What big brands sell, Mcdonald’s Netherlands billboards that smell like french fries, & more

What do you think big brands actually sell?

I think they sell some sort of type of experience.

Close. Basically there. So I was watching this video on Instagram and basically this video shows McDonald's brand page on Instagram. It doesn't really show their food. When you look at Nike's page, doesn't really show their products. At the end of the day, it tells— they're showing experiences. They're showing feelings to people.

Yeah.

Feelings are ultimately stories, right?

Emotions, emotions, storytelling.

Yeah. And so, that's what big brands do at the end of the day. When you think about Walmart, they're not like, hey, come buy our $2.99 MrBeast chocolate or something. It's— look at Walmart's. I don't even know what it looks like. Hopefully I'm wrong. But Nike and McDonald's are good examples of this. So, go take a look at their Instagrams and you'll get a good sense for what they actually do from a corporate branding standpoint.

Dude, speaking of McDonald's, did you see what Ad Age posted about them?

No, what happened?

What they did in the Netherlands?

No.

So, you know, I don't know if you can see my screen. It's blocked. I already used my daily limit. In the Netherlands, they're showing a big banner, like a billboard or whatever you want to call it, an image. It doesn't have a McDonald's logo. It's red, but guess what it does? It smells like French fries.

Oh, that's cool.

Yeah, and, you know, their overall goal is it's unbranded billboards. Right. So there's no M logo, but it has their color scheme.

Yeah.

And it just smells like—

That's a feeling. That's an experience at the end of the day. So, you know, us, by the way, us doing this versus us lecturing at you, this is more of a feeling.

This is—

you guys are experiencing us having a conversation here. This is why it's more interesting, at least to us. 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 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 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.

The other thing, dude, and I'm curious on what you're seeing on your end, but I was looking at an article and the Perryman Group estimates— wait, not that. Where's the article? Oh, here you go. NBCUniversal has generated $1.2 billion in Olympic ad sales. It's the highest that it's ever been. Publicis stock is up. Omnicom is recovering. WPP earnings are slightly down, but Publicis is doing pretty well. Omnicom's not doing that bad. You know, they're showing signs of recovery. Dentsu Aegis has gotten hit hard, but not hit that hard. Google is doing well financially. Facebook is doing well, at least their ad units. The real question is, is do you think the marketing industry is recovering at this point?

How was your Q1?

My Q1 was, It was decent. It wasn't as good as we wanted, but it was decent.

But US was way up year-on-year comparison versus last year. Yes. Quarter-on-quarter. Year-on-year over quarter.

Yeah, US did really well. It's because we're in 19 countries. Some of the other countries are lagging quite a bit behind the United States. Like Latin America is lagging quite a bit.

So I'm like, I'm most— yeah, I'm US-based only. And so yeah, it looks— Q1 looked a lot better. And then Q2 is still looking pretty good, I would say. So I'm like, I'm still cautiously optimistic. But because you just don't know what's gonna happen, right? It's still like, would you say the Magnificent 7 are still overvalued? I would say yeah, they're probably a little overvalued right now.

When you're comparing your Q1 of this year to Q1 of last year—

Oh, way better.

Did you also include your tuck-ins?

No.

But do you have— this revenue has a tuck-in. So I'm curious to see what it would be last year if you had the tuck-ins in there.

Well, I'll have to tell you offline. But yeah, yeah.

But you get what I mean, right? Because then you'd have a true apples-to-apples comparison.

Yeah. But we'll just say it's up significantly.

Yeah. Yeah. But yeah, no, we're seeing like in certain markets for us, like India, we never saw a dip. We can grow 40, 50+ percent year over year in India, no problem. Like it's just booming.

So you're still flying in India right now?

Dude, we're almost at 200 employees just in India for the India market, not to outsource. I'm talking about India working in India for Indian companies. Like in India, we work with Amazon India, Tata. Tata owns Range Rover, Jaguar. They own a lot of stuff.

Jaguar, not Jaguar.

