Branding in the AI Era: Beyond Features and Benefits

0:00Yeah, Damon, so our mutual friend Damon John was in Austin, Texas. because we've got South by Southwest here in town. Yeah, it's going on. It's for like the next, I don't know. It goes on forever. But the interactive part is overlapping, I think, a bit more with the movie part. Or maybe it always does, and I'm just never here. Because normally this comes in town, and I leave.

0:26Hey, everybody. Welcome to another episode of the Business Lunch Podcast, which with Ryan Dice, my wonderful partner. Ryan, how are you doing today? I'm doing so great. I got to live my best Hollywood life over the weekend. I saw you posted some pictures. Were you with Damon? Yeah, Damon. So our mutual friend, Damon John was in Austin, Texas. We've got South by Southwest. Is that going on right now? Yeah, it's going on. It's for like the next, I don't know. It goes on forever. But the interactive part is overlapping, I think, a bit more with the movie part. Or maybe it always does and I'm just never here because normally this comes in town and I leave because like all these except last was it last year was it south by or was it it was no it was a different festival that your wife was like hey you know what would be good let's go down into the crowd now yeah that was yeah that was that was a different that was a music festival so actually way worse I'll talk with her and tell her that you've been wanting to go to southwest too and that she's kind of been meeting me and she's she's probably never done it you guys should go well I've been I got dragged down to south by southwest all my and look it's it's a great thing if you're into technology and all that other stuff it's fine I'm just not really into crowds and people and strangers wanting to breathe my air and wear my skin and so you know but Damon's down there and he's like hey come down I'm speaking of the thing it'll be fun we don't get as many opportunities to hang out anymore so I'm like dig it I'll do it and normally it overlaps with my kids spring break so I'm gone yeah not this year I'm here but yeah I mean so he was like do you want to go to this um this this premiere wrap party and i was like i don't even know what that is but yeah sure but it was this movie that paul rudd did and so we watched the picture yeah that was it was on my phone really tiny i just saw it kind of in passing and i was like oh okay yeah so paul rudd of ant-man fame if you're into marvel stuff if you're he seems hilarious is he in person as so freaking funny and so incredibly cool and what was nice is like he and damon are actual friends like their neighbors I think they have a house next to another in Miami and so and this was not um like this was purely just a crew wrap party for like friends and family only so everybody was just super chill like I didn't know any of the other actors who were there because I just don't I'm not that I'm involved in in Hollywood but just everybody was just hanging out he was like Damon was like notice there's no step and repeat because nobody's here taking pictures everybody already knows everybody that's cool so it was just really cool you felt like you were to sort of hang.

2:50It was in a gallery. So it was a, you know, the music wasn't obnoxiously loud. You could actually talk to people. Yeah. So we got to hang out for a little bit. It was nice, really nice, hilarious guy. Um, then we went from there to this other kind of thing. And I'm just obviously this tag along, I'm sure, but he's like, I think some of his staff or something. Um, and then we're, we're walking back. I'm finally like over it. And, um, we're, we're walking back and it's well past my bedtime. It's I think like almost 11 o 'clock at night, which I need to be in bed. we're walking back uh down sixth street which is kind of the big you know hullabaloo place in austin and all of a sudden everybody just i hear everybody go nuts and um damon's like what's that we look over and it's ben affleck getting out of out of his car yeah and um and then we're like oh ben affleck that's kind of cool and then right behind him is mark cuban um and so damon walks over he's like hey mark there you know mark's like david you want to come come to a movie and it was a premiere of like his accountant two which is a great movie by the way it was a great flick i really enjoyed it yeah i can vouch for two uh it was really great but apparently mark was a producer or something on it um so we got got to go to the movie you know hung out with them and their whole thing in a at a movie premiere which i'd never been to and have you ever been to a movie like an actual legit movie premiere not only uh b movies not uh the ones that clients of mine produced not to like a major you know theatrical release what was cool is because it's basically all the crew it's friends and family um when different actors would appear on screen people would just go nuts because like their friends were there you know and it's like and and at a scene that was like kind of funny like people would laugh and when the bad guy got killed at the end everybody cheered like it was just it was fun like it was way you weren't just watching something you felt like you were more engaged.

4:45The old Rocky Horror Picture Show used to be like that, right? Exactly. I'm like, man, if this is what every theater experience was like, I would go to the theater a lot more. Because it really was cool. Like you felt like you were in more of an experience. And then the meeting, the movie's over, the credits start rolling. And I start to get up. And Tim like pulls me down. He's like, don't get up. no i didn't realize that nobody leaves during the credits because everybody wants who's in there wants to see their name or their friend's name show right of course of course i'm like this is the time when we leave no it's on the lone jackass who doesn't know how this whole thing works um and so you're sitting there and names are coming up and people are clapping and cheering and it's it's basically like the bow at the end of a of a major flick so anyway this is has nothing to do with the topic of anything today um in an attempt to try to bring it back to something that might be helpful for people.

