Bonus: Alex Schultz, CMO of Meta — Scaling Growth and Rebranding a Trillion-Dollar Brand

0:00Alex Schultz:20 years ago, Creative was where the agencies make their money. Now the media buying is where they make their money. Probably that is going to change. Like I use automated ad campaigns myself now when I buy on Google and on Meta's properties. What's Creative is what data we feed to the automated ad campaigns. My first conversation with Mark, I said, look, the Facebook company brand is really confusing. People don't know if we mean the company or we mean the ad. And after a few months, Mark phoned me. I was in the shower and he starts saying, yeah, I think we should rebrand the company. Do you think you can do it in seven months?

0:34Alex Schultz:I've never done this before. So I say, yes, of course I can. And then I go and talk to my team who are like, you have lost your mind.

0:50Hello and welcome to the D2C podcast. Today, we have a very special guest here, Mr. Alex Schultz, CMO of Meta, the platform that all of a lot of what I've kind of built my career on has been based on. And you have been there since 2007, growing the world's most revolutionary social network, ad platform, all of it. Welcome to the DTC podcast, Alex. How you doing?

1:14Alex Schultz:I am good. I'm sweltering in the middle of the British night, which is not what none normally says. Yeah, you don't hear that. But it's good to get the good weather in while you can. And so you've written a book, which I'm really excited to dive into, because it's funny, the agency that I'm based on has Confessions of an Adman. We have David Ogilvie's book on our front table for people to come in and peruse. It's sort of a bit of a business Bible. And I've kind of seen your book positioned as sort of, you know, potentially an update for the digital age, which would be amazing. That would be really nice.

1:47That would be really nice. That would be, yeah. Hey, we'll talk in 50 years and we'll see if...

1:52Alex Schultz:We're still around the singularity game. Yeah, that's right. Oh, we'll get into that too. But maybe just walk me through a little bit of your history at Meta, because you've been there for almost 20 years now. Yeah. So, I mean, I started my career in online marketing as an affiliate. Yeah, me too. That's where I came from as well. As did Daniel Ek, by the way. Daniel Ek was an affiliate marketer before everything happened for him. Yeah. So, I started as an affiliate marketer, was an affiliate for eBay, joined eBay to do affiliates in-house, moved to the States with eBay, paid search affiliates, all that stuff.

2:23Alex Schultz:And then I joined Facebook as it was in 2007. I was given a job offer in 2006, but I didn't have a visa. I was on a L1A visa, so I couldn't transfer. So yes, I joined Facebook in 2007, the week after we launched the self-service ad platform. So I joined the week after Pages launched in the week after self-service ads and beacon and my first job was grow our small business community and grow the people buying self-service ads and i did that for like a long time and actually that's still part of my job today so that bit grow self-service small business organic use of facebook has been part of my job the whole time i've been at meta and then i layered other stuff on.

3:08Alex Schultz:So my friend Naomi, who's now VP of product, she's amazing, runs like 10 ,000 people. She's brilliant. She was doing SEO. And we just launched in September before I joined in November, they'd launched public profiles for indexing on search. And they weren't ranking and they thought, oh, it's because Google hates us. And actually, it was because it was six clicks before you could find a non Facebook employee when you were at the site indexed. And so I just gave them some SEO advice. And that took me from doing advertiser growth to helping user growth. And that was where my whole career took off at Facebook Meta.

3:44Alex Schultz:And yeah, like I joined the user growth team when they started it. I did more than SEO. I did things like on-site merchandising to get people to import contacts, paid search. I launched an affiliate program for a while, which I thought was silly. Email, lots of email marketing, which today is push notifications and SMS as well as email, but it's all the same thing and I've just gradually been doing more and more of that around 2012 we we obviously um IPO'd and everyone said oh Facebook missed mobile but the weird thing was for users we had the users were active on mobile we didn't have ads and so Mark asked the growth team well how did you guys know to optimize to get users to register and use Facebook on mobile and we said well it's analytics we had the data we saw they were trying to so we we got out of their way we did conversion rate optimization we made sure they could register and so he then said go build an analytics team for the whole organization so my boss Javi and I set up the analytics function for for Facebook we recruited this guy Ken Rudin who's great and we built out the analytics team a few years later it came and reported to me directly and basically ever since then I've done some I've done direct response marketing and analytics and five years ago, our CMO at the time, Antonio Lutio, left, great guy, one of the legends of modern day creative advertising, and he suggested to Zak, well, you've tried a classic product marketer with Gary Briggs.

