Connor (4:07)

I've got a bit of an agenda. We can, we can let the conversation go wherever we want from here. I thought an interesting starting place would be Taylor. You had a thread in February, February 3rd. Actually recording today April 30th. So I think you were ahead of the curve in terms of it being a rocky time for E Commerce. I think that really, that narrative really has escalated quickly through March and particularly April with the rise in tariffs. And basically what you said was the, the couple main takeaways. Over the last three years brands have seen shrinking growth. You saw crazy numbers. I think 2020 average store was up like 69% or something. And last year was up, I want to say like low teens, something like that. So you're seeing brands grow at much slower rates and if they are able to find growth, they're squeezed from a cash perspective. So that growth is incredibly hard to finance. And your point was whether it's a softening consumer environment or an increase in cost via tariffs or anything else, that it is just going to become a rocky time for E commerce. So I've got two big questions and I've got some sub points within each. The first one is how are brands growing today? I'd love to hear from, from you what you guys are seeing at Common Thread. And then I figure Connor, Cody and I can jump in as far as what we're seeing or what our experiences have been.

Taylor Holiday (5:21)

Yeah, this is a great question. It's funny, like a February 3rd tweet feels irrelevant. You know, it's like the world changes so fast and we're unfortunately in the midst of I think a change that has been certainly complicated for a lot of our industry. But I think the problem is, is that this conversation is really so dependent on so much of the underlying attributes of each business. And so as an example, like if you're importing product from China right now, it's just this conversation is, is like the, the, the surrounding elements are sort of inconsequential relative to that problem. That problem is like an insurmountable, non solvable issue if you don't reconstruct supply chain, create alternative demand or like you may not even be able to survive. Right? Like. So I think, I think we have to almost carve out and set aside that there's a reality for a subset of brands. And we just did a survey across all of our businesses to try and understand our own business risk as well as theirs. And it's about I'd say 30 ish percent that are like have dramatic impact from this in a way that is going to require some substantive business change. So let's just set that group aside and say like we recognize that there is a massive macro event that's causing a pretty dramatic impact from that. And then on the rest of it. What I, what I recognize is that E Commerce is obviously we know is a cash intensive business and challenging to drive growth regardless of the environment and especially if the cost of capital is really high and hard to access. And unfortunately I heard Sean today on the, I was listening to the operators on the way in and he was talking about his unfortunate credit due to failed parking tickets. Well, E Commerce as an industry we have poor credit. Like we have a long history of, of sort of not taking, taking very risky debt and not deploying it to the return of lenders. And so we are not a place that a bunch of people are looking to loan a bunch of money to at this moment in time. And so there's just a lack of availability of capital, both debt and equity. And so you combine margin pressure with a lack of available capital and you get to a situation where it becomes very difficult to grow because growth rates are funded by an investment of inventory beyond your present value. So what do I mean by that? If you want to grow 10% next year, then your next inventory purchase larger than your last one. And if you didn't generate excess cash at that same size, you actually don't have the money to fuel growth. So the impediment to growth isn't actually marketing or demand creation, it's your capacity to buy inventory. And that's really like the underlying attribute here is a lot of this conversation sort of centers around consumer demand how what's happening on Meta. But if you actually can't purchase the inventory at scale, then that's the actual limiter to your growth rate. And so I think that's not an angle that the conversation sort of sits in a lot, which is that in order to grow 100% you have to be able to buy a ton of inventory, which means you have to have a ton of cash or be able to finance that in some capacity. So what I saw in the final loop data and shout out to them, Leo and team do a really good job of both communicating and sharing information was just that the average EBITDA rate wasn't clearing the availability of cash such that you could purchase for a large growth rate. And so that's like the structural challenge that you're describing at CTC last time, and I'll try and keep this short is that we're seeing CAC higher than the previous year. AME are down about 2% in Q1 new customer revenue about flat and margin expansion happening through the growth of existing customer revenue, which is what tends to happen in a challenging environment. People lean on their existing customer base, they grow mer a little bit, they capture a little bit more margin. We also have seen discount rates up like 40%.

Connor (8:55)

Wow.

Taylor Holiday (8:56)

So there's a, there's a substantial increase in the last quarter of people using discounts as a lever for growth. Right.

Connor (9:04)

Okay, cool. So, and that, that's kind of what I wanted to dig around, dig in around. Regardless of the cash constraints of fueling growth. It's just like of the brands that are growing or even like what are the tactics that are, that are leading to maintaining revenue year over year. You just listed, you said cacs going up. So people obviously are having trouble generating demand and acquiring customers at the same rate. You're saying they're relying on returning customers and then 40% increase in discount rate is insane. I don't think I've seen that stat thrown around. So people just promoing more in order to stay flat. You'd say that's, that's a pretty good synopsis of, of E Comm right now.

Taylor Holiday (9:41)

Yeah. And I think, I think the discount rate is also a function of an attempt to create and bring cash forward to solve with some of the tariff issues too. Right. So there's, there's, there are some attributes that again are related to that versus just the general market demand needs that are certainly at play. But yeah, I think, I think that's a big piece of it. I think there's, there's a lot of confusion around meta right now and the best strategy to deploy against it. There's a lot of people trying a lot of things to solve for that problem in a way that I think is, I'd say more chaotic than I've experienced it in a long time. Like clarity of the right practice and deployment in every ad account is confusing. I think we've, we've been on a long tail of like Google PMAX challenge where there's been this sort of like decline in participation in the core ad products in that platform. TikTok. TikTok I think unfortunately was disappointing as an ad product outside of shops for a small subset of brands. You have applovin that sort of was this great hope that dissipated into nothingness. I know you're still a fan, I think Connor, but for most people. So I, I think that yeah, there's a general challenge and then you have really low consumer sentiment and you combine all those things and you get to like a pretty moderate to below average general ecosystem. I think I just saw too. I don't know if you guys saw. We, we published Officially the first quarter of negative GDP growth. So we are one quarter away from a recession and it's pretty clear that we're headed that way. So I think those things are all.

D (11:05)

All very real, 100%.

Connor (11:07)

So maybe we could double click on some of the Meta stuff. I want to, I want to kick it to Cody though. Cody, I know Taylor just mentioned a state of disarray in terms of best practices media buying on Meta. We were talking before the show whether it's optimizing for incremental profit, optimizing for last click results, etc. Etc. There's like more options than there's ever been. Cody, I know you've been testing a lot. So like what have the last couple weeks been like for the, the JRB account?

Cody (11:33)

Yeah, I feel like they're, I feel like Meta's just throwing a lot of, a lot of at the wall and I feel like some of it is really good and some are we not in 50 minutes.

Taylor Holiday (11:43)

How many minutes? In how many minutes?

