Apple's headset, WPP partners with Nvidia, Rise of creator capitalists, Twitter ad revenue tanks 59

0:00We've got another reaction video, not video, episode for you. and we got a lot to talk about a lot has happened in the last couple weeks neil and i are glad to riff on a couple of these topics and we're just going to start from the very top and the first one that we want to bring up is how apple's wwdc happened yesterday as of this recording and a lot their big announcement their marquee announcement was the vision pro you know it's not just called the vision it's called the vision pro do you want to describe what it is well neil froze so i'm going to describe what it is while he he comes back so the vision pro is their let's call it their their what they're defining as their ar headset so augmented reality headset and it comes in at a price of 3500 and it's really interesting because you can do a lot of stuff with it neil what did you see with it yeah so it looked really cool i watched a lot of the videos on YouTube as well for people who are saying like, oh, try this out and this is what it felt like.

1:03And they were giving the end of the reviews. The Apple video teaser that they release on their website gives you a good overview. I liked it. Everyone's saying it's overpriced. I'm going to buy it. I'm waiting for it to come out, of course. I was a little bit disappointed on how they're announcing it now and then you can't buy it until 2024. But I get it because they were saying that they need time for developers to go and create apps and stuff and build the ecosystem. But the reason I love it is for a few reasons. One, I'm a big movie watcher. You can have like three on at the same time. You can just have a big screen on, wear the goggles when I'm on a plane and I'll just start watching these movies and it'll be like I'm in a movie theater.

1:47So that part I love. The second thing that I love is you can actually use it as a computer screen, right? So you're wearing the goggles through your hand gestures and your eyes, you can end up changing things or like clicking on icons, looking at photos, browse the web, the list goes on and on. But the reason I love it is I believe it's going to change marketing. And Apple, even if this first version isn't perfect, over time, I believe they'll penetrate the market. A lot of people will start using them and it'll start creating new forms of advertising that we don't have access to right now. If you look at what Apple did with the app store, a lot of companies, including us and you, for a lot of our clients at NP Digital, we're running ads on the app store.

2:32It drives a positive ROI, assuming you can do it right. I believe this will create a whole new ecosystem. Just like Amazon too. I was at an event in Utah maybe a month or so ago, and I met up with some of the Amazon guys. And Amazon was telling me like, hey, we can swap in ads on our shows and movies that we create at Amazon. So when you're watching prime they can just switch it out just like you're doing a pay-per-click ad they can just start rotating stuff out and it looked really cool based on what they were showing me but i think you're going to start seeing a whole new ad category in which you'll be able to advertise in augmented reality or virtual reality or whatever you want to end up calling it and i think that's exciting and fun for marketers because these devices they're allowing you to see the world in a different way, which I believe will end up making it where there'll be a totally different ad format.

3:26And a prime example of this is imagine being able to like, if you look at how they're doing FaceTime in the Apple glasses, and this was my favorite feature, they do like a 3D scan of you and it looks pretty realistic. Now imagine if they can take that and your friends all wearing the goggles and you could be in a mall together and they see an ad for Chanel. So when you walk into the mall first, the first thing you see is Chanel store. You guys are all there together. And what ends up happening is, is you try out different purses or bags or wallets or t-shirts or shorts. I don't know what they sell other than purses.

4:00And you click the buy button, boom, within a few hours, it's delivered to your house or within a day or two, it's delivered to your house. Like I just see a ton of new ad formats that are opening up. And the real cool part about it is because they're able to scan your face and make a realistic looking like FaceTime version of yourself. So when you do FaceTime with other people, take that one step further. One's if you want to do interactions with other people in this quote unquote, virtual world, and you guys are all together in one place, even though you guys live in different cities or states or countries.

4:29Yeah. So I think the key thing to understand here is that Apple might potentially be changing computing as a whole here. And if you think about our behaviors, a lot of our shopping, a lot of our reading, it's done on computers. And if they're fundamentally changing and shifting computing, much like how they were shifting mobile back in 2010 or so, they're going to be the leaders here and they might become the next big app platform. I mean, they already kind of are a big app platform when it comes to the app store ads, right? And one key thing to call it here, this is more of a small thing, but Safari, which is Apple's browser, they're locking it down more and more, meaning that it's the removing URL trackers completely.

