Louis Vuitton & Dior's genius real estate strategy, Alex Hormozi on content promotion, and more

Do you know about Louis Vuitton and Dior's genius real estate strategy?

No, but they probably own a lot of the real estate where their stores are.

So check this out. So Trung Phan says this, new Bloomberg profile on Bernard Arnault with details on LVMH's real estate strategy and why it's key to beating luxury rivals. So I'm going to just call out the highlights here. So when LVMH buys a building, so they own Dior, they own Louis Vuitton. So when they buy a building, it takes the best storefronts for its own brands and often asks rivals to move out when leases expire. That's the first part. The second part is they are either— so for rivals, all this creates an intolerable imbalance of power. They are either at the whim of property owners desperate to score a Dior or a Vuitton store, or LVMH itself is their landlord. Either way, they're likely to get bumped from the best locations.

That's smart.

Yep. That's how— and that's why they're one of the most valuable companies in the world.

And you're saying that in many cases, they're just buying the real estate?

Yeah. So, look, Arnault exploits this imbalance in a few ways, namely through real estate. His private equity arm, L Catterton, owns properties worth billions of dollars, including premier retail locations and office buildings in most major cities. And it's taken advantage of cheap borrowing costs to accelerate the pace of acquisitions. Last year, LVMH spent £2.45 billion on— or euros, maybe— on real estate Acquisitions, a record for Arnault's group.

Yeah, here, check this out. I just Googled the property 468 North Rodeo Drive, which Rodeo Drive in Beverly Hills is amazing real estate for shopping, is owned by LVMH, is not currently being used. The property housed Brooks Brothers store until 2018, when the men's clothing brand sold the building to LVMH.

There you go.

See, reinforced. Sometimes there's like multiple dimensions of chess you have to play to win. Yeah.

Dude, wow.

Whoo-hoo.

LVMH buys Rodeo Drive retail space for $110 million. I didn't realize it was this expensive.

When?

This is March 2018, so it must be a crapload more now. Okay, LVMH, Louis Vuitton Inc., purchased a 2-story, 6,200-square-foot retail space at 456 North Rodeo Drive in Beverly Hills For $110 million, nearly $17,750 per square foot. Wow.

And their stores look the best. When you drive by Rodeo, the Louis Vuitton store— there's a Dior store, right? Or is it coming?

Dude, I don't know.

You would know.

My kids don't shop at Dior.

Wife?

She just— she shops like at Aldo and Lululemon. Oh, see, that's good. She has Louis Vuitton and all these brands too, but she doesn't wear them, so she stopped buying clothes.

Yeah, yeah.

When I first started dating her, it was different. But at this point, she's used to—

How long did that take?

Not long. By the time we were married and stuff, she never cared for fancy stuff. Dude, there was one time I bought her a Louis Vuitton purse and I don't know how much it cost, but I remember this was when we were having our first baby and I bought a Louis Vuitton purse that I— it was a big, nice purse that had these compartment doors that you can add inside. So it'd work like as diaper bag, et cetera, but still be a Louis Vuitton purse. Yeah, and it looked really nice and expensive. Guess how many times she wore it?

Once?

Zero.

There you go.

And then a few years later, and she liked it, like genuinely she liked it. But my wife doesn't really carry around purses. She doesn't really wear fancy shoes or anything like that. She has a 1-carat ring, doesn't really care for, you know, fancy ring.

Yep. And like one of our friends that has a 10-carat ring.

Really?

Yeah, I told you.

Oh yeah, that's true. But you know, everyone has each their own. I think what we spend money on is, I don't know what we spend money on, homes?

Yeah.

Probably homes is the biggest expense.

Yeah, I mean, in the last 12 months alone, you've swapped probably like 6 or 7.

Yeah. Yeah, sadly.

I got to take a minute to tell you about the Agency Owners Association. This is a peer group for agency owners. Think YPO or EO, but for agency owners. And I just wanted to read you a couple of testimonials. So this first one comes from Carrie. And we asked her, what do you like most about the group? She said, having a group of people to discuss and bounce ideas. The leads are great too. Yes, we share leads in this group as well. This one from Aliyan, he says, the ability to really post whatever I want and need and the group responds. Great experienced members. Getting a lot of insights from conversations with other members. Getting a lot of value from sessions from Eric. Getting advice from others as well. And so if you want to grow your agency faster and you want a peer group to do so, just go to marketingschool.io/agency. This is a group that both Neil and I created, and our hope here is to create a vibrant community of agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside. I saw an Alex Hormozi short. So Alex Hormozi talks about not promoting in your content. So he has this short over here. Maybe I'll just open it so you can see it as well.

