Sep 20 • 31M

The Unmakers: WeAre8's Lizzie Young on why she wants exactly 6.5% of social media budgets

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Insights into the media and marketing industry from an Australian perspective, from the founder of Mumbrella and the author of the best selling book Media Unmade, Tim Burrowes
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Welcome to the latest episode of The Unmakers, Unmade’s podcast series where we talk to the people remaking the media and marketing world. 

If you're an unmaker with a story to tell about how you're changing the media and marketing world, we’d love to hear from you on letters@unmade.media.

Lizzie Young: Social media without the toxicity

In today’s episode of The Unmakers, Tim Burrowes talks to Lizzie Young, CEO for the Australian operation of new social media platform WeAre8.

In the conversation she explains why it was time to leave Nine, why she wants to capture 6.5% of marketers’ social media budgets and reveals the next major step in WeAre8’s product roadmap.

Today's episode of The Unmakers was edited by Abe's audio.

Transcript:

Tim Burrowes:
In today's episode of the Unmakers, I talk to one of Australia's most accomplished commercial media executives, Lizzy Young. After a career spanning the radio industry in the UK and Australia, and a dozen years rising towards the top of the executive ranks at Nine, Lizzy Young joined social media startup WeAre8 in July this year. It's off to a blistering start. I began by asking her why it was the right time to leave Nine.

Lizzie Young:
So I wasn't actually looking around. The story goes Sue Fennesey, who I have never met and was not connected to, DMd me on LinkedIn October last year during the pandemic lockdown number two, when I was in the midst of a great role at Nine, homeschooling two children. And I thought, "Sure, let's have a conversation."

Tim Burrowes:
Now Sue is known in this industry for having started Standard Media Index.

Lizzie Young:
Absolutely. So when I received her DM and I did a bit of research, I thought, "Aussie, female founder, has had a couple of businesses, one of which was SMI, this will be an interesting conversation regardless." So we did that. And actually that conversation was about telling me about WeAre8, from the point of view that I was in control of Nine's marketing spend. So she was talking to me to present the product and tell me it was going to launch in Australia in 2022. And at the end of her pitch I said to her, "If you are asking me to divert six and a half percent of Nine's social media spend for a campaign to WeAre8 when you launch as a test and learn, we'll absolutely do that." Great offering, of course, to which she then said, "I'd also like to talk to you about running Australia."

Tim Burrowes:
Interesting. And we'll come on to that in a second, because I suppose one of the interesting things about one of your roles at Nine, was there was a point when Nine was really prosecuting the case of the distortions in the market we were seeing, created by the big platforms, by Facebook, by Google, and you were the face of that to a certain extent. So I suppose, do you think that made you a little bit more open to that conversation?

Lizzie Young:
Absolutely. Yes, you're absolutely right, I've long been on the record of believing the economic models of the global platforms were not appropriate when you compared them to how local media companies operated. So I think what I heard from her about WeAre8, is her absolute desire to flip the system, and her absolute desire to think about how you could deliver a digital experience for a consumer and a brand differently, and actually make a difference. And she's put her money where her mouth is.

Tim Burrowes:
Okay, well let's come onto that. I suppose the other thing is it came in terms of thinking about your role at Nine at a time of change. A new CEO had come in, there was a new team coming through. Presumably that was a factor as well. Did it feel like this was a punctuation point, a moment to move on?

Lizzie Young:
I felt very much like I'd had an amazing 12 years at Nine and we'd done lots of things in that time, two mergers and acquisitions, et cetera, grown new brands, new platforms. The thing that actually did it, was I had just got to the point where every year is the same cycle. And if I was honest with myself, did I want to do my 13th year of the calendar year? Every show happens at a certain point in time. You can really plan to January to December. And if I really think about my career, in my head I had probably one more big exec role to do. And I knew I wasn't going to go to another local media player, and I definitively said I wanted tech. So that they were the considerations. As sad as I was to leave Nine after such a long time and a great time with a great team.

Tim Burrowes:
Now it must admit, I did have a hunch that when you left Nine you'd been in the running for CEO, as a number of people had been. Maybe it was just seeing your route blocked, and time to see what happened once you stepped away. Because sometimes that's what makes things happen, is people becoming aware. But it feels like you actually did have something tangible already to jump into.

