Lab Weekly - 03/04/2022
Unpacking subscription-based loyalty programs. Plus, news analysis and cool stats roundup
Hey there! Welcome back to another edition of Lab Weekly! This week, let’s take a closer look into the usual subscription services that are popping up in healthcare, QSRs, and airlines, and what they can tell us about the new rules around brand loyalty, In addition, we will also offer some commentary on the latest news in metaverse, cloud gaming, and TikTok. Let’s dive in! - Richard Yao
The Subscription Economy Enters New Dimensions
Can the subscription model work for service-oriented brands? Many across the travel, healthcare, and QSR industries are experimenting to find out, revealing a new dynamic of customer relationships and how brands can leverage it build loyalty.
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Three Emerging Trends Redefining Beauty
Chelsea Freitas, our VP of Strategy & Innovation, pinpoints three key emerging trends — from new consumer behaviors to the impact of virtual beauty — that are reshaping the future of the beauty industry.
How Brands Can Find the Right Entry Points to the Metaverse
From in-game experiences to connected communities, brands should carefully weigh the pros and cons of each emerging option as they prepare to enter the metaverse.
Amazon Luna Launches For Us Users; Adds Free Games For Prime Members [The Verge]
Nearly 18 months after its initial announcement in September of 2020, Amazon’s cloud-based game streaming service is finally launching in the US today for anyone to use. In addition to adding a variety of new features to the beta test version that has been running via an invite-only “early access” program, it will also offer free games for Amazon Prime members at launch. As previously shared, the core Luna+ service with over 100 games will cost $10 per month, with the kid-friendly Family Channel and Ubisoft+ Channels available for a respective $6 and $18 per month.
This official launch of Luna marks yet another milestone in the gaming industry’s long march towards cloud-based gaming and the subscription-based business model it enables. As I noted in an article on the gaming landscape last summer, Google Stadia, one of the early-to-market pioneers of cloud game services, had not been doing too well, which tampered the momentum of the space. For most gamers, cloud gaming services have not been [compelling enough to make the switch. Hardcore gamers are happy with their game consoles, which still offer far smoother gameplay and less latency, whereas casual gamers are often unwilling to commit to a monthly subscription cost. In short, cloud-based gaming has not found the right product-market fit. Thus, the “Netflix-fication of video games” has been stalled for a while.
Somewhat ironically, since I wrote that article, Netflix itself has made serious inroads into the mobile game space, adding a mobile gaming service directly into its regular app and bundled in its subscription with no extra cost. Meanwhile, other cloud gaming platforms, like Microsoft xCloud, Nvidia Geforce Now, and Facebook Gaming, have struggled to find footing on iOS due to Apple’s demanding App Store restrictions. All of these platforms have attempted to sidestep Apple’s policies by launching as web apps, which obviously doesn’t provide the best gaming experience. Can Amazon Luna leverage Prime and the company’s industry-leading AWS cloud service to provide a better cloud gaming experience and get more players on board? Only time will tell.
Related: Amazon’s Lost Ark game debuts as a hit [Bloomberg]; Google Stadia faces a slew of tough questions—and few prospects of success [Wired]; Netflix acquires another game developer to build ‘world class games’ [The Verge]
American Eagle Debuts On Roblox Via Role-playing Game Livetopia [Ad Age]
Apparel brand American Eagle will make its metaverse debut on Roblox with a virtual “member’s club” for players to explore. The brand partnered with Livetopia, a role-playing game on Roblox, to create a virtual “AE Members Always Club” where users hunt for digital apparels based on its latest spring collection. For the uninitiated, Roblox is an open-world environment MMO game where developers and players can build their own mini-games. American Eagle noted in its press release that Livetopia is a top-ten game on Roblox with over 1.5 billion visits to date. It is smart for American Eagle to partner with an existing role-playing game with a large existing traffic, rather than building its own Roblox game from scratch.
As brands start to enter the metaverse, many are gravitating to Roblox as they try to engage an audience of 55 million daily active users, a majority of whom are hard to reach through traditional media. While practical applications of the metaverse are still being ironed out, apparel brands have clearly seized the opportunities to showcase their products as players personalize digital avatars through custom skins and outfits.
Related: Bruno Mars and Anderson .Paak are coming to Fortnite [The Verge]; Epic Games is acquiring music marketplace Bandcamp [Engadget]; ‘The Walking Dead: Last Mile’ is a massively interactive live event launching this summer on Facebook [VentureBeat]
TikTok Increases Video Length Limit To Ten Minutes [Variety]
TikTok is ready to take YouTube head-on, as it ups the maximum video length from 3 minutes to 10 minutes. It’s not clear how many TikTokers will take advantage of the longer-form videos, or what the change will do to TikTok’s main algorithms — given that it relies on crowdsourced viewer stats such as video loops to decide which videos are worth surfacing to a wider audience, longer videos are naturally at a disadvantage as less viewers may compete viewing it — but the change clearly shows that the company is eager to facilitate ways to keep viewers in the app for longer periods of time. Also unclear is if TikTok plans to insert mid-roll or end-roll ads to longer-form videos.
TikTok has been capitalizing on brand marketers’ increasing appetite for social commerce, creator economy, and full-funnel measurement to fuel its growth. 66% of brands spent more on creator marketing in the past year, according to a new CreatorIQ and Tribe Dynamics survey, and TikTok is top-of-mind for many of them. Short-form content can be limiting when you’re promoting a brand, product or service, and it can be limiting in terms of monetization. For advertisers, this change should be a welcome change that offers an opportunity to keep viewers engaged longer on the platform. But at the end of the day, your content has to be compelling enough to hold their attention, regardless of whether it’s a minute long or ten.
Related: Condé Nast inks deal with TikTok to monetize exclusive content [Digiday]; 8 states launch probe into TikTok in push to protect younger users [TechCrunch]; Facebook Reels rolls out worldwide along with new creative tools and ads [TechCrunch]
Digital broadcasts and streaming services are quickly becoming one of the most popular ways for viewers to watch sports. eMarketer estimates that 78.4 million Americans will watch live sports digitally in 2022. By 2026, that number will jump to 131.7 million, or 38% of the U.S. population.
Five streaming services — Hulu, HBO Max, Discovery+, Paramount and Peacock — accounted for 65% of OTT ad spending last year, according to a new MediaRadar report. Total OTT ad spending reached $1.3 billion in 2021, the report found, but still represents approximately only 3% of total digital spend per month.
Half (50%) of US publishers feel the deprecation of third-party cookies could be an opportunity to differentiate via their own first-party data, up from 25% who said the same last year, according to data from video ad platform Teads, AdAge reports.
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