organic content is down, paid content must be up, right?

Nope — huge drops there as well in the past year.

Digiday said what’s likely behind this drop is an industry perception that Meta’s platforms don’t perform as well for driving revenue as they used to.

One bit of good news for Meta is that its work on brand safety seems to be paying off. Most agencies polled still say the platforms are brand-appropriate for their clients, though that number, too, is dropping — 75% last year for Facebook to 62% this year. Instagram fared a bit better.

The New Kid on the Block

As for the newest member of the Meta family of apps — Threads — only about a quarter said they see marketing potential there.

Did Your Brand Get Stymied by Amazon’s “Secret Algorithm”?

A new report from The Wall Street Journal says Amazon used a secret algorithm to figure out how much it could raise prices before its competitors stopped increasing their prices as well.

This was disclosed last month as part of Amazon’s legal battle with American trade regulators, but had been redacted until now.

Here’s what the Journal says we know about it:

• It was called Project Nessie

• It would inflate prices, then monitor other retailers (like Target) to see if they followed with a price raise of their own.

• If competing retailers kept the lower price, this algorithm would return Amazon’s price to its regular rate.

• Amazon apparently stopped using it in 2019

The current lawsuit accuses Amazon of maintaining its market share illegally. That case is continuing.

TikTok: Ad Free Plans Coming Soon?

TikTok is testing a new paid plan which would eliminate ads from subscribers’ feeds.

Reverse software engineers have found a “pick your plan” screen buried in the app’s code that says the ad-free plan will be $4.99 per month. This differs from X’s version of this, where having a paid plan will only eliminate some ads, and only from some parts of the app.

Normally, when this stuff happens, media get a kind of generic p.r.-speak non-statement like “We’re always testing ways to improve our blah blah blah and we have nothing more to share at this time.”

That didn’t happen for this. TikTok actually confirmed to Techcrunch it’s testing this in one English-speaking country that wasn’t the U.S.

Based on the wording of this screen, it seems as if while ads will be dropped, other types of paid promotions, like influencer partnerships or live shopping, would still get through.

TiKTok is getting a growing share of media spend, and fewer eyeballs available for media buyers isn’t great for marketing campaigns.

Will Meta Follow?

This is a trend that the big players are watching closely.

This week, the Wall Street Journal reported Meta is in talks with European regulators to also add a paid product which would drop ads for subscribers.

Meta declined to confirm or deny the report.

Meta Has Trained Its AI On Your Brand’s Content

Your brand’s Instagram posts have been used to train Meta’s AI models.

The admission coming late last week from Meta, confirming what most people assumed: That whatever you post publicly on Meta’s platform gives them a whole bunch of rights to use it however they like.

The legal wording of this agreement you make with Meta when you use their platform, of course, doesn’t specifically say your posts will be used for AI training. That contract template was written well before this AI hype. But it does permit wide, non-exclusive use, that isn’t particularly limited.

As for what media specifically was used in the training pool, Meta’s a little loosy-goosy. They said the "vast majority" of the training data came from publicly available posts on Facebook and Instagram. But “vast majority” doesn’t mean “only” — it’s possible Meta used this language to cover itself if it comes to light that posts intended for private audiences were also used.

This is less an issue for brands, which post almost everything publicly. But it does provide some wiggle room for the company in case it later has to disclose that images and text in private messages made it into the pool.

Indeed, the language they used around personal data was also couched.

Clegg told Reuters that Meta believes it can make an argument that its use of uploaded content falls under fair use, but added: "I strongly suspect that's going to play out in litigation."

In Brief

Bing’s chatbot now offers DALL-E 3, OpenAI's advanced text-to-image model, but it’s still a little buggy. When we tested it, it refused to make photorealistic images, then suggested we try something like “a realistic model of a computer” — which we did indeed try, and Bing replied that it couldn’t do it.

The app with authenticity as its positioning, BeReal, has seen a decline in active users, with an 18% drop since last November. This according to an estimate from SimilarWeb. The company disputes the numbers, claiming over 25 million daily active users globally. read more

Amazon over the weekend sent emails to customers warning them about gift card scams, and then claimed that the recipient had purchased gift cards — which they hadn’t… Something more than a few people assumed was, itself, a scam. Reddit was full of screenshots of this email, with one person saying “Some intern just caused a global panic and is definitely fired." read more

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