Cody (11:46)

My bad. I think some of it is really good. Like I think they're, they're doing a really good job listening to the market and understanding what advertisers, advertisers care about. And it's not growth at all costs, it's not max conversion. So they're, you know, they're the only one doing anything incrementality based. Hopefully we don't get in trouble. But doing stuff to try to reach new audiences within a purchase campaign, which I'm really excited about. Profit optimization, testing, you know, but I feel, I feel like there's so many things that they're trying to do and pushing that that creates probably a little bit of confusion and then just, I just think the whole game is changing how it's played. Like Taylor, you had a really good video on the updates and Andromeda, but like I just think it's so easy to get a brand to get really good at one thing and like more of a feed style advertising and you know, if you're not, you just have to keep up so quickly with the changes and you need so much volume and so many different styles of creative that it's, I don't want to say it's harder than ever, but it's so different from what it used to be.

Connor (12:47)

I'm, I'm curious, Cody. So you listed off some of the options that Met is now building out for, for advertisers. What's your guys's approach? Do you guys have like a testing roadmap where you're like first we're going to test optimize for incremental profit. Then some other new feature. Then we're going to test more or less creative. What does that look like? Yeah, yeah.

Cody (13:05)

So we, we partner with disruptors on that and I'll join usually every like two weeks for, for a call where we're just trying to figure out, trying to go first principles like what are we trying to do, who are we, who are we trying to reach and you know, what are the tests that we're excited about? So we've tested, we were on this like nc. I talked about this like blot out new customer event and a lot of these tests didn't work and so we had to get purchase working again which took some technical stuff. So now that we got that we, we, it like unlocks our roadmap. So we tested VO value optimization. That seems to be working pretty well. We're testing profit optimization. That's like an alpha that we're in. We tested this, this, this frequency bidding thing. So just trying to fix some of these challenges we have, but there's a lot of different ones and like what I'm not clear on is like let's say these all work and we're running a, you know, holdout on them and they all perform well. Like none of them are proven enough to be like our new bau. But we also don't want to have like four different optimization settings running in our account. So like I'm not entirely sure what to make of it or where to go, but we're all trying to get more incrementality and more efficient performance out of meta. Yes.

Connor (14:12)

Okay, so what Cody just described, we've had the same experience. Taylor, what do you do if you're trying to service a hundred brands?

Taylor Holiday (14:17)

So. Yeah, exactly. So take that problem times a hundred and then assume that there's a brand rep from Meta on the other side that are all recommending something different. Right. And so like I'll, I'll, I will literally get on with one customer and the brand reps like yes, North, North Beam Apex optimization. That's the play. And then I'll go to the next one. It's like no, we've got incremental optimization. You need to be running. Oh no, let's go to ASC seven day click only. Oh no, let's go over here and it's BAU 7 day click. One day view has to be the same. Oh no, we need 20% top of funnel. Oh no, we need, it's like the optionality. It feels like this is what happens when you let customers drive your product roadmap in a way that what you get is everybody asking for something specific to their business, which is great on an individual case, but not even, not collectively.

Cody (15:00)

Yeah, that the whole like using MTA or using GA to optimize, like I think that's like the worst decision they made. They made some great decisions, like incrementality based stuff. But that's what it seems like. And like what the feedback has been is, hey, we've, we've heard from businesses that this is how they measure performance. So we're trying to align the systems but it's like probably the worst thing you can do for incrementally reaching new customers.

Taylor Holiday (15:21)

That's right. So I think that that became this challenge where what it introduces is like it's like you walked into a restaurant, there used to be options on the menu and now brands show up and there's like a hundred options on the menu. And you want to be disciplined and thoughtful about how to sequence through which decisions to make and to be like to, to do your best. And I think Cody, you guys all do a good job of this of to say like okay, we're gonna have a hypothesis, we're gonna test it, but there's too many end nodes in this testing system now. We can't possibly sequence through it well enough. And so now it just becomes what that leads to more room for is anecdotal and individual experiences driving people's decisions about the ad account. Which is like worst case scenario for our world for sure.

Connor (16:01)

Yeah. 100%. It has become like a Cheesecake Factory menu sort of deal. Just everything you could possibly order.

Taylor Holiday (16:08)

That's right. That's right.

Cody (16:12)

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Connor (18:14)

Connor Rolling. Where are you guys at with, with, with your experience with all the options within Meta?

D (18:20)

Yeah, well we've, we've tried the, you know, the different optimize, you know, optimizing for the North Beam MTA attribution and, and some of the other things. There's some other exciting things that are getting built out that are going to be fun. I don't know if it's out yet so I won't say it but you know, one of our sponsors, Meta's integrating with one of our sponsors so we can optimize for their results as well. You know. You know it's how you can basically optimize for these. I don't know if Taylor, if you've heard of this from Meta reps, but we're working on that to be able to optimize for the house Geo holdout test which I'm really excited about and we're, and we're doing those things, you know, for us going back two minutes, the big thing we're seeing in our account is exactly what Cody said, right? These meta reps said, hey, we know what marketers are optimizing off of. We're going to Shift our algorithm to like optimize for those metrics. And those metrics look really good for us. I mean, we've scaled aggressively in the last two years and we've had minimal efficiency losses on Meta. Great. But our rolling reach has also come down. Meta is more of a middle bottom of funnel channel for us than it's ever been before. So our testing roadmap is very much geared around how do we unlock Meta as top of funnel again. So our stuff is really built around non purchase conversion events and optimizing for that. And we're seeing some really good readouts. It just takes a while because we have such a long consideration period. And if I run a view content campaign, I need to give that audience a lot of time to convert to actually measure the, the incrementality and profitability of that. So we're doing a lot of that. We're testing View content stuff and it looks really good so far and we're excited about what that can do to unlock the top of the funnel for us. And then we're also starting to play around with, you know, even going further down the non purchase conversion rabbit hole with some of the playbook that the fellows over at Marathon have been working on with their, their new brand value model. So we're running you know like Instagram page visit stuff. We're running Facebook like campaigns. We're running, you know, they have, they have new events set up that you can basically optimize your, your Facebook campaigns for a branded Google search. Like we're running stuff like that and using their model to measure it. Now I'll be the first to tell you, I don't know yet if their model like is going to lead to, you know, if we can attach that to revenue growth. I hope so. But we're also starting to play with stuff like that and use Marathon's model to measure that. So we just launched these in the last like two, three weeks and we're, and we're capturing data on them now. But it'll be really interesting to see if we can, you know, attach revenue metrics to some of these upper funnel, you know, brand content, brand engagement type events. But those have been the big, big things for us is like how do we unlock it as top of funnel again? Get that rolling, reach up on, on non purchase conversion stuff.

Cody (21:03)

I can just like feel Taylor and C. Taylor getting a little bit more red every time you say top of funnel and that it's not top of funnel. So do we want to go in there at all?

Taylor Holiday (21:12)

Well, it's funny.

Cody (21:13)

Yeah.

