We're All in the Diaper Business (And Mark Schaefer Explains Why)

Hey everyone. This is Mark Schaefer. Welcome to another amazing episode. Wait a minute. Mark, wait a second.

This is my show now.

This is your show now. Some habits die hard. This has been in my blood for 13 years, and I'm so delighted that you're doing so great with the show. And thanks for having me back. This is so much fun.

We are so excited to have you, Mark. And if you are listening, welcome to the AI Marketing Companion. My name is Sandy Carter. I am the host as opposed to Mark, who started out just a little bit ahead of me. And we are— we're going to have a great discussion today. But first, I have to say a huge thank you to SEMrush, who I personally use in my company, especially for SEO. I use it for SEO too, but I now use it for SEO, which is about being found on all of these new LLMs. And as well, Brevo. I use Brevo for my marketing personally for the podcast. So all 20,000 folks who signed up to get my newsletter, and for my company. I love what they do just around helping you market and keep in contact. So both of those companies, check them out, Semrush and Brevo. And in the LinkedIn post, I will put links to both of them as well. Okay, Mark, back to the scheduled program. I'm betting everybody knows you, but why don't you just give us a little intro if you don't mind?

Well, I do a lot, but I think at the heart of everything I do, I'm a teacher. I'm just at a great point in my life where I can send the elevator back down and teach people, help people, mentor people. That might be through speaking. It could be through my books. It could be through teaching at Rutgers University or through my Uprising Marketing Retreat, which you attended a few years ago, which is, it's kind of like marketing Christmas for me.

Well, it was for me too. I mean, I had hoped to go for so long and then I finally went and now I know what the magic's all about.

Yeah. It's hard to describe unless you go. So, but that was, that was just It's wonderful having you there. And we have it just once a year and in the spring. And that's, uh, that retreat's called The Uprising. So those are some of the things I do.

That's awesome. And I also love all the stuff you do around personal branding. I know you're going to come back on one more show and help us with personal branding too.

100%. I mean, I'm very—

and you have a personal branding workshop coming up, right?

Yeah.

Yeah.

I have one coming up in August. There's a few slots left on that. And, you know, I'm very passionate about that. And it kind of really goes, also goes into the topic we're going to be covering today, because I mean, I feel strongly that in this competitive world and AI is, you know, taking so much of the content footprint these days that your personal brand is really the last leverage you've got. And I just, I, when I talk to students, I just beg them, they've got to be working on their, their personal brand, but onto other topics.

Okay. Well, most recently you wrote this amazing, I would, I call it the little book.

The Little Book.

The Little Book of Wonders, because it is, it's a small book. I mean, I read it on an airplane ride and I wanted to ask you some questions from that because it was really about the impact that, that AI is going to have. And in fact, one of the lines that everybody quotes from your book is the biggest disruption in marketing history isn't coming for your job, it's coming for your customers. So if you don't mind, Mark, walk us through what you mean by that and why you think marketings are— marketeers are still preparing for the wrong threat.

Well, a little bit bit of background. I wasn't planning to write this book. And last spring, I was invited to participate in a research project. They invited 300 futurists to answer the seemingly impossible question: how will AI change humanity by 2035? Now, here's the part that was so amazing to me, so energizing to me. In the final report, there was consensus about some big ways humans were being rewired. It seemed inevitable. Now, this is amazing, and I know you feel the same way. Nobody knows what's going to happen with AI. Nobody could predict anything about AI, but you had these philosophers, psychologists, academics, you know, Silicon Valley insiders coming together and said, yep, this stuff's happening. And it's not happening like in a sci-fi way. It's happening now. Now, as you view this through a marketing lens, if AI is rewiring human beings, that's changing our customers. It's changing how they think, it's changing how they act. It could be fundamentally changing consumer behavior. And so we've got to stay on top of that. And what's remarkable to me, Sandy, is that literally nobody's talking about this. They're talking about prompts. They're talking about transformation. They're talking about workflows. They're talking about agentic commerce, but nobody's talking about how AI is changing the psychology of our customers. And our employees, and also, by the way, our families. And there's no going back.

