AI Is Smashing the Marketing Funnel & It Might Crush CMO's in the Process | Mike Walrath | Yext

Summary

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CMO Confidential

Episode Title: AI Is Smashing the Marketing Funnel & It Might Crush CMOs in the Process
Host: Mike Linton
Guest: Mike Walrath (Chairman & CEO of Yext)
Date: November 6, 2025

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Episode Overview

In this episode, Mike Linton sits down with Mike Walrath to explore how generative AI is fundamentally altering the marketing funnel as we know it – with enormous implications for CMOs. They delve into the collapse of the traditional awareness-consideration-conversion-loyalty model, the rise of "zero-click" and AI-driven discovery, and why the new era requires brands to rethink how (and to whom) they're marketing. Throughout, the discussion highlights actionable advice, cautionary tales, and both the existential threat and emerging role for marketers in an AI-mediated world.

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Key Discussion Points & Insights

1. The Death of the Traditional Marketing Funnel

• The Funnel Is Dead (03:25–04:58)

  • Mike Walrath asserts that the marketing funnel—how marketers understood brand-building through awareness, consideration, conversion, and loyalty—“is over” as a guiding concept.
  • Quote:

    "The funnel you’ve known your whole career is over. Right. There’s no more winning interest and getting attention to the consumer on the website. We’re moving to zero click." (Mike Walrath, 05:31)

• Changing Consumer Discovery

  • Discovery no longer begins and ends where marketers can fully control the messaging or experience.
  • Personal Example: The Land Rover buying journey, historically funneled through brand touchpoints and dealership visits, is now replaced by personalized AI research and recommendations.

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2. Zero-Click and AI-Powered Discovery

• Zero-Click Explained (09:26–11:37)

  • Increasingly, queries don’t result in website visits. Instead, AI summarizes, recommends, and synthesizes research inline.
  • Example Scenario:

    "The entire sort of awareness and consideration part of the funnel has now been compressed into the AI experience." (Mike Walrath, 11:35)

• Personalization at Scale

  • AI agents aggregate and contextualize user preferences, drastically compressing the awareness and consideration processes.

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3. Marketers Are Losing Control Over Messaging

• AI as the Gatekeeper (05:59–06:54, 13:59–15:35)

  • Brands are rapidly losing control over ad copy, message delivery, and when/where/how consumers encounter brands.
  • Quote:

    "AI creates the first environment in which you’re not going to be in control of your advertising copy and message anymore… You will not be able to decide what your ad copy is." (Mike Walrath, 05:59, 06:05)

• From Marketing to Bots to Influencing Bots

  • Marketers must now optimize for being the best possible AI recommendation—the so-called “AI Bake Off” (13:53).
  • Quote:

    "We have to become influence marketers. ...The most important difference is going to be that we can no longer control the message." (Mike Walrath, 18:37–19:05)

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4. Brand Is More Important (and More Challenging) Than Ever

• The Enduring Role of Brand (06:54–07:13, 21:59–22:39)
  • With AI now fronting human interactions, only well-established brands with strong presence can compete for algorithms’ attention and recommendations.
  • Quote:

    "Branding is more important than ever. ... If you don’t have the brand, you’re not in this game." (Mike Walrath & Mike Linton, 21:59–22:26)

  • The era of the “brand scientist” CMO emerges—someone equally comfortable with creative and technological skillsets. (24:04–24:55)

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5. Data Is King—Not Content

• Bots Don’t Read, They Scan Data (25:56–28:17)

  • All content needs to be turned into structured data so bots (not humans) can ingest it quickly and easily.
  • Quote:

    "Bots don’t consume content, they consume data. And every piece of content you’ve ever created has to become consumable data." (Mike Walrath, 25:56–26:14)

• Actionable Example:

  • Creating multiple data sets for restaurant menus (vegan, keto, carnivore), not just a generic menu for everyone, because AI recommendation engines will pick based on specific user profiles (40:10–41:01).

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6. SEO is Not Enough—AEO, GEO, and Constant Iteration

• Evolving Optimization Disciplines (29:18–30:29)

  • Traditional SEO falls short. Now, CMOs must understand and invest in emerging practices like Answer Engine Optimization (AEO) and Generative Engine Optimization (GEO).
  • Quote:

    "The future CMO can no longer have the luxury of having a group of people in the basement figuring that stuff out... if you miss that, you are going to be so competitively disadvantaged that it'll be hard to recover from." (Mike Walrath, 29:18–30:29)

• First-Party Data Reigns (31:42–32:45)

  • AI relies predominantly on your first-party data (citations/listings)—not social chatter or third-party reviews—for its recommendations.

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7. Memory and Context: The Invisible Challenge

• Memory-Driven Discovery (19:48–21:21, 42:14–44:14)
  • AI’s memory and understanding of user context revolutionize how consumers act and what marketers must provide.
  • Quote:

    "We’re used to marketing to intent based queries and the intent is now hidden in the context and in the memory… it makes the marketing challenge much harder." (Mike Walrath, 20:52–21:21)

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8. Major Danger Zones and What CMOs Must Do

• Biggest Mistakes for Boards, CEOs, and CMOs (36:17–38:07)

  • Failing to invest in the right talent, systems, and data infrastructure.
  • Relying on a single channel (e.g., Google) is a death sentence in an AI-fragmented world.
  • Quote:

    "First thing we have to do is we have to understand that the traffic's not going to come to us anymore. All of your metrics around website traffic and referrals and that's all going away." (Mike Walrath, 37:46–38:07)

• Land Grab: “Giddy Up, It’s a Land Grab Everywhere” (39:58–41:01)

  • Marketers should hurry to own as much first-party data and relevant content as possible—on every relevant platform/answer engine.