Jaguar. I don't know how to say it, dude. PwC, ESPN, Black Decker, Apollo Health, which is one of their biggest hospital companies in India. ZTV, which is Sony. But we work with massive brands there for the India market and they pay well. It's not like we're charging, you know, $1,000, $2,000 a month or anything like that.

Dude, speaking of ESPN, I was watching a documentary recently about how ESPN is struggling, right? Because when you look at— I think it was over the last, I don't know, 10 years or so, there's been 40 or 50 million people that have cord cut it or cut the cable cord basically, right? So they're not paying for cable anymore. Yeah. ESPN is part of those bundles. So when you— when people sign up for like Comcast, for example, like $50, $60, $70 a month, ESPN actually takes $10 of that. It's actually pretty significant.

Really?

And that number gets higher and higher. The ESPN tax gets higher and higher, right? But with all the people cord cutting, um, it's actually starting to hurt ESPN. So ESPN, they're owned by Disney. I think Disney owns 80% actually. And what's, what's happening— and 20% is owned by Hearst.

Yeah, you got it right.

So what's happening is, um, ESPN Is they're going to try to make a— they're doing a streaming collab service with Fox and somebody else now, and eventually they're going to make their own too. But that's how they're planning to diversify because media is just getting so much harder now. And really what ESPN has is that $1.2 or $1.7 billion college football deal that they have for the playoffs. So they don't have many deals, but I'm just saying it's getting harder and harder. And even for them, they have to Adapt with the times or else they're gonna die.

Well, a lot of the other networks have taken some of the sports deals. Amazon has taken some of them.

Yeah, and they have all the money in the world.

That's right.

They just do it all day.

Yeah, Disney has money, but not Amazon kind of money.

No, they don't have Amazon money. They don't have YouTube money.

Yeah.

AKA Google money.

Yeah. Dude, those guys just print cash because it's like their business. They can probably cut half their staff and they still would do well, just like Elon cut so many people out of Twitter. And it's like, oh, It gets more traffic than it used to.

It's cut 75%. And everyone's like, all the papers that were writing about him, this is where everyone gives us negative reviews for talking about Elon. But all the negative reviews, it's like, hey, Twitter is a ghost town. It's not going to work anymore. It's probably going to shut down next week. And it's like, nope, still going.

It's still going. It's still popular. Yes, their ad revenue may not be doing as well as it used to be. But here's what's funny. He has, call it 25% of the staff based on what you read. And I've seen more releases on Twitter or X, whatever you want to call it, since he's owned it than in the prior years before. Yeah.

Neil's saying they're just shipping a lot faster. Like, by the way, there's a, there's a new blog writing feature here too. Grok shipped. And then there's like, there's more of an emphasis on video too. And oh, I can even bold my text now. Who knew? So yeah.

But not on all platforms depending on what you're using it on. But yes.

All right. 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 necessarily going to let them in. We do 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 wanna 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. Remember the Instagram acquisition from back then when everyone's like, oh my God, Mark Zuckerberg overpaid. He overpaid because he paid $1 billion for Instagram. So you've seen the numbers, I'm sure.

Yeah.

But it took 6 years for Instagram to go from universally mocked as a waste of money to doing $11.3 billion a year in revenue and growing at almost 50% a year. It's even higher than that now. 2021 was $32.4 billion. And just so everyone knows, that's actually more than YouTube.

So— Is it more than YouTube in ad revenue?

Well, that was 2021.

So, okay.

But it's higher now. So when you look at the numbers, if you click on it, it's higher than YouTube.

So I saw the 2023 numbers. I don't have off the top of my head, but, or the more recent numbers.

Yep.

There was an article about it. Facebook.com generates more revenue than Instagram, but it's actually getting really close.

Yep.

So it looks like based on the growth rates that I saw in that article, Instagram will overtake Facebook. It's just a question of time and it's probably going to happen in the next few years.

Look, I was surprised Instagram is bigger than YouTube. I would have thought that YouTube is bigger. So that means Instagram is also bigger than Netflix too. You can look it up.

YouTube ad revenue.