I just had an interesting discussion on this from someone who's into agentic AI, and I love this example that he gave of how we're being rewired. He said, you know, when you used to go and look for, like, let's say you're going to a college graduation in Texas, you used to go and look for, okay, show me dresses. You know, we'd go to Nordstrom's, you'd shop for a dress. But now what people do, they've been rewired to go to ChatGPT, and they're like, hey, I'm going to Texas in the middle It's hot. I need a graduation dress. And so that little question changes so much about the way that companies respond, right? Now, in their descriptions of products, they have to have good for heat or how the dress could be used versus just the dress is made of silk or it's pink or whatever. I thought it was really fascinating to see how many people were now shopping this way, not in the old way. And it hasn't even been that long, Mark, for sure.

Yeah, I saw research just recently this week, Sandy, that we are getting access to less than a third of the search queries on Google. And, you know, a lot of people think, oh, Google, well, that's AI too, right? I mean, their AI answers, their search bot, their, you know, their knowledge boxes and so forth. So, I mean, yeah, more and more of this is being moving over to the AI functionality.

Yeah, it's quite interesting. Now, in your book, one of the most counterintuitive ideas is the Betty Crocker lesson. That people need to feel useful, not just comfortable. And we've spent, what, 2 decades stripping out, you know, the friction. So why do you argue that making customers feel capable now matters more than making things easy?

Well, the Betty Crocker example is a famous marketing case study where Betty Crocker, I think it was in the '50s or maybe early '60s, they introduced a new cake mix where all you had to do was add water. And it was a complete bomb. Betty Crocker couldn't understand it. So they hired marketing help and they determined that, that, that homemakers didn't feel like they were actually making anything. They had lost their human agency. They were being deskilled. They felt like they weren't really baking. So he made a recommendation. He said, look, change the recipe. So you have to add an egg. And just adding an egg made it a big hit.

Now.

This is really important because AI, if it isn't doing it already, it can threaten human agency. So I'll give you my moment. About 3 weeks before ChatGPT was introduced, I had just finished writing my book, Belonging to the Brand. I spent 2 years writing this book. And when I'm finished writing a book, I am totally exhausted mentally, physically. I mean, I'm usually sick from the effort. So ChatGPT comes out. First thing I do is, well, aha, let's see how smart you are. Write me this, this thesis, write me an essay, da da da da da, that could go into this book about brand communities. Write it in the voice of author Mark Schaefer. And in 3 seconds, it did it. And it was good. And it could have gone in my book. And I just was like, stunned, like, that suffering is, is part of my journey. That suffering is like the, it's like what I I do to help people in the world. This is like part of my purpose of, of, of why I work. And I could, for a moment, it was like, where do I belong? Do I still have a place? Am I still going to be an author? So now if you just compile that over AI can make decisions, even like ethical decisions, parenting decisions, and you start, I mean, AI just solved an argument for me and my wife. We didn't even debate it. This is what ChatGPT said. Okay. You win. So, uh, so we're, we're skilling, we're abdicating our agency to AI. Now, this is going to hit people really hard. And so one idea is to add friction or add aspects to your marketing that involve people. So instead of saying, here's our AI, just click here and you'll get everything you want. Maybe you position it like, hey, come along with us on this journey. Here's AI, but you know, between you and our services here, we'll come up with the right decision together. An example I have in the book that I think is really kind of cool. On, we have this big do-it-yourself chain here in America called Home Depot. Every Saturday morning they have workshops for parents and their children. So they'll come and they'll learn how to do something together. They'll build something. They'll, they'll learn about tools or learn about painting or fixing things. And so it's sort of like reinforces this idea that you are useful. You still have a place in this world. And I think that's, that's a, that's an interesting idea. As we consider how our customers are being de-skilled, there was actually, there was a, there was a quote in the book, learned helplessness was the phrase I wanted to, to remember, learned helplessness that we would just, we're just giving up to AI because we don't feel as useful as we used to be.

You know, I just did a podcast with my daughter.

Yeah, I listened to that.

It was interesting because we were just chatting about, you know, what do you see? What, what do you think people of your age, what are they struggling with? And this was one of the things that she really brought out is that, mom, my generation is delegating their thinking.

Yes.

ChatGPT. And in fact, she gave an example. She said the other day, 3 or 4 of her girlfriends got together and she asked one of the girls there, hey, what do you think about this? And you know what the girl did? She didn't answer. She went into ChatGPT and said, what do you think I think about this? And then repeated it. And so one of the things—

Oh my gosh, that is wow.

