15 years ago, if you thought it was a good idea to pay strange men to drive around your fourteen-year-old daughter, you would be laughed out of a room. Now, parents are more comfortable with their daughters going into Uber than driving themselves.
We are going through major consumer shifts.
I’ve had the great pleasure, I run a 1000 person marketing agency and Chase Bank has been a great client for a long time and I’ve been very close to that account. And even before that, had worked with a bunch of people in the credit union industry on their marketing strategies, so I always enjoy when I have much more context of the day to day. So that’s a lot of fun. And three, I had an incredible breakfast with a small group of people that are in the audience and just the quality of the questions and the vibe in general excite me. So, thank you for having me this morning, thanks for being up. I got in late last night from New York and noticed a bunch of you were still running around a little bit later.
And so the fact that you’re here this morning is impressive. Many different places where I wanna go, one, I’m gonna give you a little context of how it got here because I’m gonna assume a lot of you don’t know who I am but number two, I think a great way to start this talk is very simply this. You’re about to find out that I grew up in the liquor business and launched one of the first e-commerce wine businesses. So I grew up in an unbelievably regulated business my entire career. I’ve had the great privilege of working in the financial sector for some of the biggest clients in the world over the last half decade. And the thing that keeps ringing in my mind as I was getting up this morning is, I think in 2019, as we head into the next decade, I think this needs to be the conference, this needs to be the moment, this needs to be the time that this collective room starts really putting their mind in this place where they realize that using regulation as an excuse to not innovate is not a sustainable strategy.
I think the reality is that so many people in this sector default into blaming regulation as an excuse to not learn the new communication portals that matter to our end consumer. I stand here today, and the reason I started a marketing company a decade ago was because marketing for me a decade ago after investing in Facebook and Twitter and Tumblr, after being an early investor in Uber and being a big better on Netflix when it went public, I genuinely believed that there are so many innovations upon us whether it’s blockchain, whether it’s peer-to-peer, whether it’s online competitors.
There’s so much innovation from a business standpoint. It’s so difficult for so many people here to go back home and really rejigger their app or their website to be lacking the friction needed to compete in a 2020 world, this is like practical in the trenches stuff. But the one place that is very practical to begin the battle that is needed for the companies and organizations here to compete in the next year let alone next decade, the one place you can adjust quickly is your marketing strategy and marketing spend. It is hard to go back and rebuild a tech stack infrastructure, it is much easier to go back and cut your direct mail budget in half then allocate it somewhere else. This is a very important time in this industry, it’s a very important time in our society. There’s a real massive naivete in the collective of understanding that the Internet is the middleman and that everybody else is just waiting for their time to be exposed.
Books got picked on first but then along the way, I was saying this morning, just only six or seven years ago I was in D.C. giving a keynote to the black car and taxi industry desperately trying to get them to understand that uber was a problem. And what everybody did in that conference is what everybody does in every industry which is they come up with the excuses or concepts that they hope the customer wants instead of the reality of the customers needs. The reality is if you’re in this industry and you create any friction towards a transaction for an end consumer, they’re not interested. We value time. So again back to my investing career, I invested nine years ago in Venmo, right. When I think about the dynamics that that played out, and that one didn’t work out as well ’cause it didn’t operate to its success, it’s sold early and in branch tree really made the dollars but the thesis was right.
And the reason so many of the things that have happened in my career have worked out is because I’m blindly consumer centric. Anytime you think about what’s in it for you versus what’s in it for the user of you, you’re already vulnerable. And I do believe that we are upon a very important decade of technology innovation that only building your actual brand will be able to compete against. We are only a decade away from at scale. So many of our customers making financial decisions through the Alexa or Google home or apple pod in their home, and when you understand what that toll booth looks like, it’s gonna make Google search of the last decade seem like child’s play. So let me take a step back and give you a framework because I actually think five minutes of context of how I got here will help you understand what I’m about to push that I think you have to consider. I was born in the former Soviet Union, I came here when I was three years old. It was a super hardcore lifestyle, I mean I lived in a studio apartment, half the size of the stage that I’m standing on right now with seven family members.
My dad got a job as a stock boy in a liquor store and used to drive from Queens to New Jersey for two bucks of an hour which just tells you how cheap gas used to be, and it was really, it was a hardcore struggle. I went on one family vacation in my whole childhood we finally moved to Ades in New Jersey about five or six, four or five years in, six, five years into America because my dad became the manager of a liquor store in a town next door. That is where my entrepreneurial career began. I started a lemonade stand and then, I should be honest here, I manipulated my friends to stand behind the other five lemonade stands I created. So I had a six lemonade stand franchise (audience laughing) and for everybody here over the age of 38, you might remember big wheels, those little things that we used to ride as kids.
I used to ride my big wheels to every one of my locations at the end of the day to collect my cash like I was Tony Soprano or something. (audience laughing) So that’s who you have on stage. Actually, now I’m gonna go… I appreciate the laughs, so I’m actually gonna really bring it to you. Actually, six months before that business, my first actual business was going into people’s yards, ripping their flowers out of their yard, ringing their doorbell and selling it back to them.
So not the proudest year of my life. But I was super entrepreneurial, I’m 43, so I had the benefit of being of the age when baseball cards and sports cards got really big and was a huge phenomenon. And when I was 12 years old, at that point, I’d already realized that I was an entrepreneur even though every other immigrant was getting straight A’s, I was getting D’s and F’s. My mom is just amazing and built an enormous self-esteem but she was super frustrated by that part, so she really said that, if you’re not gonna be a student, you’re gonna have to learn how to work.
