Wall Street rate-cut expectations, Meta ad woes, Burger King's rival tactic, SEO tips, & More

Did you see the Powell report today?

What do you—

no. From the Fed?

No.

Wall Street pushes out rate cut expectations, sees risk that they don't start cutting until March 2025. Inflation's not going down enough, so—

So they're not going to— no boost for the election.

No boost for the election, but typically the Fed doesn't want to cut right during the election because they don't want to have favoritism towards one candidate or another. Typically, what they would try to do is cut it quite a bit before or after the election.

The cuts would have favored Biden this year, but no more cuts. So I don't—

it's not certain, but it's looking like there's a good chance that there may not be any rate cuts this year because they just can't get inflation down.

If you were to bet, I would bet that probably no cuts this year.

I don't know if there's going to be no cuts, but if there are cuts, I think they're going to be very little cuts. And it's not going to make that big of an impact in the housing market or the debt markets. Hypothetically, SOFR right now is trading at 5.5%. So let's say if you got bank debt, you're at 3% plus SOFR, you know, you're at 8.5%, they cut it by 0.25%. Maybe they do 2 rate cuts and 0.25% again. So what, your rate, your interest rate goes from 8.5% to 8%, your mortgage goes from 7.5%— I don't know what the rates are today— to 7%. Yeah, it's still expensive.

Yeah.

I don't see the interest rate markets. I'm not an economist. And I'm not telling you guys to make any decisions.

Neither am I.

Yeah, based on this, but I don't really see rates being somewhat decent until either later in 2025 or 2026.

You know what happens typically when they cut? That's the pivot, right? Yeah, that's when the recession happens after that. And so like, if you look at the graphs, every time a cut happens, that's when the recession happens afterwards.

So I think we've faced a lot of the hurt, and I think there's more hurt to be had. I think when they start cutting rates, yes, the recession could be had because at that point, the data is backwards. It's not like today we're in a recession. It was, we were in a recession. And there were some points in the last few years where based on their definition, in theory, we were supposed to be in a definition—

They just kept revising it and they're going to go back in time and they're going to revise it again.

And it's like, oh yeah, we are in a recession. It was just like, remember when Obama was in office? And I'm not trying to get political here. I'm not saying he did anything, but Whoever was in charge of this, and I bet you it wasn't him, but it was someone, they ended up saying, oh, look at unemployment, but they changed the definition of what is considered unemployed. And after a while, if you stopped trying to get a job and you were unemployed, they would remove you from the pool of being considered unemployed. And it's both sides that are doing this, the left and the right. They're both responsible for changing the definitions.

It all comes down to what? The story they tell. And it's all marketing at the end of the day.

It's the story you tell. Yeah, because one could say, oh, we don't like the Democrats, but at the same time, Fed Powell is a Republican.

There's a good story here, by the way. I'm going to share this from Jesse Pooji.

Am I pronouncing that right?

You're Indian. P-U-J-J-I. Pooji?

I have no idea, dude.

All right, so, so Jesse says this on Twitter. So he says, I thought I wasted $75 million on Uber ads, but it led me to a marketing breakthrough. So it's 2014 and Uber hired my company to manage its ad spend. Their goal: get new drivers. My team spends $75 million for them and earns a healthy commission. I'm proud. In fact, every time I get into an Uber, I ask the driver, how did you hear about this new thing? I expect them to say, I saw a great ad. Nope. They were like, I heard about it from my cousin, or, I heard about it from my mom. I'm bummed. Seems like my ads aren't working. My firm will lose Uber as a client. Then I start asking, how did you sign up to Uber? They're like, it came up on Facebook and I signed up. My breakthrough realization, attribution is somewhat unknowable. Now I tell founders with less than $25 million in revenue to stop stressing it, which is kind of what we've been talking about for a while. It's like you can't try to know everything because you're going to stress yourself out.

Dude, you can't control everything either, right? It's just easier to just continually do whatever you have to do and then just go from there.

Yeah, track, but don't stress over it. That's all. And then like, we— I don't know about you, but sometimes there's like, clients that want to— that think you can track. It's like, it's as if they think it's like 2010 marketing, where you could track and you can see all the keyword data.

Yeah.

And Google Analytics. Now it's just all gone to crap.

It really has. But it's getting worse with cookie deprecation and everything that they're doing. It's just like, you'll just be in less control. But data analytics, I believe, is even more important than ever because of this.

Yes, I agree. But you can't rely on it. Like, you can't be the end-all be-all.

No. But you can start doing more brand recall studies, different type of attributions. And It's funny, this is bad to say, but I kind of like this because it forces you to be a good marketer. Yes, exactly.

