You're not Elon Musk—your words impact marketing, Adidas' performance marketing failed, and more

What's funny is, and this is actually not funny, but Elon Musk is going through the opposite right now. He's rich, he's created so much marketing content out there on random stuff, and he says whatever he wants, and it's hurting his numbers. So many people are stopping to buy Tesla. Overall, the business is, you know, they're still making money hand over fist.

Yeah.

But he has to do a ton of price cuts and other things out there. And if you look at every single news site out there, Like even CNBC, I was reading an article today and it says Elon Musk, you know, and I'm paraphrasing here, Elon Musk says it's insane to vote through mail, yet records show he's voted in the past through mail. And this is what happens in which if you do well and you have some sort of audience and you say whatever you want to say, people are just going to use it against you. And you should, people in general should be careful with what they say because it can hurt them.

Yeah.

And I don't think anyone is really too big to fail. I'll give you a great example of this. Look at the— is it Telegram founder? Yeah, the Telegram founder got arrested by the French police. Supposedly has a net worth of around $15 billion. They said, hey, money laundering, anti— or drugs, sex trafficking, all this kind of stuff they're saying is going on to your platform. You're responsible. We're going to throw you in jail. They could do the same to Elon. They can do the same to this Telegram guy. Having money Doesn't mean you can do whatever you want or say whatever you want, whether you're right or wrong. And if people don't like you, your life is going to be harder. Just look at Elon Musk and his comp package. It got taken away. Why? Because someone politically didn't like him.

You know, there's a conspiracy theory. So we were yesterday in the first Uber. So my Uber broke down, right? So the Uber broke down on the freeway and like, you know, we got in the second Uber and then we're kind of just talking about the conspiracy theory here is that So I think what has been said, and you guys can correct us if you want, or correct me if I'm wrong more so, but France is usually not going to take an action like that to arrest the Telegram founder unless the US is okay with it, right? And so because this has happened, right, it means potentially that the US accepted it, meaning that this might be the setup for putting who next in jail. But The—

when you look at X, Facebook, Google, or let's talk about even Google, like Gmail, you can use these products to do funky stuff. I bet you people do use Gmail related to sex trafficking and money laundering. And so with Facebook and same with a lot of other platforms.

My point is the conspiracy theory here is that they're setting the Telegram founder up to set Elon up for X next. You see what happened With in Brazil, right? Where I think they've like froze the funds or the bank accounts of Starlink and SpaceX, even though it's not related to X because the Brazil president doesn't like Elon. And so to your point, yesterday it was interesting. So George Gammon, the so he's great on great on macro. He was just talking about how he believes that you and I should openly state our opinions more. And I said, well, the reason we don't do that is not even because like sure clients is one thing, right? Clients want might not like what we're saying, or they might disagree with some of our opinions. You can't agree with everything. But what's more important, you brought this up, is that if you state your opinions openly all the time, you're going to polarize your employee base. And that's going to cause unnecessary drama. And that's going to cause unnecessary division in your company. And that leads to less focus on getting the actual work done. Yeah.

And also on a lot of subjects, I don't know about you, but I don't have tons of opinions. Like I don't read a ton on politics or anything like that.

No, but I will say that you and I We talk about things and we mostly agree on things, but we also know that many people disagree with these things too. But they're not like crazy things because we're both centrists.

So yeah, I, I, in just the world we're going into, I believe people should be careful with what they say online, offline, anywhere, because it can end up biting you and it can just hurt your marketing in the long run. And I think Elon is a prime example of this. I think if he keeps going like this, I'm not saying he's right or wrong. I'm just trying to state what's happening is he's getting a lot of hate from places and people are going after him politically and they have been. Look at how he's losing comp packages, right? It's the government, the system that decides if he's going to get paid a comp package that the shareholders agreed upon. Yep.

So at the end of the day, be smart. If you want to, like, sure, we like I have noticed sometimes when I kind of go outside and test my opinion a little more, it really irritates people. And that's how we get some of the 1-star reviews sometimes. And I know if I double down and triple down on that, we'll get way more views, but it's just not worth it at the end of the day, right? Sometimes I might venture out a little bit, but not that far. 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 Ollie, and 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 agency owners and do a lot more with it in the future. So again, marketingschool.io/agency, and we'll see you inside. Dude, speaking of deploy, we had talked about this a little bit in the past, but so I'm gonna share my screen again. Let me know when you can see this. So here's what it says. It says Adidas CMO came to the same conclusion back in 2019. So here it is. So you know how recently we talked about how Adidas was like, what brand marketer was like, yo, we overspent too much on performance marketing. So this was— was it Nike?

Yeah, that was Nike.

So Adidas said this in 2019, we overinvested in digital advertising. So Adidas admits that a focus on efficiency rather than effectiveness led it to overfocus on ROI and overinvest in performance and digital at the expense of brand building. So I know we had a take on this a couple weeks ago, but this gives us a chance to talk about it a little more because both Adidas and Nike, or at least a representative from Nike, said that.