So I worked a lot. But you know for me, this was not the golden era of entrepreneurship. Again, depending on what age you are, you know that the 80s and 90s was the college you go to is a direct attribution to how successful or good you are. So I was making $2,000 to $3,000 a weekend at these malls in New Jersey yet all my parents my parents’ friends, all my friends’ parents and definitely all my teachers told me I was gonna be a loser. I don’t know about you guys but when you have $37,000 in cash under your bed when you’re 12 years old and you’re not selling weed, you’re not gonna be a loser. (audience laughing) That one’s for all the parents with D and F students out there. Don’t worry guys, it can work out, it’s cool. Anyway, and you know it’s funny, the way I look at school in the modern education system and the way that college is structured and the debt you have to incur to get a piece of paper that no longer translates to an actual job that makes it ROI positive is a lot of the way I think about being a traditional financial service provider in today’s environment when you’re not leaning in to the infrastructure of the web let alone, and all of you know this like, the amount of VC funding and private equity money being put into FinTech and competitors and layers above and like Cloud…
We’re not even talking, forget about Bitcoin or cryptocurrency, we’re not even talking about the manifestation of a mature blockchain. There’s so much pressure on us collectively in the macro, what I’m affected by is the next part of my story. When I turned 14, my parents said, okay, the baseball card thing is a fad, which they were right about, you need to start working in the family business. So I went from making $3,000 a weekend to making $2 to $3 an hour bagging ice in the basement of my dad’s liquor store. So I call those the Dark Ages, I hated it. My dad ran his liquor store like the Soviet Union, so his employees didn’t necessarily love him.
So the 14 year old son that look nine really took the brunt of that. So it was a tough era but eventually when I turned 16, I was allowed upstairs ’cause I was relegated to the basement and bagging ice and something amazing happened. I realized that people collected wine. Even though my dad’s store was called Shoppers Discount Liquors, we were in an affluent part of New Jersey, Short Hills, Millburn, Summit, Livingston. Some dollars in the neighborhood and they would come to the store and they would ask for these expensive wines. Me being bored, started reading about wine and that connection ’cause I wanted to help my family business made me realize there was something there, a passion.
And so by the time I was 18, no 18 year old should know as much about wine as I did. I was off-the-charts wine book smart. And then I went to school, freshman year, September 1994, I’m in my dorm room playing Madden 94, dominating by the way, (audience laughing) and my friend runs in and he says, you have to come and see this. At this point, I had already been really helping my dad, I had a lot of knowledge, I was a good salesman on the floor and I was gonna open up 800 Shoppers Discount Liquors.
I was gonna build the Toys R Us of liquor stores. It’s kind of how I thought about it as a 17, 18 year old. Now I’m in a dorm room in September of 94 and I get pulled out of my room and I go look and I see and hear for the first time. For the under 25 under 30 set here, you missed one of the great rackets in business history. America Online used to charge three bucks a minute to be on the internet, though they gave you a CD that gave you eight trillion free hours. It was the first time I saw it, I said something ridiculously stupid like, is this the information superhighway or whatever we called it back then? I had heard of it, but at this point I’m 18 years old just to put into context, and I’m sure this resonates with a lot of people in this room, I’d been on a computer for 20 hours in my life ’cause of classes, it was just not a part of my lexicon or my life.
But what happened next was super interesting. Within an hour of being on the internet, but the first time in my life, I found myself on a bulletin board selling sports cards and I realized that this was going to be what I was going to do. And so on intuition and just tasting it, I launched one of the first three e-commerce wine businesses in America, 1996, when I launched winelibrary.com and rebranded my family’s business. This is where it gets important here. My objective here today is to not worry about the macro issues potentially over the next two decades because for a lot of executives and operators here you won’t be around to see that play out anyway and that’s not practical, and I have no interest in ideology or futurism, I care about general practicality.
I believe the biggest ROI that I can bring here today is help people under and alternatives of what they could be spending their money on to communicate to end consumers to do business with them. That is what I’m passionate about on everyday basis. I have no emotion, you’ll hear me talk about LinkedIn and Facebook and Twitter and YouTube and a bunch of things in a little bit, I have no emotion to them. I could care less if they spoke in Twitter and YouTube are around tomorrow or not, the only thing I do, and it’s not up here, but when you saw my slides earlier, it says I day trade attention. The only thing I care about on an everyday basis is where is the consumers attention, how much does it cost to get to them and how and what creative do I need to put in front of them so I can get their business? But I’m not emotional about it.
I built my family business this way. I took a business that was doing $3.8 million in revenue, 10% gross profit, so you can imagine how little money was left for marketing. I took a business that, in 1998 when I left school, and started operating my dad’s business on the back of winelibrary.com on the back of email marketing and then on the back of Google AdWords which were the two big innovations having a website, doing email marketing. How many people here were doing email marketing in the late 90s, early 2000s? Raise your hands. So for the OGs that just raised their hands, (audience laughing) do you remember those open rates? I mean I had an email newsletter… How many people have done email marketing in their career? Raise your hands high.
Wait to hear this. In 1998, I had a 200,000 person newsletter that had 91% open rates. (audience laughing) What I know more than the sun will come up tomorrow is I know that marketers ruin everything. (audience laughing) As a marketer, I ruined email. I remember my email newsletter when I first innovated, I’m like, maybe I can email people. And so I emailed like 80 people and we sold way more wine. And then I was like, wait a minute, that didn’t cost me anything. Like the catalog that I used to send out the same to sell, the same stuff cost me a fortune. I remember from 1998 to 2000, sending so much email ’cause I was convinced that eventually we would charge for it. Like it was so remarkable.