5:13So UTM trackers and things like that, those are gone. They're blocking trackers from loading. They're locking browser windows. And so they're locking more and more people into their ecosystem. And so from a business standpoint, and I'll talk about some of the marketing stuff as well, but there there's more and more lock in because if, if you, if you're like Neil and I, we use a lot of Apple stuff, right? I'm on an Apple device right now. He's on an Apple device. We have our iPhones. You can look at your computer. You look at it, boom, it becomes a big screen on the vision. Now, you can unlock different devices that you have too, and there's this entire ecosystem.

5:44The services that you use, whether it's music or whatever, now you just live within the Apple ecosystem, and now you're going to be locked in even more. And so that means at the end of the day, more profits for them as a business. I'm not saying everyone can do it, but if you're able to do that, then you have more control over how your business does over a long period of time. Now, the other thing too is we, you know, Neil was kind of just mentioning like there's new ad formats and all that too, right? And so I just think ads are going to be, when you think about native advertising, for example, when you're, let's say you're reading a blog post, sometimes it's just like a story that's in there and it doesn't really feel like an ad to you.

6:24And I think advertising, as we know, it's going to change where it's going to be less interruptive and it's going to be more integrated into the things that you're looking at because literally you're watching things, right? The other thing to pay attention to as well is this is their version, basically their version zero. And when you think about Apple Watch when it first came out, we knew it wasn't going to be a great product. The battery life wasn't that long. It wasn't super well developed. And so we know over time it's going to continue to get better. Neil, do you know the battery life of this Vision Pro?

6:53I don't, but I was reading somewhere or not reading. I was watching videos. Someone was talking about a few hours, so I don't know how accurate or inaccurate that is. Yeah, have fun with it. It's two hours. Yeah. So yeah, that's what I saw. I don't mind the two hours because can you just leave it plugged in? You can leave it plugged in. You just need to be near like a USB-C or something like that. Yeah. Yeah, but if I'm on an airplane, the main place I'm going to be using it is when I'm on an airplane. So the seats already have plugs. Just plug that thing in. Yep. Look, I think this is interesting.

7:23Obviously, you have to think there's a pricing exercise too, right? They're targeting the early adopters. And so Neil's saying he might pick it up. And for a lot of people, it's going to be a little price. I'll buy it. I'll buy it. Okay. For sure. He's going to buy me. He'll probably buy some for his kids too, but it's, they want the early adopters to come in, right? You're going to buy for your kids. It's the new iPad. The parents should all buy it for their kids. Cause it's a new iPad, right? Dude. Even my four-year-old daughter, she has like two iPads and iPad pros and new ones. And one of them she broke.

7:56So she's like, daddy, can I get a new one? I promise I won't break this. And I was like, okay, honey. And I bet you if I get the goggles, she'd be like, daddy, can I try? And she'd be like, daddy, can I get it? And I was like, how am I going to say no to her? Yeah, okay. So I guess Neil's going to be buying three of them at minimum for his two kids and him. But look, I think there's a lot of marking lessons here. The WWDC event, so to Neil's point, yes, it's not coming out for six months, but it's one of their most anticipated events every single year. And so to announce it here, to have this whole, when you have an event, there's a lot of fanfare.

8:33There's a lot of hype that builds it up and it lived up to the hype, the creative that they had for it too. I highly recommend everyone watch the creative. It's like a nine minute video on how it all works. That's how you build a lot of FOMO into this product where it makes like, I want it desperately, but I'm like, man, I think I might just wait to the next product cycle. But chances are I might just go buy it. So, and yeah, it's expensive device. You may not get the penetration as most people are thinking like with the watch, uh, they sell roughly$40 million, 40 million watches per year. At least that's from headphone addict.com.

9:10My guess is they'll sell somewhere around like 10 million of these devices. I still think that's a lot because I don't look at it as a virtual reality device. I think I look at this as a new way to do computing new way, a new way for us to browse the web, read articles, watch movies. I see it as way more than one of those meta headset devices like those Oculus ones. Yeah. Now it's game on for, for meta as well. Cause this is supposed to be their space and you know, whether Apple, Apple is kind of met us. I've never even once thought about buying a meta Oculus device, but this thing actually does quite a bit from being able to run a lot of the programs and the apps I'm using to browsing the internet.

9:48Like I can actually use this to do a lot of tasks. It's more useful than just, Oh, go play video games. Yeah. Look, it's practical. You know, we like it. It's interesting. So let's move on to the next thing. Actually a related note here is, um, so Neil, we kind of talked about this recently, but we'd also talked about this with mutual friends and what it takes to actually build a generational business. If you think about Apple, I think they've been around since what's since 1976. Is that what it is? I think you're Googling it right now.

10:22So Apple was created in 1976. You're right. April 1. Oh, wow. Okay. So 1976. So they've been around for years, right? Like we're not talking about like a decade or so. We're talking basically 40, almost 50 years. They've been around for almost 50 years and they almost died. Keep in mind, like Steve Jobs, original founder was fired and they created the, you know, the macotosh and you know eventually the ipod which led to the iphone most people probably don't even know what the ipod is by now and then now they're they're leading away with build them out do you remember that microsoft yeah i trust they needed another competitor so i think they gave them what was a hundred million bucks back in the day 500 i think yeah i think it was a hundred million want to bet i think it's 500 mike while you search it up okay so the vision pro so the point here that i'm trying to make is that it takes not one year, not five years, not 10 years, but 20 plus years to truly build something generational.

11:16And I think Neil had to learn the hard way. I had to learn the hard way as well. And we had to get slapped in the face a couple of times to just realize that you get what you focus on. So we're both wrong. Microsoft in 1997 invested$150 million in Apple when they were on the brink of bankruptcy. Okay. So you're closer to being right. Either way, it was a lot of money but it's not that much money considering their market cap microsoft did end up selling off a lot of that stock if they kept it microsoft's market cap would be through the roof right now yeah yeah so anyway i mean you heard what i said right look it takes 20 plus years to build something really great you know and those of you like don't feel stressed just because you see other people hitting it big and the headlines with the vc back stuff because a lot of the vc back stuff is now vapor right a lot of the unicorns are like maybe they're just donkeys now so So the way I look at it in entrepreneurship and marketing, you start seeing traction, decent traction within three years from my experience as an entrepreneur and as an investor.

12:14Within five years, things can really start hitting their stride. And it takes really 10 plus years to build something. And it takes much longer than that to build something generational. I would agree with Eric, maybe 20 plus years. but when you're starting off as entrepreneur if you don't see the light at the end of the tunnel in which you're getting traction within three years you're doing something wrong and if you don't see how your business can be around 10 plus years from now you're probably in the wrong business you need to be thinking super long run and 10 plus year increments of course you need to see traction on an annual basis or quarterly basis but if you don't see your business around in 10 plus years, you're kind of screwed.

12:54All right, pick the next one. So the next one is Twitter ads revenue drops 59%. That's kind of crazy. Where'd you get that stat from? So this stat was from, let's see, it was from the register. So let me read the headline here. So leaked documents show a 59 % ad revenue decline last month. Can a Yaks back get Twitter back on track. So Yak is, I guess, Yaccarino is, that's how her last name is pronounced. Linda Yaccarino is reportedly starting work at the Bird site today, weeks earlier than expected, in the wake of a wave of leadership resignations. And the same day it was reported that Twitter's ad revenue is well and truly in trouble.

13:37So, and by the way, this is forecasted to happen into June as well. So 90 % of Twitter's revenue comes from advertising. So food for thought there. I look at it as opportunity for marketers. We've been doing a lot of stuff with Twitter ads. And the way we see Twitter ads is, yeah, a lot of marketers may not want to be investing in it. But I see opportunity to get clicks and conversions at a very affordable rate, especially if you want to go after high net worth individuals. We find a lot of them on Twitter. We think it's a great place to spend marketing dollars. And we're finding out that the economics are working really well.

14:17while a year to two years ago, it just wasn't as affordable from a CAC perspective, but right now it is. So we're doubling down on Twitter because of the affordability. You know, a couple of days, we did a recording talking about how Axios is looking at the future of media. And they believe that newsletters are a heavy part of media. And obviously they're a newsletter, but earlier today, I was looking at someone that we've talked about on the pod, Matt McGarry. So he's again, the newsletter guy that helped with the hustle. And I believe he helped with the Milk Road crypto newsletter. And so he knows a thing or two about building newsletters and he's getting emails for$2,$3 a pop or so.

14:55And I believe that if you're going to try to build, most of you that are listening to this, if you're trying to build a brand for yourself or you're a business, I think most of the time it makes sense to have a newsletter and newsletters are kind of making this comeback, which we've talked about. And I don't know about you, Neil, but when I go to Twitter and I look at the ads, a lot of the ads are really random, stupid ads. And so that's an opportunity that tells me that a lot of stuff is underpriced and that a lot of inventory is actually available. And it's your chance to buy low when other people are, they're being fearful.

15:27So it's now your chance to be greedy specifically for Twitter. If you listen to this podcast, just try Twitter ads out. Even if it's like 50 bucks or a hundred dollars, you'll be shocked on the kind of engagement that you can get for very little money. You know, I don't know if you saw the, um, so Elon did an interview with, I believe it was Babylon B. So they're kind of like, um, like a humor slash, I don't know if they, they're funny. I'll just call it that way. It's, um, so anyway, they're like a popular podcast, but he did a sit down with them and he's like, Honestly, the$44 billion that I paid for Twitter in the grand scheme of things is not going to be a lot of money.

16:08And so that's how he looks at it. It's a very long-term view. I mean he's had companies almost die before. I mean PayPal almost died before. SpaceX almost died before. Tesla almost died before. He's had a lot of things almost die before. So this ain't his first rodeo. It's like the majority of his businesses almost died, but then they come out really strong and big. And you know what? He's going to make$180 million from PayPal, and he's going to gamble all the money, mostly on SpaceX. and it's going to work. So, you know, that's how he plays the game and more power to him. We're a little more risk adverse than him.

16:37So it is what it is. The final thing I'll call out here from this article is, so she's joined Twitter earlier. So Linda Yaccarino, and she has already made a couple of partners. Everyone knows, do you want to tell us what her title is? She is the CEO of Twitter, new CEO of Twitter. She came from NBC Universal and ran their ad division. Correct. So it's her job to save this. And, you know, I don't think she has a she probably has a short leash on this, if I'm being honest. So we'll see. I'm sure you hired some lieutenants and a few other people, at least. Yeah. So she hired this guy, advertising executive Joe Benarok and some other people.

17:15So reportedly, this person reported to her as head of communication strategy for advertising and partnerships. And that is what it is. So it all comes down to hiring at the end of the day. So let's pick the next one. Let's talk about Microsoft expands this ad network to 23 new countries and what this means. I think this is a great segue because the next three topics we want to discuss are all kind of related together. But let's dive into the Microsoft one first. Yep. So the Microsoft ones, I'm looking at this right now. So they're now in a total of 187 markets since 2022. And that means you can reach 14 % more markets overall.

17:56And I'm reading this piece on Microsoft.com right now. And well, the way you have to look at it overall is it's not just Google that's playing the game, but Microsoft is very much a global game when it comes to advertising on Bing. And they're just going to get tougher and tougher because they're adding a lot more enhancements to Bing, especially with the open AI integration. So I think this is good. It adds more competition and it forces both sides to compete more. And when I say both sides, I mean Microsoft versus Google. I want you guys to think about Microsoft expansion in a really simplistic way.

18:32Most companies, when they do marketing, they'll think about a region like United States or even if you want to start going after the European Union and go more broad, right? So not just Germany or not just Italy or not just France, but the rest of the EU or the UK. there's way more to the world than just some of these regions. These regions are great. I'm not trying to talk trash on them, but it's more so if you want to do well in marketing, you can't just think US or EU or parts of Latin America. You got to think whole world. If you think about regions like Pakistan, they don't have the highest GDP, but it's a growing country, 200 plus million people.

19:13Nigeria, growing GDP. I don't know what the population of Nigeria is, but it's quite large. I think it was similar to 200 million people, 213, right? So that's huge. And if you look at Pakistan, they are the exact numbers 231. There's a lot of people in many of these countries, and they're developing, and they're going to be stronger. Maybe not in the next year, but you fast forward 5, 10 years. You know, we talked about building a company that lasts generations earlier. Well, the Microsofts, the Apples, the Googles, etc. They're playing the long game and they know the money is in all these countries that have massive populations, maybe not right now, but in the future.

19:58Even with our ad agency, NP Digital, within four months, we'll be in 20 plus countries. No joke, 20 plus countries. We're interviewing someone right now or earlier today to run MENA, which is Middle East and North Africa. and this person was just like, yeah, in this region, I think I can help you drive 15 plus million dollars in revenue. Doesn't seem like a lot, but if you're in 50 or 100 countries and certain countries, I know that's more of a region, but if certain countries can drive you 10 million, some can drive you 50 million, some can only drive you 5 million. It really starts adding up.

20:36That's how you start building bigger businesses that get to not 100 million in revenue, but 500 million, a billion plus in revenue. You need to expand globally if you're trying to create a much larger organization. And it's easier to scale your marketing when you're doing it in multiple countries versus just pounding your head and saying, hey, I need to get more market share in the United States, which is tough. Neil, do you know how many new markets they launched in 2022? No. Okay. So they launched 130 new markets in 2022. So this is now their fifth wave of global expansion. And this is kind of what we came to.

21:10And here's the other thing I'll add too. So Microsoft Clarity, they're a sponsor of the podcast. What they're doing is interesting too. They're just trying to get more market share. Basically, they're competing with a hot jar, which is like a heat mapping tool. It's like a usability tool, right? They give it away for free and they're also adding AI insights to it. And they're just trying to sponsor and get more users, more marketers to use this stuff. And so when you layer on Microsoft Clarity, plus you layer on all the open AI enhancements and then all the global expansion that's happening. Microsoft's taking this stuff very seriously.

21:46And Satya Nadella, who is the CEO, he said, look, nobody's made Google dance in a while and we just want to make Google dance. So I think they're kind of making Google dance a little bit now, right? Did you see Tim Cook dancing yesterday? Did you see that one? No, I didn't see it. Oh, dude, dude, dude. Okay. Okay. You pick the next one. I'm going to find this video. Go. When I first started my business, the overwhelm was real. I didn't have the tools to help me scale. If only I had Shopify from the start to handle all the behind the scenes work. Shopify is the platform behind millions of businesses globally from huge names like Mattel and Gymshark to the smallest brands just getting started.

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24:38WOMS if you can use generative AI to fill in a lot of the gaps? What this does, short run, yeah, you're spending money on technology, long run, you're saving an arm and a leg to create a lot of these campaigns. You can either choose A to save some of that money, but what I think a lot of companies will do is use the dollars to just create a lot more campaigns. So then you can start A-B testing a lot of your creatives to see which ones are working better. And you can start creating higher quality production for much less money, which will start giving startups the edge because they'll be able to start doing similar things for pennies on the dollar.

25:15You know what's interesting? So I don't have a lot to add here besides the fact that WPP making this move is smart because NVIDIA is all the hotness right now. And there's a lot of talk about NVIDIA kind of being one of the foundational layers of AI because their chips are so far ahead of everyone else's. So Neil and I aren't engineers here, but to partner with kind of the darling of this AI trend now, one, that's smart, right? The second one is for all the clients that want to get on top of this AI trend now, now they can say, oh, we're partnered with NVIDIA. Don't worry, we'll take care of it for you.