The Future of Social Commerce w/ Sarah Penna (Orca)

0:00Maybe what makes a great short form content creator isn't necessarily going to make a great live stream. And I think part of that is making it very difficult for brands and creators to kind of figure out how to crack into this market.

0:15Hey, Sarah, welcome to the show. How are you? Thank you so much. I'm doing great. Happy to be here. Fantastic. You know, today we talk about something that I care a lot, that is social commerce, live stream shopping, and, you know, anything that is related to that. But before we get started, you know, we go in the ins and outs of everything today. Why don't you tell us a bit more about yourself using the map method that we use here on the Influence Factor podcast. Basically, it's divided in three different sections. It's the mission, achievements, and purpose. So the mission is what do you aim to achieve with your work.

0:46Achievements, anything that is like, you know, notable milestone in your life or career or both. And the last one is the purpose. So why do you do what you do? Sarah Penna, I'm the SVP of the creator team at Orca. So for me, my mission has always been to be very innovative in the digital media space. And I would say a through line of my career has been creating opportunities for creators to connect with their fans and make a living doing it. I've had a very interesting career. I've had a very fun career. Some highlights would be, you know, I started Big Frame right when creators could start monetizing on YouTube.

1:22So in 2010, late 2010, I started what would turn out to be the first talent management company to focus exclusively on YouTube talent. I built that company up, raised venture money, really proud of sort of the reputation that my company continues to have to this day, which is, you know, very creator first, very focused on actually adding value to creators at a time when that actually was very rare. And people were mostly just trying to get as many creators signed up as possible. exited that company in 2014 and sold it to DreamWorks slash Awesomeness TV. A personal milestone at that time was I was actually six months pregnant with my son.

2:00So he's about to turn 10, which is wild. So 10 year anniversary of selling Big Frame happened this year. And we decided to tell the team on April 1st, which I don't recommend anybody doing. But you know, How You Live and Learn. And then I operated a new business within Awesomeness TV until 2017 and then left to pursue a lifestyle IP brand called Brolic. That was in the romance space. So that was really a passion project for me. I love the romance space. In 2017, again, it was very early. You're now seeing this massive rise of book talk and book tubers and all of that. And then went on to lead creator partnerships at Patreon before joining Orca two months ago.

2:44Wow. So that's a very quick highlights of my career. And my purpose is really simple. It's get creators paid. Fantastic. First of all, congrats on everything that you built. Quite a journey. That's for sure. I can imagine only we would have like to do a 10 hours podcast about all the different, right? I have a lot of stories. I'll say it's hard. I can imagine. I can imagine that. And, you know, before we get more in the details, tell us a bit more about Orca, just for people that might not know about the platform. Yeah, absolutely. So Orca is a social commerce company. We work with brands across live streaming, short form video, and then the team that I oversee, which is affiliate.

3:25And so we work with about 12 ,000 influencers across our affiliate network to help them get products into their hand and promote them through mostly TikTok. And, you know, so, I mean, we all know, right, that social commerce is finally becoming a thing, right? Thanks to TikTok shop, you know, and when it comes to live streaming, there is Amazon Live and others. Of course, it's not the same as, you know, as strong it is, let's say, in China, right? Or even in Indonesia, other countries like that. And something I wanted to ask you, it is how do you actually become a good live stream host, right?

3:58Because you can be a fantastic content creator. You can be an amazing influencer. it doesn't mean that you're going to be a good live stream host, right? Because it takes a lot of energy, many hours in live. You know, you need to know about everything about certain products. You need to know how to interact with people, reading comments in lifetime. So for anyone out there that would like to maybe get into these, do you have any tips for them? Yeah, you're very accurate in that. You know, maybe what makes a great short form content creator isn't necessarily going to make a great live stream. And I think part of that is making it very difficult for brands and creators to kind of figure out how to crack into this market.

4:38At Orca, we have about 42, between 42 and 45 posts, live hosts that are actually on our payroll. And we help train them. We do brand immersions with them, really get them to know, you know, understand the product. I think the difference between what we would, you know, when I say influencer, what you would typically think of as an influencer, they're mostly trained in the art of brand integration. It's very different than the art of selling online. And when you see, you know, sort of traditional content creators going live, it can be kind of hit or miss. So you definitely have to have a lot of stamina.

5:13You need to be able to talk and to go live and to be interactive for four to six hours. Wow. It is a long time. So, you know, we have some tips and tricks around making sure you have a co-host or you have friends come and join and they can kind of, you know, take over when you need to go get a snack or take a bathroom break or just rest your vocal cords for a minute. You have to have a lot of charisma. You have to be able to immediately grasp people in those first three seconds. You know, what is it that is going to draw that audience in? And then you really have to know the product and understand the product.

