Month: February 2022

While some brands are flocking to the blockchain by launching NFTs or establishing themselves in the metaverse, other companies are still on either side of the spectrum. From contemplating whether their customers are ready for a new virtual shopping reality, or if the crypto-native internet users will be receptive to their brand’s debut in Web3, not all companies are ready to embrace the blockchain.

But in these early stages of blockchain development, what a lot of brands aren’t realizing is that the move to Web3 doesn’t have to be an all-or-nothing transition and can be taken gradually and thoughtfully. That’s how Amanda Cassatt sees it, according to the latest episode of the Digiday Podcast.

Cassatt is a pioneer in Web3, having assisted in the launch of the Ethereum blockchain as well as co-founding two companies, Serotonin and its subsidiary Mojito, both of which work with companies to find their footing in the Web3 space. As CEO of marketing agency Serotonin, her team works on customer acquisition strategies that are directed to crypto-native audiences, and as president of Mojito, a NFT studio and tech platform company, clients like Sotheby’s have worked with her team to execute NFT drops and develop metaverse presence in some cases for the first time.

While there is a lot to understand about the blockchain, Cassatt said the strongest approach a brand can take to entering this space is to remain focused on the unique value proposition of a company. 

Below are highlights from the conversation that have been lightly edited and condensed for clarity. 

Taking a more digestible Web2.5 approach

Most of Mojito’s customers and most of Serotonin’s clients aren’t coming to us saying, “We want to recreate our entire business in Web3 and dispense with Web2.” Web2.5 is a term that we’ve coined for that in-between area that’s getting denser and denser and makes sense for companies to be in.

A lot of the best-known businesses that are known for working in the crypto or Web3 space actually are not themselves Web3 business models. I would point to Coinbase, for example, which is a really well-known company in Web3, but their main business model [is] a centralized exchange. That type of business has existed since the dawn of money markets being the way they are, and they are [taking custody of] your crypto for you, [which is antithetical to the Web3 ideal of a decentralized internet but is necessary for this stage of Web3 development that we are in].

Centuries-old companies are evolving into Web3

Sotheby’s was founded in 1744 and they saw, very early to their credit, the burgeoning NFT space as an opportunity for their business. And they, in partnership with us, we’re able to take the core thing that makes Sotheby’s Sotheby’s, and that makes Sotheby’s valuable, and translate that into Web3. 

So what makes Sotheby’s valuable? They’re these incredible curators of the best goods in the world and they add so much value to the market by putting that Sotheby’s seal of approval on an object, saying this is worthy to sell in [an] elevated context because this has some kind of special story and special value. And they validate its authenticity and they validate its merit. They did their first NFT sale in April [2021as a] digital artists pack, [and] they sold that for $16.8 million. It was only the start, they did more than $100 million in NFT sales last year.

[Sotheby’s] was able to make that journey by translating what made them special and valuable from the context in which they operated into a Web3 context. That’s what works. What I’d recommend to brands is that they introspect and think about what the DNA is of their brand, or [what] they’re offering that makes [them] so beloved, that makes [them] so treasured and valuable. And think about a way to translate that into Web3, that brings that same advantage into Web3.

Customers new and old can benefit from Web3 experimentation 

For most brands that are in or approaching the Web 2.5, they have these really engaged existing customer bases. And by going into Web3, they also have the opportunity to engage Web3-native users. And the problem — and also the opportunity — there is that those two audience types expect different experiences. So existing fans of a given traditional or Web2 brand might not have a Web3 wallet. 

[But] the opportunity, whether we’re talking about Web3-native users, [or not, is brands] align incentives with [their] customers in really powerful new ways. So traditionally, brands and their customers have had an arm’s length relationship from each other. And there’s an arm’s length relationship with the investors or the stockholders. And one thing that Web3 is is a powerful alignment engine to collapse the categories of user or buyer, company or team and investor into a single group that’s aligned and part of a community that cares about a certain artifact or a certain experience. And that’s all participating together. And part of the value of that web three project comes from the community that is able to accumulate.

FACEIT’s millions of loyal users make it valuable to advertisers interested in the esports community — but this is the company’s first advertising offering, and it approached the launch with an air of experimentation. “We need to do some A/B testing, in terms of what creatives work and what works for our audience,” said FACEIT commercial strategy lead Giulia Zecchini.

At the moment, FACEIT provides brands with a range of formats for in-platform ads, including overlaid videos and leaderboard banner ads placed at the bottom of the client. “It’s sticky, where the overlay and video have a very tested logic. The overlay is quite intrusive, and we don’t want to disrupt the user experience,” said FACEIT ad monetization product director Moritz Natalini, who FACEIT hired over from in-game advertising firm Bidstack. “We have created tracking that basically triggers the overlay only when the user comes back from X amount of inactivity. So, for instance, if the user has played a game and has been away from their window for more than three minutes, they come back and they have this prominent image.” (FACEIT declined to provide specific details about the pricing of its advertising product.)