Yep.

Yeah.

One of the things—

Yeah, there's a quote in the book. I think this was the part of the book that was hardest for me to write, I think. There was a young woman I interviewed for the book, and I said, I met her at a community event, and she was telling me how she uses AI every day. She's like a junior in college. I said, you know, I'd like to interview you for this book I'm working on, get a Gen Z perspective, right? So I called her on the phone, and she said, when you told me you wanted me to answer questions for your book, My first thought was, I have to ask ChatGPT. And I realized I have crossed a line. I am making myself dumber. I don't know where I am. And she said, it's not just me, it's everybody I know. And I mean, that's just really hard to hear.

And to your point about the Betty Crocker lesson, one of the things, my daughter's going to write a book with me about, you know, what young people should do now about AI. We did a little workshop with moms and their daughters and we, we, I went through a little training. And so again, putting a little friction in because like Cassie, my daughter was like, hey mom, all those people know how to use it. But we kind of went in and we were teaching them some different ways, putting a little friction in because the moms were considered friction, I have to say. And I have to say that workshop was wildly successful. So I think we're going to do some more garnering, uh, some content for the book, but also just, you know, helping people and, you know, thinking about that next generation and teenagers, I thought in the book, There was some interesting research and some scary stuff. I mean, reading all about AI companions, the most used, just listen to this, the most used AI on the planet are AI companions. And you talked about teenagers forming romantic relationships with AI avatars and the whole community around my boyfriend is AI. In fact, one of my friends, one of our friends, Kathy Hackl, she actually dated 5 AIs and then wrote an article about it, trying to see if she could form a relationship. So. When a customer's closest confidant is a bot, what does that authentic human connection from a brand even look like anymore?

Yeah. Well, you, you have to think about, and for a lot of people, this is just seems impossible. It just seems like, you know, a Hollywood movie or something, but it is, it is real. It is, it is happening. It is happening now. And you think about, there's there's just no compromise. Whenever you have an AI companion, you don't have to work at the relationship. They don't roll their eyes. You know, if you're talking about what you did at work today, they don't fall asleep because they're tired of listening to you. They don't get irritable. And so it's, it's like a relationship that doesn't— without compromise. And I gave the example in the book where, I mean, I've even had little insights into where I thought AI was, was like taking care of me. Like it was kind of like he, I don't know why I said he.

Yeah. Yeah. I am.

Maybe that's part of it.

Yeah, that's right.

Maybe that's part of it. And so, so this is really an interesting dilemma for marketers. It's an interesting way that the world is going because think about what is the most powerful marketing in, in, in the world. And that is what? Word of mouth marketing. It's the earliest form of marketing. It's how all the earliest businesses were created. And it's, it's unadulterated by, by AI or technology or anything else up until now. So, I mean, there's this very famous number from Nielsen. 92% of US adults will believe a recommendation from a friend or, or really any human over any advertising or marketing, even if it's just a review or a testimony. So. This idea of a trusted recommendation is, is, has always been a very important part of marketing, creating experiences, creating a story or an experience that's so compelling, so worthy that people can't wait to talk about it. Well, what happens if that experience or that recommendation is coming from your best friend and that's a bot? And I don't think really anybody has the answer to that right now. I mean, this is really a new, new world. But trust in AI is increasing at an exponential level. And it's not just for small decisions. It's for what college should I go to? Who should I marry? What car should I buy? Big decisions. People are turning to AI. I think I saw some New Harvard study that the number one use of AI queries right now is for therapy because people trust what's coming out of AI.

Yeah, it is, it is really interesting. And the one that really got me, Mark, was healthcare. So the study coming out of Stanford showed that humans alone were trusted 70% of the time. Humans plus AI were trusted like 80% of the time. AI by itself was trusted 85 to 90% of the time. And I have to tell you, I actually just went through a medical situation. And I could not have done without, you know, that physical therapy who said, Sandy, you can do it, you can make it. So it is a little interesting to me to see how many people say, oh, I'd prefer my doctor to be an AI, or the recent study, I prefer AI to be my boss because AI is not going to be play favorites, it's not going to be political. So I want an AI for a boss. It's interesting how many people are coming out with those statements right now.

