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- [00:00]
Ryan Reynolds
Hey there, Ryan Reynolds here. It's a new year and you know what that means. No, not the diet resolutions. A way for us all to try and do a little bit better than we did last year. And my resolution, unlike big wireless, is to not be a raging and raise the price of wireless on you every chance I get. Give it a try@mintmobile.com switch $45 upfront.
- [00:21]
Sarah Hofstadter
Payment required equivalent to $15 per month. New customers on first 3 month plan only taxes and fees. Extra Speed slower above 40 GB on unlimited. See mintmobile.com for details.
- [00:30]
Billy Idol
Hey corporate types. Billy Idol here. Just because you use workday to drive long term success, it doesn't make you a rockstar. Rockstars drive fast cars, not business operations.
- [00:42]
Rachel Tippograph
Be a finance and HR rockstar with workday. I think that there needs to be an ethical path where if you are able to garner that much attention and monetize it, you have a responsibility to protect the masses. I believe that the biggest advertisers in the world care more about long term shareholder value than short term sales.
- [01:09]
Sarah Hofstadter
Just because audiences are aggregating in certain platforms does not mean you can't just buy based on audiences in safer environments that might align better to your brand values. Brands you have choices. You are not being held hostage. There are other ways for you to be able to get your conversion. Welcome to today's episode of Brave Commerce.
- [01:31]
Rachel Tippograph
I'm Rachel Tippograph, the founder and CEO of Mic Mac.
- [01:34]
Sarah Hofstadter
I'm Sarah Hofstadter, president of Profitero and.
- [01:37]
Rachel Tippograph
This is a show that talks about what's relevant in E commerce for the world's biggest brands. Today you got Sarah and I and Sarah is recording this from Chile on her vacation because we are in the middle of a live news story.
- [02:00]
Sarah Hofstadter
Yeah, very rarely do you hear us talking about breaking news or more on trendspotting. But man, the news over the past couple of weeks we're recording the day after the inauguration and boy, has this weekend been quite the whirlwind. I actually tried to escape for the inauguration. That's why I went to Chile this weekend. Tried to go as far as I could. That was about as far as I could get. But you can't escape what is going on today. And obviously we're here at Brave Commerce talking about the impact on commerce, media, advertising, what do they all have to do with each other. And obviously the disconnect and reconnect of TikTok, the major changes in the way Big Tech has been responding to some of the political macro political changes. We can't avoid this, its impact on how brands big and small are choosing to behave. So, Rachel, I can't turn on a media outlet without seeing something from TikTok. Bring us up to speed on what the heck's been going on related to the impact of the turning off. The turning on of TikTok.
- [03:07]
Rachel Tippograph
Yeah, absolutely. This has essentially been two years in the making. You know, two years ago, while Biden was president, he essentially flagged to the government and the Supreme Court that TikTok could be jeopardizing national security given the fact that ByteDance, which is a China based communications company, is the owner of TikTok. And we were seeing this at a state level, if everyone recalls, this was happening in Montana and a few other states where the government already said, hey, if you're a government worker, you gotta remove TikTok from your phone. And so things started to heat up this past spring. So I'm talking about spring of 2024, where essentially a bill was passed that come January 19, if TikTok did not find a US company to be the owner of TikTok US, that the Supreme Court would say that TikTok. TikTok US is not allowed within America, which means that the app would eventually deprecate on your phone and Alphabet and Apple would need to pull it from the App Store and if they didn't, they would face huge fines. We're talking about in the billions of dollars. Fast forward to where we are today. It's been really fascinating. As many of you know, my company Micmac, we sit at the intersection of media and commerce. And in 2024 brands, many of them the largest brands in the world, trafficked Micmac through $3 billion of global ad spend. So to size that up for you, that's like kind of the size of Walmart Connect's business. And I share this because our data is really statistically significant and anecdotally in Q4, you know, I was talking with a lot of our customers asking them, hey, if the TikTok ban happens, what's going to be your strategy? And the majority of brand executives really didn't think this was ever going to happen. And they were willing to wait and see what would happen. Fast forward we get to January and in the 21 days of January, Mick Mac has essentially seen a 97% decline in TikTok traffic in the US and 30% decline in TikTok traffic globally.
