Marketing's Open Air Conspiracy, Big changes to paid media, Brandformance, & more

Ralph, I got a question for you and then Kasim as well. So we just talked about SEO, but like you guys talk about paid quite a bit and sometimes I'll listen to you guys like, oh, this is really good, right? So like what's changing in paid right now? What are you guys seeing? We'll just start there.

Yeah, I mean, I think one of the big things that's changing for us is for, and you can actually sort of see this and everyone's starting to talk about it in the last year or so. And when Meta holds a conference on it, you know, it's now a trend. Which is performance agencies and performance marketing turning into brand. And yes, brand performance, I don't know, or brandformance. I don't even know who coined that term. It's ridiculous, but it is actually true. What we found is that a lot of the brands that come to us, they come to us for performance. They come to us for website conversions. They come to us for high-intent-based keywords on Google. And they're like, we've sort of hit this wall. Like, what's our next step? And what we found is that going up funnel from there and going, heaven forbid, branding. And I talked about this at the last conference that we were both at a couple of weeks ago is that, you know, this is a new way of looking at things. And it's not like you need to shift 100% of your budget over to awareness and consideration, which, you know, obviously that's inventory that Meta has and they want to sell it. I get it. The point is, is that we've started to shift conversion-based ads over to more consideration, which is maybe just a first touch, or maybe it's a coupon code, or maybe it's an opt-in, all the way up to just pure awareness with no call to action. CPMs are infinitesimally smaller than they are in the conversion area, and you can actually lower your overall ad spending, get better return on ad spend, lower CPAs. The real thing is that what's the mix? How do you actually do it? Is it just, hey, I'll just do video view campaigns at top of funnel and then I'll just retarget everybody with those audiences that I capture on Meta? It's not quite that simple. It's nuanced with every individual industry. We've done this now with about a dozen different industries and we've figured out that the real key to scale is not just continuing to bash people over the head in the website conversion and the low, low funnel. I wouldn't even say website conversion campaigns on Meta are really lower funnel. Like they're people that are considering maybe I might purchase or have had the behavior in the past that they have actually converted on the platform, but there's still a small portion of that 2 million person lookalike audience. And in order to expand out from there, and we talked to the Marketing Against the Grain guys about this, you can actually create your own conversion audiences by using reach, by using awareness, by using traffic, by using link clicks, you can, by using video view, you can create your own brand and your own conversion audiences. And that's the real game changer that we've seen just recently. It's totally counterintuitive and it's not very popular, but hey, you know, Meta at least understands that there's inventory, kind of like with Performance Max. Performance came out, Performance Max came out. They're like, well, what are we going to do to monetize the Display Network? It's kind of like Meta right now. Everybody's going after website conversions. What can we do to monetize and get more of these performance marketers, especially these high-volume agencies, to start using these other campaign objectives. And they've slowly but surely sort of integrated it in, dropped a couple of really good articles that say, hey, this is the way, this is how big brands grow. And we've started to implement it on our mid-sized clients and we're seeing results, which is really the big trend. But it's not a popular trend.

Ralph, I got a follow-up for you on that one. So let's say before you had $100 to spend, what percent was going towards retargeting? What percent was going towards awareness? And what does that look like?

So actually, what's the dollar amount for a mid-size brand, right? Like what's a revenue example and a dollar spend example so we actually can get a real life scenario?

