Anti-Innovation: The Antitrust of 2020
We're going to skip discussing the blow-by-blow of the hearing itself. The long and short is that it was an exercise in grandstanding, and there was clearly a "guilty" verdict already applied to every company in the room. Though it was fascinating to hear the circular logic of "you are a monopoly, therefore doing X is illegal, and because you did X you are a monopoly".
That said...
The basis for the hearing is incredibly important as the industry, and the world, advances into this new age of business and technology. In the simplest terms, the intent of antitrust legislation is to promote the optimal consumer experience. Historically, we have believed the best way to do this is through competition as it organically incentivizes companies to continually fight and innovate for consumer dollars/attention. And that's a key aspect of all this... innovation.
In 2020, it's very difficult to hold these companies up to traditional antitrust and monopolistic definitions. Being big or being aggressive competitively does not make a company a monopoly. Especially when it's because of those exact traits that consumers have benefited tremendously over the past 20 years.
Zuck put it well in his defense of big tech:
"We’re here to talk about online platforms, but I think the true nature of competition is much broader. When Google bought YouTube, they could compete against the dominant player in video, which was the cable industry. When Amazon bought Whole Foods, they could compete against Kroger’s and Walmart. When Facebook bought WhatsApp, we could compete against telcos who used to charge 25 cents a text message, but not anymore. Now people can watch video, get groceries delivered, and send private messages for free. That’s competition. New companies are created all the time, all over the world. And history shows that if we don’t keep innovating, someone will replace every company here today."
So then how do we update and enforce antitrust laws for 2020? (For a deeper dive on this topic we recommend Stratechery’s write up here.) We believe that when looking at these companies the conversation around innovation is paramount. Is Google/Facebook/Apple/Amazon actively innovating and providing incremental value to the consumer?
When you start looking at the track record and recent business activity, Google, Amazon, and Facebook have a common thread. These 3 continue to fight tooth and nail for market position, bring new innovations to market, acquire companies to empower their suite of products/solutions, and provide a consumer experience that is better in 2020 than it was in any year previously.
Interestingly, the only company that has been lagging in the past decade is the company that every other write-up said was just there "for show" and was asked the fewest questions during a 6-hour hearing - Apple.
For those that don't know, Apple was already in front of the Supreme Court in 2018 to defend itself in Apple Inc. v. Pepper against the accusation that the app store is monopolistic. In a 5 -4 decision, the Supreme court affirmed the decision that consumers, “may sue Apple for allegedly monopolizing the retail market for the sale of iPhone apps.”
To interpret some legalese, we’re not saying they’re a monopoly but were saying they’re wearing a top hat, have a cane, and one of the game pieces is a tiny car.
Let's review a few highlights of Apple's business today and double-back on why the App Store issue is actually a problem:
As of Q2 2020, Apple has $193B in cash on hand. That's nearly double the cash of Facebook and Amazon combined. Why isn't Apple investing in itself or acquiring companies? There is a strong argument for Apple to be the acquirer of TikTok over Microsoft.
With one prompt, Apple crippled IDFA and an $80B industry due to the dominant position it has on mobile devices. Yes this is being done under the guise of consumer data privacy, but it just so happens to also put Apple into a premium spot around data while launching a large broadside into Facebook and Google.
Apple has been criticized for years now that it is no longer an innovative company, where flagship and market leading products like the iPhone are now essentially following the R&D and innovation of Android competitors.
Apple recently announced that it would be ending it's 15-year partnership with Intel and will now be making its own computer chips. How this will impact the end consumer is to be determined. However, less competition tends to stifle progress.
And yes... Apple has an essential monopoly on the app store where they force rules on 3rd party companies that their own apps aren't held to. This was a key line of questioning during the hearing where Apple has the rights to copy any other app in the store but no 3rd party has the right to copy an Apple app.
While Google, Amazon, and Facebook have been innovating and constantly competing for market share in new categories, Apple has instead been collecting a dragon's hoard of cash while performing the tech equivalent of a deadly sin: complacency.
Stratechery put it best back in 2018:
"Apple has every right to the outsized profits it makes on the iPhone. Consumers could buy cheaper Android devices but they don’t because they value Apple’s hardware, or iOS, or the integration between the two... To put it another way, Apple profits handsomely from having a monopoly on iOS: if you want the Apple software experience, you have no choice but to buy Apple hardware. That is perfectly legitimate. The company, though, is leveraging that monopoly into an adjacent market — the digital content market — and rent-seeking. Apple does nothing to increase the value of Netflix shows or Spotify music or Amazon books or any number of digital services from any number of app providers; they simply skim off 30% because they can."
We applaud innovation and risk-taking because the product is generally a net positive for the consumer and for society as a whole. And opposed to what was being implied during the hearing, the aggressive push by Big Tech into new verticals or acquisitions of companies are incredibly huge risks and by no means absolute.
Look at how Tumblr was acquired for $1.1B and sold for $3MM only 6 years later.
While Google/Amazon/Facebook are fighting and capturing new markets, Apple is collecting rent. And when you combine complacency with a nearly $2T market cap, you start looking less like the passionate, risk-taking, tech icon in a black turtleneck and more like Smaug the Dragon sitting on a pile of gold while collecting a tax for just existing.
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Thanks to Pedro Santos for sharing their work on Unsplash!
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Facebook Ads Bidding Strategies can either make or break your advertising campaign. If you've been struggling with getting the best results, understanding the benefits and drawbacks of each strategy can save you both time and money. The right bidding strategy can help you reach your target audience more effectively and get the most out of your advertising budget.
Each bidding strategy has its unique benefits and challenges. Some are great for maximizing visibility, while others prioritize cost-efficiency. Choosing the right one depends on your specific goals, whether that's more clicks, better engagement, or higher sales. Knowing the pros and cons of each strategy will help you make informed choices that benefit your business.
