The Evolution of Marketing and the Power of Social Media

0:00Do you know what my thesis is built on? 1950s and 60s marketing. The biggest brands in the world ran a lot of newspaper locally and the creative in the newspaper was contextual to the market they were running the newspaper for. And then they would run a national campaign based on what they were doing in the newspapers. All I'm doing is treating social media like local newspapers and like local radio, but I have better data than they did back then, which then makes our campaign work much stronger because we've mitigated the risk because we've gotten a consumer affirmation. And in the last three years, social media has gotten such strong algorithms because of TikTok, now everyone, that I have really clean data.

0:35I think there's a lot of great things about the ad world, but I think the elephant in the room is a list of things. One, I think creative's too expensive. I also think the process of getting, I believe that creativity and the idea is the variable of success. Yeah. I believe the process of getting to that idea is vulnerable in a 2023 world. Yeah. I think we continue in ad land to act as if the internet doesn't exist. And so I think there are brilliant strategists. I think there are brilliant creatives in all these wonderful shops. I just don't feel comfortable being at the mercy of their subjective opinion.

1:19And so for me, social is important because A, it has an incredible amount of the consumer's attention. but more importantly, it's a place to extract consumer insights and get consumer affirmation that can mitigate the risk of the creative campaigns. Okay. And you say the ad industry creativity is way too expensive right now. Why do brands still pay for those amounts? They do the math. They see what the effect is. They've started to not. But over the last seven years, brands have taken more in-house work than we've seen in 100 years. That's because it's too expensive. We've seen companies started by a wine retailer go from zero to 1 ,500 employees and hundreds of millions of dollars in revenue.

2:13The answer is to your question directly is because they all look the same, so they had no alternatives. But over the last seven years, the amount of revenue shifting to companies that look more like mine and the in-housing is the response. Yeah, so they're reacting already and. How about all the money they spend on influencers that give them creative? Yeah. This is what I've been trying to help some of my agency. You know, I have many friends who own creative agencies who see the world very differently than me, which I respect. Yeah. For the people that read this beautiful magazine and like the far majority of them do not see the world the way I do.

2:50Yeah, perfect. I respect that. I don't see that as a bad thing. The thing that I rely on is the truth of the results in business will dictate the outcome. I also look at history. When the television was invented, the agencies that were doing copy for radio held on for dear life. They used to shit on television like you can't imagine. The problem was the television was going to defeat the radio. The problem today for the ad industry is that television is evolving into the internet. Streaming and connected TV is more like social media than it is television. And so this is going to play out, whether I disappear tomorrow or not.

3:36And so for me, I just have a passion to try to help the creative agencies that maybe don't like what I say to survive. And so they have to have this conversation. making a 30 second video that costs millions of dollars of retainer to come up with the idea and then hundreds of thousands if not millions of dollars to produce and then millions of dollars to distribute in 2023 is crazy. Yeah. But you know the arguments that are used like well you have to have a big audience you need to I agree for that. But television has a big audience It builds trust the internet is not building trust. Yeah. I think that's cute to be direct.

4:23First, I agree with big audience. If I thought television commercials had big audience, I would make all of them. When people say that television has audience, I agree, television shows. GRPs are a fake number. They're potential reach. They're not actualized reach. No, that's fine. The end. I know that when I A, B test, full-pledged social brand building and sales and full-pledged television, and I have clients doing both. We do plenty of television. One thing that your readers would be stunned by is VaynerMedia, as a creative AOR, has done more Super Bowl commercials than any creative agency in America over the last four years.

5:06Now, I believe in the Super Bowl commercial because people do watch. In America, the Super Bowl commercial is watched as much as the game. Every other commercial's not watched at all. Of course many of them are seen, but it's too expensive against the actualized reach versus the potential reach. So my argument to my arguments is television commercials do not have a large audience. Okay. They have a very expensive medium-sized audience. Yeah. And that there are other places like social media that have large audiences. if you spent the same$4 million in creative and production and$7,$10 million in media and spent that$15 in just social in brand building, you would become big like all the brands that became big in the last 10 years.

5:52Yeah. And it's a real strange economic around television. The less GRPs you have, the expensive for TV ads get. Go figure. Yeah, how come? Because they want money. Yeah. Because the distributors and the agencies are taking the money from the brands. Yeah. I don't know what else to tell you. I do not believe that media publications or the agencies have the same aligned interests as the brand. I do not believe that. Yeah. Who's to blame for that? The brands themselves? Yeah. If you write a check for something bad, it's your fault. Yeah. I don't blame the agencies. Publicis is a publicly traded company.

