20Growth: How Wix Built a $100M Marketing Machine | Why LTV is BS and Why Time Return On Investment is the Most Important Metric | How to 10x Your Growth: What is the Next Great Channel with Omer Shai, CMO @ Wix

0:00Marketing is investment. I never used lifetime value. When you're doing 10 things, you can be amazingly well in three things. Another three are going to be okay. And in four, you're going to fail. We need to go back to the rules of bringing people with zero knowledge about marketing. I paid half a million dollars for the voiceover. It was a fucking stupid idea that I had. This is 20 Growth with me, Harry Stebbings. Now, in the episode today, we have a legend of the growth world, CMO at Wix for the last 18 years. Omar Shai is one of the OGs. I learned more from this episode of 20 Growth than almost any other episode of 20 Growth, including why time return on investment is the most important metric for growth leaders today and how he manages, as granular as possible, his$100 million marketing budget at Wix today.

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4:29Perk's AI is purpose-built to automate shadow work so teams can focus on real work with real impact don't let anything get in the way of your next breakthrough leave the travel and spend to perk visit perk.com forward slash 20vc today perk powering real work you have now arrived at your destination oma i'm excited for this dude listen i i store the shit out of you with michael eisenberg with mayor with many of your board so thank you so much for joining me today dude thank you very much really happy to be here you know i'm a fan of your show dude flattery will get you everywhere one thing that i want to start with is i hear that you've got some news and so can you tell me what the news is and go back a little bit to a time last year when that idea originated so the news is that we are going to do two super bowl spots this year one is four weeks and it's going to be the sixth one that we're doing for the amazing company that I'm part of it in the last 18 years.

5:30And in addition to that, we are going to have Super Bowl spot for Base 44 as well. I think that we are the youngest company ever that going to have Super Bowl commercial. Another interesting story to tell is the timeline of the decision to go and to purchase the spot. So we announced that we are buying Base 44 around mid-June 2025. I have on record a message that I sent on WhatsApp to a friend of mine, Mark Zaminer, who is buying the Super Bowl sports for me in the last six or 10 years, actually. It was the TV and radio. And on July 2nd, I sent him a message that I would like to buy a spot for Base 44 and how much it's going to cost me.

6:19So it took me, let's say, 12 days. I was a bit slow to solve some amazing indication from community, from people who love the product, how they're using the product, the intent, user behavior, the acquisition that we can have. And we went and purchased the spot that we are just announcing. So from speaking to so many friends of yours, they all said that I had to speak about the historical Super Bowl investments that you've made. Can you help me understand the rationale behind doing Super Bowl. Obviously, it's a huge platform and brand marketing wise, it's amazing. But for you as a CMO, why do you think it's such a good investment to do Super Bowl?

7:00The way that I'm thinking on brand activities is that it's not an empty. Okay, it's not only brand. And when I'm doing acquisition, I'm not doing just acquisition marketing. So when I'm doing brand marketing, I'm thinking the balance between brand and acquisition. And when I'm doing acquisition, I'm thinking about the balance between acquisition and brand. And the beauty about Super Bowl, I'm saying it a lot of times that in the day after the Oscar, everyone are talking about who dressed what. And the only day that people are focusing on commercials is around the Super Bowl. And the day after, people keep talking about what was the ad of who.

7:43And all the years we are keep thinking about technology and how to skip and buying a premiums in order that we won't listen to commercial on Super Bowl we are talking about the commercial and you know I'm a huge sport fan and I'm huge NFL fan and I understand them it's not only sports NFL and Super Bowl particular is like a celebration and especially in the US but it became more and more famous globally. And just to be part of that is to be there. And I keep saying about it, you know, product is the main of our companies. We are nothing without products. But to trust a product, to trust what our users are doing, and to be in the Super Bowl is a message.

8:29You said about the balance there between brand and acquisition, and how Super Bowl kind of plays into that. When you do a Super Bowl, do you see acquisition skyrocket? Like, what is the impact to the Super Bowl direct on acquisition? Yeah, so definitely you can see impact on like the spike at the day of the spot, but you need to be smarter in the way you measure. I believe that there are tons of opportunities at the two weeks before the game day to do a lot of marketing activities around the creative, around the PR, around the 60 seconds, the 30 seconds, what kind of activities you allow to do around the spot.

9:11So eventually the way again, that I believe in brand and the balance between brand and acquisition that sometime, and it's okay that it's not today. It's okay that it's tomorrow. Eventually I would like to see spike in the traffic to our site. That means that if we don't see people coming, relevant users, okay, I will add the word relevant, relevant audiences who are coming to our site. If we didn't do so, we don't need to invest at the marketing activity that we're doing. And marketing is investment and not as a spend. And eventually you would like to see the return on your investment. And for us, return on investment is users who are coming to our site, users who are using the product and eventually convert and telling others how amazing our product is.

