Take Back the Customer: Social Commerce in 2019

Welcome back at Landia twenty nineteen. Happy New year. So today we are starting off our year kicking it with one of the smartest people in the industry, Rachel Typograph. She's back on the show. She is the founder and CEO of Micmac. Really excited to hear about what she sees happening in the social commerce space. And I think everybody's been asking question, is everything that's been happening with Facebook going to affect my business? Is it gonna actually

make an impact? It has in the media space. We know that on the publisher side, but is it really going to impact brand? Are they willing to think about potentially moving spend off the platform as a result? Will be interesting to see as somebody who's built her business around that model, Like has the bottom line been affected or will it be? Or will it be? And I think one thing that you and I have talked about, Laura, that we're super interested in is is there another platform?

Is there another platform? Maybe that's not going to take the place of Facebook, but do we enter into maybe a more disintermediated world of social media. Is that happening or is it the fact that we have big companies now merging and acquiring other platforms to create massive entities that may be able to compete with the Facebooks and the Googles of the world. And you're implying with legacy companies,

which act is very interesting. So we will be right back with Rachel Typograph and we're back in the studio with our first episode of with Rachel Typograph, founder and CEO of mic Mac. Rachel, welcome back to the show. Hi, Rachel, Hey, excited to be back. So, Rachel, we couldn't think of anyone else to kind of kick off for us. One start with who is mic mac? What have you done and where have you kind of gone from? So mic mac is the e commerce platform for social video and beyond.

Our business is broken into two parts. We call our software micmac Attached in its simplest form, it's a vertical video product details page that can connect to any e commerce card, so it could be d t C or third party retailer like an Amazon, Target or Walmart. And then we have a second part of the business, which is called micmac Studios. It's our creative service arm. We're

literally all day long. We only do two things. We either optimize existing assets to get people to hit add to cart, or we create original content from the ground up that gets people to hit add to cart. Obviously, so much has happened since, both within the social space, obviously advances in technology, more around trust and transparency. How has the business evolved to be honest? Um, we're on fire. Last year was the craziest year of my life. Professionally.

Our business grew and the reason being is that all trends point to mcmac. The reason I say that is because we live in a world now. We're fundamentally everything that I've been preaching people finally understand, which is if you give up your first party data, you give up your brand. And the way that you capture your first party today to today is via direct response, Performance Marketing, and e com and we literally sit at the nexus

of that. You know, the business has grown three and we're working with partners like Bows, Campbell's Essay, lauder Craft, Glauria Levi's Mattel, PNG, under Armour, Unilever. I could literally go on and on um And the reason why we're signing all of these brands is that a major evolution in our products since we spoke last is our integrations

with third party retailer cards. So when we spoke in November two tho seventeen, my business was primarily focused on working with direct consumer brands, and I began to take this very contrarian point of view in the market, which is personally, I don't believe we're going to live in a world where you go to paper towels dot Com to buy your paper towels and deodorant dot Com to

buy your deodorant. And as I saw the entire media landscape and overall retail landscape applaud every single director consumer brand that came to market, I go, there's gonna be a point of saturation where there's too many of these brands in market. Cost for customer acquisition is going to get too high, and the pendulum is going to swing

the other way. And I felt like the company that was going to win in the landscape would be the one that could take all the principles of direct to consumer brands and apply it to third party retailer environments. And that's when I began to integrate with Amazon, Target, Walmart, Alta, Sephora, best Buy, Exporting Goods, pet Co, and my business changed overnight because the majority of the COM sales today actually still come from those major third party retailers that I

just went through. And when you're a brand and you are driving traffic to those environments, you literally only know three things impressions, click, curate in your overall sales. You don't know anything that happens after that click or after

that swipe up with us. You now know everything. So we get these brands that more often than not have been these legacy brands that are heavily reliant on third party retailers to drive the line share of their eCOM sales, and we get them to act more likely to see brands, meaning they now know the entire customer journey, they understand the media channel effectiveness, they can measure influencer effectiveness, they can measure creative effectiveness, they can capture all of that

data in their d MP or their CRM, and that has been a huge, huge turning point for our business. And the other part of that, which is directly related is the evolution of our audience product. So we call it the micmac Engager audience, and what we have found with nearly all of our clients is that it's actually become either the top performing or within the top three most effective audience within their ad managers. Going back to like this example of like a c retailers, you drive

