Zero Clicks #7: About that Q4 Facebook budget...

Every week in Zero Clicks, we explore the interplay of AI, media, and commerce.

To put it mildly, it’s going to be a stormy couple of months for marketers on Mt. Zuckerberg. With both presidential candidates poised to spend hundreds of millions of dollars on advertising in the coming months, the Facebook & Instagram algorithms are about to be hit with the full weight of the American zeitgeist. Ads that generally work magic when the second glass of Santa Margherita Pinot Grigio hits will be drowned out in a sea of desperate calls for campaign dollars and even more desperate memes.

With Facebook and Instagram conversion rates stunted and CPMs jacked to high hell, it’s put up or shut up time for all the platforms on the periphery of CMO radar that often compete for the scraps of experimental growth marketing budgets. Likewise, for marketers that have been looking for the opportune moment to test new channels, now is the time.

Outside of the obvious reallocation of budgets into Amazon and Google, let’s look at which other channels stand to have a moment.

The prime suspects

TikTok Shop: By and large, TikTok is going to be difficult to wade through during election season, with eCommerce brands competing against various psyops, perhaps foreign-state sponsored and otherwise.

However, TikTok Shop specifically may prove to be a boon in Q4 for brands that finally take the plunge on the platform. TikTok Shop is rapidly trying to transform itself from a platform that just hawks commodities via long tail affiliate creators to a true storefront for prominent brands. It’s always smart for brands to ride the current that large platforms are churning, and the tide of TikTok Shop now flows towards branded storefronts. Talks of a ban have gone suspiciously quiet, and I expect an absolutely monster Q4 for both TikTok Shop and the company’s ad business.

Snap: For perhaps the hundredth time since it burst on the scene a decade ago, Snap is trying to cross the chasm from upper funnel channel for FORTUNE 1000s and agencies with money to burn to performance marketing for SMBs at scale. Evan Spiegel has articulated a strong vision for doing so, but as pointed out by analyst Eric Seufert, the company has to make up significant ground on post-ATT infrastructure to really play ball.

The great irony here is that there is one advertiser who has a ton of direct response success on Snap…Tiktok in late 2019 & early 2020. Still, if there was ever a time to log into the old Snap account for the first time in a few years, this Q4 would be it. If Snap can provide any relief for DTC companies reeling on Meta, it would be a massive boon to the ecosystem.

Reddit: This has to be Reddit’s moment. Riding the wave of seismic traffic growth from Google, this is Reddit’s chance to prove it has the tools to be a performant ad platform. It’s also the time for brands to pony up and test– by and large, Reddit hasn’t fully repriced its inventory to account for the seismic surge of new visitors from page one of Google, so there’s value in testing the current ad offering now in possible preparation for devoting a lot more SEM budget in 2025.

Pinterest: With a $4B ad business, Pinterest is certainly nothing to scoff at. It’s also a business stuck in neutral in Silicon Valley terms, growing at only 10%. Like Snap, the company’s grand strategy is built around making a concerted direct response push, with former Google executive Bill Ready at the helm. Pinterest is about as fuzzy and apolitical a platform as can exist in the modern age, so expect it to be a safe haven for many marketers chased away from conventional social.

Retail Media Networks: It’s been a monster year for retail media beyond Amazon– Walmart Connect is outpacing Amazon’s growth, Roundel has new pep in its step and a 20%+ CAGR, and the long tail of new platforms gets ever longer.

One glance at October Facebook CPMs and many brands that were likely holding out on the minimums required to launch an integrated campaign on Walmart Connect or Roundel might finally find Q4 to be the first palatable time to do so. Retail media is a beautiful 75% profit margin business that’s about to get a lot bigger.

Some deeper cuts

Applovin: With a market cap of $37.3B as of this writing, Applovin is larger than Pinterest and Snap combined, with a significantly smaller employee base than either company. The stock is absolutely on fire and the company has its sights set on commerce as their next big growth channel, offering generous subsidies to brands willing to install their pixel and test.

Their current ad unit is incredibly disruptive– it essentially interrupts a game you are playing on your mobile app to fire up a video ad, but it… maybe works? Growth marketers are ROAS mercenaries– if performance is there, AppLovin could quickly win a place in the mix.

Flip: I was excited about Flip when they burst onto the scene last year, viewing their $140M+ fundraise and hyper aggressive growth marketing tactics as a “we are so back” type moment.

To date, Flip’s pattern as an advertising channel seems pretty clear– performance for brands spikes when the company dials up the Ponzinomics to acquire new users and then lulls. However, Flip does have a nascent ads platform (now powered partially in collaboration with Applovin) and if they can take advantage of the spike in performance for Q4 gifting season + a wave of new users, this could be their time to prove to brands that they are a sustainable performance channel that belongs in 2025 budgets.

While the vibes in marketing and commerce alike are just better when Meta works, the doldrums of election season are when the best growth leaders prove their mettle. Here’s to a hell of a holiday season.

SVP Marketing, Consumer, Loyal

Loyal has a very simple mission– to help dogs live longer. I don’t need to sell that mission at all, so I’ll sell the commercial potential. Pet medicine is a wildly untapped space with a gargantuan TAM and absolutely dynamite unit economics. Several commoditized pet supplement brands have profitably reached eight and nine figures across the DTC & Amazon ecosystem– truly innovative medical treatments have the potential to be orders of magnitude bigger.

Manager, Growth Marketing, Hims

Whatever you think of Hims, it’s hard to argue with their marketing execution. The company is an absolute brand and performance powerhouse, and whoever steps into this role will likely have the chance to test nearly all cutting-edge channels. Two years at a company like Hims under your belt, and you’ll have your pick of growth leadership opportunities across innovative CPG brands.