Square's New Bank, Traditional Ad Growth, Deals and Review Details

Square Bank Should Scare Traditionals

Square has expanded its banking capabilities and is now offering full-service banking for small business customers. Formally called "Square Banking," the service follows the launch of other Square financial services in March. There are three financial products that comprise Square Banking: Square Savings, Square Checking and Square Loans. These new services are designed to work with existing Square products such as payments and Square Payroll. Here's the value proposition: "[SMBs] now have a single home for their entire business, gaining a unified view of their payments, account balances, expenditures, and financing options." There are no account fees, no minimums, no overdraft fees. Sales proceeds are instantly accessible to business owners or they can deposit money in a high(ish) yield Square Savings account.

Our take:

• According to one analysis, SMBs spend in excess of $500B on accounting, bill payments, invoicing and related services. This is the addressable market.
• Square will bring in new POS/marketing customers with these services and migrate existing customers off their current banking relationships.
• No other financial institution or POS vendor offers this combination of services. Square is a unique animal in the market. BofA be very afraid.

Traditional Media Surprise with June Ad Gains

Print newspapers and direct mail are the surprising beneficiaries of the recovery in ad spending, according to new data from Standard Media Index. Not all traditional media are equally participating, however. Print magazines fell 3% year-over-year (YoY), while newspapers saw 60% growth. Out-of-home grew 52% YoY and traditional radio spending grew 44%. Direct mail catalogs have been a marketing staple for retailers, which appear to be holding their own against social commerce. One reason perhaps is that a catalog operates as a kind of "physical presence" for some brands. Another potential reason for traditional ad growth: rising costs for digital ads. Some traditional media may now be much cheaper by comparison.

Our take:

• In addition to ad inflation, major tech companies have trust problems. Consumers don't trust digital media much, according to a YouGov survey
• Offline media are more trusted. In the US it's: 1) TV 2) print and 3) radio. For digital: search is first, social is last (above graphic).
• There's also ad clutter and "noise" online. And the reduction of digital tracking capabilities may be reducing the attribution gap with conventional ads.

Shopping Deals and More Detailed Reviews

Google announced a couple of new product developments pertaining to shopping and restaurants. In its larger effort to compete with Amazon, Google will surface deals and discounts under the Shopping tab (searches for "discount code" have grown 50% YoY). For example, users will see "40% off" and "on sale" labels on product images. Seller deals uploaded to the Google Merchant Center will be shown automatically (no ad spending required). The company is also collecting more specific data for restaurants as part of its review form: prices, meal category and whether takeout, delivery or dine-in. This is all done via buttons and should elicit substantial new information from users. The pricing information in particular will be interesting as a way to more accurately categorize restaurants or enable more filtering in the future.

Our take:

• Google's product search strategy vs. Amazon relies on being a more "360-degree" source of information (i.e., online and offline).
• Deals is an evergreen consumer category; recall the absolute frenzy surrounding daily deals back in 2008 – 2012 (ish).
• Google is already the top review source (and a top fake reviews source). Capturing deeper data is part of a broader effort to get more granular.  

Recent Analysis

• The High Cost of Fake Reviews, by Mike Blumenthal.
• ICYMI: Image Packs and the Localization of Product Search, by Mike Blumenthal.

Short Takes

• Retail recovery reflected in foot traffic data.
• With Kanter appointment at DOJ, Biden fills key antitrust slots.
• FTC: new bill would enable fines for privacy, deceptive practices.
• Social commerce: YouTube buys Indian startup Simsim.
• The four main categories of Google traffic declines, graphed.
• One engineer's ethical qualms about Google documented in comics.
• The coming Western-Chinese forking of the internet.
• Substack invests in podcast network called Booksmart Studios.
• Uber expands grocery delivery to over 400 locations across US.
• Uber and Lyft drivers held a one-day strike over working conditions.
• Neflix: strong non-US growth but loss of 400K North American subs.
• Ulta Beauty to open 800 store-in-a-stores within Target.    
• Dick's Sporting Goods testing five (count 'em) new store concepts.  
• Smartphones making US teens lonelier than previous generations.
• Amazon patent app for tiny car to go from delivery van to your door.

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