I would say a mid-size brand for us is probably 8 figures plus, high 7 figures, somewhere in the $100 million, $200 million range. Range, not quite enterprise level. So it's in that it's a wide range, but like they have a director of marketing, they have a VP of marketing, they have somebody who's sort of in charge of an actual department. And we found that that's really the folks that are open to this idea as opposed to the SMBs, which we were talking about before. They're like, no, no, no, no, I ain't doing that unless they're super, super local. And that's all you can do is just blast the area. You've got a real estate agent or a You know, a lawyer who has a 10-mile radius for people that he pulls in. So yeah, so that's sort of the range. So it depends. I mean, you know, like we've got clients in the personal injury law space that, you know, the signed case amount is anywhere from $500 to $5,000, whereas in the e-com space, we might be talking about like an average order value of anywhere between $50 to $200. I would say in those ranges is where we're really seeing— that's a very wide range, but that's where we're seeing this type of strategy work extremely well. It's not for the smaller businesses and it's not for the local businesses, at least what I've seen, but we don't really deal with them as much. And enterprise, we tend to stay away from enterprise a bit just because there's just so much bureaucracy there. But I would imagine they're already doing it. Like, they're already big brands because they've done it. That's the whole point. It's like big brands are big for a reason. Small brands are small for a reason, right? So they think small. Big brands have figured out a way to do this. And if you are a mid-sized $10 million to a couple hundred million dollar brand and you want to get to more than that, hundreds of millions, billions of dollars, you got to start thinking like a big brand. And that sometimes is a real sales job for our client success owners. And some buy into it and some don't. And the ones that don't, we sort of secretly, you know, start to put a little bit of ad spend, you know, in their $100,000 a month budgets or whatever it happens to be. They're like, wow, why are CPAs all of a sudden dropping? Why is my, you know, CPMs, they used to be $30 or $40, now they're $20. It's because we're making this shift and we're blending the things together. To ultimately create conversions and lifelong customers.

Kassem, let's flip it to you. And by the way, Kassem, you can have the question because Neil so rudely cut in and stole my question from Ralph. So Kassem, it's yours.

The changes I'm seeing?

It's your show.

But yeah, changes you're seeing.

Let's go there. This is— there's no such thing as attribution. There is no such thing as attribution. And it's— I feel like I'm Chicken Little and the emperor has no clothes. And everybody's identifying the problem in different ways. They're saying different things. But when I come out and say there's no such thing as attribution, it was like, that's a very inconvenient truth. We can track nothing when it comes to the customer sales cycle. We can see nothing. If you look at the spectrum of from top of the bottom to the funnel, And then left to the right of the journey, impression to click, you can see 1% of it maybe. And you have all these, and it's everybody is my impression, my feeling. Everybody's treating that 1% of data as though it's the single source of truth and they're optimizing off of it. And they're even looking at it as though it's somehow, it can be used in order to, model what's left and then that's not true at all. You can't see the top of the funnel, period. You can't see most of the middle of the funnel, period. You can see some of the bottom of the funnel depending on the channel we're talking about, but even then it atrophies based off of time, location, device, et cetera. So the idea that digital marketing has a data and analytics component I think is a lie. I think it's an open-air conspiracy. I think all in-app metrics are a lie. All ROAS data is a lie. All TCPA data is a lie. I think all of Facebook's data reporting is a lie. I think, and dude, it's nuts because here's the other thing. I have $100 million in ad spend under management and observation. I can prove this shit, but you still have agencies coming out being like, you're getting a 1,600% ROAS. Does your bank account say that? How is it that you can have a Google agency and a Facebook agency Selling this shit, and these and the customers. I'm like, do you put a dollar in and get sixteen hundred dollars out? No. Then then where's the disconnect, dude? Am I the crazy one, or is it the idiot that's telling you that you're getting sixteen hundred percent ROAS? And yet we still are in this world where agencies are getting away with saying, oh, sixteen hundred percent ROAS. If that were true, you know what I mean? Like we'd be minting. You have a magic money minting machine. Why don't why aren't we putting a billion dollars? Why am I not? Mortgaging my kidneys to put more money in the top of this funnel so I can get more 1,600% ROAS. It's, it's unbelievable to me that we're still to this day eating this shit and everybody's like, no, you know, it's like, I know there's some opaque in there, whatever. And we're treating data like it has some holes but it's 80% congruent. Y'all, it is 99% black box. We with little pinpoints of light. And you have these data-driven marketers that are running around sending you reports every 30 days saying, here's what's happening. And it's such a bold-faced insane lie that, you know what I mean? I'm just like, all right, well, I guess if you're gonna pay for that, cool, good for you, God bless. It's unbelievable, it's unbelievable.

Yeah, so what should people do in a world of, Dark social or lack of attribution, whatever.

Dude, people think they're driving a Formula One race car. They're not. They're sailing a sailboat in the dark at night in the rain under cover of cloud. You know what I mean? It's it's here's what people need to do is they need to they need to they need to go full funnel with their marketing. And Ralph Burns, my buddy, has been saying this for a decade. You have to do brand awareness, brand building. Stole it from Neil Patel. That's the problem. Yeah, dude. Well, and here's the other thing too. Stole it from Neil. Rob stole from Neil. Neil stole from Eric. Nobody steals from me.