traffic to an environment like Amazon. The moment someone arrives at Amazon product detail page, you've completely lost that audience. Because our software replaces that product detail page, we now can collect that audience. We collect that audience on behalf the brand, and we pass it directly back to them to live within their preferred ad manager, meaning for literally the first time ever, they can go retarget that audience to close the sale. They can use that audience within

their future prospecting media. So that's one of the major differences between brands that are heavily reliant on third party retailers and DD C brands right, because the moment a D two C brand acquires a customer, they now own that customer. And the high pothesis is the next time that they go remarket to them, their overall cost for customer acquisition should be lower and their effectiveness therefore effectiveness is much higher. Correct some of the portfolio companies, they've

gone all in. It's literally the end all be all. If you talk to the CMO any brand marketer, it's a part of their daily lexicon. And then there are other portfolio companies where you're just overall concerned for their future because they're not talking that way. What are they talking about? If they're not talking about this, what are they talking about? I would say it's all over the map, But there are certain categories that I absolutely feel are

more standout than others. So, I mean, the beauty brands are all over it. I would say they're the most progressive of you know, the overall legacy brands UM, and then after beauty, uh, you know, consumer electronics, apparel and footwear. They're definitely ahead of the races, and I'd say we're it's more of a lad But this is one of my big best for two thousand nineteen are people who

are within the food in BEV overall grocery category. I think you're gonna you're gonna see people make leaps this year. I'm very very bullish on grocery, but it's very new to them from a customer standpoint. Within grocery, especially with like perishables, we're all becoming a lot more comfortable never touching our food before we buy it. So that's more of like a societal evolution and combined with more plays

within the on demand commerce space. Meeting Yah, I buy melons in the morning and by the time I get home from works at my door. Is why I'm getting very very excited about grocery and two thousand nineteen for brands to have a different relationship in grocery, that category

is where things start getting really interesting. And also to me is the opportunity where brands can start working with when you talk about bundling, thinking about bundling in a different way, right um, where brands can work together, where there can be new products actually created with shared kind

of I P or shared data. And you're starting to see a lot of the portfolio companies think that way, like the brands of these organizations have been mostly siloed, and they're absolutely coming together for bigger portfolio plays right now. You started really focusing on DTC brands. You spent a

ton of time last year with big legacy brands. Who are you going to put your money on in terms of really being competitive and being able to push this new mindset but also new practices kind of into the industry, they're all becoming one of the same. Meaning, if you walk into Target today, you are beginning to see all of the Darling direct to consumer brands available on the

shelves of targets. And the reason being is that one of the tradeoffs with D two C is that you begin to experience limited reach and growing costs per customer acquisition, and if you want to be able to increase your reach, you end up on the shelves of Target, and the moment you do that, you are no different than the legacy brands that you were trying to cut out from

their market share. So we're starting to get a lot of inquiries from all of those brands because they're like, wait a second, we've now given up all of our first party data. How can we begin to reown that and that's been really interesting, and I would say I've experienced more and more that over the last six months. So there's definitely a big undercurrent happening. And with the

legacy brands, so they had that massive distribution. But three reality is, you know, performance marketing and producing creative that converts. It's totally new to them. So the amount of education that we need to invest, both on the brand side as well as the agency side that services these brands is enormous. What you're not saying is that brand is less important. You're actually saying brand is actually more important as a function to pull through to sale. Oh I

am the biggest, biggest, biggest pertonent of brand. UM. Brand will lower your cost for customer acquisition. Brand will increase your recall. UM it is the end all be all at and in both situations, you're going to need to do both. Like there's there's literally no director consumer brand that will not have a wholesale play at some point

in their company's tractorate. One of the things that I love about you is that you don't just talk to talk, you walk the walk and inen you developed mic mac Academy is that the name and the purpose of that was to actually go out and educate brands about the use of an implications of working in the social commerce space. What led you to create that? I decided to productize the educational arm of what we do for a few reasons. One is I love it um. It's honestly what energizes me.