And I went from emailing once a week to three times a week to five days a week. And then two years later, I was like people read email on Saturday and Sunday, so we went to seven. And then I was like, maybe you can send more than one email a day. (audience laughing) Systematically, from 1998 to 2007, I destroyed our email newsletter. (audience laughing) But on the back of that and on the back of buying all the wine terms on Google AdWords a day it came out, how many people here have done Google ad marketing in their lives? So the day came out, it was five cents a click for about 4/1/2 months before 10 cents became the base.
I literally owned every word, from wine to Cabernet, to Merlot. This is where the story of my career is devastating. I’m very proud that I built my family liquor business from a 3.8 to a 60 million dollar business in seven years with no capital, with no VC money. As a matter of fact, and you’ll love this, this crowd will love this, my dad’s so old-school, I didn’t even know that credit lines existed. So I built a business from three to 60 million on making every penny work its ass off. That was email and Google AdWords. That’s what I’m gonna talk to you about today. How do you make every penny work it’s ass off? How do you not, and I think everybody will resonate with this following line, the greatest thing that’s happening in marketing right now is that we put the past on a pedestal and we demonize the current.
We put the past on a pedestal, tried and true. We create bullshit reporting to justify the spend and then we ask stuff that has real data to prove that it works. That is ludicrous and that is why we’re seeing so many companies lose market share and decline. It’s because the executives behind that feel comfortable with what got them there instead of understanding that’s exactly what’s gonna make them vulnerable and that you should be required to continue to up your game and learn new skills and understand how new things… People are like, Gary but I don’t understand how Facebook works! I’m like, figure it out, dick.
(audience laughing) Like, isn’t that business, like isn’t that the merit of what we’re doing here? Like the reality is, that’s what’s happening. So I built up that business on the back of those two platforms, that was my life, that’s kind of how I did it. And then a very transcending moment happened to my career, and then we’ll go into tactics.
YouTube came out, I’d already built this huge business and I saw it and I’m like, this is interesting. It was about four or five months old and I started a wine show called Wine Library TV. I sat in front of a camera, drank four bottles of wine for 20 minutes (audience laughing) gave my opinions about it and hundreds of thousands of people decided to start watching it. A couple funny things about it, and this is the number one thing, and we just had this at the table, right before I came here, the reason most people struggle with contemporary digital marketing is because they’re in sales mode not providing value and building brand mode.
You’re transactional. It’s like, what did this post get me, its CAC and LTV, it’s math, it has no brand or LTV dynamics in it. I was that person. Remember the reason I told you is think about where my DNA started, rip the flowers, sell it, right, not good. Well, great business models, sat on inventory for no time, high margin (audience laughing) but not good morals. What I thought on February 21st 2006 which is when I first taped the episode of Wine Library TV, what I thought I was gonna do was do QVC, right. How many people here grew up in the New York tri-state area back in the day? How many of you remember Crazy Eddie? I thought I was gonna do Crazy Eddie Meets QVC. I was gonna be ridiculous in myself and I was gonna sell wine. The camera goes on, this is literally five seconds, said if you literally go to YouTube and type in Wine Library TV episode one, I can see it, I know myself, I don’t know if you’d pick up on it but somewhere around one minute into the video, I’m like, wait a minute, this is being recorded and will be on the internet and will be around forever.
I can’t sell, I have to actually give my actual opinion on these wines. And so the reason I became an internet phenomenon and why it exploded was I was literally going on the internet every day, five days a week, to hundreds of thousands of customers and potential customers and panning the wines that I was selling in my own store at times. I was being an editorial voice, not a transactional voice. What that seed created for me is something I wanna talk to you about, but what’s really interesting to this story and how we got here today is YouTube sells to Google for $1.7 billion.. I read an article, I’m super blown away by that number. I don’t know if you guys remember when that transaction happened, that was 07, like it was a very different world back then. 1.7 billion feels like a trillion today. It just seemed ludicrous, 90% of the world had never even heard of YouTube, it was this big thing. And in the article it said, Angel investor Ron Conway makes X amount of money on his $25,000 investment, like 25 million dollars, something ludicrous. And I remember thinking, man, I’ve been so right about email and Google AdWords and now YouTube, I need to become an Angel investor.
And in 2007 and 2008, I started doing that. And the first three companies I invested in were Facebook, Twitter and Tumblr. So I’m rich (audience laughing) but more importantly than that is what happened next was instead of becoming a VC, I mean you guys know this dynamic on the back of that and uber, like I wasn’t rolling. And instead of raising two or $300 million dollars on a fund, getting two points, making all that money just to take meetings and having 20% of the upside which is what most of my friends did from that era, I decided to build a 20-20 version of Mad Men, client services, shitty business, terrible yada, makes no sense to all my smart friends. But the reason I did it is why I find myself here today. I believe there is a gross underestimation on how substantial the consumer behavior shifts are and are about to be.
If you think a lot of things have changed over the last five to seven years, and they have, in the way we behave, in the way… I mean dating 15 years ago, if you online dated you were the weirdest nerd in your mom’s basement. Now it is like standard to swipe left and right 24/7, 365. Our behaviors in our society, 15 years ago, if you thought it was a good idea to pay strange men to drive around your fourteen-year-old daughter, you would be laughed out of a room. Now parents are more comfortable with their daughters going into uber than driving themselves. We’re going through major major consumer shifts. And all the things that were tried and true are being pressured by technology. This industry is on the precipice of being disrupted dramatically. Forget about macro technology trends, just on competitors that look like Amazon and others.
