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Show Transcript

Shane Madden: Hi, everybody. My name is Shane Madden. I'm here from TPT Digital, currently based in New York, but originally, from Ireland. The name of our podcast is Off The Clock. Our segment today is social media as a brand and political platform on the future state. I'm super excited to have you for the next 30 minutes. I'm joined by my cohost Whit, and then our special guest, Tom. So, Whit over to you

Whit Harwood: Yeah, great to be here, and thanks so much to Shane and everyone at TPT Digital for hosting this and helping to pull this together. My name is Whit. I'm currently a team lead of the go-to-market group at Peacock, the new streaming service from NBC Universal and as Shane alluded to, we're joined by Tom Ovenden today to talk a little bit about social media and all things in that space. So Tom would love to hear a little bit about you and what you're doing.

Tom Ovenden: Yeah. Thanks, guys. Thanks for the invitation, really honored to be on here with you guys and yeah, just really interested in digging into some of these topics. I think from my side, I'm working at Extreme International. We've been going for just over 25 years now. I'm heading up all of the social and media within the company, obviously very focused on social. But yeah, excited to talk to you guys a little bit more and kind of get into it.

Shane Madden: Yeah. Awesome. We're going to talk about a lot of different segments on today's segment is obviously social media. Now I'm going to kick off. So obviously with the great dispersion because of COVID-19, we've seen a proliferation of both media and social media. I've heard lots of commentators political and otherwise refer to social media as a monopolistic goldmine of mis- and disinformation. To the extent that as of this week or last week, I'm sorry, the US governments and states, I think it was 48 states in the US alone, backed by the FTC, are going after Facebook specifically for anti-competitive behavior. There is a perception at the moment that Facebook is dark money. 

It's the menace for social media. It's driven rifts and division amongst communities, both here in the US and then further afield, and given all the movements of what's going on with social media, how it's kind of morphed into what it's become, Tom, my first question to you would be, where do you see this thing going? What's the future state of this thing? And I think I'd be super interested to hear your thoughts, particularly firstly, from a brand perspective, but also then from your average consumer's perspective.

Tom Ovenden: Yeah, definitely. I think what makes social media and the ecosystem around it so fascinating is it's expanding in every direction at once. And I think whilst we look at social media as a kind of blanket term, I feel like we're starting to see more intricacies and specialties within that ecosystem. I think when you're looking at this from a very general point of view, I think one thing everyone would like to see more of is just transparency and clarity within the industry. Whether that's necessarily the way it's going is another question. But yeah, I think it's fascinating. We're seeing social media develop more alongside technology, we're seeing technology develop alongside social media. So it was a really interesting space on the whole, but also one that's quite hard to keep your finger on the pulse.

Shane Madden: Yeah. There's a lot of movement. Whit, before you jump in, one other quick thing on that, Tom. As of December 2020, Facebook acquired the CRM platform Kustomer with a K for a billion dollars, I believe. And I believe the angle there is, both companies offer the ability to enhance and automate communications. But I guess the interesting thing about that acquisition is the idea is to help Facebook with customer service operations and then to allow Facebook to sell that proposition to brands once they got that information. So it's going to record all interactions across their communications tools. That on top of, Facebook, obviously, and I'm mentioning Facebook here, but we'll dive into others, launching their own cryptocurrency, like that's true product proliferation and product constellation. What are your thoughts on that as someone who works with Facebook as a brand and how do you think you can benefit from that as a brand?

Tom Ovenden: Yeah, so I think Facebook is an interesting customer; I mean, it's interesting because it's showing us some of the signs of what they're hoping to do strategically. I think Facebook has obviously in building a huge number of clients are using that platform for customer service, but by acquiring customers, this is allowing Facebook to essentially reach beyond its platform walls and helping to ultimately control the bigger picture kind of, regardless of whether it's on Facebook or one of their competitor platforms. So I think it's interesting; it's showing a lot of plans and strategic thinking from Facebook, but then it's also showing a lot of, yeah, a lot of interest in the wider picture, not just their own platform.

