Google's AI marketing event, Bankrate's AI content results, Ad index falls for 10th straight month, Nvidia jumps 30%

0:00Welcome to Marketing School, the only podcast that provides daily top-level marketing tips and strategies from entrepreneurs that practice what they preach and live what they teach. Let's start leveling up your marketing knowledge with your instructors, Neil Patel and Eric Hsu. All right, we're back for another reactions video. We've been traveling for a couple of weeks, but we're finally back. So we've got a lot of topics on the docket today, and we're just going to go one by one. So first and foremost, let's start with the Google Marketing Live event. You go. So Google had a marketing live event.

0:38Before that, I believe the other event was called the IO event. If you break down both of them, you'll then get a full picture of what's happening with AI search, the tools they're creating. Really cool event. If you haven't seen it, you can still get recorded videos of it. Eric, what are your thoughts on the event and the changes that they're making? Yeah, so it's a lot of AI being added into ads, right? So we're not going to read off all the things that were mentioned, but for example, you can now create campaigns using conversational AI, meaning that you can basically type into a chat interface and ask it to create some of the assets for you.

1:18Similar to a lot of Adobe just came out with something earlier this week, which we can talk about. But mid-journey, you can basically do text to video, text to photo, and things like that. Maybe text to video is another tool, but conversational AI is basically going to make it a lot easier to create campaigns. and you can basically integrate, you know, you can now add for Performance Max, one of the newest campaign experiences is going to be enhanced goal and new brand new goals that will allow you to steer PMAX efforts towards your ideal customer. I'm just reading off the summary here. So all that to say is I'll pass it back to Neil in a second, but at the end of the day, they're trying to save you a lot of time.

1:58I don't think these are the most groundbreaking features. I think we're still in the very first inning of AI here, but it shows that they are really focused on trying to drive a better user experience for advertisers. Yeah, the other thing that they showcase during the event is, let's say you're in the AdWords interface and you have a cat food website and you want to end up creating ads. You can just type in, it'll end up coming up with images for you and you can end up saying, all right, well, this cat food looks good. Let me actually showcase the ingredients and then boom, it'll come up with tons of different variations just showcasing the ingredients.

2:35So you can get really specific. They're just releasing more tools to make the whole experience easier for marketers and corporations to spend more money on Google. And they're trying to use AI to produce the best results out there for you. So that way you don't have to play around to try to figure out how to maximize your ROI with AdWords. But on the flip side, or technically Google Ads, I know they changed it from AdWords to Google Ads years ago. But technically, if everyone's using AI and they're doing the same stuff, it's not going to give you enough of an edge. I still believe you're going to have to do a lot of creative stuff manually.

3:19the Google tools will save you quite a bit of time, but you got to come up with your own unique stuff to really try to stand out. If you don't, you're just going to be doing the same me too stuff as everyone else. And it's not going to be as effective over time. As a side note to go on a tangent real quick, Neil, obviously the moat is the data that you have. So are you doing anything interesting with the data that you have from the software products that you have? We are, we're slicing and dicing and trying to come up with more trends and insights on what we should go after in different industries.

3:51And we're also breaking it down by different countries too. Yep. So the other thing too, so what I was trying to say earlier, so I use, funny enough, I use BARD to summarize the event. And so now I'm reading off a BARD summary here. So for example, you can now use Performance Max to reach customers across Google's entire advertising network, including search, YouTube, display, and shopping. So you're going to have a more holistic approach because when I remember running ads maybe 10 years ago or so, if I'm going to create YouTube ads, it just goes for YouTube ads. But if you do a PMAX thing, it goes across everything.

4:20And there's a better way to measure product profitability. So that's all coming. The other thing I'll say too, is you're going to have enhanced YouTube campaigns, meaning that you are going to have a way to optimize just for getting views. And then also you can expand your creative assets and optimize results with Google AI. So basically a lot more to do with YouTube. And I will say YouTube ads is one of those untapped gold mines. I used it, I bet an entire startup's livelihood on YouTube ads back in the day when I was about to get let go. So I was like, okay, if I'm going to be let go, I'm going to bet the entire thing on YouTube ads.

