E125: Bold Creative Wins Where Budgets Can’t

31:31Like meta. Let's just say like meta, right? Because YouTube's a different animal. Yeah, so I think that's the thing that we run into with brands is like, and okay i'm gonna see if i can make sense of this okay so you i mean we all realize like 17 at this point 17 of all commerce happens online and which is a shocking statistic after covet right i'm just like what like still only 17 of stuff and then i'm like well how much of that stuff is amazon walmart.com like and how much does that leave the rest of us it's one of those things where I started realizing, okay, well, we're still in a moment where 80 plus percent of stuff is bought in the store.

32:14Those sales aren't happening on meta. That is great for direct consumer. It's a channel that you have to win in. The brands that grow past typically $50 million have figured out a secondary channel that can help them scale. I can't think of many that haven't. And I will say that, you know, it tends to be that in order to win on those other channels, you have to be able to tell your story well, right? So television, connected television, YouTube, like, unless TikTok's the other channel, like there's not really a lot of other places to drive, you know, a sense of sticky awareness that then gets people to buy in real time, but also allows you to win at retail.

33:04You know, like the work we're doing for Spruce and Native and Tongo and all these other brands, like they're not, their KPIs have nothing to do with, you know, driving tech, right? In fact, in many cases, they're like, please don't buy it on Amazon or through us because we want our retail partners to win. We have, they bought stuff from us that we have to move. and so i guess what i'm trying to say is as there's a like there's always going to be an image that will perform well on meta there will always be a ugc piece that will perform well neither of those are necessarily brand building they sell they sell products they pay the bills they're they're bread and butter but they will never create a dr squatch like outcome they'll never create a Grooms-like outcome.

33:52They'll never create a Poppy-like outcome. They just won't. You can't get there. Even looking at what Hexclad did, by investing in Gordon Ramsey and going up Funnel, they've changed the perception of their brand drastically. Meta drove the sales and the ability to invest in more. But that next level is always almost always narrative driven. I hope that answer makes sense, but that's how I think about it. It's like, you need to have great meta creative. A lot of that can be done either in-house or with great partners that can create great images and great UGC pieces. Okay, it's no secret that margins are getting squeezed and profitability is a challenge for brands in 2025.

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35:55So stop leaving money on the table, fuel your creative performance, make every ad dollar count in every channel, hold them all to the same standard. If you want to reach out to Northbeam, just let them know the operator sent you and they will take good care of you. That is super interesting. You see a lot of brands and you brought up like$50 million is sort of a cap for meta advertising DTC-focused. That's great. People should hear that, right? You know, Ridge probably got to... We were bigger than that when we were just spending money on meta-sellingstuffer.com. This is where I think category is so important because none of the brands you mentioned were selling wallets in stores.

36:33Like, that doesn't really exist. It's very CPG-focused. But out of all... So let's talk about your ideal client coming to you and where people should avoid you. And you said like$50 million, you're making a push into retail. You need people to remember you when they're not looking at their screen, right? That's kind of like the key thing. TV is a big part of that. And the unique thing about TV buying is it's not like meta. It's not really an ad auction. You might give them five pieces of creative and they're just going to run whatever, right? So like you have to actually have a point of view when you go to that.

37:04Like you can't just like you spray and pray. Is$50 million still the cap? Is that where you see people like struggle? the way I think about it is what that cap is, is going to look different for every brand. And I'm not telling you anything, you know, it's like, okay, what is the lifetime value? Is it, is it a consumable? Is it a non-consumable? You know, what are your margins? Like there's so many things I can't pick a number. I just think that there's a point where brands feel it. Like they feel, they know that like, ah, if Meta's having a bad day, my business doesn't work. I'm like, that's, that's not a good place to be.

37:37Right. Right. And so I would say most of the brands that we're meeting that are ideal have, you know, figured out. I mean, we do launch quite a few brands, so I'm not going to say that this is needed. I can see this working early on to Sean. I think it's just like a level of risk and investment. It totally does is not inexpensive. Right. Right. I think about like, I mean, I'll just shout him out. Chad Janice at Grooms, like he came out of the shoot and he was like, I want multiple anchor campaigns. I want, I want to go big from day one. I want brand to be a moat. I'm not selling a product. I'm selling a brand.