5:10Alex Schultz:You've tried a classic brand marketer with me. Why don't you try a classic direct response guy with Alex and see what happens if you make him CMO? And I've been doing that ever since. So that's my very jobs at Meta. I love to hear it as a former reformed affiliate, uh, came coming up in those early days of sort of aggressive directors, not aggressive, but direct response marketing, where in order for us to get paid, we have to create funnel congruency. We have to, you know, we have to change the color of the buttons. We have to change the headline. We have to optimize for performance. And so I love to hear other affiliates who've gone on to such amazing things.

5:45What do you think it is about the affiliate mindset that has served you best in your career?

5:50Alex Schultz:Oh, I mean, I, this, I actually go into in the book, like I think for me I had to pay for college as an affiliate like I was in a place where you know I'm very lucky I had great parents they looked after me but dad lost his job and like we didn't have as much money and so I was like I have to pay for college myself and so affiliates was driven out of need and I really learned how to do online marketing and instead of you know just having vanity metrics they weren't vanity metrics it was a question of me actually paying for my life and the lifestyle I wanted to live in to actually do the marketing and I think that is the thing that makes like Daniel has this guy Shaq who's a really amazing guy Shaquille Khan he was um a Viagra affiliate back in the days when I met him which now is very mainstream with hymns and everything but back then was a bit more dodgy and like those guys are just like they know what drives results because it was how they put food on the table.

6:50Alex Schultz:And so whenever you bump into someone who's lived in the world of affiliates and was an affiliate, and it was actually their income, like they know online marketing naturally in a way that someone who's just come to it as a profession doesn't know it. There's nowhere to hide. Yeah. Well, you also know about net 90 payment terms. Yes. Which was my big mistake. I was minting money because eBay let you buy, My keyword eBay was allowed to be bought and nobody was doing day parting back in 2004 or whatever. So I'd buy it in the middle of the night. So the conversion rates were astounding. But then I had to wait to get my credit card paid off by getting the check from Commission Junction.

7:29Alex Schultz:And so I ended up in this place where I had this massive ROI, but I only had£2 ,000 every three months to spend on it. I haven't heard Commission Junction in a while. My very first event I ever went to was a Commission Junction event in San Diego. And it was a magical entree to this wonderful industry that has been ever since. So you have been in charge of the marketing of so many key products within the Meta ecosystem. Can you give me any anecdotes of sort of like strategy that kind of went into one of these launches that you're maybe particularly proud of that might be reflected in your book?

8:03Alex Schultz:The big one I'm most proud of because it made my career take off at Meta was the self-service advertising platform. what happened was the company thought we'd get all of our users for the self-service advertising platform through buying paid ads um and so i was put in charge of paid search and and our own buying on on facebook where where were you buying ads before facebook paid search google google that's right yeah we found every keyword that google bought to acquire advertisers and we bought all of those keywords smart but what was amazing was like they didn't have they didn't have conversion tracking.

8:39Alex Schultz:They literally were buying all this paid search. At that time, it was like 10 million a year, which was huge for Facebook. And they had no conversion tracking. So I just put in conversion tracking. And that meant that we suddenly were able to rebalance and get loads more ROI. I then started tracking what was happening on the site. We created custom audiences. So you know, now everyone uses custom audiences. The first custom audiences were built by this guy, Danny Ferrante, core data scientist who was working with me. Brilliant man, still works, still works for me today. He built the first custom audiences so we could target small businesses on Facebook and encourage them to buy ads and do funnel drop-offs.

