SGE has the potential impact over $40 billion per year in ad revenue for marketers, The genius of Ferrari's marketing, and All-Electric Mercedes-Benz G-Wagon

0:00Neil and I have an agency owners group called the Agency Owners Association. All you have to do, just go to marketingschool.io slash agency. Once again, it's marketingschool.io slash agency to learn more. And now back to the show. Dude, I have some data, by the way, from BrightEdge. You want the data? Yeah, I want the data. So he's sharing some. So this is from Jim Yu, BrightEdge, Enterprise SaaS. And thank you for sharing this data. So Jim Yu said, this is BrightEdge's recent data on SGE. So search generative experience for Google and perplexity, perplexity.ai. And so SGE data. SGE has a potential to impact over$40 billion a year in ad revenue for marketers.

0:38Broken down by industry, SGE impacts search queries at the following rates. Healthcare, number one. So 65 % of queries analyzed were impacted by SGE. E-commerce, 50 % were impacted. B2B tech, 46%. Education, 42%. Insurance, 42%. Entertainment, 35%. Restaurants, 37%. Travel, 30%. Finance, 19%. Last thing over here on SGE, before we talk about it, and then we'll move to perplexity, BrightEdge tapped SEO experts on how they're thinking about SGE plus generative AI search, and this is what they found. 52 % are actively experimenting, which SGE doesn't tell me much. 46 % say AI-powered results are getting better over time.

1:17Also doesn't tell me much. With some exceptions, typically 85 % of results are serving SGE queries. That's interesting. Speaking of SGE and the whole health keywords, we track a lot of data um scraping and also doing like surveying and you know we'll pay people to be like hey do your normal searches and let's see what happens totally agree a lot of health queries have sge results in there but you want to know what's funny from everything that we've seen what's funny is it really funny if it's not funny you have to pay me for with air one okay i'll buy you air one either way. A lot of people aren't clicking on the health results.

1:57The accuracy of what they believe to be accurate is very different. And I'll give you a polarizing example. This is extreme example, but you take vaccines. Some people are pro vaccines. Some people are really against vaccines. Some people are against COVID vaccines. Some people are for them. People have really strong beliefs with healthcare and what they do. Some people refuse to take medicine and they want to do everything like homeopathic organic jobs yeah i don't know what the name is i you know the correct term for it and then there's some people like me i'll just pop up i got a headache cool advil all right let me take some time at the same time i got some day cool all right pop it in and i know that i'm exaggerating here you shouldn't take medicine and overdose i'm not trying to tell anyone that but like what i mean by that is like if i have a headache and advil says take two i'll take three right that's a realistic example like all right cool and i won't wait hours for my headache to be over oh you're just jamming in i was jamming i'm like man i got a headache i don't care to deal with this let me just pop it in yeah so i'm a very different viewpoint so you have sge in certain categories from what we're seeing and we're analyzing a lot of day and then we'll eventually end up putting out a report on this we're seeing a lot of SGE results just getting ignored.

3:13But again, this is its early innings, right? If it was baseball, we're in this first inning and SGE will improve drastically over the years. Will it get more clicks or not? Depends how qualified or how good the results actually are that they're producing. Yeah, and this is the only one where he put parentheses here. Google will show disclaimers on the healthcare stuff because you don't know what you can trust at the end of the day. And that's a big thing, right? If they can't trust the search results, that really affects their core business. Perplexity data. So everyone, perplexity.ai, it's another LLM that you can use.

3:43A lot of people like using it. I've used it here and there. I don't use it too often, if I'm being honest. Some people, it's their home screen. But I don't think you use it. I still use Google, I'm just being honest. So perplexity is growing about 40 % month over month, which means that more consumers are using and engaging with the platform's provided responses. I'm curious what that base number is, because 40 % on a really small number is not much. But you have to assume that they're doing pretty well. Domain differences between Google and Neil searching right now. Domain differences between Google SGE and perplexity shed light on which content sources search engines value.

4:15Reddit is a top domain across most of perplexity citations by industry for seven of the top nine industries with healthcare and finance as exceptions. What? I was just looking at their traffic numbers. Not bad. Perplexity. 100 million? 156 million a month. Okay. Similar web isn't showing 40 % growth. So growing 40 %? What are you saying? It's showing 24.13 % growth. That's still pretty damn good. That's still really good at those levels. Yeah. Okay, so it's significant. See, Neil was waiting to pick it apart, but this is like, oh, that's pretty good. No, no, I didn't think it was bad. I just assumed it was way more traffic based on their valuation.

4:52What is their valuation right now? It's like over a few billion bucks, at least. I could be wrong, but I thought I read it. No. No. Yeah. Okay, so for healthcare, restaurants, travel, and education, perplexity, and Google have a similar focus on high-authority websites such as Mayo Clinic, a top-ranked hospital, Yelp and TripAdvisor, trusted restaurant and travel sites, and online course provider Coursera. In e-commerce, both engines heavily source Wikipedia and Amazon. And Google uses core and consumer reports for third-party product information while Perplexity references Reddit. That's interesting.

