491: Build Better Ads Using AI with Nick Schakelford of Structured Social

0:00Right now is literally the best time to start an e-commerce business and here's why. In 2018, we created something that was a first of its kind, a comprehensive online course to start and launch your e-commerce business from scratch, and we called it Start and Scale. Now, five years later, this course has helped 25 ,000 founders in 65 different countries kickstart their business ideas, including thousands who have achieved six and seven figure results. Founders like Laurieann Trinh, who use Start and Scale to create a kids apparel brand that celebrates heritage. Or Samantha Brett, who used Start and Scale to build Naked Sundays into Australia's number one SPF skincare brand.

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3:06All right. The man, the myth, the legend, Nick Schack. Welcome to the eCommerce AI Summit. So excited to have you. And yeah, man, you're an absolute legend in the space. You really are one of the best out there and really one of the thought leaders when it comes to paid media, especially for e-commerce. You've taught some incredible programs on the founder platform. It's been amazing to watch your journey. You've shared so much value with our community audience, provide so much value throughout the years, past couple of years especially. And you've also recently launched Brez, which we're going to talk about as well, this incredible CBD drink.

3:51It's a beverage. So first question I ask everyone that comes on is, how did you get your job, aka how'd you find yourself doing the work you're doing today? Yeah, I've actually been reflecting on this because I've had to do a podcast yesterday, and they asked me the same exact question. And this started out of necessity. I'm 33.

4:17I turned quotes because whatever you want to call it work or not work this is my 10th year of doing what i'm doing now you can say i dabbled a couple years before that but this is my my what i call my genius year that i've been doing this for quite a while and i i used to play professional soccer and when i say used to that was like uh the david beckham uh documentary is going live right now and it's been absolutely crazy because part of it he says when he joined the elite galaxy was the year that I missed him. So I was one year after he left us and had that incredible impact on the States, which made my job possible.

4:52What that actually did to me was realize that I'm never going to be good enough. I'm never going to have enough money. And I'm stuck in California where in the States, they don't really care about sports. So I sit here going, what am I going to do? And at the time on a second division, lower level team, even though it's the LA Galaxy, I'm not getting playing time. I was able to get a partnership with a goalkeeping club brand called keep air and it was a dude out of canada his name is dennis his actual name was dennis air and he's like hey trying to sell these gloves and i was like awesome i i'm a little bit younger i could probably figure out how to sell these gloves and we split up a shopify store and the first thing i started to do was to do influencer marketing or trying to sell these these gloves and so for the first two years uh i would say 2014 15 16 first three years or so i was learning Shopify, I was learning how to sell product.

5:41I was learning how to kind of just put it places. And that meant boosting posts at the time. And so I knew, dude, I knew at the time that this was going to be huge. I just didn't know it would be what it is today. Yeah. There you go. Now you've spent hundreds of millions of dollars profitably on Facebook ads, probably more, right? Yeah. And And then you launched Structured, which is an incredible social marketing agency, really focused on paid advertising. But then also you guys do email marketing as well. And what else? You guys do a ton of stuff. Did you see our O2? We had to. I would say, remember when all this drama came out with iOS 17 and people were panicking?

6:24This is right when we launched our partnership together and we made a course that wasn't like hack based and it was lit logical and system based and framework based. And we made a huge bet in it. And I'm thankful for the community that we did today because that still stands the test of time, even though we have updates with Jordan and Phoenix and myself coming in or even live at this point. To me, it was a very interesting time to go get live with the stuff because we do do all the things. But for me specifically, I love the paid area. And it kind of led me to what I'm doing with Breeze because I had to put my money where my mouth was because a lot of times I was like, oh, look, you run an agency, but you're not really running it.

