Decoder with Nilay Patel
How influencers are changing advertising with Digitas CEO Amy Lanzi
Thu, 17 Oct 2024
Today’s episode is a little different: Digitas CEO Amy Lanzi and I recorded this conversation live on stage during advertising week in New York City at an event graciously hosted by Adweek. I've actually been dying to talk to Amy. Digitas is one of the most important agencies in the entire advertising business with huge clients and massive influence over big platforms like Instagram and YouTube. After all, they're the ones buying the ads that keep all of those companies afloat. As you'd expect, she has a lot of thoughts about influencers, creators, AI, and everything that is going to change the advertising industry in the months and years to come. Links: Publicis Groupe acquires influencer-marketing giant Influential | Marketing Dive Epsilon has first Digital CDP to provide native omni-channel activation | Epsilon Stagwell is on the hunt for adtech as the ad company continues its acquisition spree | BI Emma Chamberlain Is the People’s Influencer | Allure Inside the World of Sephora Squad | Marketing Scoop Fanatics Launches Fanatics Live, a Next-Gen Live Commerce Platform | Fanatics There’s no AI without the cloud, says AWS CEO Adam Selipsky | The Verge A Google breakup is on the table, say DOJ lawyers | The Verge For Gen Z, TikTok Is the New Search Engine | The New York Times Credits: Decoder is a production of The Verge, and part of the Vox Media Podcast Network. Our producers are Kate Cox and Nick Statt. This episode was edited by Xander Adams. Our supervising producer is Liam James. The Decoder music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices
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Hello and welcome to Decoder. I'm Neil I. Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other products. Today, I'm talking to Digitas CEO Amy Lanzey, and you'll notice this episode is a little different. We recorded this conversation live on stage during Advertising Week in New York City at an event graciously hosted by Adweek magazine.
We've actually been dying to talk to Amy for quite a long time. Digitas is one of the most important agencies in the entire advertising business, with huge clients and massive influence over big platforms like Instagram and YouTube. After all, they're the ones buying the ads that keep all of those companies afloat.
Amy is really sharp on what value a company like Digitas brings to its clients and the role her company plays in the online ecosystem. But it seems very clear that all of that is changing rapidly as more and more ad dollars go directly to creators and influencers on those platforms instead of ad agencies and the platforms themselves. As you'd expect, Amy has a lot of thoughts about this.
Digitas is part of a huge holding company called Publicis Group, which just spent $500 million to acquire an influencer marketing agency called Influential. Amy was on the committee that made that deal, and you'll hear her explain how and why huge advertising companies are starting to automate and operationalize influencer and creator content.
The idea is to use AI to examine all of the content on the platform, find the right influencers reaching the right audiences, and use software to contract with them on sponsored content at scale. It's a big idea that's sweeping the advertising industry, and I wanted to know how Amy saw it all playing out in the months and years to come.
We also spent some time talking about a smaller question that no one seems to know the answer to. What is the difference between a creator and an influencer? Let me know if you know the answer. Okay, Digitas CEO Amy Lindsay, here we go. Amy Lanzi, you are the CEO of Digitas. Welcome to Decoder.
Thank you for having me.
I am very excited to talk to you. We are in a very intimate room at Adweek House in New York. And so I asked you earlier if I could do this a little differently than a normal episode of Decoder. A few weeks ago, I emailed Amy and I said, I have a number of questions about advertising. And she emailed me some great answers.
And then I was like, I should call Amy and do the rest of the reporting for the story I'm working on. And then the opportunity to do it live with an audience showed up. So I'm going to ask you the normal Decoder questions. about structure and decision making. And then I'm just gonna do some reporting about what on earth is going on in the media. And hopefully at the end of this, we will know.
Wonderful, it sounds good. I'm a little scared, but it's gonna be good, yes. All right, let's start with the basics.
For the Decoder audience, Digitas is a very important advertising agency. It's part of a larger holding company called Publicis. You recently changed the positioning of Digitas to be a network experience agency. So tell us what Digitas is and what on earth that means.
Yes, okay, so Digitas is an agency inside of Publicis Group. We are a modern marketing agency versus advertising, which is very important. Our value prop to our clients is around delivering networked experiences. What that means is how do we know more about them to earn the right in their own network? So that means the network of you, all the channels, all the places you spend time.
I need as a brand to be able to earn the right to be able to be part of your world. And then now I'm able to make loyal consumers and drive sales over time.
One of the things that I have been thinking about a lot is we have built The Verge over the past decade plus and we go try to find new audiences in other places is that I would say the story of the last decade is giving up distribution to big platforms.
And now it feels like that distribution is changing one more time as more and more creators and influencers do direct brand deals, as advertisers give, or as platforms give more and more tools to advertisers directly, as things like television start to have programmatic capabilities and connect to TV apps. How do you see all that distribution changing inside the concept of the network agency?
So to our North Star is following attention. So and that's pretty simple. When I say that to you, it means a lot when you're, you know, if you're working on a brand that's trying to get to Gen Z versus Generation Alpha, etc. And so we look at it as where should we be spending time to make authentic connections? for our brands.
So that could be on a social platform, that could be on Roblox, that could be on ad-supported Netflix now, right? It could be in all those different places. And it's really about using intelligence to be able to figure out, is this a place I'm spending time? Is it a way I can create loyalty? I can create loyal consumers and then ultimately drive sales, obviously. But that's how we think about it.
So it's an audience first mindset versus thinking about how you are investing in TV, which would be, I would say, the step change from the from to what you just sort of said. And the platforms really blur that world because how do you define who is a video partner? What does that mean? So that could be YouTube. That could be. So that's something we really think about is like the time and context.
