Dangers of AI, Best-kept SEO Secret, & The North Face's Genius Marketing (Reactions Dec 2023 Week 2)

All right, so we're going to start on the reactions for this week. And Neil, you actually get to go first, or would you like me to go first? It's up to you. I'll go first.

You get to choose.

Okay, so there's actually Ross Hudgens, who's a guy that we both know. He had a post here on Twitter. This is one that we get— we're basically going to react to a lot of this news. And so actually, this one relates to the AI piece that I was just trying to get to. Scaled AI content carries real reputation risk for big brands. So this is Ross Hudgins. The juice here is rarely worth the squeeze. So Sports Illustrated said on November 27th, today an article was published alleging that Sports Illustrated published AI-generated articles. According to our initial investigation, that is not accurate. Articles were product reviews and were licensed content from external third-party company. And then they're just trying to offload the blame, right? So I think this is a good place for us to start. And we kind of touched upon it a little bit in the last episode around AI-assisted But I just think that too many people are just saying— I talked to a guy, I remember there's an entrepreneur, he's like, yeah, I was paying $15,000 to a content marketing agency and I decided to fire them. And you know what? I'm just paying $50 to an AI tool and it's just cranking out articles for me. Now, on the other side, this sucks for the content marketing agency because I have a content marketing agency friend. They're in trouble right now. They're losing a ton of clients left and right.

Yeah.

And they don't know what to do because everyone's switching over to this, right? I think there's a happy medium here. Obviously both Neil and I have agencies, but it's at the end of the day, like we just want to say, hey, the right thing to do here is to have a human in the loop at the end of the day.

If you don't have a human in the loop, the content's just also not as good. And I think everyone forgets this, no matter how smart AI is. If you look at ChatGPT, their index, at least of this recording, is from September 2021. So anything that it outputs is going to be, you know, scraping the web and it's scraping a lot of old stuff. Like when you're asking it just general questions and it's just old, people want fresh new information. Bard is more up to date, but even still then people want fresh new stuff that hasn't been talked about. If you look at all the content that does well, it's typically new stuff. It's not old regurgitated information.

I think the way to do this, Neil, is, okay, Let's say you have a ton of data. I think companies that have a ton of data, right? Like let's say we collect a bunch of data from clients. It's like you can now use Gemini or Bard or ChatGPT to upload the data that you have and then use it to come up with insights. And then you can take those insights, that data, and then you can craft a nice LinkedIn post, a nice Twitter post around it. And so that to me is still very AI-assisted and I think it's going to do a good job because I'm, you know, just like tangentially related here, like I don't like it when I have to go to my finance team and be like, hey, can you give me the blended LTV over the last 3 months? And then this channel over here, that channel. And then like it takes forever to get the answers. But to be able to ask immediately and get those answers, I can move a lot faster.

You can. What's funny is what you're talking about doing with AI, that only works if you have data. I think a lot of companies don't have data, so they're just relying on other people's information on the web. But like one thing that we're doing with our business is, We're moving from AWS to Google Cloud, plus they offered us an amazing deal today.

Oh, why? Oh, there you go.

That's what— Let's just say financially we saved a lot of money, but in combination, we believe, you know, Gemini, Bard, whatever you want to end up calling their solutions depending on the names they're starting to use, um, it's just going to be a better place for them to dissect our data and give us insights versus AWS, plus AWS costs And when I say discount, I'm not talking about like 10, 20%. I'm talking about something substantial.

Yep. All right, Neil, you're next.

Pick one. All right, so let's talk about the agency model is dead.

You're supposed to pick one of yours, but that's okay. We can go with that. So, but we're getting used to this format still. So this is interesting. So Neil, I listened to this podcast. This is Perpetual Traffic and it's a pretty, shout out to them. It's a pretty good marketing podcast. And what I would say is I agree with a lot of stuff that they're saying and some of the stuff like it's both Neil and I have agencies, so we're incentivized to just understand our incentives at the end of the day. But a lot of stuff is changing where Google, for example, what used to matter a lot was the way you Google Ads is how you structured your campaign, how you bid on, how you eliminated, how you had negative keywords and a lot of that stuff, right? And now it's more so it's starting to trend towards this Performance Max. It's not all the way in that direction right now, but more and more people are just saying, hey, I'm just going to run Performance Max and just leave it there. In the next 5 to 10 years, who knows what happens, right? Here, let me finish my thought first. The other thing is—

let me talk about Performance Max, right?

Because I think— go, go, go, go, go, go, go.

Right. So I haven't listened to this podcast episode. Did you see the— was it Adweek that wrote an article on Merkle and Performance Max? Did you see that?