Yeah, I think you need to have a mix. Performance— and dude, I talked about this here in Brazil— people are getting a lot of things wrong about performance marketing. Branding and performance marketing don't have to be separate. Performance can help you generate a brand. If you're running AdWords everywhere and people are seeing it and it's profitable, at the same time they're clicking on your website and they're seeing a brand, right? It's helping build your brand. I get some of the brand style campaigns are done very differently, but running ads, doing SEO, email marketing, CRO, et cetera, it all can help with getting your brand out there and getting people to know about it, right? Some of the biggest brands that we see, like Lumi, for example, or Dollar Shave Club, a lot of these guys ran performance marketing campaigns through Facebook ads, Instagram ads, Google ads, and it was very effective and they've had great outcomes from it. Where I think people are getting things wrong is they did a ton of branding. A lot of them may over-index in performance and stop the brand building because in the category that Adidas and Nike are in, what really helps sales is sexy. If you're not innovating and doing something sexy, you just don't sell as many shoes or as many shirts or jackets or, you know, tracksuit pants or whatever they're called. And they're in a category where you have to continually innovate. Like if you look at Lululemon, they've recently been disappointing with their earnings. At least that was a recent CNBC article I read. It's just people weren't happy with their recent product launches. It comes down to, you can have the biggest brand in the world and Adidas, Nike, you know, Lululemon all have amazing global brands. But if you can't keep releasing amazing hit products that are the new in thing when it comes to fashion, because that's the sector I would say they're in, it would be tough to do well. And I think that's a bigger problem than just the, hey, we over-index. Well, if you look at Adidas, what really put Adidas on the map was— what is the Kanye West shoes called?

Yeezy?

Did I say it right?

Yeezy? Yeah, Yeezys.

Yeah. What put Adidas on the map was Yeezy shoes back again, right? It made Adidas sexy again and so many people lined up and were buying them. And then Some stuff happened and then Adidas no longer supported Yeezy, right? And I'm not saying that's a wrong or right decision, but that really hurt them brand-wise.

I think, and I'll just keep my part very simple because I don't have much to add with what Neil said, but it's not or. A lot of times it's and. And I think when people try to fight each other over it, it just creates this animosity that's stupid. It adds up. It ends up not being productive when you should all just be aligned and working together. Yeah.

And I look at Adidas and Nike, their biggest problem in the last few years has been products. I used to wear Adidas.

Yeah.

Yeah. I used to wear Adidas, not Adidas, Nike jogging pants or whatever they're called, like the cotton ones, right? Same ones that used to get like Champion or whatever that they used to sell at Target back in the day. And the biggest reason I stopped buying them is they didn't innovate and their products started sucking compared to like Alo and a few of the other brands. So I was like, wait, there's other products that are similar, similar price, they're just made way better quality, they last longer, they look better, and people started shifting on what they're buying. But everyone used to buy a lot of those Nike jogging pants, but then what did they do? They stopped innovating. That's their fault. Whether you do branding campaigns or performance, you're still going to struggle because you're not spending enough time and energy on products.

Yep. You know, it's interesting. I wrote on Threads, or yeah, Threads, which tends to skew more liberal, I would say. And then I wrote something about, you know, we should stop vilifying, you know, rich people at the end of the day, because in order to be rich, you have to be successful. And in order to be successful, you have to add a lot of value to the world. And adding value means creating quality products and services. And that's how eventually people, most people become rich. Sure, you can inherit, but like, Most people build their wealth up, right? I got so much hate on that one. It was like 116 comments, you know, people calling me idiot. It's like I'm oversimplifying it, blah, blah, blah. I'm like, man, this is just how capitalism works. It's not perfect, but it's like if you build products and services that people like, they get to vote with their wallets. And, you know, the size of the company just depends on the amount of value that they add. 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 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. And then you have a topic here on when will businesses start booming again? What are we seeing in the ad industry? So I basically asked them again, like, do you guys think a recession's going to hit in the next 12 months or so? Because they look at all these indicators, right? And so, you know, Mark's response was he doesn't think we're going to see a recession for 36 months. And then sorry, he thinks it's going to happen in like maybe a year, twelve months or so. And then George Gammon thinks it might happen in thirty-six months. But they both agreed that no matter what, asset prices will be inflating no matter what. That's something they both agreed on. They debated a lot of things, and I think the things we're talking about here relate to the business cycle a little bit. So your topic over here is about when will businesses start booming again?

Yeah, before I get into that, why do they think asset prices will?

Keep going up because no matter okay, the reasoning is because if in if what happens is oh economy goes into like it doesn't do as well then the the money printer needs to turn on again when the money printer turns on again the asset prices asset prices inflate and so that's the only solution you gotta that that's not the only solution but you should own assets that's what I'm saying yeah like real estate and stuff like that. Bitcoin, whatever.