7:02You're not really doing it. People say this shit all the time. So I put my money in and not only did I do it in the area that is the highest regulated space in America and in the world, which is THC and CBD, we did it with beverage. So if you're anybody that talks about how hard it is out there, I promise you, you're not doing it on the level that we're trying to do it at. So I want to jump into that. Let's talk about ads, right? Because since iOS 14 has been, what two years now two two two and a half years almost now so it's been um it's been a wild ride for a lot of founders um what's the state of paid social right now when we're you know doing this summit october mid-october sorry late october yeah for me it's a better spot than it was when we were first ring the doom bells and what i mean on two i mean it on two levels the issue the biggest issue with when the iOS dropped on iOS 14 dropped was the lack of clarity on decision making within the account.

8:01Before you could launch an account, you can make your decisions in Facebook. You didn't need all these tools. And I could see your name, all the tools that people use or need to use to make measurements and judgments. And it kind of just came back to where we are today. Today, when we're recording this, like you mentioned, middle to end of October, there's a lot more clarity and decision-making that we can do within the ad accounts now. And not only that, I think where people don't realize what the changes have been doing is like, how is AI starting to kind of impact? Because that's what this topic is, right?

8:32We're talking about AI, talking about how it could impact e-commerce. If you've been running Facebook ads, if you're just starting with Facebook ads, you are actually running almost exclusively AI style, creative AI style campaigns because it's what Facebook is based upon. Their machine learning and their campaigns, this advantage plus campaign, that's all AI. That's all based upon their audiences and targeting and what they've been doing over the years, which you and I can go here and be like, oh, the good old days, right? If you're just starting or if you're in and out, you don't really get good old days.

9:03You get the good days of right now, which is advantage plus shopping campaigns, advantage plus Facebook shop, even TikTok shop. I know this is AI audience-based and or AI creative changing-based. And that's something that we have to remember. Yeah, it's a good point, right? So you also own like this incredible creative agency where you guys just do creative. I have to ask, like, let's just kick it off. Let's just delve right into this AI stuff. 100%. I know you've got a lot to share, right? So talk to me about creative. What are you guys doing when it comes to high-performing creative using AI and creating it?

9:42Talk us through that. So I'm going to talk about AI in four sections, the way that we look at it across the agency and the team. Because we have anytime 30, 40 brands, sometimes we go out of five or whatever. It's research, copy, creative analysis. Those are the buckets of where AI should be applied specifically to your business. I don't give a shit if you're an agency. I don't give a shit if you're a brand. Those are still the core areas that you need to apply it, right? If you're driving revenue or retaining revenue retention, those are areas. Right now, if you're a brand and I'll speak specifically to ours, Breeze, if you land on our page, drinkfreeze.com, you can't buy it anyway, so it doesn't matter for me talking about it.

10:23If you land on it, you can look at it and be like, that brand leverages AI. That brand's ethos and that brand's style is AI. There's a lot of brands out there that might not be able to use it. You might not be able to leverage any of these tools because that's not the way your brain is coming across. That's not the way that your brain should be established. So if I were to look at constant, which we're talking about where we make our edits, we have a lot of, we don't have, the only AI we have in there is the ability to leverage copy to write better briefs. That's the only AI around the tool because right now there's a lot of people, which you probably know a lot of them like this, they don't necessarily know what they want.

10:59And using Dolly, using Midjourney, using ChatGBT with all the plugins with Canberra, which we'll talk about, if you don't know how to describe what it is that you want, you don't know what you're going to get. And so this is like the funniest topic that I want people to drill on. And I'm sure there's going to be a couple of other panelists and talks around this specifically, but if you don't know the correct prompting or let's say verbal engineering of what you're going to get out, you're not going to get anything. I'm sure you've heard this a couple of times today. Because it's not enough just to just chuck it into chat GPT or whatever, you know, Bard or any of these tools because you just get generic crap.

11:37It's true. And that's why a lot of this iteration comes around. For instance, the number one thing that we use on a daily basis, whether we're using ChatTubeT or Bard, is we 100 % pull all sentiment from ad comments. We export that in CSVs from Amazon reviews. And we're pulling sentiment analysis essentially around it to give us a little bit more prompting on what type of copy we need to be writing towards. So the biggest change for me is the beginning, the research, the customer avatar development of what copy we need to make and for the scripting. Anybody can do that out the gates and I think that saves us a lot of time because why would you go one by one and pull?

