Lead Execs At Netflix Ads, Pinterest Content Share Their Strategies

both industry veterans who find themselves at new, high profile gigs. First, there's Jeremy Gorman, whom they have heard of from her days at Amazon or Snap. Now she's just months into her new job as President of Worldwide Advertising a Netflix, where she's leading the charge on the streaming services new ad supported tier. Then we'll check in with Malik Ducard, who's been at Pinterest for the past year as chief content Officer after distinguished stints at YouTube in Paramount. Stick

around and we'll be right back. First with Jeremy Gorman. We're back with Jeremy Gorman. Full disclosure, you are a Variety alumnus. Am I mean technically this I'm I should recuse myself because this plight, but I will maintain objectivity. You have your Variety days were what like twenty years ago at this point, or to two thousand seven. I was there for the centennial, which is pretty remarkable for

Variety that it's a hundred and seventeen year old brands. Anyway, you've gone on to some other things since, and the little companies like Amazon and Snap and I'm just curious to start. You know, a company like Netflix calls you up, they're not even in this business of advertising, and they say to you what they want to do. Are you

like huh or oh, I see the opportunity here? You know, I think, like many people probably in this room, I was a Netflix fan to begin with, and then there was the announcement in April that that Netflix was getting into the advertising business, and my husband looked at me

and said, you're going to do that job? And I was like, well, they have to call me first, and then, you know, then they did, and um I was I thought, what an amazing opportunity to reach this engaged audience with this extraordinary content in a place where marketers have never been able to reach them before. So it felt kind of like a no brainer. But it's it's just been a remarkable nine whole weeks, by the way, So it's

been it's been really great. And I did say yes very quickly, and now my husband's very happy that he was right, all right, nostronomously married apparently, and so yes, as you mentioned the the ad based version of Netflix, you guys put out super fast with help some from Microsoft. Um, how would you characterize these nine weeks because obviously, when you move this fast, you're not necessarily loading up exactly everything you want to be doing. That's right, Yeah, I

think that's part of what's been so interesting. Is there really kind of two choices when you make a decision of this magnitude. And I wasn't there when the decisions were made to do the ad supported tier, obviously, but you can either go very quickly and partner with somebody like Microsoft, who has been extraordinary and we're on the Zander stack, or take two years to do it perfectly.

And so the nine weeks have been really exciting a lot of people, a lot of advertisers, marketers, analysts, everybody wants to hear more about what we're doing. I would say one of the things that's been interesting is we did launch with m v P. We joke a little bit and say we put the M in m v P because we did it so quickly for the minimum viable product, and we launched with fifteens and thirties, but

is definitely not representative of our long term ambition. So it's been kind of it's both there's so much excitement but also people way for the innovation that will be forthcoming. Just you know, crawl, walk, run, really, so let's let's we we have an idea of what the crawl is, what is the what are you mentioned right now as you're restricted to fifteen and thirties, What are the next

things that you're trying to bring onto the platform? I know, uh, I believe ted Surranda talked about there might be different tiers, not just one. What are some of the things that we could look for in three on the ad platform twenty seconds big innovation, not you know, we we did it in Spain already. Um, kind of sticking with the more standard AD formats in the short term, but then over the long term, I think really having the experience

be more integrated into overall Netflix. Not necessarily from a product place my perspective, but what I mean by that is, I think we have so much tonnage in terms of hours time spent with the platform, binge behavior, et cetera, that it gives us a really unique opportunity to be a will to target really differently. UM. Examples of that would be not only by genre, which everybody can do, but I think different things, um in terms of dynamic

insertion of ads near moments that are relevant to marketers. UM. I'm making this up as I as I talk here, but something like an advertiser that would want to be surrounded by uh, surrounding each gift giving moment no matter the content. We have the opportunity to do those kinds of things, uh, single show sponsorships, and then we are going to really change the world and allow people to

target by age and gender. I hear that's a new innovation exactly, but that's new for Netflix to actually really just even the operation were even collecting that information is new for Netflix, and so getting to a place where we have scale so that we can targe target by age and gender. But I think the really creative things are content based. I mean I Netflix is going to be doing their earnings results in another week or two. This will be the first time they're talking about I

