The Truth About Marketing Analytics with Sid Malhotra, EVP at Snap | Ep. 368

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0:28Welcome to the Marketing Millennials, the no BS marketing podcast. I'm Daniel Murray and join me for unfiltered conversations with the brains behind marketing's coolest companies. The one request I tell our guests, stories or it didn't happen. Get ready to turn the up. Welcome back to another episode of the Marketing Millennials podcast. Today, I have Sid, the EVP at Snapchat. Sid will tell you his whole story, but I'm excited to talk about how to measure marketing correctly, what people are missing in measuring marketing correctly, and all that good stuff. But Sid, welcome to the podcast. Well, thank you, Daniel, for having me.

1:15I wanted you to go into just a little bit about your background. How did you get into marketing and what's your journey been like? Oh, yeah. I'm an accidental marketer. I'm an engineer by trade who ended up being a marketer just overnight in one of my first products that I was launching back in Asia Pacific, which was Samsung's first Android phone. And I just dated myself right there. and the thing that happened was my product marketing guy who was this french gentleman went on a summer vacation and forgot to cc us on his note out and my boss back then i was in the product team just introduced me as a product marketer and that was it that three-month rotation project has turned into an accidental marketing journey to now being an accidental business guy, went into year five of building that very diversified advertising platform that connects almost a billion Snapchatters around the world with businesses who are trying to get into their attention sphere.

2:21Before this, I was the first head of marketing at Grammarly, helped Grammarly get into the B2B space from the consumer into the business, and that was quite exciting. And before that, I helped build Facebook's SMB ads business back when it wasn't even called the SMB ads business. And so SMBs, small and mid-sized businesses, are near and dear to me, more than just because of my career stints, because my first job out of school was actually being the co-founder of a startup, Daniel, where I learned, I guess, my single biggest lesson, which is that the opposite of growth really hurts. And since then, I've sort of moved into marketing to help other businesses find better ways to grow their own business and then service.

3:13Last but not the least, I always tell people this. My real job has two very tiny human bosses at home, an eight-year-old and a very pesky five-year-old. And those are the people who are my hardest taskmasters. that's about me yeah i mean i just got into dad life too so i i that is my number that's my number one job right now uh and then everything else is secondary but i would say most marketers out there when they think about i'm going to spend money um they look at meta and google and it doesn't mean that everybody's actually on those platforms or like their audience is on their platform but they go straight to meta and google and why do you and i want you to like talk more about how you think about like the space right now the ad space right now and um why should people think beyond those two big big channels i think it ultimately comes down to where is your next best customer going to be and have you been able to connect with them and equally as you're trying to connect with them, is your competition doing something similar in a much more crowded place, which is where Meta and Google are right now, right?

4:30Very powerful ad-serving platforms. And what we found is it comes down to that first, the audience piece. Not many people actually know this. We're almost a billion users strong in the world today. Now, outside of a few apps in the world, this is a very big platform and service to be missing out on. But more importantly, what we've actually realized is that this audience isn't really found elsewhere. And as I mentioned, I'm an engineer turned marketer. So in true fashion, I actually asked my team, hey, can you actually go find data? We've been saying this for quite some time, but do we have data that actually proves it?

5:09Because I wasn't buying it initially. And what they came back with, Daniel, was eye-opening for me. 78 % of US Snapchatters will not be on Pinterest today. 40 % of US Snapchatters will not be on TikTok today. Almost a third will not be on Instagram today. And what that's telling us is that this particular audience that is using our service isn't really using many other services in the world today. And the second portion that I think I talked about was, if you are a marketer and you're trying to see is meta and Google and some of the other peer services are right for my business? They likely are.

5:53The question for you as a marketer is where will I find my next biggest customer, consumer? And there what we're realizing is Snapchat ends up being the most efficient customer acquisition vehicle for you. And don't take it from me because I also didn't take it from my own internal team. So why should I ask you to take it from me? We actually went and spoke to independent players in the industry. So think North Beams of the World, Phosphors of the World, or Triple Whale. And it's their research of the last one year that's causing us to believe that. We are the most efficient customer acquisition channel for many businesses who've tried us for the first time or given us a try again over the last year or two.