But I think that the takeaways here is that sometimes these acquisitions take a long time to realize. And also people were discounting Zuck and saying, oh, he doesn't know how to build products anymore. But you look at all the things that they shipped and all the things that they added to Instagram. It's gotten a lot better and they figured out how to make it work.

So, YouTube in Q4 of 2023 did $9.2 billion just in revenue, Q4. So, I don't have the whole years, but Q4 alone was—

So, it's either really close or Instagram's bigger, but a couple people said that Instagram's bigger.

Either way, they were both great buys. Remember how they bought YouTube for what?

A billion.

$1.2 billion.

Both of them were a billion, yeah. Yeah, and so, it's like, again, these things take time. Like, you never know at the moment and you won't really know for like Maybe a decade.

My business partner, Mike Hamel, was listening to a podcast with Ben Horowitz. And Ben Horowitz was giving advice on acquisitions, which I think he's spot on because we also talked with a lot of private equity companies when we were going through the process of, you know, back in the day we were thinking about selling NP Digital and we were getting hit up a lot by private equity. We chose not to, of course. And it was funny, the best thing I got from those conversations, there was 2 things that I got from the conversations. One, there was this amazing gentleman named Michael Delaney. He owns a private equity company called Court Square. Eventually, he bought Power Digital. He sat down with a dinner with me and Mike Camo in Vegas. And he was going over private equity. And he was talking about, he was part of a bank back in the day. He's been doing this for pretty much as long as I've been born. But back in the day, private equity didn't have a clock on how fast you would have to sell. So they would just buy and hold the companies. And he would tell me, he's like, back in the day was the great days. He's like, we would buy a company, fix it, grow it. And he's just like, and we just keep it. Why would you ever want to sell it? You did all the hard work. And he's like, nowadays, we buy companies, and I got to sell them because I have LPs. You got to flip them. And it hit me when he said that. I was like, huh, so you're telling me a better model is to just Buy and then hold, or in my case, build, keep growing, and holding. I was like, "Oh, okay." I didn't say anything to him right then and there, but he was like, "Those are the best days of private equity. We made way more money." And I was like, "Oh, cool. Thanks for telling me that I should just hold.

Goodbye." You know what's interesting? So I told you I met with a wealth advisor right before this, right? And I could tell that they didn't like the fact that I said, "So what do you think about your investment?" I'm like, "Look." I just think about my business and that's the best compounding machine. And I just think about compounding it for a long time. So what about your other like business? I get where you're trying to—

You got to diversify.

Yeah, you got to diversify. I was like, you know, Warren Buffett said diversification is for idiots. What do you think about that? And then, and then it's like, well, you know, you have like, it's, it's too risky, blah, blah. I was like, so tell me about your portfolio performance. Right. And then, and then it was like, well, it's like here and, you know, muni funds, this and that. And our response is probably the same. It's like, we've learned that yes, asset allocation, all these things, focusing on too many things, you're not going to get the best return. It's better to just focus on your business.

Well, you and I don't diversify and we hope our businesses do well. Knock on wood, dude. Speaking of diversification, Warren Buffett talked to Bill Gates about it. And if Bill Gates didn't diversify, he would be a trillionaire at this point.

Yeah.

He should have never diversified and sold Microsoft stock. Look at Steve Ballmer.

So like, you know, the thing you hear from, um, wealth advisors, and there's nothing wrong with this, like they have to talk their book. That's their incentive, right? But it's actually, it doesn't seem risky to me to put all my efforts into my business.

Nope.

Like, if I fail, I fail. That means I suck, right?

Well, check this out. Most wealth advisors that I've met up with, like, aim for like, you know, 7-8% a year. Good ones get you 10%. So I'm like, so I'm better just keeping my business and growing at 7-8% because I grow more than that. I would be pissed at 7-8%.

Yeah.