Shane Madden: Yeah. Whit I have one for you. So as someone who runs product delivery for Peacock, which is obviously an incredibly well-documented success story in 2020 in terms of OTT and streaming services, so if we look at the market as a whole, right? So Facebook represents about 68% of the market share, Twitter about 11% market share. Facebook bought Instagram for a billion—I think if you were to value it now it's probably, I don't know, 100x that? My question for you given your experience in media is, does it make sense to put the likes of Twitter and Facebook behind a paywall? And I say that against the context of, I've heard lots of different market speculators and advertisers refer to advertising as tax for the poor. So we'd love to...what do you think about that?

Whit Harwood: I'll start by going back to something that Tom just said, which I think is really interesting, where like when you're looking at social media broadly speaking, you're really talking about, is it consolidated social media, which is kind of what we think of as from the Facebook perspective, from the Twitter perspective, it's something that was defined for the sake of connecting with people and expressing opinions. And I think that one of the things that Tom just alluded to in Facebook going much more horizontal is layering social media and communication on top of existing products and features. I think that you're going to see that across a ton of different spaces, right? Not just against these native social apps, but you're going to see different spaces start to layer on what we would consider a native social feature.

So tying it back to your question by putting Twitter behind a paywall, unless there's something else there other than the information, you're inherently decreasing the addressable market. You're restricting news information, which works on some levels, but the promise of Twitter is that you actually have it... means something different to everyone based on their algorithm, based on who they follow. And you're essentially cutting off, in my mind, any growth prospects by doing that because it's hard to convey the value of something if someone doesn't already have it. So from a monetization standpoint, would I pay 10 bucks a month for Twitter? Yeah, probably, because I'm an addict and I use it six times a day or whatever. But if Twitter were to do that without any kind of free function, you're basically saying, okay, we've reached our TAM and now we're trying to monetize everybody within that user base and could that work?

Sure. But I think one of the things that I look for in social media is, I look for things that work on two different planes, right? With Twitter, it's news and connection, with Facebook it's connection and consumption, Instagram it's consumption and commerce, and TikTok will eventually be there as well. But once you start to see these platforms go single plane, once they just exist in one primary part of the atmosphere, one example for me that's not a failed social platform, but something that certainly hasn't reached its promise is Medium. Where you have...its long-form information. It's kind of a bit of a connection platform, but it operates in one plane and therefore it's not really that successful. If Twitter were to truly look to monetize itself, they would cut their addressable market. And I think they would not have the opportunity, at least as they're presently constructed, to expand and exist in multiple plans.

Shane Madden: Could they set up something like a pay tier model whereby, so if you're Kim Kardashian, you pay a nominal thousand dollars a month, or if you've got more than 4 million followers, you pay 500 bucks a month, and then it's free for any user like you and me, unless you've got more than a thousand followers.

Whit Harwood: I don't have more than a thousand followers yet. Maybe this podcast will get me there.

Shane Madden: Right, do you think there's the option to develop that kind of...similar to what Peacock did which is a multi-price tiered model? So, a thousand, 500, or free for less than a thousand? Because I think part of the problem they have is if advertising is now being viewed as tax for the poor, how do they turn into a subscription bundle model? So reoccurring revenue bundle, how do they grow their market share to 11% where Facebook is? Is it through a subscription multi-tier pricing model?

Whit Harwood: Well, you would also have to look at it from the revenue standpoint, too. Because if you're charging the Kardashians a thousand bucks a month, they are certainly making much more than a thousand bucks a month on that platform. So you would also have to increase the number of monetization tools that you have for influencers. And right now, candidly, the written word, and we can get into a whole different digression about the future of social media in the sense of what medium will drive future growth. But right now, the written word is actually driving polarization. Video is driving commerce, and in some ways static photos and images are driving connections. And again, we can go all off on that tangent if we want to. But right now the written word really isn't a monetization tactic in the sense that...the Kardashians aren't making money from posting tweets and to a large extent, most of their money is coming from video. Most of their money is coming from commerce. So, I think you would just have to look at, what are the tactics that you're providing influencers if you're going to go down that rabbit hole.