6:37ROAS from one day to 90 days is increasing the most. And ultimately, it's those two things that if you're a marketer, that matter most to you. Is my audience here? And I'm going to get them at the most efficient and the most cost-effective manner. And both of those are becoming more and more true of Snapchat than it was maybe a few years ago. I mean, I can know firsthand. My, say my cousins that are all Gen Z, they only, well, I only can text them if I'm on Snapchat. So they won't text on iMessage. They won't text on WhatsApp. They will only be on Snapchat to text. So they're actually using the platform for daily communication with all their friends.

7:26So it goes beyond what traditional social media is, scrolling, getting content. As more people are living their life, talking to friends, having daily conversations on this platform versus Instagram, you might be sending stories and having some group text messages around. Facebook, not in my generation, maybe my mom and I are using it to do, I mean, messenger app and stuff. But I've never seen a group of people that are just solely talking on that platform as a messaging platform. It's actually quite funny you say that because you're exactly right. Many people will come to Snapchat and only use this service for pretty much everything they do.

8:11Scrolling content, connecting with their friends and family, finding out what's happening in the world around them, even figuring out where people are on a map. All of those apps that you think are standalone services in other platforms are all rolled into Snapchat. And so there's very little evidence that we see internally when people start using this service that they actually go and use other services just as much. One of the pieces that I think was an insightful piece, we continue talking to, of course, our consumers and our business users. And somebody told me the other day, I think, Sid, that's the difference between one thumb and two thumbs.

8:52And I found that very fascinating. I'm like, tell me more. And he literally just used his left hand as a phone and said, well, this is what a thumb does on other platforms and just kept scrolling up. right whereas on snapchat i'm using both my thumbs and so my attention is squarely on the screen when i'm talking to somebody when i'm connecting with a friend or family or i'm just interacting with a brand and i thought that was quite insightful and once we looked into our own data we're finding that to be true as well the other portion i want to say this um is also a myth that perpetuates a lot outside is well snapchat is just young people right that that's about it um in say 13 year olds.

9:30And that's true. The piece that people get surprised by is globally, one in four Snapchatters are now 35 years or older. In US, half of Snapchatters are 25 years or older because they're growing up with the service. The service is itself more than a decade old now. So somebody who was in high school is now finding their first job. Somebody who was in college has found their first job, has probably settled down as buying their first home. And they're not leaving the service, which is why we continue to grow our monthly active user base. So it's fascinating. It makes sense because I know for a fact, I have the service to talk to all my Gen Z cousins.

10:11They will only call me on Snapchat. They will only text me on Snapchat. If I text them, I message them, I'm on red. On Snapchat, I can text them and I get a response in two minutes on Snapchat. And I'll get a video call on Snapchat. chat so i know for a fact but i want to go into more like let's go tactical on this um yeah so the biggest problem a lot of people are is like is measurement i would say i think how people measure today marketing um and and also how they set their budget before because meta has been working for and it's still a working channel and you're you're not telling people to stop marketing on meta but you're trying to tell there are other great customers that you're missing out on that aren't on meta that could be on both platforms that you're you're missing out because they're more on there more intently so one like how do you recommend people like starting to go test a new platform like snapchat and then also what is wrong with measurement and how could they make sure that they're measuring this correctly to show that that what you've seen that the actual ROI of using a platform like Snap?

11:24Yeah, I think that's a fantastic question. And something that I believe us digital marketers are still grappling with. I'm old. And when I was growing up, TV marketing was all the rage. And the stat that used to be thrown around was, we know half of TV marketing works, we just don't know which half. and that stuff stuck with me because what that told me was well one there's a number there but that number is meaningless because you really can't do anything about it and the second was it had this sense of throw your hands up in there despair more right like i don't know but i'm gonna keep doing it because well guess what 10 other marketers or growth people i know are also doing it and i think that's sort of traveled that mentality has traveled with us on on a different level now.

12:15And I've been trying to explain this in simpler ways. And I think as usual, my mini bosses explained this the best way to me. So my eight-year-old explained this to me in the most fascinating manner. I call it the Hot Wheels ultimate car garage problem. And so I'll tell you a little bit of a story of what happened there and then why I think it connects to your question, Daniel. So our five-year-old had his fifth birthday a few weeks he's into hot wheels, what five-year-old isn't. And so my eight-year-old took it upon herself to be the gift masteress of the household, to say, I'm going to, Papa, I'm going to go and find out the right gift for Arif.

