Searching for Digital Marketing Alternatives
As third-party cookies fade away, businesses are trying influencer marketing, affiliate marketing, and even good, old email marketing.
Here are today’s highlights:
Do your job candidates really need a college degree?
As the FTC proposes banning non-competes, businesses wonder what to do.
Online retailers are increasingly finding themselves competing with phony sites.
Is the buy-now-pay-later bubble about to burst?
Fewer companies are demanding that job candidates have college degrees—with one exception: “The focus on skills over degrees helps reduce the effects of what Revelio Labs calls ‘the paper ceiling.’ Of Americans 25 and older, roughly 38 percent have a bachelor's degree or higher, which means most Americans are potentially left out of jobs even if those jobs don't truly require a bachelor's degree. ‘The general trend is one of decreasing formal educational requirements across the board, across the economy,’ said Lisa Simon , a senior economist with Revelio Labs. ‘And that's exactly what we expect to see in a tight labor market.’”
“She said for a long time, employers used formal education, such as degrees, as ways to easily screen applicants. It's harder to screen for skills in non-technical fields. Now, companies are increasingly interested in getting more applicants in the door, and that means being stingier with the screening mechanisms, she said.”
“But the data shows many companies are keeping requirements high for remote positions. About 55.4 percent of remote positions required a bachelor's degree or higher, compared to 39.8 percent of non-remote job postings, according to Revelio Labs.”
“Why? Because companies hiring remote roles will get more applicants because the pool is larger, and those companies might use those degree requirements to screen out applicants for higher-trust positions, Simon said.” READ MORE
What should employers be doing in light of the FTC’s proposed ban on non-competes? “‘I wouldn’t start by being too reactive from the standpoint of changing any agreement,’ said Reed Smith LLP Partner Mark Goldstein. ‘I wouldn’t go ahead and remove non-competes going forward if you were going to include them or rescind them from former employees.’ So what should employers be doing right now? Taking a close look at their non-compete agreements, experts say. ‘I think you just really want to get a lay of the land,’ Goldstein said. ‘What do we have out there? Who is bound by a non-compete? Who are we typically asking during the hiring process for a non-compete? If the FTC adopts this rule in some shape or form, what can we keep in these agreements?’”
“In addition to non-competes, the FTC's proposal would also affect employee agreements that could be considered de-facto non-competes.”
“The rule would affect about 30 million workers, with the FTC saying such agreements, which typically restrict a worker's ability to work in their industry for a certain amount of time or in a certain geographic location, are exploitative and violate the Federal Trade Competition Act. The rule would apply to independent contractors and anyone who works for any employer, paid or unpaid.”
“Employers have argued the non-compete agreements are necessary to protect their assets and their market positions.” READ MORE
When the infrastructure money lands, it’s expected to have a big impact on the labor market—including in some surprising places: “It has never exactly been boom times for the archaeology profession, but this past year comes close — thanks to Congress. Kim Redman runs Alpine Archaeological Consultants, a firm that searches for historically or culturally valuable artifacts in the path of construction — an essential step for federally assisted projects. For decades, she has hired temporary workers (affectionately known as ‘shovel bums’) to comb the ground. These days, she’s bringing on as many full-timers as she can, as billions of dollars in infrastructure appropriations make their way down through the states.”
“The funding comes as the economy is decelerating, and it may avert a sharper dip in employment brought on by the Federal Reserve’s attempts to contain inflation by raising interest rates. The construction industry, in particular, has been buffeted by a slowdown in new-home sales and stagnant demand for new offices.”
“‘By spring or summer, the job market will basically go flat,’ said Mark Zandi, chief economist for Moody’s Analytics. ‘The infrastructure spending won’t kick in until late 2023, going into 2024. It feels like the handoff here could be reasonably graceful.’”
“Mike Hellstrom, Eastern regional manager of the Laborers’ International Union of North America, said the union’s apprenticeship applications had been snapped up within minutes of release. His region — New York, New Jersey, Delaware and Puerto Rico — stands to get $45 billion just from the infrastructure law.”
“‘It’s going to be a really unique time of our lives of being construction workers and watching this building boom we’re about to come into,’ Mr. Hellstrom said.” READ MORE
With third-party cookies fading away, businesses continue to look for alternatives: “It's harder than ever to find customers you've yet to meet. At least, in the digital age: After Apple's more stringent privacy restrictions rolled out in its iOS 14.5 update in the summer of 2021, many brands scrambled to update and improve their marketing strategies. Because Apple's update blocked the use of third-party cookies—the software that has long been used by advertisers to track and target new customers based on their data—businesses found that paid social advertising campaigns, especially those on Facebook and Instagram, dramatically increased in cost and decreased in results. Increased privacy restrictions haven't quite eliminated paid social as a customer acquisition strategy, but they have made it more difficult to use that strategy successfully.”
“As Dagne Dover, a New York City-based bag brand, saw the performance of its Facebook ads decline in early 2022, the brand shifted its marketing spend in a different direction. One key strategy, says co-founder and COO Deepa Gandhi, has been influencer partnerships. ‘Showing up on social is still really important,’ she says. ‘So it's just a different way of approaching it: If you can't hyper-target an audience anymore, then you can partner with an influencer that has that audience.’”
“Lauren Kleinman, founder of the performance PR firm Dreamday and co-founder of the Quality Edit, recognized that affiliate earnings could reveal insights more valuable than revenue alone. Through ‘performance PR’—a term she uses to describe a mixed effort of affiliate marketing and public relations—Kleinman has helped direct-to-consumer clients such as Our Place, Seed, and Jennifer Fischer land new customers while also securing data to help better inform their targeting strategies.”