Since FACEIT’s in-platform ads are simultaneously non-disruptive, but still integrated into users’ gaming experience, the company is confident that its new product will satisfy brands without disgruntling gamers. Visually, the overlaid video and banner ads are more or less traditional advertisements; brands are familiar with how they work, and they can be bought and sold programmatically. But “it’s a fully immersive experience,” Zecchini said. “When brands come to FACEIT, they can create these experiences where people are actively participating in a brand activity — they’re not just passively watching it.” 

With traditional ad formats embedded alongside a competitive gaming experience, FACEIT Ads represents a middle ground between traditional and in-game advertising. “That would be distractive advertising, not interruptive advertising — and that works,” said Frank Maggio, CEO of the experiential advertising technology firm React. “These people just got off of the rush of playing a game, and they’re getting geared up again for adrenaline.”

In addition to its in-platform ads, FACEIT is also starting to offer consulting services to brands in the gaming space, building more bespoke advertising experiences to create a brand-safe environment. “We can build fully branded gaming experiences,” Zecchini said. “We custom-made a Counter-Strike tournament for Red Bull, which is a two-on-two format, instead of five-on-five.”

The company is also taking the age-old debate of brand safety to heart. “There’s been some edits made to the game as well; instead of having realistic blood, it’s a little bit more futuristic, so that’s great for brands,” Zecchini added.

In addition to the upcoming Intel campaign, FACEIT Ads has already partnered with brands such as Visa and Express VPN — the former through a promotion that garnered 225 million impressions, according to internal figures cited by FACEIT. With gaming activity on the rise, the esports platform’s advertising offering could give brands an opportunity to reach competitive gamers where they stand, but without disrupting their gameplay.

“When I started at FACEIT, one of my goals was to make sure brands, agencies, the classic media buyer would know who FACEIT is, because it’s obviously new to the market,” Natalini said. “But actually, it was very simple. Everybody’s looking for the esports audience.”

This interview has been lightly edited for clarity.

How have you seen the workforce changes in terms of diversity, and how have you been working to change that?

Speaking honestly and frankly, the landscape of Merkel was predominantly white. Our executive team was predominately white and predominantly male. Dentsu has a public commitment to be 50-50, from an executive women standpoint, by the year 2025. And Merkle, as part of Dentsu, we are committed to that vision as well. We are on par to get to that goal by 2025. Because over the last couple of months, we’ve hired three executives women [Liz Rafferty, global chief people officer; Sarah Strassheim, global chief financial officer; and Sandra Swindle, global chief operating officer] in that role. I would be remiss to say we [don’t] have more work to do to have BIPOC representation at that level as well. We are working multiple angles. Not only from a recruiting standpoint to getting new talent in the door, but also recognizing the talent that’s already here as well.

It always seems to come full circle back to the talent-pipeline problem. How does the industry finally get past that?

We are diversifying the actual talent acquisition channels. We have partnerships with [The Association of Hispanic Professionals] Prospanica. We are inking a partnership with the National Black MBA Association [and HBCU Howard University]. We need to build and diversify the incoming talent at the top of the funnel. We also need to start tracking who’s getting a phone screen [interview], who’s getting an interview, who’s getting an offer, and who’s getting an actual callback.

Two is looking internally, identifying high-performing, high-potential women and people of color, and making sure we put our arms around them, creating programs right to elevate their voices. Once you invite these people into those programs, what happens next? The program ends and we need to continue to actually sponsor them. People are over-mentored, under-sponsored.

Define sponsor. What does that mean?

A sponsor is somebody that will advocate for you when you are not in the room. As people of color, women and other marginalized groups know, you’re typically not at that table. Having somebody that knows you well, could vouch for the work that you have done, they could advocate for you. That’s a true sponsor.

After the murder of George Floyd, there was a lot of talk about DE&I in the industry. Two years later, how is that holding up?

The attention in the industry has lulled a little bit. There’s a sense of fatigue in the machine. I call it the DE&I industrial complex. There was a lot of attention, but some folks have actually moved on. As chief diversity officers, we have to lean in and say this problem hasn’t changed from 2020, even 2021. There’s still a lot more work to do and how do we lean in as organizations? The good thing is that we are seeing clients now coming to us and saying we need to see a diverse team. If we continue to tie it to the work that we’re doing for our clients, and clients are asking us to show up in that way, that will continue the actual momentum going forward.

At least one brand didn’t move quickly enough.

Last week, the creative as well as the context of an Applebee’s ad placement, which used picture in picture to show the spot as well as the coverage simultaneously on CNN’s news coverage of the invasion was widely criticized. The brand apologized and paused its advertising on the network. Advertisers across networks, publishers and platforms are hastily pivoting there messaging to avoid being called out as callous — or worse. 

“We looked at all clients’ media from an organic and paid standpoint, assessed where media was running, and evaluated creative based on tone,” said one media buyer, who spoke on the condition of anonymity. “If anything could potentially be considered in poor taste if it showed up against world news or crises, we suggested swapping out creative or pausing altogether.” 