Shane Madden: All right. I've got one more question for you. And then I'm going to throw it over to you, Tom. So as somebody who works in the media space, which is an interesting space at the moment, there's this great dispersion. What do you think of Twitter? Let me rephrase it,  so if AT&T owns Time Warner, which owns a bunch of digital media properties, for me, I think CNN is probably the strongest cash cow of news. In terms of their portfolio, obviously HBO Max is a phenomenal brand with incredible equity. What do you think of Twitter and or another kind of social media platform acquiring a property like CNN? Do you think that's on the cards for '21?

Whit Harwood: So it's interesting because Twitter has tried video before; video hasn't necessarily been a vehicle for them to grow. If anything, it's been cutting on-demand, video and splicing it and distributing it on that platform that way. And I'd love to hear what Tom has had in his experience from a native social posting perspective. But I think Twitter is certainly known for live events. Everyone has their phone up and they're watching a game. When they're watching the election they need to get real-time analysis from Nate Silver. We all get that. I don't know if I necessarily see the use case for having Twitter open full time for something like a news service, like a CNN. One interesting proxy here is, Cheddar was launched four or five years ago and it was using primarily social platforms for distribution, and sure they got to scale, but they also exited and they're widely distributed, but they did ultimately move to the traditional distribution model.

I mean, Cheddar is now on all the primary cable platforms. Is there a way to grow using Twitter? Potentially, but I don't think people necessarily go to that platform to consume long-form video. If anything, and maybe Tom you've seen better data on this, but if I had to guess, Twitter is probably heavy desktop and mobile relative to any other platform, or desktop first, then mobile second. Desktop, I feel like a lot of people don't necessarily have it up for an extended period of time. So, you're really looking at short watch times and maybe people cutting in and out. So, it's hard for me to see Twitter owning any individual video asset like that. I don't think we've necessarily seen success like that before.

Shane Madden: Interesting. I guess one of my predictions would be AT&T spins or divests, either HBO and CNN, or one or the other. And I think CNN as a news digital property is just such a strong commodity. And I think it will be interesting if they go paid sub model, what are the likes of Twitter being interested in that, not even from the perspective of how do they stream that content, but more even just ownership of the property?

Whit Harwood: Well, so just to play devil's advocate there, I think if you're Twitter, you're saying, you know what, we already have Anderson Cooper on the platform. He has a Twitter handle. And I want to kick this over to Tom, just to see what you've seen in the digital video space as it relates to kind of Twitter specifically, but then also how video consumption changes across platforms if you've seen anything interesting there.

Tom Ovenden: Definitel,y and I wanted to jump in on that point you made there, I think of the things I've always tried to do both at Extreme and previously is understand that they're going to the user needs and why users essentially use it, or why the user is using a certain platform. So then from my side, it's understanding that user needs, that user journey, but also that user desire is ultimately where you're seeing the best engagement, the best metrics off certain platforms.

So the way I like to approach it is—and I kind of agree with you, I see Twitter as a video platform. It's a spoken word platform. It's text and it's opinions, incredibly polarizing at times, but also incredibly powerful. I think we've seen from the Extreme side we've seen TikTok this year for us blow up incredibly. I mean, that's not only helping us to access a completely new and young user base, but it's also helping us to create new video assets off the back of that. So I think sort of taking a step back and looking more at video strategy, it's all about understanding, not only what audience you've got on each platform, why they're there, but then also how are you best serving their needs? So, for TikTok, it's understanding short form is why people are there.

It's quick, engaging, exciting content. You're going to YouTube for that more in-depth, longer aspect kind of content. I think it's...without the core understanding of what the user is going to that platform for, you're always going to be slightly misaligned.

Whit Hardwood: So I have a follow-up question with that, too, because, and we did not prep for this, so sorry to put you on the spot, but, you know, the two platforms that are inherently considered the most polarizing are Twitter and Facebook, right. You just alluded to it. And they're both inherently spoken word, written word platforms, right. They've also been around the longest relative to an Instagram or a TikTok. So is polarization something that comes from the written word or do you think polarization comes from time, and as all of these platforms age, they inherently get older, but does that mean that they also get more polarized?

