Naming itself Meta displayed a level of confidence from the company formally known as Facebook and the direction it sees for the future of tech. But as Nicola Mendelsohn puts it, “calling ourselves Meta gives a pretty big clue as to where we think things are going.”
The metaverse, an immersive virtual evolution of the internet, is of critical focus for Mendelsohn, who is the vice president of Meta’s global business group. At its core will be creators, whom Mendelsohn calls the “building blocks of the metaverse,” and she wants to ensure they can monetize anything they conceive inside this new digital landscape.
Speaking with John Battelle at Signal 2022, Mendelsohn, also touched on new launches for Meta, including Instagram Reels and shared her read on the regulatory temperature in Washington, D.C. \
You can hear more from this lively conversation below.
We have a woman who’s got a big new job and big shoes to fill. Nicola Mendelsohn who is the VP of global business group for Meta. So please join me in welcoming her to the Signal stage. Hi. Thanks for coming.
Thank you for having me. And thank you for having all my friends here as well. That’s been wonderful.
Let’s start with a change from Facebook to Meta. That was quite an announcement. I think people buzzed about it for a month afterwards. And here I am asking you, nine months later. Tell us exactly the why of it. Because Facebook the brand is not going away, it’s still the Facebook app. But what’s the why of that significant change? What is the signaling there?
I just wanted to say how excited I am to be here with all of you today. I grew up in the north of England in Manchester. And I grew up with all the products every day in my life that were your products that you made. So to be here at the Mecca of products, well, doesn’t get any better. So thank you for having me. But you asked me the question about the name change. And it’s a pretty simple one in many ways, which is, as a company, we were founded 17 years ago. And we did start off as just Facebook. But we grew into a whole family of apps and services. So Facebook and Instagram and Messenger and WhatsApp and Quest and all these different products. And so there was a lot of confusion when it came to the company name and the individual brands as well. That was one part. Then the other part was to really show the direction of travel that we’re going in as a company now and, setting out the stall as to where the future is going. We believe that the next iteration of the internet is going to be the metaverse and we want to be one of the companies that sets out to want to build that. Now we’re not going to be the only one, many other companies are going to be doing that. But calling ourselves Meta gives a pretty big clue as to where we think things are going.
It’s almost as if AOL changed its name in 1994 to internet. Which maybe Steve Case should have done, come to think of it. But it was a pretty resounding, holy cow. That was a big statement. And I’m curious from the point of view of a brand marketer, when they think about doing business with Meta is it also meant as a shift in how you think about servicing clients. Is your role across all the divisions and thinking about integrating all of that? Is that part of the shift as well?
So I think some things stay the same. And the way that I think about my role, and what we’re doing is very much about working with our partners to really understand what the opportunities they’re looking for, what are the business challenges that they have, and then how the platform and the products that we have, can help them get the best return, help them get the growth that they’re looking for. Whether it’s on the things that we’re doing today, and making sure we’re optimizing on, I call it the brilliant basics, make sure we’re doing those, but also setting up the story as to what’s coming along the in the pipeline, and then actually looking further into the future as well. And this vision of the metaverse that we have, we’re also being very clear about where things are going in the future so that our partners can be building and be ready for those as well. So I think education is a really important part. I guess that’s what this whole thing has been about, going back over a decade, to be able to make sure that this company is as it always has been, at the forefront of whatever new innovation is coming out, any new technology, any new medium. The job of me and my team is to make sure that we keep you abreast and keep at the forefront of that.
Well, let me ask you the question I asked Matthew [Henick]. And if your answer is the same that he said, That’s just fine. That would actually be great, which is how do you define the metaverse?
The way that we’re thinking about it, is natural progression of where the internet’s going. we see that about every 10 to 15 years is a big shift. We had desktop, we’ve got mobile. We’re going to have the metaverse. It’s not going to be built by one company. It’s going to be built by different companies. Tech companies, individual creators, businesses, brands are going to build on top together. I think that’s very exciting. I think the core difference here, and I think this part is really important from a marketing perspective, is it’s going to feel much more immersive. It will be a place where you can go and be surrounded by more experiences that really dazzle your senses. That feeling of connection, of moving around and hearing sounds in different ways.
We did a whole thing in Cannes about the importance of sound. And we asked a question, what’s more important visuals or sound? Everybody said visual. And then we played a little film. And the film had in it not so great visual and beautiful sound and perfect visual, not great sound. And I promise you, everybody went the one with the sound. That’s the thing. That’s the most important.
You’ve just won the heart of every sound engineer in the world.
They’ve got jobs. As Julia said at the beginning, didn’t she, but there’s gonna be jobs that we can’t imagine, they’re going to be created. And that’s certainly going to be the case with this. So having to start thinking from a marketing perspective about how do I stimulate the different senses and different ways when I’ve only been used to a 2D experience? Now that I’m going to be thinking more in 3D in motion? What new skills do we need to create and learn from?