So attention and context are the two things you have to think about to be able to earn your right into a consumer's network.
When you think about Digitas and how it's organized and Publicis, which is a larger company, One of the biggest stories, I think, of the internet media age is just scale. These platform companies have enormous scale. They have an enormous amount of data. They don't share the data between themselves. That's their moat. How do you work inside of that?
Do you have enough scale to go compete and get terms from the platforms?
So we are scaled, so this is important in the agency world. And we also have our own scaled data offering inside of our world, which is Epsilon, which allows us to see consumers everywhere, not just in one place.
So being able to do that, so using identity to be able to make the right audience first approaches is how you really start to lean into all these places that you can't necessarily see beyond their own walls. I don't like the term walled gardens, but that's what I'm talking about here.
So that allows us to have a different view so I can see you in all the different places and know more about you as a human, purchase behavior, etc. So that then sets me up to be able to understand how I should be interacting with you with context across the different platforms.
The reason I asked that question that way is I think the story of the past decade or so in advertising and marketing is roll-ups in the huge holding companies, right? You see the amount of consolidation that's happening. Digital house publicists, obviously the biggest of them all. Is that changing now, do you think? Is that scale that, let me ask this question that way.
I saw that as a reaction to the platform scale. we're gonna get scale over here because you're big so we have to be big. Now I see dozens, millions of independent creators and I wonder if the scale is as important.
So scale is important when it comes to product and services. So think of the things that we sell to service and network. The value prop of networked experiences is a mixture of productized services. So everything we deliver, let's say we're delivering you a CRM program, we're using our products, in this case it's Epsilon, for example, to be able to deliver that.
Epsilon is your data platform.
Is our data platform. So we have scaled products that enable us to compete with the platforms. Does that make sense? The way to get sale isn't hiring more, having a bigger agency.
It has to be an agency that knows how to use data and technology in service of the consumer to be able to then not compete, but I would say collaborate with the platforms and now the creators so that it's a much more equal conversation. Otherwise, you know, Digitas was born in 1980. At that time, it was just a people business, really. And it was built on the promise of direct marketing.
But that was humans talking about the promise of direct marketing and thinking about how you go direct to a household in mail, right? That was much of a human-based approach versus now you can't compete with Amazon. You have to work with them, but you have to bring your own data and your own tech to that conversation.
Yeah. Describe, let me ask you the decoder questions because I think this is an appropriate time. Describe the structure of Digitas, how you've run your group and how that connects to the structure of Publicis.
So let's start with the structure of Publicis. To your point on consolidation, we've done a really smart job in terms of how we've consolidated around this notion of product and scaled services. So we have a media pillar. We have Epsilon as its own pillar. Publicis Sapient for consulting is part of us. We have a creative pillar. And then there's the digital experience pillar.
Inside of that pillar is where Digitas sits. It's one of five agencies. Inside of Digitas, we are organized by a mixed-shirts matrix and we are organized by capabilities and business owners is the most simple way to say that. So we have a series of offices, there is a managing director that is in charge of the client book and making sure those clients have
governance, the best in class service, as well as we're bringing new things to them to drive their business. And then we have key capability leaders that are driving strategy, media, creative, CRM, and commerce. So those are the big five capability owners. And then they work as a team in a matrix or to be able to deliver those product type services to clients.
So if I show up at Publicis' front door and I'm like, I want to sell some stuff. I don't know how advertising works. I'm a reporter. It's very important. They keep me away from that side of the house. How do you pick between agencies inside of this giant holding company? Do you fight for clients inside the family?
We do not fight inside of the family, and that is unique to Publicis. Many of the other holdcos, I was at another one for a long time, they do that, and that's a different strategy. We do not. So what we do is we do two things. One, it's what is its client first? So if a client says, I need these set of things, all the agencies are not the same.
So which one is the best to service the client's needs? One. And that's an honest conversation. And for us, I'm ruthless about this. Because if you fake what you do, you won't win. So you're much better to be really honest about what you're great at and what you're not. And inside of Poulos' group, we're very clear on that. The second is managing on conflicts. So that's another thing.
So if it's an even capability, let's say that it is between agency one and two, then you're looking at the conflicts to figure out how we service that. But I would say one of the other things that's interesting in the market, and there's a lot of conversation at Adweek, is just the idea of building bespoke teams to service a matrix client and matrix needs and complex needs.
So that's something that our version of that is power of one. So we really end up being a key component of that, whether it's our data and analytics world or social world, etc. That's a compliment to another agency. So we're telling the client that's the very best thing to service their business.
And then obviously Pulisic has its own set of capabilities that I'm sure are shared between all of your agencies. What goes up and down? When do you say, okay, this needs to graduate to scale across all of our agencies versus we're going to pull this down and I'm going to take ownership of this?
So previous to, I'll explain through previous to Digitas, I was running the commerce practice for the group. That was my job. My job was to build the new space for the group, which was a commerce capability. First of all, what is that? How do we build it? What are the products? What's the service layer? What's the go-to-market?
So you build that at the center because none of the agencies really had a strong commerce capability. What does that mean? In this case, it was how do I have stronger investment strategies with Amazon? How do I have the tools and technology to be able to deliver the best sales outcome for any of a packaged goods brand, for example?
So that you build the capability in the center and then you start training the agencies and building that muscle into the agency. And then eventually you do one of two things. you acquire an agency to scale it, which we just did. We bought an agency called Mars United Commerce two weeks ago.
Or you then bake that capability into the agency and so now the agency can service that and use those products that are run at the center and then they're able to then build that into the actual value prop and the delivery model of the agency. So that's how a capability starts at the center and some things do stay in the center.