5:23Overall, Perplexity is most likely to reference product sites, whereas SGE will also include informational resources such as lifestyle and news sites. I was wrong. The article I read was Perplexity looks to raise$250 million plus at a valuation of$2.5 billion or more. It doesn't mean they actually raise it at multiple billions. That's still a good deal because if they become a trillion-dollar company. Yeah. So, look, at the end of the day, both perplexity and SG, they're just trying to find trusted sources. It seems like they know they can't have all the answers anymore. Would you invest money at a$2.5 billion valuation?

6:02If I think the company can go a trillion, I might. But no, I think I would avoid it. The thing is, it's a great company, but you can find better deals at the end of the day. The valuation is already too high for me. How much money am I going to make? Because what ends up happening is once you get big enough, people value you based on economics. They won't value you based on like, oh, you're doing this AI thing. They're like, okay, what's your profit over the last 12 months? We're going to give you this multiple and here you go. Or your future 12. And I look at like, it's too rich for me. I'll make more money just buying up businesses.

6:32I think those of you that have really interesting companies, if you have revenue, we're still not likely to invest. I'm just speaking for both of us right now. But if the valuation is like, you know,$5 or$10 million or so, then maybe it's worth taking a look, right? But other than that, it's just worth taking a look at our business and just reinvesting in our business. That's what I mean. Okay, I'll finish this off. Top search results on perplexity and Google overlap, particularly notable in healthcare. 60 % of perplexity citations overlap with the top 10 organic Google results, meaning that perplexity users are getting similar relevant responses to Google, but with the added benefit of an AI-generated summary and conversation flow.

7:09So yeah, I'm not going to read all the rest of this. Actually, no, I'm going to give you two more. One more. Perplexity offers 5.28 citations per response. When you think about ChatGPT, you're lucky if you get a couple of links in there. Gemini, you might get one or two if you're lucky. but that's good that perplexity does that. No, totally.

7:32And with perplexity or chat GPT or any of these new technologies that are leveraging AI, I think we're really going to see a ton of them raise a lot of capital and most of them fizzle out. Yep. And that's a big reason why I'm not betting on any of them. That's like the search engines in the 90s. Yeah. Oh, AltaVista. Oh, Hotlook. Oh, LookSmart. Yep. You know, AskJeeves. You got Yahoo, you got Google, you got MSN, you got Bing. Bing wasn't there back in the day, but you get the point. There were so many of them. Dude, people like you and I didn't even use the same search. And then Google came along and they're just like, we're going to remove all these banner ads and just make it simple and clean.

8:11And then a lot of us young people, at least at that time we were young, were like, oh, Google's a place to use because it's just simple and we don't see all this crap. This message is brought to you by Leveling Up Founders. And Leveling Up Founders is an invite-only event for founders. It happens once a year, usually during August. And past attendees include people such as Ali Abdaal, Cody Sanchez, Neil Patel, Vanessa Lau, and the list goes on and on. And ultimately, it comes down to the quality of the group with the people. We try to keep the group high caliber. That's why it's invite-only. So if you are a founder at the top of your game, you can go to levelingup.com slash founders to learn more about it.

8:47And then you can apply. And we'll see you on the other side. Did you try to invest in Google when it first went public? Because we're still in high school. Yes. Did you? No. No? I was too young. I told my mom to buy NVIDIA when I was nine years old because I used to buy those video cards when I played games. You keep upgrading them, right? Had she just put$10 ,000 in, it'd be worth like$6 million a day. Had she just held it. More than her homes. And Eric's mom, as a little sidebar note here, the reason she pushes young Eric to invest in real estate is because your mom's a realtor and she loves you.

9:19Exactly. people talk their own book. Like, for example, if you're talking to your son, she probably just say like, focus on what's actually working for you. Or more so you might be a little more biased towards business. Yes. But what's different, I think from with you and I versus the older generation, like our parents who weren't in business, you and I understand the concept that your best leverage is going to be whatever you're also naturally talented that I don't see you and I pushing, you know, a specific thing like you got to do this is the only way to make money. You and I have been big believers that everyone has their own path.

9:54It's because we've gotten older and wiser. Yes, but our parents are still stuck in their own ways. Yeah, it's true. By the way, most people are stuck in their own ways. That's true. I am stuck in my own ways for a long time. So am I. But we just realize that we're willing to admit it. And it's key, those of you that are a little older, to admit that. What do you got on your side? Yeah. So I have to actually load up the sheet. I got one. Go for it. Okay. So this one's from David Senra. Anyone that listens to the Founders podcast, it's an amazing podcast. You should listen to it. I think you'll enjoy it.