And again, we did not talk to this question though, so sorry for putting you on the spot, but I think it's something that just occurred to me because it's, you know, as each of these platforms changes, as they mature, and they're all exciting and they're super young right off the bat, like TikTok, which you alluded to, and then at some point, you know, is it a nature of the medium or is it nature of who's on the platform and ultimately more polarized figures rule the day? 

Tom Ovenden: Yeah, it's a really good question. My understanding or my thinking behind it is, we see a lot of polarization on Facebook and Twitter. I think those are two platforms that have been around the longest, therefore, the user saturation, in my mind, is a lot higher. You're not getting as many people signing up to TikTok, although with lockdown and COVID, it's probably changed that slightly, but ultimately you're saying, with Twitter and Facebook being the real pioneers of the social media space. I think what's fascinating is Twitter gives people essentially more slack to put out their own opinions without fear of reprisal.

I think Facebook does that the same, but I think that's also just the theme of social media as a whole, which is people's ability to say stuff without the consequences. And I've read and heard some really interesting stuff around this. And I think bringing people into that digital realm takes away the consequence, and a lot of real-world situations would stop people from saying these things. But then at the same time, that can be seen as a good thing because you're seeing people truly speak their mind, whether it's a positive or negative, but you're actually getting a more honest commentary from the general population.

Shane Madden: You know, on that note. I don't know about you guys, so I'll be 35 in March. So, my entryway or gateway to TikTok was this Ocean Spray commercial that they did, which by the way was absolutely amazing. So, I hadn't used TikTok. Hadn't even seen any videos until that. And I watched it and then I got stuck down this rabbit hole and I tell you what, it's the most addictive thing I've ever done. So, it's a compilation of eight-second videos, quick videos, quick little pops. And this whole thing of algorithm commerce, I think, is going to be super interesting. And I guess Tom, for you, like eight seconds is a very narrow window, right? And it'll be interesting to see what this does to my A.D.D, which is pretty bad as it is. But eight seconds and multiple videos at eight seconds? It's going to be interesting to see what happens there. But Tom, what do you think is, and obviously interestingly with Trump kind of getting involved in trying to broker a deal between TikTok and Oracle and Microsoft and backing out of the deal, where do you see TikTok going for brands? Do you think they remain at eight seconds, which is extremely short form, do you think they optimize? Where do you see that going?

Tom Ovenden: Another good question. I think what's fascinating about TikTok is, you're seeing a lot of brands utilize the platform and utilize it very well. I think what TikTok, and credit to them on this, they're putting the focus back towards the individuals, the creators, the influencers, rather than the brands. So I think you're getting a much more genuine platform of individuals rather than very scripted, very fake, very set up situations. Whilst Instagram is great for some of that stuff, I think we've all seen the kind of influencer pranksters that you look at and you can see through. I think what was interesting about TikTok is it’s trying to push away from purely brand-focused stuff. Don't get me wrong, there's a lot of brand focus stuff on there. Me being one of them as Extreme, but what I like is it's actually putting the control back into an individual's hands rather than kind of having these overly complicated brand and influencer deals that people are running. I think it's actually giving a lot more power to that individual user.

Shane Madden: So it's creating millions of content creators and publishers, and it's empowering those, similar to what Roblox is doing in the gaming space. So you could ultimately on the platform have 7 or 8 million content producers versus on Facebook and others, some of the big advertisers pouring millions and millions of dollars into this thing. That's kind of what you're saying.

Tom Ovenden: Yeah. I think what's interesting about TikTok is they're coming up with new ways to drop in advertisements, whether it's kind of an opening in between videos. I mean, Facebook has increased the way that they're monetizing, but I think actually the way that TikTok is doing it has been a lot more interesting, a lot more fitting with their general platform.