10:01How much was the first Super Bowl that you bought the spot for? 4.8 at eight max spends. When you are buying a Super Bowl commercial, you are paying for the airtime of during the Super Bowl, an addition of max spends that you need to invest during the year on the network that has the right for the Super Bowl. Wow. So wait a minute, you have to like co-spend. So you have to commit to spend on the network to get the spot in Super Bowl. Correct. There are some balancing and of course negotiation. And there are some companies who invest a lot on TV ads through the years. So for them, it's easier. We, through the years, there are some times that we are on air in TV and there are some times that we are not.

10:51So it's up to negotiation. But more or less, it was 4.8. What is the latest price to do Super Bowl? Unfortunately, I cannot say right now. It's more than that, but it's worth it. Do you see ROI on performance alone? Or do you believe in the long tail that the brand marketing will override that in the time? I believe in the balance. Okay. So for example, in the last two years, for Wix, not for base, okay, currently I'm talking about Wix, there are some investment, heavy investment on the brand, on activity that we're doing. A lot of videos with our users, on YouTube, social activity, some competitions that we're doing.

11:32And we're measuring eventually everything that we're doing. And what we decided this year to allocate some of this money to the Super Bowl commercial. And in our spot this year, the product is going to be in the central. Okay, so we are not going to have celebrity. We are not going to have a lot of hoo-ha special. We are going to have a product and you are going to see how other people using the product. It's almost like a direct response spot that we bought on the Super Bowl. And the reason for that is that we believed that the product was worth being the Super Bowl. This is the reason that we decided to go at Wix in the Super Bowl.

12:12In terms of base, it was a statement of new things that happened in the world. The vibe coding, the democratization of creation in general, of web application, mobile application. The nice thing about being me and the challenge about being me now is people kind of hear about what we do and then send me suggestions. One of the competitors to Base44 seemingly heard about our show and asked a question, which was you're outspending all of us on paid marketing. Yeah. Is this a game now where capital is the differentiator between winners and losers? You know what is my effective marketing run rate right now?

12:52Guess. Without Super Bowl. 150? Not bad. So I'm above 100, and it was above 100 like a month after we bought Base 44. It took me, I think, six or seven years and weeks to do what we did in Base in like months and a half, in two months. It's not just to throw money, it's to invest money smartly. You need to think about the marketing department of Base right now. It's more than 50 people. Marketing for Base is more than 50 people? Yeah. Think about all the things that we need to do. Product marketing, community, PR, education. We have a lot of effort to implement based in higher education in universities globally.

13:39If we split that 100 million up, and you don't have to be precise, I'm just so interested. What's the split between performance versus brand marketing for you? i'm not doing the separation i'm doing activities that the goal is we are calling it troy people used to call it use of a lifetime value right you remember yeah i hated this term i hate so much because how do you know what is the lifetime value what is the lifetime value how many years now do you not realistically look at it you look at a cohort of customers and you say okay 87 percent lasts for four years. And so we'll take the LTV and say it's four years.

14:19And that's a good enough proxy to give us an LTV that we can work back towards a CAC and then figure out from there. What was the quality of Gemini six months ago? Okay, this is an interesting question. Does CAC to LTV fade in importance in a world of ever transient technology? I believe since I joined Wix, I never used lifetime value. So I'm using different term. I'm using a TROI. It's time to return on investment. It was 2012. We are a poor company before IPO. And Facebook back then launched, I think they call it a page aid or something like that. And we measure everything. And I remember a conversation that I had with Avishai.

15:04And I moved with this new advertising format. I did 5X in one day because I saw the results that I'm seeing from that. So I believe in building the shorted cohorts for me to move as fast as I can to impact the result of the company. And lifetime value, it's much slower than metrics that currently I have. So I have one day cohort, seven day cohort, 14 days cohort, and 28 days cohort. It's eventually giving me an indication about when my TROI is going to be one. Do you worry that that concentrates your attention towards the shortest term TROI and not necessarily the biggest and best in the long term?

15:49No. So to go back, so we did 5X and Avishai told me, even though you are getting the money, like we close after four months, I don't have enough money to invent since those four months, okay? so you need to slow a bit down what he did after that he went and purchased facebook stocks but he didn't tell me and he didn't buy me song he's not a friend avishai is not a friend you know what i love about israelis you guys are money makers but the way that is comfortable you're comfortable with so for example we as a company that now Now I'm talking about base. Okay. So we, as the Wix corporation, are comfortable, for example, in TROI of 11 months of 12 months or something like that.