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9. Practical Advice & Cautionary Story

• Deeply Rethink Data and Context (41:16–44:14)
  • Marketers—or those who serve them—must obsess over how memory/context in AI is dictating which brands/products/services surface for users.
  • Don’t ever let your AI bot talk unsupervised in front of a group—it knows more about you than you think!
  • Memorable Moment:

    "I popped [ChatGPT] on the table... I say, ‘Hey, what do you know about me?’ …I had no idea what it was going to say because I’ve been talking to this thing for two years and it knows things about me that I don’t even know it knows about me." (Mike Walrath, 41:29–43:31)

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Notable Quotes & Timestamps

• On the End of the Traditional Funnel:

  "The funnel is dead the way we have been trained… and that may not be the most sort of disruptive thing that we're going to see with this, with this shift."
  (Mike Walrath, 03:25–04:58)

• On Zero-Click & AI Experience:

  "The entire sort of awareness and consideration part of the funnel has now been compressed into the AI experience."
  (Mike Walrath, 11:37)

• On Loss of Message Control:

  "AI creates the first environment in which you’re not going to be in control of your advertising copy and message anymore… You will not be able to decide what your ad copy is."
  (Mike Walrath, 05:59, 06:05)

• On the Future CMO Role:

  "The definition of the CMO unicorn is going to change... you have to understand the power of the brand and you have to become a scientist."
  (Mike Walrath, 24:04–25:56)

• On the Importance of Own Data:

  “86% of all of the citations that AI uses with these complex localized context-rich queries are your first-party information. ...Your first-party websites and information are the key citations for the answers that AI gives.”
  (Mike Walrath, 32:57)

• On Urgency:

  “Giddy up, it’s a land grab everywhere. Get the people, and boomer sooner, go get the land.”
  (Mike Linton, 39:58–40:10)

• On Data and AI Memory:

  “...if you’re not thinking deeply, deeply, deeply as a marketer about memory and context and how it impacts the way that consumers are going to discover your products through AI answer engines, you are massively behind the curve.”
  (Mike Walrath, 41:19–43:15)

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Timestamps for Major Segments

• [03:25] – The marketing funnel is dead: why, and what replaces it
• [09:26] – What “zero click” actually looks like in the consumer journey
• [13:59] – The future: “AI Bake-Off” and who controls brand messaging now
• [19:48] – AI, memory, context, and marketing’s new challenge
• [21:59] – Brand's enduring, and increasing, importance
• [25:56] – Data, not content: preparing information for AI agent consumption
• [29:18] – Why CMOs can’t ignore SEO/AEO/GEO and the new arms race for visibility
• [31:42] – Research findings: first-party data is AI’s primary citation
• [36:17] – The biggest mistakes: underinvestment in talent and infrastructure
• [39:58] – Advice for the “land grab” era and data diversification
• [41:16] – Final advice and cautionary tale around AI and memory/context

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Conclusion

Mike Walrath’s core message: The old funnel is gone, “zero-click” and AI-first discovery is here, and CMOs must urgently pivot toward data-driven, context-aware, brand-heavy strategies to remain visible in algorithmically-mediated consideration sets. Success hinges on relentless investment in structured data and the infrastructure and talent needed to make your content easily consumed by bots and answer engines. In the words of both Mikes: “Giddy up.”

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Transcript

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[Mike Linton]

Marketers, advertisers and those who love them to Chief Marketing Officer Confidential CMO Confidential is a program that takes you inside the drama, the decisions and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former Chief Marketing Officer of Best Buy, eBay, Farmers Insurance and Ancestry.com here today with my guest Mike Walruth. Today's topic AI is smashing the marketing funnel and it might crush CMOs as well. Now Mike is the chairman and CEO of Yext, a digital knowledge management platform that helps businesses control how their information appears across platforms and the founder of venture firm the WGI Group. Previously he was the CEO of Right Media and worked at Yahoo and DoubleClip. Full disclosure my marketing team and I had a strong relationship with the X Y was at Farmers Insurance, so I've watched the company move through a lot of times. Welcome Mike.

[Mike Walruth]

Great to be here. Thanks for having me Mike. I actually think full disclosure would also include the fact that I think you lent us one of your one of your one of your offspring for a few years, didn't you?

[Mike Linton]

I did, I did. My daughter worked at YEXT for a while.

[Mike Walruth]

I wasn't operational when she was there, but I've heard Nothing but great things about her.

[Mike Linton]

Oh, that's good. I will make sure she hears this. Hey, so let's go right to the main topic. Give us the Cliff Notes on your view of the collapse of the funnel and what it's doing to customer and consumer discovery and the purchase cycle.

[Mike Walruth]

Yeah, sure. So, again, thanks for having me. It's great to be here and hopefully I can live up to that. To that. To that theme or that title. So, you know, I think maybe we start with like, you know, you said it really well. The funnel is dead the way we have been trained. You know, I've been working in marketing since the late 90s, all digital marketing. And you know, one of the things that's been constant is that the way we think about the awareness, consideration, conversion and loyalty funnel has been. Has been consistent. Our tactics have changed, but that there's been a tremendous consistency there. And I think one of the things that we're coming to terms with now or beginning to come as marketers beginning to come to terms with is that it's over.

