MTM#31: WeChat Rises in the East & Pinterest Rises in the West

– Hey y’all.

[00:00:01.01] Welcome back to More Than Marketing.

[00:00:02.07] It’s me, Arsham Mirshah.

[00:00:04.05] And this week, we’re talking fragmentation

[00:00:06.06] and consolidation.

[00:00:08.08] And advertising.

[00:00:10.04] Let’s get into it.

[00:00:11.03] Have you heard of super apps?

[00:00:13.03] So, apparently, in China,
there is a super app

[00:00:17.09] called WeChat.

[00:00:18.08] You may have heard of it, you may not.

[00:00:21.01] It’s really popular in China.

[00:00:22.09] It’s, you know, I would imagine

[00:00:25.08] pretty much everyone uses it.

[00:00:27.09] And it’s a super app
because, people use it from,

[00:00:32.02] for everything from, you know, WeChat.

[00:00:35.06] So obviously talking to your
families, friends and family.

[00:00:38.07] But also to paying for
things, like on the street.

[00:00:41.05] Ordering food and
groceries, plane tickets.

[00:00:44.07] Paying your rent and things like that.

[00:00:47.03] So, it’s.

[00:00:50.01] It’s like a.

[00:00:51.05] It’s like one app that does it all.

[00:00:53.04] Now if I.

[00:00:54.04] That’s what’s happening in the
East, in places like China.

[00:00:59.05] Would that work here in the West?

[00:01:01.02] Like that level of consolidation?

[00:01:05.01] I don’t know.

[00:01:05.09] I mean, I feel like, in
the West, you have VC’s

[00:01:11.00] investing in all different types of apps.

[00:01:13.08] A dog walking app, an app
for this, an app for that.

[00:01:17.01] It feels very fragmented, okay?

[00:01:20.05] I don’t know if it would work for us.

[00:01:21.06] But then I think, on the
other hand, like, Amazon.

[00:01:24.07] Amazon Prime.

[00:01:25.06] If you have Amazon Prime, yeah okay.

[00:01:28.00] You get discounts on, you know,
online shopping with Amazon.

[00:01:30.08] But you also get music
streaming, video streaming.

[00:01:36.00] They have a photos app that, you know,

[00:01:38.04] you can back up your photos for free.

[00:01:41.00] It’s like, now they have
different apps or all those.

[00:01:44.05] But it is kind of consolidated to Amazon.

[00:01:47.01] So it’s kind of interesting.

[00:01:48.04] And consolidation and
fragmentation is a theme.

[00:01:52.02] I don’t know if WeChat would work here.

[00:01:54.06] I think the reason it works
in China is cause, you know,

[00:01:57.02] most of the people there,
their first contact

[00:02:00.04] with the internet is actually
with a mobile device.

[00:02:03.09] Not with a computer.

[00:02:06.00] And so, you know, they get a
mobile device and it’s like,

[00:02:09.05] their friends tell them, “Yeah.

[00:02:10.04] “Download WeChat.

[00:02:11.03] “That’s all you need.”

[00:02:12.05] Right?

[00:02:14.05] So anyway, that’s.

[00:02:16.02] It feels really consolidated there.

[00:02:18.07] Now let’s bring that to advertising world.

[00:02:21.08] Y’all know Google and
Facebook are the two biggest

[00:02:24.09] ad platforms, ad networks, right?

[00:02:27.06] And as a result, they’re
getting hit with anti-trust

[00:02:30.09] and privacy and lawsuit and what have you.

[00:02:35.00] You know, maybe for good reason.

[00:02:37.02] Because they do have kind
of a strangle on, you know,

[00:02:41.08] those spaces.

[00:02:44.04] But are they really
harming consumer welfare?

[00:02:47.08] I mean, if you want to
advertise on Google, yeah,

[00:02:50.01] it’s gonna be expensive cause
it’s a bidding mechanism.

[00:02:52.03] But it’s not hurting the
consumer in that way.

[00:02:55.01] Unless, you argue that, you know,

[00:02:57.01] because that’s the way
that most businesses

[00:02:59.07] make their money.