38:19Like we went and then it worked and we went fast and we went hard. Right. Most people, they take six, seven years to be like, oh no, like, do I do it? and he was like what's the point of doing a company if I can't go fast and hard and then he did it and I'm like I admire that I don't I'm not like that I wish I was but holy smokes when people think that way and it works it goes right like I mean so I don't know how you want to put it it's like I think there isn't like an ideal we say ideal client size I think it's more of a what is your goals or your mindset and frankly like can we be successful with them you know we we turn away 99 % of people that reach out mainly because they're either too small or their expectations for what they're hoping we'll do is a hail mary and that goes back to matt's earlier question like how often are you successful i'm like way more now because we're like can we be successful with them or what you know if someone calls me like someone reached out yesterday and they're like hey we sell sunscreen and we want to invest in this and we want you know a couple hundred thousand i'm you got a$14 product that like is seasonal.

39:28Sorry. That's just, that's, it's not that it can't work. It's just that what we do can't rapidly grow you. I can't take your money. And so, you know, we're, we're assessing how successful we can be with people before we sign them up. I would say 10 million tends to be the place like in run rate where people are like, okay, I understand my ideal client profile. I understand what's working, what's not. And then as it gets bigger, the risk obviously goes down because they know more and more about who their client is or who the customer is. And we're talking very CPG focused right now, but we're doing stuff for SaaS as well and other groups that sometimes they have much smaller, like fewer clients, but much higher LTVs.

40:15And it works great for them too. You know, it's just like, it's age old. It's like, tell your story in a way that entertains people and educates them. And then over time, hope that that wins. I will say we're not a, I wouldn't expect our work to change your meta account forever. That's not the goal. Okay. So let's talk about Gruden's. You brought them up. So two big pieces of news. Dr. Squash is getting bought. Gruden's is worth$500 million in like less than two years. you were an early investor in Groot's you saw Chad you saw what he was doing and you're like I gotta I gotta get in on this right so what what made you so confident it was gonna work and how's that how's that return looking uh is it like you got like 100x or what yeah yeah that's funny um uh so yeah I mean look the number one question that we that I got for Adam and I my business partner got for you know four or five years was hey did you own part of Dr.

41:13Squatch. Like you guys were so intertwined early on. You helped. I'm like, no, like we got paid to do our job. We did it. And, um, you know, it was, you know, I have no, um, I don't have a regret about that. Right. There was no seat at the table. It wasn't, it wasn't, that wasn't it. Right. Um, but it did open up opportunities for us to help launch laundry sauce and launch grooms. Um, and there's a variety of factors that we're looking at honestly it's like one day i'll come back and tell you why exactly we we um uh invested um i can't yet uh maybe when they maybe when they exit um because i think that i will say this ultimately you have to ask yourself what am i really selling and so with dr squatch i remember we're in a boardroom and we have this thing up on the wall and they're stuck i'm like jack's there and we're not selling soap and like if you want to buy 15 20 bars from costco you can get it for like 20 bucks and that's like two bars here so if we're selling soap we're dead we're dead like we're not selling soap not to not to people in mass like we have to sell something more you have to um just like liquid death is not just selling water like they're selling something more It's a sense of self-expression.

42:34It's a sense of joy, right? Ultimately, that's what we sold with Dr. Thor. It's the only product that brings people joy in the bathroom for men, right? It makes people think about the commercials, makes them laugh. Now they have these crazy collabs, and people will legitimately smile looking at their soap. I'm like, what's joy worth? It is very valuable, very valuable. it's like if we're always looking for like can what we're doing have an outsized return and what we can actually sell the self-actualization of the consumer can we can we do that so i've invested in laundry sauce right laundry sauce was i'm like this is a chore that we're turning into self-care that's crazy like this is a laundry product that people will gift to one another that's crazy like this is a whole different way of thinking about this category and it's something you're going to buy anyway so then by definition it can be disruptive and so again that's that's examples of like how and why of course we're thinking about things like what channels can it win in you know what's what's the cac payback what's the ltv opportunity what's the extension plans like all those things go to our heads too i mean i would say ultimately you asked earlier about raindrop i'm like what makes raindrop so successful is adam and i think like operators even though we run an agency right like we're thinking about these things in ways that like ogilvy's not even though they have incredible creative talent and leo burnett you know what i mean like they don't even know what an ltv cac ratio is when they're ideating um and so it's it feels like an unfair advantage going into what we're doing now how involved are you guys still like in every, cause your team's quite a bit bigger now than it was with Dr.

