2094 – How AI is Reshaping ROI and Business Growth in Advertising with Jessica Hawthorne-Castro

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1:05With us right now, it's Jessica Hawthorne Castro. Jessica, you are the CEO of Hawthorne Advertising. Hawthorne Advertising is on the web at hawthorneadvertising.com. I would recommend to our friend that's listening that you might want to pull up the website so you can kind of see what it is that we're talking about, because we're going to be talking about advertising. Jessica, it's so great to have you. Thank you so much for having me today, Josh. Lest anyone think that you are a fly-by-night advertising executive, Hawthorne Advertising is quite a legacy brand. Do you mind just really quick kind of give us a little background on who Hawthorne is and the work that you do today?

1:46Yeah, absolutely. So Hawthorne Advertising has been around nearly 40 years, if you can believe that. we're still independently owned and operated, and I own the agency at this point. We actually are credited with starting the performance marketing industry. So with everything that has changed over the years with advertising, I would say the one thing that still has not changed is generating ROI, return on your investments for your campaigns and growing your brand. So we've been doing that since the beginning and then incorporating everything from analytics, different media systems, and now obviously AI into marketing.

2:26So the core principles in terms of growing a brand and business still stay the same, but we just continue to evolve through the evolution of everything. Wow. Wow. Well, so Jessica, I'm honored to have you. And for those of us that are just, we're running our companies, we're not really paying attention to what's going on in your world. Obviously, you touched on a couple of things that I would imagine are trending quite a bit. But would you mind maybe just, especially as we're producing this episode now at the very end of 2020-24, looking at 2025, give us, if you would, maybe a little bit of a state of the union for where advertising is today.

3:07Absolutely. I think what is on most people's minds at this point is how AI, or that's obviously a large, all-encompassing word or theories at this point, but how is it going to affect all of us and advertising? So just in what we do on the day-to-day, again, I mentioned we grow brands and businesses. We do it profitably through all media platforms, and that's online digital media, offline media, across all social channels and also encompasses things that you still see when you're going to events and outdoor and radio and sponsorships and everything like that. So we coordinate the media across all of our clients' platforms and measure it effectively to be able to see which media platforms are operating the best and most efficiently.

4:08We push, we grow, and the platforms which are the most profitable. And then we also invest in other areas that need to grow. Say you have a market in a certain area of the country that you want to grow your consumer segment there. We will invest in the different media platforms for local market media advertising as well to be able to grow those. And so in terms of what is AI doing, it's just really making us more efficient, right, at what we do. And I think that if, I mean, Josh, you can tell me from your experience, I'm sure you're using or experimenting with AI or note taking or, you know, whatever, whatever it is, right?

4:50With all different forms. But yeah, and I'm laughing because it's at this point we were I was just talking with my wife and one of my sons a couple of days ago. And as we were talking about, well, what was it like, you know, back whenever I'm like, I mean, if I had to go back there right now, if I had to even just give up, you know, the AI tools like ChatGPT and some of these others that we are using and go back to the old way of going. Googling and searching on blogs. I mean, I know this sounds sacrilege what I'm saying, but this is happening all around us right now. People are evolving so quickly.

5:33We are so in Moore's law right now in some of these areas. And my gosh, I can't imagine how this is going to transform advertising and making sure, which I think, Jessica, you'd probably acknowledge that one of the biggest challenges is getting the right message in front of the right people. That's right. Exactly. And I think that some have said, you know, it could have even changed over the last few weeks. But in terms of AI, chat, whatever it might be, it's essentially artificial intelligence is essentially the IQ of, say, like a high school college student. Right. And very quickly, it's going to be able to surpass and pass every, you know, exam or anything that that's out there in terms of the data it collects.

6:18But still, in many things, like we discussed, content generation, right? That's either written content that can even be visual images as well. You can actually get, you know, 30 to 80 % there, I think, depending on the format of what you're initially looking to do. But I think at this point, and, you know, you can tell me, Josh, you still definitely need the human touch and the eye to go through it to make the corrections. You know, it it can create things that are may or may not even exist. Right. So you need to still have the human element to make sure that you are it is correct. Right. And it is getting the message you can have across.

7:01But but it is it helps you with that upfront efficiency. Right. Right. And then and then from there, you so you a lot of the initial legwork, like you said, like the Googling or the customer segmentation or whatever it might be. It helps you with a lot of that upfront information, but you still have to do a deep dive to edit, make corrections and all of that. But but what it cannot do yet, but I say yet. Right. is it cannot actually purchase media on platforms besides programmatic like digital, but you still need that connectivity to make sure that your message is still coming across for the right place, the right person, the right customer segmentation to grow the brand.

7:49So that is still, you need your team to do that. But you can definitely get, like I said, about 30 to 80 % there with a lot of things, which is really just making us all more efficient. And then we're seeing ways that we can be better, right, with our creative, with our messaging, with expanding our brands, the sales, like everything. So we see it as a real advantage, obviously. Yeah. So obviously, Jessica, you know, just thinking or advocating for my, you know, our friend that's listening right now, I think nearly all of us, like we've done some form of advertising at some point, right? Something.

