Meta's CMO on AI, Creators & The Future of Advertising

0:00Hi, everyone. This is Scalable, a weekly show about the business of the creator economy.

0:04Jasmine Enberg: I'm Kaya Yurieff. And I'm Jasmine Enberg. Every Thursday, we take you beyond the headlines to tell you what's happening, what it means, and why it matters. Meta is tapping creators to help it sell more smart classes.

0:16Alex Schultz: I was using this with my boss for our one-on-one earlier. Hey, Meta, how much battery do you have left? 75 % left, and I've been wearing these, and it's 3 p.m. in the afternoon.

0:25Jasmine Enberg: And it's not slowing down its investments in AI anytime soon.

0:28Alex Schultz: We've made bets that big before. We dive into these topics and more with Meta's Chief Marketing Officer and VP of Analytics, Alex Schultz.

0:40Hi, Jasmine. Hi, Kaya. And hi, everyone. Thank you so much for tuning into our weekly show about the business of the creative economy.

0:47Jasmine Enberg: What is Meta's creator strategy? We know its platforms are critical to the creator economy, and we hear so much about how other brands, creators, and even rival tech platforms use Instagram and Facebook to further their businesses. Instagram, for example, is the top creator platform in the US with roughly three quarters of creators regularly creating content there. That's ahead of both TikTok and YouTube. And that's according to data from Creator IQ. And almost every brand deal now includes Instagram. I don't think I've actually ever really heard of a brand deal that doesn't include it. And combined, Instagram and Facebook will account for close to half of all influencer marketing spending in the US, according to eMarketer.

1:27We also hear a lot about what Meta is doing to power influencer marketing on its platforms. That includes new tools for affiliate marketing, creator marketplace, and partnership ads, which turn organic creator posts into actual ads. Lately, we've even been hearing more about what Meta is doing to attract creators, especially to one of their surprising locations, Facebook. All of this is an effort to grow its core business. As partnership ads, for example, had a$10 billion revenue rate in the first quarter of this year, more than double what it was at the same time in 2025. But what we don't hear as much about is how Meta itself works with creators.

2:04Jasmine Enberg: Now, you might expect Meta to partner with creators around its AI efforts the way that companies like Microsoft, Google, Anthropic, and OpenAI are doing. And while AI is part of Meta's creator strategy, Meta's chief marketing officer, Alex Schultz, told us that it's not its top priority with creators. And here's what he said about why.

2:24Alex Schultz: I love a lot of the marketing folks around OpenAI, but I don't think we've resolved the concerns about data centers or the trust in OpenAI at all last year. I don't think it's better. I think it's worse. And so it's not clear that stuff is working in this space. I think it works to sell glasses. I think it works to get people to install Instagram or sadly install TikTok, which I just advise against use Instagram instead. It works to sell laundry detergent. I'm not completely sure it works to regain trust in data centers. I think that's a different problem.

2:56Jasmine Enberg: So for context, the AI race, of course, is fiercer than it's ever been. And so many have met as competitors, including Microsoft, Google, Anthropic, and OpenAI, those companies I just mentioned, have turned to creators to help promote their products, also to help reshape the narrative around the technology, including things like environmental impact, spending, and those data centers. And, of course, also be seen as cool with consumers. So take Microsoft and Google, for example, they're reportedly paying creators upwards of$600 ,000 to essentially post content. And again, a lot of that activity is happening on Meta's platforms, mostly Instagram.

3:35Jasmine Enberg: And it includes some unexpected creators like Alex Earl, who has a long-term partnership with Microsoft. And she recently shared her trip to Microsoft's headquarters in Seattle on both Instagram and TikTok. Travel with me to Seattle for the day to go to Microsoft's headquarters. We started off the day with meetings with the social team in a treehouse. I had a meeting with the head of Copilot. Microsoft has been one of the partners I work with. And it's always important to me to meet and stay close with the team. Then there's OpenAI. ChatGBT has become synonymous with AI for consumers, the same way that Uber has for ride sharing.

4:06But competitors, especially Anthropics Cloud, have been gaining steam. That's where creators have come in. OpenAI even took the unusual step of acquiring a tech podcast, TBPN. And it's also been working with creators behind the scenes to get their feedback on how they can better use their products for things like generating thumbnails, complicated infographics for their videos, or even to help them build their own apps without needing to code. Here's what David Duxon, OpenAI's Business and Partnerships lead, said about the importance of creators at our Scalable Summit last month when I asked him what exactly is OpenAI's strategy here.

4:36One of the opportunities in AI is that these tools are so capable that a lot of people don't actually know where to start. They don't know what they can use it for. And so when you have a creator who can show their audience, hey, here's what I can use this technology for that's relevant to me, that's relevant to this community, it's incredibly powerful, right? Having creators showcase these use cases to communities that share that passion is super, super important to us in communicating those benefits of the products.

5:06Jasmine Enberg: But going back to what this has to do with Meta's creator strategy. So we know that Meta has also worked behind the scenes with creators to get feedback and improve some of their products. That includes Instagram's video editing app, Edits. In fact, we recently broke the news that Edits had hired its first ever head, Brett Westervelt. He is a meta veteran. He gave us a breakdown of how the app gathers creator feedback. And that includes through a WhatsApp group that it runs, as well as a creator council. These creators tell Edits developers about glitches on the app and what features it could add.