44:22Squatch. And you know, what, when you guys bring on somebody new, this is always such a challenge with like service business, right? I mean, I had it in my, my agency when I owned it is how do you stay in the weeds? Like, how do you zoom in in the right places? You know, like what's the secret, if it's the secret sauce, like at the top, like a lot of agencies, truthfully, there's no such thing as good or bad agencies. There's only good or bad people. at agencies. That's the truth of the business model. So you could get a bad person at a really good agency of otherwise great people. So how do you guys manage that?

44:57I think the best way to, I guess, describe that is we're still not that big, right? We're still, I think, just under 80 people. So we're not like this massive, you know, 300, 400 person agency. So that's one. um you know our team is incredibly experienced um and we have been really fortunate to grow and retain great talent like there i there's very i'm trying to think like there's there's no no one would come into our agency and not be working directly with someone who worked on dr squatch or grids right or native or spruce like you know what i mean um and so there is there's never like a case where it's like oh you just have some random junior person and i will say like we just we just had a call someone that's been like kicking the tires with us for like two three years and they're just like guys every time we talk to you your pricing goes up i'm like yeah like that's that's a reality like we we're not gonna we can't keep flat pricing and then keep our our team together you know so like we've that's that's been a reality of it it's like Like, yeah, our pricing has gone up at least 15 to 20 % every year.

46:11And it will continue to. I have no doubt. Because I'm like, I'm going to, until there's a max out, I'm like, there's still, depending on how you look at it, with the potential outcome, it's still a great value of what a great campaign can do for you. But at the end of the day, like, you're not, there's just no world where someone's not getting people who know what they're doing. And I take personal pride. I watch every single ad that comes out from us over a certain threshold, like just because I care. Right. Like it's, you know, I'm not I don't watch every single UGC. We do what we call performance organic and UGC.

46:48Like I don't watch all those videos, but anything that's like a highly produced piece. I mean, even if the client approves it and I see something that I don't like, we'll still go back and edit it. Right. Like it's not like, well, client approved. It's like still not right. We got to make it right. Yeah. And so there is a reality that we have a group of people that care at our agency and take pride in the work. And it's hard to quantify or see. It's just a reality. So I just want to break it down for the audience, right? So we have people listening. They're doing between$10 and$500 million, right, across every single possible e-commerce and CPG product.

47:23But really, I think where Raindrop, what you're saying you're looking for and like really would make successful campaigns is high repeat products in legacy categories that are kind of boring, where you can bring fresh ideas and breath and really let brand shine. Right. So so Grooms, these are like Flintstone gummies, but for the modern day. Right. You have Dr. Squatch, which is like Irish Spring, but like with fun and colorful collabs attached to it. Right. Native is the same thing. You got the unicorn ads like you're taking boring categories that are sold mainly in retail, but have DTC that got on like 50 million and you're helping explode that brand across all of this.

48:03Now, that's the top layer. These are going to be long form. Before you go forward, Sean, the way that you just did that is what makes you you do that. I was like, holy crap. Yes. Like, yes, that's that's that's correct. Have our team write down our ICP after this podcast. Beautiful. Thank you. Thank you. But what I was going to say is that is where the long form, like top of funnel brand campaigns are going to work. You're going to put those on connected TV, linear TV. You're going to buy NBA playoff games and you're going to run YouTube long form ads on top of that. Right. And then you're going to take all of that and you're going to make cuts of it.

48:42And then you're going to mix in UGC, I think you called it professional organic or whatever. Performance organic. Performance organic. Let's talk about that side of the business. So we all understand this big top funnel campaign, right? Ridge has done a couple of them. Lomi, Kickstarter was exclusively that, right? Like these big, beautiful brand campaigns. Let's talk about where the rest of the market is going. Where is the meta ads going? You said UGC, performance, creative, organic, whatever you want to call it. What mix of the business is that? And what are the clients doing over there that's working?

49:19yeah well okay so i think the best way to think about where and how it works in is like you know we just did a big campaign for mage yellow panda we did a big campaign for function of beauty where they want to create an overall campaign and a campaign message that then infuses its way into every single channel in like a unified way unified voice um and so that's where we would get involved right if it's like hey you know we want statics in ugc and we call it performance organic because it's it's really it's it's concepted and shot on an iphone but it is an ad right it's not just like a social video it's meant to convert and sell um i would say what we tend to see is like look you know the there's always like a cheaper way to do everything and so for someone i think you know to give you a sense like a performance organic is like 30 videos for 30 grand right well it takes a team of people who come up with the ideas they're concepting it They're getting those approved.