5:41I do think the more experiential we can make these, anything that we're doing today as we're shifting into a world of AI, it was just so freaking fun because everybody there was engaged in it. They weren't simply viewers, they were participants. And we were talking a little bit about how, you know, we just had our Founders Board Mastermind retreat a couple of weeks ago, got back from Mexico on that. And unfortunately, you know, we, we film all of our gatherings and I guess some of the audio got messed up, but I was like, it doesn't really matter that much. Cause it was a retreat. It wasn't like an event.

6:17Yeah. It wasn't just us talking to people. The experience was in the room, hanging out with folks and the pool and yeah. And in the pool, exactly. But I think we're now moving into this area where everything's going to be fully online, fully automated, fully just plug me into the matrix. Or like, I want to be completely, give me the red pill, like, like, let me out of it completely. Give me the full real experience. And you just don't want to get trapped in the middle. Like you just don't want to get trapped in the middle. Yeah. At the risk of hijacking what we talked about and forgetting it for the like 7 ,000th time, the thing that I wanted to talk about that I mentioned to you.

6:56Um, I, I watched an old marketing video came into my, I think, Instagram feed and it was, um, Steve jobs talking to the Apple team about branding. And I thought it was really interesting because he was talking about, um, what branding is and, and where it's going and should be. And I think we're back at that cycle and you and I have talked about it because right now I see pretty much everyone saying exactly the same thing. Um, if you've got a car, it's our car goes zero to 60 in this much time and corners here. And if you've got, um, uh, you know, beer, it's, you know, this tastes good. And if you've got, uh, um, how to make your business better, like our stuff, uh, it's like, we can scale your business.

7:51I've exited, you know,$700 million businesses and I've grown$700 million businesses and everybody says the same thing. And some of them are liars and several of them are true. So what is it that makes you different and how do you differentiate? And, um, what, what Steve jobs was talking about was he said, um, look, uh, it is, he said, you don't see Nike talking about our sole, our souls on our shoes are four millimeters thick, but the other guys are five and we've got, you know, titanium laces and, you know, this, that, and the other, it's just do it. And, um, and he was talking about, uh, milk and he's like, he's like the whole milk industry was dying.

8:44And then, um, they came up with got milk. He said, which, which, and I thought this was pretty funny, which curiously is about not having the product that we're trying to sell. So, cause it's got milk, you know, got milk. No, I don't, you know, things are bad. I need it. Um, but nothing about milk tastes great. Even it was just basically milk is the lubricant that will take the crap that you've eaten and shove it down your throat. I mean, like that's, that's me saying that, right? That, I mean, that's basically what it is though. That's, that's what all of got milk was. Um, or the, um, you know, the, the whole drug thing where they threw eggs in a frying pan and said, this is your brain on drugs.

9:22It's like what they're after is the emotional feeling that the brand conveys, which I know is nothing new, but I feel like it's easy for us to get lost as having, you know, just created a couple of offers. And I know you did too, to get caught lost in, you know, It's not feature creep. It's like feature heap, where you're really just piling on all the stuff. And the problem is that everybody else piles on the same stuff. And then you find yourself really in what Michael Porter called perfect competition, which is a race to zero. Because you're ultimately going to get into just price. I mean, it's going to be that.

10:03And so I thought it might be interesting to talk for a minute about that. because my guess is that a lot of the people that are listening or watching to this are going through that with their products. I mean, I know when I talk to people across the board from our friends that own auto dealerships to other people in our industries to you name it, it seems like it's down almost everywhere. Like it seems like that the feelings of whatever it is that's going on in the economy is hurting. And so then the question is, what do I do? And this is the last thing I'm saying, then I'll shut up. And then in those times, Harvard did a study and said most people pull back on marketing.

10:41And that's the worst thing that you can do because the people that double down on marketing are the ones that share a voice. But I think it's important that you're doubling down on the right kind of marketing. So I'm going to kind of throw all that up on the wall at you and then say your thoughts. Well, I'm going to throw a question back at you because I think we need to approach this from two stages. The first is, why do we think that this is happening? Because clearly there is a change that is taking place. And it's not merely macroeconomic. Like you can't just say like, oh, it's just a slightly different macroeconomic cycle.