9:17Alex Schultz:So did they enter the funnel and start to buy an ad, but not convert? And so we'd like, we built custom audiences for that purpose, like fundamentally to grow that. And that became a big product down the line. It's very meta. Yes. And then the last thing we did during this period, and I had to do it in this sequence because nobody believed me. So I started by showing I could make the search better. Then I showed I could make the Facebook ads buying to get Facebook advertisers better. And then the last thing we did was we looked at the traffic that was coming from onsite linking. And so I go into this in the book a lot because in the end, if you've got a product, you want to promote to your own customers to buy more, to shop the shop, to do things.

10:01Alex Schultz:And so putting the right link at the right time in front of the person is really important. with the right wording. So we did have a fun thing where we found out create an ad was way better than the phrase advertise. But yeah, so putting links in the interface when you as a small business are thinking about buying an ad is way more important than putting them on the homepage in front of the same customer. And so that process of like, okay, so I can do search, so I can do Facebook ads, and now they'll let me play with the product, which is actually the big thing that drove growth, that I'm really proud of because it was a it was a way in and it was the way I broke through so that meta does direct response marketing fully integrated with the product teams it isn't siloed literally eating your own dog food and building the business on the tools that you're building and also changing the tools I mean that's the one thing I can do is I can add a link in Facebook which is important hugely important super cool you're also there for the rebrand That was, that one came out as someone, as an observer, that one came out of left field.

11:04And it's just, it's happened, it happened so seamlessly. I think some, I think some people still call it, say Facebook. But talk a little bit about that decision and the fallout from having to rebrand this icon.

11:17Alex Schultz:Well, sometimes I still say Facebook, so I can forgive people. I think when people, when people deliberately say Facebook, I'm like, come on, it's not like Alphabet. This is a user facing brand. We have products that are called meta products. So yeah, so when I took over as CMO, my first conversation with Mark, I said, look, the Facebook company brand is really confusing. When we say Facebook, people don't know if we mean the company or we mean the app. Not only is it very confusing, it blocks people understanding that as a company, we do more than just Facebook the app. So we need to get away from it.

11:54Alex Schultz:And I was thinking something like BMW Group as opposed to BMW, you know, like Facebook group or FB Inc or something that like put us in a gap. And after a few months, Mark, I think it was only a few months, Mark phoned me. I was in the shower and my phone starts going off. It was actually a text messaging. It was WhatsApp. And he starts saying, yeah, I think we should rebrand the company. Do you think you can do it in seven months? And obviously, I've never done this before. so I say yes of course I can and then I go and talk to my team who are like you have lost your mind rebrand a trillion dollar company in seven months that's never been done but we pulled together a really great team uh David Droger externally was really important um this chap Andrew Sturk who now does brand Anthropic absolute genius he was super important uh there was this lady Mayumi uh she was she project managed the whole thing these were brilliant people We got this tight gang together and I rebranded it from this house in Norfolk during the pandemic.

12:55Alex Schultz:I was in this house. My favorite moment in the whole thing was there was this one small group meeting. Mark's staff is called a small group where I've just bought this house and I've just got a new great and I'm setting up a fire for the first time. And I'm like, I'm not involved in small group. I'm going to sit on my laptop and I'm going to make this fire work. and I got the fire started and then I said to I said and then Mark said Alex could you give us an update on the rebrand and I messaged my friends Naomi and Javi and I'm like guys I've just started a fire and Javi replied very kindly he's like no Alex you didn't start the fire Mark started the fire he's pushing to do this it's an important change for the company I'm like no no no no no I've literally just started a fire that's hilarious so it was uh but it was I mean it was it was it achieved what we wanted, which was it gave separation for the company from the apps.

13:46Alex Schultz:And it allowed us to say that the company did more than just legacy social media. It does a lot more. And those two things, you couldn't have Oakley Facebook glasses. That wouldn't make sense. Or Ray-Ban Facebook glasses. But Ray-Ban Metas makes sense. Meta AI makes sense. If you're sticking Facebook AI in WhatsApp, that doesn't make sense. So I'm really proud of what we've opened up with the word meta. One of my pet topics on this podcast has been top of funnel advertising and really thinking about how to establish brands in the world and whether that can be done through just through direct marketing enough, you know, good storytelling through direct marketing, what role, you know, brand elevation and different brand executions kind of come into that in into, you know, the e-commerce world.