4:56So that's what happened, and it worked out, thankfully. And I think more and more people are using YouTube. I think people are like, oh, it's too saturated. It's actually not. I think it has one of the best long-term potentials in terms of all the social media channels. else. Yeah. And they're just making changes and adapting to what everyone else is doing. So that way it's a easier for you as a marketer or business and B hopefully it produces more income for them, right? You can't hate them for it. Yep. And before we move on, so, so here's what I want to read off to you with the new two, the two new campaign types here.

5:31So you have video views. So video view campaigns will combine skippable in-stream ads, in-feed ads, and shorts ads to get the most views for video. So they're combining all the video views now. And I think that's pretty smart because a lot of people watch shorts at the end of the day and they're trying to figure out how to better monetize shorts and also pay the creators more money because shorts creators right now really aren't making anything because the views aren't worth as much. But if you have more advertising layering into shorts, then they should be able to do well. And it makes a lot of sense for people to buy video views, especially if you think you've cranked out a banger, putting views towards that might make a lot of sense, especially if you're retargeting your audience and trying to build more, more affinity for your brand.

6:08And then the other one here is demand gen campaigns, which will show across YouTube shorts, YouTube in stream, YouTube in feed discover and Gmail to drive conversions. And you'll get a new lookalike segment builder to help advertisers expand the reach. So ultimately what's this going to do is it's going to save you time. Hopefully it's going to drive more conversions for you. So we think all this stuff is exciting and you know, the AI hype train is going to continue to go, which I think actually goes in well with the next piece I wanted to bring up here, which is Nvidia stock jumping 30%. I don't really want to talk about it so much from the point of, hey, like Nvidia the company, but we can talk about it more from like a marketing standpoint and maybe like an overall business standpoint too.

6:46So what are your thoughts on this, Neil? Well, the reason the stock jumps so much is because their forecast going into future quarters has changed drastically. 11 billion. Yes, it change drastically due to the demand for the AI chips. And Marvel, I think it's called Marvell or Marvel Technologies is another one in which their stock went up quite a bit as well for similar reasons. But this is all just telling us that AI is booming. It's here to stay. And a lot of companies are starting to leverage AI technology, not just in marketing. You're going to see a lot of things change within the next 12 months you know saying i love saying when it comes to ai there were decades where you saw very little progress related to anything related to ai now there's weeks that go by where you feel like there's decades worth of progress you know funny enough the story here was i used to play a lot of games growing up and when i was nine years old and nvidia went public i told my parents to buy nvidia stock because all they would do is talk about stocks back in the day, but it just shows that my point of saying all this is when it comes to business, it's not that it takes a year or even five years.

7:59It doesn't even take a decade. Really, we're talking about decades here. So Jensen Huang, he's been doing this for over 30 years, right? And I think if you want to build something really significant and just sticking with it, sticking to your guns and then adapting to the macro environment, adapting to technologies, That's what it really takes. Again, it's not one year. It's not one decade. It's multiple decades at a time to build something significant. And that's what I think is so impressive here. I think the forward-looking guidance they previously had was$7 billion. And then it became like$11 billion.

8:31That's our guidance moving forward. And from what I'm seeing, from what I'm hearing, I mean, everyone's trying to buy these GPUs, right? It used to be, and we're not technical people here, but GPUs, these are – I was looking at a graph earlier today on Twitter, and basically these chat GPTs, there's more lag that's coming in now, which means there's more demand on the computing systems. And that means there's more demand for stuff like whatever NVIDIA is pumping out. That being said, though, I don't know how much of a moat they have long term because you have Facebook making chips, Apple's making chips.

9:07You have all these big tech companies that are focusing on making chips. But I still think NVIDIA is great. the big takeaway for anyone listening and this is just my opinion i'm not necessarily right on this we're seeing a lot of companies heavily invest in ai and try to build new products i would slow roll things quite a bit more if i was most companies and the reason being is most businesses aren't going to be an ai play in which they have some revolutionary product that's going to enable AI at mass scale like ChatGPT or BART or NVIDIA chips. Most companies are going to be using AI to bring more efficiencies, create better products and services, and enable their core business to perform better leveraging AI technology.

