Snap snaps and Big Tech feels the heat: What’s next for advertising?
If 2022 has taught Big Tech anything, it’s to not be complacent about advertising revenue.
Just last week, Snap confirmed it would be culling a fifth of its 6,500-strong workforce,completely restructuring its advertising team.
The social media giant said it was seeing “increasing competition for advertising dollars that are now growing more slowly,” with shares plunging 74 per cent in the last six months alone.
Twitter and Meta have also had their tails between their legs in recent months as Apple’s iOS changes raise question marks for the future of user tracking and ad structures.
On this side of the pond, the Advertising Association warned that inflationary pressures would continue, with growth in the UK’s ad market expected to be just 1.8 per cent this year, and stunted next.
So, the question seems to be as we head into the final quarter of this year, what does the future of advertising look like?
Serial entrepreneur and founder of WeAre8 Sue Fennessy reckons her new venture could be a solution for this.
Speaking with Morning Wire, she said the best way forward for brands and consumers is to completely reframe the way we view social media and the advertising structures that underpin it.
Having launched her own sustainable advertising platform this spring , the purpose behind WeAre8 is to move away from the “toxicity” found in apps, both in terms of the content and the remuneration structure.
As it stands, WeAre8 serves as a stream of “positive” video content, where users can get paid to watch eight minutes of ads on a TikTok-style feed.
They then have the option to turn these earnings (which are currently quite nominal) into charitable donations, funding issues like climate change and social justice.
“It is about waking people up to the fact that they have value and putting them at the epicentre of the system,” Fennessy told Morning Wire “It is about allowing consumers economic power in the equation.”
For Fennessy, who previously founded and sold media firm Frontiers Group and data business Standard Media Index, the disparity between brand input (research from Revealbot suggests that advertisers should expect to pay $0.94 per click or $12.07 per 1,000 impressions) and overall output not only negatively impacts firms, but also on consumers who aren’t getting their own slice of the pie.
WeAre8 makes money by providing guaranteed click-throughs for brands and providing a space where users are actively seeking out ads and thereby inclined to engage. It currently welcomes the likes of Nike and Nationwide as clients and has also raised over $16.9m from the likes of Channel 4 and former footballer Rio Ferdinand.
Although WeAre8’s model isn’t proven at scale yet, with a user base of just 450,000 people, the power behind it appears double-edged: it allows brands to better spend money on advertising and enables users and good causes to cash in.
The company told Morning Wire exclusively that it plans in the coming months to widen the function of the app to allow people to start sharing their own content, with a new family and friends feature, departing from the purely verified influencer accounts and brand reel that it currently has.
And despite the economic headwinds, Fennessy remains optimistic about the ad landscape – especially when they can combine purpose with bang for their buck.
“In any economic downturn period, the upside for companies is that you need to get smarter and make spending go further,” she said. “For all the good we do, we make the dollars sustainable and help money go to charity. We deliver better results”.
So with Facebook parent firm Meta posting its first-ever year-over-year decline in advertising revenue in its recent report, and Zuckerberg admitting it to be an “economic downturn that will have a broad impact on the digital advertising business”, perhaps the greatest opportunity for WeAre8 lies in monetising on this demise of Silicon Valley giants and luring away those advertisers.