[Mike Linton]

Right.

[Mike Walruth]

It's not going to work.

[Mike Linton]

The funnel's been in existence since, you know, before we were born.

[Mike Walruth]

Absolutely. Yeah.

[Mike Linton]

The first thing I learned at DoubleClick.

[Mike Walruth]

Was like, here's how you talk to marketers and, you know, what we're talking to them about are awareness and consideration. Right. That was. We were selling, you know, basically brand advertising. And so, you know, it was, I mean, it was literally one in the 101 documents in 1999 when I started working there. And I think, you know, we've been able to rely on it. And I think we have to come to terms with the fact that, like, it's. It's not going to work the way that it, it has historically worked. And, you know, and that may not be the most sort of disruptive thing that we're going to see with this, with this shift.

[Mike Linton]

Tell us more because is this a total collapse and, you know, the idea that you would move consumers down the, you know, awareness.

[Mike Walruth]

Yeah.

[Mike Linton]

Consideration, purchase, you know, repurchase, and you could throw trial in there if you were consumer goods.

[Mike Walruth]

Sure, yeah.

[Mike Linton]

Tell us in your mind, how is this collapsing? Take a look at it from the side. Used to have this, this perfect triangle funnel. And now what do you have in it?

[Mike Walruth]

Yeah. So let me, let me. Maybe I can, I can throw in a couple more inflammatory statements and then try to stitch them together.

[Mike Linton]

Knock yourself out.

[Mike Walruth]

We love inflammatory statements into a quilt. That makes some sense. So, so the funnel, you've known your Whole career is over. Right. There's no more winning interest in getting attention to the consumer on the website. We're moving to zero click. And we have to talk about what zero click means. Put a pin in that one. The second massively disruptive thing that I think marketers need to understand is that AI creates the first environment in which you're not going to be in control of your advertising copy and message anymore.

[Mike Linton]

Right?

[Mike Walruth]

You will not be able to decide what. What your ad copy is.

[Mike Linton]

Right.

[Mike Walruth]

I think this is a shocking development for people who. That's the one thing you've always been able to control, Right. And I think if you apply those two things to. And maybe the best way to think about this is to use an example. So historically, if I take a brand, take a great brand like Land Rover, right? And, and if I were the CMO of Land Rover for the last 15 years, you know, I can think in terms of obviously my brand and the critical importance of my brand. And actually, I think this is one of the things that's not going to change, right, is that great CMOs are still going to have to be great branders. They're still going to have to think about how do I build a brand and what is the message and all those important things. And I think some people who have incentive want you to believe that that part is going away. And I just don't think that part's going away.

[Mike Linton]

I agree with you, but can I go back before you go, you go on journey. What is in place of the funnel? Is it chaos? Is it.

[Mike Walruth]

No, no, no.

[Mike Linton]

Yeah, tell us what. They used to have this funnel. Everyone understood the funnel. Even consumers understood the funnel. What is now in place.

[Mike Walruth]

So let's think about it. Let's use Land Rover as an example. So Land Rover, you know, has, you know, I drive an old Defender. They have a new Defender. It's an amazing automobile. I don't own one. I might own one. I have a 1993 Defender. I love driving it in, in the summertime in the Northeast. But if I'm Land Rover, what I want to do is I want to sell my new Defender, right? So I, and I'm thinking about that in terms of a, in terms of a funnel. And I think that funnel starts with a consumer question, right? So I think there's the, you know, obviously there's the awareness piece of this, and I think the big B capital brand piece of that stays the same. But when it comes to discovery, consideration, conversion, if I'm Land Rover, you know, I'VE I've been thinking a lot about how does the consumer first find my, find my, find my brand. And, and let's just assume for the, that a lot of that starts on Google historically. Right. So for the last 15 years user, you know, I go to Google and I search for either Land Rover Defender and I go probably directly to Land Rover site.

[Mike Linton]

Right, right.

[Mike Walruth]

Or a dealership or a dealer site or something like that. If what I do is a different search And I say 10 best, you know, what's the best SUV as that's also a daily driver, what's the best off road SUV that's also a daily driver. Right. The way that I think Land Rover thinks about the funnel historically is I need to win the attention of the consumer. I need them to come visit my proprietary first party content and I'm going to take them through the consideration to conversion to loyalty part of that funnel, primarily through direct interaction with that consumer.

[Mike Linton]

Right.

[Mike Walruth]

And you know, this is why like things like sponsored search and, and organic search have been so important in the, in the marketing funnel because it's how do I, how do I win the attention of the consumer? And the assumption there has always been the best way to get the attention of the consumer is to have them on your website.

[Mike Linton]

Right. They know the brand, you get them to the website, they're in the funnel, you can pull them down.

[Mike Walruth]

Yeah. So, so, so today what we hear about is, you know, everyone, you know, it's very, everyone's talking about zero click. Right? Zero click. And I think in a lot of cases we say zero click. And I'm not sure people are fully grokking what that means. Right. And so let me give you a different example of how I think this is shifting. So I went to ChatGPT the other day. I could have gone to Grok, I could have gone to Gemini, I could have gone to Perplexity. I could have gone to any number of these things. And this is what I did. Instead of a best SUV that's a daily driver and I can take off road is I said, I've been driving a Tesla Model S for the last 10 years. I am considering something else and I'd like to consider an SUV something fun to drive, but that I can also take on the beach and whatever else, that's my query. So that is a very different query than best SUV daily driver.