I want to ask you, this isn’t an elephant in the room question at all.
I’m waiting for that one.
If it weren’t for TikTok, it would be. They sort of crowded out the other elephant. But I will say it must be nice not to be the focus of a pretty relentless press, and Facebook née Meta, has been the focus of a lot of press attention for many years. Relentless stuff like that can get in the way, I imagine, of regular business, the tech policy, the sitting Congresspeople who like to talk about your company and others. Do you feel the company has been fairly treated, particularly by those on Capitol Hill in the United States?
John, I don’t know if any company feels fairly treated when you’re in the eye of the storm. But I think there’s a bigger, more important point here in terms of what you’re talking about. We’ve seen extraordinary advances in technology over the last 20 to 25 years. And the pace of regulation hasn’t caught up in the same way. We see with all new technologies, you have a honeymoon period, then you have a reality moment where people question and then you kind of learn how it works within society. And I think we’re in that place now. As a company, we’ve spoken for a long time about the need for more regulation. We welcome it, we think it’s a good thing.
We’re certainly seeing more regulation happening in other parts of the world than the US. Europe has been really at the forefront of a lot of the changes. I think it’s a good thing. And I think it’s an important thing also, as we starting to think about what, it could look like in the metaverse to take the lessons from last time and really get ahead of it this time. So a couple of the things that we’re doing, we actually invested $50 million in a two-year fund, to really go out and create research with academics, with people in civil society and with politicians, so we can start to work out what the guardrails are now, not to wait for it to be built.
With that greater experience comes potential for, I suppose greater harm. Julia was talking earlier about, creating an environment where, you know, kids have the right to play and not worry about it. I think that people think well, things got squirrely towards the last five years or so, with all the narratives about data misuse and misinformation. Why should I trust the metaverse if that’s the next thing, it needs to be secured first. So I’m glad you’re working on that.
But I want to pivot to a little bit just a tiny bit more about the metaverse in our state of digital video that we saw earlier there was mentioned as sort of have Web3 was this great hope, interoperability that we spoke about with Matthew, the crypto and blockchain underpinning some more personal agency as it relates to data and expression and identity. Then there seems to have been a significant pullback from that, led by currencies, the financialization of these markets. Facebook had a big effort in this in this space. Certainly blockchain broadly has not been abandoned. How should this audience think about Facebook’s role in blockchain? Crypto. That was a big part of your message to the market over the past couple of years, including Adam Mosseri, from Instagram. I pay attention to everything he says in space, because it gets very smart, and he processes a lot of it. So is Web3 over? Is crypto and blockchain over? Are we in one of those moments give and take that happen often in technology cycles?
I don’t think it’s over. I think there can be confusion sometimes between the metaverse and Web3 and what it actually means. It’s probably worth clarifying. Where we are now, if you look at web 1.0, that was very much about sort of static websites where you couldn’t do much with it. You sort of just read it. Then you went into Web2, which was more about you could get engaged people could upload, read and write. Now we’re in the world of the potential that we see for the metaverse where you can read, write and own. And the things that you’re describing, crypto, the blockchain, they’re the things that are going to underpin the metaverse. Do I think they’re over? No, I don’t think so. I think we’re still right at the very beginning of this. I think this is important when we come to thinking about marketing. The ability to create things in a place where a person can have a much deeper immersion, spend many minutes and perhaps even longer with the brand in different ways and then to be able to take things, and we believe in an open and interoperable, as Matthew was saying, is how we see the vision of this working. If we can all work the technologies together and the agreements going forward as well. We’re really all in on that’s how it should be.
There was a great example recently from Mini, who created the Miniverse. And the issue that they have, it’s a challenging issue, which is that they can’t make enough cars at the moment with some of the challenges that are going on.
With the supply chain.
Exactly. They want to create still the excitement for their audience, their future potential car customers. So they built the Miniverse. And there’s a few clues of what they’ve done that I think are really interesting. So they’re working with creators, and creators are going to be the building blocks also of the metaverse as we see it. What you can do is you can go and wear a driving suit. And they work with fashion influencers, creators to design lots of different versions. They also work with car creators to create different customized cars, and you can do that. And my favorite one is that they also work with physicist creators. Because in the metaverse, you don’t have to do things like in the real world to the Mini that you can drive can do a loop-the-loop and can drive up walls. But they wanted it to be as accurate as it could be, if you were able from a physics perspective to be able to do that. You can go in you can have these different drives with friends or people that you just meet hanging out there. I think that gives a lot of clues as to the sorts of things that perhaps other brands might do in the future as well.
Seems like the cars are leading the way. It was Ferrari’s and Minis and then in Lego Land it’s the Lamborghini’s.
With the Strataverse from Fender, you can go and play a kind of air guitar and hang out and strum away with others.
