Shutterstock Outlines Its Vision for Giphy's Potential Ad Offer

The launch of Giphy’s native advertising platform, set to be revealed at the end of this year, will be worth hundreds of millions of dollars, proclaimed its new owner Shutterstock’s chief executive Paul Hennessy during the company’s most recent quarterly earnings call. Shutterstock acquired Giphy from Meta in May in a cut-price deal of $53 million after the social media giant was forced to sell the gif library and search engine after Britain’s Competitions and Markets Authority ruled its ownership to be anti-competitive. That ruling—which claimed to support digital advertising competition and social media use in the U.K.—cost Meta hundreds of millions of dollars. It had purchased Giphy in 2020 for around $315 million. The advertising opportunity is in the hundreds of millions of dollars.Paul Hennessy, Shutterstock CEO Shutterstock claims Giphy has around 1.7 billion daily users, with the platform holding 14,000 API connections, including integrations with Instagram, Facebook, Whatsapp, Microsoft, TikTok, Samsung, Twitter, Slack and Discord. Its library currently holds more than 100 million GIFs. It was through Giphy’s ‘Paid Alignment’ advertising service, which was available to U.S. marketers and was set to open up internationally, that triggered concern about Meta’s already strong hold in the U.K. digital ad market. Shutterstock is reviving the ad product in the coming months. “Thinking long term, the advertising opportunity, given the size and scale of the Giphy businesses, is in the hundreds of millions of dollars,” said Hennessy. He also said he expected Giphy to become a larger part of the company in the years to come. The future for Giphy at Shutterstock To avoid disruption and maintain scale, the 125-person Giphy team came along with the deal. For Meghan Schoen, Shutterstock’s chief product officer, the appeal of Giphy is its storytelling capabilities. “That was really meaningful for us,” she explained. “At our core, we're really focused on storytelling. Giphy is a business of micro-moments and storytelling, and with tremendous scale. It was a natural extension of our core value proposition for our users.” We saw it as a massive opportunity to further evolve our creative engine.Meghan Schoen, chief product officer, Shutterstock Schoen outlined the company’s ‘three engines’—content, data and creative—which Shutterstock is focused on building to help marketers and advertisers tell their brand stories. Giphy is a platform that was "instantaneous" in doing that while having a "tremendous reach," she told Adweek. "We saw it as a massive opportunity to further evolve our creative engine and really create that demand engine at scale," she added. In terms of the advertising proposition, Schoen would not go into detail but claimed that Giphy was a platform that would help marketers be a part of everyday conversations and offer native advertising. “Historically, they have not had an ad platform—the team's near-term focus is setting up the ability to actually have advertising run through the platform in really native and organic ways to unlock those capabilities and that scale for marketers,” she added. “When we say ‘native advertising,’ what we mean is somebody searches for something like ‘fun’ or ‘happy,’ and having the ability to have product placement in those gifs that feels very natural and something that someone may select, but it's also a way to get a brand front-and-center in everyday discourse. Those are the things that I'm sure the team will continue to explore.” With new partnerships with OpenAI, LG AI Research and Meta around its data and image libraries, the company also believes the evolution of generative AI will impact Giphy's own future library. "We're in the business of helping marketers, advertisers and creators tell their stories. And so there's a whole host of capabilities that we are exploring right now that allow anyone to make our library infinitely customizable," she commented. The ad industry's view The use of Giphy as an advertising product is not widely featured as part of the content strategy. “It's not discussions we're having with clients unless they’ve got some revolutionary product that we can’t envisage, then I would be guessing what that is going to be,” commented Allan Blair, head of strategy EMEA for VaynerMedia. He did admit that memes were still “a big part” of social media marketing and internet culture but added that clients were cautious about introducing them in their own communications due to copyright issues. That GIF You Just Shared? It Might Actually Be an Ad As to how it may be fair as a display advertising platform, Andrew Spurrier-Dawes, EMEA Head of Precision at Wavemaker, said that Giphy faced challenges. "The first is that the user is not on a social network, and so not there to browse, but instead searching for a specific gif. This means that the attention/engagement rate will be low as it is a drop in and out type of library rather than a publisher, where the dwell time will be higher. It will be tricky to increase dwell time without being interruptive," he explained. "Secondly, gifs are at the heart of pop culture, where certain gifs can be on a trend for a short burst before the next gif comes along. This means a really tight approach to brand safety and content control is critical to offering advertisers a space they know that will be relevant and appropriate for their brands—and not stealing their content if they are an entertainment brand."