All right, real quick, I need to tell you about the group that Neil and I created called the Agency Owners Association. And this is a group that's similar to entrepreneurial organizations such as YPO or EO. By the way, Neil and I are both in YPO. But we thought it'd be really cool if we're able to create a group that's dedicated to agency owners to helping them scale. So you could be at 6 figures, 7 figures, 8 figures, we have different groups for different levels. All you have to do is go to marketingschool.io/agency. Again, that's marketingschool.io/agency, and you can go there to apply. And I will tell you right now what we're doing is there's an online community. We do calls every now and then. There's stuff that we share in there that we don't share publicly. And you can, at least with the online community, you can cancel at any time. So you can go there to learn more about it. And that being said, back to the video.

Did you see the article that came out about Meta?

No.

All right. So—

I saw it on Twitter, the stuff.

Yeah. So according to an article on Search Engine Land, small businesses in particular have traditionally been relying on Meta to reach their target audience. Thanks to the efficiency of its AI-powered targeting technology. However, many advertisers claim that the social media giant's dependable advertising system is currently experiencing significant issues, prompting some to relocate their budgets to rival platforms. In essence, if I had to sum it down, Meta's advertisers are claiming sales are down and costs are up due to a glitchy automated system, their technology, their AI. And, you know, what they're saying is, They're still getting conversions, but they're spending way more for the conversions, which is making Meta more—

The advertisers? The advertisers are complaining. Yeah. So there's a lot of people on Twitter in the last couple of weeks that are just being— attribution is just way off. A lot of people that have ad agencies are complaining about it. And so they're just like, but nobody's offered a solution. They're just kind of all taking it.

Yeah. Yeah. And you know what? This kind of actually benefits the platform because you know who has amazing attribution? Facebook and Google.

Inside, they are, they're actually trying to keep people in there. Yeah, for attribution.

They're just saying that the attribution came from them because there's a lack of data. So whatever they can attribute to the conversion, they're gonna say it is them.

Yep. Have you seen how Burger King leveraged McDonald's?

No.

Okay, so here's a little story. So did you know that most Burger Kings are built near McDonald's?

Yes, I knew that.

Okay. So, and why do you think that is?

Because they already know in that market that there is—

They've done the research already. So, it's like kind of piggybacking on the research, right? So, this— I think this was done in Brazil. There's a company called Rappi, the delivery service. Okay, so you would know. So, here's what Burger King did. Basically, anytime someone ordered a Big Mac, basically, They partnered with Rappi. So, anyone that orders a Big Mac, send them Burger King— oh, anybody that orders fries, send them a Burger King burger, like a Whopper, right? And so, well, why does that work really well? Because at the end of the day, Burger King is Burger King, right? So, they might say McDonald's gives the best fries, but who's the Burger King? And so, that promotion did so well and eventually McDonald's was like, what is this? They say, Rappi, shut it down, and they shut down the campaign.

That's slick. They must have got paid a good amount of money from Burger King for that.

Oh, sure. Yeah.

That is a slick campaign. You know, Burger King is owned by—

The brothers, 3G? 3Q, 3Q Capital, I think.

I don't know, but it's a Latin American—

Brazilian.

Brazilian.

Yeah, yeah, yeah.

And although I think they live in Sweden or Switzerland or something like that.

They're rich.

Yeah, they're rich. They also owned Heinz at one point, right?

Yeah. Have you read the book about them?

No.

It's called The 3Q Way. It's a good book.

Yeah, I think the guy's name's like George something Burger.

They have Tim Hortons, Burger King, just all own all these chains.

I'm like, Google autocompleted Burger King own online or order online. Uh, Restaurant Brands International is the owner, which I think is— dude, I don't know. I just know it's— it got eventually a long time ago got bought out by the Latin America or Brazilian company.

Yeah, yeah. I mean, that's another, that's another example of people doing a lot of M&A, and they just focused on one area.

Lemann is a co-founder of Brazilian investment firm G3G Capital. Spot on.

3G.

Yeah, they own brands like Burger King, Anheuser-Busch, and Heinz. Jorge Paulo Lemann.