Taylor Holiday (21:14)

Do we want to go there? I, I'm curious if you, if I. One of the things that I think I have frustration is this idea of rolling reach. Like, I, there's this like, it feels like a meta indoc indoctrination towards getting us all to keep spending more and more into these different ad products. And I, I'm just curious, like for the businesses that you guys have and the spend levels that you're at, like, how big is your addressable market relative to the impressions that you generated on Meta last year on a reach basis? Like, don't you think you're out beyond the market size? Like, do you really want to go to the next person that's so wildly outside of the market for your reach? Like when I was at Kayla as an example, we, our customer base was pretty clearly like married and engaged adults. Right? Like, and there were in the United States, I don't know the exact number. So I'm going to misquote this. 30 million married and engaged adults. And at one point we had reached them all like seven times. But the solution in that problem for selling a wedding ring isn't to start advertising to single people, right. It's to come up with a different angle to reach those same people or a different product with those same people. Connor, I think this is sort of more what I've seen you guys at Ridge do, which is like, okay, now it's a new design to reach that same person in a way that then will convert them versus go find the net new person who isn't in the market for a wedding ring. So how do you guys think about the relationship between those things?

Connor (22:31)

Well, one thing I'll say is my, my beef with rolling reach is that a lot of people will calculate it on like a two year timeframe and it's like, okay, yeah, if you're a big brand, you're gonna hit. We've hit every man in America and most women and it's like it's, it's, it doesn't give me. And, and the way rolling Reach is calculated is it's going to decline over time. You're only going to reach each unique person once. So it's like not as if it's going to continue going up forever. Where I think it becomes a little bit more interesting is like it's, it's April 30th now. Like if we want to look at rolling reach year to date, like right. Have we. We've hit every man in America over the last two years. But how many have we hit in the last three months? And how might our bidding strategy drive up frequency on the people that we haven't hit in six to nine months? And that's basically what I think we'll see more of that people optimizing for impressions of people who haven't seen your ads in a while. And one way you could do that is look at Rolling reach on a much smaller basis. So that's, that's historically how we've used it.

Cody (23:27)

Yeah, I think we've almost gone from like complete bottom of funnel to complete top and skip the middle where it's like we're. Because we're looking. We ran like a brand lift study with Meta is like what is the action intent? Like we want to re get more millennial. We haven't done a good job there. And so we are looking at their recall, their aided and unaided but we're also looking at their action intent. And what we're finding is like hey, we're actually maybe reaching them, but they're not considering us nearly as much. And I think that's a different strategy and it's hopefully cheaper and easier to reach somebody and get in front of somebody who's slightly closer to the purchase thing and then. Yeah, I think, I think the reason I'm excited about some of this testing that meta is doing is it still stays on the purchase objective which does help ensure somebody is a little bit closer to in market and then it's putting the right message or the right offer in front of them versus just as like blanket net new reach. So I do think that meta has an issue on and they're, I believe they're starting to admit it on purchase campaigns of if the right inputs are not given it just circles the same people over and over. And I do think that can like bid up frequency and, and lead to not the, the best performance. But I don't know if like the best strategy is like we just need completely net new eyeballs.

Connor (24:40)

Totally.

Taylor Holiday (24:43)

Didn't you just say like I want to just that sentence that you said, if you don't give it the right inputs it does a thing that sounds like user error. Like that doesn't sound like, like what is the tool supposed to do if you give it the same set of inputs all the time? How is it suddenly supposed to turn those same inputs into a conversion of a net new audience? Like why would that happen?

Cody (25:02)

Yeah, 100, 100% like it's, it's the prompt and you're giving it the same Prompt. And I, I think, I think you said before we, we got on like there's different ways to, to accomplish the same thing. Like we went reach campaigns, we went TV, we had success, we grew 50% last year. So it somewhat worked. But I think where we neglected was those inputs and that diversified creative to reach different audiences within conversion objectives. Like that is really where our big focus is for this year.

Connor (25:29)

What I was going to say in, in a, in a brief defense of quote unquote, top of funnel is one. Cody, you just said meta making changes so that you remain on purchase optimized campaigns. The problem with that is like you're still optimizing for purchases on like a seven day likely just click basis. And it's like, okay, yeah, that's not quite how people shop like you ultimately as a brand, like I'm optimizing for purchases over a 30 or 60 day period, at least in certain parts of the funnel. When I'm running a sale that might not be the case. But when I'm thinking about growing the brand, I don't care at all really about people converting within the first seven days. And that's where I feel like you might want to optimize for something further up funnel. And then what I would say is like something I would optimize for when I say top of funnel. And I've talked about this a bunch, we optimize for view content. So people viewing products and they're dropping them on a landing page so they're two or three clicks away from actually viewing a product. What we're optimizing for is like a browsing user, someone who's shown some interest and intent on the site to get more information and then we've measured that via incrementality to say not only is that a decent optimization, but we're driving incremental purchases that are not getting reported in the meta account.

Taylor Holiday (26:42)

Otherwise what time horizon are you doing that on? So this is, this is another trip that I want to push on. Okay, well exactly. So, so when you run your incrementality study on whatever event, let's say it's, it's top of funnel, add to cart page view, what window are you measuring in?

Connor (26:56)

So like, so we'll run like our most recent test, we did this view content optimization for three weeks. We got a readout within 10 days. I think our first readout was at 10 days and we were unit economic profitable. Which is like, okay, if we can clear, we can return the ad dollars we've spent and the cost of the goods within 10 days while we're driving more higher percent new visits, more impressions. We think we're, we're feeding the funnel, we're going to capture more value over the longer period and we'll see that over a three week period. We haven't measured it over a six month period.

Taylor Holiday (27:29)

But so I just, so I think about this like a degrading tale like of acquisition over time. So like if you measured, you said in 10 days you had a view how much of the value was captured in the 10 days versus in the 30, like what percentage.

Connor (27:44)

So that's tricky because you're spending throughout the whole time.

Taylor Holiday (27:47)

Right.

Connor (27:48)

Like it's not as if I, we ran it for 10 days, that's the value we created and then we actually remove the, the, the target and now we're just like doing a holdout on that.

Taylor Holiday (27:58)

You don't, you don't do, you don't do a post treatment window at all.

Connor (28:01)

Well we do, but that would be at the end of the, the three week period.

D (28:05)

Yeah.

Connor (28:05)

So I don't know these numbers off the top of my head. I know that the 10 day readouts unit economic profitable and that's largely what we're shooting for is short term break even in ad channels that we feel we're filling the funnel for like value over the longer term.

Taylor Holiday (28:19)

So I would. Yeah. And I bet if you did a post treatment and I know if you've, I've heard a few of you guys talk about this but like you'll get a lift but the percentage of the lift will not be greater than 50% in almost any case. It would be very, very rare.

Connor (28:30)

Sure.