- [05:31]
Sarah Hofstadter
Where is it going?
- [05:32]
Rachel Tippograph
Where's it going? Yeah, well, I can't finish the TikTok story without talking about One more thing that's happened in the first 21 days of January, which is that two weeks and a day ago, Mark Zuckerberg made a really big announcement that Meta would essentially be deprecating fact checking on the platform. So one could argue this is all in support of free speech. But the flip side of free speech is hate speech, meaning anyone could go on Meta and say anything, no matter how untrue it might be. I share that because between Meta and TikTok, we've also seen a decline in meta traffic. Since the announcement, we've seen around a 9% decline. While all this is happening, we have seen massive traffic shifts to Alphabet, meaning paid search, YouTube, DV360. The lion's share of dollars right now is going to Alphabet. The reason why is I believe brands see that as a platform to drive super efficient reach as well as conversion, especially on the YouTube front. YouTube has done an enormous amount of work since 2012 on brand safety. And I also believe that brands are trying to find places to put their dollars where they consider it's brand safe while so many platforms are becoming political. And if you follow that talk track, the other place that we've seen dollar shift is Pinterest. And Pinterest, if you think about it, is like the safest place on the Internet. It's essentially, you know, pretty photos and no commentary and no videos. Fast forward. This past weekend was insane. We at Micmac were following it hour by hour and we can break down our data that way. And literally January 18th at 10:00pm to January 19th at 12:15pm Eastern Standard Time, we saw our TikTok traffic completely plummet. Then I'm sure you all saw the news headlines. Trump and TikTok leadership had some unofficial pact. He wasn't even president yet because we're still talking about January 19, that Trump would make a deal with them, everything would be okay, and TikTok thought that was enough for them to come back online. And so essentially, over the last 36 hours, when it comes to big brand advertisers, we've slowly seen TikTok traffic come back. I mean, I'm still talking about like one and a half percent of total traffic. But what's really interesting is Micmac also works with what I would describe as challenger brands, meaning some companies that are doing like 100 to 200 million in revenue. And those brands, they went full fledged back onto TikTok, where 30% of their traffic was already there within hours of TikTok coming back online. So I think it also really speaks to how reliant like the SMB market is on TikTok.
- [08:21]
Sarah Hofstadter
Let's break some of this down because you know you're talking about the SMB market being highly reliant on TikTok because traffic is traffic is traffic. And when you're trying to grow a business, you may not necessarily be considering all of the choicefulness and other things that kind of go into the consideration set for bigger brands. But I'd like to start unpacking around the meta things. I want to work backwards if you will. Well, the idea because you talked about the traffic moving from meta a little bit more to Google to Pinterest and how much better Google YouTube have been in terms of being more responsive to hate and frankly fact issues and things like that. Obviously nobody's perfect and we'll catch a lot of people for saying that one is better than the other, if you will. How much better do you think Meta will actually be by community fact checking versus the BS fact checking that they had been doing to date?
- [09:16]
Rachel Tippograph
The challenge with social media is that social media is an echo chamber. And so I think that community fact checking is only going to proliferate singular points of view where you're going to congregate with like minded individuals and will continue to exist in this highly polarizing place. What I'm most concerned about is things that could lead to acts of terrorism, things that could be harmful to children, things that could create issues with gun safety. Do I personally care whether someone's reporting the weather correctly? No. And so it makes me really nervous that we're removing accountability from these platforms that make multibillion dollars per year off of consumer engagement within their platforms. I think that there needs to be an ethical path where if you are able to garner that much attention and monetize it, you have a responsibility to protect the masses.