16:40And the beauty bit about TROI that is measure every traffic source and the blended traffic as one. So I know every source, the TROI that I have, and I have TROI of everything as a mix. and we're saying, okay, we are comfortable and TROI off, let's say, 11 months or 12 months, something like that. And if I'm keeping the TROI on 11 months, I have unlimited budgets. Help me understand that. Why is 11 months the sign that you have unlimited budgets? Because it's something that you're comfortable with as a company. Because you take into consideration retention of the users and users who are doing upgrades and using that moving to more expensive packages and churn inside.

17:32Do you think that needs to compress in a world where an anthropic model opus 4.5 changes the game for so many and you know we've seen it clawed code has cannibalized a lot of cursor's business overnight and everyone's cancelling cursor, does that TROI, time to return on investment again for people, does that need to compress with this technology cycle? It depends how comfortable are you in the product. It depends what are the traffic sources and what is the risk and the way that you're managing your risk, right? Let's say if I have very balanced traffic sources of 10 traffic sources, let's say, and every one of them, bring in 10 % of the collection or the ARR of the company, it will take me some time to be on a risk when a new company jumping in and offering a product.

18:29While when I have just the one traffic sources, let's say LinkedIn posts by CEOs or something like that, that you can be more like a trendy product and then the risk of a new company of a new product that come into the same audiences with the same techniques put you on a risk so the way i'm thinking about it all the time that i would like to have as many traffic sources that i can have in order to build a business for the long term. I get you, but is it not a game of 80-20, where 20 % of the traffic sources drive 80 % of the outcomes? It's all the time. It's a tricky one because I saw some, let's say about Maurer, okay, that when we bought him, almost all of his traffic came from social, everything, okay?

19:26It was linking posts. It was, let's say, some posts and some community efforts. What we are doing, we are bringing the multiples. Okay, this is the reason that I need a lot of people in my department to do a lot of things. So I'm doing social and I'm doing education and I'm doing YouTube and I'm doing Facebook ads and I'm doing TikTok and I'm doing Twitter and I'm doing search and I'm doing SEO activities. is I'm doing a lot, a lot, a lot of things eventually, because this is how I believe that you need to build a business in a mature way to reduce the risk and to find arbitrage all the time. I would like to find the arbitrage of tomorrow.

20:06Let's get to the arbitrage of tomorrow because I do want to talk about that. But if we think about being like a relatively early stage founder, how do you advise them when you have a channel that's working? Do you just double down, keep going don't worry about diversifying against your point there don't build the traffic sources that are diverse just double down or be expansive and have a portfolio of channels from an earlier time i think that you should do both i think that you need to do 10x of the things that are working for you but all the time to open in your areas because you don't know what's going to be tomorrow that means that i talked with someone and i shared with them that we are doing super bowl spot for for base and he told me or that we increase the budget in aggressive way and the first thing that he thought is that he told me he said why are you doing it are you afraid of and i looked at him man i'm not afraid of anything okay i have opportunity and i'm trying to optimize any opportunities that I have in order to build sustainable business.

21:12Let's play a thought experiment though. What if we took the budget that you are now putting into SEO, into performance, and we said social has worked so well for Mayor and Base. Let's own social. Let's do UGC like never before. Let's absolutely double down on Mayor's brand and let's just suck the air out of the room on social. Why would that be a worse strategy than the diversification? because and it's a it's like projects okay let's think about project and again this is something that is part of the the way that i'm the methodological of the way that i'm thinking and working in the last 18 years when you are doing one thing and you are doing it tremendously well there is only one thing that you can be successful in when you're doing 10 things you can be amazingly well in three things let's say another three are going to be okay and in four you're going to fail.

22:06In the math that I know, three is bigger than one. I'm a venture capitalist, but I would agree with that statement. So three is bigger than one. Again, when you're going all in on only one thing, a lot of time you are playing, you are talking with the same audiences. Let's say you are very good at acts. Okay, I'm doing an amazing job at acts, but the audiences and acts eventually on Twitter, there are only specific users with specific intent, specific behavior. And what about the other users in the world? You don't want to talk with them. They're different, but they're very good at. It's like going after conversion rate as a matrix.

22:49I think how stupid it is to go after conversion rate. Why? Because 10 % conversion rate, is it good or bad? Depends on how many people are in the funnel. Exactly. So if you are not paying for the next 1 million users, and they cost you, let's say nothing, and the conversion rate is just 1 % compared to the 10 % that you had before, is it good or bad? Again, depends on the top of funnel. It's good if it's a large top of funnel, a million or 1%. Yeah. No, it's amazing. Okay. Because you didn't pay for them and they didn't cost you nothing and they cost you nothing. So you don't really care about the conversion of those users.

23:27You care about the conversion rate on specific users that came yesterday on those users you would like to improve. I will explain what I'm saying, okay? Because I'm not sure that I'm clear. Let's say that I'm bringing traffic to Wix from New York, users who search for website builder. Of those users, I would like those users to convert on a better way on a daily basis. I would like my product to be better, the messaging to be better, everything to be better in order to increase those user conversion. In general, I don't really care of the overall conversion of the company. But what you care about is your day two conversion to paid, correct?