6:33How many comes to, these are publicly traded companies. They are supposed to care about their shareholder value. Of course they're gonna sell programmatic and television. There's more margin in it. Yeah. If I did that, I'd be closer to buying the New York Jets. But I can't do that because it's not gonna end up being historically correct. And I have a very long-term vision. If I was the CEO of a holding company, I would sell that too. If I had to worry about my stock price every 90 days, I would worry about my margin too. Right now I have the luxury of not worrying about my margin. I have the luxury of growth.

7:08And what I need to trade on is truth. Yeah. How much expensive or how much cheaper, the other way around, is a bottom-up social campaign, start a campaign compared to... Here's where I tend to get people's attention. It can be just as bad as traditional. Okay. This is the important part. Do I believe the opportunity is greater against the cost in social than traditional? Yes. However, 99 % of the people that are going to read this article are currently wasting all their money on social. Because if you don't know how to do it properly, a football. How much is a football worth to Messi? Billions.

7:56How much is a football worth to me? I don't know how to use the football. Yeah. Just because, so to me, this is where the conversation becomes more complex. I don't believe in digital over traditional. I believe in underpriced attention and understanding how to fill the attention with the context of the creative that is required for the attention to create the action. So I'm willing to buy outdoor billboards when it's remnant for one month on an 80 % discount because they're waiting for the next buyer for a year. and I'll buy outdoor. I'll buy television if I think the price is right. I think Super Bowl's underpriced at$7 million for the spot.

8:37I believe it is underpriced. The most scaled underpriced attention in the world today is on the 10 apps on the iPhone and the Android. Facebook, Instagram, TikTok, LinkedIn, YouTube. That is where the highest potential for actualized consumption against the cost exists. However, if you do not know how to media plan for it, if you do not know how to do creative for it, I watch all of our clients before they become our clients waste tons of money in social. In house, they just think the kids are gonna know what to do. External small agencies, they wanted to go small because they thought it would be better but they're not sophisticated.

9:20Creative AORs that are only actually focused on television so quietly they're charging you a million dollars a year to do social but it's really just matching luggage from the campaign up here. So I would argue people waste as much money on social media as they do on television. It's the opportunity if you did them all perfect, which one would extract the most brand that I argue that would happen in social more than television in 2023. And is it because you have more possibilities to know your audience on social media? Is that a great advantage? The great, very smart observation. The great advantage of social is you can win on relevance at scale and most of the brands that we're talking about have awareness, but they're not winning on relevance.

10:02And when you're making one video for 30 seconds, you can't make it relevant to everyone. By nature, it needs to be vanilla because you're trying to make it work for everyone. The problem is when you try to make something work for everyone, you make it work for no one. So what social allows is for consumer segmentation and demand spaces to be greater because you're doing a higher volume of creative and ads, which allows you to then have, it means something. You and I have different interests. We need to see something different from Coca-Cola for us to buy it. If we both see the same vanilla, it's probably not gonna work for either of us.

10:39If we both see something that hits our interests, it gives us a chance to consider it. What people don't understand about social is it's not test and learn, it's not spray and pray, it's not throw against the wall and what sticks. It's actually back to the old days. Do you know what my thesis is built on? 1950s and 60s marketing. The biggest brands in the world ran a lot of newspaper locally and the creative in the newspaper was contextual to the market they were running the newspaper for. And then they would run a national campaign based on what they were doing in the newspapers. All I'm doing is treating social media like local newspapers and like local radio but I have better data than they did back then which then makes our campaign work much stronger because we've mitigated the risk because we've gotten a consumer affirmation and in the last three years, social media has gotten such strong algorithms because of TikTok and now everyone that I have really clean data.

11:36Yeah, yeah. So the problem is actually that the scale that brands want to have for a big audience is also their problem. They want to make one boulder and push it down and what they need to do is make a thousand pebbles and push it up. Yeah. That's the reverse. That's not how brands are built based on a book written in 1991. And the subconscious of the industry has not caught up to the reality of the consumer. What the industry has done very poorly is realized that there have been unlimited examples of what I'm talking about happening outside of the industry. Yeah. What insights do you start with?