50:33They're going through all the things. A lot of people are like, look, I'm just going to have an internal person at my company who's just going to source UGC. And then we're going to give it to an internal editor, an external editor. It's like what our agency does is take all the strategy and the heavy lifting off. And people are paying a slight premium to do that. Or they just don't have the internal capabilities. Like I'm just, you know, when you look at Performance Organic, it's like it does work well. Like those are the ads. Performance Organic and Statics work incredibly well on beta. And the beauty of it is if you make 30, I just need one or two of those things to absorb $150 ,000 plus in spend.

51:14And it's a win, right? You're not like, it's, yeah. That's also a great price. I mean, like, you know, look, our internal team, we have UTC professionals, people who manage it, the whole thing. And I mean, our cost per video might be$600 all baked in, right? I will say we don't tend to do performance organic for people as like a standalone thing. It's usually part of like a broader ecosystem. Because again, when people come to us, it's like, and I think I can't stress this enough. I mean, I'm going to say this out loud. It's going to sound crazy. For every 300 inquiries we get, we take two clients, right?

51:53Which I never thought I would say. and like we could change our business to be a UGC factory it's just like at some point I'm just like can we be successful because that's what we're trying to build like we want long successful relationships um and that's just it's probably a me thing to be honest like there's a lot of people be very happy just like yeah you know I'm a 20 million dollar UGC company right I'm you know that's probably a me thing i want to be very clear that's not like a you shouldn't do it people shouldn't do it um but uh yeah we we typically wouldn't do performance organic as a standalone um we usually would do it as a broader campaign um i'm not saying we wouldn't but that's not the he says a great price i'm like it's a great price for someone who is like yes i'm gonna do a campaign and you're gonna do the top level creative and and it's gonna reach into all these channels and you're gonna do it all like that's where we shine.

52:49It's mostly the add-on item, right? You have to buy the main course before you can get dessert. It's kind of what it sounds like. You got to be doing a campaign with you guys and then you can add this on. I think it's more so what can create a long-term relationship that delivers outsized value and it's not going to be performance organic on its own every quarter. Operators, Black Friday, Cyber Monday is coming up. Is your SMS list ready? If not, get on Postscript. They're helping us drive 14 % more email signups through their better opt-ins. They're helping us get 6 % more SMS subs every single day because they have perfected the art of pop-ups.

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54:35Thank you for being here. yeah i just want to like this idea of the the large hero sort of video like large campaign if you weren't in like if you didn't have raindrop is this something it's hard to answer this but like is this something you're like i think consumer brands in general should be thinking in terms of like larger campaign moments sean i'm likening this almost to like your sweeps like you guys create a moment every year and you do like a massive creative production around the moment that like the campaign right yeah and i'm all i'm almost thinking like that this kind of like you invest in this sort of campaign in the same way as a instead of benchmarking it sean against like a creator or ugc or like any other ad creative investment is that the wrong frame like is that the wrong comp for this like should you actually be looking at it more like no this is like a sweeps like i'm gonna put a lot of money into this because it's like i'm gonna create a moment in time and i don't know jacques if that's for you or if that's for sean but like i just sort of that's what's coming up for me sean you go first yeah okay what i was gonna say is um we've worked with rain drop for a lot of stuff but like but but like jock said itself it's like baseball where you know if you hit a 300 in baseball you're gonna go in the hall of fame, that means you're missing seven shots.

56:01You know what I mean? Like, and, and the reality is like, um, you should treat it like a sweeps, but we need to make sweeps successful. So there's like a lot of iteration and it's a very quick feedback loop where like we've, it's taken us five years, but I think the sweeps we'll do like, I mean, maybe$50 million in 45 days, right? Like it ends up being a big, big event for us that is totally, uh, didn't exist five years ago. Right. So it gets better and better and better. Where these are more of a lottery ticket. So like sweeps, we have to hone it in. We have to make sure this works. But you're going to do a rain drop campaign.

56:37There's a three in 10 shot that it's a massive success. Then there's probably like a five in 10 shot. It's okay. And there's some shot that it flops. But you can't bet the farm on that. I think Jacques, you even said that when people come and be like, hey, this is our hail mirror. We need you to fix this for us. And it's like, you're going to say no to those clients because this has to be part of a different strategy, right? So Matt, I think you should definitely maybe plan on doing one like every Q3 into Q4, especially if there's like an additional kicker. What are the kickers? If you're a CPG product and you're going, like we have a big tech business now, right?

