What Top CMOs Secretly Think About AI | Ep. 3017

So I actually have an interesting story for you related to marketing that was enlightening for me that happened with our company, okay?

When was this?

And it was this week when I was in Colombia.

Oh, you're in Colombia?

I was in Colombia, yeah, I just got back.

Okay.

So speaking to like the top 30 CMOs who won awards for the best CMOs in Latin America, most of them work for large global enterprises, right? So for me it was potential customers, fishing with dynamite. And I didn't get paid for the event, but the event was branded. Neil Patel's going to be here. My images were everywhere, even on their name badge. They put my image on their name badge. Oh, that's exactly what you did. It wasn't our event. We didn't pay for it. It was a Forbes event.

Yeah.

And they were the ones giving out awards to the top CMOs in Latin America. People flew in from all over the world, like really large corporations that we were talking to. Almost everyone in the room worked at a public company. Where in Colombia was this?

Bogotá. Nice.

But it was all publicly traded organizations. And something interesting that I learned from, not necessarily the community there, I actually learned 2 things that were interesting. But one, the first thing that was interesting that I learned from one of my managing directors in LATAM. So we have this company that pays us for APAC region, all right, work. And this company that pays us for APAC, it's a large global 5,000 or 1,000 company. It's one of the largest organizations. If I told— if everyone saw their logo, almost every person, consumer or B2B person, they would know who it is. Extremely large organization. And overall, they're happy with us, but they're upset with us in certain regions.

Hmm.

So, they're not happy with the work quality in certain regions because for that organization, some of those regions, they make very little to no money from. So they may give us a budget for a random region. I'm, I'm making up a region, Pakistan or something like that. And they say, we want you to do work here for $700 a month. Okay. You know, just as good as I know, you really can't do much for marketing for $700.

You can't do anything. You can't do anything. Yeah.

It doesn't matter if you're going to have to hire people. So it's not that the parent organization or the company is disappointed, it's that Some of the people, some of their employees who work in those regions like Pakistan will be like, we expect more from you. And then when they break down what they're looking for, my cost just for that region, labor's cheaper for like Pakistan, but we did the math on it, would be almost $5,000 a month. It's hard when you're getting paid less than $1,000 to go spend, call it $5,000. Like, we can't lose all that money.

Yeah.

So then when we talked to the parent organization, the parent organization just expanded our contract outside of APAC. So they gave us a whole new region. I was just talking about LATAM, hence I brought up LATAM because I was talking to my managing director in Latin America.

Yep.

And he's been in the ad agency world for such a long time, and I was just like talking to him. His name is Javi. I'm like, how the heck did we get more money from them when they're not necessarily happy? He's like, Neil, you're looking at it from a very different lens. And I was like, what do you mean? Globally, they're actually happy with the results. If someone's spending X dollars and they're making Y dollars and you're more profitable than the previous agency, you're doing a good job and they're happy. But you're always going to get some people grumbling within certain territories that they wish they would get more from you. And the global company knows that you're never going to satisfy them because they're not giving you enough money for those regions because economically they don't make enough from those regions where they're willing to increase the budgets. So So their employees within those regions are always going to complain saying the work isn't good enough. We expect more.

Because they need to look good there too.

They want to look good there. They want to do more for their country, but the parent organization's like, yes, you want to give us a— you want us to give you a budget of 10, 20, 30 grand a month for this small line of work when we would just— it would just go down the drain and we'll lose money because the market for us in that region is so small. Why would we invest it? Yes, we pay people on the ground, but we have to because we have to be a global company on their end.

Right.

And what I ended up learning from this was if you're a global agency and you have enough offices, enough regions, you'll get the work because they don't want to work with someone who's just in one region. And I thought as an agency to keep getting more work, you have to do amazing work in every single project. And genuinely, we try to.

Mm-hmm.

But companies are understanding that, oh, in these areas, we don't expect your best work because we're not going to give you the most amount of money and it's acceptable. You're going to get complaints from our team in those regions and they're going to rate you very poorly. We're okay with that. I would've never assumed that or guessed that. That was the first thing I actually learned. That was the first time I understood that. It makes sense.

And I don't think you're saying don't try to do work. You should. That's which is what you just said, but you know, As long as you're adding massive value to the kind of global organization, you're good to go.

You're good to go, but as a founder, I look at it very differently than some of the people on my team. As a founder, if someone's not happy, and it doesn't matter whatever region, I'm just like, how could we do better? What could we improve? Where could we use technology to be more efficient and give them more value for the money even though they don't have a budget? And I've never really looked at things from a big global company perspective, 'cause we're not that big.

Cost of doing business.

