← The Digiday Podcast
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- [00:00]
Tim Peterson
Foreign.
- [00:10]
Kamika McCoy
Hello. Hello and welcome to another episode of the Digiday Podcast, a show about the business of media and marketing. I'm Kamika McCoy, senior marketing reporter here at Digiday.
- [00:20]
Tim Peterson
And I'm Tim Peterson, executive editor of video and audio Digiday Media.
- [00:24]
Kamika McCoy
Tim, I feel like we start off every episode like this, but how are you?
- [00:27]
Tim Peterson
Yeah, I'm doing all right. You know, it's, it's starting to get a little bit warm here. I've adjusted to daylight savings a bit, so be careful. Formula one season has started back up.
- [00:38]
Kamika McCoy
We might be soon getting rid of daylight savings, so take it with a grain of salt.
- [00:41]
Tim Peterson
Oh, I would love that. Let's be clear. I would love that. I think daylight savings is one of the more stupid things that we do as a country, which is saying something. I would love to. I'm not a farmer. I.
- [00:56]
Kamika McCoy
You said enough is enough.
- [00:58]
Tim Peterson
Yeah. Like the clock's falling back. Fine with it. Great. In fact, the clock springing forward. I don't need that in my life.
- [01:06]
Kamika McCoy
Yeah, agreed, Agreed. I think if we get rid of daylight savings, we'll also cure my seasonal depression. But before we talk more about my seasonal depression, Tim and I are.
- [01:15]
Tim Peterson
And we do talk more about your seasonal depression.
- [01:19]
Kamika McCoy
Tim and I are joined by Digiday's platforms reporter Crystal Scanlon to talk about TikTok. I'm going to call it Tick Tock Purgatory and where we stand with the looming band. But first we've got some juicy scoops, including recession players, streamers and YouTube creators in scope three, which is not scope Lee, scope three. And it's launched of ad tech and.
- [01:39]
Tim Peterson
Not scope two, not scope one, not scope four. Scope three.
- [01:42]
Kamika McCoy
Perfect. So let's go ahead and talk about the recession fears flaring up and kind of the effect that that's having on business. I'll say from my personal experience. I went to the grocery store the other day. I'm in metro Atlanta. I think egg prices have never been. Have recently not been cheap. I was paying maybe like 6 bucks. Went to the grocery store, not even joking. $9 for a regular pack. I'm not even talking about like the nice cage free pasture. Just like regular eggs. They're like nine bucks. And I was like, oh man. Like I'm actually find a new way to make pancakes here because this is out outrageous. But yeah, what's, what's your experience been?
- [02:26]
Tim Peterson
Yeah, I'll do one better. Although I've had the egg experience to the point where there was one grocery shop recently where they didn't have any of the regular eggs and the cheapest only available eggs were blue eggs. So did that if only for the story, just being like, yeah, we got blue eggs, they were fine, they tasted like normal eggs. But no. So I buy salmon each week. Two weeks ago went bought my salmon. It's just like a frozen filet. They do it by the pound, but it was nine bucks last week. I go grocery shopping. I go to pick up the same salmon. Look at the price tag, $19. So more than 100% uptick in a week. I go yesterday grocery shopping again. I'm already assuming the salmon is going to be like 19 bucks. But I'm just like, let me see if it's changed because it changed pretty dramatically before. Now it's $23. So suffice to say I didn't get that salmon. I got some cans of tuna inside. But yeah, everything is just getting a lot more expensive at a time when people are worried about not having as much money available because yeah, that, that R word recession has started bubbling up again just like it did. What was that 22, 23 when there was a lot of are we in a recession or not in a recession? What are the indicators? Last week one of those indicators popped up where The S&P 500 officially entered a correction because it was down more than 10% from the February high for a long enough period of time. There was another marker, I think earlier this month or this month consumer sentiment hit a two plus year low. I think November of 2022 was the last time consumer sentiment was as low as it currently is. So it's not, it's not great, it's not what you want.
- [04:23]
Kamika McCoy
No. The IAB did some reporting that said more than half of marketers, 57% of marketers say that they're extremely concerned about the tariff impacts as well. So there's like several ripple effects, you know, that are, that are happening here. Marketers have already been tasked for the last couple of years, like I don't think we ever left this post Covid, if that's what you want to call it. The idea of a marketer having to do more marketing with less marketing dollars and it's almost like a never ending cycle. And here we are again because you've got people concerned about tariffs, you've got people concerned about the price of eggs and whatnot and that taking a salmon and salmon and that taking a hit on how much somebody is willing to pay for for groceries. So yeah, that's no bueno.
- [05:08]
Tim Peterson
No, especially I mean we're about to head into the upfront market, the annual TV and streaming advertising haggle. If the recessions concerns are looming over that, that's going to really affect how money gets allocated, to what extent money even gets allocated. Next week we have our Digiday Publishing Summit where we bring together a bunch of publishers in Vail, Colorado. I expect this is going to be a question we're going to be asking of those publishers, at least during the town halls, is to what extent are they starting to see any early indications? Because the last time I think it was the March 2022 DJ Publishing Summit during one of my prep calls with the speaker. Before that summit was the first time I started hearing about recession concerns from folks in the media industry. And then it became a topic and then it became more than a topic. It became like a legit concern and reality folks were dealing with. So this will be next week's publishing summit will be something of a temperature check.
- [06:13]
Kamika McCoy
Yeah. And we'll, we'll return for more of that. Who is not suffering recession is creators. And specifically Mr. Beast.
- [06:22]
Tim Peterson
Yeah. Although most more so from his feastables business than necessarily his YouTube business or even his Amazon show business, which is interesting.
