Executive Briefing: Friday 14 August

Executive summary: The marketing landscape is seeing significant shifts, from new regulatory demands on platforms impacting publishers to a dramatic drop in product visibility within Google's AI Mode. Social media strategy is recalibrating towards algorithmic engagement metrics, while a major advertising group overhauls its incentive model. Amazon is also raising the bar on e-commerce delivery speeds in Australia, increasing consumer expectations. Australian News Bargaining Incentive Expanded to Include More Platforms The Australian government has finalised amendments to the News Bargaining Incentive, mandating that platforms such as Google, Meta, LinkedIn, and TikTok pay a levy to Australian publishers if they fail to strike content deals. A key change restores the maximum share any single media outlet can receive to 25% and increases the minimum number of deals required to offset the levy from six to eight, providing greater opportunities for smaller and regional publishers. This regulatory move intensifies financial pressure on major tech platforms while creating new revenue streams for a broader spectrum of local news organisations, though AI platforms remain exempt from the legislation. Google AI Mode Dramatically Reduces Shopping Visibility New research indicates that Google’s AI Mode is fundamentally reshaping e-commerce discovery, displaying approximately 95% fewer product listings compared to standard search results. While traditional search shows products on 88% of queries, AI Mode only does so for 23%, typically featuring 4.3 products per answer against 22.5 in standard carousels. This drastic reduction means e-commerce brands must now prioritise superior product data quality and conversational attributes to secure visibility in AI-driven search, as competition for fewer, more curated spots intensifies, despite potentially higher conversion rates from the targeted traffic. Social Media Shifts Focus from Follower Counts to Core Engagement An analysis of over one million purchased social media growth orders reveals a significant evolution in strategy: mere follower counts have lost their market value. Views (42%) and Likes (32%) now dominate demand for paid engagement, with Shares and Saves doubling their order share in the past year. This trend underscores a shift towards metrics that directly influence algorithmic recommendation systems, signalling that success on platforms like Instagram and TikTok, which collectively account for 76% of demand, hinges on driving authentic interactions that indicate content value, rather than simply expanding audience size. WPP Overhauls Incentive Structure Amidst Growth Strategy Global advertising leader WPP is significantly increasing staff bonuses in the latter half of the year as part of a comprehensive strategy to drive renewed growth. Under its new CEO, Cindy Rose, the company is transitioning to a "single company model" structured around four operating units—Creative, Media, Production, and Enterprise Solutions—across four regions, all powered by WPP Open. Incentives, which saw a 120% increase to £130 million in the first half, are now aligned with overall company performance and common objectives, demonstrating a commitment to stabilising the business and attracting top talent amidst ongoing market challenges. Amazon Accelerates Same-Day Delivery in Sydney and Melbourne Amazon Australia has significantly enhanced its Prime Free Same-Day delivery service in Sydney and Melbourne, introducing more precise overnight, afternoon, and evening time slots for hundreds of thousands of eligible products. This strategic expansion is designed to meet escalating consumer demand for rapid and flexible delivery options, offering customers greater control over their purchases. Additionally, the introduction of "Amazon Day" allows Prime members to consolidate multiple orders into a single weekly delivery, aiming to reduce packaging and boost convenience, reflecting Amazon's continued investment in its Australian logistics network and customer experience.