[Mike Linton]

Right, exactly.

[Mike Walruth]

The next part is really critical. So the next part is ask me as many questions as you need to to understand what I'm looking for. Right. So I get a series of clarifying questions from ChatGPT. What do you like about the model S? Is it the quiet? Is it the power? Is it the cabin? Is it the nav screen? Is it the integrated Google, you know, blah, blah, blah, Right. It asked me five or six questions, then it says, okay, I'm ready to make a recommendation. It then thinks for seven minutes.

[Mike Linton]

Seven minutes. Wow.

[Mike Walruth]

Seven minutes.

[Mike Linton]

Yeah.

[Mike Walruth]

And it's telling me, researching, thinking. It's telling me what it's doing, right? After seven minutes, I go make a cup of coffee. I come back and what I have is a full presentation on six or seven different models of SUV that I knowing everything it knows about me, which is, by the way, far more than the questions that I answered, will get to that memory. It's now made a recommendation and it's recommended the Land Rover. It's recommended an Escalade. It's recommended for other things that I might like, right? So the, the entire sort of awareness and consideration part of the funnel has now been compressed into the AI experience, right?

[Mike Linton]

Personalized. And the other thing, that whole personalized at speed while you drink coffee at your house.

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[Mike Walruth]

Exactly. So what I've been given is what I would have gotten five years ago if I assigned the task to an administrative assistant who's known me for 10 or 15 years, knows everything about me, and went off and spent days doing that research and came back and basically said, look, I think this is the car or these are the cars you should consider, right? So I've gone through basically awareness, consideration, right? What we'd like to think is that the next as marketers, I think the easiest way for us to think is, okay, now I'm going to win the click, now I'm going to win the traffic, right? And so what's going to happen next is they're going to come to my website and I think in some cases today. That is what's going to happen next. Right. So they didn't come to my website after a singular search because I had done a great job with SEO and I was at the top of the page. They can't, you know, but maybe after what amounts to 6, 7, 8 queries and a whole lot of research, no.

[Mike Linton]

I win the AI Bake Off. And what are they going to do with me now? So I'm number one in the AI Bake Off. What happens?

[Mike Walruth]

Yeah. So in today's paradigm, you know, what will happen is it will present me the research and then it will ask me another question. And this is something that you're going to see is it's going to ask me another question and it's going to say, what do you think about these? Are there any of these that you'd like more information on? Right. And at some point in that process, today they are going to invite me to go visit the. Maybe it's the. Maybe it's the Defender page. Maybe it's the homepage. You know, they're going to send me somewhere, by the way.

[Mike Linton]

Or they'll send you to a dealer.

[Mike Walruth]

Yeah, I think they'll send a dealer to me.

[Mike Linton]

Oh, interesting.

[Mike Walruth]

So this is what I think happens next. Right. And we're now in the world of prognosticating, which means I can look like a fool, but the way that. When you talk about funnel compression, the way that that funnel is going to change for market, and the problem the CMO is going to have to deal with is that I'm not controlling this conversation as much as I have historically. My agent is controlling this conversation, and they're doing it with a tremendous amount of context. And they know more about me than the marketer does, but they also know more about the marketer than I do. Right. And so the way that I think that evolves and this isn't happening today, but it won't be very far away, is I'll say, hey, I think this Defender looks great. Is there a dealership near me? And you know what my AI is going to tell me? Yeah, there's a dealership five miles away, but you don't have to go there. I can send the car to you.

[Mike Linton]

It's super interesting. So I want to write the CMO into the story, because implicit in the discussion we just had, and I know we're prognosticating. Yeah. Yes. The brand is powerful enough that you're going to recognize it and you have enough presence in the entire space that AI finds you so those are two marketing things. You know, you have to be. You have to have brand power, you have to be around. So they. Yeah, we did a whole show called is your next best customer AI Bot. But then what is the marketer's job next?

[Mike Walruth]

Yeah, well, so, so, so if you think about it, like if you're the CMO of Land Rover again, like, you know, and you can kind of bake the end state of your job. So there's all the art and all the science that goes into being a cmo.

[Mike Linton]

Right.

[Mike Walruth]

But I think the end state is going to boil down to some key metrics, like test drives, like units sold, like visits dealership. Right. Because at the end of the day, those are the first pieces of the conversion part of this. Right. So we like to simplify it and say it's awareness, consideration, conversion, loyalty. But we all know, like, with a considered purchase, like a car, like the conversion phase has multiple steps, you know, Right. Visit the dealership, I might come back later for a test drive.

[Mike Linton]

Right.

[Mike Walruth]

Then I negotiate.

[Mike Linton]

Right.

[Mike Walruth]

Then I might buy.

[Mike Linton]

Right.

[Mike Walruth]

And so the role the CMO ultimately plays in this process is, I think, across that entire spectrum, defining where are the value points, what are the things we need to understand? Right. And how do we make sure that when the question gets asked and the complexity of that question is going through the roof, that we have the best chance of being the answer to the question. Right.

[Mike Linton]

Well, and it says consideration is obliterated in the funnel because you're going to get to the consumer answer without the consumer having to do that much work. They won't.

[Mike Walruth]

Yeah, the consumer is outsourcing the consideration.

[Mike Linton]

Yeah, it's outsourced the entire consideration in the funnel to AI. And it's also actually going to outsource maybe a lot of the negotiation in there. And. Yeah.

[Mike Walruth]

So take it to the second part.

[Mike Linton]

Right.