It’s all coming because the services continue to be commoditized as the technology advances. If you play out the chess moves of that, it’s the same thing that’s happened in politics, it’s the same thing that’s happening in transportation, it’s the same thing that’s happening to book stores, the wine industry. What everybody in this room eventually will realize and I’d be very grateful to get an email in 35 years and be like huh, I didn’t really believe you but now in hindsight, I’m surprised how it played out, you were on it. I believe one man’s point of view, that if you play out the chess moves of the advancement of the inn and technology, the only thing we are all left with is brand.
The only thing we were all left with is brand. And why I decided to build a client service business and learn marketing was I was an entrepreneur in Silicon Valley winner but I knew nothing about fortune 5,000 land. I didn’t understand why the money was being spent the way it was being spent. And I needed to go get my hands dirty and taste it. And over the last decade, and ironically, today’s the 10-year anniversary of the business my brother AJ and I started called VaynerMedia, I’ve learned a ton of stuff most of it is disappointing to be honest, most of the reason money is spent is political and defense and trying to rise up the ranks. I used to be mad at you, the individuals, now are mad at the system, right, the machine makes people do that. I’m so tired of CEOs and board members coming up to me and saying, Gary, I so believe in your progressive marketing.
I’m like it’s practical, it’s not progressive. They’re like, your progressive marketing but I can’t get my executives to execute, It’s my people… I go, no it’s you. Employees are easy. I don’t know guys if you’ve seen this but it works tremendously well if you’re in control. You just change what people get bonus done. (audience laughing) Yeah, thanks mom. (audience laughing) Like literally I had dinner with like a fortune 500 CEO the other day and she’s amazing and she’s like, I’m just so frustrated, like I can’t get my people! I’m like, good news. Instead of your bullcrap internal MMM or Nielsen brand stuff lyft or sentiment analysis, all these stuff, like, there’s nothing that anybody in this room is held accountable to from a reporting that they don’t understand that it’s deeply flawed and easily manipulatable.
You all know this, right. I mean how many more meetings do you wanna be in where the reports like are sentiments tremendous but our business sucks crap. (audience laughing) And so I said to her, I said look. if you so believed in LinkedIn and Facebook, just change the bonus structure, just change the rules. Like I have a funny big idea, I guarantee that your CMO and your brand managers are gonna spend a lot more money on Facebook if you put a bonus in place that it you hit this much Facebook spend, you get bonus. So like we have enormous control to change the game yet people are undereducated. Do you know many people are here this morning that have massive points of view on Facebook marketing but have never spent a dollar on Facebook and seen the results of it? We live in a world of headline reading.
There are people here of strong points of view of Facebook, Google, YouTube, LinkedIn, all these things predicated on headlines. You know many people run up to me, they’re like, Gary what about Cambridge analytical? I’m like, what about it Ron? Ron has no answers. Target and IRS and visa breaches put out tons of data. What we have is a huge misunderstanding of what consumers are actually doing. I’m watching the Venmo’s and the Robin Hood’s and the rocket mortgages and the blah blah blah blah blah, draft this and (mumbles), like brands that are built out of nowhere. I know kids that are building 87 different URLs for nine bucks an hour, like credit, house income, home.org running Facebook and Google Ads and taking customers and making margin on being referred. Like the consumers attention is very clear, it’s this. You may not like that it’s this.
You as a human Karen and Rick, you might not like that at dinner your kids on the iPad the whole time. Two things of that, take the iPad away and stop complaining, two, it’s the consumer, you don’t get to pick. Watching people make executive decisions on how they wish the world was versus what the actual customer is doing is one of the most fascinating things to me of all time. Like I literally had a meeting three or four years ago where the guy was like Gary, I hear you on this Instagram thing but I gotta be honest with you, I just don’t get it.
And I go, that’s cool John but you’re a 68 year old old white dude and currently the people that use it are 16 to 24 year olds. I don’t know if you remember during this breakfast but you’re the CEO of a company that sells to 16 to 24 year old women. This dynamic is amazing, the amount of companies in this room that have not taken the leap into contemporary marketing is fascinating and it is completely predicated on one to do things in this room, it’s very simple. It’s just the truth for the majority, not everybody, it’s either A, the internal machine doesn’t score it positively and that head of marketing CMO or VP or whatever it may be doesn’t want to fight the system and conforms even though she or he doesn’t believe in print or radio or outdoor or whatever else commercials, they do it because that’s what the Machine accepts and there’s no reason after 15 years of great work for them to make themselves vulnerable to fight that fight and so they just conform or be if they have the autonomy, they’re not comfortable in these new environments because they haven’t been practitioners of it themselves and they’re not sure or see they’ve run some Facebook or Google or YouTube ads and it wasn’t successful and on a small test they decided the whole thing doesn’t work.
The ROI of anything is predicated based on how good you are at it. How many people here are familiar with Wish, the shopping app? Raise your hands high. How many people have never heard of it? Raise your hands high which I’m gonna assume… Do me a favor, let’s like make a rule ’cause we’re about to do some Q and A two rules this morning; No half-ass hands. (audience laughing) And two, there’s no judgment here, it’s just data for each of us, like there’s no reason to hear of Wish. I know if I’m asking it or like oh, I don’t wanna be not in the know. So real quick, one more time, high, how many people have heard of Wish the shopping app? Look around everyone just to get a sense.