I don't know if it was the same Stanford study, but it was in the same timeframe where they showed that there was this trust in AI, but it also showed that they salted in answers that were completely wrong. And it was like 76% of the people trusted even the wrong answers without questioning it. So that kind of gets back to that idea of agency. Kind of gets back to this idea of discernment, this idea of de-skilling, of cognitive offloading, which we're putting more and more pressure on AI to think for us and make decisions for us.

Yeah, it's really true. But you know what, Mark, I really chuckled in your book where you said, we're all in the diaper business. I don't want to be back in the diaper business. Well, except for grandkids. You've got two. Well, you got one.

I've got a grandchild. I do.

You do. So tell us that story. What do you, what do you mean when you say we're all in the diaper business?

Well, I have this lovely little boy who's my grandson, my first grandson, and he's such a bright, just a bright child. And he's also an expert pooper. So good. And he goes through a lot of diapers. Now, if you're in the diaper business, he is your customer. He is the user of the diapers. Almost said the end user, but you know, he's the user of the diapers. And, but he's not the decision maker. To sell those diapers, you have to go to mom and dad. They are the decision maker, even though they're not the end user. This is what's happening with AI increasingly. So people are going to AI and just taking the answer. And so your customers may not be the decision maker. Increasingly, they're not. This is a cataclysmic new reality for marketers. And that's why I say we're all in the diaper business because the customer isn't the decision maker. Now here's the good news. And I don't know, I'd like to hear your view on this as well. So in the book, you know, I stated an opinion. I interviewed lots of, like, I interviewed Andy Christodina and Rand Fishkin and many of the great thought leaders in, you know, SEO and search and how it's impacting AI. And I kept hearing this number that about 80, 85% of the marketing we're doing today still works for AI. You know, the things that you're doing around content, around branding, around advertising, around reputation, it's still going to work okay. There are some new things that we need to work on. So the good news is that most of the marketing you're, you're doing is still going to work in the, in the AI era. The big decision, the big problem is you don't get a list of choices. You get the answer. So it's going to be very, very difficult. And of course there's a whole new cottage industry emerging of helping people to show up on AI, et cetera. However, I want to also reinforce this idea as far as your marketing strategy that, look, don't forget the basics. Don't forget the basics of marketing, which still help you. So I recently went to Europe and I wanted to have some fun. So I was going to spend 5 extra days in Paris. So I went to ChatGPT, like you do these days. And I said, I love art, history, nature, food, plan for me an itinerary for 5 days in Paris. It did a spectacular job. It even told me what metro stops to go to, the best time to go these different places. Like I couldn't believe it. It even said like, if you're going to the Louvre, don't use the main entrance, use this other entrance because there's never a crowd Wow, this is great. However, I said, for my trip, I'm going to fly Delta Airlines and I'm going to stay in this type of hotel because the brands matter. This is an important idea. This is an override to AI. If you mean something to your customers, if you have loyalty and you have this connection to your customers, that's the ultimate override, right? They're not going to even search for for an alternative. And here's another thing, Sandy, we talk about cognitive offload. People don't want to think. They're also not going to want to compare brands. They're not going to want to do the work, right? So if you are a category leader, this might be a great time for you. People may default to you because they just don't want to think anymore. And AI's probably going to rec— you know, at least recognize the category leader. So branding more important than ever. Don't— let's not get so intoxicated with the SEO tips and tricks that we forget marketing basics. We also talked about word of mouth. Okay. I'm going— a friend of mine says, I see you're going to Paris and I know you have to eat gluten-free. Let me tell you about this bakery in Paris. It's the best gluten-free bakery I've ever been to. So of course I not only went once, I went twice because she's right. It was the best I ever went to. Now this bakery doesn't have the marketing firepower. To be an AI recommendation, but this is word of mouth marketing. They are creating a product and a brand so great, so worthy, so interesting. She can't wait to talk about it. That still works. That is still, that's another override for AI. So every marketing leader out there is being deluged with all the tips and tricks to be number one in AI. And that's going to be really hard. It's probably going to be really expensive. Don't overlook some of the good old marketing stuff like branding, word of mouth, advertising, community, brand communities that we've done for years and years. Still works.