[Mike Walruth]

Which is we've always used, I think, advertising as a way to ensure that we're part of the consideration set. So there's a reason why paid search is close to 40% of all advertising. It's because we have enough understanding of the intent of the consumer that we can basically buy our way in front of the consumer at the moment when they're in the consideration phase. It's the most powerful advertising medium we've ever seen. And what we get to do in that case is it's very expensive, but we get to put ourselves in front of the consumer with our key message at the most critical moment. Take that, wrap it in tnt and blow it up. Because that's not the way it's going to work in the future. The way it's going to work in the future is, is marketers have to become influence marketers. We have to figure out, because we're no longer, now we will be able to buy our way in. Right. As marketers, but the way we buy our way in is going to be totally different. And the most important difference is going to be that we can no longer control the message.

[Mike Linton]

So in essence, are you saying we're going to be marketing to bots? Basically? Do I need to call, call John Connor?

[Mike Walruth]

We're marketing, we're marketing to people which are basically being front ended by bots. And I think this is the part that, so it's a very hot space right now. The whole like, I'm going to be your AI SEO engine.

[Mike Linton]

Right. And I'm going to reverse engineer everything for you.

[Mike Walruth]

Yeah. And here's the good news and the bad news about that. That's a really important thing for marketers to figure out. But the way that it's being done generally today is so limited that it's going to be virtually useless.

[Mike Linton]

Right.

[Mike Walruth]

And the reason why is memory.

[Mike Linton]

Right. Tell me more.

[Mike Walruth]

Yeah, so you know Google has no traditional search, has no memory about me to speak of, Right. Every search is greenfield, Right. All it has is the context in the query. Right. And we all grew it, you know, you and I, we grew up learning how to speak search, right? So we grew up learning to say, you don't ask, hey, I'm really hungry for lunch and I think I'd like a burger. We learned to speak search burger near me. 33435. Our children and their children aren't going to talk this way. They're just going to speak English. What that means that combined with the fact that these AI experiences are storing everything. They have so much context that, you know, whether I tell them to remember or not that, you know, they do.

[Mike Linton]

Look, I talked to, I talked to my AI like it's, like it's in the room.

[Mike Walruth]

Yeah, well, I'm going to save my. I know at the end you asked for a story, so I'm going to tell you a story at the end.

[Mike Linton]

Save it. Don't, don't jump the queue on that.

[Mike Walruth]

No, no, I'm going to say I'm going to save it, but it comes back to this point. So, so I think that the key point here is that we're used to marketing to intent based queries and the intent is now hidden in the context and in the memory and so the market, it makes the marketing challenge much harder because what I have to do is I have to anticipate what are the key sort of things. So like my AI knows that I own a Defender, right?

[Mike Linton]

Because I feel like Land Rover should send me a polo shirt or they should.

[Mike Walruth]

Yeah, we are.

[Mike Linton]

I'm totally available for.

[Mike Walruth]

Totally, totally. Maybe the polo shirt or a Defender.

[Mike Linton]

Yeah, a Defender, if it's possible. I'm open.

[Mike Walruth]

Yeah, I mean, it's crazy. I'm not. That one hasn't arrived in my driveway yet. Right. But I think that this is the thing, is that the visibility of the sort of, the intent is going to be more hidden. So what does that ultimately mean for the marketer is that two things become really, really important. The first thing is like branding is more important than ever.

[Mike Linton]

Yeah, right.

[Mike Walruth]

Because behind that AI and that, that agent is a consumer. And what you do to establish that your brand is superior or your brand attributes match that target consumer is, is, is going to be much more important when you no longer have the sort of referral based sort of system to get them to.

[Mike Linton]

Well, look, if you don't have the brand, you're not in this game.

[Mike Walruth]

No, you're out of the game if.

[Mike Linton]

You don't have the brand of the game.

[Mike Walruth]

So you hear way too much of this. Like, oh no, CMO has to be a scientist and a scientist only. You know, that's, that's bullshit, for lack of a better word. Because, because the brand becomes ever more important in this.

[Mike Linton]

And it's the brand for the bot and the consumer or just the consumer.

[Mike Walruth]

So it's. I think it's both, but in a different way. Right? So at the end of the day, you know, judgment lives with the consumer. Now maybe we get to a world of AGI and super intelligence where like we start trusting the bots to have judgment. Like you could imagine a world in a sci Fi universe where I just say, look, go buy me a new car. You know everything about me, you know what I like, you have all the information, just go buy me a new car. I want it delivered to my house next Tuesday, right? I leave it to you, AI Bot, to make that decision that then, then you really, there is no funnel anymore, right? And at that point it is, how do I establish brand to a, to a bot, Right? But if, but, but by the way, if it's AGI, if it's super intelligence, then, then you do it the same way you do it with humans, right? Only you find the channels, right?

[Mike Linton]

Or when you ask the question, you know, I want, I want to buy a Mercedes or something, pick the best one for me. You are actually controlling the brand when you ask. Yeah. Or AGI to do it. So is this actually destroying the CMO job or is it changing it to the extent where instead of managing the funnel, I'm managing the brand and the customer expectation and interface?

[Mike Walruth]

No, it's, it's, I think it's massively expanding the value of the CMO position. But the CMO has to change the way that they think and they have to be. I think the definition of the CMO unicorn is going to change. And so you're going to need either the new CMO unicorn is going to be an incredible brand marketer who knows how to create brands and knows how to create that magic and understands that there are still going to be marketing mediums where.