5:43It is very QVC feeling, right? is that there can be entertaining elements, but what you're really looking for is explain the product, show swatches, show befores and afters, be excited about what it is that you're selling. And I think we're starting to see that space get a little more mature than it was even, let's say, six to seven months ago. And how do you keep people to, first of all, stay on, right? Because you said four to six hours. So of course, I don't think that someone is going to stay there for all the six hours, right? maybe a bit of back and forth, joining in and so on. So my first question is like, again, you already said something, but like, how do you keep that entertaining?

6:22And number two, how do you potentially get the people to come back? Is it incentives? I know that especially in China, again, there are so many apps where you go and there is a lot of gamification happening, right? So the more time you stay, the more money you spend, the more coins you get. If you come back and you do a strike, right? So every day you come back to the live streaming, you get also some bonuses. What could be some of the tips for people that, again, they don't have the tech components of what is happening in China, but specifically in the US? In terms of things that people can do in their live stream, one thing that we talk about a lot is this idea of loops.

6:59So you don't have to have new material for six hours. You're going to have sort of a 15-minute segment that's going to loop. So you actually do want new audience cycling in and out. You're not necessarily wanting someone to stay. Sure, if they want to stay around for the whole four to six hours, welcome them. But the goal is, hey, how can we kind of bring someone in? They're not going to be totally lost, you know, if they join midstream. They're going to kind of come in. There's going to be a loop within those loops and in between those times. You can do really fun, interactive things. Giveaways work really well.

7:33You know, that works across all social media whenever you're trying to increase engagement views everything obviously within the parameters of what tiktok allows so um giveaways discounts those are probably the two biggest drivers so heavily discounting products during the live stream creates that urgency and that follow oh my gosh this thing that you've been eyeing you've probably seen it in your for you page popping up now's the time to get it because it's 45 off and this is it we're just going to do it for these, you know, this one live stream. And so people will come back and see the flash sales.

8:06It makes sense, especially that's what I say all the time, right? If you're taking time off your day, right, to go on a live streaming because it's happening in that moment, there should be, right, an incentive on why should I buy in that moment, right? Because if not, I can just go in async, right? I go to TikTok, I go to Instagram, go wherever I like, you know, Snap, you know, YouTube, even Pinterest, right? And I can just go and search, right? I pull the information to me, I find something and then, you know, I buy. But if instead there is like, you know, okay, there is a big discount happening right now.

8:36All if you buy now, right? So again, similar to QVC, right? Urgency, the formal effect and so on. So if on the one hand, right, we have hosts, right? That they go through a sort of like almost academy, right? So they have to learn how to interact, how to stay there with energy and charisma for six hours. On the other hand, you have the everyday person, right? that maybe didn't go through all this training. And because of now, you know, affiliate marketing getting bigger with the social aspects, everyone can create a video these days and say like, oh, these, you know, massage machine, whatever changed my life.

9:10These brownies with protein are the best, right? So first of all, why do you think that it's getting so popular in terms of like your affiliate marketing? Again, it's been there for ages, but now it's getting popular again. And are you noticing any trends? Yeah, so I believe that the ease of actually being an affiliate marketer on TikTok has created, it's similar to when YouTube made it easier to do brand integrations. They sort of paved the way for an entire industry to form around that with the creation of MCNs and incentive programs and onboarding brands, educating them. We're in that same moment right now.

9:46TikTok is educating brands. They're empowering companies like Orca to educate them, to help them get comfortable with the TikTok platform. And for creators, it's amazing because there is a lower barrier to entry. You can become an affiliate with 5 ,000 followers on TikTok. You have this whole suite of brands at your fingertips. You can add them into your showcase. You're not required to have a manager or an agent going out and negotiating brand deals with you on your behalf. So we're seeing brands need to shift their understanding of how to work with creators, specifically when it comes to affiliate on TikTok and sort of change the expectations from this is going to be a highly controlled back and forth, creative concepting, multiple rounds of notes with a creator and an upfront fee to, you know what, we're just going to set the criteria for who can work with our brand, who can get samples.

10:40And we're going to release a little bit of control and we're seeing huge results for the brands who are able to get there. Is your brand ready to amplify its reach while the influencer marketing factory is here for you. We are a global influencer marketing agency helping brands ignite their growth. From influencer identification to campaign strategy, handling legalities and agreements to managing shipping and logistics, we got you all covered. We work with hundreds of brands across different verticals from Fortune 500 companies to direct-to-consumer brands. And we don't just stop there. With detailed ROI analysis, we help brands like yours measure success, transforming impressions into conversions.