11:17It's just kind of like an 08, 09 type thing, because it's not really, right? I mean, I do think that what we are experiencing right now is fundamentally different. It is fundamentally unique. You've got a lot of different forces converging at the same time, whether it's AI, whether it's, I mean, there's a lot going on, you know, out there. there that is new. So I think it's worth just pausing to say, what's changing? Why do we think it's changing? And then in light of that, what do we think that we should be changing about the offers that we're making as marketers and as business people and things like that?

11:50Because again, this was something that we want to talk about. Anyway, I think we should just go straight to it. Why do you think, I mean, what you're seeing out there, why do you think we're seeing these changes? I think it is a whole lot of things. I think that the average person has less money to spend now than they did four or five years ago. And if you look at credit card debt is at an all-time high. Interest rates are significantly higher than they were just a couple of years ago. Rent and mortgage payments have been affected by that as well and are at high times, eggs are at an all time high as, you know, inflation has crept back, but still high.

12:32And all of the support money that was being poured in from credits to loans has evaporated. And I think that because of the administration change and the, you know, terrible war that is being fought in the media versus politics and the challenge between the left and the right, that there's a very, very significant uncertainty that's going on. And I'll finish it up with, we're in a kind of heightened world insecurity time where you have BRICS and Brazil and India and Russia and China, um, all run by folks that are, you know, in our minds crazy, I'm sure in their minds we are, but, but we seem, it seems very tense.

13:28Like, you know, things could, it's a tender box and things could blow up at any time and everybody's got their finger on the button. So I think it's a lot of that combined with the unprecedented access to media and audiences for everyone to copy the messages of everyone else and throw them all at the same audience. And so I think it's those things. What are your thoughts? I think it's those things. And I would add to that because everything you just described is all things that we've seen before. Right. And so they're things that we would expect to cycle around from time to time. Right. Whether it is inflationary cycles, whether it is cycles of.

14:15They don't seem like, though, this time the challenge is that the indicators versus the markets were really running contra to everything we knew about how indicators and markets run. Interest rates went up and stocks went up. I think that's only because, I mean, if you go back to like the 70s and 80s and stuff like that, what did you have? You have a lot of inflation, which was followed by like periods of intense, like international, like the Cold War. You know, all these things were kind of coming in and around the same time. What didn't we do that time that we did this time? Well, this time we printed gobs and gobs of money, which did create more inflation.

14:54But because that got pumped into the government, both spent both the government sending to people and the government spending money, which when the government spends money, the vast majority of that gets spent in the private market. It's the government paying businesses and other contractors to do it. That's going to prop up and froth up the economy, but it's not sustainable because it's not inherently value creating. It's not like an entrepreneur going out there, coming up with an idea. Well, it's almost always on credit, right? That too. Yeah. But the biggest thing is that there's no core value creation.

15:28There's no alchemy taking place. When an entrepreneur says, I've got an idea, and they manifest a value creation idea from scratch, then new value is brought into the marketplace. When the government simply just prints money and spends money, it's typically not done in a way that's value accretive. Right. So I think that's there. And I'm not saying that's not a problem. I'm just saying it's not necessarily something we haven't seen before. You could argue we're a bit overdue. I think you got that. And all the stuff that you said, you're right about access to media and the media consumption and the way that everybody can find their own silos in that so that that creates the tension both domestically and internationally.

16:09And now let's layer on AI and this massive disruption that this is creating across the board. Massive disruption. Let's also layer on GLP-1s. and so many people being on these drugs that are fundamentally changing the way that we approach just about everything you know it starts as like i'm going to do this to lose some weight but now everybody who's on these things they're like they're not drinking anymore which again i was saving that i left it out intentionally for a separate episode because i feel like i know i know man but it's all the same thing yeah it's all that i think i think that's the issue is it's all the same.

16:49It's all the same thing. And I think we almost have to talk about it. What is that thing? It's all the same thing. What is that same thing? I think all of these are coalescing to create this environment that we're in right now that makes it truly unprecedented, where you do have the macroeconomic, international, inflationary, domestic, international strife that we've seen before, layered on with huge economic disruption in the form of a technology that we've seen technologies come in. I don't know that we've ever seen a technology come in and impact every single sector of business and life. It would have to be the industrial age, right?

17:31With manufacturing and the assembly line and such. And maybe to some extent, the internet around the 2000 era, that was pretty world changing. It was. I just feel like it happened more slowly in terms of its impact. And it seemed to create a lot of new as opposed to disrupting what was already there. I feel like this is taking down a lot and is creating a lot as well. And, you know, I wasn't, I'm sure there are plenty of people who like lost their jobs and their businesses as a result of, you know, in that period of time, but it is, it is this heavily disruptive period. And then the fact that a significant chunk of not just humans, but the biggest spenders, because let's be honest, these GLP ones, these weight loss drugs are a luxury item.

18:21Okay. The people that are getting them are people who actually have diabetes who need it and rich people. Okay. So let's set aside the people with diabetes who need it. Now, I don't want to get too far off though, just because I I really do want to talk about that on a separate podcast. I, and we can go there if you want to here, but I I'd love to talk more about the branding thing that jobs was talking about with, with the other stuff. If it, if this lightly feeds into it, let's do that. But unless you want to go into the full thing, because I feel like that, the, that the impulse stuff is a full on episode that we just, to me, it's all the same thing.

19:02So yeah, let's look, we can, we can see where it goes. I just, um, then we're talking more about, okay, great. So that's true. Let's just assume all that's true. And nobody disagrees with us because why would they, um, then, um, what do we do about it? Yeah. I, and I think it go, I think the answer is exactly what, what you were describing, which is the, the, this idea that I need to come up with the biggest, boldest, in some cases, scarcity driven offer. In some cases, you're going to feel foolish if you don't take something. If we think about all the stuff that has worked in the past, it was who could make the biggest, boldest offer one.

19:46That was the biggest, that was the business that won. And I think that there are two big, I think that all of these things that we talked about are pushing back against that. Number one, you make a big offer. A lot of people still can't do anything about it because they just don't have the extra cash. Number two, you make a big offer, but with everything going on right now, I just kind of don't believe it because I'm sort of jaded. I don't believe anything. Yeah. They don't believe it. So many claims. I look at YouTube videos now and it's so much blah, blah, blah. It should be illegal and insane or insanity.

20:22I see like, if I look down my, especially if I look at AI, the most insane week in AI ever, every single week. Every week. Yeah. So we're dulled to it, right? We've got not offer blindness, but you know, something akin to it. And I do think in addition to that, you have something floating around out there that now I do think that, and this is why I say, I think it's all part and parcel of the same thing. The impulse control that would have cause somebody to say, but I, but I got to do it. That, that kind of twitchy thing, that, that, that fear of missing out that would have caused people to move forward and take action even against their own best interest.

21:03Many cases, I think now they got scaffolding around it and they're just not doing it. But have you seen, I think it's true with food, but I believe it's more because of appetite suppressing than it is impulse suppressing. I know the article that I sent over talked about, like that guy ran deep into, you know, the entire economy is going to change because of that. I haven't seen any science on it and I didn't see any in what he wrote about. So I'm currently a bit dubious about the, you know, the claim that one moves over to the other. Have you seen anything on that? I have. I can't, I don't have anything here that I can quote.

21:41Maybe we can find it in the show notes, but yeah, I mean, what I've seen is they are discovering that that these GLP one drugs are not just there for food, but, um, they're, they do help people with their alcohol intake. Um, uh, they're like shopping, like any type of addiction, which let's be honest, if there's one thing that we are phenomenal at as human beings today, it's getting addicted to stuff. And if there's one thing that businesses are good at doing today, it's getting us hooked on stuff. But what it seems to be is a little bit of a buffer, a little bit of scaffolding around our dopamine needs.

22:18And so it still seems pretty early because they're not running specific studies around that. But yeah, I mean, I've been seeing more and more discussion. I just don't, I haven't seen that yet. And I get alcohol because your desire to eat and consume goes down. So alcohol is a byproduct. I don't think it's my addiction. I haven't seen anything where alcoholics are like, you know, and they have, they definitely have drugs that will inhibit your desire to consume it, but I haven't seen the other. And also, alcohol consumption is a detractor from the effectiveness of those drugs. So a lot of times they'll tell you, try not to drink because it won't be as effective if you do.

23:03They've been telling people, try not to drink forever. Yeah, but it'll be interesting to see. But I do think going back to your previous question, I don't think it's too big of a leap to assume that if it's that effective with food, which is the one thing that I think all of us are addicted to because we kind of have to be to not die. And so if it's that effective, I don't think it's too big a leap to say it'll be effective in these other areas. Operating under the assumption, though, that it is or like, let's set that aside. But all the other things being true. I do think that the answer is less of a lizard brain, like this guttural fear of missing out short-term, like, you know, twitchiness to get people to buy, which is what we've all been living under.

23:51We've all been living and operating in essentially a clickbait empire. That's what businesses have built. We've all been living and operating in clickbait empires. I think where it is shifting over to is, can I actually create an emotional connection that's lasting? And that goes to brand. Exactly what you said. Like that becomes the solution because the impulse is going to get satiated somewhere or another, right? Like there's going to be something, but we are still going to do business with, we are still going to invest in, we are still going to work with the brands that we know the most, that we like the most, that we trust the most.

24:29And so that's the ultimate moat still that you have today. Mm-hmm. Yeah, it is interesting. And also, if you're moving away from Lizard Brain, you would say, well, then you're moving to Logic Brain. And if you're moving to Logic Brain, you would be more about features than benefits, or you would be features and benefits. And the more benefits and features that are great, the better. So then you're back to a giant offer stack. And that's still not going to do it because we've watched it not do it. And because it's impossible to differentiate. I mean, you can, there's only so many things that somebody wants before they're overwhelmed with.

25:07I've lost, you've lost me on the 7 ,255th thing that I'm getting as part of this. It sounds like I won't have any time for it. Right. But I buy Apple and I'm an Apple person because I'm, you know, organized, neat and tidy and, um, like tech and, you know, and, uh, elegant design. That's a whole different feeling. And then I think his was make a dent in the universe or something like that. Um, that's, you know, that's a whole different kind of thing. So do we, are we moving away then you think from direct response ads to branded ads? I think so. Cause I don't think that the opposite of lizard is necessarily logical.

25:50Okay. Like I think that's one place that you could go, but, and like, look, I'm not an evolutionary biologist by any stretch of the imagination. I was operating this entire time that you were. Yeah, I know. I know. Right. But that is, I mean, there's obviously different, different parts of the brain and I'm not going to, you know, or a neuroscientist or any of these things, but I do think that, that one, you certainly have the lizard brain, you know, basically do I flee, do I fight or do I the other F, you know, it like, am I, I'm trying to do one of these things to survive, right. That, that raw general thoughtless instinctual survival.

26:28And I do think that that is what we've been tapping into because if it's easy to get my credit card and buy, then that's going to work. Now, the counter of that is the hyper logical. I think there's a deeper level than that though, which really is the pure emotional connection. And so this idea of it's more relational, it's more self-actualizing. So I I think it's, it's at a level that's even higher than, than the logical. So there's the lizard, there's a logical. And then if you want to stick with the L's call it love or something, but it's, I think it's, I do think it's beyond and, you know, and above that a little bit.

27:07And I think that's where we almost need to be playing now. And that's where the best brands have always played at. That's what Steve jobs was talking about. That that's when Apple, when they were at their best, that's, that's what they were playing at and making that kind of connection. the reason that I think it works is because by definition, not everybody can do it. So if you take AI, AI at this point can write better than almost any normal average person. It can write, if I give it a good idea, it could come up with something that sounds pretty much like me. And with a little bit of tweaking, it's better than something that I would produce all on my own sitting in a room by myself.

27:53But for everybody else, it's all great. And it's only going to get better. So what's the differentiator going to be? The individual's experience, right? The individual experience that they bring to it, their specific, very true story, their specific, very true experience, their unique point of view. That's the thing that AI won't replicate. Well, that's all the essence of a brand. If you get right down to it, right? It's the things that AI can't replace. And those are what create the real emotional connection. That was what made that theater experience that I had different than any other theater experience I've been in.

28:30Every person in there had touched some aspect of that film. And you felt that I, I hadn't, I didn't know any of the names coming up there on that screen, you know, but they did. And that connection is what made, you know, maybe like it. So if you're a coffee shop or a digital marketing agency or a retail store, what do you do? I think it starts with having a unique point of view, which is the hardest thing at all. And, and so what that means is almost by definition, there's going to be people who fundamentally disagree with you and kind of hate you for it. But I do believe now brands more than ever have to plant a flag and they have to be very explicit about who they're for and in doing so be very explicit about who they're against.

29:23And that's where it begins. And that's the thing. Nike was very, very good at that. Reebok was very, very bad at that. And so Nike won and Reebok lost. And if you look at the best brands in the world, there you go. You can hate Elon Musk. Plenty do. It's kind of the point. He's pretty explicit about who he's for. pretty explicit about who he's against. His brand right now, people are saying, oh, you know, Tesla's losing market share and they're going down. And this all could be right. He's losing a lot of people, but I can tell you, I know a lot of folks who never in a million years would have thought about buying an electric car, but now want nothing more than to buy a Tesla.

30:02So he's gaining market from a new place. So that's where it starts, I think, is having a unique point of view. And what's hard about this is so many of the brands out there, they just don't. They just sell coffee. And so as a result of this, I think they're not going to make it because they kind of don't have a reason to exist in this next world where everything is commoditized. Like I can get really great Nespresso through my little machine in little pods in my house. If I don't know, which I do, there's a local coffee shop, Summer Moon here in Austin, I know the owners. I know what they're all about.