- [06:29]
Kamika McCoy
As a content creator, I guess you could almost consider him a media platform within himself. But yeah, the, the feastables and the chocolates and things like that are making way more money. I think I saw a number that said his sales were like 250 million and the profit from that was 20 million. So.
- [06:45]
Tim Peterson
And I mean that's also been his reputation of he is very willing to lose money or to spend every dollar that he gets up front to be building of this business and as risky a financial strategy. I don't think he is doling out financial advice to anyone, but obviously it's working for him and it seems to be a situation where rising tide lifts all boats. He has created this tide with his Amazon show Beast Games, which did really well for Amazon. And so now you have Netflix and Peacock looking to do other shows with other creators like dude, Perfect, Ms. Rachel are among some of those that have gotten shows recently or are reportedly in talks to be getting shows on these other streaming services.
- [07:34]
Kamika McCoy
Yeah, we've been reporting pretty heavily these or you but I say we and I mean you have been reporting crystal too pretty heavily on, on YouTube and like how they're becoming these really, really creators becoming these really big powerhouses for YouTube. Talk to me a little bit about kind of like what does that mean for their like original content programming, original show programming.
- [07:56]
Tim Peterson
YouTube's. Well, that's non existent. YouTube used to have original programming. We've talked about it before on the show where they had like Cobra Kai and other shows, but, you know, those shows didn't really work on YouTube. Cobra Kai then became a big hit for Netflix. But it's interesting, you know, the Wall Street Journal reporting that Netflix and Peacock and others, Amazon, are looking to do more shows with YouTube creators, in large part because of the success of Beast Games and what Amazon had with Mr. Beast. But then there's YouTube, which has been out of the original programming market and seems definitively out of it. There was a VP of AMIA for YouTube who spoke a couple weeks ago at a conference and said that YouTube has no plans to get back into original programming. Then YouTube CEO Neal Mohan a week or so ago, I think we talked about it on last week's episode, kind of, you know, admitted we weren't good at picking original shows. Now again, they picked Cobra Kai. Cobra Kai was good. It just didn't work on YouTube. But what's interesting to me is this is all happening at a time when YouTube has become the, the predominant streaming service on TV screens. People are watching, spending more time watching YouTube on TV screens than any other streaming service, and they're spending more time watching YouTube on TV screens than they spend watching YouTube on mobile. And yet there's always been this question of like, is YouTube TV? And that Mr. Beast dude, perfect, Ms. Rachel and others are going to these other streaming services to do their big TV shows as opposed to doing those on YouTube. Is it really a good look? Because I was just talking to a big agency exec on Friday and I was asking them, like, where do things stand right now with this question of is YouTube TV in the eyes of clients, in the eyes of advertisers? And this agency exec was saying it's still not. Yes, there are examples like Mr. Beast of highly produced videos on YouTube that could be considered TV quality. But there's still so many videos that are just people's cat. Like the stereotypical examples that often people think of when it comes to YouTube. And I would think, again, these creators going to these other services to do their quote unquote TV shows not on YouTube. That's definitely not going to help YouTube when it comes to this question of is it TV in the eyes of advertisers, the eyes of audiences is a whole different thing. It seems like, no, absolutely, YouTube is TV. But yeah, advertisers, that's a lot of money right there.
- [10:43]
Kamika McCoy
That was actually the. When you mentioned that, the first thing that I was thinking of is, well, depending on how it's. How it's categorized. Because YouTube is such an enigma when it comes to like, if it's TV versus if it's. I think we've uncategorized it as social at this point. But it does beg the question, like, well then where does that money then come from? Does it come from my video budget? Does it come from my, you know, social, social video budget or wherever the case may be. And based on what I'm hearing, it doesn't seem like YouTube has been able to land its foot just the way that it wants it to be able to make that case.
- [11:17]
Tim Peterson
Yeah, no, this agency exec said it's coming from the video budget, not from the TV budget.
- [11:23]
Kamika McCoy
Fair enough. And maybe the video budget is just one big, you know, pot of charms that they get sold.
- [11:29]
Tim Peterson
At some point you would think that'll be the case. But again, it's. Inevitably it seems like it's TV and video are going to have to be considered the same thing. And again, like YouTube's the best case for that because of how much time people are spending watching YouTube on TV screens. But there's still this perception block on the part of many advertisers where they just don't see YouTube as TV.
- [11:54]
Kamika McCoy
Yeah.
- [11:55]
Tim Peterson
To what extent that really matters to YouTube, I'm not sure. YouTube still seems to be doing very well for itself. At the same time, if it does lead to creators being like, well, I want to do a show, I'm not, you know, I want to do more with my programming. If they feel like they have to go to Netflix or Amazon or Peacock or any of the others to do that, probably they'll continue to do YouTube. But maybe at some point there have been other creators who have gotten shows who, like Lilly Singh when she got her late night show on NBC. I don't remember her posting as much on YouTube when she had that. I think. I don't remember, like when Grace Helbig had her late night show on. I forget if it was. It was one of the Turner networks, if I'm not mistaken. I don't think she was as active on YouTube for that period of time.
- [12:50]
Kamika McCoy
Yeah, that is a. I love that we lend every juicy scoop on. We'll see. And to be continued. And that's what we're going to do with this one as well.
- [12:59]
Tim Peterson
Yeah, I mean that's. That's all we can do.
- [13:02]
Kamika McCoy
Absolutely. And then the last topic, not scope one. Not scope two, but scope three, yeah.
- [13:08]
Tim Peterson
Kimiko, do you know who Brian O'Kelly is?
- [13:10]
Kamika McCoy
Doesn't ring a bell.