11:20You can find us at theinfluencermarketingfactory.com or just searching the Influencer Marketing Factory on Google. And in addition to these guidelines, you said it's a bit difficult, right? Because you're going to lose a bit of control, but is there any other way for the brand to still being able somehow to say, okay, we want to open this up to kind of everyone, right? They want to do affiliate. But again, you said the guidelines, what is the best way to control that type of things? Should the brand and contact people that are doing affiliate marketing one by one? Should they like, tell me a bit more how they can, again, do that without losing control of their also brand image, right?

11:54Because if you don't really, you know, pay these people in advance, you cannot really say what they should do and what they shouldn't, right? So the ball is in their court, but you still want to protect your image as a brand. So any tips there? Yeah, I mean, I think it depends on your goal as a brand, right? If your goal is sort of market awareness, you can be a little more controlled. in messaging and you know they're without getting too much in the nitty-gritty but with you know using a company like orca we can help do open plans versus target plans and target plans have a lot more control versus the open plans now we will manage expectations with those brands that the more control you have and the more restrictive your you know creator profile is certainly the lower gmv we expect especially at the beginning casting a really wide net is important then we can see these are the kinds of creators that are working really well.

12:48We're going to double down on them. We're going to invest in the top affiliates. We're going to do, you know, actually create direct relationships with these creators. So I do, I would recommend, I mean, depending on the brand, you know, obviously an independent brand upstart is going to have a lot less parameters than a legacy brand that's been around for 75 years. And so really for me, and this is, this is true for brand deals. It goes back to what is your, you know, do you want to just get on TikTok talk shop? Do you want to get your sea legs under you? Do you want to see how it works? Find a couple top affiliates that maybe you could flip into, you know, brand, you know, actual brand deal creators.

13:24Great. Are you trying to drive massive GMV? Very different strategy. Since you said it depends, right? By the goal, the objectives and so on. If we, let's say, you know, could be brand awareness, could be GMV, whatever. When should brands, you know, start beginning, like, begin thinking about their social commerce journey and strategies. And what are some of the things that they should avoid in order to commit specific mistakes that maybe you've seen happening over and over? Yeah. I mean, I think it depends on the brand again, but one really good metric of, hey, it might be worth us to jump on this affiliate.

14:01And this could be TikTok. It could be, to your point, Amazon. It could be the various third parties that work with Instagram. YouTube's getting into the game. Is there already significant organic video content being made about your brand? If yes, and we can help you define significant, right? Because that's a very vague term. But if there's at least some traction with your brand organically, probably a good sign that if you start an affiliate program, you'll find some traction within six or seven months, if not sooner. and so that's really the first thing that i would say for a brand i would also analyze your competitors who are your direct competitors what are they doing in the space what's their organic traffic look like what is their paid affiliate are they on tiktok shop are you seeing them everywhere or are you seeing them kind of you can see on tiktok how many items have been sold of a specific item they just say it right there yeah so is it a really big brand and you've only sold 10.

15:01They've only sold 10 items. Well, it's probably a sign that the market isn't quite ready for your product. And then it's also what creators do you want to go after? Obviously, there's a huge makeup and fashion and skincare on TikTok. That's the biggest category. Are you in the pet space? Are you in a very unique niche that isn't oversaturated that TikTok probably wants to get into and it's going to help you onboard and incentivize you. So those are the things that I would have. And do you have any case studies that you think that, you know, maybe even like, you know, with Orca, like, you know, there was, they were successful and the why there is a why, like, have you noticed anything that worked well for a specific brand?

15:44So again, I would like to know a bit more if you can share either case studies, numbers, metrics, why they were successful and so on. Yeah, I can share without using names. We work with a wellness brand that's in the vitamin space and they are they're an independent brand so again take that if you are working with a brand and it's much more of a legacy brand with a bigger legal team let's say take that with a grain of salt but they are incredibly open with who they want to use as affiliates so they're like anyone who's excited about the brand we want to work with them you know unless there's brand safety concerns you know the the typical kind of brand safety concerns the second thing they do is they are very generous with their sampling.

16:28Again, this is easier with vitamins, sort of like a lightweight, low cost of shipping item than say a chair or a cooler or even a mug, these kinds of things, right? You have to take into consideration. And all of those factors combined, they're doing high six figures a month in affiliate revenue. So it can be incredibly lucrative. and those are the kind of things that you can toggle. How many people are reaching out to? How many samples are we giving? How strict is our criteria? And what ultimately is our goal for them? It's Drive GMV. We work with another brand in the beauty space and they're very good at using their Hero product, which is a product for your lips.

17:14They're very good at using that as sort of a hook and it's a low cost. They sell very, very well. and then you use that as your cook to get people okay that's i i'm i'm willing to invest you know ten dollars in this in this lip stain um and i love the brand what else do they have so that's another thing you need to have at least some kind of low cost item i would say tiktok right now is not at the maturity level for very high end makes sense no especially you know yeah like in the beauty or vitamins and so on you can have like this couple of dollars, right? The type of things that you can easily ship.