[Mike Linton]

But you have to create that magic without a lot of the tools that you used to have 10 years ago. Yeah, you have all these new tools, but they're not as clear. You don't have TV working like it used to use for sure. You have attention spans that are short. So the brand, brand building is harder.

[Mike Walruth]

I think the advertising surfaces for brand building are obviously going to, in a, I mean you think about the implications of a zero click world for, we already talked about it for Land Rover, but for any publisher it has, you know, there's panic in the publishing, you know, world now because you know, if you're, if those clicks are to your content and your content is ad monetized, if the content is being brought to the consumer instead of the consumer being brought to the content, what happens is the advertising surfaces that you have to brand yourself change. And so, but you know, we're going to have live sports, things like that are going to be, are going to benefit hugely from this because there are going to be places where you can establish brand. But we haven't gotten to the second part. Right. And this is the huge shift is that if you're going to be a unicorn CMO in this world, you have to understand the power of the brand and you have to be really creative about how you do it. But you do also have to become a scientist.

[Sponsor Representative]

Right.

[Mike Walruth]

Because at the heart of the mechanism of influencing the bots is understanding that bots don't consume content, they consume data.

[Mike Linton]

Right.

[Mike Walruth]

And every piece of content you've ever created has to become consumable data.

[Mike Linton]

Give me an example of taking a piece of what you would call traditional content.

[Mike Walruth]

Yeah, sure.

[Mike Linton]

Earning it into data.

[Mike Walruth]

I'll give you a better one. So, so, so take it, take. Let's stick with Land Rover, right? I'm going to get that Defender. So, so, so Land Rover has an extraordinarily beautiful website, right. It has been, it has been designed down to the pixel to represent that brand and the quality of those products and the attributes of that brand. It has amazing complexity to it. It has drop down boxes, it has images, it has all these things, right. And they've spent, I don't know, tens of millions, maybe hundreds of millions of dollars on creating that digital experience of their brand. Right. For human beings.

[Mike Linton]

Right, Right.

[Mike Walruth]

But if you take all the structured data, which is, which is all the core data, this is the, this is the location of the dealership, this is the inventory that we have, this is the, you know, this is the resale.

[Mike Linton]

Value of the car. Yeah.

[Mike Walruth]

Here's the, here's all the specifications, here's the engine, here's every piece of structured data from that website.

[Mike Linton]

Right.

[Mike Walruth]

I mean that website is, is, is an, is a beast. Right. Every time a consumer visit that website or a, or a, or a bot, right? Is that website, they're sucking down huge amounts of, you know, images and drop down boxes and they're navigating and it's very, very sort of heavy. Right. You take all the structured data of that website and you put it into a structured data file and it's hundreds of kilobytes, Right? Right. It's less than the smallest image on your iPhone. Right. And so what we're going to have to do as marketers, we're going to have to figure out how do the AI experiences want to consume our data? Because what they don't want to do is visit our website, suck down all that. They don't care about the images. They might go get an image off the website, but they don't want to be constantly consuming it. Right.

[Mike Linton]

And so they can't evaluate an image. So.

[Mike Walruth]

No, but they can go get a reference image, right? They can go link, they can go get a URL and so, so you still are going to need these surfaces, you're still going to need your, your experience for the consumer because some consumers are going to want to go touch it and feel it and like, you know, virtually look at the pictures, look at the, you know, design their own. All those, all those experiences are all going to have to exist, but what is the state of the consumer when they arrive at those experiences is going to be much further along the funnel. And so therefore Your job as a CMO is making sure that every piece of data about your business is in a form that it can be distributed and consumed by AI answer engines.

[Mike Linton]

So that means I have to re engineer everything so the bot can pick it up at speed versus make. What I hear you're saying is don't make the bots work.

[Mike Walruth]

You can't make the bots work. No, because if you're competition and you have to understand at a really granular level, what is your competition doing? Because we're seeing this evolve, right? There's a huge debate, which I think is a worthless debate over is AEO or GEO different than SEO? Here's the thing that most people don't want to say out loud is that the CMO has largely not given a shit about SEO, you know, AIO or GEO historically. Because, because it's wonky and it's, it's, it's a, you know, like understanding citations, understanding how, you know, other websites impact my ability to be visible, understanding how I rank. Like all that stuff. It's been this sort of like the, you know, the guys down in the basement figure that stuff out, right? If you're a C. I think the future CMO can no longer have the luxury of having a group of people in the basement figuring that stuff out. Because like whether it's SEO or it's GEO or it's AEO or any other three lever acronym that we want to come up with, if you miss that, you are going to be so competitively disadvantaged that it'll be hard to recover from.

[Mike Linton]

Hey, how do you know mathematically or when you're looking at your stuff, even if you're really good at it, how do you know you're doing it right?

[Mike Walruth]

Yeah, well, you, you, you, there are signals, right?

[Mike Linton]

Tell me.

[Mike Walruth]

So we, we released a piece of research today. This is literally did this this morning. We examined over, so, so, so we examined over 6.8 million citations for AI answers. It's the largest citation study ever done, I believe. I can't imagine that there's ever been a larger one. And what it tells you is when the AI engine is answering a question, what is the reference material that it's using for the consideration portion?

[Mike Linton]

Right, right.

[Mike Walruth]

Yeah. And by the way, let me just throw kerosene on the fire here. So one of the worst pieces of advice that marketers have been getting is, hey, you have to cultivate your Reddit experience because Reddit is huge from a citation standpoint for these AI engines, right?