- [13:11]
Tim Peterson
So Brian O'Kelly is kind of one of the ad tech pioneers, one of the programmatic pioneers, if you will. He founded Right Media, which was, I believe is credited as the first ad exchange, or at least one of the first ad exchange, which is it was acquired by Yahoo. And then after he did his earn out at Yahoo, he went and launched AppNexus, which eventually was acquired by WarnerMedia, now Warner Brothers Discovery, and became part of Xander. And then he had since gone on to launch Scope three, which was about really drawing attention to sustainability in the advertising supply chain and helping to measure carbon emissions when it comes to advertising. Well, now the scope of Scope three has really broadened and digitated, has done a ton of coverage on this. Seb, Joseph, Ronan Shields and Marty Swant have been doing a lot of this coverage in the past week. But Scope three will use AI agents because, of course, everything has to be AI these days to optimize programmatic ad buys and police for brand safety. And so this is at least one of the bigger examples to date of AI agents or the agentic era of AI coming for programmatic advertising. What if any, of that made any sense to anyone who hasn't been living and breathing ad tech for a decade or more?
- [14:43]
Kamika McCoy
I am gonna say that this is curious for a company, and I don't know how they'll make this work, but if you started a hard pivot, if you will, if you started with, like, trying to reduce carbon emissions and whatnot, and now you're leaning into AI, which has been criticized not specifically for carbon emissions, but for, you know, harm to the environment. That is a. That is a. My favorite word ever. Juxtaposition. An odd one, A curious one, if you will.
- [15:09]
Tim Peterson
Yeah, yeah. And I believe that came up in one of the articles that Marty wrote. I don't know to what extent, like, it got answered, but from what I remember, it seemed like the argument was effectively, well, if we can make the programmatic advertising supply chain more efficient, that it'll effectively cut carbon emissions to offset whatever emissions come from AI. But I don't know that Brian O'Kelly directly addressed the question of, okay, if you bring an AI into this, like, isn't that creating more carbon emissions? It's a phenomenal question. I just don't know if we have an answer to it.
- [15:47]
Kamika McCoy
Correct. Another we'll see moment. Now, what have publishers said to this? Are they on board?
- [15:56]
Tim Peterson
No, the publishers are never necessarily on board off the bat when there's an intermediary, at least not at this point. I think they've had enough experience of like companies coming in and putting a hand in the publisher's pockets, if you will. So Seb Joseph, our executive editor of News, did an article last week talking with publishers for what they thought about Scope three and some of them were just like, so what is this exactly? It's a demand side platform. Another one. And I think that's part of the challenge with Scope three right now is it is kind of unclear what exactly Scope three is trying to do thrown around brand safety and AI agents and optimizing supply chain and all of these things. But is it standing in for the trade desk or Google? No, not necessarily because those are two of the companies that are on board as well as Meta. So it does seem like Scope three has figured out there's a new place in the programmatic supply chain for it to kind of sit at. Which for publishers raises the question of like, so is this another company who's taking a cut of the CPMs? You know, that idea of advertiser puts a dollar into the programmatic advertising supply chain and like a dime makes its way to the publisher. Is it now going to be a nickel?
- [17:22]
Kamika McCoy
Yeah, that is, I would imagine that's their biggest question about all of this is what then becomes my cut of, of this? I will say after. I don't, I don't think that I'm going to leave that part of the conversation with any more resolve than I came into it about Scope three.
- [17:42]
Tim Peterson
I don't know that anyone will like. It's, it's just like what you were saying before. It'll remain to be seen like how this goes over, but it is coming at an interesting time for the programmatic ad market, specifically the open part of the programmatic ad market because it's been a rough start to the year for that market. Trade desk earnings were a little underwhelming and then, you know, there was analytics report a few weeks back that drew further attention to just advertisers, ads running in places they don't want them to be and other factors at play that Ronin Shields are senior ad tech editor I believe is his title now. And then Seb Joseph and I are going to discuss on LinkedIn we're going to be doing a live stream on LinkedIn on March 19th talking about why the programmatic open ad market seems to be a little screwed right now.
- [18:37]
Kamika McCoy
Love that. So that's not ending on A will see. You will just meet them on LinkedIn for the live stream.
- [18:42]
Tim Peterson
Yeah, yeah, just come on LinkedIn. It's the Digiday Bold call. It's at 1pm Eastern on March 19th and then we will have a recording of it that'll go up on the Digiday YouTube channel shortly thereafter.
- [18:54]
Kamika McCoy
Fantastic. Fantastic. As we wrap up Juicy Scoops, our guest this week is our very own in house special guest again, platforms reporter Crystal Scanlon, who is here to talk to us about TikTok purgatory and where we're at with the TikTok never ending, looming TikTok ban.
- [19:13]
Tim Peterson
It was a fun conversation because we, you know, she kind of caught us up on. Okay, since January 19th, how have things been going for TikTok? How have things been going for advertisers on TikTok, creators on TikTok, TikTok's rivals. And then towards the end of the conversation, we talk about, okay, the potential suitors lining up to potentially acquire TikTok's US business. And the three of us make cases for our picks, which I enjoyed. I also feel like I made the easiest pick, but people will have to tune in for that for sure.
- [19:49]
Kamika McCoy
We love a Mortal Kombat choose your fighter moment, but with marketing and advertising. All right, well, with no further ado, we'll get to it.
- [20:08]
Tim Peterson
Hey, Crystal, thanks for joining me in.
- [20:10]
Crystal Scanlon
Kiko, thanks for having me.
- [20:13]
Tim Peterson
Yeah, we want to have you because we want to figure out what's going on with TikTok, if anything. And it feels like. Kamika, I feel like we've been talking about TikTok on and off for the past, I mean, more than the past two months. But I feel like we've been kind of reaching the end of the thread when it comes to what is there to say about TikTok.