It's better to have certain media components that are all working together because those teams can learn new tech and move it faster into the agency or the delivery teams. But then there are things for Digitas in particular, and this is a unique place for Digitas within group, is we are inventors. Digitas is known for inventing and making.
So we make choices on the things we're going to make to push with clients that then are sort of new space. You were at our new front, right? We developed that because it was a white space in the market. So that's what we'll make that's really true to the value prop of Digitas and what clients expect from us.
then those things end up potentially being something that scales across the other agencies.
Do you ever keep anything from your sister agencies?
Yes, we do. Yes, we do. We have to. I mean, we do because it's new to us and we need to make the market for ourselves first. Part of it is also you're not going to take something and scale it on other clients either. And our clients come to us with that expectation. And it's also part of our IP. We are unicorns and that's part of our DNA.
This is the other decoder question, and I think it's going to lead into everything else. You have a lot of decisions to make. What you keep inside Digitoss, what you scale up. There's a big decision I want to ask you about, about what to acquire. What's your framework for making decisions?
So I'm so glad you asked me this. I was ready. This was the one question.
My entire show is LinkedIn paid. I just want to be very clear about this.
So when I joined Digitas, one of the things I noticed is that everyone talked about the culture of Digitas. It's fantastic. I said, great, tell me about it. What is the culture? Well, it's fantastic. It's everyone likes each other. It's really great. No one could articulate the words. And to me, a culture is important about the talent and the types of clients and the types of decisions you make.
So we reset our culture. We're fearless. We're inventive. We're generous. Unicorns love figs. You get it? And that is how we make decisions. So everything we do, we use that, right? So we say, is this making us more fearless, inventive, and generous? Are we bringing this, are we making decisions for our clients, for our talent?
Are these products going to be pushing the envelope that's required for us? So we use that very simple framework across people and product and pitches. That's how I think about applying that across the three things.
So the decision I want to ask you about the most, which I emailed you and asked you about this decision. In July, you were on the committee at Publicis that bought a giant influencer marketing company called Influential, which is not confusing at all.
Yes, good name, great name.
$500 million to buy influencer marketing capability. Tell me about that decision. Why go acquire an influencer marketing company?
So, so many of our, and this is a huge conversation in Adweek this week, want to figure out how to understand, tap into, and leverage the creator economy. It's growing and growing and growing, and everyone talks about it, but it's really hard because there are, There are 3.5 million creators we see inside of Influential globally, and we see 100 billion data points every day about these creators.
So when you get into trying to actually authentically leverage creators, you cannot do it without, like I said, a tech platform. to be able to quickly understand them, contract them, understand what are the rules of engagement, and to also keep up with them. And so you need to be able to have a tech approach to be able to do that. And so this was the main driver is one.
And now when you take that and you bring it into how we're investing in media, for example, and how paid and owned work together, you cannot do that without having a handle on creators. to think about how they fit in that mix and how we are working with them at scale. And I think the scale question is one. It's one thing if you have a couple of creators, it's manageable.
It's not when you're a global brand that wants to do this in a relevant way across markets. You need to have a tech platform and the data to be able to do it. That's the first. The second is, how do you then think about the rise of all the trends you might see to be able to then get smarter in media targeting?
So now you mine for those and you build the cohorts and then you find the creators that are more likely to be someone that is leaned into girl math, for example. Now I can find someone that's tuned into this girl math mindset and I can find them programmatically because we've put all these things together.
And the creator is really now that big connector that helps us have better insight and intel into our consumers.
So I just want to put this in context. This is a trend right now, these acquisitions of these influencer firms. WPP just bought three of them. Stagwell, which is Mark Penn's company, their product just appears to be acquisitions. They bought four in the past year. I don't know anything about advertising. I know enough about Mark Penn. What's differentiated between these?
How did you decide, OK, we're going to spend $500 million on influential?
The mix of their tech is the primary difference. Also the culture of the management committee with ours. That's really important. I've done a couple acquisitions for group and that's the most important. It's a people business. So if the culture doesn't match on the management team level to the culture of the group, it won't work.
But the main thing is looking at that technology and just the scale that they had and how it would work within our world is really, they were a standout and that's why it happened.
Let's talk about that technology. And this is really now, we're just in the heart of the reporting call. This is the thing that I have been thinking about the most recently. You say technology. OK, we influentialize API access to most of the big platforms. It can do visual recognition of a lot of the content on those platforms. It can see who's talking about what inside, say, the social videos.
Is that just more ad targeting? We want to go reach these consumers, so we're going to find the creators who are making work that reaches those consumers and make them do sponsored videos for us?
Maybe, could be. I mean, it depends on how brands want to leverage the technology. I mean, the clients we work with, it's more about how do you use creators and find the right creators to be in sub communities to be able to have an authentic connection because those brands won't survive over time.
So for us, it's about that our North Star of networked experiences and how we are able to deeply understand the creators and all those things more deeply to then help brands like a Sephora, for example, authentically show up in a way that is a systematic approach versus one-off creators and you kind of don't know exactly what happened if you don't have this type of intelligence.
We have to take a short break. We'll be right back.
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Welcome back. I'm talking to Amy Lanzi, CEO of Digitas Live on stage in New York City. We were just talking about the tech that goes into an influencer-based ad ecosystem. Now it's time to ask, what even is an influencer? This is the vergiest verge question I can possibly think of asking you. What is the difference between a creator and an influencer?
