Interview transcript with CEO of Open Influence Eric Dahan about the TikTok partnership
The big three themes about the partnership consists of the following:
- Finding a niche
- The age of authenticity
- Gen-Z’s LinkedIn
Anthony Carranza: How did this partnership come about?
Eric: So we started, yeah, about almost ten years ago. And I mean a little bit of the story was really an accident. I was in college, I interned for this company called Outlook, which was a daily deal site and our flash sale site. And I built an app that was in that space after interning there, and I was looking for a way to promote it and being still in school and entering like that top sort of space and everything was it was tough to raise money to market the app. And so we just started working with people on social. This was before the word influencer was coined to mean what it is, what it does today. And so we started working with at the time we call them social celebrities, but they’re influencers, getting them to post. We’re able to just in network and stuff. So it was really cool because we’re a e-commerce app. We were seeing purchases happening on the back end and at the time there was this really big question around does social media actually result in real purchases? And I think intuitively everyone knew they did, but no one was confident enough to really, really make that bet. And so we were fortunate because we saw people making purchases on the back end on their app. The thing that did suck is that our commissions were horrible on that app, and so we started approaching brands to feature themselves directly on our app and go from a small affiliate commission to something more meaningful that we could support the business off of. But what we found were the brands were a lot more interested in how we’re marketing the app instead of selling discounted merchandise, which was what a flash sale site is. And so we quickly pivoted and just started offering marketing services and just grew from there. So we’re very early to the space. We were there the early days of Instagram and saw it working with Instagram before Instagram even had its own paid ads. And so kind of jumping forward to TikTok, we were working with TikTok back when it was musically.
Eric: [00:03:26] Yep, yep. We saw TikTok go through that same phase maybe like three years ago where it was very reminiscent of Instagram 2013. And so we knew it was going to be big. And over the past several years it’s just been a growing part of our business. Over the past year it’s been, I would say, growing exponentially. And so last year we signed a partnership with TikTok to build out a deeper integration. And and then we made the announcement, we completed that integration and we work together with TikTok to make the formal announcement last week that we’re very proud of. And so the things of why we did this and and why it’s important is we have from our TikTok roots, what we’ve heard is the most advanced integration or deepest integration of of any partner. We’re one of only a handful of partners on the creative side. But what this does for our business is it helps us expand our TikTok influencer community. It helps us get additional data and better insights up front on influencers directly from TikTok, and it helps us run reporting a lot faster and more efficiently. And so it’s been a really it’s been a really fruitful relationship and and integration. And our business is just our TikTok business is just growing even faster now as a result.
Anthony Carranza: Are you surprised by from the evolution from where Instagram was mostly, you know, people that were verified, people would go to that. And it was, I think, very well, you know, edited pictures but with TikTok it is all about videos and organic engagement. Facebook was for us college students. But now it’s like, I don’t think there isn’t a kid who doesn’t know what TikTok is. Yeah, very surprised. So how has the video, I guess, shifted? Was that for your business, for Open Influence? Like, was it an avenue with the video or was that another adaptation as a result? Or is just you? The operations and the focus were easy to pivot towards that direction or.
Eric: Yeah, yeah, yeah. So so in regards to like was it easy? Yes. Because we’ve been creating a lot of video content, I would say, over the past several years, sort of leading up to the TikTok really ramping up video content was becoming more and more crucial. And so in 2016 we were doing a lot of school, I think even back in 2015 with Snapchat. But really ever since story content came around, I really took off in 2016. And then with that, there’s been so we’ve been doing that story type content. We’ve been doing a lot of just video content both on Instagram and YouTube for a while, and it’s become a bigger and bigger and bigger part because it’s just more engaging. And so in TikTok came around or I should say start to ramp up, it was very natural for us to deal with video and wasn’t very disruptive. I think what’s really interesting is, like you mentioned, Facebook platforms are generational, media is generational. So it’s not my grandfather read the newspaper every day. You know, it’s not like when I turned 20, I started picking up a newspaper, you know. So my dad watched TV and I never had cable. I’m 32 years old. I’ve never paid for cable. So it’s if you look at it, media is generational. And if you look at TikTok, I think I think the format that you talk about about sort of it’s more raw, it’s more authentic. And that really. Sort of embodies Gen Z’s values, right? Gen Z is really all about authenticity and the sort of rawness and true ness the self.
