Will Investors Learn Social Nuances?; Crypto’s Score On Super Bowl Ads

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The Street Loves Me For Me

Once upon a time, social media challengers begged for Facebook look-alike valuations. 

But a funny thing happened with social media stocks this week. After Facebook nosedived on its earnings report on Wednesday, investors soured on Snapchat, Pinterest and Twitter. 

Pinterest’s market cap dropped by a fifth overnight; Snapchat lost closer to a third. Twitter, which doesn’t report earnings until next week, dropped by a mere 10%. 

But each bounced back a day later – in Snap’s case adding almost 20% on top of its previous position after reporting better-than-expected results. 

Amazon had a similar one-day dip in after-hours trading on Wednesday, which also jumped back up a day later after smashing estimates on advertising in particular. 

The episode is important because it shows that Wall Street investors often lump social and online ad platforms into a too-broad category, but also that they’re starting to course-correct by accounting for nuances in how they value these companies. 

Snapchat, with strong branding potential and less reliance on cross-app conversion tracking, isn’t in the same boat as Facebook. It also sports its own video creation vibe, whereas Facebook competes directly with TikTok. 

And Amazon and Google are search giants, with very different dynamics than the Facebook ad platform.

Crypto And Gaming, Go Long 

This year’s Super Bowl is full of firsts.

Thirty-one advertisers in the game this year, or 40% of the total, are first-timers. Major repeat brands like Disney and Amazon are making way for reps of the “new economy,” including sports betting and crypto, Insider reports. 

Crypto is going toe to toe with decades-old brands, a source tells Insider. That’s even with a high bar for entry. Getting an ad slot in the Super Bowl is no joke – some advertisers paid a record $7 million for 30 seconds of airtime this year.

NBC claims it sold out its avails for the game in September, but can hold back a couple of “floaters” or give up some of its own promo time to capitalize on late bids.

Speaking of crypto markets exploding, it’s likely many advertisers paying late premiums for Super Bowl spots were from the crypto category, Insider reported in January. The category is hungry for brand recognition and respectability by association. The Los Angeles Arena, where the city’s NBA and NHL franchises play, rebranded as crypto.com last December. 

Crypto and sports betting apps are also hamstrung by tight rules on Google, YouTube and Facebook. The platforms only reversed bans on crypto advertisers last year, and tight guardrails remain.

There’s Gold In Them There Bales

Say what you will about the global supply chain, it enables a bizarro $36 billion economy in used clothing sales. 

Luxury fashion or Nike apparel could be manufactured in Bangladesh, shipped to the United States, donated to Goodwill, then reshipped across the Pacific to Malaysia, where there’s a market of boutique eBay and Etsy sellers who spot desirable items in bales of thousands to resell back to Americans. Often there’s a pit stop in Japan, a leader in luxury fashion. Check out this New York Times feature on the trade. 

The idea works in only a few markets – affluent enough to have strong ecommerce services and where people have disposable income and are attuned to global fashion trends (i.e., what’s selling on Instagram and TikTok). 

Nike, for what it’s worth, filed a suit this week against alleged counterfeiters who use Amazon and eBay. Nike also abandoned a major first-party seller partnership with Amazon in November 2019, because Amazon couldn’t (or wouldn’t) take down sellers of counterfeit or cruddy Nike products. 

Nike brings brand clout that used-clothing resellers do not. But the resold clothing market is estimated to grow by more than $40 billion in the next three years.

But Wait, There’s More!

A change by Apple is tormenting internet companies, especially Meta. [NYT]

Damian Burns: Twitch launches its first Advertising Certification program. [tweet]

Google hopes to salvage its Stadia gaming service with streaming deals with Peloton, Bungie and others. [Insider]

Google, Meta and Amazon are on track to absorb more than 50% of all ad money in 2022. [Digiday]

You’re Hired!

Ad tech vets are joining Vizio’s in-house team. [release]

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