The buyer continued adding that “the situation is ever-evolving” so the agency is “planning for multi-scenarios in terms of media whether that means shifting or pausing.”

Advertisers are looking at advertising on platforms with user-generated content such as TikTok as well as news networks and publishers. Some advertisers have reshuffled content planned for TikTok to move away from posts that are too product-focused as there’s the possibility for consumers to question why the brand is so sales-oriented at this time to be more thoughtful, according to one ad exec, who added that it’s a delicate balance that has to be tended to very carefully in this moment. 

“What we’ve been seeing for most clients for TikTok as well as most social platforms is a pull back on advertising and ramped down on organic posting as well,” said the agency exec. “People are not interested in what brands have to say. It’s not a great time to get in front of people. Unless your brand has a concrete reason to say something it’s better to lay low for a while. Most brands have been following that advice.” 

When it comes to content on platforms like TikTok, some performance marketing execs are advising clients to take stock of ad campaigns and influencer efforts and to flag the agency with any concerns or questions; to expect big fluctuations in volume and degree of engagement as well as reporting; and to be on the lookout for disruptions in platforms analytics tools given the possibility of cyber disruptions.   

“We have to take a day-by-day approach,” said the ad exec. “The situation has been so fluid. Clearly this is not something that will stop in a day.”

3 Questions with Pinterest’s CMO Andréa Mallard

What does the growing creator economy mean for Pinterest’s marketing strategy? 

We want creators on Pinterest to find their people — not just those who like what they do, but who also do what they do. So we’re intentionally building experiences and features to encourage more meaningful engagement between creators and their communities. It’s not about mindlessly scrolling. We are making it easy for them to react to, build on, make and shop inspired ideas through new features like Idea Pins, Takes, and Pinterest TV. Our marketing strategy reflects that. Our message to Creators is simple: It’s different here. And we’re putting our money where our mouth is by directly rewarding and incentivizing Creators to create and share content that inspires community and participation vs. content that simply “gets a reaction.” Reactions are good — but action is better. We’re a brand about encouraging people to actively create a life they love, not just passively consume the lives of others.

With the uncertainty of Covid-19, how is Pinterest’s marketing team adapting?

The need for inspiration has only increased because of COVID, so our marketing team has been working as hard as ever. We turned our annual Global Ad Summit into a next-level digital experience (think television show, not webinar) called Pinterest Presents [on March 10]. We’ve learned how to shoot commercials in newly innovative (and completely COVID-safe ways), like using robotic, connected, Hollywood-quality cameras while the creatives literally art direct from thousands of miles away. And, of course, we’re getting scrappy by producing more creative in-house with our insanely talented team — we have the best writers, designers, videographers, animators and storytellers in the business who can produce incredible work in a matter of days if we have to act fast. COVID dramatically sharpened our collaboration skills; it didn’t diminish them.

What emerging advertising strategies are on tap for Pinterest this year?

We believe brands are most successful when they stop interrupting and start inspiring. So we’re teaching the world’s most inspirational brands how to produce genuinely useful, educational and unexpected content on Pinterest — not ads. 

Second, the number one thing our Pinners have asked for is the ability to easily buy all the amazing things they discover on Pinterest. So, we’ve dramatically increased the ways merchants can get discovered and people can truly enjoy the experience of browsing and shopping again. We want to inspire more shopping on Pinterest. From livestream shopping to using AR technology for beauty and home, we want to become the world’s most inspiring, most personalized shopping experience.

Lastly, you will continue to see us predict and define the trends to come, like “dopamine dressing” which is all about vibrant feel-good outfits like rainbow dressing and electric blue outfits. Because people turn to Pinterest to look forward and get ideas, we literally see the future first. For brands, this gives them an unparalleled chance to get in on the ground floor of a trend that’s going to be huge (not something that’s already nearly over). –– Kimeko McCoy

By the Numbers

Influencers have become an increasingly important part of strategy for marketers these days as shoppers’ trust in brands and advertising continue to wane. Influencer marketing is expected to grow as brands look for new ways to authentically engage with their consumers. But a new insights report from Adolescent Content, a Gen Z media company, reveals Gen Z shoppers are highly selective about which influencers and brands they choose to engage with. More from the report below:

• 29% of Gen Z respondents said they are concerned about how often influencers post ad content.
• Meanwhile, only 26% reportedly care about influencers posting curated content. 
• Just 8% of Gen Zers who responded to the survey strongly feel that brands understand their generation. –– Kimeko McCoy

Quote of the Week

“If you don’t absolutely need the money, wait… too many [ad tech companies] went out last year.”

–– Michael Barrett, CEO of publicly-traded SPP Magnite, on why ad tech companies shouldn’t rush to join in on public investment.

What We’ve Covered

• How advertisers are adapting to a more nuanced social media landscape.
• Inside Reddit’s plans to boost its ad presence in the U.K.
• Why Abercrombie & Fitch is focused on TikTok to reintroduce its brand to millennials, Gen-Z.