- [20:33]
Kamika McCoy
Yeah, I was going to say welcome to TikTok purgatory with us. Krystal, we're glad to have you.
- [20:38]
Crystal Scanlon
Yeah, I think probably for the last couple of months it feels like we've probably lived about three lives in it.
- [20:44]
Tim Peterson
Well, especially you. You've been like leading our coverage of, you know, what's been going on with TikTok.
- [20:50]
Crystal Scanlon
I mean, it has certainly kept me busy, that is for sure.
- [20:54]
Kamika McCoy
Give us kind of, I mean, to your point about having lived several different lives at this point. Give us, give us a timeline here. I mean, we don't need to go all the way back to 2020, but even these last couple of months have been nuts. So I'd love for you to kind of give us like a walkthrough as to how we got to where we are, to our TikTok purgatory, if you will.
- [21:12]
Crystal Scanlon
Sure. So I guess granted, like very brief towards the back county history in terms of like last year, April May was around the time the actual bill went through all of the US and then from that point onwards, even after the bill got signed, everyone was still pretty much just, it's not really going to happen. It's not really real. It's more real than it was in 2020, but it's no more real that we're all just going to jump off TikTok. It got to about September when people were still just, I guess, sort of in denial a bit. But then it wasn't until I guess we got to about just before Christmas, that's when things started to really kick off. And by kickoff, I mean, marketers, even though they'd been working on contingency plans since literally around April, May last year, specifically for TikTok, I mean, obviously that's kind of a general exercise that they do, but just before Christmas, they were definitely putting them into action. They were talking to me definitely about saying that they were looking for alternatives. And the typical alternatives were Instagram Reels, YouTube Shorts and Snapchat as being the closest, next best thing that they can put their ad dollars to. In that period, actually, obviously there was you had kind of two buckets of marketers. You had the one bucket which was in contingency plan mode. Just what do we do? Jesus. Like, this is all happening really quickly. On the other hand, you had the ones that were definitely still like, no, we'll just ride it out. Like, this will happen. Very, very kind of in denial still about it. But at that time, what I found quite interesting, there were definitely some ad execs that were talking to me, explaining that apparently during their conversations with some TikTok execs, they were actually saying or kind of almost admitting finally and taking it seriously that, you know, we don't actually know how this is going to play out. So if you do put some upfront ad dollars to anything on our platform, we. What we will do is we'll honor refund if we can't actually go through with that. But the kind of the caveat to that was as much as it seemed from their perspective that TikTok execs were being basically just supportive partners to them, at the same time, that refund offer wasn't actually in any form of contract. So it was kind of going on a. You have to really trust that word of mouth. And that was kind of the bit of a sticking point for some people. Just like, do we really trust this? Because even if we do trust it, at the same time, these people might not even have jobs in the next month.
- [23:30]
Tim Peterson
Yeah, because there was also a bit of an executive exodus too that you reported on at this time.
- [23:36]
Crystal Scanlon
Yeah, there's definitely been like a few big names. I mean, starting in January we had Sameer Singh, he was the general manager of Global Business Solutions in North America. He literally left like last month, but it was announced kind of earlier. Jack Bamberger, he was general manager of agency business for the U.S. he was kind of reported to have left on January 3rd. Another really major person that even I've had a lot of kind of contact with was Adrienne Lehendz. And like she'd even been with the company for four years. Her most recent role was Global head of content strategy and operations. She was such a public face for TikTok as well. Like I'd seen her on a number of panels, she did a lot of speaking to press and she actually announced her own departure on LinkedIn literally just a month ago. On top of that, I mean, even stretching back as far as last summer, some of the execs I've spoken to, there was definitely a bit of a kind of an unease amongst people. Just, do we stay? We want to stay. We love working at the platform, but at the same time we all have bills to pay. Do we trust it? Do we stay out? Do we stick it out? Some of them that have left definitely told me that the whole kind of uncertainty that kept rolling around was definitely a really active factor as to what made them kind of push to seek something else. Just because they're worried essentially. And even just with some, some of the recruiters that I've spoken to in the past month or so, they were even saying like even up as I suppose especially around the time of that 19 of 19th of January, they were seeing a lot more people who were on LinkedIn. They had clicked on the open to work bad on LinkedIn. So that was a recent thing. And apparently even another exec search firm, they'd literally had an influx of business like in the. I think it was the triple digit mark. They were telling me, especially leading up to that period of just people from tick tock inquiring about where they can move to and how they can exit.
- [25:27]
Kamika McCoy
Again to the point of like so many lives have been lived with this tick tock ban. But I want to talk specifically About I'll call it D Day, T Day, I don't know, January 19, where the app finally goes dark. Mind you, you've got everybody, including me, saying, you know, this band has been extended many times. Like, who's to say if it actually comes through? I want to ask, where were you guys at? You're in the uk, Crystal. So I don't know if you were impacted the way that we were, Tim and I, here in the us but where were you guys on D Day the day that TikTok went offline?
- [26:00]
Crystal Scanlon
Honestly, for me it was literally just like business as well. I say business as usual. Like I signed on the app, there was absolutely no difference. Like I literally had to message people in the US to be like, is it off yet? Because I had no idea. So it was as if, like, well, nothing happened over here.