Lizzie Young:
Well, I definitely agree with that Tim. And I think the last time I heard you mention me on your podcast, you were posing that exact question, was it that I was leaving Nine, or that I was really heading off for what was a real new opportunity?

Tim Burrowes:
Well this is probably a good point here to talk about WeAre8 and the product, so let's maybe just... Some people will have downloaded it and tried it I'm sure, but others listening won't. So let's maybe talk about it first of all from the consumer point of view. I must admit, I haven't spent much time with it, but my initial impression as a user is it feels a bit like Instagram but without Mark Zuckerberg's fingerprints on it.

Lizzie Young:
So what we aspire to be is a social media platform. We have two parts to it for the consumer. There is the 8Stage, which is our social media content feed, and there is the brand advertising experience, which actually benefits the consumer, or in this case the 8Citizen as we call them. So when you come to us, there is a social media feed. It is meant to be inspiring, empowering, it is meant to reconnect you with yourself, your community, the world around you. We are hate free.

Tim Burrowes:
Oh I shouldn't have done that. I just switched to WeAre8, and immediately it started making noises. So yeah, sorry about that Lizzie.

Lizzie Young:
That's totally fine. So yeah, so you were just on the 8Stage. So our 8Stage is our feed. Inspiring, uplifting content that reconnects you with people, your community, the planet. The second part of the experience though is the ad experience, which is entirely opt in. So it only comes to you when you decide you have the mental availability all the time to engage in advertising and brand messages from a client.

Lizzie Young:
So the ads sit there each day for you and you get a little alert and when you opt in, then your ads for the day play. And then you'll watch through that ad, and then there's between one and three little questions for you to answer about the ad. And once you've done that, you have earned some money into your eight wallet, little micropayments make you feel good, and you then have the opportunity to pay it forward to a cause that you care about from one of our eight areas of social impact.

Lizzie Young:
At the same time you know that actually money has also gone to climate solutions and money's also gone to a charity of the brand's choice.

Tim Burrowes:
And this, I suppose, is the key point of differentiation. Because you know that old cliche, if you're not paying for the product, the product is you. Then obviously, in this case, the consumer is a part of it. Do you think it takes a particular subset of consumer to actually be willing to volunteer to watch the ads?

Lizzie Young:
Yeah, I do. There's 21 million Australians using social media at the moment and they are on products for 90 minutes on average a day. There is absolutely a place, if you want to go and hang out in the metaverse, go do that. If you want to dance on TikTok, do that, tweet on Twitter, do that. When you want to change the real world, you come to WeAre8. So there is going to be a subset of those people who, within their 90 minutes, think they could probably give us eight minutes a day because they want to feel good about the impact they can have. And that anecdotally is certainly what people are saying.

Lizzie Young:
So the way from a consumer's point of view that the product works, is you get your first micropayment into your 8Wallet 30 days after you join. And then every day after that, that you've watched or consumed an ad, you get these little micropayments. And once you start doing that, receiving those payments and you start paying them forward, that's when you start to feel really good. And we want to be habitual but not a habit. And at the end of the eight minutes we say to you, "Scroll less, live more. Go and live your real life."

Tim Burrowes:
And I suppose one of my first instincts is, as you say, that micropayments is not life-changing amounts of money or anything like that. I guess maybe this is a good moment to talk about it from the brand's point of view, my instinct would be the sort of consumer who's willing to give up their time for those micropayments, may well be somebody who's not a premium high-worth consumer that advertisers might want to talk to. Is that a fair assumption or...

Lizzie Young:
I actually don't think it is in this. I generally like your assumptions actually Tim, to be fair. So unsurprisingly we've done some work on who our target segment is, and found that they are the optimistic change champions. And that is then split into three segments, early adopters, university students and parents with children, young children. And they are also broadly the people that probably changed the government in this country earlier in the year. So it is definitely not low socio, I think it is broad, absolutely broad. And I think the great thing about this platform is that we are inclusive. And we want to be a place where people can have a voice, be that the people who have the ability to make a difference, or be that the people who are underrepresented or don't have other avenues for telling their story and actually raising awareness of their cause.

Tim Burrowes:
And just before we talk about how this looks from the brand's perspective, how about for the users who are there just to scroll the feed, what is it do you think that will attract them to this feed as opposed to hey, everybody's got a feed?