12:17Because if you want to make, let's say, 50 messages for different audiences, you have to have 50 insights or... we first start with creating the consumer segmentation. So the first thing we do is we start with the consumer cohorts. Yes. We usually start with clients' first-party data. You know, a lot of our clients, as you can imagine, you know this, they already have done a lot of work. Yeah. They've been doing work. They've done their brand positioning. They've hired Bain, McKinsey, Boston Consulting to do work. They have agencies. They have history. Some of them have their own dot-coms. They have depletion reports of how the products, they have plenty of data.

12:52Yeah. So we take that all in. Then we do qualitative data. We read everything that is being said about the brand and their competitors. So we take the qualitative data from our work, which is consumer, you know, psychographic, demographic, psychology work, and we mix it with their first party data, and that establishes the consumer segmentations. Okay, it's a combination of listening, social listening, and data. But social listening with real rigor to extract the insight. Yeah. The talent, we hire strategists and train them for the talent to extract what does that mean? Not just this is what they're saying.

13:32If you do not have the talent to take 5 ,000 people's comments and say, wait a minute, everything what they're saying here is based on insecurity. If you can't make that transition, then you don't have the strategic talent to build strong cohorts. Okay. So that's what we focus on. We make the cohorts. Here's where it gets interesting. The work makes the work stronger. Let me explain. Now we make the cohorts. Now we start doing advertising. Local, radio, and print. We think an individual piece of social content has the potential to impact more business than an entire national television campaign.

14:12We do that because we know it's true. We know that Ocean Spray sold out across America because of one TikTok made by one person. We know it to be true. So you have to say it's a religion. It's a different religion. So now we're marketing every day for the sake of better marketing. Three, four months later after we've put out all that creative, 30, 40 pieces a day. Not throw against the wall and happy Sunday. real marketing, real ads, print, radio. Why do people value a full billboard where it's just a static picture with a headline and they don't with a picture on Instagram? It's the same thing.

14:55And often this is being seen more than that. And this costs a lot less than that. Absolutely. But here's where it gets interesting. Why that's so important. After three or four months, we can start seeing, huh, Hispanic males in Los Angeles or moms in Berlin 21 to 25 or 52 to 55 year old men who are interested in Manchester United in the outskirts of London. It's not working. We've marketed to them 30, 40, 50 times and we're not getting traction. Let's kill that cohort. But over here, we've been marketing to 21 to 25 year old moms, young moms, 21 to 25, very young moms in London who have a high income household.

15:46And if you read all the comments, we're gonna pull out Asian moms 25 to 30 and we're gonna start marketing to them because there's something happening in this cohort. And so the cohorts become an accordion. So our consumer segmentation is a living and breathing heartbeat. And that's how we're using the marketing to do the marketing better. here's where it gets really interesting. Now you have the content in that 21 to 30 year old Asian moms in London high income, all of the content doing well. That series of marketing becomes the brief for our senior creative directors to now do a campaign based on the insights.

16:30Okay, yeah. Got it? Yeah, absolutely. That's the model. And can those insights you get and can it alter a strategy? Normally, they define a strategy and then target audiences. As you note, that's a very astute question. For us, as you can see, it dictates a strategy. None of our strategies write a brief. The work becomes the brief. Yeah. Okay. It's a very different model, but it's very real. You know, we've become the creative AOR for Pepsi. for Gillette, for the biggest brands in the world in America, coming from just doing social. And now we're the creative AOR because we believe that that is going to be the requirement, the idea that two talented people, and by the way, all my people come from Wyden, Crispin, Droga, 72 and Sunny.

17:25But for me, as brilliant as the strategist is and the creative is, to just rely on their opinions and then the client subjectively saying yes or no, and betting the farm on that, I'm just not comfortable with that. Yeah. No matter how talented they are. Yeah. Can we go to the production of content? The creative process. I think we are from a period of huge change, big change with artificial intelligence. How will it affect your business? It will put us all out of business. Yeah. Yeah, well, a lot of them, a lot of us, I think. I think they will. I think, first of all, here's the thing everyone in our industry has to hear.

18:13None of us can use any of this creative yet because the copyright and trademark issues are huge. Mm-hmm. I'm at the, I would be using it today at Vayner for our clients if I wasn't worried about that. Mm-hmm. I think for our industry, big brands, we're gonna have to wait a half a decade for the court systems to really go through a lot of this litigation. Because a lot of the creative, we don't know the sources. Yeah, yeah, yeah. And so commercial use, yeah. So I think, you know, before anybody reads this and runs to retire, you got a good five to 10 years, it's going to take some time to figure this out.