Yeah. Cost of doing business where some of these companies are in these regions because they have to be, and they're not willing to spend money and they have employees and they know their employees will never be satisfied because they're not willing to give 'em the budget.

Yeah.

And we're still doing better than the previous people they paid. So the results are better.

Yeah.

But you'll never satisfy the people because the people want ton more money and budget, but globally they're just like, if we just give you the money, it's flushing money down the drain because in your country the TAM is too small and we can't make money. So that was the first thing I learned, and that was eye-opening to me on how global companies look at marketing spend. And in certain areas, they don't care if they get the best work because they're not willing to give you the money because it's just not worth it for them. And the regions it is worth it for them, they expect top-tier results and a high ROI and the best work ever because that's where they make their money from. The second thing that I learned from being in Colombia, and I saw this speaking in a few other regions like Hong Kong, saw this in Singapore, saw this in Brazil, and the list goes on and on. In marketing, a lot of us like talk about LLMs and what we're doing with LLMs. Dude, most marketers have no clue what LLMs are. And what it means.

Not even an LLM.

They know what ChatGPT is, but you just say the word.

Yeah.

If you say the word LLM.

Yeah.

And the guy at Forbes told me, hey Neil, maybe we should describe what LLMs are because most people in the room don't know what it is. So I asked the audience in the room who was very, they were participating, how many of you know what an LLM is? No one really raised their hand. Very few people, like less than 10%.

In Colombia.

In Colombia, all CMOs controlling regional, you know, or LATAM budgets. Yeah. So people who aren't controlling like $100 grand, I'm talking about people who are controlling millions and millions of dollars in spend and typically monthly. And it was just interesting that they don't know what LLMs are. But if I asked the room, has anyone used ChatGPT? Do you guys know what it is? Pretty much everyone raises their hand.

That's interesting. Yeah, it's interesting because it's the majority of people are still very surface level with this stuff, which is good, which is your opportunity or any of you listening to this, this is your opportunity right now. to get ahead. Yeah, so continue.

And in marketing, I see the big opportunity in which they all use ChatGPT, but when I ask them, when you look at your marketing, how many of you use ChatGPT in your marketing? Almost everyone raises their hand, right? How many of you guys love it and think it's made your business better and marketing better? Almost everyone raises their hand. How many of you guys have seen an increase in traffic or revenue or leads by using ChatGPT? And I'm getting very specific here because that's what they're mainly using, right? Or any other AI marketing tool that you're using? Literally, it's crickets and almost no one raises their hand. And the big issue is, is they're all— marketers tend to use AI for shiny object syndrome, doing cool things, but they don't know how to focus their efforts on crap that moves the needle.

Yeah. Yeah. And so there's a— it's a skill gap. It's becoming a wider skill gap right now. So the question is, what do people do about it? Like, it's some— a lot of people ask for training, but in my mind, I think training is one thing. But you— it goes back to how much do you want it? How curious are you at the end of the day? And so we press really hard when we talk to people now during interviews. The very first question is actually like, what are you doing with AI right now? And what's the most impressive thing you built with AI? Show me the numbers. What did you do? What prompt did you use? What did you contribute yourself personally to this? Because some people like to— Yeah. I actually talked to someone recently, they're like, oh yeah, we built all these things, blah, blah, blah. I was like, oh, this sounds great. So what did you personally contribute? He's like, oh yeah, I told someone, I told a team to do this. I was like, who else was involved? Oh, like 10 other people. I was like, so who wrote the prompts and everything? Oh yeah, the engineers did. So you didn't do anything.

Wow.

Right, so.

And I bet you they're taking a lot of credit.

Yeah.

Executive type role. That's why I only hire executives who are player coaches. Like if you want to be a VP of marketing and you're not willing to get your hands dirty for like 80+% of your work, I don't want to work with you.

You have to get your hands dirty. I know, like, we still get our hands dirty today. We're not above that. And that goes back— like, we're down to be the janitors if we need to do that.

Yes.

All right. So I wanted to take a moment to tell you about my podcast co-host Neil's agency called NP Digital, and they work with a whole host of global companies or global organizations. Also, Neil has SEO tools such as Ubersuggest and AnswerThePublic. All you have to do is go to npdigital.com to learn more. And we'll see you on the other side. Do we want to talk about the— can we talk about the Sydney Sweeney thing real quick?

So due to part of the whole meme stuff and then before that, what was the other ones that went on? Kohl's. Was Kohl's one of them? Kohl's. Kohl's was one of the meme coins right before the Sydney Sweeney.

I'm not even talking about the coins. I talk about the commercial. Good Genes.

It caused the stock to boom.