There you go. That was the guy. Alright, so I wanted to take a second to tell you about leveling up Founders. This is an event/mastermind for people doing 7, 8, 9 figures. These are founders that are doing that amount, and we've been doing this event for a couple years now. We've had amazing speakers, but more than anything, it's about the people. What I mean by that is like-minded people want to hang out with like-minded people, and this is the best spot to connect with people of a certain caliber. And we vet every single person that comes through. So if people are— even though they make a lot of money, but their character, we don't really align with that, we're not going to let them in. We did this event in Beverly Hills and it's happening in the beginning of August. All you have to do to learn more about it is just go to levelingup.com/founders. Again, it's levelingup.com/founders if you want to hang out with amazing people. Neil, my podcast co-host, is going to be there. I'm going to be there. People like Syed Balkhi, he will be there as well. And again, it's going to be a great time. levelingup.com/founders to learn more, and we'll see you inside. Have you seen the explosion of $3.75 No. Okay. So have you seen like the Instagram or the Reels? So this is stuff I watch on Instagram. So when you walk into a hotel, there's like a big screen and there's like someone with like a headset, like welcoming you in. Have you seen that? Or like when you try to go order at Burger King or something and it's just like, there's like someone greeting you, that's no longer like $15 to $20 an hour, $25 an hour, because you know the minimum wage—

Have you seen like a hologram?

It's not a hologram. It's a real person from the Philippines taking your order or doing customer service because the minimum wage has got so high. Like in like New York, it's like $20, right? It's like, okay, I'll just hire some. And these people that are customer support agents, they actually work like 4 or 5 different jobs at once because sometimes they're just security for someone walking in or greeting someone. So imagine if you're someone from the Philippines or Pakistan or something, you can make like, you know, $20 an hour or something, which is—

That's insane.

A lot of money.

That's a great way to solve your problem when wages are going up and you got to figure out how to make things profitable.

Hey, if there's a will, there's a way. People will solve problems.

Yep. So another thing that I want to talk about is, you know, it's just like companies are now selecting— I don't know if you saw this with John Deere, but companies are now selecting individuals to be their brand on social media.

What do you mean?

So John Deere, which is a tractor company, they selected what they call a Chief Tractor Officer. So now all the TikToks will be from this person who now works from John Deere. So think about influencers, they're creating their— or you know how people say corporations are like faceless brands?

Yeah.

Corporations are now starting to hire faces and be like, your job is to just create our TikTok content and you'll be the face of John Deere or Pepsi or whatever it may be.

Yeah, yeah.

that they use. And then they'll do the same for Instagram, Facebook, etc. So now they have a face of the company. People are like, oh yeah, that's John Deere.

So let's think about this. So if you're the company, if I'm the company, I'm doing that, I'm trying to figure out how I can de-risk myself. Because we've seen this in the past where, for example, HubSpot did these podcasts with, with people, and then the employee would leave, right? So what happens if the employee leaves? There has to be some type of, you know, hey, whatever content you make for the next couple years or whatever, like How do you protect your downside? That's the question.

They're probably just paying really well. Think about it. Okay, let's just say if you get paid $300,000 a year, it would be hard for someone to make that kind of income doing anything. That's a lot of money.

I had a conversation with someone recently. This person is up in line to become global CEO of this one company. They have like 4,000 employees or something. They don't want to do it. And so they might get paid all the money in the world, they might get all the accolades. But when I was talking to them, I was like, what is it? It's like, I need to have my own thing. I need freedom.

Yeah, but some people don't mind working for a corporation. And let's say hypothetically, you get $300 grand a year. Yeah, a lot of people stick it out. And John Deere, I'm looking at their net income for 2023, $10.17 billion.

But what if they decide I want freedom? What happens? John Deere is shit out of luck.

You create a new person. You can spend a ton of ad dollars to recuperate the brand.

Or you can AI it.

Or you can— yeah, you can AI the person and spoof them with their privileges, be like, here's another half a million bucks or a million dollars. Um, but— or you can go to that original guy who's like, I want my freedom, to be like, here's a raise, you now make half a million dollars a year.

They're like, I don't care about the money anymore. What if they want to become a monk? Like, you know.

But what the scenario you're giving is unrealistic. It's—

There's always outliers.

There's always outliers. No, I'm just trying to figure out, you You have to de-risk against the outliers, right? Not really, because look, there's always things that you can't control. But if you're John Deere, what percentage of revenue is going to come from TikTok in the first place?

Who knows?

Very little.

Who knows how this stuff compounds like down the road? Probably not very big.

It's a B2B play. They're selling to farms and people like that. And there's not tons of options. John Deere really is one of the biggest players for agriculture.

What'd you say their numbers were again?

They do $60 billion in revenue and $10 billion in net income.

Okay.

That's Ford's future as well. You know, people talk about Ford, the stock, they're saying that they'll make more money going into farming and some of these other categories than just selling cars to consumers.

I think that this is a good idea. I think more and more people are going to do it. We know, like you've seen it, we've seen it too. We're just getting more and more inquiries for influencer marketing because people know they can't just rely on the traditional channels. So de-risk or not, you know, that was more of just a fun conversation. Chief Tractor Officer, CTO. I like it.