It's one of the favorite parts of what I do at Mick mac Um. Two is there's a major skill gap. And it's interesting because I personally do not feel any of this is rocket science. It's more about access. And if you've been put in a job where you never were encouraged to go inside of Facebook ad manager and start buying ads and experimenting and see how it works, then you live in the darkness. And what we try to do here at mic mac is explained to everyone.

This isn't rocket science. We're going to teach you the core principles. We're going to sit with you while you navigate this new world and allow you to begin to understand, uh the effectiveness of the partners that you're working with, including me. Right. So, the more I educate the client, we're just raising the standards for everyone who's involved. And

what is the skill gap? Because Alex and I talked quite a bit about the talent and the need to integrate skill sets that weren't previously needed, let alone train for right. So, what are the things that you're seeing that the industry needs to be aware of and begin to implement? Probably yesterday, I think so over simplify it, uh, just within like you know, the world that I primarily touch.

Most of these brands, these legacy brands that are readily available at third party retailers, they've been producing creative and buying media the same way since you know, the dawn of television, which is that the majority of their focus has been on awareness. So spray and pray. Let's make sure every person under the sun understand what our product is. Secondly, let's produce creative that can communicate this mass message more often than not through the lens of television. It doesn't

work online. And what I constantly explain to our partners is that there's really just three things that I want you to think about. Campaign objectives, niche, audience targeting, and creative formats. And so when we sit down with legacy brands, one of the first things that we have to do is convince them that a portion of their media cannot be bought against awareness, It actually has to be bought

against more bottom of the funnel conversion metrics. The second thing is helping them leverage perhaps internal audience data that they already have within an existing CRM, or start to develop niche audiences that they can use in their ad Tiger day. And then the third is producing creative that is literally designed to get people to add to cart, which is a totally different creative muscle. So to boil down what's missing is honestly just an understanding of what

works within performance marketing. I know that MAC advises and works on production as well. Are there agencies that you've been particularly impressed with in the performance space, that is that are actually creating great creative that pulls through to sale. I mean, there are great agencies that we work within performance, but they're mostly focused on media. Um, what we have found to be the most effective creative teams are the

internal creative teams. They run with the creative best practices, there's less ego involved, and they personally are accountable for sales. This is a huge white space for an agency. You've and I actually think a really great, really great b Two B talent needs to come over into this space, and I don't know if it's come over. It's like they're there, but people aren't thinking about them like this because they're in the the you know, the B two B world is kind of gone. It's like over on

the side. So that's what we do right at MCMAC Studios, but in complete transparency, Like I don't make money from mcmac studios. MICMAC Studios is an enabler for my software and the reason why is that the content space is so competitive that content has become commoditized and it is very, very very hard to make big margins on content. I mean, we saw it in the media landscape this year. Digital

publishers like so uh, it's it's a hard game. And that's why, you know, we are in service of training everyone. I'll train agencies, We train internal creative teams to be able to produce content that converts because wherever the content comes from, as long as it follows the key creative best practices that we see day in and day out, I don't care if I didn't touch the content. We are just in service of educating the market on how to do this and how to do it at scale.

But are there things that still surprise you, like questions that you get asked that you're like moving into, Like we can't possibly still be asking that question. Yes, I mean like there's obvious things like well, literally receive creative where you don't see the product. I mean like you know this, this isn't an aspirational perfume commercial where the girl's hair is blowing in the winds in a convertible. Like, you've got to show the product. Number one, and you

need to show it right away. Number two is a lot of people are still so hesitant to put calls to action on their creative. If you want someone to shop, you've got to tell them to shop. Um, so you know it's it's all obvious things. Uh, you know, developing niche creative. So you know we do an enormous amount of working beauty. Uh, we do a lot of work these days in hair care. I am curly hair. If you show me a piece of creative with straight at hair,

I'm a wasted impression. And meanwhile, we get creative all day long. That that doesn't speak to that sedimentation. Um, so you know there are obvious things that happened day in and day out, but there's internal bureaucracies that often handcuffed my clients from being able to change. Let's talk about Facebook and talk about you know, your business. I think, like many businesses, media publishers, technology companies, creators, creators, in

the beginning, we're really dependent on Facebook. I don't think your business was dependent on Facebook, but Facebook was an important platform to your business. How has that changed in the last two years and what's the future uh for

Facebook with your business? But also what are you seeing and hearing from brands that you work with in terms of are they going to continue to be on that platform, are they going to abandon that platform, are they looking to replace that platform maybe with the platform of their own or otherwise. So when we opened up and I introduced mic Mac, you know what I said was were the e commerce platform for social video and beyond the end.