My recommendation is do not promote in the content ever. So think about it like this. Is that you want to have this big valuable thing, all this content that you're teaching. The CTAs, in my opinion, in content are not very effective. They kill reach. It feels weird. No one likes it, whatever. People will naturally just take the next step if you put it in the descriptions, you put it in your link in bio. Like, you do those 2 things, you will get traffic to your stuff by just saying, this is what I do.

Agree or disagree? He's talking about social content, and because he's talking about social content, I agree. If he was talking about blog-based content, I would disagree.

So social content in terms of like your long-form YouTube, for example.

Yes, but one really quick thing on the good marketing. You're probably thinking there's other stuff out there. The best marketing doesn't feel like marketing. There's other quote unquote similar versions of it. Who said that? That is Thomas Fishbourne.

Yeah, see, good old Thomas Fishbourne. I have no idea who that is.

But mine is good marketing looks— you get what I mean.

Yeah, yeah, yeah.

There's other variations of it. Yeah, yeah, yeah, yeah, yeah, yeah. But yeah, so when you look at what Alex is talking about, if you're creating social content, anytime you're driving people off the platform, you're ruining your engagement numbers. And I think it hurts you versus just telling people about it within the video and having the buy link in the bio. I agree with that. But on the flip side, if you're ranking on Google and you have tons of people reading your content, if you don't put a CTA within your text, within your blog post, you're not going to do as well compared to if you did.

So agree on the second part. I think, so, I looked at all the signups for the Agency Owners Association. 90% came from our mid-roll ads.

Yeah, but it depends on the type of ad. Our content here—

That's an inside ad. That's what he's talking, that's what he's referring to.

But he's not talking about podcast ads.

No, he's talking about in, like basically in-content ads, right?

For social media.

But that is social media.

Our podcast is not. Most people listen to it just downloading it from iTunes.

It's both. It's on YouTube and it's on iTunes.

But there's no way we're getting the views on YouTube like we are within iTunes. We're getting pretty good views.

Like 80K last month.

I bet you it's not even 10% of our views. Listens, overall listens can't be even 10%.

Different because there's Shorts included. Yeah. So we can only look at the long form.

You get what I mean, right? Like if you compare the long, and if you also look at the Shorts that are getting the 80K views, a lot of the Shorts don't even talk about Agency Owner Association.

No, they don't. Videos.

Okay.

So yeah. New, returning, overall video views, 8,000.

Yeah.

8,000 in 30 days. So that's long-form videos. But I would just say, I think, absolutely put your link in bio, absolutely pin the first comment like that, that will always work well. And you know, we talked about this. Yeah, you have another 30 minutes of suffering here. So Luke Belmar, we talked about how he gets 200 million views a month. What I do like is he doesn't put an ad in. You can't put an ad in a Short, right? But what he does have is he has a watermark where it just shows like whatever it is that he does. And that actually gets a lot of people searching for it. And you want to talk about branding from an SEO standpoint, that works out well too. So just depends on what you're doing. I think we definitely do it for audio and it works well for us. But for social, I think we can't speak to it yet, to Neil's point.

No, to social, we've already done a lot of tests. I, at least I've done a lot of tests. In social media, if you send people off your content In the middle or something like that, you are going to lose engagement and your reach is just going to get suppressed. But on the flip side, if you, with your blog articles or other formats that aren't relying on social algorithms, you can send people to wherever you want because if someone's reading your blog article, you're sending them to a CTA that's still keeping them on your site or wherever you want and you can still do well.

Yeah, you know, podcasts are interesting because when you think about Alex Friedman, for example, he posts to YouTube and it gets a lot of views. But his first 5 to 10 minutes is all ads, right? And, you know, I'm like, yeah, you're right, it does kill retention. But, um, okay, Lex Friedman, F-R-I-D-M-A-N. You know, I think on YouTube he might actually take away the ads. For audio though, he keeps the ads there. So that's actually— okay, that's how it works for him.