12:57I said, that's good. Why don't you give it a try? So she researched online. She looked at Costco catalogs, Target catalogs. She looked up Amazon, like a discerning consumer than she is. And she's quite smart. Ended up actually zeroing it on a Hot Wheels Ultimate garage set and kept it in the cart. Didn't buy it. She said, we have at least eight days to order it. So I'm going to see if the price comes down. I'm like, yay, dad win right there. Finally, day five clicks it and buys it. That got me thinking. If I'm the growth person on that product listing page for Hot Wheels Ultimate Car Garage on Amazon, who am I going to give that credit to?

13:47It's probably a high credit to the product listing page, maybe a branded query because she was on ChapGPT and Google as well and searching for it. But ultimately, what it all missed was some of these other touches that she had that actually influenced this journey. And you know, the thing that made her buy this was the Netflix Hot Wheels series, where the ultimate car garage is the first thing she sees. And she knows how he reacts to that particular program. But Netflix is not in the journey. Now, I'm not advocating here for any particular platform. What I'm saying is this whole journey was completely missed.

14:29And that's the Hot Wheels car garage problem. which is if you looked at 10 years ago, the only thing that would have gotten any credit, right, as a marketer, I would have given any credit for was that last click from that product listing page in Amazon. Fair, because that was the only thing I could measure. Now, with the multi-touch attribution models out there and a lot of different companies and platforms making it simpler to understand, measurement partners are able to attribute partial credit, right? Sorry, I'm going to get nerdy here for a second. I'm an engineer, so there you go. What that did was advertisers can now come back and say particular clicks had different weights.

15:12I'm going to give this click from publisher one and this click from publisher two some credit, and that's all rolled into my purchase. I'm going to give this$100 purchase some partial credit elsewhere. What it still misses is that particular thing that actually made my daughter buy that set in the first place, which was the view, the long form video that she viewed. She didn't click on it, but that led to the branded queries and that led to the search. And I think one of our partners, actually a few of our partners have started doing some work here. So for instance, Phosphor recently found out that there's a 32 % uplift in the return on ad spend that happens when Amazon sales are included.

15:58Why is that? That's because people don't just buy immediately. They look for things, they research for pieces, and they end up buying it elsewhere, Amazon being one such player. Another partner, Northbeam, I think is doing bleeding edge work on this space. by their clicks and deterministic view model. And so what it's doing at its very core, it's allowing brands to track not just clicks, but really identify our signals in a view or an impression. It's a direct match and not a guess. And so the problem for marketers was, well, there's this probabilistic modeling that happens. So I'm not really sure if someone really viewed this ad because you're looking at IP, device type, and so on.

16:45with the deterministic view that Northpeak is coming out with, it's really platform logins. It's first-party keys. And they're able to directly match that impression to that purchase that happened. And so now for the first time, marketers have real-time knowledge of all this journey that led to a purchase. And when you build this very accurate first-party data, you can actually solve that Hot Wheels car garage problem. And you probably will be able to give the credit to the right place that encouraged my daughter to buy. We're also in a more of an age of the Hot Wheels of zero, non-click content of content that, and even more with AI now, where you have to build for an AI agent to query your stuff and not click on anything and not have multiple clicks.

17:45And that's going to even get harder for you because some of the marketers are going to do research not by themselves. An agent's going to go out and go find the best SaaS tool, the best this for you. And if you don't have the right way to query it. And then Hot Wheels, there's a reason why Hot Wheels are doing long-form content too. Yes. To buy kids. That's the reason why F1, people are paying a lot for F1. a lot of these long form, Lego does Lego movie. It's because they know there's like a halo effect of that. When the Lego movie, a kid watches a Lego movie, they're going to like Legos. No, I think that's exactly right.

18:26And this is the piece that's been very hard for marketers to wrap their brains around, right? Because you've inundated everyone with data that's primarily last click or are please multi-click ways. And I think it's these other touches in the consumer journey that are definitely getting missed or were getting missed. And I think we'll get solved for. You raise a fascinating point about AI. And I think for the first time, at least in the last two decades, we're going to see this move from discovery and search feed into discovery and prompt feed. Where you and I are likely not going to end up searching on many, many tools.

