International round-up: Trivago overspends on advertising & ‘sacrilegious’ lamb ad banned
Plus Facebook reveals ‘inauthentic’ Russian accounts spent big on ads during the US election and Verizon outlines its plans to become a more dominant advertising force.
Trivago admits it has spent too much on advertising
If you live in London, you’re more likely to spend time with the Trivago advertising woman than a loved one. She’s literally everywhere.
But Trivago execs might just be cursing her as this week the brand issued a profit warning after a sharper-than-expected ad revenue slowdown, which didn’t give the company enough time to pull out from the significant ad spend it had already committed to search and programmatic channels.
According to reports, the Düsseldorf-based hotel search giant had been confident its 2017 revenue growth would be 50% up on its 2016 revenue. But it was forced to lower this to just 40% growth, partly due to overspending on advertising.
Speaking to the Wall Street Journal, Axel Hefer, Trivago’s CFO, also gave some insight into how the travel brand approaches (or avoids) ad agencies. He said: “We do not work with outside agencies often, as we feel as though we can learn best by doing so ourselves.”
READ MORE: Trivago Concedes It Overspent on Advertising and Lowers Forecasts
Australian lamb ad sparks outrage
A television ad by Meat and Livestock Australia promoting spring lamb has sparked outrage after being accused of mocking religious figures.
Full of religious jokes, the ad uses images of the Hindu god Ganesha to promote lamb consumption. The Hindu Council of Australia has called for the ad to be banned, describing it as “crude and sacrilegious”.
However, ad agency the Monkeys claimed the ad plays on the idea that anyone can enjoy lamb, no matter their background or religious beliefs. They claim the ad is playful and not offensive.
Australia’s Advertising Standards Board has received 30 complaints about the ad, with members of the public clearly puzzled by the decision to use a religious god to promote meat.
READ MORE: Lamb ad insensitive and disrespectful, say Hindus and Anglicans
Facebook says Russian accounts spent big on US political ads
Up to 470 accounts, most likely operating out of Russia, misused Facebook between June 2015 and May 2017, according to the platform’s chief security officer Alex Stamos.
He said these accounts generated as many as 3,000 political ad buys, which equated to around $100,000 in ad spend. Interestingly, analysis by Stamos shows these ads focused on pro-Kremlin rhetoric as well as divisive messages around gun ownership, immigration and race issues.
Facebook said it shared these findings with US authorities. Something tells us Trump will deny everything.
READ MORE: Russian firm tied to pro-Kremlin propaganda advertised on Facebook during election
China set to become second largest spender on social media advertising
According to new Forrester research, China is on track to become the second largest spender on social media ads within the next five years.
However, the analyst firm said China was still some distance from challenging America’s dominance as the biggest spender. It said China’s 2015 GDP per capita was only 13% of the US figure while China’s social ad spending per social user is just 6% of the social ad spending seen in the US.
WeChat dominates the mobile social networking market in China, but the platform is still lagging behind US rivals such as Facebook when it comes to monetising users. And while Weibo is one of the largest social networks in China, it only generated $567m in ad revenues from its 313 million monthly active users in 2016.
When it comes to social media advertising, the Chinese might just want to follow the blueprint laid out by the Americans.
READ MORE: China set to become second largest social ad spender in 5 years
Verizon hopes to become a more dominant ad platform
Verizon is building out its advertising business as it launches a new loyalty programme that gives it more access to consumer data.
The new Verizon Up programme gives subscribers credits that can be redeemed for access to movie premieres, concert tickets or even phone upgrades. The trade-off? Consumers must agree to share their web-browsing history, app usage, and location data with the wireless carrier.
Currently, Verizon generates around $7 billion a year through digital advertising. Google and Facebook generated over $37bn and $14bn, respectively, in 2016. It will be banking on Verizon Up to help close this gap.