5:39We also know that meta gives creators access to some of its tools early, in part to help spread the word and teach people how to use them. Most recently, some creators got access to a highly wished for feature that has been long on people's wishlist, including ours. Yes, which allows you to reorganize your Instagram profile grid. So we have not experimented with it yet, but we're very excited to spruce up. I have. Have you not looked at our Instagram account?

6:05Jasmine Enberg: Oh, you have? Well, I haven't done it for my personal. Well, I know we've been updating the reels covers, but you've been moving stuff around. I haven't noticed. Go have a look after we finish recording. Okay, so here's what creator and writer Jack Appleby said in an Instagram reel. He was one of the people who got early access.

6:19Alex Schultz: Crazy Instagram update. You can reorder your profile grid now. Move these posts around wherever you want. The feature launched today, but Meta gave me access last week so I could build you some strategies of how to use the tool. So Meta also initially gave creators access to the standalone Meta AI app when it launched in April last year. And part of the reason they do this also is they want to ensure that content on the app is actually there when people open it at launch. So that's one reason. And also they want to make sure people actually download it. So Meta AI now has over 1 billion monthly active users.

6:52But this includes all users across Meta's different apps because the tool is also embedded into Facebook, Instagram, and WhatsApp.

6:59Jasmine Enberg: So that's actually one big edge that Meta AI has over some of the AI startups like Anthropic and even OpenAI. I mean, it already has this massive built-in audience and distribution channels through Facebook, Instagram, and WhatsApp. And that means that people don't have to download a separate app in order to use it. Meta has also integrated AI into like literally every single corner of those apps from the search tool all the way to checkout, meaning that it is impossible to avoid. And trust me, I have accidentally clicked on Meta AI a million times in WhatsApp. That said, though, 1 billion monthly active users is about as many users as a chat GPT app alone had in May, according to estimates from Censor Tower.

7:40Jasmine Enberg: So Meta clearly still has a lot of competition in the space and a lot of catching up to do. And of course, it's spending really heavily to do so. So this year, Meta estimates that it will spend between$125 to$145 billion on AI, mostly on infrastructure and data centers. That's about two thirds the revenue that it generated in 2025. Now, a lot of these efforts are actually going toward transforming Facebook, Instagram, and even WhatsApp into more AI-driven shopping platforms. It is not clear that this will work out for them, though. And here's what Schultz said when I asked him if the spending was worth it.

8:20Alex Schultz: Good news, bad news. If we are in a place where we spend a few hundred billion dollars, which is a lot of money and it isn't completely transforming commerce, we're still going to be able to use that compute to do ranking for ads. We're still going to be able to do ranking for feed. It would definitely not be a deadweight loss. If it is something that is truly transformative and opens up those new businesses, we would be very sad not to be part of the game. And so I think it is a very sensible investment that the company is making, even though I 100 % get it's a massive infrastructure build out in a way that, you know, few industries have ever seen.

8:53That two-thirds stat gets me every time. It's massive. But either way, Meta and other companies have gotten a lot of criticism from the media, consumers, lawmakers, and even some tech entrepreneurs like Mark Cuban about that hefty spending. Gen Z has been particularly vocal. They have serious concerns about the environmental impacts of AI. Many of them are graduating now, and they're concerned about AI replacing entry-level jobs. At several graduation ceremonies this year, graduates even booed commencement speakers when they brought up AI. Take a listen.

9:23Jasmine Enberg: The question is whether you will help shape artificial intelligence. We do not know. So that was the voice of former Google CEO Eric Schmidt at the University of Arizona. And he wasn't the only one. Speakers at the University of Central Florida and Middle Tennessee State University were also among those who got booed. And this matters a lot to Meta because Gen Z is the demographic that it needs to reach the most. Okay, but at the same time, Gen Z are the biggest users of AI, especially ChatGPT, which so many of them just call chat now, like it's one of their friends. And for a lot of them, chat probably also helped get them through school.

10:00Jasmine Enberg: So according to some data from Harvard Business Review from last October, roughly three quarters of Gen Z adults had used an AI chatbot at least once in the past month. And over half of them said they used AI to help them with their work. And 46 % said they use it to help with writing, which Harvard Business Review smartly noted could overlap with schoolwork. I'm sure it does. And this is not to say that Gen Z's concerns about AI aren't real and aren't valid, but it's more complicated than it seems. And I think that supports some of what Schultz was saying, that creators probably aren't the solution to the problems of trust and accountability that these AI companies are facing.

10:40Jasmine Enberg: They alone aren't going to change people's perceptions of AI. Still, we were not entirely convinced by his proposed solution on how to change people's opinions about the technology. And you can hear that exchange in our full conversation at the end of this episode. But first, if changing people's minds about AI isn't Meta's priority within influencer marketing, then what is? Selling smart glasses. You probably caught that in the clip we played of our interview with Schultz earlier in the episode. And what was so interesting is that if you read between the lines in some of his response, what's also clear is that Meta seems to primarily view creators as lower funnel sales tactics.

11:16Jasmine Enberg: That was evident, too, in the company's latest earnings report, where all of the mentions of creators were categorized as commerce efforts, including Kaya, that$10 billion revenue run rate stat for partnership ads. And that, again, is very different from some other tech companies, including OpenAI, that are tapping creators for things like thought leadership and, again, to build trust and awareness. I mean, beyond TBPN, for example, I mean, creator Gigi Robinson recently started an ad promoting ChatGPT's applications for health. And I believe that ad actually ran on TV. There you go. The lines are blurring as usual.