Lizzie Young:
So interestingly, early data, 98% of people are opting into the ads. So there's only a small portion of people that are coming purely for the feed. But what I think the feed does, is it resets you. It gives you something every morning that is a look at the world as we'd love it to be. And of course it's not all rainbows and unicorns, we deal with quite heavy topics like climate and things like that. But we are doing it in a way that I think is very constructive, and what we are not doing, is allowing any toxicity onto the platform. So there isn't that endless doom scrolling that can then happen. And it's also, I mean you referenced Instagram, I think what we are really proud of from a product perspective, is our imagery and our video is beautifully presented. So it is, I think, very engaging in that sense. The content is beautiful.

Tim Burrowes:
And for the most part, my impression of the algorithm is that it feeds the content of creators as opposed to the content of friends and family. Is that fair, or is that just because I haven't really made any friends yet?

Lizzie Young:
So we are definitely really keen to participate well in the creator economy, and you would be getting a lot of creator content at the moment. And there's a whole piece of activity that we're doing around funding the creative economy through a creative fund that we have. You've actually spoiled one of our up and coming announcements later this year. There will be a third feed, or a third screen rather, I should say. So there's the 8Stage which is our content feed, there is the 8Wallet, and in the middle will be our friends and family feed. So we are literally creating that at the moment in the product, and that is a two-way, only your friends and family. So exactly what the others were set up to do, and then have walked back from, you will have on WeAre8.

Tim Burrowes:
And let's talk a little bit about the privacy side of things, because that was a huge issue for the platforms, still is. What data and information do you collect, and how do you go about communicating it?

Lizzie Young:
So we have a private, very plain English privacy policy available to everybody on our website. When you sign up to us, it is all the usual suspects, but it is also your mobile phone number. And we have to do that, because that is an additional check for us on our intolerance of hate. So we also ask for mobile phone, but we explain to people why that is.

Tim Burrowes:
And so if you're kicked off the platform, you're not going to be able to come back on while you're using that number?

Lizzie Young:
Correct. There are also other, a raft of other safety features and enhancements that we have, that enable us to also have that position of zero tolerance on hate. And from a privacy perspective, we've absolutely done everything to the absolute highest level. We are held to account by the fact that, as a company, we are B Corp certified, we are audited by PWC, Always On. We have really set ourselves structurally in a place where we have the highest ethical standards possible.

Tim Burrowes:
Okay. Well obviously most people who listen to this podcast probably work somewhere in the communications industry. Many of them might be in the media agency side or brand side. Clearly they're thinking at the very least, "Maybe I should be trying the platform," or, "Is this platform for me?" What is the pitch to brands and potential advertisers?

Lizzie Young:
The pitch is simple, test us with six and a half percent of your social media spend.

Tim Burrowes:
Okay, now you said six and a half percent twice, so why six and a half?

Lizzie Young:
I really wanted it to be eight, but the data just doesn't stack up. And because Sue is so data obsessed, she's like, "I can't change the numbers, I can't change the numbers." So six and a half percent means that the campaign is carbon negative. That is why it's six and a half percent through our methodology with Ecology and PWC.

Tim Burrowes:
I have to get you to explain that a little bit, I think, because I don't fully understand that.

Lizzie Young:
Let's take a step back. So the pitch to a client is, "Spend six point five percent of your social media spend and move it to WeAre8. That six and a half percent will then make your campaign carbon negative." Basically we have methodology through our partnership with Ecology, which works out how much carbon would be emitted by the brand's journey through our platform. We then over calculate that to make it carbon negative, not just carbon neutral.

Lizzie Young:
I think it's also probably worth at this point, there's two other critical things in this. We've already done carbon reduction, because unlike a lot of other digital platforms where you are being served and bombarded with ads that no one is engaging with, we don't have any of those ads. We are only delivering the ad that someone has opted in and is now viewing all the way through. The other really strong point when I say to brands test us with six and a half percent, and that number is because of the carbon negativity, making the spend carbon negative, there's almost no reason not to do it, because there's no wastage, because we only deliver the ad that someone has called. So there is no budget wasted at all.

Tim Burrowes:
And I suppose it is funny, because the answer and the reason for six and a half percent wasn't what I was expecting to hear. I thought you were going to have some sort of science on why you need to shift at least that much budget to measure the effectiveness of a new channel.