12:16Like what we used to talk about was export, go into a word cloud. From the word cloud, go into pull on big commonly used words. You don't need to do that time. ChatGPT or even Bart will do that for you specifically. Now, hey, FounderFam, I want to talk to you about something super exciting. We're officially partnered with OmniSend, the email marketing and SMS platform built specifically for e-commerce founders. We've been recommending OmniSend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling the seven figures, it really helps you automate your marketing and get real results.

12:52Did you know on average OmniSend customers make$68 for every$1 they spend, which is an insanely good return on investment. And because you're part of the founder community, you get 50 % off your first three months with the code founder50. Just head to OmniSend.com forward slash founder without the E to get started. All right, now let's jump back into the show. the things that i see converting specifics we're october we're getting ready for black friday cyber monday the the easiest way that i can see major wins around the creative space using ai is when you have the chat gbt and canva relationship so chat gbt allowed the integration with canva specifically and if you ask a lot of these smaller teams or even just the ones that want to get a test a little bit quicker that ability to get a couple of these templates up and live through simple, simple prompting, because they already have the templates on Canva.

13:47You give a little bit of a background or explanation of what you're trying to do on chat GBT, and you'll be able to get something worth getting live. And that phrase that I just said is extremely important, dude, because a lot of us spend so much time trying to create the perfect creative or trying to get like a AI influencer to wear our product. And it just looks too overproduced. And if you go from a world, which we just came from, Nate, there's like people say like make really ugly ads that have a lot of humans a lot of ugc a lot of rawness and all of a sudden on this end you have like a highly overproduced ai creative it doesn't vibe unless that's your style unless that's your brand and it gets me every time so like for instance i wrote down a really really seamless uh way that we use it so and i'll i should probably send it to you guys after just so that you can drop it into uh with this is something that we did not make, but it's something that we believe is really, really powerful.

14:41There's a team called NoCommerce. They do post-purchase surveys and we're like, Hey, I'm trying to do sentiment analysis, but I'm also trying to make sure it's relevant. I don't want to just be looking up random comments or looking at Amazon reviews. And so after the purchase comes and a lot of this comes back to tracking, where did you hear about us? How did you know about us? What did you buy? And so no, it does post-purchase. What they're able to do is export all of this and instantly send it right into chat GPT for you to get a little bit more prompts for you to make iterations on your ads.

15:12And they have like this whole walkthrough, which I think is fantastic that we use on a day-to-day basis. I have it right here. I'll make sure I send it to you and your team. Awesome. Okay. So you guys, in terms of creative, you're using it big on the research, constant, a lot on the briefs. What are you doing on the, and using it for the, you're not using it for the scripting or if it's a song written ad or, yeah. The scripting, there's a tool that we would do called Runway. So Runway is called, Runway is text to video creative specifically. So what we would be using this for is we're having our creative strategists, that's a real role.

15:51That's a role that everybody should be doing. If not, if you ever heard about it, I'm sorry, you're a little bit late, but it's just their only role is just talking about creative and copy. And so they would just export the script instead of hiring a creator to create it, upload into Runway, Runway would prompt just images or just a seamless piece of creative that's 100 % word prompt. That would be the extent of going a little bit over the deep end of leveraging copy to kind of create some of these prompts. Because if we played with it, I would say, and I ran a poll today, there's a lot of people that are using AI at 60 to 70 % of the work, but they're really having to spend that remaining part of fine tuning it and making it exactly to their brand.

16:33I think you would agree with this. A lot of people feel this way. Yeah. A hundred percent. What about mid journey, man? Well, I do believe in mid journey, but it has to be, again, it has to be towards the specific brand. So our designers love mid journey and they love that. I would say they were on the dolly side of things, but as soon as mid journey was able to kind of create, not as, how would you say this? You're going to lose a little bit less fingers in, in mid journey. Like they're going to give you all of them rather than some of these dolly dolly creations. And it It looks a little bit questionable, but it's so polished.