11:50But to show just how serious Meta is about its glasses and how big of a role creators will play, they recently made a big hire. Jim Shepard is its new director of content and creator partnerships with a particular focus on Meta's wearable business. We've both known Jim for a long time because of his decade plus tenure at Snapchat, where he led the company's creator strategy, as well as relationships with creators, celebrities and other media partners. Now he's essentially going to be doing the same thing. but for Meta. And The Hollywood Reporter indicated that his remit will also include getting more celebrities to wear Meta Ray-Bans and also encouraging more creators to film content using them.

12:24Jasmine Enberg: So to be fair, this isn't an entirely new strategy for Meta. The company has long tapped celebrities to help promote its Ray-Bans, including a Super Bowl TV ad that ran in 2025 that featured Kris Jenner, Kris Hemsworth, and Kris Pratt. That's three Kris's, which is very hard to say in a sentence. The trifecta. The trifecta. Gentlemen, what a place you have.

12:47Alex Schultz: Who eats art? Think you're supposed to say, hey, Meta. Like, hey, Meta, who eats art?

12:52Jasmine Enberg: But yes, hiring Jim suggests that we're going to see even more efforts like this. And it makes a ton of sense for Meta to bring Snapchat's top creator exec on board. I mean, Snapchat was the first social app to debut smart glasses, which it calls spectacles. Yeah. And Meta has also been holding events with creators to demo the products. They've struck deals with creators to wear them. And part of those deals is for creators to capture content with them. Reese Feldman, a creator known as Guy with a Movie Camera, is a great example. We spoke to him on a recent episode of Scalable when we were at the Cannes Film Festival.

13:23And Reese was invited by Meta to attend and walk the red carpet with the glasses and capture content, of course. This was Meta's first time sponsoring the film festival. And because of some rule changes, they were actually allowed to have the Ray-Bans on the red carpet, which was great for them. And they also tapped some local creators as well to cover the festival. Here is one example from one of Risa's videos. Hey, Meta, start recording. We are on the red carpet.

13:46Jasmine Enberg: Okay, so as we mentioned at the top of the episode, none of this is to say that AI is not a part of Meta's creator strategy. It is. Meta smart glosses have Meta AI built into them. So when you have a creator promoting Meta Ray-Bans or Meta Oakleys, they're effectively also promoting Meta AI. And so many of the reels that we've seen from creators who Meta has been partnering with really do focus on that integration between Meta AI, the smart glasses and shopping. Again, a lot of Meta's big AI ambitions right now revolve around commerce. And so here's one example from Chris Ashley, who has nearly 900 ,000 followers on Instagram.

14:23I was laying in bed and I decided to start running. And of course, I had to go to my favorite chat bot, Meta AI, because the shopping feature on here is incredible. So I'm looking for running apparel. So it's going to recommend Instagram posts, Facebook posts, web links, everything I need to make sure my fit is legit, even the right color. So I like to listen to music while I'm running. So I figured, why not get the Meta AI Oakley Vanguard? That provided me with specs, what people posted about them, and everything that I needed to know to make sure I made the right decision. So running outdoors was cool until I had to run from a dog.

14:53And then I thought, you know what? Maybe I'll just get a treadmill. So I immediately opened up the Meta AI app so I can shop for a treadmill on Facebook Marketplace. so I don't have to run from a dog

15:02Alex Schultz: and I can just run in peace. And I found exactly what I needed. It showed me all kinds of options within my local area. And look at me now. I have a treadmill and I can run in peace without a dog chasing out behind me. All thanks to the newly revamped Meta AI app. Thank you.

15:17Jasmine Enberg: So there you hear Meta AI and Meta Oakley's. He also managed to weave in Facebook Marketplace. And I have to say, like, I'm pretty impressed by this video and how it subtly showed how big Meta's ecosystem really is and how much you can do within it. And I think working in Facebook Marketplace was a very clever angle as it's one of the few, if not the only reason why Gen Z and me, in fact, still use Facebook. Same. And also just a tidbit, I saw this video because it showed up on my feed as a sponsored post. So full circle here. And then I sent it to you. But yes, getting Gen Zers onto Facebook has been definitely top of mind for Meta for quite some time now.

15:58And obviously a big part of their strategy. is to get popular creators from other platforms like TikTok and Instagram onto Facebook with the hope that their audiences will follow. Schultz talked a little bit about this too in our interview. Again, plugging that Facebook paid out$3 billion to creators in 2025. Here's a little more of what he said.

16:15Alex Schultz: Creators are finding a load of monetization on Facebook. Like about a year ago, Mr. Beast came out and said how good it was as a monetization vehicle for him. And sort of stories of, oh, Facebook is the past, whatever, it's just not true. Like it's obviously the majority of our active users between Facebook and Instagram are on Facebook. Majority of revenue is on Facebook. Facebook is still like huge. So we will have to see how this will work out for them. I remember back in 2025, CEO Mark Zuckerberg made a big declaration on an earnings call that a top priority for the year was getting back to the quote OG Facebook.

