Chatbot Or Not?
It’s the age-old ad tech question: Should you build your own tools or buy from a vendor instead?
Walmart and Target both approach their AI shopping investments along these two different axes, Adweek reports. Walmart favors the in-housing route, while Target prefers partnerships.
Each strategy has its pros and cons.
For instance, Target’s focus on existing platforms, which currently includes a “curated shopping experience” directly on ChatGPT, allows it to quickly scale within environments where shoppers already use AI.
But given that ChatGPT is rolling out ads (and Google hasn’t ruled ads out for Gemini), it’s likely that Target will eventually share that space with its retailer competitors.
Meanwhile, Walmart has partnered with OpenAI and Google but is also developing its own “super agents” to help users find items within the Walmart app. One customer agent bot, known as Sparky, even has its own ad formats.
Owning your own chatbot ads feels like a no-brainer – unless, that is, nobody’s talking to the chatbot. Then you’ve just wasted a lot of time and resources on something that doesn’t reflect actual online shopping habits.
Speaking of which, read on!
Horizon’s Fall
Is the metaverse officially dead now?
Meta announced on Tuesday that it’s shutting down the virtual reality version of its Horizon Worlds metaverse platform in June, Wired reports.
Users will no longer be able to access Horizon Worlds using Meta Quest VR headsets – which, recall, is the exact experience Mark Zuckerberg once pinned his company’s future on.
Horizon Worlds will be removed from Quest’s app store on March 31. Meta will shut down the VR version of Horizon Worlds entirely on June 15, after which the experience will only be accessible via mobile devices.
So why did Meta’s metaverse fail despite billions invested and major brand and entertainment partnerships? Well, it just never got as popular as VR-based worlds like VRChat or “metaverse-like” gaming platforms like Roblox.
That, and Meta also never proved that consumers actually want to spend time in virtual worlds instead of just going on social media.
“Meta was trying to solve a consumer problem that doesn’t exist,” says Forrester’s research director Mike Proulx. “You can’t build a mass social platform reliant on hardware most people neither own nor want to wear for more than short bursts.”
Plus, Meta never demonstrated a value proposition for advertisers.
“Advertisers follow their target audiences,” Proulx says. “And those audiences were never inside Horizon Worlds.”
Pay 2 Yap
Speaking of so-called fantasy spaces, that’s exactly how consumers feel about short-form video platforms, writes Alex Greifeld, an ecommerce consultant, in an essay for Future Commerce.
The old world of influencer marketing was an extension of the magazine ad mindset, Greifeld writes. Brands paid influencers to appear alongside and recommend products. An influencer’s rates were unrelated to how a sponsored post performed.
The new age of influencer marketing belongs to what Greifeld calls “the yappers.” Yapper ads feature nonprofessional touches of authenticity. For example, yappers often feature nonexperts, use amateurish editing and include uncut, unscripted dialogue, genuine background noise and unflattering lighting.
Super-normal-seeming posts are now the only way to break through.
“The first decision every brand must make,” Greifeld writes, is “Do we lean into this new algorithmic model and build our content strategy around it, or do we back away from social platforms entirely?”
Fashion brand Loewe, for instance, leans in with cat videos, street interviews, ASMR – whatever the algo wants. It’s made a commitment to organic posting across its network.
But Bottega Veneta, by comparison, deleted its Instagram and quietly pays and boosts influencers to tell its brand story. Apparently, to have its own account would be déclassé.
Whichever way you choose, you’re making a statement.
But Wait! There’s More!
With its metaverse plans dashed, Meta is setting its sights on the real world by opening its first retail store in New York City – something Amazon previously attempted and then abandoned. [Bloomberg]
In other Meta news: Advertisers are pretty annoyed at having to pay the digital service tax for Meta ads in Europe. [Digiday]
LinkedIn announces a partnership with The Trade Desk to expand its CTV ad business. [Business Insider]
Why Walmart and OpenAI are shaking up their agentic shopping deal. [Wired]
After pressure from Sirs Elton John and Paul McCartney, the UK Parliament is ditching a proposed change to copyright law that would have required creative professionals to opt out of having their work used for AI training. [The Times]
Dr. Patrick Soon-Shiong had an ambitious plan to take the LA Times public by 2027 – but like other billionaires-turned-media-moguls, he’s struggled to deal with the current media environment. [WSJ]
You’re Hired!
GSTV hires Eric Kozik as chief strategy officer and promotes Kristina Lutz and Aaron Olson to CMO and CTO, respectively. [release]
Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