Taylor Holiday (28:31)

And so this idea that like people don't shop in short windows is the thing that I think is I just would challenge this idea because I think what happens is there's a long tail of impact but it also includes a lot of other impressions from a lot of other sources along the way that we then can assign back to this initial interaction to be like oh, they saw the super bowl ad and then purchase six months later. Yeah. But a lot of things happened also along the way in that six months, including their own disposition towards desiring the inmar becoming in market relative to the action. But when people want to shop for things, this idea that they're on like a 45 day journey of deciding whether or not to buy a wallet is like a very abnormal behavior. Once they're in market the decision is pretty tight into the action or the interaction with the ad in almost every case. Right. Like I just. It's very rare that there wouldn't be that you would have an ad impression, no subsequent ad impression of any other type held out from everything. And then like 90 days later they would be like, oh, you know what, now I'm going to go back and buy that product.

Connor (29:30)

Totally.

Taylor Holiday (29:31)

So. So I do think the short window optimizations get this like negative sentiment that a lot of times we as advertisers want to use to sort of push the assessment further and further and further along. But I think that there's this distinction between the perpetual tilling up of the soil so that when that person becomes in market they buy versus that ad impression made an impact that actually drove the purchase 90 days later. Those are like distinct things.

Connor (29:56)

I think, I think that's super fair. I guess this is like not going to be a scientific answer, but there's also no, there's no, there's no way around it. Like this almost makes me think so. Like one thing I'll say is our post purchase survey, I think it's 50% of people have heard about Ridge like more than six months ago. Right. So it's like clearly there's consideration I.

Taylor Holiday (30:18)

That data is so. It is so like erroneous in it, in people's capacity to actually determine that. I think it is a really hard thing to ask people to do.

D (30:29)

Okay, but don't you think there's trends.

Connor (30:31)

Out of that like at least directionally it's like. Right. I think we'd know if people were seeing an ad day one and then buying on day three or whatever.

Taylor Holiday (30:38)

You would know because they would tell you or you would know because click source data would tell you.

Connor (30:43)

No, no, I think they would tell us. I think, I think we wouldn't see the distribution of when did you hear about us? We would see a completely different distribution if we were closing on customers in a really short time frame.

Taylor Holiday (30:53)

Did you see the, I posted the other day the, like this graph of the A breakdown of qlik attributed source versus self reported attributed source.

Connor (31:01)

Yeah, yeah, yeah.

Taylor Holiday (31:02)

And that's like in a very, very tight window. Like the discrepancy is massive. Right. And, and part of this is just like a recall problem that like people's capacity to say why they did anything is like really, really subject to error. So I think, I think like if, if, if you were to ask me when I did anything six months ago, my error rate on that memory is like insane. It's like it is the, the error bars are so wide on anything that I try to recall six months ago that like the idea that we would use that as like then that means that some impression or ad value from that time period should be expected to be realized six months later. Feels crazy to me. That feels totally.

Connor (31:41)

Well yeah, but what you're saying feels more like the attribution question, like where did you first hear about us? Is so much harder than when especially if we're just taking that directionally. If my takeaway is our customers, our new customers today seem to have known about us for a long time. That, that feels like a relatively safe. You're.

Taylor Holiday (32:00)

That's. You just got very general. They've heard. Our customers have heard about us for a long time. That's like okay, but what do you do with that?

Connor (32:09)

What I think we do. And so this is what I would say is we are looking to measure profitable incremental returns on short term basis but we're not holding our ads to the same MER target that we have. Right. Like let's make sure we're driving incremental results in the short term that we're filling the funnel because we know people consider ridge wallet purchases for some amount of time and I think it's longer than people would other otherwise expect. And then we're going to manage our budgets to our MER targets. And this kind of reminds me of your. The discussions that have been happening over the last couple months around MER and AM where it's like there is there as E Com operators we have to just manage a very large black box and an unknown. So it's like if I can manage the very short term while filling the funnel for the long term and I'm managing against the MER that we're projecting then like then I'm doing my job well and I'm not too concerned about like perfectly piecing together which impressions did they see when over that 60 day period.

Taylor Holiday (33:05)

So that I like. So the idea that I would, I would release the idea that I'm measuring the long term thing and say that there is money that we spend that is a brand activation for the sake of driving high quality brand interaction on an ongoing and perpetual basis. And then there is media that we are attempting to drive incremental profitable return in some short window. I think that is like, that is, that is right. But what we try to do and I think what I was pushing on is trying to tie the two together which is to say that I'm going to try to defend the long term brand spend under some thesis of 90 day return based on survey Responses would be like well timeout.

Connor (33:41)

Totally.

Taylor Holiday (33:42)

I, that I would be like hold on. This is a, is a mechanism for a true return on investment is really, really dangerous. But I think the idea that brands should be spending on brand activations is like absolutely no doubt about it.

Connor (33:55)

Now do you think they should be measuring the brand activations?

Taylor Holiday (33:58)

Absolutely not.

Connor (34:00)

Yeah. Okay.

Taylor Holiday (34:00)

I think it's utter nonsense. I think it's, I think in almost every case like the, the attempt like I've, I've, even Connor. I'd be curious you guys. TV commercial. I've heard you guys like pontificate on this and I, what I watch people do is they grab all sorts of things. They grab all sorts of indications like to, to, to, to validate it. And I think that's understandable because it's so ambiguous. It's like the, the, the. The science just becomes very wonky at some point around, around this. Especially when your distribution gets really wide. Right. So now you have retail, you have all these different elements that to actually try to pin down the dollar impact is really hard. I, I prefer like what I like is and I, I posted the other day the, the vice president of marketing from Skullcandy about their new campaign launch for their Method headphones where it's like there's this brand story piece that exists as a center point of this campaign that is going to be driven for impressions. We're going to spend money on YouTube and it's going to serve a lot of purposes. It's not going to just serve this purpose of generating profitable media return. It's going to anchor the creative structure of the entire campaign for every asset. It's going to give a through point from beginning to end of the campaign. It's going to define everything down to the color scheme of what it's doing. And, and this asset is important. It plays an important role in the campaign. But it's not about the incremental positive contribution margin that this specific asset creates over time.