9:52And a lot of businesses right now that we're talking to are trying to figure out where to invest a lot of money in AI. And to most businesses, I recommend to wait and see where others are investing the money and let them invest. let them build the shovels the tooth the shovels the axes the jeans whatever you want to end up calling it and just pay for their software their ai technology and license it it's going to be cheaper and more efficient people will come up with some really crazy stuff over the next 12 months that will really help your business when it comes to efficiencies or marketing it's easier than you going and investing millions of dollars to build something when someone's already going to build it and you can just pay a thousand dollars a year to just use it yeah so i was at an investor conference this week and so those of you that listen to the the all-in pod brad gerstner is sometimes he appears and he's a he is part of altimeter capital super smart guy and i think he owns he owns 20 something like that of snowflake the publicly traded company so like they plowed it and hard.

10:56So he's been around the block when it comes to just being an investor. And so what he said was those companies that don't use AI, they're going to be left in the dust. It's almost akin to not using the internet. They're going to be at a severe disadvantage. So my main point here is I believe that most companies are going to be AI enabled long-term. It's just the same thing as using the internet. That being said, to Neil's point, I don't believe that they should be trying to build platforms. They should be trying to build, um, AI products, which is kind of what we're seeing right now. There's, you know, the, the, the funding environment has dried up, but there is money going into AI just because it's like the new hot thing.

11:36So anyway, that's that. And don't, in other words, don't focus on building a ton of AI tech, leverage what's out there, be patient, wait three to six months. Uh, you'll probably, if you don't find it right now, you'll probably find what you need within three to six months and someone's already built it and you can just license it for pennies on the dollar. Yeah, I think it's important for everyone to take a crawl, walk, run approach. So in our, we have these working AI group meetings each week and we're talking about new ideas that we wanna try out and new things we're doing internally, things that we wanna do for clients and things like that.

12:09And I participate in those just to help drive the conversation forward. And what I keep repeating to people over and over is that let's take a crawl, walk, run. What's the crawl, walk, run approach here? What's the impact on this? So all the marketing experiments that you've ran, the frameworks that you've used in terms of running your marketing meetings. So the impact confidence ease framework. So the ICE model, right? And so when you're going to try and experiment, think about how big of an impact it's going to make, how confident you are that it's going to win, and the ease of running that experiment.

12:39And so it's really important to A, prioritize, and B, try to chunk whatever project that you have in mind into more bite-sized pieces. that way it's a lot more manageable. Neil? Yeah. Let's move on to the next topic. You want to talk about Bankrate while we're on AI? You want to talk about Bankrate's AI content follow-up? Yeah. So I'm going to share my screen over here. Those of you that are watching us on YouTube, those of you that are not, just watch along or listen along, I should say. So Bankrate is a, they've used an AI tool to write hundreds of articles. And this article in itself is analyzing the results.

13:18And I'm just going to give you the high level here. So Bankrate, they talk about, it's like a financial website. And they do disclose that when they're writing articles, whether they're assisted by AI or not. And so here's what we can see here. So one thing is that we can see that on a small sample size of about 20 AI articles, there are a few that are ranking in the number one spot for the keyword that they're aiming for. So that's pretty damn good. and 11 of the 20 articles that this person checked are ranking on page one for the primary keyword okay and the the main takeaway here is it doesn't seem like the ai content is ranking any better or worse than bank rates human written articles but they're having a humans modify the ai content no and just double checking it so it's not just publishing ai content without any human intervention no correct yeah so there is human intervention here and that's one of the key points of this article too.

14:13So one thing I'll just keep moving through this and we'll move to the key takeaways, but can AI detectors detect this content? So in some cases they are detecting certain paragraphs are generated by AI, but as long as to Neil's point, as long as you have a human being, a human editor, or it's human assisted or humans handling the last mile, then you're good to go. Right. So you can see if we go to the very bottom over here, the key takeaways here, right? So if you plan to use AI to write content, I'd try to model what bank rate is doing edit the article and make it enjoyable to read create author pages that prove your expertise so that goes into the eeat don't publish hundreds of ai articles every month eeat stands for experience expertise authority and trust correct and also publish human written content don't go 100 ai so going back to the crawl walk run approach i talked about earlier this is very much i believe this is kind of in the walk phase right they're testing this out They're not running.