This article will guide you through five key Facebook Ads Bidding Strategies. You’ll learn about their benefits, drawbacks, and how to pick the one that suits your campaign objectives. By the end, you’ll have a clear understanding of which strategy will help you achieve your advertising goals effectively.
Understanding Facebook Bidding Mechanics
Facebook bidding is essential for advertising success. It involves auctions where advertisers compete for ad placements. Understanding key elements like Auction Dynamics and Different Bidding Strategies is crucial.
Auction Dynamics and How Bids Work
In Facebook's auction, ads compete based on bids, estimated action rates, and ad quality. Bid represents how much you're willing to pay for a specific action (like clicks, views, or conversions). The Cost Per Result adjusts based on competition.
Bid Cap lets advertisers set a maximum bid. This ensures spending control but may limit campaign reach. Meta bidding strategies, like Lowest Cost and Target Cost, help optimize for specific goals, balancing cost and performance.
Factors influencing the auction include:
- Bid amount
- Ad relevance
- Estimated action rates
Exploring Different Bidding Strategies
Advertisers can choose from several Facebook bidding strategies. The Lowest Cost strategy aims to get the most results for the lowest price but may lack spending control. The Cost Cap strategy helps maintain an average cost while driving results.
The Bid Cap strategy is useful for high-control needs, letting you set the max bid per action but it might restrict delivery. Target Cost aims for a stable cost per action, ideal for steady budget planning.
Choosing the right strategy depends on your campaign goals, budget, and desired Cost Per Result. Evaluate each option to find the best fit for your needs.
Implementing Bidding Strategies for Campaign Success
Successful implementation of bidding strategies can drive better results and optimize ad spend. Key factors include setting appropriate bid caps, maximizing returns using ROAS goals, and balancing volume and value.
Setting the Right Bid Cap for Your Campaign
Setting the right bid cap involves determining the maximum amount you are willing to pay for a result. This ensures costs don't exceed the budget. Bid caps can help control spending and improve efficiency.
- Analyze past performance: Review historical data to identify the highest bid that achieved desired results.
- Adjust as needed: Be flexible to change bid caps based on real-time campaign performance.
- Consider the competition: Higher bid caps might be necessary in competitive markets.
Maximizing Returns with ROAS Goals
Use the Return on Ad Spend (ROAS) bid strategy to drive maximum returns. ROAS goals ensure that every dollar spent on ads generates a specific amount of revenue.
- Calculate target ROAS: Set a realistic ROAS based on past campaigns.
- Monitor and tweak: Regularly check ad performance and adjust your ROAS goals to meet revenue targets.
- Balance quality and cost: High ROAS might limit reach, so find a balance between cost and quality.
Balancing Volume and Value in Bidding
Balancing volume and value helps achieve the right mix of reach and profitability. Consider using both Highest Volume and Highest Value strategies.
- Highest Volume: Bids are set to get the most conversions, good for awareness and large-scale campaigns.
- Highest Value: Focuses on getting the highest-value conversions, suitable for targeting high-value customers.
By carefully implementing these strategies, advertisers can meet their campaign goals effectively.
5 Facebook Bidding Strategies: Benefits, Drawbacks, and Selection Guide
Static ads and dynamic ads serve different purposes in the world of marketing. Static ads are simple and stay the same at all times. They are easy to create and can be effective for straightforward messaging. But dynamic ads offer customization, changing their content to fit the audience's preferences and behaviors.
Dynamic ads might seem complicated, but they bring better results by targeting specific groups with personalized messages. This means higher engagement rates and more conversions. Static ads, on the other hand, are less effort to produce but may not capture attention as effectively.
Deciding between static and dynamic ads depends on the brand's goals and resources. Each has its strengths and can be powerful if used appropriately in a marketing strategy.
Understanding Static and Dynamic Ads
Static ads and dynamic ads serve different purposes in digital marketing. Each has unique features and benefits that cater to varied marketing needs.
Exploring Static Image Ads
Static image ads are straightforward. They are typically still images that do not change once created. These ads are ideal for conveying a clear, unchanging message or brand image.
A static image can include text, graphics, and logos, and is often used on websites and social media platforms.
Advantages of Static Images
- Consistency: The message remains the same, which can be useful for brand recognition.
- Simplicity: They are simple to create and often cost less than dynamic ads.
- Predictability: Once the ad goes live, what you see is what you get.
Unpacking Dynamic Advertising
Dynamic ads are more complex. They can change content in real-time based on user data and behavior. Unlike static ads, dynamic ads can alter images, text, and calls to action depending on who is viewing the ad.
Benefits of Dynamic Ads
- Personalization: Content can be tailored to each user, potentially increasing engagement.
- Flexibility: They can show different messages to different audiences without creating multiple ads.
- Efficiency: They adapt to user preferences, making the ad experience more relevant.
Comparative Analysis and Use Cases
Static and dynamic ads offer different benefits and limitations. This comparison will help you understand where and how to use each type effectively in your marketing strategy.
Static Images Vs. Videos
Static images are simple and quick to create. They load faster than videos, which is great for mobile users and slow internet connections. They allow for clear, focused messages without distractions.
Videos, on the other hand, capture attention better with motion and sound. They convey more information in a short time. Videos are more engaging and can demonstrate products or services in action.
Leveraging Opportunities for Static Ads
Static ads are useful in various scenarios. Billboards are a great example, as they need to be read quickly. Print ads in magazines and newspapers also benefit from static images. Online banners are often more effective when static, as they load quickly and are less intrusive.
Static ads are best when the message is straightforward. They work well for short calls to action like "Buy Now" or "Sign Up." Visually, they should be clean and uncluttered to convey the message quickly.