14:33I'm curious about your thoughts about brand establishment. at this point, can it all be done on self-serve meta platforms? Or do you need to be thinking about other even non-meta top of funnel exercises to grow a brand?

14:46Alex Schultz:So look, my perspective on this is the top of funnel performs. The problem is you've got idiots out there who track everything on last click. And they don't actually do incrementality analysis. And that I think actually, if you go back to the Ogilvy book, Ogilvy on advertising, not Confessions of a Hat Man, he has a useful idiot in it. And I think for me, the useful idea is someone who just does post-click tracking. Like, of course, you can build a brand on Facebook. Of course, you can build a brand on Instagram. Of course, you can on Google. Of course, you can on TikTok. 100%. We have countries around the world, like Indonesia, where we've never spent a penny on brand marketing.

15:24Alex Schultz:And we have an incredible brand. But we have spent a lot of money on direct response. So 100 % you can build just on direct response. but that doesn't mean that you can't do performant top of funnel marketing like in traditional ways too you just have to measure it right just have to understand it so for example in the us for whatsapp it's much harder everyone's using iMessage so in a world where everyone's using iMessage i can't just win with a direct response marketing campaign i have to pair it with a top of funnel brand marketing campaign because people aren't aware of whatsapp when they're aware of it they're like, I've already got a messaging app.

16:02Alex Schultz:What are the properties of this that are going to get me over the hump? And actually, like, if you're in this totally competitive dynamic against someone like Apple, you need to buy some traditional media as well as some direct response media. If you're starting in a greenfield site, like Indonesia 10 years ago, growing Facebook and Instagram, you don't need to do top of funnel brand marketing. You can really just concentrate on direct response. I think that's a great answer. I was actually reading or watching your interview that you did at Can Lions this year, sort of about the role of WhatsApp and the content that you actually created for WhatsApp being about, I think it was Afghani women, essentially being able to communicate about something that had to be private.

16:42And I actually hadn't thought of WhatsApp as like an encrypted privacy app as much. I just thought about it as another messaging app. But it's cool to hear you guys, you know, met a storytell about the importance of privacy in certain situations, right?

16:56Alex Schultz:Yeah, it's totally broken through. In the US now, and it is down to our brand marketing, we track this very closely. I mean, I've got this guy, Tom Tang, Tom Two Brains Tang, T2D2, a PhD from Beijing and a PhD from MIT. This guy's brilliant. Don't want to meet him on a poker table. Yeah, no, no, no. But no, no, Tom Tang is absolutely incredible. And he was my mentor at eBay and then he ran analytics for Walmart for their marketing team. And now he sort of works for me now. And he's doing an incredible job. And when we look at what we've done on WhatsApp, we've been able to show with test and control groups, geographic match markets, and then also on a pre-post basis as well, that we have directly moved WhatsApp up so that in the United States, for people aware of WhatsApp and iMessage, WhatsApp is the leading, most private messaging app.

17:42Alex Schultz:And that has been 100 % driven by marketing. Things like the Afghani girls in the soccer team, right the way through to, we did this really interesting app with Modern Family last year that came across very well. And a Super Bowl ad. Yeah, the Super Bowl ad was for meta glasses, though. How did the CPMs work out on that? You know what? The CPMs were great. We just spent an awful lot on the creative. So actually, like, for that ad, the guy shooting it was Matthew Vaughn. Kingsman. Yeah, and for me, Layer Cake, my favorite movie of all time. Oh, what a great movie. Such a great movie. And there's a sequel book to it as well, which you should buy after you buy my book.

18:20Alex Schultz:um yeah chris jenner chris hemsworth chris pratt it was very expensive to film but the actual cost of the the cost of the ad didn't work out as that much and i can prove to you that that gave us a one-third uptick in our total sales of um the ray-ban metaglasses these are the oakley metas what is true though is it wasn't actually necessarily the super bowl media so we got a lot of, we got a lot of influencer coverage from the three main stars. They have huge followings on social media. So they just posted the ad and it went really, really well and went viral. We used it as a moment for us to actually promote in our own product.

