2021: The Year Of The Big-Tech Death Match

What happens when big tech 'scales' all over each other? Google augments product discovery. And the "Gigantic WordPress Vulnerability of the Week."

Thanks for subscribing to Cache - a weekly summary of the most important stories, trends, & commentary in eCommerce marketing, curated by Rob Bettis

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Quick programming note: With the Christmas holiday approaching, this will likely be my last issue of Cache in 2020.

I've said it before, and I'll say it again - producing this newsletter is one of my favorite tasks each week. Thanks for being a part of it! 


🔎 Search

Google now lets you virtually try on makeup using AR, shop from influencer videos | TechCrunch

If you’ve ever used a Snapchat or Instagram filter, you know that one of the popular use cases for AR (augmented reality) is to change up your appearance with virtual makeup — like a different shade of lipstick or eyeshadow, for example. Today, Google is moving into this space, as well, with the launch of an AR-powered cosmetics try-on experience on Google Search. The company is working in partnership with top brands like L’Oréal, Estée Lauder, MAC Cosmetics, Black Opal and Charlotte Tilbury to allow consumers to try on makeup shades across a range of models with various skin tones or even on themselves using their front-facing camera on mobile devices.

Google created the new feature with help from data partners ModiFace, which offers AR tech to beauty brands, and Perfect Corp, makers of the popular YouCam Makeup app and other AR beauty tech.

🗣 Social

On Wednesday, Facebook started a fight with Apple that is easily the story of the week:

Facebook (FB) Attacks Apple (AAPL) iOS Changes in Full-Page Newspaper Ads - Bloomberg

Facebook Inc. lashed out at Apple Inc. in a series of full-page newspaper ads, claiming the iPhone maker’s coming mobile software changes around data gathering and targeted advertising are bad for small businesses.

The ads, which ran Wednesday in the New York Times, Wall Street Journal and Washington Post, carried the headline “We’re standing up to Apple for small businesses everywhere.” They home in on upcomi

ng changes to Apple’s iOS 14 operating system that will curb the ability of companies like Facebook to gather data about users and ply them with targeted advertising.

The Ads:

The ads were also accompanied by an email campaign and this blog post:

Speaking Up for Small Businesses - About Facebook

Facebook is speaking up for small businesses. Apple’s new iOS 14 policy will have a harmful impact on many small businesses that are struggling to stay afloat and on the free internet that we all rely on more than ever.

The actions taken by Facebook have largely been met with skepticism, if not pure cynicism. 

From Apple commentator John Gruber:

Daring Fireball: Facebook Takes Out Full-Page Newspaper Ads to Attack Apple's Changes Strengthening iOS Privacy

A full-page newspaper print ad for issue messaging has always had a weird target audience. Most full-page newspaper ads are trying to reach most of the people who read the paper. Full-page issue messaging ads are about reaching very specific demographics in a conspicuous way. But in today’s world, it’s kind of transparent whom Facebook is targeting here: old white politicians.

I think it’s pretty clear what Facebook wants: they want mobile app privacy to go back to the Wild West days of a decade ago, when apps could get away with whatever was technically possible, with all data hoovering invisible to users. They can get that on iOS only two ways: (a) if Apple changes its mind, or (b) if governments around the world force Apple’s hand, by declaring that Apple’s actions in the name of privacy are in fact the abuse of some made-up monopoly. Option (a) is not going to happen, so Facebook is going all-in on (b).

As for Facebook's small business angle, I haven't seen any thoughtful person buying it. As marketers, we certainly don't. Something about actions speaking louder than words...

At the core of this tension, you will find two technical items. 

First, the Identifier for Advertisers (IDFA). The IDFA is to smartphone usage as the cookie is to web usage. It is the unique identifier that allows advertisers, like Facebook, to track and target users with in-app advertising (in both the Facebook & Instagram apps and apps that opt-in to Facebook's Audience Network). 

Second, the AppTrackingTransparency (ATT) Framework. This is a new policy from Apple that rolled out in iOS 14. This policy is designed to shine a light on the data privacy practices of apps and to prompt users to accept or decline those practices. 

In the case of Facebook, iOS 14 users will receive this prompt when they first launch the app:

With the ATT policy in mind, Apple responded to Facebook's PR stunt with the following statement:

We believe that this is a simple matter of standing up for our users. Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not. App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice.

So what happens when users have a choice? Based on user behavior from when iOS 13 first prompted users about location tracking, we can guesstimate:

Facebook has also provided some testing results specifically from Audience Network:

Preparing Audience Network for iOS 14 | Facebook Audience Network

...in testing we’ve seen more than a 50% drop in Audience Network publisher revenue when personalization was removed from mobile app ad install campaigns.

As a digital marketer, I land within a healthy tension between user privacy and advertising tools. 

