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Scarcity Sidelined: The marketing tactic we’ve used for generations is hurting your revenue,

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In Today’s Issue:

🔍 Bold pressure tactics increase product returns by 69%: Study

📸 Instagram eclipses Google in brand and agency marketing spend: Digiday

🤖 Google launches AI-generated ad assets for Performance Max campaigns

💡 Microsoft adds Maximize Conversions and Target CPA bid strategies

🎵 TikTok ends $1 billion Creator Fund, pivots to Creativity Program

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🛍️ Boost Sales with Reassurance, Not Pressure

  • Reassuring nudges reduce product returns significantly.

  • Pressure increases sales but also return rates.

  • Nearly 6,000 ecommerce shoppers’ behavior were studied

We’ve all done it — been a little liberal the use of marketing pressure tactics. All the advice says to emphasize scarcity. If there’s only 3 left, say “There’s only 3 left!” If there’s actually a thousand in inventory, well, say “There’s only 3 left!”

But how well does this actually work? A large recent study says — not well.

Researchers found that reassuring customers rather than pressuring them can lead to better sales outcomes. 

This came from a field experiment with nearly 6,000 customers of a large Asian e-commerce retailer, and it showed that while pressure tactics like scarcity and time limits can increase sales, they also lead to a much higher rate of product returns.

The study showed that reassurance, such as confirming a product fits the customer's style or providing detailed product measurements, can decrease product returns by over 69% compared to pressure tactics. This approach helps increase the buyer's confidence in their purchase, reducing the likelihood of buyer's remorse and subsequent returns.

The study was published this year in the Journal of Marketing Research. It’s called: “The Effects of Pressure and Self-Assurance Nudges on Product Purchases and Returns in Online Retailing.”


📈 Instagram Dominates Brand Marketing Spend — Even More Than Google

  • Instagram leads in marketing spend for brands and agencies.

  • TikTok and Amazon investments are rising sharply.

  • TV and 'other social platforms' see a significant drop.

Instagram has emerged as the preferred marketing channel for brands and agencies, surpassing even Google now in budget allocation. 

This comes from a Digiday Research survey released today of more than 400 marketing executives.

The Winners

It found that Instagram has seen a consistent increase in marketing spend. In 2023, 97% of brand and retailer professionals and 95% of agency professionals reported allocating at least a portion of their budget to Instagram.

The trend is upward for Instagram, with last year's figures at 90% for brands and retailers and 89% for agencies.

TikTok and Amazon are also on the rise, with 78% of brand and retailer pros investing in TikTok, up from 59% last year, and 55% investing in Amazon, up from 41%.

The Losers

Conversely, investment in online display ads and TV has declined. Only 78% of brand and retailer pros invest in online display ads, a drop from 93% last year, and TV investments have plummeted to 22% from over half last year.

The surveys also highlighted a significant decrease in marketing spend on 'other social platforms' such as Snapchat, Pinterest, and X (formerly Twitter), especially following Elon Musk's takeover of Twitter.

Google’s Share Decreases

While Instagram is where a large portion of budgets are being spent, Google's share has decreased, potentially due to the impending phase-out of third-party cookies. Facebook also sees a downward trend, with only 23% of both brand and retailer pros and agency clients investing heavily, a decrease from previous years.

Brand Data

Agency Data

🤖 Google Introduces AI-Generated Ads for Performance Max

  • Google rolls out AI features in Performance Max ads.

  • New tools aim to simplify asset creation for advertisers.

  • AI-generated assets to be watermarked for transparency.

Google today said it will start rolling out generative AI features in Performance Max campaigns to all advertisers in the U.S.

The big one is image generation, which many marketers have been using for product shots to enhance the look. Rather than just a bottle of perfume, you can have that bottle in a field of lilies — that kind of thing.

This Generative AI tool does the same, and will let you generate a number of images, then pick up to 20 for Performance Max to cycle through your campaigns.

Depending on how much you trust Google’s scraper, the tool can also can generate all the assets you need for a campaign by providing the URL of your preferred landing page or product page, rather than creating a range of text and image assets individually.

Google says it will never create two identical images, even when given the exact same prompt.

In its coverage of this today, Marketing Dive notes that Performance Max campaigns do have problems around transparency, reporting, and inventory quality.

Asked about these reports… Google executives stressed that Performance Max requires a new way of thinking since it is optimized towards delivering on advertiser goals and outcomes differently than previous types of manual campaign construction. 

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📊 Microsoft Adds New Bid Strategies for Audience Ads

  • Microsoft introduces Maximize Conversions and Target CPA bidding.

  • New UET testing functionality aids in conversion tracking.

  • Microsoft’s “Performance Max” is available in open beta in the U.S.

Microsoft Advertising today announced new bid strategies for Audience ads. The update includes Maximize Conversions and Target Cost per Acquisition (CPA) strategies, now available in all markets where the Microsoft Audience Network is accessible.

But — as with all digital ads, of course — campaigns with fewer than 30 conversions per month may experience more volatility.

Microsoft says it’s also improved the automated bidding features across its advertising platform, enhancing conversion prediction accuracy and performance during the learning phase of bidding strategies.

And they’ve introduced new Universal Event Tracking (UET) testing functionality help you troubleshoot problem tags — these, of course, are crucial for conversion campaigns.

As a reminder, Microsoft Advertising’s version of Performance Max (yes, they have one; yes, they stole the name from Google) is still in open beta but is available for advertisers to test.

📉 TikTok Ends Creator Fund; Shifts to New Program

  • TikTok to discontinue $1 billion Creator Fund.

  • New Creativity Program promises higher payouts.

  • Eligibility: 18+, 10k followers, 100k views.

TikTok is making a significant change to its creator compensation. The social media giant has decided to shut down its $1 billion Creator Fund. This fund has faced criticism for its low payouts to creators, with some earning just a few dollars for videos that garnered millions of views.

Starting December 16, the Creator Fund will be no more in the U.S., U.K., France, and Germany. Creators currently in it are being encouraged to transition to TikTok's newer Creativity Program. This was introduced in February and claims to offer higher average gross revenue for qualified video views.

The Creativity Program differs from its predecessor by rewarding creators for longer content, specifically videos over one minute.

To join, creators must be 18 or older, have a minimum of 10,000 followers, and have amassed at least 100,000 views in the past 30 days. TikTok suggests that eligible creators could earn up to 20 times more than what the Creator Fund offered.

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