So I think, overall, we’re being smarter. We’re picking our spots. We are made decisions that make us less dependent on the platform. And this is the type of video that also really helps us work strategically with clients, entertainment clients and retail clients and other partners who can align with the great viewership and formats and IP that we’re creating in video and get really great value working with us in a way that also is beneficial to our business and doesn’t require as much of a heavy lift to deliver for our clients. So that’s how we’re thinking about it. It is the area of our business that is a bit more nuanced. And we’re trying to stay out of the middle area of the one-off kind of high-cost videos and focusing on our studio business to our IP to creators all in ways that are — that maximize the scalability and opportunity to integrate brands in a way that’s more seamless.
Amita Tomkoria: Maybe continuing on from that, you made several references to both your programmatic advertising business and then your affiliate commerce business and sort of refocusing around those two revenue streams. Can you discuss some of the specific opportunities that you see in each of those areas? And maybe on a related note, also how you guys are thinking about Google’s rollout of cookie deprecation and where and how that might impact you or maybe how you guys are sort of getting in front of that?
Jonah Peretti: Yes. I mean, as I said earlier, I love our affiliates and programmatic businesses because they are very scalable, high-margin businesses that allow us to get leverage from tech investment. And I think with AI being able to read and understand content, that’s just going to add to those businesses. At a very abstract level, affiliate generates revenue from driving transactions, which means people taking action. And our audience is very active, and we are able to inspire a lot of action from our audience to transact. And so if you look just taking the programmatic — or taking the affiliate business first, we drive more than $0.5 billion in transactions on behalf of our retail partners. And that results in about $50 million in commerce revenues for us.
So you can see it’s driving significant GMV for our partners. It’s also a great business for us. And it is something that will benefit and does benefit from our tech investments. Some of those things might be a little more nuts and bolts like being able to really do a great job featuring the products and the prices and great post formats and collections and gift guides and things like that, our editorial and tech work. And some of it is deeper machine learning, recommendations and now with Gen AI, the ability to remix content and feature a bonus product for someone, that might be a personalized selection for them, and other things that we’re just starting to imagine and that could extend far beyond that. So we really like to be in businesses that are — that benefit from our tech investment and also benefit from new technology trends like Gen AI, that will allow those businesses to get even more leverage six months from now, a year from now or two years from now.
Programmatic is similar. If affiliate is about transactions and getting paid to drive transactions, programmatic is more about attention. Classically, advertising is about selling the audience’s attention. And programmatic is the most tech-enabled, most scalable, highest margin way of selling attention. And we have more time spent than anyone in our competitive set. So we have a lot of attention that we can monetize through programmatic. And I think when — I mentioned earlier how programmatic can be enhanced by more data, particularly data around contextual alignment of advertisements, and that’s something that we can do with advancement in AI where we actually have machines that can understand our content and almost hand select, but at a massive scale, how advertising should be placed to maximize contextual alignment and conversions so things like that.
Overall, AI also will help us get more audience to the site and spend more time on the site. And we’ve seen that AI content drives more time spent than other forms of content because it’s more live, more personalized, more interactive. And as we continue to push the envelope on that kind of work, there will be people spending even more time on our site, we expect, and that will drive more opportunity for programmatic monetization to monetize that time and attention that people are spending. And so there’s a lot of excitement about sort of focusing on the next stage of the Internet and how to build a really strong, scalable business in commerce and advertising for the next stage of the Internet. And I think the cookies kind of represent an earlier stage of the Internet sort of the pre-AI stage, where a lot of the targeting and retargeting that — with cookies has been — you visit a retailer site and then the ad for that product follows around the web everywhere you go.
And that kind of very dumb, basic form of retargeting that was very effective is going to be harder and harder to do as cookies get depreciated. But more interesting, more sophisticated forms of targeting that are based on AI, based on contextual alignment are going to start to replace that. And I think you have already seen, as Apple start — has changed their — the ability for targeting within apps, you’re already seeing that companies have been able to adapt and evolve using new technologies that can perform as well as although differently than some of the older targeting technologies.