Beyond part is what's very new to the Atlantia audience. So, uh, what I began to notice the beginning of two thousand

eighteen was media budgets were getting consolidated. The essentially were centered around Facebook, Google and Amazon, and CPMs were getting really expensive and by the end of March of two eighteen, I began to feel that media budgets were starting to shift, that partners were looking for other alternative places to place their dollars to lower that CPM, and partners were coming to me and saying, hey, we want to use you in programmatic, we want to use you in paid search,

we want to use you in YouTube, Pinterest, et cetera. So this summer, uh Mic Math essentially released a feature that allows our partners to traffic us everywhere. And that's how my partners use me now. So they put us in programmatic, they put us in paid search, they put us in YouTube, they put us in interest, and so we become the default destination you are l in our partners digital and social media period. That is what success

looks like for us. And in terms of the Facebook ecosystem, uh it still has a very strong footing, and the reason being is that pretty much the only entities that can rival Facebook in the amount of data that is available for deep segmentation is Google and Amazon. So that's

the real realities of the dr landscape. And what we have seen though, is with missteps that happen, I have seen clients react and typically what happens in those um reactionary moments is that they will pause their Facebook media, but then they eventually restarted, so they're not and reallocating it elsewhere. They're just holding they they hold UM. Sometimes will reallocate and they'll give some money to Snap or

pinterest UM. But it's a temporary thing. And the reason why it's temporary is that Facebook is just effective when it comes to d R again, Like it's really hard to rival the effectiveness of that platform. And the reason being, and I think I talked about this in two thousand seventeen and I remained to be bullish on it, is that Facebook has had their pixel and market for nearly

seven years now. The amount of audience data that they have collected compared to the other social platforms that literally only released a pixel last year, like you just can't compare. Are there indicators that you've seen in that as we moved to we ought to be thinking about in terms of channels or platforms that brands are going to need to put on their radar quickly, I e. Audio going into chatting with you guys, I was thinking about, you know,

what are my major predictions for two nine? That's where we're going and one of them is around alternative distribution. Um. So we're seeing this across the board. Uh, you know, cost per customer acquisition is getting really high, and a lot of the mains popular consumer categories and so now you need to diversify. And so I think social is going to remain to be a really strong play. Um,

but in it's not just going to be Facebook. I do think that Snap has made an enormous amount of investments in their d R ecosystem last year that is going to begin to pay off this year. I have to say, we continue to see amazing results within YouTube, So I'm super bullish on YouTube, and I think that they've done a lot in terms of investing in brand safety that a lot of people are going to start

shifting dollars back there. Um. I think that we're going to begin to see that messenger is actually going to replace our email inbox. So in terms of customer attention, loyalty and all the traditional ways you used to convert someone via email, I do think it's going to move to messenger. To finally, because we've been talking about this for four years, do you think finally do you think nineteen is the year This happens. Yeah, you're going to see it in a really big way within the SMB market.

And and once we all start to experience that more and it becomes a more part of our daily life, it will then infiltrate the large brands audio. I see you know, continued d our investments in audio. Everyone that I speak to in terms of advertising on podcasts continually says how strong it is for their business, and so I do think that people will start to begin to invest more in that uh space, especially from a programmatic lens.

And then in terms of voice, um, you know, voice will continue to infiltrate search and will be the place for recall. And then you know, we just touched upon this um. But in terms of the alternative distribution lens, you know, I am very bullish on third party retailers. I think that as Amazon makes investment in their private label business, it forces as other retailers to think about attracting smaller indie brands in a different way, and that's

going to create a lot of interesting warfare. And the stronger that your brand equity is, the better it will be for you to negotiate with these large retailers, because they want your brand consignment. I just think that from a societal standpoint, we're looking to reuse, recycle and old. What's old is now new again, um And the first place that you can look at this isn't within the

sneaker market. And I think that you're going to start to see a lot of interesting brand plays happen within consignment in a way that we haven't thought about before. And I actually think it's going to allow eBay to begin to become more relevant. And you talk about a company that's sitting on an enormous amount of first party data with actually a really interesting advertising business. For me,

that's exciting. And then I think that we're going to start to see commerce really start to scale in more

alternative spaces like coworking spaces and airlines. Sky Mall was the original major retailer, and I think that uh as we continue to see travel increase, especially amongst gen Z and gen Y, and you look at the use you know, airline mobile apps and the amount of time that we're spending on planes, I truly believe that there's a major major retail play that's gonna be resurging within that environment.