Um, but going back to the private equity, it was 2 things. What one Michael Delaney said, he's like, You know, hold on to it and just keep growing. I was like, oh yeah, this makes a lot of sense. Thanks for that. And the second one with Ben Hello Ben Horowitz. When Mike was listening to him, he was talking about some of the best things that Andreessen Horowitz has done is they'll overpay for really good deals. If something's going really fast, you have conviction. It's worth paying a premium for really good deals versus paying. A good price for mediocre deals.

Because, okay, I mean, like right now Nvidia is a good example of this. Like people might be like Nvidia is overvalued, but in 10 years, is it going to continue to run up? My argument would be yes. Now, if I was focused on stocks right now, yeah, I'd put my money into Nvidia, right? That's, that's a good example of that where it's like it might be a little overvalued right now, but still.

And that's not financial advice from Eric.

We don't give investment advice here. Yeah.

Or the YouTube example or Instagram example when Facebook bought Instagram and Google bought YouTube. Everyone thought they overpaid for it. Even they thought they overpaid for WhatsApp, which I think was like $17 or $16 billion.

$16, yeah.

And at that time it was a lot of money. It's still a lot of money, but WhatsApp has a massive community. Facebook just has to monetize WhatsApp and then things will be really good for them.

Dude, so you're saying all the phone conversations you had that when you were running the process where I said it doesn't make sense to sell, you mean I didn't convince you? I know.

Yeah, Eric was telling me— he actually— no, when we had conversations about should I sell or not, you were telling me it depends on the multiple.

No, I said why would you sell? You have something great going. Why don't you just keep compounding it?

You did say that, but you, you did also say if someone offers you a ridiculous number—

Well, yeah, if they gave you like $100 billion or something.

Yeah. No, but we are talking about multiples, right? Like if someone gives you like 25 times or something crazy, or that overvalues the market, you know, you can just arbitrage the money and just buy it all back again when it goes to reality.

And now, but now I'm like, no, probably not, because it's so much work.

Honestly, if I had to go back and do it, I'm really happy that I kept the business. But if I had to redo it, I would have sold 100% of the business when the valuations were really high, and then bought it back.

Because you think, oh, you think you could have gotten a discount on it?

I know I could have got a discount. The whole market, dude, I know so many people that paid 18, 19, 17 times for these agencies. Some of them were quote unquote digital transform agencies, but they're really marketing shops and they got above 20 times EBITDA. No joke, they're trading for 10 times right now, 9 times. And not all of them will sell back. It's hard to buy it back, but some of these funds are struggling and yeah, you can go buy back the business.

Well, let's brainstorm this. So there's a company that we will not name that sold a couple years ago. And a big holding company bought them. And, you know, it's not going so well for that company right now. If you were to come back and buy them at this point, I'm just like, all the turmoil that's happened, all the cultural differences, you're buying a—

The founder tried buying it.

Yeah?

He hit him up.

I just think it's difficult at that point. It's like, how are you going to reset the— you have to bring the entire executive team back. You have to bring the band back.

He would have brought it back. He would have done really well with it. But guess what they said to him when he hit them back up?

What?

F you? Yeah, they're like, we'll never sell it back to you. So it— and he could have picked it up at a steal, pennies on the dollar compared to what he got paid out. But here's the thing. The company that he sold it to was a publicly traded company. They were worth billions and billions of dollars. And their revenue, I don't have the stock in front of me, but if I had to guess, is well over $10 billion or $8 billion or somewhere like that. So if you got, call it, let's just round, let's say you got $100 million for the company when you sold it, and now you can buy it back for $15 or $20 because they just screwed it up. They don't want mud on their face. It's not, or egg on their face or whatever the saying is. They're so rich, they refuse to just sell it back because they don't save face. Yeah, they want to save face. That's a better way to put it.

Yeah, yeah, yeah. So we're going to end it. Go to marketingschool.io/agency if you want to grow your agency faster. That's the community that Neil and I have. We're like, community is everything. We think it's the next funnel, the next way of growing your audience through community. Check it out. Don't forget to rate, review, and subscribe. It helps us grow. Let us know what you continue to think. about these long-form episodes. And we'll see you— we'll see you in the next episode.

Bye.