Why not?

This is something the organic guys, and credit to y'all because the paid guys for the last five years have been like, "Why would you waste your time with this shit?" And you know what, guys? I used to believe it. I'm like, "I can hook you up straight to the tap, and I can get you instant pop popcorn." Well, guess what happened? The last ten years, we got so obsessed with instant pop popcorn that people stopped planting corn. All top of funnel traffic. Was, was compressed down. And so organic awareness building, everything that was important, we just got so obsessed with instant response. And, and, and to our detriment. That's why CPMs and CPCs have gone absolutely insane. Used to be you could run traffic, sell something, and make money. It was like, oh, it costs, you know, $10 cost per acquisition on a $30 product with a $10 COG. I made $10. And it was like, I sold something, I made money. And then it got so competitive, it was like, all right, well, I sold it and I broke even, but I made money on the upsell. And then, well, the upsell covered the cost of the traffic, but I make money on the ascension. Well, you know, I'm self-liquidating now, but I make money LTV. We're getting squeezed and squeezed and squeezed and squeezed, and it's because we're all compressing into this, into where we can see. And the answer is you have to spend where you can't see. You have to spend in impression-based ad channels where you can't track and see. You have to spend full funnel where you can't track and see. Here's the craziest part. You ready for this shit? You have to spend over protracted periods of time. The fact that the digital marketing world operates on 30-day timelines, what sales cycle outside of like, I don't know, birth control pills could possibly— what, when, why, how do customers— well, I'm gonna be a good customer, it's day 30, I need to buy. Why the fuck are we reporting on 30 days? You know what I mean? Like, there's no sales cycle in the world that functions that way. We need to be able to zoom out and look at things from We live in the age of the educated consumers. It could take people months before they buy their blue light blocking glasses or their headphones. Like, people research shit ad nauseam. It's insane. It's unbelievable. It's actually neurotic. There's something wrong with it. We're all on the autism spectrum now because we spend so much time in sales cycles. And yet, in 30 days, I'm going to make my decision every 30 days. Oh, this happened. And then, if you turn something off, this happens to us all the time. I can't tell you how many times. I know I've been complicit in it. And I didn't realize we did it. We turned a Facebook ad campaign off 7 months ago. The Google campaign died today, but I only think in 30-day timelines, so I don't realize the awareness-building campaign that I turned off that was feeding my Google campaign 7 months later had any impact or correlation at all. When was the last time— take any agency, any marketer, any CMO, any director of marketing— when was the last time anybody looked and saw How, how there could have been a correlative event beyond 90 days. This happened 7 months ago. You'll never, ever, ever, ever see the impact that happened downstream because we can't think like that because everything happens 30-day windows. It's unbelievable. And we're just like, I guess this is life now. Billions of dollars being spent in this weird, insane ecosystem where we're all lying to each other and ourselves. You know what I mean? It's nuts. I didn't mean to get all weird with you guys, but it just—

No, that was great, dude. This is like the controversial takes portion right here. So I'll tell you what, Neil's got a controversial take. So Neil wrote this tweet once a couple weeks back about how business coaches are the stupidest things ever. I don't get it. So maybe that's something that's worth debating. So Neil, let's go through that controversial take right now.

So with what you're talking about, let's start. With I'll start with the data and analytics side. I think the worst players in this space are actually the platforms. We see it the most often with Facebook and Google telling you the return on investment. They can spend billions of dollars to make AI, but they can't spend the money to accurately report return on ad spend.

Oh, I guess I'm just bad at it. You should just keep spending money because we can't tell you.

Yes, so I know. Just Google.

Yeah, and you know what? It's a Like, so you're telling me you can't sync with bank accounts, inventory software, all these places to really figure out return on investment? Because it's not that complex when you think about it. Right.

Right.

And I do think data is going to get worse. I don't necessarily, I know you're not saying it's exactly 1%. I get what you mean by that.

I'm being mildly hyperbolic, but it's, it's way worse than people admit it is. Yes.

Way worse. And it's going to get worse with the The cookie deprecations, right?

Right.