Great, that’s a lot actually now. Put your hands down. How many people have not ever heard of it? Raise your hands high. Appreciate it, thank you. So Wish, depending on who you believe is doing between six conservatively and $12 billion in revenue. It’s a shopping app, they spend all their money on Facebook ads, 95%. The only things they’ve really done that maybe you’ve seen is they have the patch on the Lakers Jersey and during the MacGregor Mayweather fight, they had the logo in the corners and in the middle of the ring. 12 billion, nine, six, at this point somatically doesn’t matter, it’s probably one of the only potential long-term competitors of Amazon, yet most people still don’t know it exists because the way they did marketing was under-priced attention in Facebook. The disproportionate. I promise you if everybody here knew how to do it, there’s a lot of nuances and we’ll get into some Q and A but if everybody knew how to do it, five mile radius of your branches, using the data to find your prospects, if everybody here really knew how to be a modern-day Facebook and LinkedIn marketer, your business would be dramatically different.
There is no radio or local television or outdoor or direct mail campaign that fires better than those two places when you understand creatively what to do. The flexibility of these platforms to put content out that resonates with the end consumer ’cause you’re targeting people of certain incomes or certain genders or things of that nature is just too remarkable to overcome for the other platforms that require vanilla.
Your direct mail eight-by-twelve is the same picture to everybody, that same message you’re trying to get across of why your branch is so awesome just a mile away needs 39 different pictures and videos to 39 different segments psychographically and demographically on Facebook. That’s why it converts. If you make one video or picture on a five mile radius, it acts more like direct mail and radio. This is about knowing. Guys, ROI of having the skill. The ROI of a basketball for LeBron James is going to be over a billion dollars. For me it’s negative 3,000, I’ve torn both of my meniscus.
To me, that’s the punchline. So what I’m passionate about is getting this room to understand that they need to figure out something that is practical to become a modern-day marketer. For example, let’s talk about underpriced attention. These are platforms that I believe if you spend money on are a better deal than if you spent it somewhere else, then the words of the videos become the variable if it’s successful. Number one, podcasts. How many people here are actively listening to podcast? Raise your hand. Actually, you know what, do me a favor that’s important. If you listen to a podcast, and it could be many different one or the same one, if you listen to a podcast most of the week, like two or three times a week or more stand-up. Just do me a favor, let’s get the blood flow going. Stand up if you are actively listening to podcasts. We’re talking about 60 (mumbles) maybe that’s a little weak. All right, thank you, you can sit down.
For me one of the most interesting places to market right now is podcast. If you’re a bigger brand in the room ’cause obviously some aren’t, but if you’re a bigger brand buying pre-roll I’ve read podcasts right now on shows that you think hit your demographic or potentially as narrow as financial shows as broad as something that might be considered high net worth if you’re looking for that world, whatever it may be, you’ve got to make those decisions. But I will tell you this, there’s a great misunderstanding right now of the worth of pre-roll podcasts because the data isn’t clear yet of how many people are listening or watching, Apple is not really reporting yet. In that youth, in that blurriness, what I always deploy is common sense. I know people are listening to podcasts at scale, I know that the companies that have been actively marketing on podcasts the last two years, MailChimp, things of that nature are growing on it, on the Seth Rogen Show, they’re growing dramatically. One of the things that as you can imagine as a street kid from an immigrant family, one of the great devastating things that has happened in our society and this is based on 70 years of prosperity, we have eliminated common sense from our businesses.
Do you know me people here live their life as a human one way but then as soon as they go into the office say completely different things about their marketing? Who here can’t wait to leave Vegas, run home and carefully go through their direct mail? (audience laughing) Guys, I mainly work with fortune 500s, the Budweiser, actually, how many people here happen to see the Dwyane Wade Budweiser video that made everybody cry? Raise your hands. So I appreciate that. So that’s a bigger media execution that we’re super proud of. What I’m Way more proud of is more than any Super Bowl ad or anything else they’ve done on television the sales of Budweiser in Miami and ironically Chicago where he’s from and he played for a few minutes have exploded, right. I mean a lot of people saw it, the costs were much less. And here’s where it gets crazy, we didn’t even have to spend on Facebook and YouTube that heavily because when you make great content it travels itself.
There is no commercial on television or newspaper ad or cold call that goes viral. There’s no taking that and passing it on. As all of you know word-of-mouth is the foundational thing to business and that is the great thing… Social media in our society today and it’s something I’ve been talking about for a decade, I am not naive or unaware of where everybody wants to position it. It’s because Americans don’t like to be held accountable for anything. So when the banking crisis happens, it was your guy’s fault, right, not me even though I was a $100,000 in debt making $87,000 a year and thought it was a good idea to buy a $537,000 home. In a decade, we’re gonna blame colleges for collapsing ’cause all the college debt, but it’s not gonna be our fault for not being self-aware and understanding that $80,000 in debt for a piece of paper that doesn’t get you a job is a bad deal.
So that is what I spend a lot of time, our inability to be held accountable. And so I just think it’s a very interesting time in marketing, I highly recommend looking at podcast. Number two, LinkedIn. LinkedIn is gonna feel natural for this crowd ’cause it feels more mature, older, you know, great. I’m thrilled, if you follow my content for last 10 years, especially my last book, I didn’t even have a LinkedIn, I had a chapter on every platform.