Eric: While I’m a millennial, millennial content was a lot more aspirational and Instagram really embodies that well, and Instagram is a platform is built around that. The whole idea of taking images and adding filters is a very millennial concept, and that’s what Instagram started as. So at the root, Instagram was sort of was built to optimize around its customers being millennials and as a result, embody those values. While TikTok was built around Gen Z and embodies those values. And so I think there’s in terms of for brands, brands have to take a very different approach and strategy when they’re looking at TikTok as Instagram. Because just because you create a piece of content that’s a video that you can put in a vertical format on Instagram does not mean that’s going to transfer at all to TikTok because it’s just so different. It’s also the kind of content, right? Millennials are all about experiences. And yes, I think human nature we like experiences, period. But if you look at like, let’s say financial content on Instagram versus TikTok or business, a lot of the Instagram stuff is really motivational. It’s about the emotional aspect of, Yeah, work hard, don’t give up. And you look at TikTok, it’s like, okay, here’s how you can make a 7% return in 12 months. So it’s a lot more tactical. And I think that speaks to Gen Z’s value of financial literacy over millennials totally know.
Anthony Carranza: And I’ve seen financial videos on TikTok be less traditional and in the tone delivery that we normally see where it’s very polished now, it’s a little bit more casual and it’s wax about it, but it’s very much more like a cool, casual conversation. It’s not as jargon, I think where they start to do the pitch and all of that is then you go to my profile and click on my link tree. Yeah, I know it’s I’m fascinated by it too. Like I said, I was an accidental adopter of musically because my kids were about it. And I said, Well, let me figure out if there’s any way I can connect my lessons to it. Sometimes it is, but it’s interesting the things that I’m seeing. I’ve met other teachers on the platform, so yeah, no, totally. I’m sorry. That was just a side note. Excited about the conversation.
Eric: Oh, awesome.
Anthony Carranza : And let’s see what else. As far as the partnership, I note with the communication that Antonio said, do you want to expand on a little bit like finding the niche, the age of authenticity? Gen See then how those integrate into this partnership and how is that making Open Influence successful in this partnership or campaign?
Eric: Yeah. So I think. I think what’s really interesting is I ask myself like, why is TikTok excited? Right. So and so it’s like, I know why I’m excited, but why is TikTok excited too about this and why are they investing the resources to do this? And they’re very smart. They realize that their creators, their creators, help power their community and they want to make sure their creators are happy. But but I think there’s also another element to that, which is social platforms monetize by selling paid ads. And what TikTok has really understood, because they understand creators so well and they’ve done a really good job of understanding this space, is they’ve built an ad product that’s just around turning influencer content into ads, which is something we’ve been doing for years on other platforms as well as TikTok, but it’s called whitelisting. And so it’s when you take an ad, a piece of content an influencer creates and you run it as a paid ad through their account. And so instead of I’ll pick a random example instead of like Pandora, right? You’re getting an ad for Pandora where the ad is by Pandora and their content that they produced is through the influencer and the icon and the account that’s coming from the Influencer’s account.
Erick: And so TikTok understand and how this ties into the age of authenticity is because TikTok is leaning on creators to help brands create the right content for their ad, because content on ad content that works in other places that’s very polished and sort of studio produced and product driven does not work well on tick tock, tick tock. What works well and tick tock is user generated content, content that feels authentic. Someone demoing the product in their living room with the vacuum in the background and a cat walking around. And so. So that’s what works well, not some really curated pretty product shot. And so to help brands really understand this, TikTok is leaning into creators and influencers to create this concept for brands to then go use those ads. And so that’s that’s a whole dimension of this that’s really exciting for us as a business. And we’re actually helping not only brands perform well, but we’re helping usher them and them into this whole new way of advertising, which is a lot more authentic and leverages real people in a way that brands have never done before.
Anthony Carranza: Well, that’s very comprehensive. And then I’ll get to sort of the wrap up. But this conversation has been fantastic as I’ve been waiting to kind of get in touch with someone in that space because it was usually LinkedIn, Facebook or Instagram. But it’s cool to see this happening in TikTok. With regards to that, do you see are there any concerns over the long haul? Because, you know, there is a lot of conversation about data, data, user generated data, especially around maybe younger users and also regulation. Do you think that that at any point might come into the mix affecting the business model or not at this point based on how the business is going, where the trends are evolving? And also TikTok constantly like adapting its app to try to make the content as relevant to the user community.