57:11So for iPhone launch, we're going to be in Verizon and Best Buy and AT &T and all these places with our iPhones. I should probably have a raindrop ad that goes live like in August 15th that, just shows all of her phone cases and says you could buy at those places, right? And it's funny and it's engaging because there is some other way to win there, right? If Best Buy sees the ad, they're like, oh, these guys actually care about us, right? There's additional ways to win. So that's the way I think about it. I think Matt's totally right. That is like, it is like an investment that like you should make it a campaign, but it can't be like sweeps where like sweeps has to work.

57:46You know what I mean? No, no, no. I guess maybe sweeps is, I'm using sweeps, Sean, is like the only thing that's coming in mind for me as like a lightning strike moment for you guys. But this idea of campaigns. So here's what I, here's where I'm coming at this from Jacques. I don't see anybody talk about this in, in DTC, like in consumer, people do not talk. And like the idea of campaigns, if I say the word campaign, they think that little row in Facebook ads manager, That's what they think, right? And anybody who has been around for longer than 36 months in this business or is basically before Facebook ads, a campaign is not that, right?

58:32It's typically a moment in time where you're concentrating a serious amount of resources around a narrative, and you're basically getting attention. As much attention as I can for the dollars invested in that campaign. And I don't know why we've lost the plot on this in consumer, but every large brand does this. Correct me if I'm wrong. Every friggin' one. I'm going to mirror it back to you, but in the way that I think about it. And I'll say two things. Most direct-to-consumer people I talk to, and it's like the funniest thing, basically what everyone wants is they're like, how can I swing for a single and maybe hit a home run?

59:15Like it was like the number one question I get on every call. So like, is there a way to like test into this and figure out? And I'm like, that's what UGC and Statix are doing in your Medi-Cal. there is no way to bunch your way or or take a soft swing into winning on youtube connected television and beyond there's just not like i just don't i've never seen it i don't so what you're really investing in with a campaign is telling your story from your brand tone of voice and for sometimes for some people for the first time ever you know and that's not the case with lomi and ridge by the way you guys have both done it right but you also maybe you didn't do it early on, maybe as you grew.

59:55I would argue for Lomi, you had to. It was baked into... We actually did it. Yeah, like we invested a lot in a scripted hero launch. Yeah, because you had to win. Your big spend isn't on meta, correct? It's on other channels? It was, yeah. I mean, we're relaunching Lomi 3 right now. It's like third gen. And all I'm thinking about, same as Sean, is like I need to... We have to like actually, because we don't have inventory yet, but we have to start planning for this for Q4. We actually have to say like, okay, how are we going to pull off like a big re like relaunch of the product to the market um like what's that story what's the narrative like who are we talking to and um like sean we have a large retail rollout coming with that so like there's just a lot of stuff that's going around for me and and i i i guess i'm old i think in terms of like you know you should plan on some kind of buying moment like a campaign you know a reason to be loud with your brand and to matter in that moment i'll also just say another thing because there's so many operators listening it's like you know you the other big thing that dgc doesn't do well is like yesterday was when you should get started for q4 right like people tend to wait until like six weeks and the number of calls i get in like august september like hey so we really like we're so excited to work with you but we need it done by like november 7th and i'm like yeah no we'll see you next year like you know it's like the number of times that that happens with operators because we we tend to think in like quarter to quarter sort of like you know i'm not putting all of us in the same bucket but like quarter to quarter versus like oh okay you know i have something on my calendar for june or july that says like q4 is coming now's the time to pull the trigger um so i laugh because i'll be i'll be talking at um in three weeks at google um new york um you know on a variety of topics i'm already thinking like oh man it's already too late for some of these brands are gonna be there and they're gonna be all fired up and then it's like and now it's august and they're behind the the ball on um on 240 though like uh and sean you're you probably see this now because you guys are doing best buy and verizon and all this retail does not operate on like quarterly schedules right like when you're talking to a best buy like sean going into best buy like this q4 that was set last q4 so like in the world of consumer goods it is just us idiots in d2c who try to operate on like daily and weekly plans oh yeah No, no, very clearly.

1:02:33It's a DTC thing. It's not, retail is always a year ahead. It's just the ones who are like, I sell things on the internet. You know, like we run into our first wall on scheduling when it comes to product development. You know, like as a software guy that came into consumer goods 20 years ago, I was like, what do you mean you can't ship it next week? Like, but I had the idea today. Yeah, yeah. Like, what's your problem? Like, just make it, right? You have a factory. It's like, no, no, no, that'll be 18 months of development. That's how long it takes to make a product. So that was the first wall you hit with consumers.