- [26:15]
Tim Peterson
Yeah, for me, I think we were watching a movie maybe because it was the Saturday night. I think I'm in California. So I think it was around 9 or 10 at night when my significant other, she may have been on Instagram and was just like, oh, looks like TikTok's down. I wasn't paying attention and I was just like, okay. So they did that a little earlier, maybe they timed it to east coast and they just did an outage across the whole country. And I was just really curious, is this going to hold up or not? Because from this is how depraved a journalist's mind is. I was just like, well, the most interesting thing is if TikTok is in fact banned in the US like that's. We're going to have stories for the next weeks and months where Kimiko and I are going to have a ton to talk about on the podcast. Like from an occupational standpoint as a reporter, it's like the best thing that could happen is TikTok actually getting banned. And then I think it was by like the afternoon the next day I was like, no, it's back on. Everything's fine again. Well, that's kind of boring. And it's felt kind of boring since then. Like it was. It seemed even hard that week to figure out, okay, what are the stories now? Because I think we all had been lining up coverage of like, okay, if this band goes through, like what are kind of the follow up stories? And then all of that got just blown out of the water.
- [27:39]
Kamika McCoy
Exactly, exactly. Part of this, and I will briefly tell you all my. I was having nonverbal time scrolling at 10:00 at night. I was for sure that we had until 1159 down here in the South, Lo and behold, I was trying to get my last couple of scrolls in while I could. And yeah, it just starts glitching and being ruined. But I will say I was only trapped in meta jail for maybe 12 hours before the app was back online. Now, so much of this is banked on TikTok having to sell its business, which it says it will not, with the. The algorithm will not be for sale, which makes TikTok you know, what it is. But, Crystal, talk to me a little bit about the, I guess the, the hot potato being passed around as far as who's going to buy this app or who stole their hat in the ring.
- [28:30]
Crystal Scanlon
Sure. So we've kind of got a number of people. So we. First of all, we've got a consortium with Frank McCor, Project Liberty, and that includes Reddit's co founder, Alexis Ohanian, and they've proposed a 20 billion cash offer. We've got Jesse Tinsley's consortium, he's the co founder of Employer.com that includes the CEO of Roadblocks as well. And they've. They've basically proposed over 30 billion for TikTok's US operations. We've also got Oracle, we all know Oracle, obviously they currently handle the US data. We've got Microsoft, they've put forward their renewed interest after its last attempt in 2020 kind of fell through. We've got Rumble, they've tried to join in, just said they'd be quite happy to join a consortium and act as a tech partner. We've also got Perplex eai. They've proposed a structure whereby it would combine its business with TikTok and then the US government could potentially own up to 50% of the new entity post IPO, and then ByteDance would retain a minority stake without the algorithm. And. And then, of course, unsurprisingly, we did at one stage have Elon Musk. And on that front it was literally Trump himself. He said that he'd be absolutely fine with Musk buying it if he chooses to.
- [29:41]
Tim Peterson
Fantastic. And then there's also like, Mr. Beast and a group of investors. Right.
- [29:47]
Crystal Scanlon
Yeah, there certainly is. I think at this point, anything goes with any buyer. I guess it's whoever's got the biggest cash flow.
- [29:54]
Kamika McCoy
Maybe Digiday should also throw its hat in the ring. We can, we can buy it as well. Crystal, are you getting the sense that any of these buyers are being taken? Your Elon Musk and your Mr. B's? Are any of these being taken seriously?
- [30:11]
Crystal Scanlon
I think so far at least, everything that I'm seeing, everything that I'm hearing, Oracle is definitely a real front runner. And that's I guess because from the U. From the US Side, well, they already organize like all of the US data. And then from the China side, well, they're kind of used to that kind of setup. So far I think Elon Musk definitely would have been a good front. Well, I say good. He would have been a front runner on the basis that, well, he's kind of very, very pally with President Trump. So it's kind of, he'd have all the kind of green lights on this side. He's obviously got great like I guess, relationships with China because of Tesla. But so far I've not really heard a lot about the others. They sort of, the hats are in the ring, but I'm not hearing anything specific. Just I know that the meetings have happened between the Trump administration and all of these different groups, but there's not really a lot of information that any of us really have.
- [31:01]
Tim Peterson
Right. And so a game we're going to play towards the end of this conversation is we're each going to have to pick our fighter, pick of these different suitors who we think is likely to be the one to emerge as the new owner of TikTok. And our reasoning for that. But first I want to kind of talk about this, the TikTok purgatory period, like Mikko put it. So since Krystal, as you mentioned, leading up to January 19th, TikTok was trying to assuage advertisers concerns. At the same time other platforms were trying to encroach on those ad dollars. But then TikTok didn't go away. And so in these past two months, has everything could just kind of reset to the status quo or have you noticed any changes on the advertising side of things?
- [31:51]
Crystal Scanlon
I guess with the advertiser side, it's still kind of in that two buckets on the basis of you've got some advertisers that are very much just like I will just still be there until I can't be there until it just suddenly just disappears. And then you've still got the other advertisers that I guess are a bit more risk averse, that they just kind of have started already putting their ad dollars elsewhere. Likely snap, snap and reels and shorts as well. But at the moment, just in a general sense, it's almost like it is just business as usual. And that's even been the same sort of perception that TikTok itself has put itself out there with. And that's been their message throughout this entire thing, literally since this whole band became a thing last year. When I was in Cannes last year, all the way through Christmas up until now, anything that I get, messaging wise, anything I hear is business as usual. It's like the band doesn't exist.
- [32:42]
Tim Peterson
Yeah. This morning I was talking with an investment head at one of the major media agencies and was asking them like, how are things going with TikTok? It's felt quiet and they're just like, yeah, it kind of has reset. Like they mentioned in, you know, post January 19th through like early February, CPMs had gone down and I guess like TikTok execs had reached out to them and their teams being like, hey, so we have a lot of inventory available in case you want any of it. Like CPMs are pretty good right now. This person was saying because they had clients who had been pulling back or because of the uncertainty and they had campaigns that they needed to get out, whether it be Valentine's Day or, you know, St. Patrick's Day maybe, what have you, Super Bowl, I guess too they just needed to take that money elsewhere. And so it freed up all this inventory. But it sounds like that has kind of abated since then and now it is kind of a return to normal.
