What Marketers Need to Know About TikTok

First there was Vine, then Musical.ly, and now TikTok. Vine was shut down in early 2017, and Musical.ly merged into TikTok in late summer 2018, leaving TikTok as the current dominant platform for short-form video sharing.

In this post, we’ll answer some of your pressing questions about the latest hot social app.

What is TikTok?

In 2016, a new video sharing mobile app named Douyin launched in China. A year later, it was introduced to other countries as TikTok, and it soon gained popularity in the U.S., becoming one of the most downloaded apps of 2018.

How do you use TikTok?

Open the TikTok app, and you’ll see short-form looping videos on the “For You” home feed.

TikTok home screen

Facebook’s Phasing Out its Ad Relevance Score, Removing Six Ad Metrics

Facebook has announced that it will remove its Ad Relevance Score as part of a broader switch to more granular, relevant ad metrics to help improve performance.

As per Facebook:

“Rather than measure relevance in one metric, over the next few months, we will replace relevance score with three new, more granular ad relevance diagnostics metrics. Similar to relevance score, these ad relevance diagnostics are not factored into an ad’s performance in the auction. We think that this level of granularity will offer reporting that’s more actionable for businesses.”

Facebook originally launched its ad relevance score back in 2015 to provide advertisers with more insight into their ad performance, and what they could expect.

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Read full article here. 

American consumers spent more on Airbnb than on Hilton last year

1052001922.jpg.0Airbnb has long felt like an existential threat to hotel companies. New data shows that it actually is one.

US consumers spent more money on Airbnb last year than they did on Hilton and its subsidiary brands like DoubleTree and Embassy Suites, according to new data from Second Measure, a company that analyzes billions of dollars in anonymized debit and credit card purchases. Their Airbnb spending is even catching up to Marriott, the world’s largest hotel company, which added to its revenue by acquiring Starwood hotels in 2016.

The data shows roughly 30 percent growth last year in US consumer spending on Airbnb, which is expected to go public next year and is currently valued at about $38 billion.

Much of that growth, according to Second Measure, is coming from travelers who live in the central US. Currently, about a third of Airbnb’s US customers are from populous coastal states like California, New York, and Florida. That’s a departure from 2012, when people from those states made up half its customers.

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Indeed, hotels, which have long lobbied against Airbnb, are increasingly competing for the same customers. Twelve percent of major hotel* customers also booked with Airbnb last year, up from 1 percent in 2013, according to Second Measure.

Out of all US consumer lodging spending last year, Airbnb made up nearly 20 percent, according to Second Measure data. HomeAway, its home-sharing competitor owned by the travel booking site Expedia, brought in 11 percent.**

That’s impressive considering the US hotel industry brings in more than $200 billion in revenue a year. Note that Airbnb only considers its revenue to be the fees it gets from renters and travelers, not the gross bookings — what consumers spend — that would be included in the Second Measure data. It’s a different revenue model from hotels, which take in all the gross bookings but also have much higher expenses like building and running the hotels.

Airbnb’s revenue in this data would include the total amount consumers spend on its lodgings and its “experiences,” while the hotel data would include room prices as well as food, beverages, and incidentals. Basically, everything that would show up on the consumer’s credit card bill under Airbnb or these hotels (and their subsidiary brands) would be included.

Second Measure’s data is for personal US credit cards, so people traveling from abroad or using corporate accounts wouldn’t be included. Hotels tend to be more popular among business travelers — and business travelers tend to be more lucrative than leisure ones — so including them would definitely move the data in hotels’ favor.

Airbnb, however, has been trying to eat into that business travel market as well with Airbnb for Work, its segment of highly rated lodgings that have hotel amenities and self-check-ins. Airbnb says it manages travel for 400,000 businesses, and business travelers are using the service for shorter trips — ones that might have once defaulted to hotels. The average stay with Airbnb for Work is five days, down from six days last year, according to Airbnb. The fastest-growing segment of business trips is three nights or fewer.

Analysts estimate Airbnb brought in more than $3 billion globally in 2018. Unlike a number of other startups planning to go public, it’s been profitable on an Ebitda basis for two years.

* Includes InterContinental Hotels Group, Hilton Worldwide, Marriott International, Starwood, Choice Hotels, Wyndham Hotel Group, La Quinta, Hyatt, and all of their subsidiary brands.
** HomeAway revenue includes VRBO and vacationrentals.com.

Everything you need to know about Apple’s new credit card

uploadscardimage9583477473f7f1-abb9-409b-99f4-15c278e103c1.pngfit-in__1200x9600Apple wants a permanent place in your wallet, and beginning this summer, you’ll be able to give it one.