I didn’t put LinkedIn in it ’cause it was so irrelevant. Only 24 months ago, for a niche group of B2B businesses, there was a way to go. Over the last 24 months, it is transformed into a content platform for all shapes and sizes business. I’ve pushed fitness experts to go put out LinkedIn content of like three tips when you travel, it’s become literally Facebook seven eight years ago where the organic reach of your content can go much further than you can imagine. I genuinely believe that every bank, credit union and financial advisor if they’re building up a personal brand in here needs to have a very significant LinkedIn strategy but the content that comes out has to bring value. You need to think of yourself as Bloomberg, you need to think of yourself as the New York Times, you need to think of yourself as Fox News, you need to think of yourself as content, not as a salesperson. You need to put out content that builds awareness and brings value to somebody in ideas that you should be thinking about when buying a home. Six ways to hack a business loan, things that actually bring value to people.
You can do that now, as you think about your team and your agency partners, you have to become very self-aware you need to think about a couple of things. Number one, you absolutely have to think about how do you communicate best? I do it through video and then I strip the video and make audio and that’s how I do my podcast, but I’m not a great writer. So I get interviewed by my writer and then it becomes first person. Not everybody has to do everything best but you do have to be self aware of how you communicate to your end consumer.
The written word, voice and video have always been and will always be the three platforms. You have to decide how your organization is going to do that best. The other thing is you have to audit the people that are executing this. How many people here work with outside agency partners? Raise your hands. Great, this is a big one, this is a big one.
Now that I’ve been in the industry for the last 10 years, one of the things that has been very obvious to me is that most agencies are incentivized to make their own margin which means by nature being a client service provider has a disconnect of misaligned interest. A lot of the advice you’re getting and the reports that justify it right now are completely predicated on that agency’s margins.
The reason that television and programmatic digital continued to be the beacons for the biggest companies in the world is because that’s where all the margin is for the biggest media agencies in the world. And even for small shops, they will always reverse engineer to their biggest margin. Because I built VaynerMedia for myself because my long-term plan, I didn’t mention this earlier, with my agency was not only to learn but it was also to take advantage of the next economic downturn because I believe everybody’s so grossly over leveraged because we didn’t properly pay the piper in 2009 that I believe that there’s gonna be some significantly great deals to be bought when the world melts. And earlier that whole rich thing… How many people here are immigrants or kids of immigrants? Raise your hands. So for the small hands that went up, immigrants have figured out a really interesting trick, it’s called Sit on Cash.
And it’s funny, my financial advisors and I have a lot of friction because I do very high risk investing and then I send them way too much cash for their liking but my point is I’m gonna make that cash work for me, I’m patient, I’m gonna wait for the next economy to collapse and when that happens all of a sudden $4 million acts like 16, $16 million acts like 160. There is no compounding value on the market or anything else that makes it work that way if that’s what I wanna do with my money. So I think that there’s a really interesting thing of why my agency’s been able to figure it out is ’cause I’m building it for myself to buy things and run it through. This is how I figured out, why was everybody giving such bad advice.
Guys, if your company is buying a banner ad on a website that is mainly seen on a desktop, not on a phone, below the fold, you can’t waste money faster. There’s not a… Please if you do any… As a matter of fact, leave now. Leave the conference, leave my talk, go back to the office and stop any cent spent on banner ads on websites, it is a literal joke. As much as I hate television commercials ’cause watch this, watch this. Not 16 year old crowd, you ready? Watch this, by show of hands, how many people here now mainly watch when they watch television Netflix, Hulu, Amazon or HBO or when it’s on video on demand and you fast-forward commercials? Raise your hands, Netflix, raise them high. Keep them up, I want everybody in the front in these fancy couches to look back. Look at this. (audience laughing) Keep them up for a second. Can we all agree that the majority of people in this audience aren’t 14 year old teenage girls.
This audience almost 95% of you don’t even have a chance of seeing a commercial. Forget about if you consumed it and got inspired to do business, 95% of this older crowd is not even got a prayer of seeing an actual television commercial $60 billion spent to make you buy things in America on television commercials. Then you’ve got digital banner ads, nobody… Who here does click the banner ad? (audience laughing) Can somebody raise your… The only banner ads you click are once I went to your website, you got me in the funnel, you re-targeted me and then you annoyed the living shit out of me to buy those socks or take that mortgage and then I clicked it. It is not a consideration funnel, it is a retention and retargeting funnel. We are broken in marketing in 2019. The reason the Toys R Us is in the sears of the world and you’ll see it every single day in every market, it’s coming guys, it’s coming.
And honestly it’s actually here. And you know what I’m most worried about? How much damn margin and how profitable the companies in this room actually are. The biggest thing that I struggled to push a new agenda in marketing is the current results of businesses. When I spoke the Toys R Us eight years ago, they were thrilled with their business. They didn’t wanna hear it.
This is what happens every time. The only audience I’m worried about when I go pitch a new client or speak here is one that is currently successful, that’s what happens. Things are always good before they’re bad. And so I just don’t understand the following. If you believe 50% of what I’m saying, the reason I started a marketing company not a build a technology company is because it’s the easiest thing to change, it just is. You can go home and change it, you can. And I think the days of like, I mean… I literally have clients that are spending more money on outdoor billboards than they are in Facebook and Instagram. I don’t know if you guys, when you leave this conference, can you please just look at everybody who’s driving on the highway.
Let me promise you this, every single person that’s a passenger is looking at their phone. So I think we can all agree in 2019 versus 1999, billboards should not have gone up in price. At least half the audience has been eliminated from seeing it. The scarier part when you look at people driving, if you happen to do this which is what I do, is half the people driving are looking at their phone. (audience laughing) You guys are scary out there. We are not deploying common-sense behavior against what’s actually happening with our consumers and that is why we were becoming long-term vulnerable. Now let’s go into you’re buying in, fine Gary, I’ll call your bluff. Let’s talk about YouTube real quick. One of the greatest ad products in the world today is a specific product that YouTube has which allows you to target people who searched on Google something and then go to youtube to watch something completely different.