Lizzie Young:
Right. No, actually it's literally purely and simple about turning your spend carbon negative. Because we know, once we get through that piece and we are serving an ad to someone on the platform, the carbon emissions are offset. So ethically it's a good thing to do. We know that there is no wastage on a brand's budget, because we only charge at the end of the fully completed video view and the engagement with questions. So there's no wastage there. And we know that our attention is kept all the way through of our 8Citizens. And then we also enable brands to click directly out to their owned asset. Whether that means you take someone to watch now, buy now, subscribe now, and currently we've got a 37% click through rate as well.

Lizzie Young:
So there is lots of different metrics in the journey that a brand can have with WeAre8. And at this stage, and it is early days, but the signs are very encouraging around how we can play a role in really engaged and from an attention perspective, in how audiences are consuming ads on our platform.

Tim Burrowes:
I was going to ask, I mean obviously as you say, it's very early days. Do you yet have a good case study you can point to, of a brand that's used or is using you effectively?

Lizzie Young:
We have lots from the UK. So big brands have used us and had incredible results. Nike. Nike have gone from two test campaigns to always on, basically. Heineken. So lots happening in the UK.

Tim Burrowes:
Are they doing that as a brand building thing or as something more promotion-specific?

Lizzie Young:
We are definitely absolutely fantastic for brand building, and we're absolutely fantastic for storytelling, I think. From a retail perspective or promotionally, too early to call in Australia. Certainly in the UK brands are being able to use us for that now. So if you think about that trajectory, that five months on from launch, so we've just got to get to that scale where we can literally shift a product in a couple of days time. And that's what, our ambition is to be there by November this year, given retail Christmas, et cetera. But certainly at the moment fantastic for brand building with retail opportunities to come, and we are building those at the moment for clients for Christmas and summer.

Tim Burrowes:
And with any media product, including social media product, you've got two sides, you've obviously got to create the audience and the advertising demand. How are the two balancing out at the moment? Are you actually able to deliver the scale of audience that advertisers want so far, or are you carrying spare inventory? Where are you at?

Lizzie Young:
You've nailed it. We are literally on that chicken and egg journey. We've had great support from the ad industry. We launched with Nine partners, and we have a much larger number in the pipeline at the moment. And now it is literally about onboarding citizens and getting them to start that daily habit of coming back to us and making us habitual in how they think about being able to have an impact to deliver the eyeballs that our brands need.

Tim Burrowes:
And recently you've launched your first major, I suppose, brand campaign locally. Tell me about the process behind that and the campaigners as it started to roll out and where it will go.

Lizzie Young:
So we think we've developed something that really speaks to our unique position in the market. And inherently we are looking at ways to demonstrate being good. Good for people, good for the planet, good for brands, and doing the right thing. So we've launched a campaign called It's All Good on WeAre8. And the process behind that was actually quite interesting, because we really wanted something that was light and uplifting and gave hope. And we are here because we believe there is a problem to be solved with how social media treats people and brands. There's no question about that. But we didn't want to dwell on that. And that's not very inspiring, but that's the business problem we're trying to solve.

Lizzie Young:
But conversely, from a consumer perspective, why come to us? Actually, because we want you to feel good by doing good. And so it's all good on WeAre8 was born, and interestingly we uncovered an artist in Adrian Eagle who has a song called AOK, that we think just speaks beautifully to that, but actually it was more than his lyrics and his song, it's actually fundamentally his beliefs. So we've been on a bit of a journey with Adrian to understand his very kind heart. And he has become the soundtrack to that commercial, along with the whole creative that's rolling out.

Speaker 4:
Social media that's free from hate, good for the planet and puts money in your wallet.

Lizzie Young:
And the campaign launched, as you say, this week. We've got everything from out of home, television, BVOD, radio, audio streaming, search, as well as some really nice activations, we think, around... We did street chalk, obviously good for the environment, disappears after a period of time. We did Apparition Media, the street posters that are on recyclable materials with Planet Arc. So we've really tried to be conscious where we can of our footprint. Overall we're also offsetting the carbon emitted from our campaign as best you can in this market at the moment. It is very tricky. There is lots of different calculators, we understand all of that. So we've at least done the best we can in the current set of circumstances, because we think it is the right thing to do, particularly given who we are. So really that campaign, it's everywhere really, other than paid social and I probably don't need to explain why we wouldn't use paid social as part of our mix.