Whit Harwood: Well, so Shane, you alluded to the rabbit hole, right. And it's easy to fall down. It's punishing right? In a way, you're just like, oh my god, where did the last 30 minutes ago? But from a product perspective or at least from the dynamic of why that is, it's probably because they diverged from the follower graph. You inherently follow certain accounts, but the algorithm, at least as I understand it, and Tom, I would love your perspective on this from the brand side, is you're primarily surfaced kind of more trending content than even the amount of content that you follow and the inherent nature of the videos being super short...I mean, you're obviously going to run across more stuff than just what you follow.

So, Tom, is that an advantage for a brand that if you're kind of nascent in this space and you can have a first-mover advantage that, hey, listen, if we own our voice and flood the space, there's a chance to gain a lot of momentum here and gain brand equity, brand love. Just because one of the things that I always regret is not being on Twitter in 2007 and I would have 10,000 followers right now, because back then it was just people were following everyone and everyone I feel like who was on the platform that early has a million followers. Do you see a first-mover advantage or does the algorithm inherently push you away from, or at least kind of keep you at arm’s length, of gaining a lot of momentum?

Tom Ovenden: So I think there's always that first-mover advantage. You see it with every platform. We've benefited on that slightly. But I also feel like it's a lot to do with the strategy, particularly around content strategy. It's understanding as much of the algorithm as you can. I think no one fully understands an algorithm. That's almost half the fun of it, but yeah, what’s interesting is although TikTok is aimed at short-form content, 6 to 10 seconds, ultimately, you can put minute, two minutes, five minute plus stuff on there, but it's the understanding of how the algorithm works, that you're going to see the benefits from. So, every video completion, yes, a hundred percent, someone's watched that video twice. It's a hundred percent. The higher that percentage is, the more that the algorithm is going to spread that video. So it's about trying to game the system, but also do it in a way that's not completely obvious from a brand point of view. And it's just going to put kind of a bad taste in people's mouths.

Shane Madden: So, I have a quick one on that. So, I guess the social media, the whole ecosystem, and that whole space, right? It's the new medium, and it's probably what TV was 40 years ago, 30 years ago. The platforms are built to create re-engagement, and there are probably two ways to do that. The first thing is outrage, the second is hate. And what these platforms are geared to do is create those dopamine-driven emotions or hits, right? So I guess, Tom, for you, and I know because the business you're in, it's a little bit different because you've got a very core community and base and very engaged, but do you find as a brand's owner and sponsor on these platforms that when you're competing against other folks in your space, you're having to create more outrageous stunts or like outrageous things to do in order to generate some electricity and interest on the platforms? Or do you think it's, this thing will go away, meaning this dopamine-driven thing will go away because it will soon be the TV of 30 years ago. What are your thoughts there?

Tom Ovenden: I'm probably slightly biased on this being from an extreme sports company where we're kind of all driven on that dopamine hit, but yeah, I think for us, we understand the content, it's that old phrase that gets over-quoted, but the content is king. It’s understanding a high adrenaline, exciting video for us we know it's going to drive engagement. We know it's going to drive excitement and we know it's going to ultimately drive those metrics. And I think it kind of comes down to very much what we think of from a company point of view is, it's all about exciting, inspiring, and entertaining. Those are three core principles that we try and use across the board from a brand point of view. So, I mean, it's tough. We mentioned the social dilemma before and, we know that these platforms are being created from a UX and UI point of view that is addictive. And even the guys who are building these platforms themselves are falling down these rabbit holes.

That being said, it's...exciting content is always going to be exciting content. Whether you hate it or love it, you're going to be watching it.

Shane Madden: Yeah. Where do you think Snapchat is going and then secondary to that, Twitch, this new Amazon platform? Any thoughts on that?

Tom Ovenden: Snapchat again is a really interesting one. One thing that I really liked that they're doing at the moment is that kind of heavy AR and VR use. You're seeing a lot of playing around with that. I mean, we're seeing other platforms and brands obviously playing with it as well. I think some of the stuff Snapchat is doing is really interesting. I think the only question now is how widespread is that AR/VR adoption going to be? And then Twitch again, with the Amazon kind of connection there, Twitch is a fascinating one because they've created a really unique audience of very like-minded people. So, ultimately, they've created one of the largest ecosystems for highly engaged users, which is in many ways the advertiser's the dream.