17:52As you said, they're very light. Yeah. When it comes to other, like either luxury items and so on, it might be a bit difficult. So, so I absolutely understand that. But it's a good strategy, I think. Most probably in time is going to be, going to be some saturation, right? We've been seeing like waves, right? Where even, you know, like there were like a few people doing like bachelor parties or like things like that and asking to brands, like, can you ship me everything, right? That you have for free. I'm going to, da, da, da. So we're seeing all these waves. And sometimes it works. Sometimes it's just a waste of time and money because it doesn't really bring to anything.

18:26So as we correctly said before, it depends by the type of brands, the type of industry, the verticals, the goals, et cetera, et cetera. What is missing right now in the social commerce industry? Can be technical, can be behavioral? I think it's two things. One, I think we need more platforms to get into the native affiliate space like TikTok has. TikTok just owns and dominates that space and it's amazing. But we know from early YouTube monetization days, one platform owning it all, it's not good for the creator economy. It can change, things can happen. We don't know. So I'm heartened to see YouTube getting into this space.

19:11I would love to see other platforms taking lead. I know Instagram had some attempts at it. I'd love to see that try again. Pinterest. I think there's a lot of opportunity there. I think there's also a lot of trust that needs to be built between the consumer and the product. I think there's a perception that it's not the best quality stuff. Or do I even trust? Am I buying something on TikTok? Personally, I remember the first time I bought something on TikTok. I'm like, I may never see this product. That was kind of the feeling that I had now shop a lot on TikTok shop. And I feel very comfortable that the items are going to arrive there.

19:52It's high quality. It is what it says it is. But we're doing the work and TikTok's doing the work to bring those more recognizable brands onto the platform and shift that perception of kind of, you know, bargain basement items from brands we haven't heard of to, you know, brands that are loved and trusted. Like we work with Elf. I think that's a great example. is a brand that's a legacy brand. It's loved, it's trusted. It's doing very well on TikTok. They have their live stream short form on affiliate strategy at lockdown. And I think rinsing and repeating that strategy is very necessary. Especially now that you have reviews and photos and videos under each TikTok shop, right?

20:34I think that that is going to be another big thing that other social media has to start implementing because it's not the link that brings the body item the social commerce. Social commerce is social, right? So you need to see social proof from others. You need to see exactly like how it works for Amazon, right? Amazon became like what it is also because you can easily go in the reviews and read real reviews, right? They're like transparent, you know, honest. And you can see even like the item, how it looks like in the hands of a normal person, right? And not just the brand, right? Because the brand will always try to make it like look perfect, right?

21:09But when you see that, oh, that dress actually stay like, it fits perfectly on this person that is similar to me, it's not just a model, then fantastic, you will most probably buy it, right? And so this is what is missing. What are, last question for you, but what are some of the trends or things that you would love to see in the creative economy? So let's not just look at social commerce necessarily, but as a creative economy, it's a big question, but is there anything that you are very excited about to see? I mean, I'm always excited to see creators making money in unique ways. I really like this affiliate space because like I mentioned, it knocks that barrier to entry way down.

21:44I come from the membership space as well. And I would love to see that space continue to mature and find its footing. I like that the affiliate and the creator membership space sort of live diametrically opposed to each other in some ways. I'd like to see those be more additive. I think someone could be a very successful affiliate seller and have a really thriving robust community. You're still seeing TikTok creators having a hard time finding footing on other platforms. I think it's essential that they start finding that footing, building that community, being able to move audiences from place to place.

22:18That's always been essential to success and longevity. So I'd love to see creators and platforms making that easier. And yeah, again, the affiliate space, it leans into the algorithm. The creator membership space leans way out of the algorithm. So how do those two things play together and really help somebody make a full-time living at that amazing no that's also what i'm looking like for work too uh you know more monetization easier way to do that more integration right longevity for sure as well right because it's easy to maybe hit the jackball like one time but then what does it mean right stay there for for the long term right so age-old question from from the john of the creator economy i think we're getting i would say every year closer and closer.

23:02And yeah, I'm excited to see where the social commerce space takes us. Me too. A hundred percent. Fantastic. Bessara, thank you so much for joining me today. Fantastic what you built so far, all your journey. Again, maybe one day I will hear some of the stories, I'm pretty sure again, right, that you have a lot of things to share. And thank you for also sharing with us your knowledge about the industry, what is happening right now, all the tips for brand marketers, for creators, for potential hosts listening today and for your, you know, like sort of forecast and excitement about the future of the industry.

23:37Absolutely. Thank you so much for having me. Amazing. Thank you, Sarah. This was the Influence Factor by the Influencer Marketing Factory, and I'll see you next week.