Well, it's a really good question. No one has a, like, to me, there are creators that are rising creators, right? That have, you know, nano created, they have a couple thousand or a hundred followers and they are like very important to certain cohorts or to communities. And then as they become more and more known, they then really, in my world, turn into influencers, right?
We didn't really need big influential when we were just looking for a couple of influencers. I will give an example, an old example, when I worked on a confectionery business and we were looking for mom bloggers, okay? That's old. This is old school, yeah. This is old school. Those were influencers. They were very influential in helping moms figure out lots of things.
So now influencers are, I think, is an overused term because it, to me, is someone that's a little bit more well-known. You might be able to find them. They might actually have someone that's representing them, for example, versus the creators that you follow on your For Your Page and I follow that we're not going to find unless we're deep inside of a tech system like influential.
So in your mind, the difference between the creator and the influencer is just scale, just scale of audience?
In my mind, yes. I mean, when we talk to clients and sort that, and they say we, and even clients, it's very open now, right? Everyone is saying, in fact, a lot of the creative pitches we have are really social pitches. They're just not calling them that. And sometimes they'll ask a PR agency because they're looking for influencers, but they're actually looking for creators.
But because it's through the PR lens, they're used to the influencer language. So for us, we talk to clients about like, what type of creator are you looking for? Is this a new person? Is it someone that's really deeply into a sub-community? Like this is a Croc story that's very important to them. Versus is it someone that, you know, look at Emma Chamberlain. She was a creator on YouTube.
And now she's more of an influencer. She is someone that's sponsored by a beauty brand. So she has gone through that sort of life cycle. So when we talk to clients, we're like, what are we doing with them first? And then that'll help you land which of those areas you sort. But this is, you know, it's a pretty gray area, to be honest, on the use of those words.
They're used interchangeably, I would say, in the market and with clients.
Yeah, I'm wondering if the creators are using them interchangeably, because I hear from creators who say things like, I am not an influencer. And I'm wondering if that's a sorting that's coming, whether there's going to be one class of creators on these platforms that has one set of rules and a class of influencers that has a different set of rules.
I don't know if that's going to shake out anytime soon, but it feels like it will come.
Interestingly, we did something with Crocs that is right in this, which is the social team found something that influencers made on YouTube in either 2006 or 2007, and some creators remade it. Okay, so just think about that. So I think, and it was an adage and whatever, but I think it's an interesting thing to look at the difference.
And I would say that there's probably some, so I don't know this, but there's probably something like, no, I'm not an influencer, I'm a creator. Which, you know, influencer also feels a little bit like you're maybe working for the man a little bit too, right? And just the lingua franca, but that's me. I don't know, I'm guessing. But I think your call is right. Well, you're the money.
What you think really matters.
Yes.
That's why I'm asking you. If you ask the YouTubers, they will tell you that money has nothing to do with what they make. But you are actually the money. And I'm wondering if you think there's more integration with influencers or less integration with creators.
I think there is, that's a really good question. I think there is more to be made with the more, slightly more scaled, sophisticated creator, maybe they call themselves an influencer, because brands now are now, they've tested the waters. And so you have a lot of pressure to have all this content. And they've tested the waters. And now it's like I have all these different creators.
And if you let it loose too much, what does your brand stand for? Because brands are the original creators. Brands make... content. Brands made soap operas, for example. They were creators. And marketing innovation said differently is creating content.
So I think as that becomes more of a need for brands to stand out as we have so much noise, I think there will be a little bit more of this, I need to have someone that's obviously authentic and important in a subculture, but also someone that I can count on and point to that has their own voice that feels right and authentic for the brand.
It's interesting that you brought up this split between PR and marketing. The reason I started thinking about this story and asking about this story is I found myself over the summer giving what can only be described as pep talks to comms people at big tech companies. And if you are a comms person at a big tech company asking me for a pep talk, I know something is wrong. Something is deeply wrong.
And what they were all saying is, We're all turning to influencers over and over and over again. And it's our marketing divisions that are getting the budgets because they can just pay for sponsorships to get exactly our message said the way we want to. And our comms and PR teams are shrinking. We can feel it coming, shrinking. Also, we're out of reporters.
I don't know if you've looked around the industry. Those seem to be pretty rare. That feels like a dangerous spiral, right? Everything is going to get bought. There will be no more media left to earn. There are markets for the big tech companies, in particular, there are markets where it is entirely pay to play.
They launch a new feature and you, in EMEA, you gotta just pay some influencers to ever talk about it. Does that worry you, that we're kind of chasing down this road where everything's pay to play?
It does, which to me makes me tip back to the influencers because the more pay to play that is, the more not authentic it is. And I look at everything we talked about our kids through the lens of my 11 year old who's gonna call that and say like, this is not authentic. And I think we have to think, consumers are in control, we always say this, they really are.
And they are also looking, brands need to protect what they stand for. Because if you play that out in the long term, and you don't have your proper comms plans, then what is the brand gonna stand for over time? Right? Especially in a world where there's so much content.
So you have to have something and you have to, it's not control, but you have to have your own authentic voice as a brand for a creator or an influencer to work. Otherwise, what are they talking about? Or what are you telling them to talk about if you haven't figured out what that is?
This, I think, connects with one of my criticisms of platforms. I'm curious if you feel the same way. If you ask Adam Asary at Instagram or Neil Mohn at YouTube, they will tell you. People want people. They want individuals. They don't want brands. They don't want institutions. They want people. It's all people. And my response to them is, you know you guys run the platforms, right?
I just imagine Mark Zuckerberg with a big knob that says virality on it. I've been doing this for a decade. I'm more and more convinced there's a big knob that says virality on it in his office. And it feels like they want it to be, the platforms want it to be individuals. They want to delegitimize institutions at whatever scale.