Yeah. So how much did they go up by again?

I forgot.

So, okay, everyone, for those that don't know, so Sydney Sweeney, she's— let's say she's very attractive. American Eagle, right, did, did this jeans commercial called Good Jeans, right? Basically saying she has good genes and they have good jeans, right? It's like kind of a joke, right? And then what happened was they got a ton of backlash. And I was laughing about this because I don't know if I sent you this the other day, but there's all these people making TikToks. It's like, this is fascist. This is like, this is pure propaganda. This is like Nazism because it's the good jeans, right? This is like celebrating, like, you know what I mean? Like they're saying it's like a super like white supremacist type of commercial. Oh, because she's blonde? Is she Yeah, she's white, right? But it's like, what are you guys talking about?

Does she have blue eyes? I'm assuming because of the headless horseman. Yeah, she does.

But it's like, dude, that's not even the point. It's kind of a fun wordplay on the word jeans, right? And then the Cobra Kai guy, Johnny Lawrence, he made an ad afterward with American Eagle. He's like, I also have good jeans, right? He's like, screw all this wokeism and screw all— and I'm just like, yeah, like the reason it popped is because a lot of Americans are— people are just kind of sick of seeing this whole like just It's a good commercial. And then the way, the way American Eagle responded. So here's what they said. They did a cheeky backlash response over here, and I think they did a good job with this.

Right.

So sometimes when people are, they're getting more views, I think they're trying to capitalize on it more. So it says here, to whom it may concern, we sincerely apologize for featuring Sydney Sweeney in our recent advertisement. In hindsight, we underestimated the combined impact of her blue eyes, blonde hair, and general hotness. Also, we did not realize how big her boobs would be. Our marketing team has been sent to denim sensitivity training. Thank you for your feedback. Please stop emailing us.

Yes. And what happened to their stock? It went up.

It went up by how much?

It looks like it went up around 20%. There you go. I'm roughly estimating.

That's the power of a good ad, guys.

Like, and it's still up. It started to contract a little bit, but you know what happened, right? It started getting pushed by all the meme stuff, all the Redditors.

Oh, did they?

Yeah, it started getting pushed. I don't know if it was actually the Reddit community like WallStreetBets, but CNBC was reporting that American Eagle's the next, the new meme because there was a few right before it and they just kept piling on and they were just Making a ton of cash from, because before that it was Nextdoor's a real estate company. Nextdoor boomed. I believe it was Kohl's. And then I believe American Eagle started getting into the meme craze. And dude, this is like people's sensitivity can drive marketing in a bad way. And the perfect example of this is Jaguar, which you and I have talked about on this podcast episode.

Mm-hmm.

They went with the more sensitive route with their advertising, and they went with what they felt was more political based on what they felt people wanted. But when you look at their European sales in April 2025, they faced a 97.5% drop in car sales just based on because of their advertising.

Yep.

And it was partly because of their advertising, also partly because during the same period they wanted to focus on pushing full EVs. And to give you the numbers, and this is all from AI Overview, I don't know what URL Google's pulling from, but it went from 1,961 previous sales that year or that month of that year to 49. And it just goes to show that leaning into what may be a smaller percentage, but they tend to be louder wants, isn't always a necessary— isn't always the right move with your marketing.

Look, I think it's nice to lean into social justice and all that, especially in 2020, right? You saw all the ads like Nike, and I'm just not going to call it the ads, but it didn't really work for them. Right. And then now, now what's happening is like, look, Jaguar, Bud Light did this. And then you see that I think a lot of people wanted that kind of social justice angle to work, at least in America. I think Americans have moved on. And that's why a lot of people, at least on Twitter, a lot of people are laughing about these ads. And then people on TikTok that are complaining about this fascism, guys, it's not fascism. It's just a good ad. ad at the end of the day. And you and I are both people of color. Like, I don't see it as a racist ad.

Do you?

No.

Yeah.

Move on. Like, it's just a good ad. Let's deal with it. I'm happy they got more reach and I'm happy they grew.

Yes. I haven't read Eric's tweet on SEO is now a fool's errand for startups. There's a lot of traffic from Google. Google search volume is going up. You may not get all the clicks to your website, but you can still generate millions and millions of dollars in revenue from SEO. It's proven. Eric and I see it every day. We have a lot of stats and data on this. Our clients are generating a lot of revenue. It's not just our agencies, but it's a lot of people globally. And a lot of the factors in SEO, I don't know the percentage-wise, but call it 80+% are very similar to traditional SEO for AI. And there's a direct correlation. Search Engine Land had an article on this from ranking on page 1 of Google and also getting mentioned on ChatGPT. So SEO is still really valuable. But whenever we talk to companies, no matter where I go to speak, and I know it's the same for you, I haven't asked you, but I already know it's the same. Everyone only cares to talk about AI SEO and GEO, AI SEO, LLM SEO, whatever you want to end up calling it, or search everywhere optimization that we like calling it. Don't care. People want to just talk about that.