Shane Madden: Yeah. Whit, Evan Spiegel, the CEO founder of Snapchat, if Zuckerberg was to say to him, listen, let's go back to that deal that I offered you years ago. I wonder, do you think you'd take the deal, after seeing how things have panned out in this space, or maybe he's happy, maybe it's the unicorn of non-Facebook platforms.

Whit Harwood: I think that they're probably not only content but excited about what they're building because I don't think that they're… well, Tom just alluded to kind of the AR experience that they're building. I don't think that there is anyone else. And there are a couple of very young companies that are looking at AR shopping, but when you looked at the graph of who their user is, very young, a lot of engagement on that platform. A lot of consumption, too. I mean, the discover section for them builds brands. You look at something like Stay Tuned from NBC News, which was there very early on, and they built a massive following of primarily 18- to 24-year-olds. When you look at who's using that platform, and you look at kind of the graduation of that user base into a space where, ultimately, they're going to be spending discretionary income. That in 5, 10 years’ time is potentially a monetizable gold mine. So, I think they're actually graduating their user base into consumers at the same time that the technology is kind of riding along parallel with it. And so, you look three to five years out, and it's probably not five years, it's probably closer to three years, and they've got a lot of 25- to 28-year-olds on that platform that they're going to have AR shopping capabilities that are going to dwarf what everybody else is looking at. And they're going to be able to monetize your user base that nobody else has a stranglehold on. So, I think they're extremely content with where they are. The stock price has obviously had a great year as well. So, I think that people are starting to recognize that the engagement on the platform and the value of that base is extremely high.

Shane Madden: So I guess in summary and Tom, I'd love your two cents on this. I’m going to give my two cents on this or my thoughts on this. This thing isn't going anywhere, we know that, right. Firstly, I think the DOJ/FTC are going to potentially spin one of the Facebook brands, whether it's WhatsApp or Instagram. We see the continued growth of TikTok, probably remain in the eight-second format. It'll be interesting to see what happens with Twitter and their subscription model and whether they do get into this media production space with CNN or something alike, although Whit disagrees with that. I agree, I think the future of Snapchat is super interesting with AR/VR and using that to drive...that could almost be a full e-commerce stack, that platform.

I think what will be interesting is the rise in these free speech social networks like Parlor, particularly as we've just finished one election cycle in the US. The next one is obviously the midterms. Then we've got the presidential in four years. It'll be interesting to see what happens with that. But I think that it'll be interesting to see all these different moves. And then obviously the last thing is the cryptocurrency rollout from Facebook as they try and develop their competitor to Amazon, which was their shopping cart. I just think it's such an interesting space. Will it continue to create hate and distrust and divisiveness? Probably. Cause that's what it's built on, is outrage and hate, those emotional feelings. Do you guys disagree or agree with any of that? Is there anything else you'd add to that, just top-down, like where this thing is going?

Tom Ovenden: Yeah, I think I would definitely agree in the sense that most of the social media marketing you hear about is something that has evoked emotion. I think that's something that ultimately a lot of people aim to do. Some people get it very wrong, some people get it very right. And it's ultimately about just finding that balance really. And I think, in terms of the kind of social media landscape, from my side, I think we're seeing everyone doing a lot of the same. What I think will be really interesting is we're just starting to see people really differentiate from their competitors and offer their users something that no one else can.

Shane Madden: Yeah. And that's probably TikTok. As you said, it's content, owned, empowering content, producers, millions of them with low barriers to entry. And its short-form eight-second video, I just think it's genius. It's the most addictive thing I've ever done. This is amazing. We probably didn't get to speak on everything. Really appreciate your time guys. I know we're at the 30 minutes here. Whit, I don't really have anything else to add.

Whit Harwood: Thank you, Tom, for hopping on. It's been a blast to talk through everything social with you.

Tom Ovenden: It's been an absolute pleasure guys. Thanks for the invite.