They want to make sure that they are constantly working with an army of 20-year-olds who might burn out, but they're an endlessly replenished army of 20-year-olds. And that makes it really hard to build anything sustaining anymore. Do you feel that same kind of underlying chaos, that the platforms want it to be a little bit unstable?
I think they want both, both. They want our ad dollars, to be clear. And they want brands' ad dollars. So one way to get at it is to make it about the individual that a brand is investing in that's a creator. That only works so much. So I think they want both, and they want to understand the balance of both.
But I think the experience doesn't come off that way because a lot of brands don't know how to balance the two. So you probably experience more of the individual piece, the individual experience versus actually how brands authentically show up in a way that breaks through. But they want both. The platforms, they kind of want the ad dollars. It's really important.
One of the other trends I see just across the board with creators in particular is the rev shares on the platforms. Just you're a YouTuber, you're going to get your AdSense rev share. That's gone down over time. They're making less money just showing up in publishing content. So they're having to turn to brand dollars. They're having to turn to sponsorships.
I always joke that you can tell when a YouTuber is about to get their wings because they make a video about how pissed they are at YouTube. And it's like, oh, you grew up. You graduated today. We're going to throw a party. And then they figure out whatever the next thing they're going to do to make the revenue and manage the chaos of YouTube.
Do you see that as an opportunity for you to say, OK, all these creators, they can't trust the platforms. They are learning they can't trust the platforms. Maybe we can be a more stable component of their revenue mix?
We see it in two ways. For me, when we say this inside of Digitas, at some point Mr. Beast needed an agency. So how do we become the agency of the YouTube creator that now grows up, right? He has an incredible set of products, et cetera. So there's one thing in terms of these businesses These creators actually could be new clients of ours. That's one way to think about it.
I think the other thing is, especially with brands, like I mentioned Sephora, that are very committed to beauty for all and diversity and inclusion, especially when it comes to beauty, that are building collabs with these creators. So it's a more cooperative engagement.
And brands that are doing that are really overcoming some of the things that may turn them off completely from the model on YouTube, for example. I think some of the things that are happening on TikTok shop is also really interesting in terms of how now expensive it's gotten. It used to be free. Now it's gotten very expensive to sell things on TikTok, which we knew was going to come.
And so I think that's another thing that's going to also say like some new brands or creators that are now selling their own products in that way are now going to really rethink that model because you just can't afford it.
Do you ever open TikTok or Instagram and hit the one video in the feed that's basically just low-rent QVC and think, what the fuck is going on? Yes.
Well, I do. And I have to say, because I work on so many pitches, my whole situation is they're like, does she like cats? You don't have like a burner with a protected algorithm? No, I wish. So, like, my For You page is a little bit of a mess. But, yeah, there are some things that you see that, you know, live shopping, you're like, what's happening? Who is watching this?
And, you know, what's happening here? But people are watching it. We just, again, this is like the sub-community component that if you get it right, we actually just had an interesting conversation today with Fanatics and Fanatics Live. Yeah. And it's incredible the people that are collectors that log on at 11 a.m. to watch this one person, Andy and Joe, that are selling a $4,000 collectible card.
And you see it. And there's about 2,000 people on at 11 o'clock. And we just had that meeting today, which is wild. So there are people that want it because it's about attention. And now you can get as precise as that very specific moment. So when I see them, I say, what is this? And somebody's watching this.
And this is fascinating as a curious marketer, how you understand this and you authentically show up.
I hear that and I just think work from home was a mistake. That's fine. It strikes me that all these big influencer marketing company acquisitions, the shake out in the market, you're looking at a very powerful tool that did not have a lot of pricing data in it. It did not have a lot of consistency in it. It didn't have just a lot of people repeat making deals.
gaining information and experience in it. And now you've bought a big company, there's a bunch of other big companies, and a lot of stuff is going to get normalized and sorted out in models. And it feels like maybe a bunch of pricing chaos is going to result in a crash in prices, right?
That this might be a bubble because there's no information and we're going to all learn a bunch of ROI information and prices are going to come way down. I've heard this danger from creators. People are worried about it. Do you feel the same way?
I think, like anything, the market normalizes to where it should be. I think that's fair. And I would say that we've talked about this in terms of just the search market. Look how much that's transformed. So, yeah, I think that what I am more forecasting is clients...
seeing especially when it comes to the creator space that have rushed into it and sort of decoupled from more traditional marketing things let's just call it that for now that have created a lot of chaos for their brand in the market that they're now wondering wait is this actually helping me sell more shampoo
Is this really helping me build my brand, build loyal customers, and grow my fair share over time? And so I think there will be a little bit of a ruthless look at some of these things. And it's like anything in marketing. There's a big trend. Everyone rushes into it. And then you look back and say, did this sell the one more thing, which is how we view it?
So I would imagine that there's a lot of energy and there's just only so much time. So the more creators that are here, there's diminishing returns on that.
Before we started, Amy asked me about memorable Decoder interviews and asking the CEO of AWS why he advertises in the airport. Surprisingly spiky. Did not know the answer to that question. This all started because a few weeks ago I asked you about the rise of creators as creative directors. And in particular, I see small brands who are very worried about selling one more thing.
It's all they think about, saying, why hire an agency? Why hire the overhead that can just rush into a trend? I'm just going to hire the creators directly. They'll do all my work for me. They'll sell the thing. I'll give them some equity. We're all going to win together. I see this more and more, especially small tech brands love to do this. Do you think that's a durable long-term trend?