- [33:44]
Crystal Scanlon
Yeah, I would definitely say so. Like there's definitely not been, there's been no one that I've spoken to where they've suddenly kind of had a last minute panic about anything. It's almost just as if it's gone back to that age old situation of oh, the ban. Oh yeah. Oh, that thing like, oh, that might be coming around, but it might also get extended. We might still be here for like the next 10 years.
- [34:05]
Kamika McCoy
I think it's worth noting that with advertisers, at least in the conversations that I have, a lot of this is because there's not these massive investments, ad investments in TikTok in the same way that there is in a meta or a Google. Right. But on the other side of this, who this would really impact is content creators and influencers. Right. I've talked to a handful of them and they are syncing with the Titanic, going down with the ship, staying on to the last breath. So talk to me a little bit about what it's looked like from that.
- [34:34]
Crystal Scanlon
Purview, I guess with the creator side of things. I guess the one, the ones that will really be impacted are the ones that really rely on it especially to like fund their lifestyle. The ones that have really made such massive followings Just because TikTok, the one thing that it has over any of the others is the algorithm, which has obviously meant that they can grow their followings far quicker there than they can on any other platform. However, the ones that are relying on it that much, whether it's funding their bills, their rent and everything, they're still in the minority. So for the majority of creators, it will impact them in the sense of they may not be able to build followings rather as quick on other platforms, but they're not going to lose out necessarily, like money wise. So. And apart from anything, I guess, because they all know that they can't rely singly on just one platform to just basically be their bread and butter. Every creator that I've spoken to anyway is typically platform agnostic. So they are literally diversified across all the platforms just to kind of, I guess, hedge their bets in case anything like this does happen. Like we saw what happened with Twitter back in the day. Now turn to X. Now we've obviously got TikTok. I mean, who knows what will happen with any of the other platforms in the coming future.
- [35:42]
Kamika McCoy
Yeah, and also vine rip, that's true.
- [35:46]
Tim Peterson
I do miss Vine. There are some great vines out there. They're still on YouTube as compilations. Maybe that's what'll happen with TikToks too.
- [35:54]
Crystal Scanlon
Yeah.
- [35:55]
Kamika McCoy
Now, something else interesting here is that while these creators are diversifying themselves, right. You even see like a lot of times you'll see them have a link in bio or something like that that'll spawn you off to their other platforms. Even when TikTok was getting ready to go down the first time, I saw a couple of creators, like put up like Rest in Peace flyers and things like that. And the caption was always like, find me on YouTube. Find me on, you know, Instagram, Whatever the case may be, it's almost like I would imagine other platforms heard, right, heard that flailing and said, oh, we've got some opportunities for you here. I know you were studying that. At least Pinterest and a handful of others were like blatantly making the call out to be like, yep, come on home. So talk to me a little bit about that.
- [36:39]
Crystal Scanlon
Oh, yeah, we've literally had like, well, there was Pinterest Chief Revenue Officer Bill Watkins, like, he was definitely going after all the advertisers, that's for sure. I mean, he posted out on LinkedIn, literally just saying, like, we are here to help all of our clients and agency partners, because many of them were in his Words urgently looking to reallocate their media dollars. So obviously Pinterest was going to be their new home. And this is what we'll do. We'll give you all of these incentives, whether it's creative resources, like anything to help them kind of get those ad dollars over. We had Substack, they were actually coming out as well, trying to get all the creators from TikTok. They put a post out, basically detailing creators that had kind of gone over from TikTok, but then also announcing a $25,000 prize for TikTok creators who would inspire others to join Substack and spark a trend to move others over. So we've got that. And even Snapchat had a find your favorites on Snapchat campaign back in January as well, and that was just ahead of the band deadline. And that was a way to encourage users to find all of their influencers that they follow on any other on TikTok, to be able to find them on Snapchat and basically come over.
- [37:46]
Kamika McCoy
That's something. I can make the case for Pinterest. I can make the case for Snapchat. I'm having a harder time making the case for Substack.
- [37:54]
Crystal Scanlon
I'd say it's. It's one of those things, like it's a wild card, but, I mean, anything goes at this point.
- [38:01]
Tim Peterson
Yeah, I mean, they all are, you know, contenders in there. I mean, even, you know, Pinterest is dealing with, you know, there have been stories about the AI slop on Pinterest now. So Pinterest could use the help, too. But, I mean, even you had. I think it was the information reported. I think it was on January 20, the story came out of how, like, Meta was offering payments to top TikTok creators to be coming onto reels. So. And it still feels like it's really TikTok reels and shorts. Like, that's kind of the tier, and then everyone else is a tier or more below that. Is that a fair read on that? Am I being ungenerous?
- [38:39]
Crystal Scanlon
No, I'd say that's probably accurate. And especially with Meta, actually, what they did, like, right after the new year, they actually announced that they're launching their own video editing tool as well, which is expected to come out in the. Well, I guess within the first quarter of this year. And that's going to be a competitor to ByteDance's Capcut, because we all know that literally, if TikTok goes, then chances are Capcut will too.