18:59Alex Schultz:We used it as a forcing function in the moment of the Super Bowl to promote in our own product that we have these glasses. We took influencers to the Super Bowl who posted about it as well. So it wasn't just, oh, there's these two slots in the Super Bowl. It was all of that around. And then we used the creative consistently for the next four or five months. We didn't like change the creative at all. And so there was this drumbeat of the creative too. So it was a real step up. It was totally visible. And then it's been an angle change since then. I love that. The word that we're talking about all the time this year at Pilot House and on the podcast is strategy.

19:35And just about how all of these tactical things you can do are meaningless if they're not knitted together with a strategy that thinks about the entire campaign and what you actually want people to do and think about.

19:50Alex Schultz:Yeah. I mean, honestly, in classic marketing, they call it the brief, right? But yeah, you just, yes. I feel like I don't have to say them just yes. Let's talk about click here. So you've got 20 years plus in the trenches, growing a trillion dollar brand, as you say. Why did you decide to right-click here and what's its main thesis? Yeah, look, I mean, I decided to right-click here because I felt that there was a gap in the market. What's good is the publisher, Hachette, who do, for what it's worth, they publish the publishing house that owns the group that publishes Ogilvy. So Hachette felt there was a gap in the market as well.

20:28Alex Schultz:there's been no major marketing book that addresses the channels and how to use them for the last 40 years and a hundred years ago there was claudsey hopkins scientific advertising lots of it still rather than today then there was rossa reeve's reality and advertising and then ogilvy uh confessions of an ad man and ogilvy on advertising and so there's a gap i don't have a book to recommend to my friends and so what i wanted to do was go out and write the modern ogilvy on advertising, which is really aggressive. And I feel slightly ashamed as a British person to say that, but that is what I tried to do.

20:59Alex Schultz:Aim big. And I'm really, really proud of it, honestly. Like the goal of it is to help people be really good at online marketing, whether you're starting out or whether you're a veteran, whether you're a business leader who wants to use these tools, but isn't a marketer, but has a company and whether small or large and wants to use it. There are examples throughout the book that work for all of those different people. The core theses are principles of timeless channels change. Like what you learn on snail mail is the same as you're going to use an AI. It really is like a postcard through the mail is the same as a chat with an AI agent.

21:31Alex Schultz:It's just the turnaround time is quicker. It's very, very similar. And there is a thread through history of like snail mail, email, SMS, push notifications, AI chatbots. It's a continuum. So that's that's point one, number one, number one. And point number two is incrementality is everything. You've got all of these people who, not to be rude, but Ogilvy has an idiot in his book. I will say I've got an idiot too. It's someone who uses post-click tracking as the way they measure results. You've got to do holdouts. You've got to do on-off tests. You can't use the same tools. Social media is great at being able to do lift studies.

22:05Alex Schultz:We offer them Snap, TikTok, all the other ones do. Search, you can't do lift studies, so you have to do match markets. You have to do on-off. You have to do all these things. But really, don't use post-click tracking. do incrementality measurement, which your customers for your blog, your listeners for your podcast understand well. I think you're probably preaching to the choir, but it never hurts to hear. I think that's been the main, like the channels change, you know, but the strategy can be timeless. I think it is the analytics side of things that's probably updated the most since the time of Ogilvy, I guess, right?

22:39Where I guess they were still doing basic holdouts and they were doing, you know, but But I think that, you know what I mean? I think that analytics piece is the big evolution.

22:49Alex Schultz:See, I think the tools are, but the underlying isn't. You go back to the Wanamaker quote that everyone knows, half my advertising is wasted. I don't know which half. That's because he knew on incrementality. That's because he was actually doing holdouts. You look at Claude C. Hopkins, Scientific Advertising. The book is over 100 years old, and it went with that title. They have holdout testing. Now, we would say a bunch of the stuff they said in here is not well done. It's not particularly competent. That's because we have a century of learning behind us. But I think like, actually, it's very much the same job.