That has been going on for a while, especially with the birth of DTC brands when that was a thing, like when Casper was born. There also were a number of agencies that were born just like that, where they had certain creators, like creatives, not creators, that also had a piece of equity, and that was a new agency model.
I do think that that is a continued trend now, but now it's about having these creators versus creatives on staff or taking these things in-house because they wanna be closer to performance. But I also know that at some point these brands need to grow up and they need to do things to drive shareholder value and do really big things in the market. And that's typically when they come to us.
So it's not about winning in paid social, which is what a lot of them are worried, how do I sell the one more thing on Instagram and all dollars go there. But as they become more aggressive, there's more PE, whatever it is, they tend to then come seeking support that's more to get them to that next phase of growth.
That feels like a graduation point, right? You're saying, okay, you run a small company, maybe you start a direct consumer. You're gonna go pursue a direct sales model. Maybe you'll hire one or two influencers to help you out. At some point you're gonna scale and you're gonna need a big agency. What's the moment? When can you tell that that moment has arrived?
If they take another round of funding, that's one. And those are interesting ones, that's definite. Second, if they are now moving, let's just use the DDC thread, if they're suddenly, they were only selling direct and now they're selling it wholesale, and that's more complex to figure out how am I selling on my own channels and now how am I selling at Walmart or Target or whatever.
And so now they need more content, they need more support, they also need people that have an outside-in perspective that haven't grown up in that org. So those are the two signals, I would say, or if there's just immense pressure on that category, Casper is one of those.
They looked for an agency because they were doing all these things in-house so that they need to really sort of change the game to be able to get to that next growth path.
You mentioned MrBeast. There's, I would say, a category of creators who have transcended the platforms. They've transcended the algorithm. MrBeast, I think he said he made Feastables because no one could afford his ads. So he might as well sell energy bars. This trend of digital creators, No longer shipping bits, but choosing to ship food items seems bananas to me.
Like if you can sell software, you should sell software. You should not sell bottled water, which is what the Paul brothers are doing. That feels like, okay, their ad rates are so high, it is more effective for them to literally ship water around the world than to accept one more brand deal. That feels deeply unsustainable to me. But it is a trend that I see over and over and over again.
What do you think is driving that? That their rates are just so high? Or is it that big brands don't want to pay the numbers that it takes to sponsor Mr. Beast for data? I think, well... Or the return isn't there, I should say.
Is the question more about why are brands not investing there? Or is it more, why did Mr. Beast want to get into this space? Which is the question.
Well, I think it's both.
I'll pull them apart a little more.
They all want to diversify. They're all getting old. I'm getting old. You're graying the beard now. I'm not.
We're all 29. That's great.
We're all going to be YouTubers forever. But they all know they can't do it forever. It's demanding. It does burn them out. So I think everybody wants something more durable than that, something that will outlast them. A bottle of water might outlast you. But then, in particular, what I see is their rates, the sponsorship rates for the biggest YouTubers are so high
that brands won't come to them anymore. And so they're saying, well, I can just take my influencer power and use it to market my own brand. And I will just, I'll pocket the margin, even though I'm selling some of the lowest margin products in consumer goods history, which is crazy to me. And that equation seems like at some point we'll no longer like balance out.
It won't, it's not, I understand the question now. It's not, I think it's a little bit of the, this has always happened. We've always seen stars create their beauty, for example, or a brand like Fabletics, for example. This is a model, we used to call it licensing, we just don't call it it anymore.
It's now a, someone like Mr. Beast that's decided to launch products, but it basically is licensing 3.0, if you think about it. And so it can't happen unless you have the right distribution model. So if they don't have that set up, at some point, everyone has to have the hard conversation when they get out of the direct model and they need to scale and they're now selling at those big retailers.
you're competing with everyone that has gigantic sales teams that goes in to talk to CVS or Walmart or whatever it is, that is unsustainable for them to keep up the momentum, drive enough innovation. At some point, it'll be too expensive. So that's one. And I think part of it is, yes, it's expensive to sponsor.
And also, I think, again, as brands need to figure out, there's no more money for brands. So if you are a YouTuber that suddenly becomes very expensive, there's a lot of other places you can spend money. That just doesn't make sense long term. So I can also spend my dollars elsewhere.
But I also think there's a little bit of, like, this is graduating as a YouTuber, for example, that you now have your own product line. Yeah. It's an ego thing, I think, too. I agree. Because there's a whole cottage industry that's wanting to get to this group that wants to sell them some new beauty line or whatever and convincing them that they can carry this.
I've been trying to come up with a fake vodka for years. If anybody wants to help me, my ego is not healthy enough. Let me ask you about the pressure from the other side. The idea that a small brand can go to a creator and they will just basically talk about their brand and be their creative director, fine. On some small scale, that's fine.
Maybe they'll graduate and they'll come higher at Digitas. On the other side, you have the giant platforms saying, you know what? Give us your creative. We'll use AI. We'll generate infinite targeted video ads using your creative. One for every person who might see it. And that'll be how it goes. That's just the future of TikTok. Smart Plus announced this week, right? AI-generated ads on TikTok.
On the one hand, I think, well, that won't work. And on the other hand, I think, well, money is going to chase that idea because it seems really compelling in one particular way. Is Digitas going to do AI-generated advertising in this way? Do you think the platform's basically promising they will make infinite creative for brands is a real threat?
I think Any promise of infinite content that seems like it's right and authentic is a threat in general to brands as well as to the health of agencies. It sounds fantastic. I would say that in the market right now, even brands still have barely figured out how to just do DCO. So it sounds amazing to think about that offer, but it also comes with a lot of risk.