16:51I later did some reporting on what exactly the strategy would entail. And unsurprisingly, it was courting creators, including asking major YouTubers like Mr. Beast and Mark Rober for their feedback. And part of it, too, was rolling out more financial incentives and cash bonuses for creators on Facebook. They have been beating this drum for a while. In 2023, Tom Allison, who's the head of Facebook, wrote a blog post with somewhat of a rallying cry. He said, quote, Facebook is not dead nor dying. It's, quote, alive and thriving. But needless to say, I can't say that much has come of these efforts yet.

17:22I mean, perception of Facebook certainly has not changed, even if creators like Mr. Beast are making some more money there.

17:27Jasmine Enberg: It's so true. And like we've said so many times on this podcast, I mean, perception is reality on social media. And I remember this was a couple of years ago when we released a forecast at eMarketer showing just how many Facebook users the app still had. It got so much media pickup. I mean, it was literally everywhere. And I was so surprised that it made so much news. But again, now it makes sense, given that the perception is that nobody uses Facebook anymore. Yes. I mean, definitely the older demographics are on Facebook. I was recently in Poland with my grandma and my grandma from the other side of the family was showing her a reel on Facebook.

18:04So these are the very sweet. But you know, there is a big population on there. But it's also telling that they've stopped releasing daily active users on Facebook too. Oh yeah.

18:13Jasmine Enberg: I mean, that was a major move and a clear signal that they were trying to hide the weakness in Facebook user growth. So anyway, back to the smart glasses for a minute. So we got to try the newest Ray-Ban version while we were at the Cannes Film Festival last month. So this is Meta's second version of the glasses. And we were pretty impressed, especially with the sound. When you're playing music, the person next to you cannot hear it. It's pretty crazy. I think also Meta was so smart to partner with brands like Oakley and Ray-Ban. So the glasses are at least something you'd like to wear and look stylish at the very least.

18:43And then the tech is just the bells and whistles.

18:46Jasmine Enberg: Yeah. I mean, I was also super impressed by the sound. And we also learned in our interview with Schultz, during which he was actually wearing the Oakleys, that one of the main microphones is in the nose bridge of the glasses. And I don't know where I was expecting the microphones to be, but clearly not there because this is one odd random fact that has stuck with me since our conversation. Was he wearing Oakleys or Ray-Bans? He was wearing Oakleys. Okay. So for comparison, we've also tested the spectacles or specs of the company Cosm. We were together last fall, We went to Snapchat's office and they're only available for developers.

19:20These developer ones are definitely not ready for primetime yet. I mean, first of all, they're incredibly thick. As I said to Evan's speaker on stage last year at our conference at the information, they're a little chunky. But one of the coolest features they have is automatic translation.

19:33Jasmine Enberg: The two of us speak really niche languages, Finnish and Polish. And when we tested it out, I mean, the translations were spot on. And so that was super impressive. Meta did not have Finnish in Meta AI or in the smart glasses because I asked. Did you ask about Polish? I don't think so. Oh, no. Oh, my God. Did you not? No, we got to find out. I doubt it. But yeah, like we said, I mean, Snap has argued that its tech is much more advanced. It can do a lot more than Meta's. But the reality is you still need people to want to buy them and want to wear them. And if they can serve some sort of utility for consumers, even if it's basic, like capturing content, taking calls hands free, right?

20:11These seem simple, but if they help people in their day-to-day, they're more likely to buy them than some complicated technology they don't understand or doesn't have a clear kind of impact or use case for their day-to-day.

20:22Jasmine Enberg: Totally. I mean, one of the things that Schultz said to us in the interview is that he was wearing the Oakleys during his one-on-one meeting with his boss. And that is a very basic task that anybody who works remotely will understand and appreciate. Side note, Schultz reports to CEO Mark Zuckerberg. So we have to assume that's who he was talking about. All right, here is our full conversation with Alex Schultz, CMO of Meta. He explains why AI is a threshold technology. He gives us a preview of what Meta is unveiling during this year's Ken Lyons Advertising Festival. And he shares what he thinks needs to be done to improve the public perception of AI.

20:57Alex Schultz: Hey, Meta, how much battery do you have left? 75 % left. And I've been wearing these and it's 3pm in the afternoon. Pretty amazing. I'm like so impressed with the sound. Yeah, I was using this with my with my boss for our one on one earlier. And it's just perfect the bone conduction plus the microphone is in the nose hi alex welcome to

21:17Jasmine Enberg: scalable hello so nice to have you here i cannot believe it's been two years already since we lost

21:22Alex Schultz: spoke for another podcast i mean you you you haven't aged a bit me out the bags have grown

21:27Jasmine Enberg: significantly bigger you cannot tell i promise you cam lions is just around the corner again all three of us and 10 000 ish other people are going to be heading back to the south of france as we do pretty much every year. And for as long as I've been going there, Meta has been in the same spot, right by the Palais, prime real estate. I imagine you'll be back there again this year. What can we expect?

21:51Alex Schultz: There's two things, AI and creators. We're going to have booths that do allow people to actually experience Meta AI. We're going to show Meta AI. We're also going to really center creators because what we're finding is partner ads are working really, really well. Last year at Cannes, I was pushed on us making sure that we have the data, right? Like you upload custom audiences to us. You tell us who your target audiences are with pixels, with Cappy, with all these things. Can we tell you which creators you should work with based on their audiences matched with what you want? So we ship that at New Fronts.