19:07who will get influenced by something, either of friends and family, most likely, some word of mouth, some ad, some impression somewhere, who are going to go into and ask an agent to take that action on our behalf. And it takes a fundamentally different mindset for a marketer to know who to give credit to and where to allocate your media budget, at least as a starter. It's going to be a hard one for everyone to crack, but I think it's an interesting space to keep watching for. The problem, I also think, is we're... For the last 10 years, we've overly indexed on marketing measurement to the point that it's making us not as creative as we want to be.

19:49And now the pendulum has swung from if you are this overly analytical marketer and doing none of the creativity, you probably are going to lose out because AI could do probably better than you now. Platforms are getting smart with targeting and AI could do it for them. So what's left is creating great content, creating great creative. of what's creating and if you're only relying on overly measurement i don't i i i 100 think you need measurement tools like the ones you've mentioned and i had 100 but i think there's also looking at your overall metrics and saying is is is roa's go trending the right way is cac trending the right way is blended trending the right way is our marketing trend at the right way and not overly indexing on things.

20:46But then it goes into the problem. That goes into the problem because meta is a walled garden. Google is a walled garden. There's a reason why they don't share data with each other because they want you to spend more on their platforms. And they want you to feel like their platform is giving you all the credit. When that Netflix movie that made someone go to hotwheels.com, that got retargeted on meta and some other is giving you credit and now i got to spend more meta because but it really was that hot wheels movie or that that content creator creating a cool video or that person and that's why you need to think broadly i i 100 agree and i think the piece daniel that um you hit upon is such an interesting insight that i think gets missed out and almost like the bread and the butter is the thing that's going away from our breakfast tables pretty quickly, is finding the creative insight with where your customer's current headspace is.

21:53So I'll give you an example. The most used part of our service is chat. People come to Snapchat to chat, to connect with friends and family. And you're right, they don't use text messages and they don't use other services. In fact, my own wife, who works at a small shop that also produces a messaging service, ends up using Snapchat a lot more than using that service. And what we find there is this full-skilling experience of just being able to connect visually is a very different creative environment. And if marketers bring the same creative that they were using for, say, lower funnel purchase campaigns on some other peer service, you create creative fatigue very quickly.

22:41And so the tips that I always give to people, particularly as you go to the holiday season right now is, but you know what? Hang on. Don't think about polished creative. Think about whitelisted ads from your creators or influencers who are talking about that category, who are talking about you. and just figure out a way to get that to be promoted. Use new concepts that are not about conversion directly, but got you a lot of engagement elsewhere. That ends up working and creating the top of funnel for you that you could then retarget later. And then advertorial style videos that build trust. So don't try to sell me on something immediately.

23:20Try to tell me what your product, your service is all about first. and that ends up building trust, eventually builds conversion. Most of this stuff gets lost in this race for down funnel ROAS, which is very important, but then you completely miss the creative element of it. The problem in marketing usually isn't lack of ideas, it's lack of time. If your to-do list keeps getting away from you, you should look at Optimize the OPPO. It's an AI agent platform built specifically for marketing. Use their pre-built agents or build your own powerful agents and workflows completely code-free. Optimizely OPPO learns your brand, plugs into your existing tools, and can automate personalization, compliance, reporting, and way more.

24:04See what it could take off your plate at optimizely.com.ai. Yeah, I mean, that's why there's good platforms like Motion that you can understand creative. There's platforms out there to help you. And I also think that people look at numbers, like just because you're acquiring a customer, is it a good customer or bad customer? Is it the customer that you want? What was the creator that drove that customer to you? Is that the type of, are you actually attracting like a loyal customer or a discount shopper? Or I've worked with a couple of companies that we did a good offer, but that offer attracted discount shoppers that are not an ICP.