So we, Digitas, we built our own AI platform. We have, in partnership with Sapient, we have a solution that has been, the group has invested quite a bit here to have both an enterprise solution. So how do you design an enterprise approach for a CMO or a CTO so they can think about bringing AI into the way of working on that side? So you're not dependent on the platforms.
You need to be coming with your own set of content to be able to do that and your own systematic approach to it because it opens up a ton of risk. So I don't, in a world where brand safety is really important and with your example of someone turning a knob, I think this becomes a really interesting space to just say, sure, we'll give you all of our assets and go crazy and do that.
This is about, because it's about brand safety. So it used to be just about, okay, how do I make sure what's happening here is not placed against something that is unsafe for the consumer and not right for the brand? Now you've made double of that, which I think is a really interesting space when you listen to the promise of this. But it is something that we are
we're looking at saying like we all need to be able to use tools, AI tools, to be able to come up with more content. There's no question. There's no debate. We need more content. We need to feed all the feeds with content. But we also need to be able to do it in a way that's sustainable, that is also maintaining the integrity of that brand. And so how do you do that?
I don't know if I would just give all of my assets to any of those platforms.
More content is a really interesting idea. If you look at all the big platforms and their AI ideas, one, they are all chasing AI video generation because they want to do exactly this, infinite targeted creative, and you need AI video generation for that. But then you look at the big creator platforms, and they're saying to creators, YouTube is saying, hey, we'll do AI-powered chat for you.
So your audience can talk to you and an AI version of you will talk back to them. Meta just announced the same essential idea for creators on Instagram. Is more good? I feel like at some point, the need to pump every platform full of content all the time will just make people turn away and seek something a little more carefully considered.
I'm hoping that because I'm very insistently still just one person. I get to clone myself into 1,000 Zoom avatars, which is a real thing the CEO of Zoom proposed on my show. And it feels like that would be an opportunity for, for example, journalism to continue existing. And yet the demand is for more. It's always for more. Do you see that coming back at all?
I definitely think that we are, I mean, in the market now, there is a demand for real life, right? We're seeing the rise of experiential. We're seeing the rise of sports. Consumers really wanna be in like connected moments. And so to me, that's less content, right? We're talking about attention and time.
So if you are actively watching this rule or whatever that thing is, or you're going to a concert or living your life, you're not scrolling and consuming all of this content. So I think we are seeing a definite change in that for sure. And I am very hopeful as well because I don't have that much time either. And I also don't want that for future generations that that's all they're doing.
But I do think there's the continued transformations from all of these platforms that no matter where you're choosing to spend your time, you need new types of content to be there. So if you, you know, my son is, you know, a gamer. So like, how do you show up on Brawl Stars? That's a whole new content. That's a whole new set of thing that has to be contextually relevant.
It has to feel right that someone is making while someone is over here playing Monopoly Go. See what I mean? So there's so many other interfaces now that, of course, we're going to need more content types. But I hope that doesn't mean everyone is consuming more content. That's their whole life.
We have to take another short break. We'll be back in a minute.
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Welcome back. I'm talking to Digita's CEO, Amy Lanzi. That was all the opening I needed to talk about the fun and creative side of advertising, which really does exist to drive attention. You talked about differentiation in games there. Let me ask you about the fun side of advertising, the creative side.
I see a lot of platforms algorithmically pushing everything towards the same look, the same feel, the same formats. It feels like we've lost a lot of creative differentiation through the algorithmic platform era. Advertising is not standing out. Are your creatives frustrated? Are they worried that they're being asked to kind of make the same stuff expressed in 50 different platforms?
Our creatives I think are, they like the way they've been able to get to new, they like telling stories. So I think I would think about how the opportunity is to actually tell authentic stories, whether you're partnering with a creator or you have an incredible brand and you're creating fantastic stories to put into the market, because that's what consumers expect from brands.
So they think about that opportunity as one. I think the second is also using some of the different tools we have to help our creatives come up with different territories, like traditional how you do pitches. that they can use all of our AI tools to come up with territories you wouldn't have thought of that then inspire these unique stories.
It's a little bit of what we talked about in the new front around the stories that brands, and it's a human, there's a human part of this. So there's actually, I think, a little bit more of a fierce protectiveness of the creative process. But we also need to be using and harnessing creators or these new products to be able to push the boundaries of what it means to tell stories.
I don't feel as much that, I don't hear as much, I'm worried that everything is just going to be shoved into the feed and it's all going to look exactly the same. That's not something that I hear our creatives worried about, but it is something to worry about because if everything is a sea of sameness, no brands break out of that. So over time, it just erodes everything.
The flip side of that is when you use a platform like Influential, you go contract a bunch of creators. The thing creators say to me about what makes a sponsorship work is they've got to let go. The brands have to let go. They've got to let me do my thing. I've got to be authentic. How do you balance that?
You have in-house creatives who are beholden to a client, and then you are using Influential to contract creators who are saying, actually, you can't tell me what to do.
It's again, it gets back to the creators also want to make sure that they're connected to brands that that makes sense to them. So creatives are the ones that create the story around a brand and what that brand means and how that then enables a creator to be able to have a I call it like a freedom in a framework to be able to do things that feels right for Brand X.
They wouldn't be doing that if it was just some random brand. There is that matchmaking that happens, and so I look at creatives, and this is what we were emailing about, is they're able to think about the timeless part of this brand, what it means, what you matter, what do you stand for, what are you known for, and then that enables the creators to be able to play in that space.
It gives them the right playground. Because then they're able to understand how they should, because otherwise it's completely not authentic. And then I think that's a risk for them in the market that, you know, someone like my daughter who's, you know, a sophomore in college won't follow them anymore.
