THE Most Effective Channel for Brand Dollars (Week 24)

Ecom Trend, Google Ads Update, 5 Musts to Scale TikTok Shop Affiliate, At What Point Does AI start crossing a line?

Olympics SZN

The Summer Olympics 2024 is here. One of the best global events there is. Always great to watch the world’s best athletes on center stage representing their country. There’s always something inspiring to takeaway from it.

Just spoke in NYC yesterday morning at Playtime NYC- the largest event for the children’s fashion and lifestyle industry in the United States. The main topic? You guessed it - - - SOCIAL COMMERCE! Brands know they need to embrace it, but generally are overwhelmed by it. It’s been the hot topic of 2024 and will only get hotter. The event was livestreamed, you can watch the whole thing here:

Before we get into the thick of it, some good news came out of the US Census Bureau this past week: Ecommerce now represents 24% of overall retail sales and is GROWING 10% YoY. Meanwhile, store-based brick & mortar sales are FLAT YoY. Ecommerce has had a rough couple years, but our industry is still growing, which is a great sign (& honestly expected).

1. THE Most Effective Channel for Brand Dollars? 🤑

Kantar, a renowned market research company, recently published a study that reviewed ad platform efficacy on brand awareness and brand cost effectiveness. The results probably will not surprise you. They didn’t surprise me.

Meta came in as the top ranked advertising source on brand cost effectiveness, association, and motivation. Many have considered Meta as solely a bottom-of-funnel channel, but they are mistaken.

There is simply no better platform for brand discovery, brand awareness, and conversion all in one.

2. Google to Rollout AI Overview Ads Soon! 👀

$GOOGL reported Q2 earnings this past week and it sank 5% due to missing on YouTube ad revenue and the potential for margin compression due to headcount expansion expectations.

One notable update that came from their Q2 earnings call was that Google Ads were coming to AI Overviews "soon" in the form of Search & Shopping. When Google first launched AI Overviews, it was a major miss for reasons I covered a few months ago. Gemini’s rocky start led to a pullback in AI Overviews down to appear in only 7% of all search queries (as reported this month). Google's CEO, Sundar Pichai, noted quality & cost improvements that will enable AIO volume to increase in the near future.

I’m interested to see these new AIO ad placements roll out. My prediction is that I don't think they will impact Google Ads volume or performance much at all. It’s more of a necessary rollout to prevent organic AIO from limiting the potential total number of ad clicks on standard search & shopping ads.

Another INTERESTING Google update that just so happened to release the night before earnings was that it would NOT be killing 3rd party cookies in Chrome. This is a major reversal from its stance over the past few years, where they claimed it was coming. It seems as if they’ll be switching to informed consent to track users, similar to how iOS14.5 rolled out. But we’ll see how easy & obvious it will be for users to opt out. More to come on this as we see it materialize.

3. The 5 “MUSTS” to Scale Affiliate on TikTok Shop

In the last 30 days, 3 TikTok Shops did $5m+ in revenue.

Across these 3 brands:

- 82% of rev came from affiliates

- 2,650 affiliates posted in that month on avg

Mastering affiliate is clearly the rate limiting step to scaling social commerce.

Here are 5 MUSTS to scale affiliate on TikTok Shop:

#1 - Focus on Volume

Partner w/ as many affiliates as possible. The cost of an affiliate post is the cost of your product, w/ endless upside.

Assuming 25% COGS, it cost each of these 3 brands LESS THAN $7 (including S&H) per affiliate post.

Across 7,950 posts-- here's the math:

Total COGS: $55,650

Total commission: $3.3M (est. 20% of rev)

Total revenue: $16.5M

Of course, ad spend juiced the affiliate posts to get to $16.5M in revenue, but each brand only had to risk ~$18.5k to create $5.5M in ONE MONTH!

#2 - Offer HIGH Affiliate Commissions

@drjonsnow

Dont run TikTok Shop affiliate campaigns UNTIL YOU WATCH THIS! #tiktokshop #affiliatemarketing #influencer #tiktokmademebuyit

Higher commissions motivate affiliates to post more about your brand. I broke down the math on how to determine what you should offer in a previous post of mine.

TikTok Shop is a numbers game, volume is everything. Offer an attractive commission to get your numbers up.

#3 - Don't Rule Out Small Accounts

Social commerce enables any size account to generate significant revenue. Follower count does NOT limit organic reach!

For proof that small accounts can crush, read my tweet👇

#4 - Create Content Briefs

Providing talking points or scripts ensures content aligns with your brand. Affiliates don't HAVE to follow the brief, but normally a bunch do.

This way you get content that aligns with the key UVPs you want portrayed for your brand.

#5 - Request Usage Rights

Request usage rights & spark codes to extract more value out of your affiliate content. Incentivize affiliates w/ gift cards in exchange for usage rights, track affiliate performance & request/log usage rights all within one nice dashboard. Refunnel is my favorite app for this. Happy to intro you to Refunnel’s CEO if you need this for your brand.

💥 We're still in a wide open window of opportunity for scaling social commerce affiliate armies. If you need help building out your program, reach out HERE.

Thoughts on Google Gemini’s Olympic Commercial?

This is a great mental exercise on AI.

I completely agree w/ Johnny and am kind of disappointed with Google for not identifying how tone deaf this commercial was.

AI should be used for objective tasks, not subjective.

Technology shouldn’t dehumanize us & strip away the magic of being human.

My Rule of thumb: Avoid a shortcut if it puts blinders on emotions & individuality!

What I’m Listening to 🎧

Beats of the Week: Antdot | Tomorrowland 2024

Tomorrowland in Belgium just wrapped. Deep lineup of world renowned DJs that will have my playlist stuffed for a while. Antdot is one of my favorites. This set is A+.

I welcome all feedback. Good, bad, everything in between.

Hit reply, and let’s hear it! 👂

📧 Share your thoughts or what you want me to cover next!

Yours truly,

Jonathan Snow

If you’d like to see more content of mine, be sure to give me a follow: 

📆 Schedule 1-on-1 time w/ me here.

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