- [10:17]
Sarah Hofstadter
I guess my question to you Rachel, on that is where do you see X in this whole equation? One thing that's very almost glaringly missing from your assessment is X. And one might argue despite the rhetoric, X may be better than Instagram or TikTok possibly or Facebook on some of these fact checking areas, or at least self correction of the community.
- [10:46]
Ryan Reynolds
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- [11:16]
Fin (AI Customer Service Agent)
Hey, you know what would make your customer service help desk way better, dumping it and then switching to intercom. But you're not quite ready to make that change. We get it. That's why fin, the world's leading AI customer service agent, is now available on every help desk. Fin can instantly resolve up to 80% of your tickets, which makes your customers happier and gets you off the customer service rep hiring treadmill. Fin by Intercon, the leading customer service AI agent now available on every help desk.
- [11:45]
Billy Idol
Hey corporate types. Billy Idol here. Just because you use workday to drive long term success, it doesn't make you a rock star. Rock stars drive fast cars, not business operations.
- [11:56]
Rachel Tippograph
Be a finance and HR rockstar with workday.
- [12:02]
Sarah Hofstadter
By the way, Just to be clear, I'm playing devil's advocate here. I think they're all painful. And in light of the fact that we've got two Jewish women co hosting this podcast and the latest reports are talking about more than 50% of the world's adult population being anti Semitic, you can't say that without considering the role that social media has played in bringing that to light. Whether or not they hated us before or after, they're a hell of a lot more vocal and confident in doing it and saying it.
- [12:31]
Rachel Tippograph
So ever since Elon Musk took ownership of Twitter, now ask, we have watched brand advertising traffic essentially go to zero. So this goes back to my just overarching point about this whole thing, which is I very much believe that there is a KPI that outperforms ROAS return on ad spend and it is brand equity. I believe that the biggest advertisers in the world care more about long term shareholder value than short term sales. And that's why I've consistently seen that when platforms become political or they pull back on things that could protect brand safety, you watch dollars move.
- [13:18]
Sarah Hofstadter
Can we break down the SMB from the enterprise on this one? Because often, and this isn't exclusively often, SMBs, when they're starting to build their customer base, they're going to go where the ROAS is, right? Once you're a more established brand equity comes a greater critical component. But both of those are in service of the ultimate KPI, which just selling your freaking product. The questions are, if you will, short term versus long term. Are you here to just get a CPA cost per acquisition? Are you here to build your brand equity and ensure that your brand is synonymous with things that you stand for as your values? And how do each of those contribute to lifetime value of those customers? With the myriad of available options that you've got in your advertising and communications bucket. What's your risk reward for your brand? What's the risk reward for your short term? And if you're a public company, how do you communicate that to the street? Yes, we are willing to keep our dollars with places that promote hate or that look askance to hate or just accuracy, if you will.
- [14:24]
Rachel Tippograph
Yeah, I mean, I can cite a few examples of brands taking major acts to protect long term brand equity, long term shareholder value, which have hurt them in the short term. I'll talk about my time at Gap. When I was at Gap in summer of 2010, we did a campaign where two men shared a T shirt and we put it up on a billboard. And I can't remember the exact copy, I'm blanking in this moment, but it was something like Love wins. And a lot of conservative groups were really upset to see essentially this display of gay male love in mass advertising. And it impacted short term sales. Fast forward. Today, Gap's doing better than ever. Another example was Nike. You probably remember this a few years ago it was around the time of Black Lives Matter, which of course Black Lives matter today too. But I mean that period of protests and it was the athlete that was standing up for police brutality against black people. And Nike put, you know, front and center in a major global ad campaign. It absolutely impacted short term sales negatively because again, a bunch of people in this country were not aligned with that message. Of course, we all know that Nike has gone through some difficult times with their D2C strategy. But I know till the day that I die that Nike will be one of the most valuable brands in the world because when it comes to protecting social justice and doing the right thing, they always do the right thing.