They searched for a mortgage or a loan or a bank or whatever on Google and then three days later, they go to watch a UFC clip on YouTube, they go watch a ski clip. But the pre-roll is you, before they watch that, they literally type in, looking to borrow some money and literally your pre-roll before their ski video is, hey, are you looking to borrow some money? And they’re like, holy shit, how’d you know? (audience laughing) It’s an incredible product, I highly recommend you look at it.
The key though is it’s very hard to make a compelling video that gets somebody excited. This is one big game. Once you get into the framework of understanding how underpriced the digital landscapes, certain digital landscape products are, the game that you’re gonna get caught in to is content. A lot of people are here spending a lot of time thinking about their media agency but they’re not spending time thinking about the content they put in there. The most important word in today’s digital centric world of marketing is context.
This is one big game of having enough content to match the 30 to 80 different psychographic and demographic cohorts that are potentially doing business with you. This is a very big deal. What we have not committed to in our industry of marketing is spending enough money or spending money properly to make enough pieces of content. It is remarkable for me to watch early-stage startup companies out market much bigger companies because they don’t know any better because they’re just living in an Instagram, Facebook, YouTube world.
You will be blown away what happens when you put a Asian-American in the picture or video and then target Asian-Americans with the same message and then run a separate ad with an African-American female in it and you run it against African-American females in a five-mile radius then an African-American male, 18 to 21, gets a different message than 58 to 63, then income levels. There is a graph, a framework of 40 to 70 significant segmentations in our society. And then not to mention the subtle nuances of your neighborhood. I’ll give you a weird one, if you mark it in a certain part of Illinois and Wisconsin, like if you use Packer lingo vs. Bear lingo or vice versa, the conversions on your sales are ludicrous and through the roof. If you’re a national brand… Look, I think we all know what the political climate, there are clearly two very different points of view on the current state of America, your marketing needs to reflect that. People value different things, we understand that in our social issues but as marketers we’re trying to sell vanilla to everybody. This is one big game of content that’s contextual to the platform.
LinkedIn organic content, you need to start an editorial like capability in your organization. Facebook, you could hate it, you could think Zack is the worst, you could think the Russians, you can think anything you want but when you’re in business, you start realizing a lot of things. Here’s my favorite thing. Everybody’s out there saying, screw you Facebook and they’re posting that on Instagram. (audience laughing) Headline readers versus practitioners. People like to play hero on social media but then don’t back up their actions. Their actions are very clear. Right this second, Facebook is the single best place to market in the world because people are still not pouring enough money on the platform because they’re making emotional decisions versus practical business decisions. I could care less about Facebook, I have way more Snapchat and Pinterest stack, things that I don’t believe are doing as well.
I wanna be historically correct and I will stand up here in 10 years and say, you’re still running ads on Facebook and Instagram? They’re overpriced. What’s great about Google and Facebook and Instagram and Snapchat for that matter and Pinterest, is it’s a marketplace. Ads start at a penny, and then supply and demand for that attention goes up. What’s terrible about print and radio and direct mail is there dying mediums, they’re not dead, they’re not doing as well as they used to and you’re paying the premium. They keep raising prices, that’s a macro number you might be locally doing but that’s fine, I don’t know, this is interesting to me as business operator spending money. We have such a passion for the past that we’re willing to overpay for something we know doesn’t work in lieu of something that’s staring us in the face. and then we make fun of Venmo or Robin Hood, Rock and More, AZebra. We make fun of these things, we say these things and they’re marketing a completely different way and they’re growing by the second.
You’re making fun of them because you’re not on their team. The second you quit this job and go work for them, you’re gonna sing its praises, you have vested interest. It’s like how I talked about the Patriots, I hate them. They’re cheaters, they’re the worst, I hate everything, I hope they all die them, fuck them. (audience laughing) I’m a Jets fan, that’s how I roll. But that’s sports, that’s me talking sports, that’s not real life. You’re doing that in real life, you’re making real life decisions based on not being on a certain team. Guys, this has happened. You’re not gonna get a $100 million infusion into your tech stack, rebuild your app and your website to create less friction tomorrow but what you can do is take a real step back and really start auditing every penny that you spent. There’s no reason to waste money because what I’m most worried about is voice. I will tell you it right now, I’m putting this on the record.
Caleb, where are you? Caleb, I film all my content, I like being historically correct. How many people here follow me on Instagram? A couple, thank you. You can see in the last six months I’ve been doing the recall videos. Stuff I said in 11 that became true, this is my currency over everything, so I love speaking for me, could care less about me, the crowd, one thing, the truth. The current state of the truth. I don’t sit up here and predict, everything you’ve heard in my mouth, it’s things I’ve already seen happen. This is not guessing, this is not futurist, this is not hoping. This is everyday being a practitioner spending a billion dollars in ad money between my own agency and the startups I’m involved with and my own companies and watching how it all plays.
By the way, one of the weird things to throw you for a loop, I think the Superbowl is the number one thing everybody here should run in marketing. I think the Superbowl is the most underpriced move in marketing. Everybody in America will know what you’re up to whether they watch it on YouTube or during the game. Another weird one, I’m starting to really pay attention to the collapsing prices of Drive Time Radio, right. Everybody’s listening to podcasts and Spotify, I get that. To me it’s not growing, I just care if it’s a good deal. By the way I’ll buy a million television commercials next year if they drop their prices by 85%. So for me I just really I’m desperate for everybody to understand how real this is because I’ve now lived more than two decades of business, have yelled about this is gonna happen, this is gonna happen! People don’t take it seriously or not incentivized to or to care less or… And it’s tougher for employees. Back to when I used to do it with entrepreneurs, it was their family business, that made sense.