22:21Alex Schultz: And we're going to be actually really talking about how you can use partner ads aligned with your target audience, aligned with what you want to achieve.

22:28Jasmine Enberg: So tell us a little bit more about that. I mean, we saw some research recently from the IAB that showed that advertisers are now spending more on ads like partner ads, basically boosting creator content as paid media. I mean, what are some of the results that you've been seeing so far for advertisers? And then what does that mean for creators who are, you know, participating in these sponsorships?

22:46Alex Schultz: I may not just use me as a case study. So like when I'm selling Meta glasses, these, the Oakley Metas, which I love because I'm an Oakley guy, we reached a peak of 40 % of our direct response media being partner ads. And then you see obviously the massive, massive advertisers like sort of Shein, Timu, those guys actually showing people using their products and then boosting them as ads. So it's working well enough for me as an old school direct response guy to be moving ads to partner led ads to a high double digit percentage, not the majority, but a high double digit percentage of my ad spend.

23:20Alex Schultz: I'm starting to do it actually for ads to promote Instagram and Facebook as well, because it's working. So it's working for us. It's working for a bunch of other people. It's a big business sort of for that reason. Tell us a little bit more because I understand you have some other creator and shopping announcements coming at Cannes. So give us a little bit of a peek into what else we can expect. One of the big ones is we're going to be expanding our shopping work. So the shopping work, again, really creator involved. We have an affiliate program where the creators get a cut of the sale. We're also working on live video ads.

23:51Alex Schultz: So it's actually interesting. We're introducing them much more broadly at Cannes this year. We have them in Southeast Asia and they're thriving. And what's happening on those is it's kind of like QVC. So it's sort of an integration between affiliates and ads in a way that creators are going out and sort of talking about their talking about products.

24:11Jasmine Enberg: OK, let's talk about AI. You recently wrote a thought leadership piece about how AI is a threshold technology. Tell us what that means.

24:20Alex Schultz: Look, I experienced it this way. People get surprised when AI is suddenly capable of something, right? AI couldn't do good ads for direct response. And then suddenly it could do good ads for direct response. You know, six months ago, AI was not very good at coding unless you were a very special person who knew the tricks about how to harness it and turn it into loops and have critique bots and all of those different components of it. And now everyone's vibe coding, a lot of them by texting open claw over WhatsApp. What happened was AI got better and better and better. and then it crossed a threshold where it was smart enough that it was better than anything that a human being could do or an average human being could do in this space.

25:02Alex Schultz: And then it felt like AI suddenly appeared on the scene. So that's my concept about AI as a threshold technology. You're never going to use the AI if it's worse than doing the work yourself until it crosses the threshold where it's actually better than doing the work yourself. And in a lab, that's continuous progression until it crosses an evaluation threshold. but in the real world, that feels like a sudden change. And we've seen a number of those sudden changes in the last 18 months.

25:28Jasmine Enberg: It's also very interesting timing for you to be writing this. I mean, not only is CAN coming up, and like you said, AI is gonna be a huge topic, but if you think back to last year's CAN, just before the conference, the Wall Street Journal reported that Meta aimed to automate all advertising by 2026. That is obviously this year. It was a huge topic of conversation. It ruffled a lot of feathers. I was at the CMO dinner where it was basically all that anybody could talk about. Is that still the end goal? Are you going to be automating all ads by the end of this year?

25:58Alex Schultz: Don't believe everything written in the Wall Street Journal. I think the Wall Street Journal also just wrote something saying, we are outselling Google, which last time I looked at their earnings, that wasn't true.

26:09Jasmine Enberg: That was from an estimate from my old company, eMarketer, I think.

26:12Alex Schultz: I don't actually think that's what we said. I think Zuck said small businesses could just put in a credit card and get essentially the services of an agency, which actually small businesses can't afford agencies. Like the big businesses like me, I don't buy my publicist with a credit card. It's an insertion order and a PR. We have north of 10 million small businesses actively buying ads. We have hundreds of millions of small businesses on our services. It's absolutely incredible. And they do do vast majority of their advertising now with a credit card and AI. Like the vast majority, because all the ads are ranked by AI.

26:46Alex Schultz: They're targeted by AI. They can now create the creative with AI. And we feel really great about that because we're giving small businesses superpowers. It's not going to replace the big business, agency, CMO, creative team, and all of those things. I think it's going to change our ways of working. It's already changing mine and many of my colleagues who are CMOs. And so I think it's going to grow our business. It's going to grow the share of ads as a revenue as part of GDP. and it's actually going to grow the job of the CMO, grow the job of agencies and so on. The jobs will look different though.

27:21Alex Schultz: And small businesses will get superpowers where they can do everything with AI. And actually a lot of them are already there. So that's how I'd think about it.

27:30Jasmine Enberg: Okay, so you talked a lot about small businesses. What about big brands though? I mean, like you said, I think small businesses are the ones that benefit the most and big brands are probably a little bit more reluctant to hand over that control or messaging, right? to Meta or really any other company?

27:46Alex Schultz: A few things are true. The future is here. It's not evenly distributed yet. I mean, could you imagine Unilever using AI for Dove Real Beauty? Obviously not. You know, or their Purcell ads, right? Dirt is good. You don't want to have someone with a fake white shirt saying, my whites are now whiter. And that's for Tide. That's for Purcell. That's for all those kinds of brands. But then there's the other end of the spectrum. There's other brands in all of these portfolios where, you know, there's a different kind of bar for what they do. So different brands are behaving differently. And in many cases, it's really logical because of their brand promise.