Yeah, CTO.

Yeah.

And the job is to go create Instagram TikTok content, and I'm assuming it'll eventually be Instagram and all those social networks. But again, when you're a company of that size and something doesn't go the way you want, this sounds bad, but it's true: money does solve a lot of problems. Not all problems, but money does solve a lot of problems.

Money? What did someone call money? Money's like energy. It's like a very high— it's like money's energy to get you to give you the ability to do things.

So I had a, I had a great meeting with one of my buddies who comes into town every like month or so. His name's Christian. He runs a company called Cascadia. It's like an investment banking company. They help with mergers and acquisitions of companies. And we were talking about M&A. And we were talking about Platinum Equity, which is here in Beverly Hills, right? The guy, the founder of Platinum Equity also owns the Detroit Pistons. He's done really well. He lives in Beverly Park, one of the massive houses down there. And when you— we were talking about companies and growth, and we're talking about debt. It's so funny, when your company's small, a lot of times it's harder to grow because you don't have tons of options. It's tough to raise funding, it's tough to hire employees and grow faster. But once you have enough revenue, and more importantly, enough EBITDA or net income, it's really easy to get debt and capital and just continually grow because money solves a lot of problems.

It's a good way to put it. Here's one more thing. Let's solve one more problem here. And this is from— this is a tweet from Keywordian. And he starts off with, want to survive every Google update? Study this brand. This is what Google is rewarding right now. Note that this company, this website survived all Google's recent updates, including the September HCU, the Helpful Content Update. It not only survived, traffic has exploded. And if you look at it, yeah, it has exploded.

Like, I saw that tweet.

You saw? Okay. So, so CJ Eats Recipes is extremely well diversified. CJ has a real brand that people specifically seek out. 1.1 million followers on TikTok, 976K on Instagram, 123K on Pinterest, 16K on YouTube. His website is a business, not a low-effort side hustle. And even if we ignore his social following and just look at the site, he's doing everything right. Recipes have original photos, very authentic human-written content, tons of comments— Google loves UGC— a shop link in the header. Um, if you're thinking, yeah, he's, he's only on easy mode with a social following of 2 million, that's exactly my point. Google loves real brands that people love. There are, of course, plenty of brandless sites that survive recent updates, but they are the exception. Most sites I've seen that are thriving during this March update have a decent social media following. You don't need 2 million followers. Plenty of thriving sites have social followings of less than 100K. Grow an audience and you'll never worry about Google updates again. And we've talked about this since the beginning of this podcast. You can't just put all your eggs into one basket. You have to think about once you nail one channel, think about expanding into other channels, right? I consider M&A a channel too. We were just talking about M&A a second ago and leveraging debt. Like, it's like you— once you nail one, you start to open up the possibilities. The map becomes wider to you, the aperture, and then you can attack more things, right? And that's what this guy's doing over here. He's diversified himself so he's not at the whim of any Google update. And so, I don't know about you, Neil, I don't really freak out over Google updates. But we do have mutual friends that sometimes freak out over these updates.

Yes, we do. Well, here's another interesting thing. Because of all their social, and I bet you this has helped, you can see it here. Their Google Trends has just really taken off.

Oh, wow. Over what period of time?

This is pretty much forever, but it looks like they've taken off in—

Last year or 2?

Uh, yeah, last few years. 2 years. Yeah. And they really started exploding.

Did you look at the website?

Yeah, I saw the website.

I didn't even look at it. It's just a recipe site, but like done well.

Yeah.

That's the key thing because back in the day when we first started doing SEO, I don't know about you, but like I told you, I had a site called howtogeriddepimples.net and then Portal 2 walkthrough. I had these sites and they're just purely for affiliate. It was really thin content and it's 2024 now. Google can catch stuff pretty easily. So, just work on building a business instead of trying to game the algorithm and you'll do You'll do fine and build a brand.

Branding is really important. People take that for granted. Yep. So cool. That's it for today's episode. We appreciate you guys listening in, uh, for an hour and 20-ish, 30 minutes. We hope you guys like the long-form content that we've been doing.

Let us know what you think, by the way, in the comments. Do you like this? Like, we're testing this right now still.

So yeah, instead of making these shorter-form episodes, just doing one really long-form one a week.

Yeah. That's another experiment we're running. We're trying to— we might chop this into different, like, still 5 episodes. But that is it for today. Please don't forget to rate, review, and subscribe. Go to marketingschool.io/agency if you want to join the Agency Owners Association. That's a group Neil and I have to help agency owners grow. And yeah, we'll catch you later. Bye.