It’s hard for you to fight a machine that you don’t even own, I get it. But I will say this, and this is probably the single best thing I can say in a room like this for the future of your career; The number one thing I am passionate about is for everybody in this room to consider the value and the ROI of (mumbles), for dying on your own sword. That was amazing that it went out, right, when I was about… (audience laughing) That was so amazing. If you guys were doing that in the back, that was unbelievable, big shout out to them. The number one thing that I wish for all of you is when you’re sitting in a meeting with senior executives or your marketing team or your agencies and you’re talking about marketing, if you have an opinion that you believe in, not because I said it, because you actually went home, you know, if you’re…
How many people here are senior marketers in their company? Raise your hands. For all of you that just raised your hand, if you don’t go home and spend 200 bucks on Facebook to try to sell something that’s sitting in your basement on Facebook marketplace, it would be a huge mistake. You can’t have opinions about something you don’t know. You must be a practitioner, please.
So let me get to the point. If you’re in a meeting tomorrow, next week and we’re talking about Facebook or Instagram or radio or television or print and you have an opinion that’s different than what you as the professional is going along with, the ROI of you voicing that opinion is that everybody else knows you said it. And it might not be valuable today but when everything hits the fan, and it will, in three or four years, the people that were historically correct will get the first jobs. That’s real life. I’ve watched for too long over the last decade friends of mine pander to the companies that they worked in on things they didn’t believe only then to feel the wrath when the company got hurt and they didn’t have the resume of articulating their truth to protect them and so they lost twice. If nothing else, if nothing else this morning, please in meetings talk about what you actually believe in instead of what’s convenient for the short term because the haves and have-nots of marketing are becoming very clear.
The stakes are very high. Let me bounce here for a couple more minutes while I’ve got it. One thing to really understand and why so many people are struggling with marketing today is this is the greatest era of math and art being equal partners. Way too many marketers today either run too much quant or they run too much art. This world too much quant, math math math, right, way too much, not building brand which is why voice is gonna be a problem. Voice is gonna be a problem because everything we now do on our mobile phone over the next decade or two, an enormous percentage of that activity is going to go to voice devices because it’s faster.
The only thing we value is speed. We give up… There is no privacy concerns in America, we prove it every day, we don’t care. We care about convenience, we like time, we like lack of friction. It is faster for me to say, hey Alexa, I’ll take two burgers and a fries than it is to find my phone go to Seamless and order it. Many more transactions. I grew up as a kid that was told nobody would buy wine on the internet, that nobody would buy tomatoes on the internet, that nobody would buy a car on the internet. We buy all things on the internet. The Internet is real life, this is fake life. And so please understand the reason I’m pushing brand, the reason the Dwyane Wade thing mattered is ’cause building brand is going to be the difference between somebody saying Alexa, send me a case of beer and Alexa send me Budweiser. That is going to be everything in the next frontier and if you’re a young executive… How many people here are retiring within the next 10 years? And I don’t mean that you’re gonna crush it and go buy a plane, (audience laughing) I mean you’re old and you’re kind of finished.
(audience laughing) Great, great, okay. So for 9% of this audience, I will say this; Nothing I’m saying is futurist, it all matters now, but obviously as you can imagine for the other 91% percent of this audience, a decade from now, let me remind you that almost nothing we talk about today existed a decade and a half ago, nothing, nothing. This is gonna compoundly grow, it’s gonna get way crazier and scarier if you don’t like this stuff and I desperately need you to understand that the, and this is actions over words, in a world where I could have gone the VC route and had a lot of easy life and lived it, I wanted to build a marketing machine to take advantage of how big this is because I believe that everything in our society is predicated on communicating, it’s why dictators take over the press when they first have a coup.
Communication matters, and we are living through the transition of communication. We have gone from a radio first world to a television first world, we now actively live in a mobile device world first. That’s just where we are. And when you look at the mobile phone, the far majority of activity besides gaming and entertainment is on social networks. If your business does not know how to communicate on those seven to 10 platforms, every day your relevance of brand is declining. This is very important. This is not ha ha ha fun, this is massively disruptive. And the naivete that I’ve seen from governments and politicians and other big companies in different sectors is happening here right now in this industry, I have a first view at it. It’s why I love working with Chase so much. Kristen Lemcke was one of the most progressive thoughtful CMOS period that I work with, let alone in this sector, pushing the envelope around relevance of brand whether it’s Sarena and Curry for that kind of cultural stuff, whether it’s the tactics of eliminating, all those banner ads that we used to buy.
She’s on it, sharp as a tack. And she’s in an ivory tower at the biggest companies in the world. Many people here are in the trenches should know can absolutely do this. I think you need to have a call in arms, this has to be the morning, we have to scrutinize the money we’re spending, we have to scrutinize the reports that we are held accountable that everybody here knows don’t actually match to the reality of our business and we have to put pressure on the most senior executives that sit on boards and C-suites that pontificate about the past or asking for ROI within a minute of the spend because all those behaviors that I just mentioned are the singular reason that great companies that make tons of profit wake up seven years later and are no longer in business.
Please, please heed this, it’s coming ’cause it’s already here, thank you.