15:07They're not trying to go crazy and pump out 7 ,000 articles that are completely AI driven. Yeah. The other thing too, is even if you use AI written content, the biggest mistake that people make when it comes to content creation and SEO is writing content isn't what gets you the most traffic. It's actually continually updating your content, which is what gets you a lot of traffic in the long run. And most publishers that we see make that mistake. yep so let's move on to the next one this one could be a quickie but earlier this week facebook got fined a record 1.3 billion over data transfers to the u.s and this is from the i think they got fined by the eu correct yeah but they're trying to fight it so they're not just paying up the 1.3 billion their stock went down a little bit when the news first came out but of course everyone assumed that they would try to fight it yeah i mean i think recently maybe a couple years ago Amazon got fined$700 million or$800 million or something like that.

16:03They're appealing as well. And I mean, what's the general takeaway here is the question. You're going to see a lot more fines coming, and you're going to get fines for a lot of things related to data privacy, which affects marketing. You're also going to see it for things like AI. Did you see the Sam Altman backtracking with EU on pulling out? No. What do you say? It was something around Sam. I'm going to actually just Google Altman backtracks. Let's see. Where is it? Sam Altman of OpenAI backtracks on a vote to halt operations in Europe. And of course, he's going to backtrack on that because Europe is a massive market.

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19:18The more first party data you have, the better, right? And if you have a data moat, then you have an advantage. That's what we're really talking about at the end of the day. So the next thing I wanted to talk about here is there's, I don't know if you've seen this Neil, but there's this concept knowing known as the ad index. And so what this means, if you think about index funds, right? So index funds, it's a compilation of, let's say, stocks. There's a S &P 500 index. These are the top 500 stocks in the US. And there's an ad index that shows whether the overall spend in the advertising industry is increasing or decreasing.

19:56But it has decreased for the 10th consecutive month. And so we want to give our thoughts around this. And basically because we both have ad agencies, we can shed a little more light here. So I think there's going to be more decreases coming in the next few months. Eric and I both know a lot of people in the advertising agency world. Almost every single ad agency we know is either flat or declining. Some are getting growth, but they're getting through growth through either a expansion into new lines of services or new regions or country. I'll give you a great example of this is our agencies, when we look at year-to-date revenue from a global perspective, what do we do year-to-date this year versus compared to prior year?

20:41Our international agencies have grown 74%. So they're up, right? That's one way we're getting growth. But most agencies are getting declined. Why are they getting declined? Because people are cutting back on marketing, ad spend, everything just due to fears in the economy, even if their business is booming. Yeah. Let me just share. this is uh those of you that are watching on youtube so this is not the best it's not the clearest image here but at least you can get a sense for you can see so basically starting in july of 22 monthly change in u.s ad spending year on year it just keeps decreasing keeps going down keeps going down december 22 look like which is usually when people spend more at least if you're d2c it looks like it was the worst and then it's still continuing to decline so i think we're in for more pain i don't know the biggest ad periods of the year doesn't even matter if your d2c companies spend so much of their budget in uh q4 we even see that in b2b because not every company but a lot of companies they have their annual budgets and they do break it down in a quarterly but at the end of the year is when people have surplus and like spend spend spend we see that in both b2b and b2c you know what's interesting too so neil and i we have this mutual friend and i was um i was at a ypo event um about a week ago or so and there's a lot of agencies there and And some of these are pretty significantly sized with hundreds of employees, sometimes even over thousands of employees.

22:03And the guy I was talking to, he really is – he's building this platform right now to acquire other agencies. He's talking to a lot of agencies. And his main point here was, look, any agency that says they're crushing it right now or they're doing really well right now, at least if they're based in the United States, they're lying to you, right? And that's based on the data that – I mean he's having hundreds of conversations. And so international is a different story. Neil just kind of gave a case in point there. No, but international markets are tough too. The only reason we're scaling so fast internationally is we're starting from zero.

22:33You start from zero. Oh, so the numbers are big, right? They're in the eight figures. Yeah. So anyway, point being - You're still small, right? Internationally, we started from zero. It's not hard. And on a side note, one thing that we love doing, speaking of ad spend going down, In December, everyone spends so heavily from like Black Friday, right before all that stuff happens to Christmas time. What we love doing, and you can do this really well in B2B, ad costs get really cheap the moment Christmas comes around. So we'll actually spend a lot of budget from December 25th to end of the year because we're able to acquire leads for just so much cheaper for our customers in the B2B category.