28:18Alex Schultz: And I'm very supportive of the way that's happening. That'd be the first thing. The second piece is I think everyone's using it for targeting. So in terms of like a lot of the back end stuff, not the front end creative, but the back end stuff, I think pretty much all the big brands are using AI in that component of the work, targeting, measurement, optimization, that chunk. And then the third bit is the agencies have pivoted really hard. You look at the work of Publicis. You look at the work of Dentsu. You look at what the big agency holding companies, Omnicom IPG, what they're doing. They are providing AI services to brands.

28:52Alex Schultz: So where you're saying, oh, brands won't hand over creative to Meta or to Google or to TikTok or to any of these companies offering these creative tools because they want their creative control. I think that makes a ton of sense. But what brands are doing is that they're using their agency to help them integrate across all these AI tools and find the best way to ship it into these different surfaces. So those would be my three things. One, there's a distribution of behaviors. A lot of it is very logical based on the brand promise. And some of it is just speed of rollout. Two, we're in a position where for a lot of back-end stuff, ranking, optimization, targeting, pretty much everyone's using it in some way.

29:31Alex Schultz: And then three, big brands, yeah, they're not just handing it over to Google. They're not just handing it over to us. They're not just handing it over to TikTok. They are using their agencies to integrate AI for them across the major platforms. And I think that's exactly what I said before in terms of the agency job continues to exist, but it evolves as it has done continually for 50 years. So how does the role of CMO evolve? I mean, you said that it's already changing how you work, but how do you see that across the board for CMOs? Another thing that sometimes we love to do, and look, it's fun, is like, oh my gosh, everything's changing in the CMO job.

30:05Alex Schultz: Like my entire adult life, everything's been changing in the CMO job. You think 25 years ago, basically the internet was like this tiny little thing on the side at a conference. And then it became the big thing. And then mobile was the tiny little thing on the side. And then like social was the tiny little thing on the side. And then it changed to reels and real-time video and creators. and now it's AI. And so I think in some ways, the job of the CMO stays the same, which is you need to adapt to a technology shift that is massively changing the role of a marketer. So in some ways, it's like the same as always, which is you have to respond to how the media environment changes and get ready for it.

30:47And in some ways, I think like, it changes completely, which is yeah,

30:52Alex Schultz: Yeah, the tools are different. If you go out and buy targeting now versus media buying 20 years ago, media buying 20 years ago was a person with a slide rule and a can-do attitude. You know, media buying today is technical integrations in your product to make sure data is being fed back so that you can auto-optimize your ad campaigns across whichever company you're in. I prefer to go to the first one, which is there are timeless principles of we need to adapt to each new technology. We need to think about the base of showing the right ad to the right consumer at the right time. and how this new technology enables us to do so.

31:25Alex Schultz: And those principles should actually cut across time. And the job of the CMO is always to be flexible to new media and new technologies. That's how I feel. But I definitely have a lot of sympathy for the second piece of like, yeah, it's changed completely again.

31:39Jasmine Enberg: So speaking of how businesses and roles have changed, I mean, one of the things that stuck out to me in the piece that you just wrote was that you said that Meta's revenue has accelerated because AI has improved return on ads then, you know, boosting the businesses of these companies as well. I think that's very hard for anybody to argue against at this point. I mean, you had 33 % revenue growth last quarter. That's on top of multiple quarters of double digit growth. So obviously, meta has been on a tear. But how long is the runway really here? I mean, you're spending up to$145 billion on AI this year.

32:12Jasmine Enberg: I mean, are the improvements that you can make really worth that amount of money? In my head of analytics role, I just spent four hours of a board meeting talking about that exact question.

32:22Alex Schultz: No, I mean, look, it's obviously central to the company right now. And it's very important to us. And we are talking about it actively at every level of the company. There's two things to think about. One is our existing business and one is the new businesses. In our existing business, we are seeing yield, like tons of yield from this thing. And so it's very hard to argue there isn't a lot of runway. If you look at GDP, percent of GDP spent on ads, for years it was 1%, 1%, 1%. We're now at like 1.2%, 1.3 % of GDP globally being spent on ads. And that's because the ROI is there. And Google and Meta and the other players, but especially the two of us, we've grown the pie.

32:57Alex Schultz: I don't think there's a reason why this couldn't be 2 % of GDP rather than 1.2 % of GDP, which gives you a lot of headroom for growth there. So that's the existing business. I think there's space. Also, there's no reason we have to be the ones that capture it. we're doing well now don't have to do well in the future we have to fight we have to do good work it's a very competitive space with tiktok with youtube with all of these players out there and so like it's not a given that we're the winner i'm proud of what we're doing in the work there then there's the new businesses and look i mean anthropic open ai these are companies doing tens of billions of dollars out of nowhere and they're doing tens of billions of dollars offering models that are actually very similar in quality to where we are with our latest new spark model which wasn't the case a year ago.

33:38Alex Schultz: We didn't have the best year last year, but we had a great year this year. And so could we offer services where businesses want to use them? Maybe.

33:46Jasmine Enberg: It kind of feels like what you're saying is you just, you got to spend it.