8:26Like we've advertised something in some way. You know, one of the things that I think I hear in conversations is, you know, apprehension to investing in advertising, because I think as well, many of us have had investments that have not paid off. And that's really frustrating, right? When it's like you're going to do this ad spend, you got this campaign and you're doing everything you possibly can, but it just doesn't work out like we had hoped. And to be fair, sometimes it over delivers as well, which is also, that's a welcome surprise. But, you know, what are some things that we can do to maybe stack the deck?

9:03And again, if we're thinking about who your clients are, we're thinking of the, you know, kind of that second stage SMB crowd, right? You know, and the kind of budgets that they're typically working with. What are some things that maybe we could do even before we begin engagement so that we can de-risk it a little bit for ourselves? Absolutely. And I think you're right. Most people, brands, anyone you talk to has had that experience. So they are apprehensive, right? They don't know where their dollars have been spent and what return on investment that they're seeing. So I would say at the very, very beginning, first and foremost, you shouldn't be afraid to ask this because any partner that has experience and worth their weight, you should ask, you know, what is my expected return on investment for this media spend?

9:56You know, it could be your different KPIs, but what is my, how many customers should I be getting? Or what is my brand lift going to be? You know, what is my expected sales? You know, what am I expected sales going to be on this? So if you get any hesitancy whatsoever in being able to answer those questions, then you should look towards partners who are not only accountable to that, but comfortable with that. And, you know, I talked a little bit about the background of the agency. You know, we've been around almost 40 years. I've been, you know, at the agency about 18 years. I purchased it. It is a second generation for my father about 10 years ago.

10:39So we never actually really worked together because I had a past life. They recruited me. I was a talent agent in Hollywood. So that's what I used to do. And then they brought me in because of my client and customer experience that ended up being really a natural fit. And then, you know, I have a master's and MBA and all that. So the business and the creative side just really came natural. But, you know, so us as an agency, we have always from the very beginning tracked every dollar of sales for the media spend that we delivered. And that seemed like a very foreign concept, you know, back in the day when it was really only brand advertising.

11:23Right. Where it was just, you know, you throw a lot of money at the wall and hope some of it sticks. Right. But we have always been, I would say, like the bit of the harder part of marketing and advertising, which is being accountable to our media and the spend. And, you know, I have a joke. It's like we sleep better at night because, you know, we have pretty sure responsibility to our clients and we're growing their businesses and their campaigns. But, you know, I feel truly that it is still, you know, an amazing thing that we do and we work hard, right? We work a little harder at it than just being able to throw a brand campaign on because we're literally shifting media spends every single day to grow a client's budget.

12:03So it is high touch and it is a lot of work, but it is, I feel, you know, the most gratifying part of advertising when you're literally building your company's brand and campaign and you should all be rising together. And that's what it should be. Everything should, you should be getting a service, you know, for what you provide. So we're fortunate that we're doing it in this space. So, yeah, well, let's to our friend that's listening right now, your website, HawthorneAdvertising.com. Just again, so people know, we talked about this at the beginning. You guys are big. You've worked with big, big, big consumer brands, Triple A, Angie, Blue Cross Blue Shield, Brother, Gerber.

12:52I mean, it's a lot of really cool brands that you've gotten to work with. and you have a lot of these logos on your site. But to our friend that's listening and they'd like to learn more, maybe they're not ready for a conversation yet, but maybe there's something that you'd love to have them dig into. Where would you send them to? Yeah, I would say that no brand or emerging brand, I would say don't ever consider yourself too small or out of the scope of advertising, right? So because, as you know, Josh, as we all know, you have to put yourself out there, you know, whether it's your brand or even your personal brand, in order to grow awareness, you know, and traction.

13:42But, and don't ever think you're too small to advertise because campaigns, even those brands you listed, right? Right. Sometimes they were segments of, you know, that brand or consumer segment within a larger corporation that we grew from from scratch. Right. And so it's just important to know that you have to start somewhere and it's important for you to invest in it. But finding the right partner who is really going to be accountable and and grow your brand is the most important thing. And you will grow. And there is really still, you know, you can, you know, viral videos and things like that.

14:21You can get lucky, right? Sometimes, absolutely, right? But investing in your marketing and advertising strategy, but by finding the right partner, make sure that you're aligned in terms of, you know, what that budget is going to be and what you should expect to see in results is really, really important. And again, some of those brands we actually created from, you know, into those categories too. So it's been a journey and we love being on that journey. Yeah. So to our friend that's ready to have that chat, what do you normally talk about in a first call? Yeah, again, it's what are your KPIs or key performance indicators?

14:59What do you think your consumer segment is? You know, what do you think your cost per acquisition should be? You know, what is the revenue you need generated? What is the timing you need of this? Right. Do you do you need to also do you need to be in certain retailers? Do you need to have something so that you grow in other areas? So we can help depending on what the what the goal is of the campaign and what you need to hit. We can you know, we target those specific things to make sure that you have growth, because sometimes it is expanding your customer base. And sometimes it is making sure that the right retail representative sees you and that you're able to go into Amazon or whatever it is or Target, you know.

15:43So, yeah, there's a lot of different things, but you need to be aligned from the beginning on what your key indicators are, what your budget is, you know, what growth could look like, all of that. So Jessica Hawthorne Castro, CEO and chairperson at Hawthorne Advertising, your website, HawthorneAdvertising.com. That's Hawthorne, H-A-W-T-H-O-R-N-E, advertising.com. Jessica, it's been a great conversation. Thank you so much for joining us. Thank you so much, Josh. Have a great day.

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