D (35:21)

If you want to hit next level growth you need to move away from correlation based measurement and move towards causality. There is no better way to test your channels. Your levels of diminishing return certain tactics within a channel than using a GEO based incrementality testing tool. And that's exactly what House is. That is exactly why all three of us use House. House is a self serve experimentation platform that allows you to configure regional test and control experiments to measure incrementality and identify points of diminishing returns. House is really the, it's the most controlled, the most scientifically sound way to do any sort of marketing, testing and experimentation. These things are very, very hard to set up on your own. It's rigorous. If you have one little variable messed up, all of a sudden your data is not trustworthy. That's why House is such a valuable partner. All you need to do is go into your ad ad accounts and ad exclusion or exclusion lists, run the data or run the test. And not only do they set up the test for you, but they also help you interpret all the results. So they're handling experimentation, design and experiment analysis, and also even going as far as helping you make sense of what to do based on that data. And we at hexclad have gotten some insane insights this year from all of our household out tests. So our core strategy this year has been doing channel level holdouts to really see which channels are driving the best and most efficient cost per incremental order. So we've tested YouTube, Meta, Google, PMax, TikTok. We're now testing AppLovin. We are getting a sense of which channels are driving the most incrementally efficient first time orders right now. And the amount of insights that come from that information is insane. It helps us inform where we develop creative. It helps us inform where we scale up budgets in certain channels and bring certain budgets down. Plus we are now able to use our incrementality results and actually plug it right into Prescient. So not only are we getting causal data, that is actual data that we can trust to make decisions off of, but now the media mix models and the probabilistic data from Prescient is even more accurate because they're using actual data to inform their models and the readouts that they're giving us. House is an essential addition to your measurement stack. Go to house IO forward/formators that is spelled h a u s.IO/ operators to start your incrementality practice today. But what about, what about. So to go back to your point of like what do you do with that information? Because we're so we're same boat, right? We're super high AOV. I just looked over the first five days of our Mother's Day sale. 85% of people answering that question chose one to three months or one of the two other higher options. So when I pair that with. Holy crap. The last four months of our, of our. Of our meta spend, in the last four months of last year we reached sub 10% of net new people. Why start to worry? Because I'm Saying, okay, Met is showing ads to people primarily 90% of people that have visited our site are in market that they think are going to convert soon. And then we take that, that leap and say, okay, how do we unlock more new reach? Well, let's run some view content campaigns. Let's just move up funnel a little bit. That's still a high intent action, but it's not a purchase conversion. And then we're measuring the net new reach on that. And that's. I agree with you, Taylor. I think there's a lot of things like you shouldn't try to, to measure from a performance marketing perspective. But then there's like the view content stuff that you absolutely can. And like we run those windows even longer. Like our view content test that we're running right now. We launched out on March 1, ended it five days ago and now we have a two week lag. So we got our midpoint read and I'll follow up with you to tell you what the lift was.

Taylor Holiday (38:56)

But that's, yeah, that's a two week. But that's again you say a long window. Two weeks is not a long window like that. Well, no, I mean very different than three months from now.

D (39:04)

I mean the whole test is a two and a half month test and that two week lag is from the moment our Mother's Day started to the end of it. So we're like, all right, we had two months of, of you know, top of funnel, whatever you want to call that right through the view content that had, you know, unarguably a, a higher net new reach. And now we have this two week post treatment window very strategically positioned where it's like evergreen moment for two months. Now we have a two week sale. Great. Like that's for us going to be the best readout of did we get someone in the funnel and then convert them? And even that I'm not that confident that that three month window of time is our typical discovery to purchase conversion. So it's still to an extent only going to be directional for us. But I'm willing to make bets. We have to make bets on directional data at, at our brand.

Taylor Holiday (39:48)

Yeah, I think you guys, so one, I still think you're saying you're spending for two months and then you're allowing a two week post treatment window. Right? That's what I'm saying. That's still very short. That's still well within the bounds of what I would think of as short term response to marketing. And, and again you have this moment of activation at the end of it that like is the obvious trigger for sort of the collection of the revenue at that moment. And so let's, let's see what happens. But I, what I'm saying is that if you took that treatment window out four more months and you isolated that cohort of users, you wouldn't see a bunch of purchases four months from now like that. If you don't continue to activate those people, they're just the impact of an ad degrades so quickly. Like think about what you remember from a TV ad and like this idea that you suddenly recall it and activate four months later is just crazy. Right? Like so, so I think ads, ads have a very short term impact. They can have longer term. There are some that like people deep connection and become part of the culture and ethos of America. But that's like very rare, right? Those things are pretty, pretty few and far between.

D (40:51)

Yeah, but the, but the, yeah, so that ad, that ad impression specifically, right, that's going to degrade quickly. But then the, the point is, right, this person that had not heard of your brand, that hear from your brand because of this View Content ad, all right, now they're in the funnel and now five months later, after seeing another six ads and eight emails and going direct to site three times and they sell an affiliate article and now they've converted. But was that person going to be there if, if they did not see that, that ad and that.

Taylor Holiday (41:20)

And that's what incrementality will help you, will help you answer for sure. Right? And if it's positive incremental return on ad spend, then it should be in a bucket where you're assessing and measuring that spend. But I just not all spend is going to fall into that category. And I think that's why things like Marathon are trying to get into this game and answer this question in different ways, which I, I love Tom and I love those guys. I think, I think they're trying to answer a really important question about somebody trying to understand what is the actual impact of these things. But, but I don't know that there's an answer that is, is reliable at this moment.

D (41:50)

I guess.

Connor (41:51)

Okay, sweet. Look, I.

Cody (41:53)

Switching gears a little bit.

Taylor Holiday (41:54)

Switch gears one last thing too because I think there is a lot of differences between your guys's businesses that are important to sort of name for people. Is that one kind of like you guys do very little net new product development in a way that that's a lever for you to drive. I know you guys have gotten into it a Little more recently.

D (42:10)

In terms of acquisition, you mean?

Taylor Holiday (42:11)

Yeah, yeah, totally. And the bulk of your revenue comes off of the set, right? Like the vast majority of it lives in that single product category. So the way that you have to solve your business problems is very different than Connor who gets to launch a new product every. You guys said you're trying to do one a week. Connor, I think is what you said before. Like that is like a fundamentally different system for driving growth in different ways. Even Cody, you guys for a long time have been one product hero and you just recently sort of expanded into a second one. Right? Like these are all very different systems for the kinds of problems you have to solve. You guys have a, like a big task of driving a large AOV item into a very disproportionate set of the population. And so that the skills you're going to evolve in trying to do that become very different than if somebody has net new products and color variations launching every seven days. They're just wildly different business functions.

D (43:03)

Taylor, do you see. I want to ask you a question about something you said you, you know, Connor said so should, should you try to measure that? You said no, like immediately. Knee jerk. Do you think? I agree.

Connor (43:12)

I mean there's absolutely not.

D (43:13)

Absolutely not.

Connor (43:14)

Absolutely not.

D (43:15)

And I agree with that. I think there's, there's a lot of like, like performance marketing lenses trying to like box up things that are just brand marketing. You're not going to be able to attach performance to it, but you should still do it. What, what did Jared from Nectar say on episode like 5? And Jared's like the most direct response marketer out there, one of the most, you know, technical there is probably. And he's like, don't do like, do good marketing even if you can't measure it right. Like duh. Do you think, do you see that a lot at CTC with the brands you work with? Like, do you see you, you don't see brands trying to measure like. And you. So you think that's good? Like, you think no, I, I'm sorry.