No.

Okay, so Merkle is a big agency. It's owned by Dentsu, the big conglomerate based out of Japan, but they're global. Um, I think they say their headquarters are technically London, but either way, they have like 60,000 or 100,000 employees. It's something large like that. And I— the last time I checked their market cap, it was around $9 billion. So it's a big corporation.

Now, Merkle was a holding company.

Uh, Merkle is just an agency. They own tons of agencies. Yeah, yeah, yeah. They're switching all the names to more like Dentsu X, Dentsu, you know, Performance, whatever it may be. So they're trying to consolidate the brands, but it is an ad agency. When you look at what Dentsu, what Merkle did is with a lot of their clients, they ended up running Performance Max campaigns and they just let Google do their thing. Guess what happened to the performance for most of their clients, Eric?

I'm guessing it went down.

It did. On the flip side, we ran Performance Max for our clients. Guess what happened with our performance?

It went down.

It went up. You want to know why?

Oh, it went up. Okay. I thought— Yes.

So what happens, what we see—

Disprove your point.

No, but what we see with Performance Max is a lot of time it ends up driving junk leads and then it's fine-tuning its model based on also the junk data or the junk quality traffic that it's driving. So what we did on our end is we disqualified the junk, we send the junk to a different landing page versus the real good stuff. The Performance Max is then being fine-tuned off of the good stuff. And then we were able to outperform versus just letting Performance Max do it on its own, like what Merkle decided to do. We didn't want to take that risk, hence we had human intervention. The point I'm getting at is, you know, in the future it may be able to figure all this out on their own, but right now it isn't. So having a human go in there and tweak it, we're finding to produce better results than not having a human go in there.

You're seeing the theme here, everyone. So the theme here is you want to have a human in the loop because we're not quite there yet where it can do everything like It's this stuff. I mean, ChatGPT is barely a year old right now, right? Like this stuff is just getting started. So it's highly recommended you have a human in the loop. Same thing for us when we run performance access, the same thing as you, Neil. Like you need to fine-tune it. And fine-tuning just means that you're helping them iterate on data and you're helping guide the model, right? At the end of the day. The other thing too, Neil, I'm not sure if you're seeing this, but I'm definitely seeing this on our side at Single Grain.

Yeah.

There's becoming— there's more and more pushback going against the percentage of spend. I don't think that's going to evaporate overnight, but I'm seeing it more than I have before. What have you seen?

Wait, can you repeat the question again? Sorry, I got a text.

Yeah.

So the question—

okay.

So here's what we've seen, right? So we've seen there start to be a gradual rise in pushback against the management fees, right? So that the percentage of spend, which is what's typical in the ad world, right? But what these 2 guys said on the podcast, and they both have advertising agencies too, is they're saying they think the model's going to go away. I'm not sure it's going to go away overnight, but I think we're going to start to see a bigger rise in pushback.

No, I would say my agencies at scale, maybe others would disagree, but we're not seeing any pushback on management fees. We know a lot of the executives that run the bigger ad agencies, they're not seeing pushbacks either.

Yeah, so I can only speak anecdotally and, you know, listen to what these guys are saying too. So Neil's not seeing it, obviously different sizes for different agencies too, right?

So—

The common theme with fees and everything like that, what people care more about the fees is performance. Dude, we've taken accounts, Fortune 100 companies, not 5,000 or 500. I'm talking about really big companies that make tens of billions in profit per year. Not, you know, every once in a while or a billion a year in profit. I'm talking about 8+ figures. I'm not 8, 9, 10, over 10+ figures.

9.

in over 10+ figures in profit per year, right? So not actually 10, 9 would be $100 million, 11 figures, whatever it is. I'm bad at math this early in the morning. But we've charged them more management fees than what they were paying before. They don't care necessarily about the management fees. What they really care is in total, including your management fees, this is how much we spend, what's our ROI? And if you can drive a better ROI, people usually don't care.

Yeah. I think here's how I would position this. It's at the end of the day, if people aren't willing to pay and they complain about price, it means value hasn't been conveyed. And so, it really is a matter of how well you're able to figure out what their goals are and what the value is of meeting those metrics and then guiding and saying, hey, okay, you want to hit these metrics? Here's what's good. It's going to take resource on our end, but if we can hit these metrics, is it worth it to pay us this? And they'll say yes, right? And if they say it out of their own mouth, Usually they're much more receptive versus having sticker shock. Yep.

All right, next up, you pick one. Here's something interesting. You know, what percentage of search traffic, SEO traffic, do you actually think that companies over $1 billion generate from outside of their brand name?

I don't know, the way you asked that makes me think a low percentage.