33:49Alex Schultz: I think like it's pretty clear this is a very unique time. Good news, bad news. If we are in a place where we spend a few hundred billion dollars, which is a lot of money, and it isn't completely transforming commerce, we're still going to be able to use that compute to do ranking for ads. We're still going to be able to do ranking for feed. it would definitely not be a deadweight loss. If it is something that is truly transformative and opens up those new businesses, we would be very sad not to be part of the game. And so I think it is a very sensible investment that the company is making, even though I 100 % get, it's a massive infrastructure build out in a way that few industries have ever seen.

34:27Jasmine Enberg: It's two thirds of the revenue that you made last year. It's wild.

34:31Alex Schultz: We've made bets that big before. One big one that's out there right now that we'll be talking about ahead of CAN is our business agents. So meta business agents are being used by lots of small and medium and some enterprise businesses to communicate for them with their customers for the first few turns of a conversation. And that, imagine a place where every business on earth has essentially an infinite customer support staff available 24 seven, who can speak in every language, who are aware of every data point for your company, and are plugged into the consumer's account with you and can organize returns, can organize upsells, can do all of those things and can chat with them over WhatsApp, Instagram, direct messenger or whatever service they want to.

35:16Alex Schultz: That's an amazing opportunity that will grow so much in terms of the economy, in terms of like, and also just users, consumers having good experiences with businesses. So can't be done today, totally available, gonna be enabled by these tools. That could be a huge business. we had manas that was growing really fast um it was already a significant nine-digit business when we bought it and we accelerated the growth of that product obviously that we have to adjust to the reality of what's happened there but there are loads of opportunities to to offer new businesses too so core business no reason ads can't be more of gdp no reason it can't be bigger new businesses we've launched business agents there's a load of other things we could launch very very interesting um so that's how you pay for it it's not guaranteed um but i'm hopeful since you mentioned the mana situation how big of a deal is that i mean for listeners that are not maybe familiar i mean you had to unwind this this acquisition i mean obviously this has such impact on future acquisitions by chinese entrepreneurs but how big of a setback is that for meta i mean that's one i can't talk about at length so i just can't go into it um okay obviously we're disappointed and we really loved the company.

36:31We talked a little bit about the sentiment with an advertising around AI, but sentiment is pretty negative around AI for the average person. I mean, you saw college students booing commencement speakers, right? There's worries about jobs. I think Gen Z in particular has environmental concerns. Other people are complaining about ugly data centers being built in their town. So how do you think about that from a marketing perspective and kind of changing consumer sentiment around AI and the negative aspects?

36:57Alex Schultz: So the two, three answers to that. One is that a lot of stuff is local with data centers. And so it's important to explain in the communities where we are, what jobs we're bringing, what opportunities we're bringing. And we actually run a bunch of local campaigns. We run a bunch of local training. We partner with local schools. We fund local initiatives. We do a lot of stuff. And in the communities where we are operating, currently the sentiment is pretty good because the data centers and the teams are giving back. Obviously, we have to keep working at that and we have to keep earning that positive local support for our work.

37:30Alex Schultz: But I do think that matters. There's like, where is this actually happening? And are we acting as good neighbors in that space? And I think we are. And do we communicate about it? And that is part of my job. And we go out and communicate locally. Then there's the more kind of national piece in the United States. I think there's a few different things you can look at. You can look at, you know, consumer sentiment. And for me, a ton of it has to be giving consumers great experiences. like if consumers are using the ai and having a great experience and seeing that it's growing their jobs growing their putting them in a place where they're more efficient and so on i think they'll feel great i do worry about things like what jeffrey hinton went out and said i guess six years ago now where it was like oh don't train as a radiologist anymore your jobs will be gone by 2026 they're not so i think the second thing is like yeah we can market but i actually think we have to prove to people these products are good for them.

38:23Alex Schultz: And that is not, that is not easy. And then I think specifically for the policy elite, there is, there is an element of like, yeah, there's an element of public affairs marketing, which we need to do. And in many ways we need Anthropic to do, we need OpenAI to do, we need the industry to do because people aren't focused on Meta as the number one most important company on this conversation. The thought leader on this is very much sort of Dario going out saying, oh, it's going to destroy jobs. it's a terrible thing and I'm so excited to ship the next model which is very confusing to me but I think it needs to be it needs to be people like him and those companies that go out and and actually talk about the excitement and the reason that policymakers shouldn't be scared because Sam did his world tour with policymakers Dario's saying it's going to destroy jobs they are in the driving seat to be listened to ahead of Google ahead of Meta ahead of Amazon ahead of the others they are shifting their tone now that they have an IPO I think they're probably regretting some of what they've said, I think.

39:21Alex Schultz: Otherwise, why shift the tone? And so we need them to go out and make the point as well, not just us. So those would be the three layers, like local, national, and then public affairs audiences. And when you flip to somewhere like the UK, there aren't any AI data centers, you know? And so it's a different, just a different conversation in that place.

39:40Jasmine Enberg: I agree that there's been quite a bit of fear mongering that has contributed to the the negative perception towards AI. I also agree that, you know, education can help improve people's perception of it. I think part of the problem is, is that the lack of trust isn't just about the technology, but also the companies behind the technology, like not just meta, but of course, you know, some of the really big players in the space as well. I mean, OpenAI, for example, some of the strategy that they've employed to try to change the perception is working with creators and influencers. I mean, OpenAI, for example, acquired TVPN.