As for tangible impact, this change will significantly confuscate the track-ability of mobile users. It will limit the number of conversion events we can track. And it will tighten the attribution window to 7 days.

How can we prepare for this change? 

Facebook gives us three things we can do to prepare. I will add one of my own:

Diversify your channels - not because other ad networks will not also suffer from this change. But because diversity provides protection and stability as ad networks and app developers navigate this transition.

Use Facebook Pixel to Reach Devices on iOS 14 | Facebook Business Help Center

  1. Plan to operate with 8 conversion events per domain. You’ll be restricted to configuring up to 8 unique conversion events per website domain, and ad sets optimizing for a conversion event that’s no longer available will be paused when Facebook implements Apple’s AppTrackingTransparency framework. Businesses that use more than 8 conversion events per domain for optimization or reporting should create an action plan for how to operate with 8 events maximum.

  2. Initial configuration and how to change it. Facebook will initially configure the conversion events we believe are the most relevant to your business based on your activity. All other events will be made inactive for campaign optimization and reporting. You can edit your conversion event selection in Facebook Events Manager when Facebook implements Apple’s AppTrackingTransparency framework. We recommend that you identify the 8 conversion events most important to critical business outcomes and assess if changes need to be made to your campaign or measurement strategy. You may need to consider if you’ll be required to optimize for upper funnel objectives like landing page views and link clicks. When you create your ad set you’ll choose only one of the 8 designated conversion events to optimize for.

  3. Complete domain verification. We recommend that you verify your website domain. All businesses should verify their domain as a best practice. However, it’s important to prioritize verifying your domains if your domains have multiple businesses or personal ad accounts that own pixels. Please note that domain verification is not a new process and businesses can complete it from their Business Manager. The key difference is that domain verification needs to be done at the effective top level domain plus one (eTLD+1), but the process is otherwise the same.

💃 Influencers

Inside Walmart’s army of employee TikTok influencers

Spotlight, which the company began testing this fall, remakes Walmart employees into public-facing company advocates. It’s an outgrowth of Walmart’s My Local Social program, which asked volunteer employees to post on behalf of their local stores. Now, under Spotlight, each employee is the brand. Spotlight is designed to showcase a behind-the-scenes look at life at Walmart. On Instagram, Castle posts about the grocery delivery services offered through Walmart’s subscription program, Walmart+, or her advice for student pharmacists.

Other Spotlight influencers have gravitated to TikTok (a platform Walmart may become a stakeholder in), which has fast become a new hub for the company. The app is teeming with employees jokingly taping their store managers to a pole, giving a “Walmart cheer” before work, or participating in a cross-country “Walmart dance party” hosted through TikTok’s duet feature.

For now, the Spotlight program is still small — but over the next few years, Walmart is looking to expand it to its nearly 1.5 million U.S. associates.

⚖️ Legislation

Texas Accuses Google and Facebook of an Illegal Conspiracy | WIRED

A lawsuit filed today by a coalition of state attorneys general, led by Texas’ Ken Paxton, accuses Google of making an “unlawful agreement” that gave Facebook special privileges in exchange for promising not to support a competing ad system. It’s just one of many claims made in a case that takes broad aim at Google’s monopoly over the online advertising ecosystem, but it could very well be the most consequential. The case is a civil suit, and it names only Google as a defendant. But if what Texas is alleging is true, then both companies may have violated federal antitrust law—and committed felonies in the process.

As described in the complaint, the scheme between Google and Facebook has its roots in 2017, when Facebook announced it would start supporting something called “header bidding.” The details are too wonky to get into here. Basically, Google, which runs the biggest online ad exchange, likes to make publishers give it first dibs on bidding to place an ad. (“Publisher” just means any website or app that runs ads.) Header bidding was a technical hack that allowed publishers to earn higher prices by soliciting bids from multiple exchanges at once. Google hated this, because it created more competition. When Facebook declared that it would work with publishers that used header bidding, it was seen as a provocation. The millions of businesses that advertise with Facebook don’t just advertise on Facebook; through the Facebook Audience Network, the company also places ads across the web, making it one of the biggest ad buyers on the internet. If it began supporting header bidding, that could cause Google’s ad platform to lose a lot of business.

Drawing on internal documents uncovered during its investigation, however, the Texas attorney general claims that Facebook’s leaders didn’t actually want to compete with Google; they wanted Google to buy them off. This seems to have worked. In September 2018, the companies cut a deal. Facebook, the complaint says, agreed to “curtail its header bidding initiatives” and send the millions of advertisers in its Facebook Audience Network to bid on Google’s platform. In return, Google would give the Facebook Audience Network special advantages in ad auctions, including setting aside a quota of ad placements to Facebook, even when the company didn’t make the highest bid. The agreement, the complaint says, “fixes prices and allocates markets between Google and Facebook.”