[Mike Linton]

It is huge.

[Mike Walruth]

It is not it is demonstrably false. Right.

[Mike Linton]

Tell me more.

[Mike Walruth]

So what people have done, I think largely is they've conflated training with inference. Right? So Reddit is an unbelievable corpus of training data for large language models. Right? It's just this huge pool of natural language and using it to teach probabilistic large language models, the probability of the next word is incredibly valuable. What it is not is a place where there's lots of authoritative, structured information. It turns out that when you ask really generalized questions, then without context, without memory, without local, without the complexity of locality, you do get Reddit citations. But that's not how consumers behave. Every question asked of every answer engine has memory, has context, and has local implications to it. Even if it's not a localized query.

[Podcast Host]

Right.

[Mike Walruth]

Even if it's like, hey, what's better, Pepsi or Coke? Right, like that you'll get a different answer if you ask that time that question 100,000 times in Atlanta versus 100,000 times in Michigan.

[Mike Linton]

Yeah, or purchase New York.

[Mike Walruth]

For sure. Purchase New York, exactly. So, so, so I think that this is the part that, that is like when you, and this is the study we just released is, is, is. We pulled down 6.8 million of these and it actually turns out that something like 86% of all of the citations that AI uses with these complex localized context rich queries are your first party information. So they are your listings. You know, in this case, this, this leans towards more localized, right? So, so listing citations are incredibly important. They're more important than ever. Because, and by the way, we don't have to guess about this because the AI will tell you exactly what the citations that used are. And your first party websites and information are the key citations for the answers that AI gives. Which means that those things have to be cultivated, right? Because if, if those things aren't, not only are, they aren't, they have to be high quality, but they also have to be distributed in a way that they're easily consumed by the aio. So if they're, if they're, and by the way, this whole notion. So there are a bunch of these crazy notions out there. One is that you have to go onto Reddit and you have to talk about your brand on Reddit all the time. And that's how you create send citations that matter for ao. That's a complete falsehood. That's, that's misconstrued against the importance of Reddit data from a training standpoint. Which by the way, they're not, they're stopping to do that now, too. So I would expect Reddit will build their own answer engine. And behind that answer engine, for that particular answer engine, those citations will be very important, but only in that. Inside that walled garden. That's a whole other topic of where.

[Mike Linton]

And then by definition, this says you've got to cultivate this constantly.

[Mike Walruth]

Constantly.

[Mike Linton]

Like constantly. Because, you know, rather than focus on Reddit, which a lot of times it's going to do its own thing anyways, your first party positionings, you have to attend them like a garden every day, is what I mean.

[Mike Walruth]

Yeah. And you, you. And it's a. And it's an arms race, because what you can no longer do. I'll give you a. Hopefully a simple example. If I'm, if I'm Land Rover, I can no longer just post on the homepage of my website, hey, we're doing our December Drive event, right? Everyone has a December Drive event. I don't actually know if Land Rover does that, but you hear, we're so attuned to the TV commercials.

[Mike Linton]

Oh, I'm so tuned to the Toyota Cellophan.

[Mike Walruth]

Totally. Yeah. So historically, because you're relying on traffic to that page, the way you distribute that information is you just put it on the page. Right? But that's not going to work in this new paradigm, because what you're going to have to be doing is finding ways to deliver that information right to all of the endpoints regularly. And this is where people talk about chunking. They talk about, like, the importance of, like, chunking up the content and delivering.

[Mike Linton]

It so that it's a sort of digestible.

[Mike Walruth]

They love recency, they love new information. They love, like, you know, the, the sort of, the, you know, how they come up with the answer to the question. And it's going to just change all the time. And so you're going to have to make, as a marketer, you're just going to have to make huge investments in your, in your understanding of the fact that every piece of content you've ever created and will ever create has to be converted into data.

[Mike Linton]

Hey, so when, when you look at all this, what are the biggest mistakes boards and CEOs, along with their CMOs, are making in the space right now?

[Mike Walruth]

They're under, they're just underinvested in the core infrastructure that allows you to, to mobilize the answers to the. So, so, so let me. I'll give you.

[Mike Linton]

Yeah, give me the. When you say core infrastructure, does that mean I don't have the people, I don't have the Data, I don't have.

[Mike Walruth]

The systems, all of those things. Right. And this is because we've had 15 years of there's only one discovery engine that matters.

[Mike Linton]

Yes.

[Mike Walruth]

So we've been lulled into this unbelievable reliance on Google search as the one discovery engine that matters. And now we have this explosively fragmenting world and every one of these discovery engines is going to work differently based on the data they're using to train the data they're using for citations and what they know about the consumer. And so. So, like the example that I think is probably maybe brings, brings this to, brings us to life a little bit is, is that, you know, the. I'm trying to think like the question I want to answer the question you asked me, the question was like, what are they under invested in?

[Mike Linton]

Yeah. People, systems, data, all of it. Right. Well, where should I go first?

[Mike Walruth]

Well, without the people, you're not going to get the right systems and data. Right. So we've gotten into a world where we've basically said we rely on the traffic to come to us. First thing we have to do is we have to understand that the traffic's not going to come to us anymore. All of your metrics around website traffic and referrals and that's all going away.

[Mike Linton]

I need people to think this through and let me do a follow on too, which is there's all these models out there, right? There's ChatGPT, there's Copilot, there's Anthropic, there's Claude, there's Gemini, blah, blah, blah. Should I go after all of them or should I just go after a couple of them?