17:03And when you get these pieces back, it's, again, if you don't, if you aren't that type of brand, which I'll send you like two or three of our ads of like purely AI Dolly based and one is pure mid journey, it blows your mind. Yeah. Crazy. And then, okay. And then Canva and ChatGPT, what exactly? So this specifically, we do a lot of our initial creative testing in Canva, meaning it's going to give you a couple of templates of whether you drag and drop images or drag and drop existing videos and they'll do the correct text overlay at the right time or they'll do a split screen of the type of videos where there's a lot of creative right now and i'll just mimic it where you have the tiktok girl speaking and she's pointing and there's like a script that's coming down or video like a video this is a canva prompt and this is a canva template that you can upload existing pieces of creative and it'll pull the full transcripts for you and it'll do it again and multiple variations with various borders.

17:59That is what we do so often, especially as we're uploading product imagery or product photography, that having different backgrounds or different placements, it does really well as we have the automatic Shopify AI tools that just changes the background very simply. Or if we're using a dynamic product ad on Facebook or Meta specifically, we'll be able to change it and it looks a little bit more polished in the actual Facebook shop itself. So that is an area that we leverage and whether you call it AI or whether you call that just a natural image enhancement, it just looks a lot better. Yeah. Interesting.

18:35That's cool. And then what stories you got or anything around like highest performing is, have you created some creative using like any other tools that have just really just, you've been surprised around how they've converted or is it more just to get to 60 to 70 %? Do you know I would actually be more confident in uncovering what was working, whether it's AI, because we still are primarily, we're still primarily image based on a lot of what's working today. And we do have a lot of UGC, so it's not heavy AI based, but I would say the voiceovers has been something that's been so crazy for us. So this is out of the team, I think they're called 11.

19:17And they do a lot of different voiceovers. So what we're able to do, especially when we're doing international to regional, we're having a Texas accent over a piece of creative. And then we're having just a regular California accent or New York accent. And if we have a demographic that we're selling to, specifically for breeze, we sell into 33 states that allow us to sell THC cannabis into their state. well if you're trying to make a point come across and myself as a californian or my co-founder aaron as a floridian we don't sound like texas and we don't sound like new york that's for sure and so having the voiceovers and us completely changing how we sound has been something that we did not anticipate to do as well as it did yeah wow interesting um let's kind of switch gears you've shared some very cool stuff on creative.

20:05What about like campaigns set up? You're all about making good decisions, data analysis, like you're big on that stuff, man, and the unit economic side. How are you using AI from that perspective? So there's been a couple, and this is kind of like more macro business trends. I think if you were to ask me not to stay AI based, but I think next year what we'll see in 2024, okay, 2020, 2021, how do you scale and move as fast as you can? 2022, 2023, what's happening, like economic, what's happening in the world, macro, why? 2024 is going to, we kind of took our medicine in 2022 and 2023. 2024 is going to be a really, really close relationship to making sure you make economics and contribution margin and And the ability to run a successful business is really going to happen.

20:57Now, before you scale to the moon, that's a very generalized term, but you didn't have to care as much because cash was cheap. You can get a lot of loans. And I'm speaking from someone who has three personal loans out right now across various businesses. It is very scary to kind of grow your own business. So for 2024, we're trying to understand and predict forecasts, and we're using two tools around this. So one, we have Lifetimely. It's probably the cheapest tool out there that are able to measure it. And I'm not too sure if they're doing forecasting or some AI on the forecasting because I would still think we'd have to kind of check our own data around this specifically.

21:33But what we're able to do is pull a little bit more analysis. And there's an easy little like hookup that we're doing just to analyze Facebook ads. Some of these tools already do it, but what we're doing specifically is we use ChatGPT and plug it in with Notable. Notable is a downloadable, a note, like a note taking, an exporting of just CSVs and files. And then I'm just having a straight conversation within chat GPT and pulling what is a correlation between my purchases and in the various regions. Why this is important to me specifically is because next year I need to go into retail. If I'm able to export my information from Shopify, export my information from Facebook specifically, and this is nothing fancy.