10%.

Yeah. So, you know, I had this post on Twitter. We took a lot of data and we were, you know, analyzing it and I pretty much break down, you know, little SEO secret that no one talks about. So we look at the brand queries, what percentage of organic search traffic are coming to websites based on the revenue size. So companies from $1 to $9 million, typically around 12.5% of the traffic is coming from people Googling variations of their brand names. From 10 to 99 million, we're seeing it 22.4% of their search traffic, organic search traffic, coming again from people Googling variations of their brand name. And for 100 million to 999 million a year, we're seeing brand queries make up roughly 41.9% of the organic search traffic. And for a billion plus, it's 68.2%. It's ridiculous on how much branded traffic actually drives for big corporations. But this shouldn't be shocking. The last time I was looking at SEMrush, they had this report of the top 10 most popular search queries. 7 out of the 10 of them were brands like Instagram, Facebook, YouTube, WhatsApp, Amazon, et cetera.

Dude, as a side note, did you, I feel like you should be getting a lot more play on this one. Maybe this has to be repackaged. Did you put this on LinkedIn too?

I don't know if I got put on LinkedIn.

This for sure would do well on LinkedIn.

You got 25,000 views, but yeah. I also think with some of this stuff, a lot of it doesn't do as well because people can't relate to it. How many of us actually have a billion-plus dollar revenue a year company?

Yeah. Well, I mean, look, I think on LinkedIn, that's why I think it'll do well on LinkedIn, but that's interesting. So what is our key takeaway for this one?

You know, a lot of people are worried about like SEO, is it coming or is it going away? It's going to affect all these big corporations. What people tend to forget is A lot of these big corporations get the majority of their organic search traffic from their brand, not from random search queries. On top of that, brands tend to rank really well because search engines know that they're less likely to create fake news. Facebook too. Eric Schmidt and Matt Cutts used to have different sayings about brands. I won't repeat them, but the Matt Cutts one is the easiest in which he would be like, look, We know that New York Times and IRS is on this side and, you know, a lot of other sites that don't have that reputation are on the other side. And what SEOs really need to take away from this, build a brand, you know, use a rule of 7, use omnichannel marketing, get it out there, use all the channels. This is how you're going to win in the long run.

You know what? I used to hate, Neil, and I think we talked about this before, I used to hate it when people called me the SEO guy. And I think you didn't really like it as much either. But as we get older, I'm just like, it's okay to be known as a guy Yes, I actually, I still hate it today when people are like, you're the SEO guy.

And then I'm like, you know what's funny? I probably spend 90% of my time on business and business strategy than even on SEO. But it's okay because being known as a guy who's good at SEO has made me a lot of my income in this world. So I'm not going to hate on it too much.

Yeah.

All right. So we're going to cap it off with this one over here. So can you hear the audio, Neil? Yeah.

Oh, not on the video yet.

I bought this rain jacket a couple days ago because the tag in the advertisement said that it was waterproof, as a rain jacket would be. Well, listen, I'm 100% sure that it's raining outside and I'm soaking wet. Oh, look at this. This is really pretty here. Listen, I don't want to refund. I want you to redesign this raincoat to make it waterproof and express delivery it up to the Hooker Valley Lake in New Zealand where I will be boating.

All right. So the key takeaway here for those of you that can't see it is this gal, she got about 10.3 million views on her TikTok and she was complaining about her North Face rain jacket not being waterproof because it said it was waterproof. Now, here's the interesting thing. Now, this next video, we can talk about whether it's staged or not, but here's the thing. North Face reacted to it.

They got a helicopter.

Yep. With the same person.

Same person. So the first one I believe was not staged. It's the second video. Let me explain what happened in the second video and we can react to it. So the second video, North Face makes a video. I think it gets like 3, 4 million views or so. They take a jacket, a red jacket, and they get in a helicopter and they fly to the spot where she's supposed to be waiting, right? She shows up in the video. She looks like she's very clean and all that. So this video looks like it's staged. But the point is North Face had a chance here to really siphon off of one video that was talking about them that got 10 million views. And then they got even more views from it.

Yeah, that's really cool. I think that was smart of them too. I've had North Face jackets in the past. Maybe the one she was wearing wasn't rainproof, but when I lived in Seattle, North Face was one of the key go-tos because they do make products that are rainproof and that keep you warm and aren't too thick. But it's really good on how they ended up reacting like that.

Yeah, we can call it social listening or just being on top of it, but I think this is just one of those things that stands out and that's how you get people's That's marketing 101. 101. So don't forget to rate, review, and subscribe. It helps us grow. Check out this next video over here. And that being said, we'll see you tomorrow.