Taylor Holiday (43:53)

I, I cut you off too fast there. I, I don't see them doing this enough. I see an obsession with everything being measured. Like every marketing action sort of boiled down into this short termism. But what I'll say is that the best people I work with, and this is why Krista from Tokova sort of fascinates me, we were joking about how like she seems a little bit disconnected from the exact structure of what's happening in the ad account. But I actually think that's her superpower. Right. She's like, really smart and not hung up on this, is that she understands. Like, if you hear her talk, she's like, actually, like, romantic about the brand in a way that she'll talk about this new campaign, about we're going to bring the west to people. And it's like, it's spiritual almost. And I really think that that's what brand is. It's identity for people, it's the capacity to move them. And like, BG School Kenny is someone I reference a lot because he was a marketer that I worked with for a long time when he was the CMO at Igloo, and he never once looked in the ad account. Not one. My entire partnership with him, because that for him was inconsequential relative to how the business was going to grow. He was going to tell stories, he was going to build products and he was going to move people because he understood the culture of who he was trying to impact. And I just think that you need both. You need this pairing of these things. But the best brands that I get to work with do not look at me as responsible for the business outcomes. They. They look at me as being responsible for being disciplined with their dollars, not being wasteful, being good about distribution. But I am not the growth story. And so I think this is like my whole Tigmas thing right now is I'm trying to highlight the places where what I see people doing is the ad account is just a mechanism for distributing a story. But I'm going to build incredible stories. And we do that. The optimization setting doesn't matter. The click. Like, it works. It works because it's freaking awesome. And that's why it works. And I think more and more that's what I see. The brands that are winning is that like, it's so rare these days that someone's like, you know what? I found a new optimization setting. We scaled it to the moon and we got. It's like. Like that almost never happens inside of ctc. Ever. Ever.

Cody (45:47)

Yeah.

Taylor Holiday (45:48)

But the ones that are coming out with amazing, cool new products, building incredible campaigns, telling these stories at a higher level are the ones that are continuing to make the ad account work. And so I. Look, what that means is I'm not that responsible for it. We're not that important to the mechanism for your brand's growth. I can think we could be really harmful and that you can be really wasteful with media spend, but the idea that it's going to be the Sole source of your growth is just very rare.

Cody (46:10)

Does that change your offering? Like, does that change anything with how you think about like strategy for CTC and what you guys offer?

Taylor Holiday (46:17)

Yes, absolutely. Absolutely it does. Like when I, right now the biggest thing I'm struggling with is that for the last 18 months everything that we've talked about is this connection between marketing and finance. Because the primary market problem I saw was waste. Like the, the amount of wasteful ad dollars was insane. Like, and so there were so many brands that were so far out beyond their marginal frontier trying to just solve this problem that the thing that they needed to right size was like the actual operating structure of their business relative to how they were spending, media, how their opex and like that was coming out of COVID Like their balance sheets are upside down. There's like this real financial underpinning of the operating that wasn't working. So we came out with a message to that. But now a lot of that's been cleaned up by force. Like people have had to resolve that issue or they were going to die. And so now there's a new challenge. And the new challenge is growing, actually figuring out how to grow. And our, our offering is evolving to try to support that because the present thing doesn't do that. Setting up income mentality doesn't produce growth. Right. Like it may help you find waste and better allocate your dollars, but it doesn't lead to 50% growth year over year, you know, like so I think that that is actually the real hard problem and figuring out our place in that and how we position it is a real challenge. Because we can't develop new products for you at this moment in time. We can't go out right now and build the big full scale marketing campaign across every medium that's going to drive that. That's not really in our place. So we have to partner with great CMOs that are doing that. But we're thinking about what role we could play in that more in the future.

D (47:41)

Does that. Is that. I was going to ask you about the last piece. You said like if, because, because you guys do creative right? Like you do, you do creative development. But I mean we've seen it firsthand, right? Like when you build campaigns that drives big list. I would even go as far to say that you, you said, you know that new ad optimization, that optimization setting is not going to grow your business 50% or whether you're optimizing for North Beam Apex or in platform. Like, like sure, there's little wins to be had. And we should try to find those because those little wins matter. But it's like the big swings, the big campaigns are what really make a difference. And I'm seeing that firsthand at hexclad. I would even say the same about that. Like the one off ad you make, right? Even that, yes, you might see a lift. But if that, that single ad in a vacuum is not going to be the difference between your business growing 15 to 30%. But if that ad is part of a more robust campaign that has a web experience built around it and product offerings built around it and email built around it, and an influence bells around it, like, if you can stack campaigns like that and do three to five evergreen campaigns like that throughout the year, like, that will drive a huge impact. So I'm, I'm like, but you guys don't control those channels.

Taylor Holiday (48:54)

That's right. But what we try to do, because you're, you're exactly right, man. Like, and that's frustrating because what people often want is the ad that drives that. They want us to create the ad that outperforms every ad they've ever made before and drives disproportionate scale. And that's like a horrible game to be in. It's just a losing game to be in. And I've played it for a long time in many ways. But, but that's why our conversation when we go to building why I wanted to get involved in forecasting is because I wanted to be able to highlight to them, if you continue on this present process of sequence of what you're doing, here's the end result. Like, and it's dissatisfaction is usually the starting point of when I give them a forecast. And then I say, okay, well, in light of that, let's look at what has driven. You guys have seen my four peaks theory, right? Like, let's, let's look at what has driven disproportionate moments of impact historically and for other brands now. Let's look out at your marketing calendar. And where are those, where are we going to create them? What's the story? What's the moment? What's the product release? How are we going to build those into the marketing calendar? And the marketing calendar is the center point of a financial forecast, in my opinion. Like it, it is the qualitative thing that drives the outcomes. And this is why I think any forecasting that happens disassociated from marketing. And there was the old Cody and I have argued before over who should own a forecast, right? Marketing or finance. And the reason I think it's marketing is because of exactly what we're describing here is that the story drives the revenue. And so we will often look at the calendar and go, if that doesn't exist here, this financial forecast sucks. If we create a moment here, it could be better. And so I think the starting point for us is to start, at least in partnership, unifying those conversations, to say, what story will we tell? What moment will we create? That's going to drive disproportionate impact on the business.

D (50:29)

I keep telling my team, and it's a little bit, I'm swinging too far one way. I don't actually mean it literally, but that I'm basically telling them all we should care about is congruency. All that really matters is that the ad hits a destination, hits a whole funnel that is congruent with one another. If that's the only thing we do with our, with our paid ads, I don't give a. I don't care about anything else. And like you go look at our Mother's Day sale assets, right now, we're producing way less assets, period over period for our sales, but they all have a very congruent experience, from ad to collection page to product page. And that's more important than anything for us right now. And I think for a lot of.

