Last night in San Francisco, BlueRun Ventures co-hosted the Brand Connect Dinner. We work with Mark Evans at Social Local to put these events together, and we were thrilled to have speakers from Facebook, Proctor and Gamble, and Topsy speaking. Also, it was a great audience of brands and entrepreneurs, seeking to build relationships and trade information.
There are a few takeaways I had from the event.
We are in early innings of what’s possible for brand advertising through Facebook, Twitter, and other social media platforms. These social platforms are offering a new way for brands to communicate and connect with users. Currently, most brands are merely repurposing content and media from existing campaigns (TV ads, magazine content, etc.) and just pushing it onto the Facebook wall, where they attempt to drive views and likes, etc. What we saw though were several very interesting examples of new types of campaigns and engagements that leveraged some of the unique elements of Facebook to enable users to engage in more personal, more deep connections with the brands. This was exciting.
There will need to be a continuing evolution here. But this is to be expected if you study the history of media. When TV first came out, for example, the first ads were basically radio ads just read on TV. It took a while for everyone to figure out how to leverage TV. But leverage it they did. Same thing will happen in Facebook.
Big brands need massive scale from a startup to really engage. On the one hand, many of the big brands–P&G for example–are getting much more serious about engaging with innovative young startup companies. We saw this at the Big Brand Hackathon earlier this summer, where Home Depot, Toblerone, Ritz Cracker, and Kraft Mac & Cheese, all joined us and a bunch of hackers to build mobile-oriented demo projects that met their specific brand objectives. Big companies and brands recognize that these new media types and these new innovations are areas they need to build musclature around, and it is great to see them engaging and working to stretch themselves to strengthen themselves here.
At the same time, its important for a reality check. Concretely, big brands are driving massive scale and massive P&Ls. This means that for a startup to really matter to a brand, there is a very high hurdle that the startup has to cross to become meaningful. As Sonny Jandial, P&G’s Head of Innovation pointed out, the Brand Manager for Dawn Dish Soap is selling $1B worth of soap per year at around $4 a unit. That Brand Manager has to move *a lot* of soap. By definition, for the brand to engage beyond a little pilot or experiment with a startup, then, the startup has to be able to deliver meaningful numbers. It’s a tall order, and as Sonny pointed out, his role is to be more of an experimenter on P&Gs behalf and help startups get nurtured to a level where they can grow to a point where they’d have an appopriate amount of scale to engage.
Budgets seem to be coming. Without holding the brands to any fixed numbers, it did sound as though there was real understanding and thinking around th e need to spend here. Engaging with Silicon Valley is not a hobby effort–it’s real and it’s serious. The bar is of course high, but it did seem as though the budget is there.
All in all, over the last 6 months, I have seen a tremendous amount of interaction between large brands and with our portfolio and with the startup ecosystem more broadly. This is an exciting trend. At BlueRun, we will definitely continue to drive further into helping engage and connect brands into the ecosystem, and I’ll look forward to the next opportunities to get together. See you at the next Brand Connect dinner!