10:25So the tweet says this, Ferrari was an absolute marketing genius. I remember one visit from a very important and wealthy American client. The factory parking lots were filled with unsold cars, which we tried to hide from public view. The American said, Commodore, I would like to buy a Ferrari. And it's not Commodore, it's Commodator or something. I don't know what that means. So I would like to buy a Ferrari. Ferrari replied, yes, of course, but we have so many requests. I'll do what I can, but I'm afraid that you will have to wait several months before you can buy one. That was because a Ferrari must be desired.

10:55It cannot and must not be perceived as something that is immediately available. Otherwise, the dream is gone. In order to maintain the exclusivity of the brand, production has always been lower than the requests of the market. So that's the genius of Ferrari's marketing. Dude, that's smart. Did you see what Mercedes did with their G-Wagon for marketing on it? Not the electric one? The electric one. What about it? They made a car, they took like three, four, five G-wagons. It was more than three, but four or five, something like that. And they made them spin in circles. Not donuts. Imagine the car sitting still and it can go 360 with the middle of the car staying where it is.

11:31And it just goes 360. Yeah, it just keeps turning. It's ridiculous. They have a video on YouTube. You should check it out. Is that what you're getting? Are you getting a G-wagon? No, they're too expensive. How much is it? G-wagon electric, it's not out yet. but my guess is when it comes out due to demand, it'll probably be going from$200 to$300. But all the electric demand is going down now. Not the Mercedes. If you want to go into a Mercedes dealership like Fletcher Jones, which is the most popular Mercedes dealership, I think, in the world, they don't have any electric Mercedes. They're sold off.

12:00I'll get an electric G-Wagon. That's pretty cool. It is cool, right? Yeah. I would lease it, though. We asked our friend, Trix. I was just like, hey, dude, because he has a Mercedes. I'm like, hey, can you put me on the list? And he's just like, there's no list yet. it's too early because we're like a year and a half away to two years, something like that. And he's like, but when we can add you to the list, I'll add you. And normally I would say yes, but right now I'm on the kick to see if I can make my Tesla last 15 years. What? You're not going to last 15 years? You don't think so? No. Challenge accepted.

12:33This is not how you're built. I'm trying to live like the old way. What have you had that's had 15 years? I've known you for 12 years. 13 years now, right? 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. The best part about it, it has everything you could need. Say you're ready to launch your own design studio. Shopify has hundreds of templates to create a beautiful store that matches your brand style.

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15:04My Salvador Ferragamo shoes. I keep my shoes forever. I believe it. Because you don't wear your shoes that much. No, I do. No, no, nice shoes. You don't wear them. Like the Ferragamos, I wear them like a couple times a year. No, I used to wear them every day. Huh? I just get them resold. Oh. Explain. You have common projects, right? Uh-huh. How old are your common projects? Three, four years old. Do you still wear them or not? Every now and then, yeah. Okay. I wear my common projects almost every single day. guess how old they are? Maybe not every day. I think half the week. Six or seven years.

15:33Yeah, you're close. It's a little bit more than six. Yeah. But they stay clean. You keep them clean. Yeah, because Franny's amazing. She cleans my shoes every week. Neil's very OCD, so everything has to be clean. Uh-huh. I was talking to her the other day. I was like, these shoes can last another three, four years. Because the soles on them are really good. Yeah. But then she's just like, but your white shoes are turning little yellowish, and they're not as white. so that's the thing that's why it's worthy to invest in quality because it lasts a long time yeah and the current projects I think were like three four hundred bucks right somewhere around there three four hundred bucks but you've used it a lot longer than a pair of like twenty dollar shoes yes yeah and same with like a decent suit like you don't have to spend you know twenty thirty thousand dollars for a suit you can just get a you can go to suit supply okay man moving at suit supply but you can get a custom suit and no hate on suit supply but you can get a custom suit for like you know thousand two thousand $3 ,000 or so, but it'll last you a very long time.

16:30Dude, almost all my suits are 10 plus years old. Yeah, that's exactly my point. I also don't wear any of them. Not even maybe once a year, and that's a maybe, but I have tons of suits that I don't wear. Yeah, and what you found, okay, there are some nice suits where you might spend a couple thousand dollars, but to me, it's no different than the suits that are cheaper. You know what I mean? I typically stick with the same brand for suits, and I like them, and I don't - Tom Ford? No. Tom Ford doesn't make my size. I struggle. You can get custom, like made to measure suits. But Tom Ford doesn't work for guys who are like 130 pounds.

17:06What brand do you use then? Burberry. So almost all my suits come from Burberry. They have like slim fit people my size who are skinny and they're able to get them for me. Although I don't wear them anymore. So that is it for today. Go to marketingschool.io slash agency to learn more about the agency owners association. Please don't forget to rate, review, subscribe. We meet in person for this. We've got Brad from recordeditpodcast.com. And yeah, we'll catch you in the next episode.