assume they'll they'll share how things have progressed. There's been some data, third party data, not Netflix's own data, that have suggested that the initial uptake has been a little underwhelming. Uh are their concerns or is their patients or perhaps I'm mis characterizing it, and your data says you know, this new subscription is flying like hotcakes because we were reporting in a couple of weeks. I can't answer that directly,

but I can tell you that we are. We're pleased with the growth that we're seeing in the tier, and I you would be able to tell if I was a concerned human. I wear it on my face. Yeah so, but yeah, good to know the future. We're not breaking it out, and given the timing with earnings, apologies, I

can't be more more direct there. Okay, I mean I think the thing that people are going to be looking for analysts, investors is there is risk that too many subscribers who are already paying more than they might be paying on the ad supported plan could sort of downshift and you could essentially cannibalize that core audience. And that's where your subscribers are going to come from instead of new people coming on, because that's really the name of

the game here. The growth of Netflix, I think has moderated somewhat after a rocket ride for many years. This will hopefully bring people in a new barrier, a lower barrier, I should say, So, are you seeing signs? Are are you I know you're not going to share data right now, but are there early indications that you are bringing in new people as well as maybe not as uh, you know,

being such a cannibalizer. Yeah, it's it's really the whole goal of it is customer choice, So for people to be able to shift between plans and platforms essentially based on what they want to pay. And in this particular macro environment, I think you're going to see a reasonable amount of both people who want to consolidate their overall streaming bill inclusive of all of the other streaming services and say I want them all, but I want AD supported, or I want you know too, but no AD supported

in these kinds of things. But historically with Netflix, people stay on the plan that they originally subscribe to. Is it conceivable that as you guys go out there with this, that we that essentially even people are paying less, you can monetize better because you're getting obviously the subscription fee that they pay plus the AD dollars that you reap from those eyeballs. Yeah, I think that that has been stated by read that our our expectation is for it

to be at the very least revenue neutral. Okay, you mentioned Spain earlier. You guys are available now at seventy of the world of the ad twelve countries. Okay, and at this point, do you guys have a sense like three will we see that number grow? We are going to stay with the twelve. Well, we learn that it's the twelve large just ad markets and also places where Netflix has penetration enough to have certain different tiers of

service versus one or two tiers of service. So we're gonna stick with that plan for now while we learn um. But long term, I think any any major AD market that can also support the multiple tiers will be things that will look at. But yeah, the twelve for now, and there are seven whole people on my team and so I wouldve is just fine for now. In front of this crowd, you may start getting resumes, so you know, uh,

what about if you're great, I'm Jeremy and Netflix. Um, what about I From what I've heard, not one percent of the content is uh does have advertising in it? You guys still need to work out some licensing. Has that progressed? Yeah, that's progressing kind of as we speak day by day, renegotiating deals that we made a long time ago. But the vast majority of content that people watch gularly is available on the AD tier service. UM. And by that, I mean, you know, people tend to

watch the same things that are is like geiste. Uh, Wednesday right now, for instance, has over a billion streaming hours. Has anybody seen Wednesday? It's so great? Uh? Okay, yeah, I guess mathematically speaking, if it's over a billion hours, then many of you have seen Wednesday. Um. And so yeah, all of those, the original content and the majority of things that people watch are available on add tier. And then we're just going to continue to negotiate and hopefully

have everything available. But it's between eighty five and nine content is available on the AD tier depending on the country. UM. There's been some criticism that you guys came to market with a pretty high CPM. UM, are you pleased with where you have sort of set the bar at this point. Yeah, you know, I think, like anything, it's a marketplace we

have we we didn't know what we didn't know. There weren't any subscribers on the ad supported tier when we started, obviously, so from a supply demand perspective, the premium CPMs are reflective of two things. One is that we just couldn't take that many advertisers. We certainly didn't want to disappoint anybody. But then secondarily, the premium content environment in which the

ads run I think warrant a high CPM. But I think we're certainly humble enough to very much understand that we are top of market, and in addition to that that the market will more or less dictate to us what what are reasonable CPMs. And then in addition, with these innovations on top of the fifteen and thirties will warrant the high CPM over time, But right now, with fifteens and thirties and limited targeting, it's really, you know, just a byproduct of demand. There's a lot of demand.