22:15This is literally to hit CSV export, uploading it through notable and having chat GPT and me just having a real conversation like you and I are having. And I'm asking, and this is something that we did literally yesterday. I need to understand if we have true sell-through and high LTV, meaning people buying us consistently in Florida, in California, and in Oregon. I need to know if I can sell through there because what I'm going to do is I'm going to go to the dispensaries. I'm going to ask like, look, I'm already selling in your area. Here's what's going to be really powerful to you. Now, if I would have had to do this before, I would have had to build all these templates.

22:51I would have had to build a bunch of things that would not have made sense. Now we're just having conversations with the data and we're building our own stories. And before you'd had to pay a data scientist how much to pull this from you as a consultant basis. Hey guys, I hope you're enjoying this episode and learning a ton. As you know, in this series, we interview some of the greatest founders of our generation to find out how they did it. However, if you're thinking of starting your own business and you want to hear from some incredible stories from everyday people like you or I who are actually in the trenches, only been building their business for maybe one year or two years, like they're building right now and they're really in the early stages, but they're getting success.

23:32You should come and check out our new podcast from Zero to Founder hosted by our community manager, Molly Flynn. These are in the trenches stories from our very own successful students that have gone through some of our programs. People just like you who are deep within the process of building their very own successful business. These are the founders of tomorrow. You can find the From Zero to Founder podcast on all platforms. And remember, it's founder without the E. All right, now let's jump in the show. A lot of e-com founders I've noticed, You talk about the 2020 to 2021 going to the moon, then 2022, it's been, 2023, it's been a bit rocky and it's more competitive than ever.

24:19One thing that I noticed from all of my successful e-com founder friends and buddies is the ones that didn't get hit as hard or were in retail or were doing wholesale. Have you noticed that too? Like you can't just be straight D to C. You need a combination of retail and D to C. Well, this has been an eye-opening thing for me because I've never been able to have, I never had to think about it. I never had to think about retail because I was never on that side. But now being on the side, it took me, I didn't know about what fare was until earlier this year. Fare is like a wholesale sell it to boutique shops left around.

24:58I didn't even know this was a thing. And so my missus comes home and she was like, oh, I've been buying small orders from Kitsch or some of these other brands. And I was like, this is a thing? Like, this is how people are surviving. You're absolutely correct. And it's understanding that, look, I might not get a lot of my data or information from these wholesale partners, but that's going to be a consistent check that I'm going to get. And I'm going to leverage our skills, our unique advantage of digital to encourage sell-through. There was a crazy story of some great friends of ours. They sell women's collagen.

25:28They're called MyAvi. And they were able to use a tool called AISLE, A-I-S-L-E, kind of like I'm walking down an aisle. And they're able to incentivize their customers in regions as they get sell through in Walmart, they get sell through in GNC. They're able to be like, hey, download aisle, get this coupon, scan this coupon when you get there, upload it onto our portfolio, our app, and then we'll be able to give you dollars back. That's a full digital experience with them making a purchase in store. And I almost lost my mind. Wow. That's crazy. Yeah, those guys from Ivy, they're really cool how they're building in public.

26:06Is that like, and I know you're building in public too. They're doing an amazing job. So are you. It's really fascinating, all their stuff on Twitter. I love following them. Well, you have to think about this right now. Like before you, and we get a lot of criticism for like, yo, you're showing all your numbers. I'm like, go try, just try and do what we're doing. Like, just please go at it. Like we launched, um, you know, on updated, we launched on four 20 on a traditional four 20, like all stuff, like all good stoners. Um, and if I check Shopify right now, we got hit with, we're currently, we're sitting on pre-orders, which if anybody has any understanding pre-orders ruins conversion rate running through today.