Yeah, I completely agree with you. I looked at my, I was looking, rereading my book, AI First, Human Always, just to see what's still relevant as I write my next book. And one of the things in there I talked about is don't forget first principles. And this is really a first principle, right? First principles typically apply to, okay. Don't forget, you're not doing AI just to do AI. You're doing AI to make money. You're doing AI to service your customer. You're doing it. So make sure you don't forget first principles. And for marketeers, these are first principles. Although, Mark, I will say, I don't know if you've checked out ChatGPT's new recommendations on brands, but one of the things that they're doing for their Agentic Commerce is you go in there and you, you're like, okay, look, I'm gonna throw a party. I'd like to have this kind of vodka. If that vodka manufacturer didn't pay ChatGPT to be part of their list, ChatGPT says, oh yeah, you could use that vodka, but why not look at this vodka? Because they have pineapple flavored and they have citrus and they have all this too. It would fit.

Is that, is that out now? I heard they were. Yeah. Okay.

Wow. Now. Yeah. And they're making a lot of money on it. And I went out there yesterday and I checked all the brands. Folks like Da Vinci and others now are are building website pages for those brands to show up on ChatGPT. So essentially, you know how you normally go out and search for something and then chat shows you what it wants? For those brands who are paying, now they can actually push their own page, their own branded page. So it's quite interesting. I'm wondering if this is going to change the dynamics. Now, that this is for OpenAI. Anthropic is not doing this. I haven't seen Google do this either, but this is for OpenAI. So —also tells you kind of the direction that they're going for versus, you know, Anthropic too. I do have one more question though. I do want to get to because I know we're going to run out of time. I mean, we always talk and everything goes by super fast. But in the book, you describe this AI decision stack where algorithms are choosing before the human even knows what they're deciding. I think this fits in really well with what we're talking about. And you point to, you know, AI referral conversion that are far above traditional search. Which is true from every report that I've seen. So if brands now have to earn trust from a machine and not just the person, kind of opposite of what we were talking about, how does that rewire everything we thought and knew about influence? You know that I am thinking a lot about that.

I really am thinking a lot about that. And the reason is, I mean, I think you and I are kind of at the same heart and mind about this. I mean, one of the phrases I'm may be known for is The Most Human Company Wins. It was a subtitle of one of my books. And, and, and I emphasize in this new book that the most human company may not necessarily be just humans. I think it can be blended in the, in, in the right way. And we're seeing a lot of backlash when, you know, businesses aren't transparent about that. But what gets me thinking about the, the real impact on, on influence is number one, we already talked about these bots who are not just trusting they are beloved. They're, you know, I've got a friend I respect very, very much. I mean, she is just one of the top marketers I know, and she has built a bot that is more or less her CEO coach and goes to this intimate friend of hers for almost every significant decision. I was at a conference last week and I heard this guy gave this talk. And what happened, Sandy, is he had worked for years and years and years creating content, creating content. And he, like, after 5 years, he was really getting nowhere and he was ready to quit. And then he got lucky and he had a viral video and his followers on Facebook went from 5,000 to 34,000 in 24 hours. Wow. Now, wow. Once that happened, the algorithm treated him differently. All of a sudden, just one video and this huge expansion in his audience. And he has advantages. He has a footprint that maybe some of us don't have. Okay. Now, long story short, he has continued to optimize, optimize, optimize. He's basically just playing this numbers game, realizing that all he has to do is grow the numbers. Even if this content is bad, even if his content is like stirring up trouble, he just needs to grow the numbers. And he can monetize through affiliate links. Everything he does is fake. His scripts are AI. Oh, wow. His production is AI. It's an AI avatar. It's not even him. He, there's nothing original. He basically looks at what is the meme of today. Do that meme. You'll create this content. He's posting 5, 6 times a day, all automated. The engagement is automated. And here was the most disturbing thing that he said was that the way he's growing his numbers is, is by trolling the trolls. Like he's actively encouraging trolls to come in and like hate on him. He said Facebook doesn't care. Facebook doesn't. So he's like even optimizing the polarization and hate and he's making a ton of, and he's making a ton of money. Now, is that influence? I don't know. Do we say this is like, we're back in the black hat SEO days? Or do we say here's a young guy that didn't have much going on for himself, and he found a way to work the algorithm to feed his family. Do we cheer or do we say, nope, this is kind of icky? I mean, I know where I come down, but it's also a reality. It's power and influence. That's— it's fake. It's automated. And that's what I'm really struggling with right now is as a teacher. I mean, I teach at Rutgers University. I'm preparing for the next semester. Like, what do I say about this?