1:03:08Like, you have to make an s***. Then the second one is you go into retail. You start talking Omnichannel. And all of a sudden, Target's like, yeah, we'll slot you in in spring 2027. I'll just say you're giving Best Buy way too much credit. Verizon, nine-month POs. Best Buy, four days. They're like, please ship us more things. But no, you're totally right. We're operating on way tighter feedback loops. I guess, Jacques, for somebody who wants to work with you, how far out should they be planning? I mean, ideally four to five months. I mean, that's the ideal time frame. I mean, things can always be accelerated for certain reasons.

1:03:48And I say that because it is a process. There's no quick way to, well, I shouldn't say no quick way. It's just not the preferred method. If you're going to be investing a campaign, putting your story out there, it is a process to get there. It's not like a, hey, we talk once, we come up with scripts, then we shoot it. Like that's probably what most produced companies and agencies do is they probably talk to somebody, write a script and try to produce it. It is an entire process from we spend four to six weeks just thinking about the concept before we write a single word. It's like it's a whole thing.

1:04:28Do you have other creatives, whether that's agency, individuals, like where do you guys go for inspiration? Like is it – because like you can't – you don't exist in a bubble, right? Like there's so much great creative out in the world. Is there – do you just sort of – do you have like places you look for it or is it just when you see it, you're like we need to put that into some kind of like idea bank because that was genius? yeah I mean my barometer for me I mean I spend a lot of time on organic social media and I'm constantly whether it's just like a simple like an effect or like you know um I'm gonna I'm gonna regret saying this but so true it's like I I watched the way Sean tweets and like posts on LinkedIn and I'm like reverse engineering like okay how can that be an ad right because I'm like you know what he's doing pokes the bear at certain like oh this this is this is this thing about salespeople that he tweeted should be a hook for an ad that i do three to six months from now right like that's how crazy my mind is i'm not looking at other ads i'm just looking at attention and what people are responding engaging with um and so that's usually what we're bringing back is like without attention, you have nothing.

1:05:49Do you guys work in office, Chuck? Sorry, you guys all in the same space together? Are you remote? We're mainly remote. I mean, obviously we have two studios in San Diego and we have a lot of people that like shoot and work out of there, but the team is largely remote and the collaboration happens largely remotely. Okay, I was gonna make this a comment around like scrolling social. social, my content team, because like we work in office together, they sit outside of my office I'm in right now. It is hilarious how often I will walk out of here to get a coffee and I just see everybody sitting there on their damn phones and they're just scrolling.

1:06:24And I'm like, I can't believe I pay people to just watch it on the internet. That's like being mad at Kobe for being in the gym, bro. Like, yeah, I know. You know, they're just, they're just doing their thing. I had a friend of mine, our candidate, a party that he was like, isn't that, doesn't that bother you that there's like that you pay kids to sit on the internet i'm like not really you know like this is we live in an attention economy and all they're doing is figuring out how to do more your next great campaign might happen on the toilet in your own office that's a weird thought that's a weird thought man it probably did oh gosh you might remember that ridge switched to rich panel about a year ago since then our orders are climbing yet support tickets are rich panel self-service portal.

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1:09:02Get started today. Thank you so much, Rich Panel, for supporting the world's number one e-commerce podcast and being on the greatest show on earth. Let's get back to it. All right. So it'd be irresponsible if we didn't talk about AI. So Jacques, VO3's out. People are, I mean, I think it was Kalshi. It's like a betting or like prediction market. Yeah. Yeah. Yeah. Like the whole ad was, was just, you know, AI generated. So is this a positive for you guys? Cause you guys could storyboard faster, right? So when you have ideas, you could actually come up with concepts and see something quicker. Is it a negative because it's devaluing the creative economy?