Eric: Yeah, I mean, not not really an issue at all because we’re not. We’re not we’re not, like, looking at, like, preteens or younger. Like, we’re not not advertising to them. Like we may be advertising to their parents. Right? So like mom influencers and moms is a big is a big topic, right, where we talk about new home goods and baby products and stuff like that. But there are a lot of rules and regulations governing advertising to children, right. And whatnot. And so like and if you’re going to use content from kids, I mean, now you start talking about COPPA compliance issues and that’s something that we don’t touch at all. The truth is, like we tend to focus more when a generation kind of hits that like 18 year old threshold and entering like the working world and they have a little bit of a disposable income, that’s when we really start engaging. Of course there’s a big part of the market there, but it is it’s a whole new world.
Anthony Carranza: And I was curious because I know that there’s always ongoing conversations, but know if you’re impacting that side. Okay. And what do you foresee from this partnership? What are the next steps? I don’t know if you are in liberty to discuss who I’ve seen the the names of the brands. Are you working with any of like that high profile community of verified creators on TikTok or not?
Erick: Yeah. Yeah. I mean, so our brands are almost exclusively Fortune 5000. We do a lot of work with movie studios, big consumer goods companies, beauty, automotive apparel, you name it. In terms of kind of roadmap and what’s next, we’re working really closely with Tiktok’s product team to just work through, I would say, some of the greater opportunities in the industry when it comes to influencers. And it’s been great because like their team is super receptive with ours, with feedback and they really encourage it. And so there’s just a really good culture. You can tell on the TikTok side that they not only care about taking care of their creators like they’re obsessed over it, right? And so it’s great in terms of roadmap, we’re just going to continue to iterate through. I mean, there’s a whole host of social commerce functionality that all the platforms are looking at. And so that’s going to be really exciting to work through with TikTok specifically as they advance their social commerce capabilities and ambitions. Because we believe creators are going to play a really big role there and really excited to just follow it and stay up on it.
Eric 2: And does Open Influence have an existing relationship or partnership with with Instagram, Facebook at this time? Or are you a little bit more with TikTok? Because what I’ve noticed in the past two years, user growth has been with what you said, like it’s been exponentially growing on the business side and users just keep flocking. I’m seeing people who are like, Nah, I don’t want TikTok now. I do. People who are just, okay, maybe there’s something to this and people are also getting compensation. So do you think I mean, I guess there’s a two part question. So do you have an existing partnership with other platforms or that the market and the demand really pointed? We need to move in this direction with TikTok.
Eric: Yeah. So so we have existing relationships with others with meta being Instagram, Facebook, Pinterest. We do a lot of work with YouTube and partnerships there. And so yeah, I mean, we’re, we’re across the board. I would say the three main platforms from an influencer marketing perspective are Instagram, YouTube and TikTok. And so it used to be just Instagram and YouTube. And you’ve had other platforms that have sort of. Not really challenged it, I would say. But but TikTok has so. That’s been that’s been fantastic to see.
Anthony Carranza: I guess two final questions. What’s. Sort of your big takeaway of this announcement.] What would be like the biggest takeaway of this partnership and the way that the integration is happening with this partnership with TikTok, like in simple terms? And then another, what do you foresee maybe in the next year, is it going to be even better or will or will it plateau or is it still too early to say?
Eric: I think from a really, really big picture point of view, the takeaway I look at from an outside is. TikTok is really serious about helping its creators monetize. That’s sort of the big takeaway with us, I think. I think it. It is a really good. I mean, for us, it just if you’re a brand and looking for a company, I mean, I think it really does signal that as a company, we’re really on the cutting edge of all things, tick tock. And so that would be sort of the takeaway. I mean, not not to plug my business too much, but that’s that’s what that’s what I would say.
Anthony Carranza: And that’s I think that that is it for now. And I was going to say to either of you, do you have TikTok, do you post videos or you don’t or you’re just more of a viewer?
Eric: I am much more of a viewer. And I’m like, we’ll spend 20 minutes a day going down the rabbit hole with tick tock. It’s fantastic.
Anthony Carranza: You’ve got good self-control.
Eric: Yeah, because it could easily be an hour.
Anthony Carranza: So that’s exactly correct. I’m on the same page with that. Yeah, I think that is pretty much all. I do appreciate your time, Eric.