Okay, so I'm going to type it in.

Lex, L-E-X, L-E-X, F-R-I-D-M-A-N. And while Neil searches for this, he interviews like Mark Zuckerberg, Jeff Bezos, and all these people. All right. I do think on YouTube, I don't think has the ads now that I think about it.

So the first ad I'm seeing on his YouTube, this is one that got 168,000 views, is YouTube. And it's an ad from YouTube to clarify.

You don't have YouTube Premium?

No, dude, I don't want to pay for that.

YouTube Premium is the best subscription. We had a conversation. Hey guys, so while he pulls it up, we had to— we have what I'm talking about.

I already found it. So you're right, on YouTube He has ads at the beginning, but they're from YouTube, right? And you have to click the skip button. In general, though, he is not putting ads.

No, but I'm not talking about that. I'm talking about his own ads, like Eight Sleep pays him and things like that.

I don't think he includes any.

Yeah, no, that's what I'm saying. He's not putting ads.

So I think he— this actually reinforces your point and Alex's point. He doesn't include the ads on YouTube because he doesn't want to kill retention. But on audio, he does include them. He just goes to town on audio. The number one challenge for businesses is hiring. And more specifically, the number one thing I get asked for all the time is, Eric, where can I go find an amazing marketer? And the reality is right now, when you think about the world, we have inflation. That also means wage inflation right now. And it means that when it comes to hiring talent, you can't spend as much as you would have in the last couple of years because it's just become too cost prohibitive. And so we've partnered with one of the best offshore recruiting firms when it comes to marketing. They've been a great asset for us, and I believe that they will be a great asset for you. All you have to do is go to marketingschool.io/hire. Again, it's marketingschool.io/hire to learn more. You can fill out the form there and we're going to place you with the best marketing hires that we can help you find.

Let's go.

Let's move on to Kieran Flanagan. He's got a tweet over here, or not a tweet, a LinkedIn post actually. So, okay guys, traditional content marketing is dying. Brands are losing the attention wars. Here's why. The state of content today Creator-led plus educational content equals growing. So YouTube, social videos, podcasts, and then also creator-led plus entertainment content is growing, same as above. But so there's a graph over here we're going to pull up. There's a chart that he has. So you can see here, you can't see, but creator-led, it shows it's green. But what's declining is brand-led marketing, right? So think about it this way. You can have us talking about marketing. We're more so creators.

Yeah.

Or you could have our companies talking about it. Who's going to do better?

We're going to do better.

We're going to do better because people like people at the end of the day. Same thing, like this is why it doesn't work that well for like a HubSpot, for example, or Ahrefs. They just don't do as well. People— so the attention tends to go towards the creators and that's why influencer marketing works so well. We see it work for our clients, you see it work for your clients. And so, you know, trust comes from people at the end of the day, not so much corporations.

Yeah, but for the influencer marketing, what we see working really well is micro-influencers or nano-influencers. The big influencers have followers that are on everything. It's hard to produce an ROI. They want a lot of money. The nano and micro influencers, you can typically, especially with nano, you could do a rev share deal instead of just paying them. And we find that to be extremely profitable. Micro influencers, you can get profitable, but it's a little bit more work. But the nano influencers, you know, we can make money hand over fist. It's just having a team to reach out and get them in quantity.

You talked about the power of marketing a magic pill.

Dude, Ozempic, you know what's funny? If you think about marketing pharmaceuticals, they're very restrictive. There's a lot of legal issues with this. I don't know if you're familiar with pharmaceutical marketing and every country is really different, but the drug that's doing really well from word-of-mouth marketing is Ozempic. And I remember going to Austin years and years ago and Ryan Deiss told me something that was really interesting. He's like, Neil, if you want to maximize your conversions, you got to promise people speed and automation, right? And you're talking about maybe like 12+ years ago he told me this.

Wow.

And I was like, huh. And this was particularly for upsells. So someone buys a product for like $100, you can sell them on a lot more money and the conversion rate or the take rate for upsell is really high. Like you can get it for over 30% if you can offer them the results either faster or automated, right? So speed or automation, and if both, even better. If you look at Ozempic, what's done really well for them in marketing is word-of-mouth marketing. The reason it does really well is it's pretty much a magic pill, in this case, a magic shot in which you just shoot yourself with this drug and you lose weight. And it's not as healthy as working out and eating right. I'm not a doctor, by the way, that's my disclaimer, but I'm pretty sure shooting yourself to lose Lose weight is never going to be as good as—

You know what it does, right? It just— you're not that hungry anymore. And so by default, you're consuming less calories.