Yeah. So I think the economy, I can't tell you if we're going to be in recession or not. I don't know any of those kinds of things. I'm not an economist, but in a bad economy, advertising is the first thing that gets cut. It's easier to cut your marketing and your ads than it is to cut people. In a good economy, when things start recovering or start getting great, it takes a long time to recruit a ton of people. You can't snap your fingers and overnight just hire a ton of people. But what companies do when things start getting great again is the first thing they do, they start turning on their ads, right? They cut back when times are bad, but you can literally click some buttons and turn on ads. And no joke, you can do it in a matter of minutes. Now, big corporations don't do it in a matter of minutes. They do it in a matter of days or weeks or months in some cases, but they can turn up the dial for ad spend really, really fast. You know, if they have— they're running their ads internally, or they just call their agency, say, hey, we got additional spend, go spend more money. And what we're seeing is over the last few years, people started cutting back on their ad spend, their advertising, their marketing purposes. Forget Google's earning calls or Facebook's earning calls. You have to remember, right, if a few players spend a lot more, like the Amazons of the world, it can really affect Google's numbers, but a lot of SMBs and mid-sized businesses were just struggling and they're still struggling today. And what we're seeing is a real slow ramp-up in which when we look at quarter over quarter, more businesses are inquiring, larger corporations, they're interested in spending money on marketing, but, and here's a big but, they're still taking time to make the purchasing decision, they're still easing into it slowly. But we're starting to see the demand slowly increase. And it's not like a rocket ship like COVID where everything went online or anything near that. But I believe based on the data we're seeing from our own business, we think within a year, unless something happens crazy economically, that businesses will start spending quite a bit more money within a year and a half from now.

And I shared the data that, I mean, what we've seen is like, there kind of has been a recession, you know, second or second quarter of 2022 into 2023, 2024, like things are ramping up, right? It's, you know, I think the word I'd use is the vibe feels cautiously optimistic, at least for kind of what we're seeing. And so that's one data point I shared with them. And I also say, so I have a friend of a friend, okay, there's the— Neil, have you heard of the Stripper Index before?

No. What the heck is a stripper index?

So the stripper index, that's when people can see, like strippers can see when consumers are spending less, less people, less customers are coming to the club, right? And so when that starts to come down, that's like a huge sign that the economy is softening, right? And, you know, the friend of a friend said, you know, that their sex worker friend was like, yeah, you know, it seems like the clients aren't coming in as much. So that's another data point, right? So like there's, we can share what we've seen with our businesses. But then there's other indexes. You can look at the unemployment rate, you can look at inflation, you can look at all these things. And then ultimately, it doesn't matter what Neil says, I say, or like what George Gammon says or what Mark Moss says. You should listen to different viewpoints and then decide for yourself. That way you think for yourself.

So with the Stripper Index, the friend of a friend said it's softening, correct?

Yes. Have they—

and was that recent or was that like a year ago?

No, that's, that's called that like 2 weeks ago.

Okay, so they're not seeing a recovery in this quote unquote stripper index.

Yeah. Hmm.

Well, I hope it does recover. We're starting to see corporations starting to spend a little bit more.

Yeah.

And more of them willing to.

Yeah, we're on the single grain side. There's a— we're seeing more account expansion. And then I would say that our lead flow is continuing to go up. And so August, usually like you, In the past, it might be slower, but it's not the case for us.

So our August was brutally slow, but really, yeah, we have a lot of European offices, and Europe shuts down pretty much in August, sadly.

Got it, got it, got it. On a side note, let me tell you a funny story. I forgot to pack underwear, so I had to go buy underwear today.

That is a funny story.

That is a funny story. I opened my suitcase, and I was like, something's missing. And I was like, oh. Underwear. Very good. And so I had to go get lunch with my VP of ops before, and I had to go to Lululemon, make a stop. But yeah, one, I didn't know Lululemon sells underwear, but oh my God, it's the best underwear. Okay, see guys, this is word of mouth marketing right here. So they have this mesh underwear that feels really good. Um, our mutual friend Yaniv recommended it, and since then I've been buying it. So you should buy it. It's very comfortable.

Huh, I never knew that. And what's interesting about what you said So I usually am the one who says I have a funny story and it's never funny. And Eric, for the first time, used it and actually has something funny to say. So yeah, he used it correctly.

On our personality test, it says Neil's not very funny. Actually, Neil's funny, but it shows I'm funnier than Neil. But anyway, um, he is. That is it for today. Please don't forget to rate, review, subscribe, and visit marketingschool.io/agency to apply for the agency owner Owners Association. So we're changing it to application only now, um, and if you're qualified, we'll give you a call. And, um, yeah, we will go from there. We will see you guys tomorrow. See you guys tomorrow.