Tim Burrowes:
Now let's talk about your growth in this market. I presume you're hiring at the moment. What roles are you hiring for? Where do you see the growth journey going?

Lizzie Young:
Sure. So we break our business into two pillars strategically. One is citizen growth, people using the platform and one is commercial growth. So people are in one of those two teams, led by Luke Robinson and Danika Johnston. And we're currently hiring people who work with brands and their agencies in the sales function. And then some very specific roles in our citizen growth function, which are around the content that you'll see on the platform, working with creators and our citizen growth.

Lizzie Young:
So that's where we're at. And from a growth perspective, I assume some numbers in terms of where we'd like to get to. So the ambition is that we'll be at half a million Australian citizens by mid 2023, and we will be at a million globally by the end of this year.

Tim Burrowes:
And to support that and sustain that and sustain your team, what sort of revenues will you need to write locally?

Lizzie Young:
Well it's an interesting question Tim, because we give back 60 cents in every single dollar that we make from our current revenue model. And look, if we took six and a half percent, which is the ask of social media spend in this country, we have a very good business. We all know how much revenue has gone to the social platforms. So if we could take six and a half percent, of course I'd like it to be more, I'm not going to lie, but if we had six and a half percent, we would have a very good business.

Tim Burrowes:
And in terms of your funding so far, so I'm guessing, I'd be surprised if you are yet at the stage of being profitable.

Lizzie Young:
That's fair.

Tim Burrowes:
And I'm interested to think about what sort of people have invested so far, because there've been investment rounds out in the UK as well. Do you find it's just your typical startup investor, or is it impact investors who are attracted to the fact that there's a positive element to the model as well?

Lizzie Young:
It's a bit of both, actually, it's a bit of both. So yes, there is definitely people investing in WeAre8 who have other investments that are impact led, and that is their reason for being. There is investment from people like Usher, Rio Ferdinand, and others who believe in it as an alternative to the other social platforms because of treatment or things that they have seen on the other social media platforms. So they really want to be part of doing something to rectify that and finding an alternative way and a better way.

Lizzie Young:
We had our first institutional investor in Centerstone Capital in Series B, and we also had investment from Channel four in the UK. So there is a mix of people. Fundamentally, I think the belief underlying it all, is that there is a way for digital media to treat people and brands respectfully, and to make an impact on people and planet, and be part of the solution.

Tim Burrowes:
And will there be an Australian-led investment round as well, or is the structure just not like that?

Lizzie Young:
There will be further investment rounds, obviously, globally.

Tim Burrowes:
And you'll have a role in running the Australian end of that?

Lizzie Young:
And within that there is Australian investors. There's actually lots of Australian investors already. Actually, a lot of people that invested in SMI as well.

Tim Burrowes:
You may or may not have a picture on this one. Normally when you talk to a CEO from a startup, one of the classic questions is, well, how long is your runway? Now obviously you are reporting into Sue, so I don't know if you have visibility of that.

Lizzie Young:
How long have I got to make this work?

Tim Burrowes:
Well, I guess it's always the question for startups, isn't it? How long until the money runs out?

Lizzie Young:
I asked that question before I joined, obviously. It'd be foolish not to. I was comfortable with the answer I was given, and it was a much longer runway than what I think we now need, two months in this business.

Tim Burrowes:
So you can see a root profitability already?

Lizzie Young:
A hundred percent.

Tim Burrowes:
Final question. Most startups fail. Proportionally, even more social media startups fail. You obviously think this one will succeed. Why?

Lizzie Young:
It's at the absolute zeitgeist of what the world is crying out for. There has been years now of feedback from brands, from people about what they're not getting from social media. And for me this was a beautiful articulation of what social media and social communities was meant to be, and the social impact that they could have. And to your point, lots of startups fail. I've just got every confidence in the world that this has made people think there is a different way and there is a better way and I can be part of it. I can be part of the solution. Something that I do already every day somewhere else can actually be turned to doing good. And that makes me feel good.

Tim Burrowes:
Lizzie, thank you for your time.

Lizzie Young:
Thanks Tim. Nice to chat.

Tim Burrowes:
Thanks for listening to the Unmakers from Unmade. If you are an Unmaker, I'd love to talk to you. Email me, tim@unmade.media.

Tim Burrowes:
Today's episode of the Unmakers was edited by Abe's Audio. I'm Tim Burrowes. Before you remake it, you've got to unmake it.