All right. We got to wrap up, but I just want to do a very quick lightning round with you. Yes. And ask you about platforms. Okay. Your favorite.
Yes.
Because they want your money, I've been told.
Yes.
So let's just go through them. Google, in a fair bit of trouble lately. Don't know if you've noticed, our nation's Justice Department is taking quite a lot of interest in them. They might get broken up. That was proposed this week. The ad tech trial is ongoing. Do you see any change in your relationship to Google? Do you see any pricing changes in how you think about search?
We, some of those things I can't talk about, but no, I mean, again, because we start, yeah, we start with, you know, search is fascinating and the search bar sort of tells lots of things. So we think about like, what is the right strategy for search and where do you spend that money?
I would say, you know, a lot of the times it's less on Google and more on TikTok because that's where actually searches are starting. more so than other, or other platforms for that matter.
But I don't, we're not seeing our relation, it's just not really talked about, honestly, with like in the way we engage with them on how brands are thinking about showing up with Google today because it's sort of over there. It's the same thing with TikTok. Like we don't get into that. We just don't get into it with them.
If they pull apart that ad tech monopoly, is that good or bad for you?
I mean, I think it's better because I think more choices are better. And I think what's right for the consumer, if consumers start doing different things, I think it's better to be able to have more choices instead of feeling like there's this one giant machine that feeds everything. I think it's better.
All right. That's Google. You mentioned TikTok. Equally chaotic in different ways. May not exist this time next year. How are you advising clients to invest or think about TikTok?
So to me, TikTok is an entertainment channel. And it's important to think about how you are, you know, showing up as a brand that entertains and how you're also, you know, right now, how are you thinking about TikTok? As I think it's like the 12th largest retailer right now with TikTok, as I mentioned, TikTok shops. How are you thinking about the behavior?
What does it tell you in terms of how you should be perhaps thinking about your own channel? We kind of... say that it's a place you have to be to be culturally relevant in there, but also like, what can you learn now? Because we don't know what's going to happen.
Are you advising people that this is a short-term bet, you gotta get what you can out of it now and walk?
No, we don't advise on what's gonna happen next, it's more about what should we be doing now, because we don't know. We don't talk about that.
You'll notice the answer to every platform question, that's why I shouldn't talk about it. Instagram, I hear from creators all the time, Instagram has the greatest reach, is the most culturally relevant, pays the worst rates, just on a creator basis, so that's why sponsorships are tremendously important in terms of Instagram. How do you guys deal with Instagram? What's the relationship there?
I mean, we have a great relationship in general. I think, again, for most of our brands, it's about how they're showing up and how they're relevant there. And then the role of the creators. It's less about that conversation. It's more about what is the right way to be contextually relevant on Instagram to either drive a purchase or drive brand love, honestly.
We tend to not necessarily get into that conversation in terms of you know, some creators you can't get to because of the pay model. But, you know, I don't, I could potentially see a time where there are certain creators that like, if they show up, that this is the one we have to, that is a must win. And what does that look like? And how does that brand feel about that?
Because it's important now for brands to think about how the platforms are treating them and the investment model. Because, you know, at the end of the day, that's not going to sell more shampoo.
What sells the most shampoo? Is it Instagram or TikTok? TikTok.
Well, it's both because people do different things.
You got to pick one.
I have to pick one? Yeah.
Which moves the most?
Instagram sells more things. Okay. Because TikTok shops is so new.
Okay. This was all just a lead up to ask you about X. How do you feel about X today?
You know, I don't have a feeling on X, to be honest.
Do you advise your clients to spend on it?
We are very careful on how they should be spending and does it right for the brand itself and understanding the risk reward. I think brand safety is a thing there. There's a lot of changes there. And so for brands, we talk about like, is this right for your brand? And what does that mean for you? And we're very clear on that.
But I would say that honestly, a lot of our clients don't spend as much, their audience isn't necessarily spending that much time, at least the brands I work with. So it's much more of the conversation about TikTok versus Instagram,
also Amazon, like that sort of space, and how you should be investing your dollars, or on connected TV, less so on X in that role, just for the brands that I work with.
Back when X was on Twitter, and it was still a bad business, but it had less Nazis. Less, I didn't say none. The reason people bought there was live and relevancy and immediacy. Has any platform filled that void? Has Threads filled that void for anyone? That was a big head shake. I don't think so.
I don't. I feel like that, you know, for me, you could see it coming to life actually during some of the recent debates. And like what happened before versus what's happening now, I think is a completely different experience. And I think for brands that really want to be part of a live experience, they're actually investing to be like actually buying a TV spot on the Super Bowl to be part of it.
But it feels very different. I don't think that void has been filled. Yeah.
All right. Well, we got to get out of here. Amy, thank you so much for this conversation. I really appreciate it.
Yeah. Thanks for having me.
I'd like to thank Amy Lanzi for taking the time to join me on Decoder. Thank my friends at Adweek for hosting us. And thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about this episode or really anything else at all, please drop us a line. You can email us at decoderattheverge.com. We really do read all the emails. Or hit me up directly on threads.
I'm at reckless1280. We also have a TikTok. Check it out. It's at decoderpod. It's a lot of fun. If you like Decoder, please share it with your friends and subscribe wherever you get your podcasts. Decoder is a production of The Verge and part of the Vox Media Podcast Network. Our producers are Kate Cox and Nick Statt. This episode was edited by Xander Adams.
Our supervising producer is Liam James. Decoder music is by Breakmaster Cylinder. We'll see you next time.
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