1:09:42Like where do you land on the whole argument? Um, this isn't going to be, this is a very, this is the way I tend to think. I would say I don't tend to go to either extreme. I'll give you an example. PJ, who is the guy who made the Kalshi ad, sent that to me before it went live. We're super close. I've known him for five years. I always knew this guy was going to be special. He was just someone that had been in my world and ecosystem. them um and i think ultimately right now i think ai is a powerful tool and i think it's one that for brands can be wielded very positively to to up level work in a big way um you know we're already trying to figure out like great we have this shot how cool would it be if we could basically use it for vfx like within our ecos like how can we do things that would be fun and unexpected um i think where it's going to be a challenge especially for brands is nothing repulses people more than ai saying i understand you right or like and so when they so people get real weirded out when they feel like they're on the outside of the inside joke like the the calci ad if you go the comments people are still very you know mixed about it and it worked for them because like all attention is good they're bombastic but man like if it would be so off brand in my mind for lomi to come out with an entire ad of like ai people it's like it would it would really really really the opposite i saw i saw volvo make this mistake toys r us make this mistake and so to me it's a it's a weapon to be wielded we are 100 like i see it as something that is going to allow us to do things that before were incredibly time like we did our ad that we did for um spruce you know was was a massive ad and has cgi dogs and like it was a whole thing right And so I'm like, well, it's going to allow us to up-level our production and do things that are even better.

1:11:58I'm not worried about how it might make UGC, fake UGC, and everything else. We're already using it to up-level our production. So do scene extensions and to build worlds. I'm excited about it, but I recognize that it's going to come with a lot of risk, and it's going to come with having to be mindful about it so that it doesn't backfire on you as a brand. Sean, do you think there's real brand risk with AI videos for a lot of brands? Like fake people. Well, I think the biggest thing is that it probably creates too much variance. Like because it's so easy to create stuff, you might create a bunch of stuff and then like you could have conflicting messages.

1:12:44The ads could just not actually mean or stand for anything. Like that's probably the biggest brand risk I see. Do I think people are going to be mad about using AI ads. I think it's a very vocal, small percentage of the world. But like it probably it's it's kind of like a fire hose or whatever. Like it's just like it'll be too much coming at people where like you really just want like a very direct, clean message. And then you want to be able to amplify that message. Like we see this. We create a ton of ads in right now inside of our Facebook ad account, hundreds and hundreds of variations just to find the one that actually works.

1:13:18But then that one is still like the message you want to tell. We want to get Spen behind it. I think fully VO3 ads for direct-to-consumer, I don't think it's going to be great, but I think it's going to be great for making cartoons. You know what I mean? Where it's less weird, less icky. I think B-roll, I sort of think, I'm with Jacques on this, I think humans are going to actually have an allergic reaction to AI. I think societally, you're already seeing it, that like our, our cultural immune system is going to respond to this stuff. And I, I do wonder if we are going to see Instagram start to have like an AI verified check Mark or like a verified human check Mark, uh, with like, who is a real person and who is not you.

1:14:07And I guess I'm just looking at this, like internet tea leaves, you know, like every single post on X has a grok is this true comment on it. Every single post, uh, like grok is this real. Like I just saw a clip from Charlize Theron on Call Her Daddy. And it's like all of the comments where Grok, is this real or is this AI? And I'm like, I'm Charlize Theron. What do you mean? I do think culturally there is an immune response coming. And I agree, Sean, that I think as a brand, you have to be very careful with this idea of like fully fake AI people and ads. Like if you're building a real brand, I think this is a proceed with caution moment.

1:14:46If you're just straight up like i'm in a direct response and sell some crap and i don't really care about the if this is like a longevity thing like i don't care if the company's sustainable or not knock yourself out like that's just an arbitrage game use every tool you can to drive all costs into the ground i just think that for real brands you gotta be careful like jock i'll send you some screenshots of how my team used it in one image on instagram it's the most viral we've been all year and not in a good way like we got destroyed yeah so let's let's talk about that like if yeah if you're hustling and then you're just like, you know, you're getting started.

1:15:19Yeah, bro. Embrace every tool that gives you leverage. Like do, do the chat GPT ads, use, use the fake influencers, whatever. But then when you're actually at scale, you just heard it's 30,$30 ,000 for 30 videos. I'm like, that's not that much. You know what I mean? Like 30 videos, like that you could spend, we're talking about spending millions of dollars against that, right? Like, look, it's creative ends up being, you know, like less than 3 % of overall marketing spend. So it's like, yeah, Like it just, it's not solving that big of a problem, I guess. Right. Like if you're getting started and like, if you're a kid and you want to make a cartoon, fantastic, run for it.