[00:03:01.02] They have to advertise and
they’re paying top dollar

[00:03:03.02] and then they pass that on to you

[00:03:05.08] in the price of the products.

[00:03:07.02] I don’t know.

[00:03:08.01] I’m not sure.

[00:03:09.07] But, I do know that, you
know, Facebook and Google

[00:03:12.05] are getting hit from every direction.

[00:03:14.04] You know, anti-trust,
privacy and what have you.

[00:03:18.01] And it’s interesting
because, it feels like

[00:03:21.05] a lot of inventory has
consolidated to them.

[00:03:25.00] But that’s not true.

[00:03:26.03] That’s not true at all.

[00:03:27.06] You look at Pinterest.

[00:03:28.07] Pinterest went public last year.

[00:03:32.00] I think in Q, end of Q1 or Q2 of 2019.

[00:03:36.04] And 2019 was their biggest year yet.

[00:03:39.04] They crossed a billion dollars of revenue.

[00:03:41.06] They had 26% year over year growth

[00:03:46.01] in their global monthly active users.

[00:03:50.01] Does anyone actually use Pinterest?

[00:03:52.00] Like, someone please
comment and holler at me.

[00:03:54.02] I don’t use it, personally.

[00:03:55.07] But if you’re a B to C
where, where, you know,

[00:04:01.07] imagery is going to
help sell your product.

[00:04:05.05] I don’t know, jewelry or home remodeling

[00:04:08.02] or things like that.

[00:04:10.04] I can see Pinterest being a viable place

[00:04:13.08] for you to advertise, frankly.

[00:04:15.06] Right?

[00:04:16.04] So, and that’s not
consolidated to the big,

[00:04:18.08] the big tech giants.

[00:04:20.06] So, that’s kind of cool.

[00:04:22.02] Also, in terms of like what
I see in fragmentation is,

[00:04:26.04] you have new mediums coming on

[00:04:30.08] all the time.

[00:04:31.07] So, podcasting, for example.

[00:04:34.04] I Heart Radio and Spotify,
both recently announced

[00:04:37.09] that they’re gonna open up
a self service ad network.

[00:04:42.04] And, you know, so with podcasts,

[00:04:44.04] you’re gonna be able to
advertise on different podcasts.

[00:04:47.05] Now, it’s only on their
exclusive shows, it looks like.

[00:04:50.03] For now.

[00:04:51.01] But, they’ve also hinted

[00:04:51.09] that they’re gonna open it up later.

[00:04:54.06] You know, our firm,
WebMechanix, we’re known

[00:04:57.05] for finding niche ad platforms
or doing kind of niche buys.

[00:05:03.06] Or sponsoring content.

[00:05:05.01] So, it’s.

[00:05:07.00] I see the industry consolidating.

[00:05:11.03] I can see it.

[00:05:12.03] Everyone can kind of see it.

[00:05:13.03] And that’s probably why you have

[00:05:15.04] Facebook and Google always under fire.

[00:05:18.00] And Amazon too, frankly.

[00:05:20.04] But, I also see a lot of new platforms

[00:05:24.06] and technology coming
out all over the place.

[00:05:26.07] So, it’s, you know, it’s
kind of how you look at it.

[00:05:30.05] And if you look, there are traffic sources

[00:05:33.07] and there are different
channels that you can find.

[00:05:37.02] And find, you know, relatively
inexpensive traffic for

[00:05:42.01] and thereby lower conversion,
cost for conversion.

[00:05:46.03] So, you know, if you,

[00:05:48.08] if you do your homework
and look, you’ll find it.

[00:05:50.08] I want to know what you
think, though, you know.

[00:05:52.05] Should Google and Facebook be under fire?

[00:05:54.08] Would super apps work
over here in the West?

[00:05:58.01] And, what niche platforms are you using

[00:06:01.02] to find relevant traffic
for your business?

[00:06:05.02] Thanks for tuning in.

[00:06:06.01] Short episode.

[00:06:07.01] Holler at me.

[00:06:07.09] I want to hear what you have to say.

[00:06:09.03] And I’ll see you next week.

[00:06:10.04] Cheers.