That's a massive opportunity for airlines. I do think there's gonna be you know, other big swings that happened two thousand nineteen that are outside of distribution. Let's talk offline though, Like when you think about out of homegoing digital, I think out of home, especially in two thousand eighteen, has

become super relevant. The thing about out of home though, is that I do most people buy it through that awareness lefs so being able to connect that within the DR ecosystem that's going to require partnerships between clear Channel and Facebook and whoever. UM. I would be interested to see if that happens. I hope it does happen. UM. But I also think that what we saw in two thousand eighteen and we'll see more of in two thousand nineteen people using physical stores through the lens of out

of home. Yeah, we have been talking about how certain brands in particularly in the New York market, have literally been built in the subway. Like when you think about the awareness factor, but then the ability to demo or try or sign up to buy or preview whatever the case may be. UM, there's just too many steps removed

at this point. But again, how tech and social commerce can potentially play UM a role in consolidating that experience I think is a real opportunity in I do think that two will be the year that every single physical store will understand that it's no longer a distribution channel. It is a place to have your greatest brand expression and deliver on a service that you can't deliver on

within the digital world. Yeah. And a you know a retailer that I I just have so much excitement around right now, And I just never thought I would say this. It's Cold. It's a female CEO, and she's just so open to making radical changes. You know, this summer they announced you can come to Cold to return your Amazon packages. Ah. I think we're going to see more retailers um begin to adopt that type of mentality, and for me, that's really exciting. So is it fair to say will be

the year of radical change in retail? I think obviously we say that every year, but the bar continues to raise, right. We're all seeing people increase their competency within this space. And I do think that every single time that Amazon makes a move, there will be other people who benefit from being the alternative solution. Yes, so, Rache, you know the drill killed by d I Y what would you kill by do yourself in I would kill the metric of row as being the only thing that matters at

the end of the day. I believe that's incredibly shortsighted. I would buy a company like Channel Advisor or quotient um. Quotient was formerly known as coupons dot com. So uh, these are companies that have been the historical players within shopper marketing. And if you can't tell from my business, I believe that shopper marketing is incredibly sexy and I

would buy them. And in terms of D I y honestly, if I could sit down with every traditional brand marketer and spend one hour teaching them how to do performance soudual marketing, I would do that myself. Well, how about we do that together in as a special micmac at Landia pop up. I love that idea. Rachel, You're the best happy we know. We will be talking to you again. Thanks, Rachel,

than you, bye bye. So Rachel, thank you so much for coming on, always insightful, always inspirational, calling out the key things that we need to be thinking about, particularly in the retail space as we kick off the new year. Rachel again keeps pointing us to brand and bottom funnel activities are together. What she's learning from, you know, all of the legacy and DTC brands is that they may

have more in common than they ever thought. So I think that there's a huge opportunity for us to reinvent how brand plays in certain spaces and how you really own that cart experience, both physically and digitally. And I think if you're sitting and listening to this episode on the publisher side or the agency side, there's a massive call to action around thinking about what your creative solution

is to support brands in the performance space. The fact that she couldn't name one, one, not one creative agency that is stepping up and producing content to really capitalize on the success that she's seeing on places like Facebook in a way that she believes is the future. It's like huge opportunity and a huge opportunity. Rachel didn't leave us with her email address. We know she'll be cool with us dropping it. So it's Rachel at mcmac dot tv, and she would like us to say m I K

M A K dot TV. So nineteen we're back, a whole new year of exciting conversations with some of the industry's most inspiring practitioners. More Places, More Spaces nineteen. You don't know what's gonna hit you, but first, big thanks to our producer Dana, all of our friends and family at Panoply. We'll be back in two weeks. Mm hmm. Full disclosure. Our opinions are our own.