24:14I care about the TRY of the company. I optimize the TROI of the company. That means I have a goal of TROI of eight months. And my job is to bring as many, as much money collection for the company in the TROI that we agreed on. That means that if my brand improved and I have more users who are coming to me that I not need to pay for them, it gives me opportunity that I can decide if I want to do it. would like to increase the TROI of the user that I'm paying. And I can decide about it with my partners, if it's the right thing to do or it's not the right thing to do. How do you think about the divergence in TROI or the contrast in TROI between Wix, where you've got, I would imagine, more retained users, more small businesses, which are stickier, versus Base44, where people are also using RapLit and Lovable and Gemini, and they're much more promiscuous.

25:19How does the TRI vary between the two? So the TRI, it saves me from that, okay? Because in the matrix of TRI, the churn of those users, the users who are moving from one product to another, it's already calculated. Because again, those 50 people that currently are part of the marketing department of base, except to three, all of them came with me from Wix. So I brought everyone, those 50 people from activities that they did in Wix to base, and they have all the experience in terms of measurement, and we know exactly the right way to measure things. So we are measuring it differently, but the philosophy is the same.

26:05How are you measuring it differently? For example, the percentage of monthly users. For example, the percentage of users who are paying us more. The packages at base are more expensive than the packages in weeks. So TRI calculates everything inside. Can I ask, going back to the 10 channel conversation, because I think that's so interesting. You said three work, four, three don't work. What are your biggest lessons on how to know when to cut a channel? When do you stop spending on a channel that isn't working? It's horrible to work with me, okay? Because a lot of time when we have a success, I saw the success before the team.

26:46I know that we are successful here. Okay, let's move on. Okay, let's be more aggressive, for example. and when we don't have a success, I'm asking the team and today the methodologic that the team is asking themselves on the daily basis, are we investing enough? Do we need to cut or do we need to invest more? So a lot, a lot of measurement, a lot of data inside that we are using and a lot of tests. For example, one of our products, we weren't sure that the YouTube activity that we're doing is effective. So we replaced this product commercial with other products commercial to see the impact. And we saw that the incremental input is very low or doesn't exist.

27:31And we modified the amount of budget that we're investing. So we keep challenging ourselves on a daily basis. How do you think about channels like content, which obviously I do, where the ROI is very long? Often you have to build an audience over a year or two. Quite a lot of budget, actually, to build that. but when it works, it really works. How do you think about that in a world of TROI? Confidence, experience. I'm very experienced. I think that I am like the most experienced CMO in every public company in our technology sphere. Okay, so I saw a lot and I have no problem to fail. And I have trust with my partners and I'm sharing a lot, a lot of information with my partners.

28:18I'm sharing a lot about the things that we are doing and I'm doing. And eventually, if you are doing some things and the numbers are not popping up from the data, you need to ask yourself, do I need to do it or I need to change the way that I'm thinking? So I have to share with you. So there is some philosophy that I preach for, for, I don't know, I think eight to nine years. and I did some tests with my team that I saw different indication for something that I preached for nine years and I changed the way that we are measuring everything in three days after I saw those indication. What did you see that caused that change?

29:02I saw incremental impact of some search activities that we did. What does that mean? Can you unpack that? Yeah so for example I don't see search as an impact on brands. So compared to other activities, search is something that I'm measuring specifically by TRIs that I'm comfortable in compared to, let's say, YouTube or social or LinkedIn or different other social activity that we're there. Search is specific. And we measure search for a long time in one way. And when we did the test, I think it was September 7. And in September 11, I asked for everyone to come to all hands. I explained the different way that currently we start working and we implemented it two days after.

29:53And you don't need to be afraid to preach to something else when the data are showing you something differently or something new that you didn't know before. Everyone is talking about the death of SEO. Has your investment in SEO changed over time down in a world of AI? Not down, actually up, because there are so many more things that need to be done today. A lot of the AI appearance currently impact with similar activities of SEO, but you need to be smarter in the way that you are doing it. Again, for companies where the marketing budget is more than$100 million, when you're staying a lot of investment is in percentage wise, it's maybe not a lot.

30:42So it's more about the way that you're thinking, the challenge that you have at the headcount that you have. So actually today, I have to say that I need to invest more on SEO related AI search methods. So I need to invest more, not less. Are you investing in AI search today in terms of how you appear in LLM rankings? If I go to ChatGPT and say, what's the best website builder? Are you investing to make sure that you show up in the top three? Yeah, definitely. Although the percentage is very low. And again, what's happened in the last two, three months that I think that Google changed again the way that we are using AI, using search.