1:15:55But like as a brand, I mean, dude, if you're, if you want to get famous people in there anyway, you're going to be spending tens of thousands, if not hundreds of thousands of dollars. So it's just, it's, it's a very weird spot to attack. But I do think there's like a, uh, AI so far, it seems, it's not even just like the quality of the video. you can just tell when something is AI, like as a human being, like you can, something goes off where it's like, that's fake. I will say, I don't expect it to be that way. I don't, like, I do think, I do think that it's already to some extent in certain ways indistinguishable if you're able to do the prompting well.

1:16:34I mean, that's the big thing is, is when I talked to PJ, it's like his prompts are like 20 ,000 words or 2000. It's like something crazy. He's not typing in like person picking vegetable from garden, right? Like he's prompting on a level that like most people can't comprehend. And so I do want to make sure to say that I don't think it's necessarily a will it get to the point where it looks indistinguishable. I'm like, that's an inevitability. That's of course that's going to happen. Yeah. I just think that, again, at the end of the day, if Volvo had, like, go and Google, like, Volvo's first AI ad.

1:17:17I watched it, and it was just, like, a bunch of B-roll put together with music and an inspirational thing. And the ick of it all is, like, these are not real people with real aspirations that you're showing. And we know that. And so, therefore, like, it's repulsive. Same thing with Toys R Us. you're selling nostalgia and childhood and then you're like look what we made with ai fake kid playing with a truck and you're just like god does that feel off and so i'm like right now it's the storyline like wow kalshi made this with ai in the future it'll be like wait a second can you believe that lomi which sells like you know uh recycling you know your your produce and everything else is like out there using inorganic ways of making their ads, like you already saw it on your feed.

1:18:06It's like, it really depends on the brand. And certain brands, like energy drink brands will be able to make AI, you know, stuff for days and weeks and years and no one will care, right? You know who I don't want to be? I don't want to be the brand who makes an AI character famous. And all of a sudden people are asking for that person's agent. and they want to interview them. Like, I just don't want to be the person who blows up a fake person and then has to be like, uh, so about that. Jane is not real. Dude, you're going to have paparazzi digitally coming after you. Like, that would just be, ah, s***.

1:18:47Well, look, the world's crazy. Smarter people than us are going to solve those problems for us. But, Jacques, here's your section to plug. We're an hour and something into the podcast. so if people want to reach out to you you have a podcast you do work for people you have awesome stuff to talk about you have a twitter plug it up man all right well here we go um first of all thanks for having me um and it's so nice to call you friends and the two other folks that weren't here today jason mike i mean this wholeheartedly and it's gonna sound so cheesy but so true it's like being able to call the four of you a friend someone i know someone i can text means the world Like I feel like we have already achieved success because of that.

1:19:31And so I appreciate that. I appreciate you having me. I am on every single platform. I have a meager X following because I don't have anything witty or smart to say or honestly controversial. I think that's the other thing is like, I just I don't know. I just not. I'm not a I'm not a controversial kind of guy. or if I have those opinions, I'm just like, nah, the world doesn't need me to be like a Walmart version of Sean. So I'm on X. I'm very active on LinkedIn. Roast me now if you want. But a lot of our clients are on LinkedIn. And then, yeah, you can reach out through the website, of course.

1:20:10And we would love to see if we're a fit. I mean, I truly, that's the way we go about it is getting a sense of like, what are your goals and aspirations? And can we help you get there? Is it raindrop.agency? Is that the domain? It is. It is. Sorry. I just assumed people would be able to figure that out. The company name is raindrop. HTTP. Pull in. Backslash. Raindrop.agency. There will be a link below. Thank you, Jacques, for coming on here. I think it's really awesome. what you're doing. We've done campaigns. Maybe we'll, we'll end it with like a montage of all your best ads coming together. So thank you for what you do.

1:20:51Thank you for being here. Exciting news. And thank you for making the end of the show. Yeah, it was, it's great to have somebody on because like that is sort of like counter to the narrative around creative in DTC with like creative, right? Like how should creative be done? I think this is great. It's just fun to always bring on like the edge case or the other way to do things. So appreciate you coming on, man. Thank you.

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1:22:52Wherever you are in the world, it is awesome to have you here. If you do not already subscribe to this show, that is my one ask, is please go to whatever platform you are watching or listening to this on. It could be YouTube, it could be Spotify, Apple, I don't care. Just go hit the subscribe button. Please pump our egos up. It helps. And before we go, one more thank you to the sponsors, Fulfill, Postscript, Northbeam, Saris, and Rich Panel. Awesome guys running these companies. We all use them. These are our vendors. That's the only reason they're sponsors of the show. So thanks again to those people.