18:48That's number one. But to your point, in a race to drive down the cost of creative, for example, one thing I'm very proud of, in our entire creative department, hundreds and hundreds of people, from Chief Creative Officer Rob Linoi to a creator that started yesterday, everybody makes creative every day. Our creative department is production. That's unheard of. So that's how we were able to drive down the cost. Right? If all 500 people are making every day, and not just being in meetings and pontificating, you're driving down the cost. But even me at scale, and us, and us globally, we will not beat artificial intelligence, creative making.

19:29however, roles will change. Now the idea, the critical thinking to what input into making, the idea becomes even more powerful. Right? So I'm excited for creative and ideas people. I actually think the future is incredibly bright. I think it's going to be five to 10 years before this industry really feels the effects because of copyright. But yes, I believe it will have a huge impact on production. Humongous. Yeah. And for the social listening part, can that be automated by artificial? A hundred percent. But again, we'll be a compliment. You know, to me, I don't think in our lifetime we get to a place where humans just do leisure because the robots do everything.

20:11But if you told me in a hundred years that's how it was, I'd be like, I understand. I can understand. You know, if you go a hundred years ago, if you showed our great-grandparents how we live with a computer at our hand at all times or in a car, they're like, what's a car? If they died a hundred years ago, like, what's a car? What's up playing? You know, think about all the technology advancements that we've lived through in a very small period of time. We take it for granted. So, you know, I'm not scared by the 100 years from now. I'm just focused on today. I'm not worried about yesterday, and I think that's the biggest problem in our industry.

20:47I'm not worried about tomorrow. I think it's another problem in our industry. We have brands that spend more money building a metaverse than they do on social media creative. That's crazy. the shiny new thing versus what's happening today so they'll do television and a metaverse but they won't do social media branding properly to me that is a profound mistake of not understanding today so I think artificial intelligence is going to be a big topic for us forever I think every can every magazine article it will be brought up and every day it will become more and more important the current elephant in the room is until we have copyright and trademark figured out the biggest brands in the world can't use it no no no and you're working together with universities over here in Amsterdam.

21:29What would you advise a student on competences or how do they prepare for tomorrow, so to say? Their gift is their curse. Their gift is that they live in this world. The curse is they live in it so they think they're good at it, but they don't understand when you do it for marketing purposes, it's different than trying to hook up or have friends or enjoy leisure. so you know I think for the kids that are reading or listening it's when you make the shift to making it professional you've got to understand there's a business hope and dream not just a creative or a funny or for fun and by the way that continues to be an argument of mine of one of the vulnerabilities of classic creative agencies I think that they sometimes lose touch with the business objective in the purpose of the video they want to make and very similar with the kids.

22:23When they transition into our company, they come in very confident and very quickly they're like, wait a minute. And when I try to build them back up, I'm like, it's okay. You use social media for entertainment, for leisure, for friendship, for romance. You haven't used it for business. Take a step back, be humble, and learn. So I would say that to them. Yeah, okay. Thank you so much. Very interesting. Thank you. I really agree with your insight. You know what's funny, I'm very humbled by that. You know what's interesting is, this will make sense to you, if it's just the headline, then they're like, but when you get into a real conversation for an hour, almost everyone in our business, even the most stark advocates of the past, if you really push and prod and have a real logical conversation, there is a struggle.

23:16Because what they hold true, who they haven't gotten second layer on. Well Gary, to your point, we need scale. I'm like, I agree. Like, you know, of course you need scale, you're a global brand. I'm like, but you're making assumptions that aren't true. And do you ever wonder why your reporting looks wonderful but your business is declining? Maybe the reporting is broken. Yeah, yeah, yeah. And I think the sort of, how do you call it, professional status plays a role as well. Of course. People, they get well paid and they make strategies though, so they go in room. Oh, I'm so empathetic. I mean, to your point, and prestige.

23:55Yeah. You know, to me, it is much harder and more interesting to make a single piece of social media content. But I'm not confused that if you're a senior creative director, making work that gets a big coverage here or go to France and win a trophy, that feels more prestigious. when you tell your neighbor what you do for a living. It feels more proud today to say I do this versus I make social media posts. It feels low. But it's going to change. Yeah, I think so. Anyway, thank you. Thank you very much.