Taylor Holiday (51:07)

Brands, dude, I pull on the same end of the rope like some. Sometimes I feel like we get brought in and we're like pitted against the team. It's like we're the ad account versus everybody else and what they're doing. And that's like the worst. It's like, no, no, I want everybody to grab the rope and we're all going to yank out at the same time. Every channel, everything. We're going to do it together. And that's going to create the most disproportionate impact. Yeah, exactly. Totally. Look at all this agreement, guys.

Cody (51:35)

You've heard us talk about Prescient AI before. We work with them at Jones Road. But you still might be wondering, what is it? What is this mmm thing? At its core, Prescient really helps brands get more out of every marketing dollar that they're spending by showing them what's working, what's not, and where to spend their money next. The Prescient team knows modern marketing is a sum of many things. Your media spend seasonality, other marketing campaigns, consumer sentiment, and so much more. That's why they don't rely on pixels bias, platform measurement or old research models to help you make the most Confident decisions. They truly built their MMM from the ground up based on models that adapt to your data and evolve over time, not the other way around. If you want to measure the halo effect that your campaigns are having on all of your channels, yep, talking about E Commerce, Amazon and even retail depression can help you out. You can test new channels, predict future performance of those channels, know how much you should be spending on each of them and continuously optimize how you spend your budget to make it as efficient as possible. Which listen we all need right now. You can do this all without sacrificing your upper funnel budget or bottom line. KPI's prescient has proven to us how truly incremental and efficient some of our upper funnel channels like tvr that was very hard to measure prior to. So if you've been wanting to try prescient, they just upgraded their model and their vision across measurement and retail is truly next level. They take marketing decision making where it's never been able to go to before. If you want to learn more and gain insights into how you can optimize your entire media mix in as little as 48 hours then go to prescianai.com operators and book a demo. Today I got a few questions. Finance. What are you seeing and what do you think you will see in terms of brands? Pnls I know you talked about some final loop data. Obviously a few years ago things got bloated and I think people are cutting, they're looking at obviously incrementality and contributions margin now especially with you know, cogs potentially going up. Like are you seeing brands or do you think you'll see brands cut OPEX super hard? Is AI solving anything there? You think like software is going to get squeezed? Like what do you think where brands at and what's going to have to happen?

Taylor Holiday (53:40)

Yeah, I think, I think the fundamental future of a consumer product business is just so different in terms of people structure. I don't know if you guys are experiencing this but I'm having a really hard time finding the surface area of things humans do better than AI. Like it's really hard for me and, and when I look out into the future I can just take every role of everybody in my company and if I break it down into it's like component parts like I say a media buyer. Okay, what does a media buyer do? Well they wake up and their first thing they have to do this thing called one map which is like provide a message to the customer about what happened yesterday. We use a specific structure. What so what now what? Give them the data, provide that. Well, that is like a horrible task for a human relative to an AI. Like so that's already been replaced. We built this thing called Scout that now does all of that messaging. Then I go, okay, what do they do next? Well, then they go through all of their, we have like immediate planning, docking and they make any adjustments to bids and budgets relative to the performance that is necessary. Again, a horrible thing for humans to do that could be automated away. Okay, what do they do next? Then they build new campaigns and they have to upload assets. Well, there's some cumbersome parts there that are like they're connected between multiple systems, between different partners. So the human still needs to participate a little. But eventually one click build and eventually that gets pressed down and all of a sudden you start looking at the work.

D (54:55)

Yeah, part's not skilled. I mean that's just, that's coordinator. Like anyone can click the buttons, upload the assets, build the ads.

Taylor Holiday (55:01)

That's right. And like, and, and so first what happens is it goes to a va, right? Like you, you outsource it to somebody on a cheaper labor spectrum. And like AI is like the, the tail end of that structure. But then I look at something like a really great one is. I don't know if you guys saw Toby, Luke, he put out this prompt the other day that was basically like asking Chad GBT to do a self reflection of him on strengths and weaknesses. And so I took it because I think Toby's awesome. And I was like, oh, let's see what it says. And I have never, not from my wife, not from my brother, not from my father, ever received a clearer, more insightful breakdown of myself. And when I think about from a management standpoint, how hard it is to teach people to communicate and give negative feedback about people clearly and how poor humans are at this because we don't like confrontation. And it's awkward and it feels bad, but the clarity. And so I had all my leaders do it and the conversation and dialogue about what it put out, took it home and read it to his wife like it was, it's like it is, it is so incredible at its capacity to receive information from us endlessly and then provide back very clear, direct thoughts. And so I think about that, how that impacts like management like our one on ones and quarterly feedback and all these different elements and you just start going across all of it and realizing, holy cow, like there, there something is really special here. Now it's hard, it's not fast, it's clunky moving people through it it. But I think that long winded way of saying opexes are going to be really lean in the future because marketing drives growth and the more of those dollars that you can fund into that part of the business, the better you are. And there's a limitation to cogs like these are hard goods that only there, there's like a commodities market that underlies the reality of how low those can go. So I think that you're going to see everything get pressed to its maximum viable point to be able to deploy as much possible fuel into growth.

Connor (56:46)

I said this, I said this recently. You know we've had, we had Dan McCormick on from Create. We had Zack stuck on from Hollow Brands. Like we've, I think we've been calling them like 3.0 D2C brands which are like they're doing 4, 5, 6 million per full time employee which I think you can correct me if I'm wrong. Feels like best in class right now. Is that what you would say for sure?

Taylor Holiday (57:05)

Yeah.

Connor (57:06)

Yeah, totally. And now I would have said six months ago that Ridge was almost too far gone with that. We've got too big of a merchandising calendar. We've got too many products that like the operational leverage just will never be as high as those brands. And it wasn't until I guess it was the most recent like image generation thing where it was like oh, I had a clearer picture of how I still think we're, we're like probably it's not that far a year or two years out from being able to get the operational leverage across a way more complex business. Multiple categories, multiple products, big merchandising calendar. Because the flip side is for those maybe not familiar with Creator Hollow, those are like more or less single skew products. They're selling gummies on subscription and they're selling a bunch of socks at once. Ridge is spread way thinner and I'm super excited about the future. And that's what you just described about having the operational leverage to actually support that at the, at the same rate.

Taylor Holiday (57:58)

Yeah, I think the, the fear I have is, is that it's really hard to go back for us who already have a bunch of people processes to go the other way.

Connor (58:07)

Totally.

Taylor Holiday (58:08)

Who I think is going to fly by us. There are all these like people starting from zero. Right. That are going to be native AI in a way. Like at CTC in 2022 we had 200 people. We have 60, 60 now and we do more revenue today than we did that, and, and that's not because AI everything, but it is because we became really candid and clear about what the necessity of people was in every part of the business relative to the task at hand. And work is a gas. It fills the space that you give it. People will, all people will ne. Employees will never come to you and be like, you know what? I should probably be part time. I'm only working to. There's really only 20 hours of work here. It will never happen. Happen. Right. The financial incentive is wrong. Right. So I, I think that there's a real challenge that as you, as you pull things away, you just discover that a lot of that work is, can be done in other ways. And I think every brand right now in this moment should be challenging themselves to find those boundaries and see what they are.