- [16:03]
Sarah Hofstadter
What's very interesting, now that you're bringing up this look back, I have to go back to the work that me and my agency360 I did on Oreo when we did the Rainbow Pride. And boy, I certainly almost got fired. Like our agency almost got fired, the brand director almost got fired for putting that post out. Which just to bring people up to speed, this was in 2012 and we put out a post and we posted it only in the US because of concerns of backlash outside of the US and it was a post that had the Oreo with rainbow colors of cream and the only caption under it on social media was Pride. And we got calls from many Gulf coast countries basically saying, take this down. And also we're taking the products off the shelf. Credit to select leadership at the company. Who said, nuh, we're sticking to our guns in the end. In this instance, love wins. But it also became something that Oreo became known for, not just in the pride, but if you look at their communication strategy today, similar to your point on Gap, similar to your point on Nike, although I don't know that I would take that to the grave. But we can have that conversation another time. Maybe we'll get somebody from Nike on. Maybe we'll have like Nike vs. Hoka or something on, on a future podcast. But on the Montes front and on Oreo, they really have made pride a center point of their communications, not just in June, but year round. And because like you said, the long term wins. But is that really what's happening right now? Is that what brands are looking at today? Now that we're coming out of this weekend, the traffic you're seeing is resurging on TikTok from the SMBs. What do you think is going to happen over the next couple of weeks? And more importantly, what do you think brands should be doing now?
- [18:07]
Rachel Tippograph
So first of all, Trump has Now said, hey, TikTok, you got 75 days to work with us on a deal. You know, he loves his deals. So the next 75 days will be telling to see what actually happens. You know, he's obviously proposed doing a joint venture with the US all of a sudden. Now the US is the BBC meets TikTok. It's all crazy, but we'll see what unfolds. So regardless, over the next 75 days, I think that we'll see TikTok traffic reach to like levels of 50% of where it was. That's my bet. With big brand advertisers, as we've already seen with the SMBs, it's going back to where it normally is. I think as a result, platforms like Alphabet and Pinterest will continue to see a lift. I think with Meta, Meta is like the spinal cord of direct response advertising. So we have to see how efficient and effective shifting more investments into Alphabet can be for these organizations if it's not reaching essentially the KPIs organizations need to see. I do think we're going to see some money shift back to Meta, but it's a really challenging time I think right now for brand advertisers that want to have a brand that stands for values that they believe in, that aligns with the next generation of consumers, which is obviously Gen Z and Gen Alpha. And you have big tech right now being run by leaders that are very focused on their own Individual gains. And as someone who's worked in this industry for 20 years, I'm really upset by it. There's no more role models for us to have in this industry right now and it's really disheartening.
- [19:48]
Sarah Hofstadter
So if you're the CMO or the head of media at a large brand, what do you do? You're saying they have tough decisions, but. But if you're in the hot seat, what do you do?
- [19:56]
Rachel Tippograph
Rachel, for me, I take a stance. I believe that if you're overseeing, you know, Fortune 1000, a brand that's doing over a billion dollars in revenue, you have an opportunity right now to do the right thing. Take a stance in the name of long term shareholder value. That is what I would personally do.
- [20:17]
Sarah Hofstadter
And where do you put your money?
- [20:19]
Rachel Tippograph
Well, I think you put your money in platforms that of course help drive the business, but are ethically trying to align with the right thing.
- [20:27]
Sarah Hofstadter
Are they in conflict with each other?
- [20:29]
Rachel Tippograph
There's so many options right now. Like we obviously didn't even talk about retail media. But I also think that this moment creates an additional tailwind for retail media. As long as the retailers do the right thing.
- [20:41]
Sarah Hofstadter
Back it up. We're a podcast about commerce. I'm serious. I'm not coming in with the bias towards retail media because we have a commerce podcast. I'm bringing it in because there is an opportunity here for retail media networks to say yo, yo, we're pretty safe here. And also to tell a different kind of a story for retail media networks, both for endemic and non endemic. And just to make sure our audience is following endemic is retail media. If you sell your products at that retailer, non endemic would be if you don't sell your products at that retailer but you're trying to reach their audience. So if an auto manufacturers advertising on Walmart's retail media network, for example, you cannot buy a Toyota at Walmart, but you theoretically could advertise on Walmart's retail media network. And the other question there, Rachel, is does retail media have to just be bottom of funnel in a world where safety might become options for you?