The company announced Monday that it’s launching Apple Card, a new credit card made for the iPhone. The card, which is both a digital card in the Wallet app and a physical MasterCard, is meant to be easier to use and understand than most conventional credit cards, according to Apple. And it boasts some intriguing benefits, like no fees and a daily rewards program.

But, as with any new credit card, it’s important to read the fine print in order to understand if Apple Card makes the most sense for you.

Read full article here. 

Pinterest is growing, but not as fast as Twitter or Snap were when they filed their IPOs

pinterest-blogPinterest’s business is growing steadily, but not at the same clip as other big advertisingdriven tech IPOs from the past decade. According to new IPO paperwork filed Friday that offered the most detailed look yet at Pinterest’s business, Facebook, Twitter, and Snap were all showing faster pre-IPO growth.

Pinterest reported revenue of roughly $756 million in 2018, growth of 59 percent from the year before. Pinterest’s 2017 revenue of roughly $473 million also represented 58 percent growth over the year prior.

That’s not bad, but it’s also not the kind of hyper growth we’ve seen from other advertising-driven tech businesses at the time of IPO. Pinterest is not just a social network or a communication business, but it is a consumer app that makes all of its money from advertising. That means it competes for ad dollars with places like Facebook, Twitter, and Snap, so it’s no surprise Pinterest also listed all three companies as competitors in its S-1 paperwork.

Twitter’s business nearly tripled in the full year before its IPO, and Facebook’s nearly doubled. Snap’s business, meanwhile, grew by almost 600 percent in the year before it filed IPO paperwork.

How big were these advertising businesses the full year before their respective IPOs?

  • Twitter — $317 million in 2012, growth of 198 percent
  • Facebook — $3.7 billion in 2011, growth of 88 percent
  • Snap — $404.5 million in 2017, growth of 597 percent over the previous year

In both Twitter and Snap’s case, the businesses were smaller than Pinterest’s is. But that kind of crazy year-over-year growth also gave a sense that they were far from slowing down. (We would learn later — in both cases — that wasn’t actually true.)

Net losses have been decreasing over the last three years, but the company is still not profitable. The picture, though, is improving: Losses came in at $60 million in 2018, about a third of its losses from three years ago.

Pinterest is also using a controversial, even if increasingly common, dual-class stock structure that will allow its founders to maintain control even as it transitions to a public company. To defenders, that set-up helps insulate a company from unruly activist investors and protects a founder’s long-term vision. To critics, that can lead to unaccountability and can therefore dissuade investors from buying shares.

Existing shareholders in Pinterest will hold Class B stock, which will have 20 times as much voting power as those who are new to the company. That’s a huge discrepancy. It’s the same uneven ratio that an expert called “pretty egregious” when it was unsealed at Lyft, but a key difference here is that it’s not just the company’s co-founders that will hold the special stock, but all shareholders.

Perhaps the biggest question about Pinterest over the years has been: What is it? Is it a commerce company? Is it a search company? Is it a social company? The distinction matters because it gives people a point of reference in valuing the business. Pinterest, for example, has pushed back on the idea that it’s a social company, perhaps in part to avoid comparisons to Facebook, the same comparisons that have been troubling for Twitter and Snapchat. (Though as consumer apps predominantly relying on advertising revenue, some comparisons are warranted.)

But understanding what Pinterest is also helps set expectations around what Pinterest will build and who they’ll work with. Today, Pinterest describes itself as a “visual search” company, where the main business pitch to potential advertisers is that people visit the site for inspiration. If you’re planning a wedding or a home remodel, then Pinterest might be a great tool for you — and what better time for advertisers to reach a potential customer than when they are considering a major life change?

Another challenge Pinterest has confronted is the belief that the company is overvalued. The company notched close to its current valuation at one of the frothiest times in venture capital: in 2015 at about $10 billion. But Pinterest’s valuation barely jumped between 2015 and 2017, lending credence to the idea that the market found Pinterest as not quite earning its mega-valuation — last measured at about $12 billion two years ago.

But if there’s any good time for a startup to file and try and avoid a downround IPO, it’s now. The IPO market of 2019 is expected to be the busiest in at least a decade, with listings en route from Uber, Lyft, and Slack. Amid worries that a recession could arrive in late 2019 or early 2020, some bankers and other IPO advisers have been encouraging clients to accelerate listing plans to avoid a broader stock sell-off.

Pinterest was initially targeting an IPO closer to the middle of the year, but appears to be heeding advice to move quickly.

Major shareholders include Bessemer Venture Partners, Andreessen Horowitz, and FirstMark Capital, each of which own more than 5 percent of the company. The filing didn’t disclose the ownership percentage of Ben Silbermann, the company’s CEO.