- [39:02]
Tim Peterson
Right? And that's an interesting one because, like Alex Lee, our senior entertainment reporter, talked to some creators after the TikTok ban about how Capcut also went down. Capcut stayed down for longer than TikTok was down and how that disrupted their workflows. But what was funny, dispiriting about that is I believe most of the creators that he talked to were just like, well, yeah, but Capcut's back now, so I'm just going to stick with Capcut. Some of it was also because Meta hadn't rolled out Edit the Reels editing app yet, the capcut competitor. They also had questions about just how good that was going to be and everything like that. Because I think with Capcut, a lot of it is just you have the AI green screen and the captioning tools and all of that, all these effects that make things a lot easier for creators. And so a question of, is Meta going to be able to offer that too? There's also. Meta just has a spotty history of making creator tools available and then taking them away. It had, what was it? Spark Studio, which was like their AI tool years ago when all the snap face filters were a thing, pulled that away. So it'll be interesting to see what happens on that end. But that's probably the nerdier end of things anyway.
- [40:24]
Crystal Scanlon
No, I'd say you're right there. Like the one thing I've not actually heard any creators say, like, what are we going to be doing about like actually putting off like reels or videos or like faux TikToks, should we call it? Like, whatever they're going to be putting together? Like, I've not heard anyone say that, but I'm sure that's going to be a massive deal.
- [40:40]
Kamika McCoy
Yeah, maybe this is where adopt not to give them ideas, but this is where they pop back in. Be like, hey, remember us? Premiere still exists.
- [40:51]
Tim Peterson
Oh, and Adobe just had tough earnings for Q4, so they could use the help right now. And also like, Adobe is just so expensive.
- [40:59]
Kamika McCoy
This is a free idea. The last thing that I wanted to ask about in terms of TikTok, we talked about what this means for creators, we talked about what this means for advertisers. TikTok shop also has stood to be the kind of the canary in the mind when it comes to social commerce, live shopping and things like that. So if again a TikTok ban happens, you know, are there any real competitors fill that space? I know Instagram Meta had its shopping tab on Instagram while ago and to your point, Tim, they got rid of that. So who's to say who steps into this space and can they kind of recreate what TikTok TikTok shop success, if you will.
- [41:36]
Crystal Scanlon
I'd say honestly, right now I've definitely not seen any platform to be able to actually emulate what TikTok shop has actually already done. The thing, the one thing that at least from conversations I've had where TikTok shop has been kind of the front runner for anything social commerce is because it wasn't just a thing that was dumped onto the platform, it was a social platform first and then like the shop element was brought into its native kind of community vibe. But no other, I guess, platform has been able to do that just yet. I mean, we know YouTube is definitely working on social commerce because they've. So far they've got YouTube shopping that's available in the US and Southeast Asia and like TBD on if and when it kind of expands beyond that. I mean, Amazon, you'd think if anyone could do it, it would be like the biggest E commerce player out there. And like even Amazon closed down its Inspire feed last month, so not even they could do it. So really and truthfully, I think if there's going to be a real hole anywhere, it will most likely be for TikTok shop versus the actual platform itself.
- [42:37]
Tim Peterson
That makes sense. So, speaking of shopping, let's shop TikTok right now. Who. So there are obviously roughly three options of how this could go in the next month. I believe April 5th is the new deadline for the extension that Trump issued when he took office. One option, someone comes in and buys it. Another option, ByteDance, cuts some sort of deal and is able to retain ownership. And all of this was for naught. Third option, TikTok, just gets banned and poof, it's gone. What do we think is the likeliest option of how this goes?
- [43:20]
Crystal Scanlon
I would reckon it's definitely going to be some form of buying situation, but with China involved, just because I can't honestly see, I mean, from everything I've read, everyone I've spoken to, there is no way in anyhow that bytedance would ever just give up that platform and have nothing to do with it ever again. That said, I've also read things saying that it's not like ByteDance needs the TikTok in the US to for its revenue to be really successful, but at the same time, it's not just going to totally give up its massive platform. I can't ever imagine it being completely banned just because, well, President Trump has done such a 180 this time round anyway to Try and keep it alive. And he'd probably alienate everyone who was on TikTok and then did vote for him. So there's that. And, yeah, I just. I mean. I mean, I could potentially, like, the ban, like, the extension could keep being extended. I mean, that's definitely an option. I mean, Trump has definitely said that he. If he needed to extend it, he definitely would. I mean, the original plan was that whoever the President was, they would have the option to extend up to 90 days. He only chose 75. So what I don't know legally is if he can only extend for a maximum of 90 days or if he can just extend as many times as he wants, because chances are, I mean, he's in power, he could probably make that call himself. So, I mean, extension. It could potentially just go on and on and on until the US and China come to some form of a deal that's mutually acceptable. But, I mean, anything goes at this point. We've got, what, less than a month until that deadline. So, I mean, do I think it'll all be wrapped up by April 5th? I mean, the jury's definitely still out.
- [45:02]
Kamika McCoy
This conversation is making my stomach queasy at this point.
- [45:07]
Tim Peterson
Kamika, where's your head at on how this could go?
- [45:12]
Kamika McCoy
The worst outcome would be. It continues to get just continually.
- [45:17]
Tim Peterson
And we have to have this exact same conversation with the Crystal of three lines.
- [45:22]
Kamika McCoy
Yeah. What is the show? Twilight Zone. It would be like an episode of Black Mirror that I am trapped in. But it's my real life. God forbid.
- [45:30]
Tim Peterson
I think about that every morning.
- [45:36]
Kamika McCoy
I'm with Krystal here. I think the likelihood is that China's going to be able to cut a deal and there's going to be a buyer. Do I think it'll be Mr. Beast? No.
- [45:44]
Tim Peterson
So who do you think it's going to be? Let's do it. Choose your fighter. We'll each kind of go through Crystal. You're our guest, so we'll start with you. If you had to pick, if you were. If this was a betting market and we could all place bets on who ends up buying TikTok, who would your money be on and why?
