đź—ž Facebook says "no news, friends"

Friday, February 19, 2021 by Robinhood Snacks | Disclosures

The new newsfeed

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Hey Snackers,

Dunkin' is selling wedding merch now, including ring bearer pillows and veils. If you're not feeling your fiancé, it's the perfect chance to say "I Donut."

Markets dipped yesterday as weekly US jobless claims hit a four-week high of 861K. But investors are optimistic about the likelihood of $1.4K stimulus checks.

Checkmate
1. Facebook bans news in Australia: a convenient "no politics" experiment?

No more doom-scrolling?... Last year, Australia proposed a bill to address power imbalances between the news media and digital platforms (read: Google and Facebook). The solution: force Google and FB to pay news outlets for displaying and linking to their content. The proposed law is expected to pass next week.

  • Google responded by making payment agreements with Australian publications, including News Corp.
  • Facebook responded by banning news in Australia. This week, FB announced that it'll no longer allow Australians to share or view news content. Woah.

Stick to the baby panda videos... and forget the breaking news on the Vegemite shortage. FB has banned all news-related links in Australia, including stories from international publishers. Also: FB users worldwide can't share or view news stories from Australia. The aggressive move could backfire if users see it as a dangerous threat to free expression. For now, it's mainly bad news for publishers:

  • Hot off the press: News outlets used to make $$$ selling papers filled with ads. When everything went digital, so did their ads. But Big Tech ads attract much more spend since they're targeted and have wider reach.
  • Hot off the feed: In 2019, 52% of Americans got their news on Facebook. And FB got all the $$$ from the surrounding ads. But Facebook says publishers shouldn’t complain, because FB drives traffic to their sites.
THE TAKEAWAY

This could be convenient for Facebook... By rejecting Australian news, it's setting a money-saving precedent. But it's also embarking on a nationwide experiment. FB has received massive heat for circulating polarizing content and fake news. CEO Mark Zuckerberg recently said that people don't want politics to take over their feeds. In Australia, FB has the chance to run a no-political-news experiment. If "no news" boosts earnings or user happiness in Australia, FB could expand it. If it hurts ad sales or engagement, FB might pull a Google and pay up.

BHM

First, the primer... The BLM movement put a renewed spotlight on racial discrimination in many areas of society, including the beauty industry. Beauty companies have a history of marginalizing communities of color through non-inclusive marketing and products. In the past year, companies like Estee Lauder, L’Oreal, and Unilever have been criticized for marketing “skin-lightening” products. LVMH-owned Sephora has been accused of racial bias in stores — including instances of associates not being able to do “dark makeup” for women of color. Recently, beauty retailers have started taking steps to improve inclusivity:

  • Ulta pledged to double its assortment of Black-owned brands in 2021. Sephora pledged to increase its Black-owned brands from eight to 16 this year (out of its total ~300). And both are expanding employee training to fight unconscious bias.
  • Sephora also signed the 15% Pledge, which calls on retailers to work toward committing at least a population-proportional 15% of their shelf space to Black-owned brands.

Building a foundation... In 2017, Rihanna’s makeup brand Fenty Beauty was hailed as groundbreaking for releasing 40 foundation shades. Many of its darker shades sold out in days. That success led to the “Fenty Effect”: Big brands like Dior and CoverGirl followed, launching 40 foundation shades each. But a December 2020 study from Sephora shows there’s still much left to be done:

  • 3 in 4 retail shoppers feel that marketing fails to showcase a diverse range of skin tones, body types, and hair textures.
  • 2 in 3 shoppers think stores fail to deliver an equally-distributed assortment of products for different tastes and preferences.
  • 2 in 5 US shoppers have experienced unfair treatment on the basis of their race or skin tone.
THE TAKEAWAY

Beauty brands have a major opportunity... to foster inclusivity, help break down societal biases, and cater to an underserved market. In 2017, African Americans spent considerably more money in the general beauty marketplace than other groups. Black spending power in the US is expected to hit $1.5T by 2021, and is projected to grow significantly in the years ahead. Black consumer choices also have a halo effect that influences mainstream tastes. Addressing racism and catering to Black consumers is key to brands’ success. It’s also an opportunity for beauty companies to move the industry and its standards forward.

What else we’re Snackin’
  • Stim: The House is aiming to pass its $1.9T coronavirus relief bill by the end of next week.
  • $$$: Walmart promises raises for ~425K employees after posting impressive holiday sales.
  • Spiked: Sam Adams parent Boston Beer saw its quarterly profit more than 2X from 2019, as Truly spiked seltzer continued to drive growth.
  • Cloud: Dropbox's quarterly sales topped $500M for the first time thanks to the WFH cloud-storage boom.
  • Robo: Google's Waymo begins testing its robo-taxi service with employee volunteers in San Francisco.
  • Awk: Peloton is fighting to cancel trademarks for the terms “spin” and “spinning” so that it can use them freely in marketing.
Snacks Daily Podcast

"If you drink plant-based cappuccinos while walking your cat, Nestlé loves you."

The biggest food company in the world just announced strong earnings. The three categories powering Nestlé's growth: pet food, plant-based, and coffee.

Tune in to hear how Purina, pea protein, and 'puccinos (?) reveal Nestlé's target customer.

Friday

Authors of this Snacks own shares of: Walmart and Google

ID: 1531619