But what I see with data and analytics, you can measure quite a bit, but not everything. And what people think they can measure in top of funnel, I think they're getting wrong because you can't measure everyone who sees your Instagram image or video or watched it. Instagram has that data, but they're not passing that over to you. And that person could have watched A video on Instagram, a video on TikTok, not ever being a follower because everyone's into Reels or TikToks these days, so they're just scrolling. They see it and they're like, oh yeah, I saw that Neil Patel or Eric Siu or Kasim or Ralph, and let me go to their website and Google them. And then I find them and then I talk to them and then I buy. Like, there's so much you can't track. I do think the importance of data and analytics is more important than ever, especially what's happening with cookies. Because it gives you some— it gives you directional movement. It's not a crystal ball. It's not perfect, but it gives you directional improvement. And the reason I think this is super important was the actual example you gave about the 7 months. Hey, we did this top of funnel, and then this is what happened to the campaign 7 months later when we stopped. Because what most organizations do that don't have data and analytics teams or people that are really analyzing everything, brand recall studies and you name it, They'll say, oh, algorithm change and something happened, economy, so it doesn't work anymore, instead of really trying to dive into the data and figure it out. And I don't think data and analytics will ever be perfect. I think it's going to get worse with privacy, but I do think it's more important. And the reason I think it's more important is the platforms have not done a good job historically to help you out with it. They'll show you that you're getting a 1,007% return on your ad spend and they don't know how to sync up with your bank account and your inventory software or whatever it may be, or your Salesforce to actually see what leads have closed. And instead they just say, yeah, no, no, that's 17% or 1,700%, spend more.

So how do we counteract this? Because Ralph, Kassem, you guys have talked about this on your pod before and there's different things that you guys use and all that. You can't counteract completely. To me, it's a black box. Honestly, I'm with you, Kassem. So what do you guys think?

So much of it is a leap of faith. I mean, I think there's a, there is a study that we refer to. It's the only really good one that I've seen with 800 campaigns, 30 years, 83 different industries. And they basically show that, you know, you can get to a certain point with activation campaigns, which is basically a conversion campaign. But around 6 months, around 6 months is when your top of funnel impression-based, the stuff that you can't Possibly even measure this podcast, for example, is going to be one little tiny speck of data because it's impression-based. And, you know, unless they say, hey, I'm going to fill out the single-grain application, I came from your podcast, you'll never know. The point is, is like, I think for a lot of us, it has to be a bit of a leap of faith. And what we try and convince our customers of this is when we're trying to go up funnel, it's trust us. First off, we've done it before, but Do it in increments and you have to be patient. You have to wait. And it's usually around like 3 to 6 months, we start to see some kind of data if we start to spend more on the very, very top of funnel. That's not discounting like, you know, their billboards and their newspaper ads and their social posts. You know, we have a customer that we just did an analysis for, huge social following on YouTube, millions. And Facebook is saying that they're getting a 13x ROAS and they've never looked at view-through versus click. And this is obviously, it's like 7-day click versus 1, you know, 1-day view. 1-day view is like 80% of their conversions. They're like, yeah, Facebook, our Facebook agency says we're crushing it on Facebook. I'm like, you're not. Like, stop all your Facebook ads right now. Literally just run like conversion campaigns for $100 a day. And I guarantee you, you will actually have the same revenue that you do. Your Facebook ad agency is spending all this money and plus their fees. Like, you guys can save money. We just saved you $50,000 right there. But the point is, is like, I think agencies are to blame to a certain degree. Going back to my original point is that they all want to take credit for it. Nobody really knows who to listen to. It's the ones who actually say, listen, We're going to look at everything and we might not be 100% right, but here's what we think is working here. And let's go back 15, 20 years ago to the days of David Ogilvy. David Ogilvy didn't have a pixel and he was a pretty good advertiser. So it's almost like going back to that. But I think patience and really understanding and going back to, oh, AI is going to replace all your media buyers. Bullshit. It's like the best media buyers are the ones that are really going to figure this out and they're going to use AI tools in order to make themselves even better. And it's going to make agents sees more important, the good ones, and like 42,000 of them, I think, go out of business, you know, with 100 left over, hopefully 4 of us on this call here today.

Hey, and then my list will be updated to just us 4.

It's just us 4.

There you go.

I just wrote your blog post for you.