Mm-hmm.

But when you look at budgets, even though it's one of the highest converting channels, the traffic volume is so low. The budgets are not there where people are willing to spend $1 million a year on that kind of stuff yet. Maybe over time it'll get there. The budgets are extremely tiny for this stuff where people are asking us to do stuff for like $100 grand, $200, $300 grand a year versus where they would traditionally for the, for traditional SEO have $4 or $5 million worth of budgets. I know that's a large SEO budget, but I'm talking about large corporations here. I'm not talking about, and these are publicly traded. I'm not talking about companies making millions of dollars. I'm talking about companies generating billions a year in profit.

Mm-hmm.

The AI SEO stuff is where you have to pivot, even though they still need the traditional SEO stuff. And if they don't do that right, they won't do well in AI SEO.

And I think for both of our companies, we're doing both right now. Like, so there's a lot of panic around, oh my God, I'm losing all this traffic, which is leading to more leads coming in, right? The panic usually causes more leads to come in. But, you know, I, you do have to do both. We agree on that. We do. I think we both do agree that traditional website traffic, that's going to decrease over time, but it's still very valuable right now. The reason why I call SEO for startups a fool errand right now is Jason Cohen from WP Engine. He posted this, right? So he says, all my companies started with paid ads for 22 years. Of course it costs money, but budget and messages are controllable. It's easy to A/B test and relatively easy to measure results directly. I'm not against social and SEO. It's just not automatically better, right? And that depends on the type of business that you're in. So what I said was, look, time to value takes too long. with social and SEO, assuming the company plus marketing channels are starting from scratch. It just is what it is, right? And even though you and I are SEO background, like, you can't just say I'm going to build a brand day one or like I'm going to start ranking unless you acquire a bunch of websites at the same time. So SEO, it's—

it depends.

I still like it. I think you still like it as well. I don't love it as much as I did before. And I think what was some— someone, a guy responded to me, Travis Jameson here, and he said, you know, the counter to that, Eric, as you know, is effectively using parasite SEO to jumpstart the SEO efforts. And as he said that, I'm like, But God, that takes so much work, right? So I responded, I said, look, sure. But with so many more variables with SEO today, I tend to tread more cautiously, meaning I just rather, if I'm a startup, maybe I'd just rather not deal with it. But if I'm more established, sure, I'll deal with it.

It's also easier to get results, as you mentioned, when you're established because you already have the authority and the brand out there and the recognition and the PR. Interesting enough, when people talk about SEO, whether they think it's valuable or not, and we are established just like you, There's a company that generates around $160 billion a year in revenue. So a massive organization, not too many people generate $160 billion a year. We got hit up for them for marketing in Latin America. We're included in an RFP with 3 others. And the reason being is according to the lady that reached out to us, her boss asked ChatGPT which agencies they should hire for the region they were interested in Latin America. And we were one of the 3 that were recommended.

So it's a ChatGPT ranking.

Yeah.

Yep. It's funny how that works.

And it's a $160 billion organization. You do well, it's a decent-sized contract. It can expand into $5, $10, $20 million a year. We would've never got that opportunity if it wasn't for traditional SEO.

Would you agree that going back to agencies for a little bit, that the ultimate goal is probably net dollar retention, net revenue retention, right? And what I mean by that is, You're going to get a lot of clients, you're going to churn a lot, right? And so if you look at just logo churn alone, it's not enough, but mostly you're making your money from expansion. You would agree with that?

Yeah.

Yeah. And so I think a lot of agencies, I think as you continue to grow, you're probably looking, you want, you want to start to look at accounts that have the most potential to grow and double, triple down, quadruple down on those. Would you agree or disagree with that?

I would agree. To share how our agency works, majority of our revenue does not come from new sales. When you look at just over time, of course, if you're starting off, you're going to get your revenue from new sales. But when you're established, it ends up being where you get a contract for $100,000, $200,000, or whatever the price is, and then you expand it to $500,000, $1 million within a year. And then after 2 years, it grows to $2, $3 million, and then it grows to $4 or $5 million over time. That's how we generate most of the revenue. It's land and expand. It's not you close a million or $5 million contract from day one. That's much more rare.

Yep. Anyway, that's it for today, guys. Please don't forget to rate, review, subscribe, and we'll see you tomorrow.