- [46:04]
Crystal Scanlon
Okay. Mine's going to be a bit controversial only because I think he's already said that he's not interested. However, things change so quickly in this TikTok front, so I'm still gonna. I will die on this hill. So I'm gonna go with Elon Musk. And my reasons for is because he's already got approval by President Trump, which is what you need first and foremost. He's probably already got a good relationship with China because of the deals he's got for Tesla. So, you know, win, win in that respect. Let's be honest, he's got enough cash so he could definitely buy it. There's no question of that whatsoever. Rightly or wrongly, he does get things done quickly, whether we agree with them or not. Different story. And often, like I've been told by so many people over the last couple of years that TikTok itself as a company is quite bloated and like, given what we've all witnessed of what he did shortly after buying Twitter, I mean, he slashed that 80% of that staff within like his first month. So he's not also been professionally hired now to like head up the US government department of efficiency. So if TikTok in the US needs to cut staff, I mean, I mean, I don't ever want anyone to lose a job, but he would be a man.
- [47:11]
Tim Peterson
Yeah. Jesus. That's a extremely valid, justifiable reason. Dark, you just made Kiko. Who you got now?
- [47:26]
Kamika McCoy
I will say there's probably more cases against this than there are four. But given. But given the lineup and who we have to choose from, I'm placing my bets on Microsoft. And it's only. Hear me out. It's only because one, they've tried to strike a deal before, so they've got some insight into what would be required. I'm not sure why it fell apart, but I would hope that they can go back to the drawing board and say, all right, we've got our ducks in a row this time. Also, Microsoft has a little bit more infrastructure than some of these other platforms. They're big on their gaming platforms, Xbox and whatnot. Given there's a lot of gaming communities on TikTok that'd be a natural kind of conversion for some of their foray into convert into creators. Excuse me. So. So. So those are the bulk of my reasonings as to why I think Microsoft would be a good contender. They've got the backing, they've got the infrastructure. That's not to say their tools are good, but it could be done. It could be done.
- [48:25]
Tim Peterson
And their hat was in the ring in August 2020, if I'm not mistaken, when.
- [48:30]
Kamika McCoy
Yeah, yeah, yeah, it was them, Oracle and Walmart and that those talks fell apart. But again, maybe they all put their thinking caps back on, go back to the drawing board and say, we didn't win this time, but this time we're.
- [48:42]
Tim Peterson
In there like swimwear Another well reasoned.
- [48:44]
Crystal Scanlon
Argument in that case, like with Walmart was in the first round. I'm surprised they haven't tried to come back in.
- [48:50]
Tim Peterson
Maybe they're just like, oh crap, we spent the money on Vizio.
- [48:55]
Kamika McCoy
Yeah, true story.
- [48:56]
Tim Peterson
We're just going to go TV instead of short form. Never mind folks. So I'm taking the easy money. I am going chalk on this. Give me Oracle, give me Larry Ellison. This deal almost happened in a press conference on January 21st anyways, when Trump was just like right next to Larry Ellison, like, hey Larry, do you want this? As if they were talking about trading cards. But Then also on March 13, the information reported that Oracle has in fact emerged as the front runner. Crystal, you already mentioned Project Texas where Oracle's already handling TikTok's US user data. So there's an established business relationship here. There wouldn't need to be. Well, I imagine there's still plenty of backend changes that would be needed, but one of the biggest ones would be the handling of data that seems to already be in place. There's also just the aspect of Larry Ellison's son David Ellison is on the verge of acquiring his company. Skydance Media is on the verge of acquiring Paramount. And so perhaps one big daddy Larry Ellison is just saying, okay son, I see your deal and I'm going to raise you TikTok just to kind of Bigfoot the sun a little bit. Also, David Ellison is potentially running in some troubles closing this Paramount acquisition. The FTC has gotten involved, the FCC has gotten involved. They're not happy because of a 60 Minutes interview with Kamala Harris that aired before the election where Trump is suing CBS News over this? If potentially Daddy Larry comes In, does the TikTok deal as a way to somehow help the Skydance Paramount deal also move through? So, and it also seems like this is according to the information, ByteDance still wants to be part of the business and it seems like Oracle would be most suited to having ByteDance still be in the mix. Whereas like you mentioned with perplexity wanting ownership of the algorithm. Perplexity seems like one they just want to cut out by dance. I imagine the Project Liberty folks also seem like that. Elon Musk I would assume would be like that. Microsoft probably too. So Oracle also seems like the one most likely to satisfy ByteDance and the Chinese government in addition to the US interests.
- [51:28]
Crystal Scanlon
I'm thinking you've won that bet.
- [51:30]
Kamika McCoy
Oh, very.
- [51:31]
Tim Peterson
Again, I feel like it's easy money. I don't feel proud about this bet. I don't feel like if we were actually betting money, I don't know how much this bet would pay off, but it feels pretty solid, if anything feels solid with respect to TikTok right now.
- [51:49]
Kamika McCoy
And yeah, that's a big if.
- [51:52]
Tim Peterson
Yeah. So we'll have to see how things go. Obviously, we have a few weeks until the April 5 deadline, so Krystal will probably have to have you back on much sooner than later to make sense of what, if anything, has transpired in the next few weeks. But thanks so much for joining us.
- [52:08]
Crystal Scanlon
Thanks for having me, guys.
- [52:16]
Tim Peterson
Thanks for listening to this episode of the Digiday Podcast. If you enjoyed it, please leave us a rating and a review on Apple Podcasts, Spotify, or wherever you're listening. Get more from Digiday with our daily newsletter sent out each weekday morning. Visit digiday.comnewsletters to sign up.