Here’s why that matters: The other antitrust cases filed against Google and Facebook this year—by the Justice Department for Google and the Federal Trade Commission and state AGs for Facebook—are based on Section 2 of the Sherman Act, which is about building a monopoly. In a Section 2 case, it isn’t enough to show that a company dominates a market; the government must also prove that it got to the top by using anticompetitive tactics rather than by just being the best.

The alleged conspiracy between Google and Facebook is different. It falls under Section 1 of the Sherman Act, which makes it illegal for two or more companies to make any contract or agreement “in restraint of trade.” (While the Texas case is a civil suit, the claims in it could conceivably serve as the basis of federal criminal charges.) A Section 1 case is much simpler. If there’s proof that the companies did agree to fix prices, rig bids, or just not compete with each other, that’s the end of the inquiry.

“If you can prove an agreement between two firms, once you have proof of that agreement, it is called per se illegal,” said Sally Hubbard, director of enforcement strategy at the Open Markets Institute, an anti-monopoly think tank. “This is why antitrust enforcers love to bring Section 1 cases, because if you can find evidence of more than one firm agreeing to fix prices, agreeing not to compete, agreeing to allocate a market—once you prove that agreement, it’s automatically illegal. It ends there.”

📈 Reporting & Revenue

PayPal introduces new fee for dormant accounts | Consumer affairs | The Guardian

PayPal is to introduce a £9 “inactivity” fee for anyone whose account has been dormant for at least a year, but still has some money left in it.

From 16 December, the annual fee will be charged, or the entire balance, if less.

PayPal says it will consider the account to be inactive if the user hasn’t sent, received or withdrawn money, or logged in for a year or more. Importantly, that means users can avoid the fee simply by logging in.

🛍 Marketplace

What’s Next for Shopify, the Other Giant of US Ecommerce

Insiders say brands are adjusting their Amazon strategies to strike the right balance between discovery on one platform and data on the other. In some cases, that means selling only their most popular SKUs on Amazon so the brands still appear in search, Simonson said.

“The savvy ones will make inventory super low, so they’re just leaving their dregs there,” he added. Then, these brands hope consumers will make the leap to their own ecommerce sites. (Pfeiffer disagreed this is an effective strategy, but said it is common to carry only a portion of a catalog in some channels to maintain visibility while mitigating channel conflict and comparison-shopping issues.)

Another strategy is to send excess inventory to Amazon instead of hosting flash sales. That way, brands benefit from additional purchases without looking like discount brands, Simonson said.

Another interesting thread from this post:

Like Amazon, Facebook and Google aren’t going anywhere in 2021. But Shopify could find an opportunity to further monetize its customer data beyond those walled gardens as the amount and quality of data Facebook and Google can access goes down and their targeting capabilities potentially suffer, he added. And it’s not just newsletters—their data access is further limited by privacy laws such as the California Consumer Privacy Act (CCPA).

“Shopify … [exists] outside of Facebook and Google, owning a lot of powerful data with respect to consumers and their purchases,” Simonson said. “They’re in a position to broker data between those companies, as well as companies like Walmart.”

Amazon executives and Jeff Bezos are worried about Shopify's growth - Business Insider

Amazon CEO Jeff Bezos has been directly involved in the discussions, which took place in recent months, according to people familiar with the matter. It's one of the many here-and-now issues Bezos has addressed this year as the CEO has become much more engaged in the daily oversight of Amazon since the pandemic started, Business Insider previously reported.

It's unclear how far the talks have moved — or what exactly the new service would look like. Shopify sells the software tools needed to build an e-commerce site and has become a popular alternative to Amazon for small businesses looking to sell their products online.

Bezos and his top lieutenants have considered launching the service under the Amazon Web Services cloud unit and having Yunyan Wang, the technical advisor to retail CEO Jeff Wilke, run the business, one of the people said.

For Amazon, it would be a return to a market it once entered and failed in. Amazon shut down a service called Webstore in 2015 that effectively competed with Shopify.

🔒 Security

Contact Form 7 Vulnerability in +5 Million Sites

An unrestricted file upload vulnerability in a WordPress plugin is when the plugin allows an attacker to upload a web shell (malicious script) that can then be used to take over a site, tamper with a database and so on.

🦠 Coronavirus

Covid-19 in 2020 - The year when everything changed | Leaders | The Economist

Studies suggest that about 60% of jobs in America paying over $100,000 can be done from home, compared with 10% of jobs paying under $40,000. 

🤷🏻‍♂️ Just For Fun

Covid-19 Vaccine Tracker: Latest Updates, Global Distribution

The first Covid-19 shots have been given to more than 1.2 million people in four countries, according to data collected by Bloomberg. It’s the start of the biggest vaccination campaign in history and one of the largest logistical challenges ever undertaken.

Japanese Wood Joinery

I could watch these videos all day. 

👋 Holla!

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