- [21:40]
Rachel Tippograph
So I do think that retail media networks have an opportunity to lean into the brand safe message right now and we'll probably see that from them in the next 90 days. Retail media obviously wants to move upper funnel. The fastest growing part of retail media is off site. However, that's all in partnership with the big platforms that we just spoke about.
- [22:01]
Sarah Hofstadter
I think the most important thing personally that I would want to take away from this podcast is You've got choices. Brands, you have lots of choices of where you can place your dollars. Just because audiences are aggregating in certain platforms does not mean you can't just buy based on audiences in safer environments that might align better to your brand values. Is that a fair argument, Rachel?
- [22:25]
Rachel Tippograph
100%. I think that if you haven't realized it over the first 21 days of January, you need to diversify your investment and you have so much optionality.
- [22:34]
Sarah Hofstadter
I think optionality is probably the most important thing for us, I think to take away from this episode, at least from my point of view. Brands, you have choices. You are not being held hostage to social platforms. There are other ways for you to be able to get your conversion and your lifetime value. You can have your cake eat too. The media landscape is so not binary anymore. You can buy based on so many different components, people based, advertising, a contextual. All these options that frankly have been available in the marketplace for, gosh, for well over a decade and now even more so precision matters. But you have the optionality. You don't have to trade.
- [23:17]
Rachel Tippograph
And don't forget, you have leverage. I think if the more of you can come together to go to the platforms and talk about the ethical standards that you want to see, that can move the needle.
- [23:29]
Sarah Hofstadter
All right, Rachel, I did ask you our famous last question, if you will, of like, basically, if you were a brave cmo, what would you do? Who do you think is the brave, bravest media platform out there today?
- [23:43]
Rachel Tippograph
I think I'm gonna say the New York Times. Two reasons why they've had so much pressure over the years to bend their POV on politicians and they never have. That's number one. Oh, okay. Sarah's DMing me right now and she disagrees. But I can imagine why I asked you the question.
- [24:03]
Sarah Hofstadter
It wasn't about what I thought. I just had a, a slight A.
- [24:06]
Rachel Tippograph
Like I'm going to stand by the New York Times. And I think the second thing is also just from a business strategy standpoint that they've also been able to diversify their revenue so they're not only reliant on news as their main source of revenue. I think gaming is now even outpacing it. And so I think it takes bravery also to move beyond your core business.
- [24:27]
Sarah Hofstadter
As the media expert and the duo here. I think this is a great place for us to end the episode. If you like what you heard, Rach.
- [24:35]
Rachel Tippograph
What should you tell a friend? Write a review and thanks for listening.
- [25:07]
Fin (AI Customer Service Agent)
Hey, you know what would make your customer service help desk way better dumping it and then switching to Intercom. But you're not quite ready to make that change. We get it. That's why Fin, the world's leading AI customer service agent, is now available on every help desk. Fin can instantly resolve up to 80% of your tickets, which makes your customers happier and gets you off the customer service rep hiring treadmill. Fin by Intercom, the leading customer service AI agent now available on every help desk.
- [25:38]
Jackie Cooper
Hi, I'm Jackie Cooper, Global Chief Brand Officer at Edelman and the host of Touch of Truth, a new podcast launching on the Adweek Podcast Network. My dad gave me this incredibly smart piece of advice. Meet everyone once. As a result, I've met some of the most fascinating and inspiring people on the planet. Now on Touch of Truth, we're coming centre stage and sharing the mic to experience stories of truth, insights and visions for the future that will challenge your way of thinking. Touch of Truth is available wherever you listen to podcasts. New episodes come out every Tuesday. I do hope to see you there.