40:13Jasmine Enberg: I mean, that feels like an anomaly, a one-off.

40:16Alex Schultz: Are you shipping an acquisition for scalable? Is this an amazing thing? I mean, we can talk about that offline.

40:23Jasmine Enberg: But also we've seen, you know, smaller scale creator partnerships. I mean, you have Google, you have Microsoft spending hundreds of thousands of dollars on creator partnerships. So what does meta strategy look like with influencers, especially when it comes to AI?

40:37Alex Schultz: You know, look, I'd reflect back in the trust piece of like, to your point, I don't think it's making a dent on those issues that we talked about earlier. I love a lot of the marketing folks around OpenAI, but I don't think we've resolved the concerns about data centers or the trust in OpenAI at all last year. I don't think it's better. I think it's worse. And so it's not clear that stuff is working in this space. I think it works to sell glasses. I think it works to get people to install Instagram or sadly install TikTok, which I just advise against use Instagram instead. Like it totally works.

41:15Alex Schultz: That works to sell laundry detergent. I'm not completely sure it works to regain trust in data centers. I think that's a different problem. What's kind of your message or advice to creators? I mean, I think there's a lot of concern about, you know, AI slop and competition and all this new AI generated content that they have to kind of compete with now. And it's scary for them, I think, too. I've talked to so many podcast hosts who are so anti doing like a voice clone of themselves. Like one creator once told me, like, I'm not in a rush to make myself redundant, right? So what's kind of your message to creators in this new kind of era of AI?

41:52Alex Schultz: Yeah, look, there's going to be three categories of stuff happening. There will be. All of them will succeed to some extent. And you have to place your bets as you see fit. So the three categories are human only. You know, think of that as Dove, Real Beauty or Purcell campaigns, right? Human only. This is a human ad. This is a human. And you know, it's a human that's doing this piece of work. For us, that's super important for, say, the Super Bowl ad, where we use people like iShowSpeed, who was amazing in our Super Bowl ad this year and really drove up awareness and sales of these glasses. And then there's going to be a category of content, which is AI augmented, where AI helps.

42:32Alex Schultz: And in that place, like, look, when we do ads, we touch up the ads, right? Like, there are people who have jobs of staging food. You know, the food on the packet of the lasagna I buy from my local supermarket does not look like the lasagna when it comes out of the packet, because it's been beautifully staged and we've done the work that we need to do to get to do marketing as we've done it. Photoshop has already existed. And that, by the way, is the same for creators. Creators don't show their worst image. They show the best of the 200 they took or the 30 videos they took. They maybe touch up the sound a little bit with technology.

43:06Alex Schultz: They maybe touch up the image a little bit with Photoshop. Maybe they wear some makeup. I probably should have done today for these bags. And that's okay. And so there'll be some that's like augmented and they're not sort of purist. They're like, yeah, I'll use AI where it makes sense. and there's some that's going to be AI maximalist and it's going to be AI first. And I can imagine a place where you say, you know what, I'm really excited about this. I am going to do a voice clone and I'm going to create 40 versions of this podcast that are cut for 40 different sort of groups. There could be an edit that's really good for CMOs.

43:38Alex Schultz: There could be an edit that's really good for people young in their career. And you could even be in a place where it's not even just edits that are cut dynamically for individuals. you just take my voice clone take my book and i become a uh marketing creator or marketing influencer whatever and you're getting infinite versions of me that are grounded in my thinking from the book that i wrote and from the online writing i've done and so on and then there are evals against it and ai judges that make sure it stays true to me and it doesn't go over the line i think all three of those things can exist i think they're going to create actually more better content for people.

44:17Alex Schultz: And then people will opt into each bucket based on what they want. I do not think all AI things are going to destroy all human things. I don't think all human things are going to mean that nobody ever uses AI to augment themselves. I think most people are going to end up in the middle and be like, oh, I like a little bit of AI touch up and augmentation, but I love the human element too. And I don't want people to be too precious about it, but it'll be between those three areas and all will continue to exist. All right, RapidVire, what is your favorite way to use AI or best AI tip? Oh, I love OpenClaw.

44:48Alex Schultz: And number one tip, ask your system to tell you every day a suggestion for how you can improve your system.

44:53Jasmine Enberg: What is the most underrated AI use case for marketers?

44:56Alex Schultz: The single most important thing is leverage the AI for ranking and targeting. What is your favorite way to use the meta AI glasses? Phone calls is my favorite. The quality of the noise cancellation is just so good. I love the photos too. Like I was holding my friend's baby the other day and I actually got the cutest picture because I was completely hands free. Like it was lovely.

45:16Jasmine Enberg: Favorite trend or creator on Instagram right now.

45:19Alex Schultz: I'm getting married soon. We're going to get married on a rug and then we're going to keep the rug and take it wherever we go. So we'll have the place we got married with us at all times. And that was an Instagram trend.

45:28Jasmine Enberg: Thank you so much, Alex. This has been such a great conversation. We really appreciate you being here.

45:32Alex Schultz: Thank you for having me. And it's great to see you again. I hope you have an awesome camp.

45:35Jasmine Enberg: Thank you. You too.

46:08Alex Schultz: We'll be right back. Don't wait for the next attack. Secure and accelerate your business at rubric.com. Again, rubric.com.