24:48and then they never came back and bought again. So you have to also think about what the cause and effect. And also, I think going back to fundamentals, like you said, basically what you said of how people are using the platform, actually look how your audience is using platforms. Look what creative works on that platform. Create creative that works on that platform, whether it's whitelisting creators, short-form video, being social first and driving, boosting organic content that did well, like go look how people are doing. I think that's the problem is a lot of markers aren't living in these platforms and then they're buying on these platforms, which is a total disconnect is if you buying on a platform that you're not using, you don't understand what works on that platform.

25:39Yeah. I think that's fascinating. And, and most, that's mostly because people don't have time, even with the deluge of all these tools. that creates a sense of overwhelmed utility. And in that agent space, you basically have a flight for safety. What I know best is where I will continue to learn more. And I think as marketers, we need to be in that learning mindset. So we got to wear every now and then the hat of our users and then go and check out how are they surfacing things. I want to get really tactical right now. I want to say, like, I'm going to do a hypothetical. You tell me what I do.

26:16So let's say I'm a brand, I'm doing holiday shopping right now. I want to put some of my budget into Snapchat. What do you recommend? What is the one, two, three step that would make me successful in testing Snapchat as a platform today? There are really three things that you should do. Depends upon your budget, but there are really three things that I think every marketer should do. When you're first testing any platform, let alone Snapchat. But I think in Snapchat, there's a third thing that's even more valuable. First, before you spend your first dollar, if you have a website or an app where you're trying to get this sale or this conversion or this purchase, make sure your data is integrated.

27:02And whether that is a conversion app, conversion API, or a third-party measurement partner, or just plain installing Pixel, you should ensure in a privacy safe way that you're bringing your own data to work harder for you on that platform. Because the platform doesn't know just yet who's going to be the converting conversion for converting user for you, right? Bringing that data is really integrally important. Most companies that succeed doing this, most marketers that succeed doing this, do this piece really well. So that's really just the number one piece. The second, and we've seen this, when people do this, they get upwards of 20 % increase in purchases and purchase value.

27:49They don't see this elsewhere before they put the data signal. The second piece that we ask all advertisers of any size to do is to allow the platform to target broad to place your ads in every part of their service. Because you're beginning to test the platform. So don't bring preconceived notions on, hey, well, my ads only perform on this feed-based platform that has this particular color app on iOS. Try and let this platform do what it does best for at least 14 days. 14 days is when most platforms are learning. What is it that will perform better for you as a marketer? And then this last piece is try and see where the deepest engagement is happening on Snapchat, particularly.

28:46And that's in chat. I was reading the study that Kanta released some time back where sponsor snaps, our newest ad product, is proving to be one of the most effective ways for brands to test new consumers. well of course it opens into a full screen ad and so it leads it leads to more lift and brand awareness but more importantly it leads to 22 percent increase in incremental conversions and when we're fighting for three or five point increases 22 percent is a meaningful lift so if you're a new brand coming with a few hundred dollars to a few thousand dollars a day to test this is what you should do first.

29:32And the piece that's really easy that most people misunderstand, Daniel, all of what I just talked about is no more than a 30-minute job. But before you hit the first purchase button, first ad campaign, this 30-minute job will be the difference between you winning and you figuring out that this testing worked for you. Yeah, I mean, that's an easy... I mean, the one which is probably what you said the most missed is making sure the pipes are connected. I always make this, because I used to be in marketing ops, I used to make the analogy of when someone goes by a house, they always say, oh, it has a nice bedroom and it has a nice kitchen and it has nice appliances.

30:18But they never go and look and say, oh, my goodness, the plumbing is all good, the electrical wires. But when they're in the house, they need their Toyota to flush and they need the electricity to turn on. And that's like the pipes of like your marketing. And like if you don't have that, running a house without good plumbing and good electricity is like running your marketing without those essential tools. And if you don't have that, it all falls apart just like your house would fall apart. And I think that's crucial. What you just said is make sure that piece is – because, one, you need to collect data for yourself as a marketer.

30:58And, two, you need to make sure that things are flowing because we're under so much scrutiny as marketers. So we have to be sure that this platform did this to do this. So I 100 % agree. Get your pipes in order before running any marketing. I think that's a big issue that a lot of people run into. And that's also the big issue why people don't test other platforms too, because they have like their pipes in order for like one platform and they don't know how to set multiple pipes to connect to one to make sure they're testing things. Yeah. And this is where partners can come in really handy, right?