[Mike Walruth]

No, you're going to have to go after all of them. And this is why it's going to be so complicated because, you know, if you think about like, what's the material that that meta is going to rely on? You know, again, we talked about citations and citations is a wonky concept that not everybody gets, but it ultimately comes down to like, what is the material that the AI answer engine relies on to give the answer to the question. So if you think about Meta, what logically is the material that meta is going to rely heavily on? It's going to be things like Facebook posts and Instagram posts. Social in general is going to be really, really important in the world of meta, in the world of TikTok. If TikTok builds an answer engineering, then what's going to be really important are your TikTok posts. Right. Which look like content but are actually full of data as well. Right. When you look at OpenAI today, what's really important are first party websites and listings information, right? And basically the replicates of your data that tell the system that these are really important things. Apple will rely heavily on the data that's on the iPhone, right? Whatever they, whoever they wind up using or build their own large language model provider. And so the difference between the world we've been living in and the world we're about to go live in is that as a marketer, if you're not, if you don't have a way to store all this content as data and then a way to distribute all this stuff because there is no more. There's one place that matters that's gone and dead and not coming back because of memory.

[Mike Linton]

I like this because this says to marketers, hey, giddy up, it's a land grab. Giddy up, it's a land grab everywhere. Get the people and boomer sooner go get the land.

[Mike Walruth]

Yeah, Think about a restaurant. And again, I could do this all day long with examples. You think about a restaurant operator who has menu data, right? It's not enough just to have menu data. You have to then present that menu data in all its different forms. So I need to have a menu, I need to have a vegan menu, I need to have a keto menu, I need to have a carnivore menu, right? That's like four different ways that I'm taking that structured data and I'm presenting it, pushing it out into the world so that when the AI knows that I am going to lean towards keto or carnivore, right? So they're going to basically they're not going to ask me, they're just going to say, oh, these restaurants have a keto or carnivore menu. Here's what I'm going to recommend to you. Expand that by a million different permutations. And like every CMO either better be a data expert or better elevate the hell out of the data expert on their team.

[Mike Linton]

All right? So giddy up out there, all you marketers. I think that's a great way to get to our traditional last question. It's a two parter. You can pick one or both. I think you've already lobbied for the funniest story. Funniest story you can tell on the air.

[Mike Walruth]

Yeah.

[Mike Linton]

Or practical advice we haven't discussed yet.

[Mike Walruth]

So it's a twofer. And I wouldn't say this is necessarily a funny story unless you think of me being embarrassed as funn.

[Mike Linton]

Oh, we'll Let our listeners decide. Mike?

[Mike Walruth]

Yeah, it's not, I don't want to set expectations. It's not really a funny story, but it goes with the advice. So here's the advice. If you're not thinking deeply, deeply, deeply, deeply as a marketer about memory and context and how it impacts the way that consumers are going to discover your products through AI answer engines, you are massively behind the curve. Right? So that is the first and most important thing that you need to figure out is how do I get my data into a place where I can think about presenting for every permutation of a question tied back to memory and context that's invisible to me. And the answer to that is you have to be comprehensive as hell. Right? Because they're not going to pass it through. They're not going to tell you what it is. That's their proprietary information. And so the story is, I was trying to explain this to a group of non marketing folks at a dinner and we were talking about how do these AI answer engines work and why is this so important? And I said, look, I Talk to my ChatGPT in voice mode when I'm in the car and I ask it all sorts of things because sometimes I'm interested in about all sorts of topics and I don't tell it what to remember about me. And so I said, but let's see what it remembers about me. And so I popped it on the table, I put it in voice mode, and I say, hey, what do you know about me? And like, it was one of those moments where like, I knew it was going to say, well, you're the CEO of Yext and you love golf and you like to fish. And like, those were like sort of the first three things that came out. And then it like. But then it just kept going, right? And there was a moment where I was like, holy shit, like I need to turn this thing off. Right? Like, there's eight people sitting around this table. I don't know all of them that.

[Mike Linton]

Well and I feel like you're holding back. The one thing it said that.

[Mike Walruth]

I'm not going to tell you that. Yeah, it didn't actually, you know, the funny thing, I mean, that's why it's not really a funny story. Like, the funny story is it said something that was super embarrassing.

[Mike Linton]

The funny part, you can tell us, you're among 150.

[Mike Walruth]

It was how quickly I shut that thing down when I realized that I had no idea what it was going to say because I've been talking to this thing for two years and it knows things about me that I don't even know it knows about me. And I just didn't particularly want my shopping history or things like that coming out, and so I would have just dumped it in a bucket in a glass of water if I had to shut it down once I realized how long this diatribe of everything you knew about me was going to be. But I think that's the part that it ties back to the advice. Marketers have to understand that we've only scratched the surface of where that's coming and this is your warning to get your data in order now, right?

[Mike Linton]

So I think that's a great way to end the show. Don't let your chat GPT talk unsupervised to a room.

[Mike Walruth]

Be careful what you ask.

[Mike Linton]

Yeah thank you Mike, and thanks to everyone for listening to CMO Confidential. If you're enjoying the show, please like share and subscribe. New episodes drop every Tuesday on Apple, YouTube and Spotify, and our catalog gives you access to nearly 150 shows including is your next best customer? And AI bot colonel mustard in the study with the job spec using AI for anticipation versus reaction and why can can't hey all you marketers stay safe out there? This is Mike Linton signing off for CMO Confidential.

[Sponsor Representative]

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