23:19B to C, if you want the numbers around those times, you're going to have to spend it between Black Friday and or Cyber Monday all the way to Christmas time. But for some industries, it doesn't matter when you get the customer. For those, we actually start going a little bit more heavy actually after December 25th because that's when we can generate quite a bit of customers for way cheaper for enterprises. Cool. So next one I want to move to is this Adobe. Have you heard of this generative fill? Have you seen this yet, Neil? Here, I'm going to hit play. I was at their event. Here, let's hit this.

24:04I was at the Adobe Firefly event live. So you saw this, right? Yeah, they ended up breaking down a lot of their tools. Yep. So, I mean, you could just do a lot more now. generative fill you may want to end up breaking this down because most people listen to this in an audio way and you were talking you explain it yeah so uh to go back what eric's looking at on the screen is not right now but what he was looking at is a road and the road didn't have lines and he just you know drew a line and said put in yellow lines to separate the road into two sides and it pretty much did it. And it can do a lot of things from changing up mountains to filling out backgrounds to saying like, Hey, add Northern lights in the background.

24:55When you have an image of a mountain in the night and you're just like, or it could be during the day, turn it to nighttime, add the Northern lights in the background. And you can do a lot of cool things like that without having to actually take a picture. I'm curious to see what's going to happen to i know it's going to happen to marketing marketers don't care if someone naturally took the image of it cool just build it for me and if you can do it through ai or gender of ai great even better um but for photographers like think about national geographics right what's going to happen to the whole photography industry now that people can just well i mean version of photoshop that so that's a that's a good point so here's what i think and i think we've talked about this offline but But you really like when we're talking, so go back, going back to the YPO event, a lot of these agency owners are worried, especially the ones that have hundreds of employees.

25:46They're just like they believe that there's going to be a big impact on service based businesses where our thesis is that you're really only going to rely on the top talent that you have. Maybe the top 20 percent generate 80 percent of the results. And so this actually ties in well with photographers, too. Maybe the best photographers out there, they're going to continue to pump out original content to feed these engines, right? But it's really only the best of the best that matter, right? So you have the up-and-comers that are super talented, and you have the ones that are really established.

26:17And then the people in the middle kind of get creamed. And so I think that's going to happen across the board, not just even in the photography industry. Yep. No, I agree with you on that. Let me ask you this. Do you see something like this potentially happening a lot more in the service industry? because I've seen my friend, he's cut. So let's say you're an advertising agency. I think there's going to be a lot of ways to be more efficient. I still see really large corporations hiring ad agencies all day long. I don't really see that changing. I see that happening, but I see you don't need to have necessarily thousands and thousands and thousands of people.

26:56It depends. if you're WPP, I still don't see how they do it without thousands and thousands of people. Because if you look at the biggest advertising contracts, they tend to be global ones. So it's like, we're right now, we're about to sign a contract with a really large financial company. Everyone knows them. If you're in marketing, most people have used them. And they need help with their marketing in three regions or SEO. And once we do well in those three regions, they'll be like, cool, we'll open up the door for 80 more regions. Yeah, I'm just talking relatively speaking, right? For a lot of those kind of things.

27:32It's hard to do it without because the culture in all these countries is very different. Then you have language, you need boots on the ground. I do believe you can automate a lot of parts of marketing. But if you look at majority of these big holdcos, they're making a lot of their money helping manage ads and everything around that from coming up with creative campaign ideas, you know, creating the marketing. Like I don't see people leveraging AI to create Super Bowl commercials. I see a few people doing it as stunts, but majority of people will still want a lot of their advertising done manually because the type of campaigns you can get if you go and build a team and go create a Super Bowl commercial is drastically different than if you just have AI create a super bowl commercial for you yeah my main point here is no doubt if you're a wpp you're you're one of the largest advertising holding companies out there just hold just service holding companies out there instead of having tens of thousands of people you might cut down a little bit so i'm saying there's going to be efficiencies i don't know if it's a 20 hit 30 hit 40 that's what i'm asking yeah so like let's say they have a hundred thousand employees i think you're going to go from a hundred to maybe like 80 85 000 employees i think you can start producing 15 20 20 % efficiencies.