“‘Because all of our clients' press is affiliate-enabled, we can delineate how every article with every publisher has performed over time,’ she says. ‘That allows us to be a lot more targeted in our pitching and outreach.’”
“Some businesses are instead re-targeting existing customers with email and SMS marketing. ‘I stopped counting how many times I heard that email marketing is dead,’ says Steffen Schebesta, CEO North America and vice president of corporate development at the Paris-headquartered digital marketing SaaS platform Sendinblue. ‘Now, we see it coming back and it's a high-performing channel.’” READ MORE
Online retailers are now competing with a wave of phony sites: “It’s a problem increasingly confounding companies like Bombas, whose business model depends on advertising online and generating traffic through social media channels. ‘It’s been a total game of whack-a-mole,’ said Dave Heath, the chief executive of Bombas, which has taken a proactive approach to rooting out fake sites that purport to sell its products. ‘The second that we report a site and it gets blocked on one of the social media channels or blacklisted, they just spin up another instance and then there’s ads running almost kind of instantly.’ Online scams, which have existed for as long as things have been sold on the internet, are adapting to the budget-conscious behaviors of American consumers. Shoppers held out for bargains during the holiday season, knowing that stores, needing to get rid of inventory and worried about slowing sales, were more likely to offer them.”
“That dynamic has created a ripe environment for fake sites to dupe unassuming shoppers who are strapped for cash and time by claiming to offer deep discounts on premium brands.”
“Impostor sites often use the same tactics as retailers, like paid search optimization tools, mobile apps and advertising strategies to generate traffic, said Rick Farnell, chief executive of Tracer, which uses artificial intelligence to identify potential cases of fraud through text and images. Tracer has taken down as many as 20,000 fake sites in a month for a client, he said.”
“About 35 percent of Tracer’s clients are retailers. Among them is Rothy’s, the women’s shoe brand known for its ballet flats. Rothy’s also works with Facebook’s parent company, Meta, and using tips from customers on Facebook who flag fake ads, said it now deals with about a few dozen impostor sites per month.”
“Toward the end of 2020 and beginning of 2021, Rothy’s was ‘easily dealing with hundreds of fake websites per month,’ Zoë Richards, a company spokeswoman, said.” READ MORE
Walgreens acknowledges that its concerns about shoplifting were overblown: “Throughout the pandemic, major retailers have warned about surging theft and a rise in brazen shoplifting attempts. But a top Walgreens executive now says the freakout may have been overblown. ‘Maybe we cried too much last year’ about merchandise losses, Walgreens finance chief James Kehoe acknowledged Thursday on an earnings call. The company’s rate of shrink — merchandise losses due to theft, fraud, damages, mis-scanned items and other errors — fell from 3.5 percent of total sales last year to around 2.5 percent during its latest quarter. Kehoe’s message is a notable shift from comments about theft from Walgreens and other retailers like Walmart and Target over the last nearly three years.”
“Though Walgreens may have overblown the shoplifting threat over the last few years, it’s true that theft has always been a problem for retailers — and that it often spikes during recessions and other periods of economic hardship, when people are desperate and may feel the need to turn to petty crime to sustain themselves. What’s more, recent factors like short-staffed stores and self-checkout can make it easier for thieves to steal.”
“The National Retail Federation estimated that shrink cost retailers $94.5 billion in 2021, up from $61.7 billion in 2019 before the pandemic. Shoplifting often does not go reported to the police, but companies have said theft has worsened during the Covid crisis.” READ MORE
Is the Buy Now, Pay Later bubble about to burst: “In a few short years, financial-technology firms such as Affirm, Afterpay, and Klarna, which allow consumers to pay for purchases over several interest-free installments, have infiltrated nearly every corner of e-commerce. People are buying cardigans with this kind of financing. They’re buying groceries and OLED TVs. During the summer of 2020, at the height of the coronavirus pandemic, they bought enough Peloton products to account for 30 percent of Affirm’s revenue. And though Americans have used layaway programs since the Great Depression, today’s pay-later plans flip the order of operations: Rather than claiming an item and taking it home only after you’ve paid in full, consumers using these modern payment plans can acquire an item for just a small deposit and a cursory credit check.”
“‘We found that most of the people that use buy now, pay later either don’t have or don’t use a credit card,’ Marco Di Maggio, an economist at Harvard, told me. He said that Gen Z was skeptical of credit cards, possibly because many of them had seen their parents sink into debt.”
“They perceive credit cards as encouraging a kick-the-can attitude toward debt, with interest steadily accruing from month to month. (Indeed, roughly 60 percent of credit-card holders don’t pay the full amount on their monthly bills, according to a McKinsey survey.)”
“What companies like Klarna once characterized as paradigm-busting behavior—young people rejecting stodgy banks in favor of more freeing forms of finance—now looks like the crest of yet another credit cycle, a familiar note in the motif of American consumption.”
“As with young credit-card holders, BNPL users under 25 have the highest default and delinquency rates. If credit dries up in a broader downturn, they are at risk of losing access even to those programs.” READ MORE
THE 21 HATS PODCAST
How’s your compensation plan holding up? This week, Shawn Busse, Liz Picarazzi, and William Vanderbloemen discuss what it’s been like trying to make sense of employee compensation in a time of COVID, the Great Resignation, inflation, and a looming recession. Shawn’s business model is evolving, and he’s trying to adjust his mix of employees to fit the new model with as little disruption as possible. Liz is expecting a year of big growth and is assessing how that will affect her staffing needs—especially as she introduces new benefits, including health care. And William is trying to create a more sustainable compensation structure while also breaking his employees’ expectation that they will always get a year-end bonus. Plus a listener asks: What tasks are the owners still doing, even though they know it’s not worthy of their time?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren