Content vs Paid Ads: The Answer Is Both

0:00Eric Siu:You know that feeling when the strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content? That someone is you, and it's due tomorrow. Breeze Assistant can help. It works right inside HubSpot. Drafting campaign copy, blog posts, emails, all in your brand voice. All grounded in your actual customer data. So you don't just create content. You create content that converts.

0:26Neil Patel:Check out HubSpot.com, the agentic customer platform for growing businesses.

0:56Eric Siu:While that all might be true, I think the answer at the end of the day, content versus paid ads, I think the answer is both.

1:03Neil Patel:Totally. We run paid ads. We do content. I think you should do everything that you can end up doing that's profitable. And this debate in marketing that's been going on for years, oh, this is better than this. Marketing is about what's better. Marketing is about what can I do that produces an ROI? And you do everything that produces an ROI, and then you consider cutting the stuff that doesn't. The reason I say you consider cutting the stuff that doesn't, I put a chart on this a while ago, or maybe it's not live yet. It was on X. I got the data from Nielsen and actually the chart goes out on it.

1:38Neil Patel:I actually think tomorrow. Let's actually see. Yeah, it's scheduled for tomorrow. So I have a chart from Nielsen and it talks about how 1 % increase in brand awareness reduces short-term CAC by roughly 1%. So it's even. So a lot of things like branding and brand awareness that gets your brand out there, you're just like, man, we're investing all this money. We're trying to build a solid brand within our space, kind of like Nike, right? That's at least what we're trying to do. And it's expensive and it doesn't produce a media ROI, but in the long run, we do believe it'll reduce our CAC. It's just some of these things will show a negative ROI and you can use a lot of different tools or people or AI to help analyze some of these things and be like, oh no, you may need to cut this.

2:24Neil Patel:It's differences of opinions and you need to figure out what works for you. Like you look at Airbnb, you go fly on any airplane. A lot of times on the TV monitors, you'll see commercials for Airbnb before the plane takes off. Or back in the day before Zappos got sold to Amazon, the shoe e-commerce site, in the TSA section, when you're going to the airport, you would have to take off your shoes. There was no TSA pre-back then. And there would be a tray and the tray had imprints of where you put your shoes and it would say Zappos. I thought that was very clever marketing and branding. It's not going to produce a direct ROI, but it gets their brand out there.

2:58Neil Patel:And some of those things, you got to determine if your company wants to invest in them, even if it's too hard to showcase the ROI on it, at least in the first few years.

3:06Eric Siu:What do you think you're spending rough range right now on paid media per month?

3:12Neil Patel:I don't know. For our own business?

3:14Eric Siu:Yeah.

3:15Neil Patel:Not much. Maybe$3,$4,$5 million a year.

3:19Eric Siu:Yeah. And then when you think about the content, your content budget, what does it look like?

3:27Neil Patel:Content includes email and things like that and website content, or are you just talking about social content or all? All. Maybe another$150 a month, so call it 1.8. So call it between everything, we spend maybe$5 to$7-ish million USD a year.

3:44Eric Siu:I'm only asking Neil because it's about 28 % of his overall marketing spend for his company, right? Just looking at organic and paid. So you have five of the seven goes to paid and then two of the seven, 28.5 % goes to organic content, right? So it very much isn't like an or situation. I would say for us, we're not spending nearly enough as we should on paid. And paid, like it works, right? Like both of them work. Why would you not do it more? And you guys are still running paid for your webinars too, right?

4:13Neil Patel:uh i don't know uh and i know we have a third marketing bucket that we didn't talk about which is in person uh let's call it another 1.5 to 2 million so let's say we spend somewhere between seven and nine ish million i'm rounding per year on marketing efforts yep great so that's and by

4:33Eric Siu:the way like it's uh we're not gonna talk about percentages here because i think it back into your revenue but um we'll just leave it as usually the percentage should be a lot higher so with your marketing?

4:45Neil Patel:We don't spend as much because what we found is we actually used to invest more into marketing than we do now. But when you're moving upstream and your goal is to get, let's call it more global 1000 contracts, a lot of marketing doesn't get you those contracts. What we found gets us those contracts faster is just buying companies in regions that we're not doing as well in or we're not as big in or we're not in at all that have those contracts and then just landing and expanding and then taking their brand, doing a ton of press and marketing, how we acquired them, and then convert their name over into our name.

5:25Neil Patel:And that ends up getting us what we're looking for. And it's just much quicker than spending all the dollars on marketing. And Eric nailed it earlier. I'm not saying that's the best approach or the worst approach. I've been an entrepreneur at this point for 25, 26 years. so I'm able to do a lot of this kind of stuff where I wasn't financially able to do this stuff like 10-15 years ago as much and it's just easier for me to do this kind of stuff than it is to build it from scratch and spend the money because the issue that we face and you guys all know this when you're doing marketing not only does it cost money but it takes a long time and we found and it For us at our scale, it does help us grow, but it takes us longer to get growth than it does to just go and buy it.

6:13Neil Patel:So we found it to be easier to just buy the growth combined with doing organic marketing. Yep. All right.

6:20Eric Siu:So that actually, we're talking about ROI, right? So Neil, I wanted to call this, I saw this this morning when I was at the gym, but I wanted to show you this because let's talk about the ROI of podcasting. because you and I, we've been doing this podcast. It's got to be close to 10 years now, which is kind of insane to say because it's gone by so quickly. But these are the highest paid podcasters here, okay? So this is from Forbes. So Joe Rogan, 82 million, right? And then you have TBPN, which is bought out by OpenAI. So apparently, I guess it's 70 million. And then Diary of a CEO, I didn't know it was 45 million bucks a year.

6:54Eric Siu:Ashley Flowers, Crime Junkie, 42 million. That's crazy. Like just these numbers are crazy. Smart List, 37. here's some other ones that you you you probably have seen so um andrew huberman 18 million a year um and you have scott galloway 19 million tucker carlson 20 million or so right so i think this is

7:11Neil Patel:really interesting but as andrew huberman get in trouble for something i don't know is epstein or

7:15Eric Siu:something like that or something no that was a peter atia that was the other one yeah yeah so what's interesting to me is like these are very much all personalities i would say scott galloway is definitely an entrepreneur andrew huberman's partner with a lot of people um i'm trying to look at who else here would be considered an entrepreneur, Neil.

7:32Neil Patel:Who do you see? They're all entrepreneurs at this point.

7:35Eric Siu:Yeah, well, I guess so. They're probably invested in a lot of things. But the reason what I'm really saying is like, who here's a business operator, right? You can argue that these two probably are business operators. And Stephen's been a business operator as well. But also, you know, you can, this is really healthy revenue, like I'll say that. But, you know, how many people can we say that have podcasts that have led to, large organizations that they've been able to build.

8:00Neil Patel:Yeah, and you look at this, the number one podcast rated here,

8:03Eric Siu:and this is probably just looking at English. There could be some other languages that people may be dominating,

8:08Neil Patel:like in Chinese or Mandarin, but in China specifically. That could be making more, I don't know. But you nailed it. I look at MarketCap, and when I...

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8:47Neil Patel:I look at. All right.

8:49Eric Siu:So I wanted to take a moment to tell you about my podcast co-host, Neil's agency called MP Digital. and they work with a whole host of global companies or a global organization. Also, Neil has SEO tools such as Ubersuggest and Answer to Public. All you have to do is go to npdigital.com to learn more and we'll see you on the other side. Ad agencies, it's like, I can't even count on two hands.

9:13Neil Patel:It won't even fit for all the ad agencies I know doing nine figures plus in revenue. There's so many of them. You can't even count them. And there's so many of them that I never even heard their names before. It's just such a massive market. And what I found is it's easier to just go and go into a big market and be a small fish than it is to go into a smaller market and try to be one of the bigger fishes. Yep.

9:37Eric Siu:And I think at least for, I'm speaking for you again, correct me if I'm wrong here, but like I enjoy the operating piece more than the content creation piece. As much as I enjoy and love doing this podcast, it's good. It's been fun. And surely it's definitely helped. But I just want to call that the way we're doing it right now is very much to generate more brand awareness ultimately. And it's to help our businesses primarily. So we're operators first, content creators second.

10:04Neil Patel:Yeah, same with me. Look, I don't mind creating content. I think it's fun, especially this podcast because Eric and I have been friends for such a long time. Some of the content that I create, I don't always enjoy. Just being transparent because sometimes you have to create stuff that you don't want to create. But it's just like being an entrepreneur. you're going to always have to do stuff that you don't like it's the nature of the game

10:26Eric Siu:my kids watching tv i don't know if you heard the yelling uh so um but yeah like i spend more time

10:34Neil Patel:on m &a and i enjoy it because it's like oh i found this company oh they're doing 12 million in revenue and they really want to sell and i can get a deal that works out for them and me and i'm like, cool. Like, it moves the needle much more. It's just like to organically generate 12 million in revenue takes a lot longer. And it's like, wait, how many of these can I buy a year? You know, and then I found that it just works better for me. But you just got to figure out what you want to end up doing. And I look at a lot of these things as they're all intertwined. It's just like, wait, I can buy a company that's doing really well, but is doing a crappy job marketing themselves.

11:08Neil Patel:And I can just put more fuel in the fire and do better on their marketing.

11:10Eric Siu:it's all different games and there's different levels to the games um and so the challenge is if you're all in as a content creator and there's no knock i'm just saying the challenge with being a content creator so like if william wants to be a content creator for example he wants to be an influencer you got to go deeper and deeper and then people start telling you all these things to do like when daddy has to tell you what to do william and you have to listen to him right that's not fun right so like but when you're when you're an operator you kind of get to march to the the beat of your own drum um and so i think it's there's no perfect solution right there's only trade-offs at the end of the day um and i prefer to deal with the trade-offs that we have to deal with right now so um there's no right or wrong it's just what your preference is so neil the final thing i think we can touch upon here um before we go i talked about earlier about recruiting versus management so we just did content versus paid ads and so i kind of said hey look if you don't want to deal with as many people headaches you should spend more time on recruiting when i say you i really mean your organization so if you're starting out maybe it's you in the beginning.

12:09Eric Siu:But I've just found that recruiting, especially when you're smaller, it is one of the highest leverage activities because, Neil, let's just look at you for a second. When you're brought in the CEO, how much did it just change the trajectory of your organization?

12:24Neil Patel:It changed a lot. And I was having a conversation with him yesterday because we were going over some deals. And he was telling me because I was, I was, I'm the one who starts a lot of the MNA conversations and I passed a team. We have a team that does MNA as well. And he messaged me because he's a CEO and he's very direct with me. He's like, Hey, I know you're looking at some deals that you may end up liking. The, the team has some hesitations on some of the deals that you may end up liking. And I was like, I'm like, look, dude, you know, I try not to interfere. He's like, yeah. He's like, you let me run the show.