So who are could you characterize the kinds of advertisers that are in this first wave and perhaps what the second wave could look like? Sure? Yeah, my favorite part of this, and thank you for asking, UM, is that it's really across the board. So we're seeing CpG companies, luxury companies, automotive companies. I could go on and on, retail, etcetera.

But we're seeing a broad swath and I think that's not only important to signify the demand that's coming into people wanting to reach this incremental audience that they haven't been able to reach before, but also really good for our member experience that you're not just like and another car and another car and another car. Um. It's it's very there's a wide variety of advertiser types and I think we'll continue to see that in various moments of

when people need things. So at the outset, you know, right before holiday, very retail heavy, not dissimilar to what many of you experience. I'm sure right now you know, tax etcetera. So we're following a very normal pattern. But it is a broad swath of demand. There's also a broad swath of players in this Marketplaceself, Disney, plus everyone's doing the ad thing. Is this a rising tide lift all boats or is it? You know what? It's this is more Darwinian than that, and you know one player

needs to take an early lead. I think it's a rising tide rises all boats situation for connected TV in general, for ad supported streaming services, for customer choice, each of the companies is really compelling another company to make extraordinary content. And while this isn't a specific add discussion or add point that I'm about to make, one of the things I think is most interesting is that five of our most popular shows of all time we're last year in

two when competition had never been more fierce. And I think that is really a reflection of everybody making everybody better. And I think we can all agree that streaming content just continues to be exceptional. Um. And then as the linear market changes or flattens, we're giving advertisers and customers a place to go. We had I don't know if you were in the room at the time. Jeff Green

from the trade desk was out here earlier. I tried to broker a deal, Oh thank you, in an auction based diamond ademic CPN format, which I learned in nursery school. Yeah didn't, didn't we all? Um? You know he's out here talking about Galileo, this first party data product for advertisers I mean, does does Netflix need something like that? The way I think the way he put it with something like the Netflix needs the open Internet more than the open Internet needs network. Maybe I have that wrong.

You tell me, what does does Netflix need the Open Internet? UM? I think I don't know. That's a hard question to answer. But you did scare me when you said he was talking about Galileo. I thought I was going to have to talk about philosophers or no. No, no, no, that's just a product. I think the open Internet needs Netflix, and Netflix needs the open Internet. Okay, safe answer? UM,

thank you. In our remaining thirty seconds, what in twenty three you know, if we're back on this stage, uh, twelve months from now, what growth story do you hope to be sort of telling? You know? Do you have a projection of where you see how much growth you're gonna get for this new ad tire? What I hope to see is that we have enough subscribers on the add here that advertisers are getting what they want in targeted environments and genre based targeting. UM. I think that

we have all of the opportunity in the world. There are so many people who love Netflix. UM that giving different price points to get more people on the service is a win for everybody, and I hope that there are a lot of customers in the audience next year who are on the basic with ADS plan. I will hold you to that next year. At this time next year, this time I will be here. Thank you, Jeremy, thank you. We'll be back in just a minute, and we're back

with Malik du Karg. I'm really happy to have our next guest with us. I've known Malik a long time. I've known you going back to your Paramount days, your YouTube ways, always a content guy, but at the intersection of content in tech. And then of course I heard about a year ago you going over to Pinterest and I was like, okay, that's interest ding, which I don't think of Pinterest as video programming and such. So what was the mandate when you got brought in as the

chief content officer? Um so, so happy to be here. First of all, what's up Andy? Hi? Everyone? Um So, I've been at Pinterest now for a little bit over a year, and the mandate is to to really work with uh incredible teams, partners, creators, publishers, brands, curators to really build healthy and thriving content ecosystem UM with video very much UM as a core focus of the platform.

So we've been building out tools for for creators, for example, and for publishers to really upload and share their video. Video has been been growing really rapidly on the platform UM, and a big part of what I do is to to help fan the flames and UM encourage that ecosystem to to continue to grow. So let's talk about some flames for some publishers and creators. Would have been some top deals that you've brought in in this first year

UM so. One one of the deals, and I think it's a good example of a model for for deals that we have continued to do, is our relationship with Taste Made. So Taste Made is a publisher UM who have a really great presence on Pinterest across a lot of categories like food and and home UH and Taste Made is a great partner because they not only create great original content that we structured this deal around UM,

but they also center creators UM as a focus. So when you look at the Taste Made presence on UM Pinterest, you very much see UM creators creators who are food creators and home decre creators UM as the fuel that really drives what they do. So a big part of that relationship is UM supporting that constituent. UH. The deal is a deal in and of itself, but it's also a model for other deals that we've done with folks like Refinery twenty nine and um Blavity and also End

Them All. I think End Them All is a good example where we worked with them in France, Italy and Spain UH to to really highlight some of the participants on Master Chef UM and to to go behind the scenes and to to catch up with these participants to actually unpack the recipes UM that they won with on the show, and to to really offer that up to our users are pinners, to be able to do those recipes themselves. So it sounds like video is not, you know,

it's not you're making some sort of hard left. It's really organic in the sense that it the very themes that make Pinterest. Pinterest programming plays on that absolutely, and I would say that there are really three things that make pinterest unique and and differentiated amongst platforms that that are out there. The first is intent when a pinner and and pinners are our users come through the front door of of pinterest. UM, they're coming with an intent

to to do something. UM. It isn't a passive entrance. They're coming to be inspired, to search for an idea, to make something, to do something, to bake something, to shop for something. So intent is really key. I think that the the other big differentiator of the platform is it's positivity and its inspiration. UM. Pinterest foundationally was built on on a notion of pinners want to be inspired

and UH. Having a platform that we call and it is the positive corner of the Internet UM really really resonates with our our pinners and creators who UM come to the platform for that UM. And then the third thing is that pinterest is really a juggernaut of human curation. And I think it's you know, wonderful that we're here at at CS at a consumer electronics conference, UM with

a platform and we center human curation. And what I mean by that is, UM, every day we have millions of pinners who are saving content, saving videos, saving images to their boards. And when they save these UM images and content, UM, they're doing it around home decre projects or birthday party, uh sort of design setups that they have coming and and that really does two things. One, it helps them to visualize and realize uh, the sort of inspiration that they want to move inspiration to real life.

But it also gives us a ton of information and signals around um, this shoes goes with this dress, goes with this successory, and we're able to see that through

the boards that UM pinners put together. So when you're talking about positivity and inspiration, I can't help but think there's obviously you know, and I know you guys necessarily consider yourselves a social network, But when you're talking about publishers and creators and programming, you're gonna be lumped in with the Facebook, Twitter, Instagram, TikTok's of the world, where positivity and inspiration seems to be in very short supply.

I would assume that helps you with particularly advertisers. Absolutely, brand safety on Pinterest is absolutely core and central, and I think it goes back to this notion that when a pinner comes to Pinterest, we want them and they

do leave feeling better than how they came in. And um, you know, when when I when I got to the company h a year ago, like when when I was elsewhere, I always like peered over and was really impressed by UM, this platform that really designed around UM inspiration and positivity and with policies that UM we're we're progressive UM for example banning weight loss ads and UM before any other platform,

but banning political misinformation and climate misinformation UM. But but I wanted to understand, like, how, uh, from a technical standpoint does it does it really work? And Uh, it's baked into the math of the system. It's baked into um our algorithms. When when the system UM is at a crossroads and is making a decision between, uh, someone searching for a piece of content, is it going to give them a video that's just gonna be time spent or will it give them a video or piece of

content that's time well spent. The system chooses time well spent because the system has captured what inspiration is UM really sort of algorithmically and mathematically. And I believe that algorithms don't just happen. Algorithms are a choice, and platforms have a responsibility. And from from a foundational standpoint, that's

how we've really built pinterest up. How does the monetization work now that I guess you're talking probably even here at CES two advertisers about a whole different sort of kind of content. Yeah, so we when when when when you look at pinterest Because of that intentionality, because pinners are coming with a mindset to do UM, it makes monetization really seamless and in fact of pinners UM see Pinterests as a place to to shop. UM. So with that,

we have made shopping a really core component to the platform. UM. So that's through building out UM product pens UH and building out affiliate links so that UM, if you're a creator or if you're a publisher, you're very easily able to UM share the goods and the product that that you're you're sharing. We also work to bring creators together UH with with brands. So for example, UH we have paid product tools, paid sponsorship tools that UM allow for

creators who UM align with a certain brand. Like one example is Gatorade. When Gatorade was looking to to really champion hydration, UH, they matched up with four really prominent IT fitness creators on the platform to make really natural, organic content to support UM not only their messages but Gatorade messages at the same time. UM. I know we have an example of one of these new video programs if we can queue that up on the screen. So

I love that one. And and that's a partnership that we did with UM the Louver Museum, and I think I think it's a great example also because I think that UM pinterest is also unexpected UM. You know a lot of folks don't realize that UM video is so prominent on pinterest and that's a growing area and opportunity or that brands have a really big opportunity to to connect with creators and and ultimately with UM you know,

their their buyers as well. And this is an example a partnership that we did with the Louver to really get sort of behind the scenes UM and find some of the surprising UM moments in areas of the Louver UM that that museum goers may not have seen. Like one of my favorite ones is UM, what about the Louver without the Mona Lisa, Like if that wasn't the first thing person went to to make a bee line to,

what else would you see? So so I think that that that spirit of pinterests of really UM opening up the world more for for pinners and users and inspiring them to explore more and to do more is very core and critical to to what we do. Yeah, it definitely sounds on brand for Pinterest, and this job that you're in sounds on brand for you because it reminds

me of you know, back in your YouTube days. You would I mean, obviously there's some key differences, but you essentially did the same thing and a number of different roles in a number of different areas. It was about building up this content ecosystem. Were there parallels? Were there things that you brought from your YouTube days that you have applied to Pinterest? Yeah, you know what that there

are are are similarities and and and their differences. I think that some of the differences goes back to, you know a little bit where where I started. I think that from UH user standpoint, the pinners who come to the platform come truly with intent. It isn't a passive arrival. They come to do. I think that the positivity of the platform UM is really it isn't a positive place because it's been mandated from a regulatory standpoint or nudge. It's actually UM the premise of the company UM. And

then that human curation is key. Like back in the day UM, I was a jazz DJ and on college radio and um, how how you place, you know, is it John Coltrane, then Billie Holiday then like that that curation is content in and of itself. And we have millions of people. There's six billion boards on Pinterest of curation and and and it's the the the only platform that that has such a significant um human curatorial component. UM. So those are some of the differences. I'd say one

of the big similarities. As you know, I was at YouTube in the early days, like right before that hockey stick and UM that that feeling and spirit of momentum, some of the patterns that that I saw at you you when we were building what would be you know, really really strong growth. UM I I see that feel that UM and love being a part of that at pinterest.

A lot of similar patterns um in different ways and for different reasons, but a similarity in being at the beginning of um what we see as a real hockey stick. But there's of course the challenge of the hockey stick, which is you know, scaling too fast, losing control of

the platform or these things. You're mindful of this so mindful um and and the company has been mindful from from really an establishment, you know, sort of standpoint like when it was founded and and I think that starting from a place of UH, we we believe that you can do good business and do good for the world, do good for society at the same time. Like I'm happy that there's a company where those two aren't at odds,

where those two are actually the reason for each other. UM. And then all the nuts and bolts, supercharged trusts and safety teams UM, you know, really really focused UM efforts on UM that the challenges that come with open platforms,

but but those investments have really yielded UM results. And and pinterest has been ranked number one most trusted platform of eight platforms UM by UM Business and no insider intelligence that's part of business in Yeah, yeah, that's right, and UM and and number one across like a number of different UH dimensions. So UM the results are showing, but UM you can't rest on on that front, and we're going to continue to to to invest there. Well, you're off to a good start. Looking forward to seeing

what you do in twenty three. Thank you so much, all right, appreciate it. MH. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you subscribe to the podcast to hear future episodes. Also leave a review in Apple Podcasts and let us know how we're doing