Yeah, this is really hard, right? Because I'm not into fake and I don't like, you know, I get people calling me all the time. Like, ooh, like you just, I just got named top LinkedIn voice for AI. They're like, oh, we can keep you at that level forever. Let us do this and this and this. And it's fake. And so I'm like, it's just not who I am. It just doesn't fit my brand. I just can't. So I'm not going to do it. But yeah, what does that mean for people who are doing it? A friend of mine created a digital twin. It's an avatar. It's really good avatar. And she's using it. She's using it to test it, but She said to me yesterday, I'm making more money from my digital twin than I am from me. Yeah. So what do I do now? Like I was doing this as an experiment to write about it, but now I'm seeing, wow, this is really interesting. I do think it's a really hard one, Mark, because it, I think it does also come down to your values. Like what is your value proposition as a human and how do you want to, how do you want to go after that? And are there parts of it that you could use? So for example, I was just talking to a retailer the other day and they told me now that there's all these bots that are buying stuff that they learned that, you know, us humans, we look at $1.99 and we are like, ooh, $1.99, that's better than $2.05. Because we're emotional, right? And so they're like, okay, so the agent doesn't care. Like they see, oh, there's like 6 cents difference. I'm not gonna buy off of that. I'm gonna look at other things. And so they're kind of having like this two-prong strategy where they're looking at, okay, How do we entice the agents and how do we entice the humans? Is that the way to do it? Like, do you and I target humans and let other people target the agents? I don't know. It's a really interesting question.

Yeah. I mean, I, this is what I go back to. I mean, you and I were in the whole digital space very, very early. Even in my corporate world, I led some of the very first digital marketing efforts, CRM efforts. In, in really in the world. And when, where corruption can occur, corruption will occur. And when you and I were in those early days, we saw stuff like black hat SEO, just corrupt stuff, right? And we, and, you know, speaking for myself, I knew a lot of people, a lot of friends that were doing this stuff. And I made a decision that I'm going to stay in my lane. I'm going to be values-driven. I'm going to be human-oriented. I made the that long-term, you know, this black hat stuff, SEO wouldn't, you know, Google wouldn't go for that stuff. These people would, it just couldn't survive. And that if I, if I just remained an ethical person, values-driven person dedicated to doing the right thing, you know, dedicated to really trying to teach people and help people, that I would be elevated eventually. And I think that's kind of where I am now is that, you know, if I had a chance to interview this young guy, I mean, the first question I'd ask him might be, How do you live with yourself? Can you go home and tell your children you're proud of what you're doing? And that interesting little side note, I know we're running out of time now, but this would be a nice way to kind of put a ribbon on it. A few years ago on this very show, when I was the host, I got to interview Tom Peters and Tom Peters, the great author, author of the best-selling business book in history. Just, just, you know, one of the great business celebrities. He was retiring and it was the end of the show and I was interviewing him and I said, okay, Tom, you know, you're going away. You have a chance. To send a last message, a final message to thousands of marketers all around the world, what would you want to say? And he thought for a moment and he said, when you go home at night, are you proud to tell your family of what you did that day? And it really made my heart skip a beat. And I think that's a good way to kind of end this discussion because in this world, we're going to be pulled in a lot of directions. And I think that is a good code to live by is to think, am I, am I Am I proud of what I'm doing today? Am I proud to tell my friends and family what I do? I think if you follow that code, you're going to be okay.

I agree with you. And you know what? Your, your success has been built on that. I mean, if I think about the Rise community, not just the event, the Uprising, but the community, I mean, people appreciate you because you've been honest, trustworthy, ethical, and you're always willing to help. So in my book, if you're a brand out there and you can be honest willing to help, I think you're gonna do successful in the long term. I think it is a long-term game. I do think it's a long-term game. Well, Mark, thank you for coming on the AI Marketing Companion. I really, really appreciate you coming back and speaking to us. And again, I wanna thank all of the listeners. You know, please send me your questions and your comments. We do create new shows based on what you send me for sure. And, um, I also wanna thank, uh, SEMrush and Brovio again because I just think that those two tools really serve our values too, and really help you get noticed in particular ways, help you go back to some of those first principles. So please check them out. Mark, thank you so much. Really appreciate it. And again, thank you to all the listeners. We'll talk soon.