The Market Report

This Week in Digital Marketing: Legal Battles and the Decline of Social Media Marketing

November 29, 2024

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This week, Google’s ad tech trial almost comes to an end, while a national proposal to ban social media for minors faces scrutiny. Other important updates include Threads’ new AI-generated summaries and trends moving away from social media marketing.

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1. Google’s High-Stakes Ad Tech Trial Nears Conclusion

In case you missed it, Google has become embroiled in a critical legal drama (again). The US Department of Justice (DOJ) has challenged Google’s monopoly on digital advertising, with allegations that the company basically owns the entire ad-tech supply chain.

Over weeks of trial, the DOJ has asserted that the company created favourable conditions for itself, which did not extend to other parties (i.e. customers, publishers, and advertisers), and controlled the landscape to stifle competition.

On the other side of the courtroom, Google has maintained the argument that they’re simply good and successful at what they do—not necessarily monopolists.

Judge Leonie Brinkema’s decision is expected late this year or in early 2025.

What this means for you:

The stakes to this trial are massive. With Google’s ad network generating $7.4 billion the last quarter alone, the outcome would dramatically affect publishers, advertisers, and rival companies.

While there will likely be minimal changes if Google wins, a ruling against them may result in more competition and potentially lower advertising costs.

Until then, the tech world will be watching and waiting.

2. Australia’s Proposed Social Media Ban for Minors Faces Backlash

Social media giants—namely Meta, TikTok, and Google—are pushing back against a proposed social media ban for minors under 16. If approved, this law would prevent minors from creating accounts on platforms, even with parental permission, and impose massive fines on companies (up to AU$50 million) for non-compliance.

Critics, including the aforementioned companies, argued that the legislation is rushed and unworkable, citing holes in age verification technology. Furthermore, they raised concerns about how cutting off online support networks may affect vulnerable young people’s mental health.

What this means for you:

Brace for impact: the passage of this law would severely limit the size of your target audience, especially if the under-16 market is a major demographic for your brand. If this happens, you’ll need to completely recalibrate your campaigns and figure out how to reach your audience beyond social media.

3. Threads Introduces AI-Powered Trending Summaries

The brains behind Threads have been busy lately. Last week, they announced rolling out ads by early 2025, but this week, they’re levelling up with a new feature. Following a similar move by its rival, X, the platform will now start testing AI-generated summaries of trending topics.

However, Threads will be testing an enhanced version of this feature, with expanded trending topics and the option to search within specific date ranges and by individual accounts.

What this means for you:

If you’re already gathering intelligence from social media platforms, take advantage of this feature quickly. Threads’ new AI summaries will be a great tool to better understand trending topics from genuine, real-time conversations that occur among your audience.

With this, you can potentially refine targeting options for your campaigns and reach your audience with relevant content.

4. Is Social Media Marketing Out? 

We’ve covered quite a few social media updates this week, but is social media marketing still relevant?

Apparently, not as much as a decade ago. According to Northeastern University professor Koen Pauwels, social media marketing spending has dropped to its lowest point in seven years, from 17% in 2023 to just 11% in 2024.

This decline is said to have been caused by the lack of connection between user activity and actual purchases. While social media remains to be a helpful tool for gathering user data, marketers are starting to invest more in retail media, like Amazon, to see better results.

Social media is not dead, but unless these platforms can prove real value and significant purchase conversions, we’ll likely see more marketers taking their money elsewhere.

What this means for you:

This news will come as a reality check for many of us. Social media is still big, but it’s no longer the go-to for marketers looking to see an ROI. If your campaigns seem to be doing well but are not translating to actual conversions, perhaps it’s time to consider advertising on retail media platforms, just like what the others are already doing.

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