That sounds fun. I want to ask you the question I asked Matthew. I’ll ask you, and then we’ll move past Web3 and the metaverse and get to advertising for a minute. But I’m curious. Interoperability. You’re kind of singing my tune, because this is something that I care deeply about, I’ve written about, and I teach a course about this at Columbia. I think it’s fundamental to the internet, but the business models of the internet had sort of consolidated. I’m not blaming Meta, or Google or Apple or Amazon, much. But I would say that’s what happened. I still am a social pariah because my texts come from a Google phone, and all of my friends have iPhones. And that just shouldn’t, I mean, maybe there’s a reason for that beyond technology, but you know, one of those people is my wife. So it’s because they don’t want to interoperate, because they want to push people towards one phone or the other. Right? It is a business reality. So the philosophy underpinning this move towards Meta big ‘M’ and the metaverse small ‘m’ is pretty contrary to the business models you have operating right now. Do you have conversations about that at the executive level?
All technologies give power to people, there’s no question going right back to the printing press when we were able to do that, it gave power to people. I think Web2 did get consolidated again, within some big tech players and platforms, etc. I don’t think it’s going to be like that with the metaverse and Web3. We’re already seeing that with the rise of the digital economy, and especially with creators. That’s why I think it’s important to think about it as read, write and own. From our perspective, as a business, we’re making sure we’re equipping creators to be able to monetize this. That’s why you see us doing things like NFT’s.
That just rolled out on Instagram.
Yes. All these things give power to the creators so that they are in charge of their content, they’re in charge of their data, they’re in charge of the monetization of it and the fact that they’ll be able to move it around. That’s the vision that we see for this.
I think it’s pretty remarkable we’ve gotten over 15 minutes into this conversation and I haven’t even brought up advertising. I love advertising. I love marketing. I love the data piece of it in particular. I’m curious, you know, hot topic of conversation over the past year or 18 months has been the cookie-less future, right? Apple is making a lot of hay over how they are the privacy first company. It really has been Apple driving a lot of this with their policies on their platform. What’s your answer to that? There was a lot of concern on Wall Street, that that was going to impact Meta’s earnings, because people used across platforms cookies to identify and reach audiences and understand that and bring that data back on to Facebook and, have a profitable return on advertising spend. What’s your counsel to the audience as it relates to the world where there were no more cookies?
What this is at the heart is do you believe in personalized marketing at scale? The answer is we do. We do because it’s good for business, because businesses can find people with new products, new experiences, etc. It’s good for people because they’re not having to see content that’s not right for them, and they don’t want to see, that’s the fundamental difference that we have when it comes to Apple. Do we think that they did this because they believe in it? No we think they did this to put profit on their bottom line. That’s been pretty clear and proven out. Now, that said, what we see is that there is a movement at the same time to people wanting to have less data being out there. We’re rebuilding our platform in a privacy-enhanced way so that we can do more with less data going forwards. At the same time, we’re continuing to innovate, and coming up with new formats to be able to connect and do that. We see the rise of business messaging. We often see that behaviors start organically with people first. People are enjoying the fact that they can communicate directly to a business through a messaging thread, be it on WhatsApp, be it on Instagram, or be it on Messenger. We’re putting more weight behind that. There’s over a billion messages a week that already go between a business and a person. So that’s pretty extraordinary.
That sounds like an interesting new channel that we might need to do a whole session on next year.
I have one last question for you. We had TikTok here. Instagram Reels is taking off and Blake [Chandlee] acknowledged that. But I just want to ask you this question on behalf of the audience, which is, you’re at scale, you’ve got a big platform, large percentage of almost every major marketers’ budget, why shouldn’t they move part of that budget to TikTok?
Blake is very generous. Blake and I are old friends and I will be generous. There’s a lot of competition in the advertising space. There always has been. I am loving Reels. Reels is one of our fastest growing products that we have ever seen. There is a shift happening in the industry, with people wanting to get connect with short form videos. It’s great to see that. I’m doing it every day. I just posted my first one that I’ve done recently with yellow penguins in the hotel that I’m staying.
Did they move?
They moved them around. If anyone doesn’t know what I’m talking about, there’s a little hotel around the corner here that has yellow penguins. The housekeeping staff move them around.
They’re plastic. They’re not alive.
I should say that. No animals were harmed in the making of this Reel. I just did that. You get unbelievable engagement. You’re talking to people in the way that they want to and we’re seeing extraordinary results. The thing that we’re always focused at Meta is are we the people that can give you the very best results? For the dollars, the pounds, whatever you’re spending with us. I want the answer to be yes. That’s the reason why. Whether it’s on Reels, whether it’s on Stories, whether it’s on business messaging, and whether it’s what we do going forward. That’s what we want to be able to do that you’ll tell us about that where your best partner for growth.
Thank you for coming to the signal stage, Nicola, I really appreciate it. Thank you.