That's all it is? Yeah.

And once you get off of it, a lot of people, it just— you go back to being hungry again and people start eating again.

Yeah. So that can be good for you versus just learning to eat right and exercise. But— and people know that, by the way. There's so many smart, rich people I know who are on Ozempic, but they take it because it's a magic pill. And the real question that you have to ask yourself is, In your marketing, can you figure out how to offer someone a magic pill in an ethical way?

Yeah. I mean, what Neil's really saying is the offer of Ozempic is amazing. I don't need to work out. I don't need to do nothing. And I pay this money, boom, and I look good. I'll do it all day, right? Because people want to look good. It's a status thing at the end of the day, right? But what I've learned is health cannot be bought. You're going to have to earn it in some way, shape, or form.

Yeah. And we both— do you still use Jacob? For your medical stuff?

Yeah.

So we both use Jacob. I don't even know what the name of his company is.

Everspan.

Everspan. There you go. So we both pay a company called Everspan. They offer nutrition advice and all this kind of stuff. And I remember I was talking to someone at Everspan and I'm a skinny person, you know, I weigh like 130 pounds and I, I don't gain weight. And they were just like, oh, you know, you can pack on more muscle. You need to eat tons of protein and all this. And they've been telling me this for way over a year, maybe 2 years now. I still don't eat tons of protein. You know, it's just not in my diet. I don't care to be jacked or have a 6-pack. And I remember—

You just want to do what you want to do.

I just want to do what I want to do. I want to be healthy though. If I'm home and I'm not traveling consistently, every morning I'll go to the gym, I'll eat healthy. You know, I'm pretty good. Some days I don't eat healthy each week, maybe 1 or 2 days, but normally I'm pretty on top of it. Don't have to worry. So then they're like, dude, have you heard about this new injectable? Like if you do this, It doesn't cause you to lose weight everywhere, just targets the midsection. You can get a 6-pack way faster. I'm like, I'm good. I'm just like, I'm not for— one, I'm not trying to get a 6-pack. Two, I'm not for taking shortcuts just like we used to do in marketing. It just backfires.

Yep. You know what the phrase I keep coming back to is from Thomas Sowell, the philosopher and the economist. There are no solutions, only trade-offs. So if you take this, the trade-off is you're going to pay a lot of money for it. It's not necessarily healthy, but once you come off of it, you're probably going to get the weight back because you haven't established the habits necessary to maintain healthy, a healthy lifestyle. Yep.

I totally agree with you. Oh, by the way, oh, going back to real estate and LVMH, I didn't read the second part of the article. Oh my God, this is amazing. Louis Vuitton purchased this 2-story, 6,200-square-foot retail property for 456 North Rodeo in Beverly Hills for $110 million, or nearly $17,750 per square foot, from Palm Beach, Florida private equity group Sterling Organization, which had acquired the property for $55 million one day earlier.

Wow.

Wow. Good flip for them.

One day return on investment. They made more than 100% on their money. That's a good deal.

How did that even happen?

I have no idea.

Maybe they were talking with, with LVMH and LVMH is like, I want this, right? And then they're like, okay, I'm gonna, I'm gonna get the money to buy this property over here and then flip it the next day. That's probably something like that that happened.

I have no idea. This could be the property that they're turning into the hotel, so they're willing to pay an arm and a leg for.

Oh, that's right.

Because it's 456. It sounds like it is because it's close to Santa Monica Boulevard and in Rodeo, if I'm not mistaken, for the new Louis Vuitton Hotel.

So yeah, anyway, guys, this is where we'll end. Go to marketingschool.io/agency to learn more about the Agency Owners Association. Join before we start to jack up the price more and more. And the good thing is there's no contracts to it. And don't forget to rate, review, and subscribe. It helps us grow. Let us know what you think about this format. We put a lot of time and effort into this format, so we've been hearing great things, but give us more great things to hear. So that's it for today, and we'll see you tomorrow.