Cody (59:01)

Yeah, I feel like we're, I feel like we're in the challenging time. And Taylor, I know you're like an early tech adopter and I try to be as well, where it's like, it's so close and it's, you can see what, you know, where it's going with image generation and stuff like that. But it's also not totally there yet where, like, I'm not firing designers, I'm not firing developers. Like, I'm playing around with this. Like, it's almost like a cursor for Shopify. It's like shop dev, like the instant and like I have like 70% of like a landing page done and it's pretty cool. But like, I still have to give that to a dev or a designer. So, like, I'm not quite ready to do that. But I think, I think it's super close. But I was talking to the guy who owns our dev agency about that. Like, same thing. Like, it's kind of at this like, really frustrating point where you can see it on the wall, but it's not totally there yet to implement.

Taylor Holiday (59:46)

Yeah, I think, I think you have to just do it right. Like, so I'll give you two examples. So, Cody, I know you right now. The way that you're even approaching creative, I think is you're giving a lot of people the opportunity to sort of create on your behalf on a, a percentage of spend basis. You put that tweet out the other day, and what I would do, what we started doing is I, I think that, right. The sequence of selling creative, especially as a service provider used to be. Do you want to buy X ads? Ads? Okay, I will sell you X ads. I will go make those ads after You've bought them from me and I will show them to you. You will decide if you like them or not and then we will put them into the ad account. And I just think like the whole thing is flipping where it's going to be like here's an ad, do you like it? Yes or no? If yes, I'll put it in the ad account or I'll even put it in the ad account on contingency and if it spends then awesome, you'll pay me after that fact. And we can afford to do that as a service provider now because the cost of production is so low like you it's the risk is basically zero across the board. And so brands should be demanding like give me the assets and I'll see if it works and if it works I'll pay you for them because and that was non viable for us if I had to pay a really expensive designer to make the ad first. But what we've done is we've now partnered in a similar way where we'll bring designers in and we'll say here's the deal, here's the our client roster. You're going to make ads, you're only allowed to use AI. That's the rule. Because we want to force the function of you figuring out how to make these tools useful. Then you're going to bring the ads to clients and if they approve them and they pay for them, you will get paid then too. And so you can create those this same system of obligation and what that forces is people to solve the problem. And we just had our first batch of 100 AI generated images get approved by a client that, that from scratch. The whole thing was AI generated and so you just have to fit. It's clunky still, it's imperfect. The images come back a little bit wrong for a while but it's refining just like anything else. Like, and I, I'm playing with the website building thing is crazy. I don't know if you guys have played with lovable like or any of these.

Cody (61:32)

Dude.

Taylor Holiday (61:33)

I, so I, I coach a little league team and, and we, we have this game, they all love video games. So like we come up with XP challenges during the game to try and get them to focus. And like I built an XP leaderboard on a website and showed it to them. I was like guys, you can go to Yankees XP.com and you'll see your scores. And it's like I did that. I don't know how to code anything but like it was, it feels like Freaking magic. It's insanity.

Cody (61:53)

Taylor, what's building right now? I'm building a little like, Doge software tracker for our business where I'm like, this is our goal. I want 50k a month in savings or 25k a month. And I'm just like, putting in there, just like around with it. But yeah, it's. It's so cool.

Taylor Holiday (62:05)

It's crazy. You just talk to it and it like things appear on the screen. It's like, honestly, the world we live in is just insanity.

D (62:11)

What's the name of that tool?

Taylor Holiday (62:12)

Lovable. There's a few of them that are. But that's the one I play with. It's just like, literally you just type to it and you're like, I wanted to do this. And it's like, boom, it's on the screen. You're like, holy cow.

D (62:21)

And it's doing. It's just the AI is doing the. The coding, development and. Wow, that's awesome. I've seen some of those tools too. I'm like, I mean, how far away are we from, you know, you or me or anyone who, like. I'm not a designer, I'm not an engineer, but I have a lot of experience working with designers and engineers to make pages. Like, are we far away from us being able to go in and spending an hour and having like a very robust landing page published?

Taylor Holiday (62:45)

It's already happening to all of you guys. Connor, I see this for Ridge for sure. You guys get knocked off all the time using this exact mechanism. Our clients deal with this all the time where it's like, make a website like this website done.

D (62:56)

Right, right, right.

Taylor Holiday (62:57)

There. There's actually a. Like, where this all goes. Is sort of crazy, right? Like when there's literally zero barrier to entry for the creation of a website. Is. Is a. Like the, the ex. The Cambrian explosion of the number of websites that exist is just crazy. And I. We literally deal with this a lot. Where our clients are seeing a significantly growing number of knockoff websites of their exact brand and the exact style and what to do with it is just like this constant whack. A mole of trying to figure it out out. So there's. There's something there. There's like all sorts of novel problems that are going to come out, but it's a. It's. It's crazy.

Connor (63:31)

It's been a year since we migrated to Rich panel and I had no idea how impactful the right customer service tool could be. Here's what our customer service team has achieved since making the move 1. Our order volume continues to rise but our support tickets, if not our self Service portal helps 47% of website visitors help themselves immediately without having to contact their agents. 2. Their AI powered social media moderator is awesome. We continue to spend a ton on Meta as a part of our marketing mix and it flags and replies to thousands of comments automatically to help us make the most of our ad spend. Like many of you, I've been cautiously skeptical about certain automation and AI use cases. But our support quality hasn't dipped at all. It's actually gone up. We're at an all time high of 96% customer satisfaction score. All this and it's still 50% cheaper than other platforms. No limits on AI usage or tickets and fair predictable pricing each month. With market and tariff uncertainty, consumer confidence is in the gutter. You cannot afford bad customer experience or overpaying for older software tools. And migration is super simple. They handle your data import, agent training and automation setup. You only need two or three calls and you're live in 14 days. They guarantee a 30% ticket reduction in the first 60 days or your money back. So it's a no brainer if you want happier customers and a happier finance team. Head over to richpanel.comdemo to book a demo today day I was so on the topic of like the surface area at which people are better than AI. I was listening to the VP of Growth from ramp on 20 minute VC. Great podcast. Jacob shared it. So I don't know if you listened to it Taylor, but they were talking about Harry Stings from 20 Minute VC was like yeah, don't you think you could just give the AI all of your campaign data and it's going to come up with the best campaign. And George is his name was talking about how what the AI will do in that case and you kind of just described it is it will just iterate or it'll just like build, like replicate. And that's like that's what's happening now. It's like you could go hey cloneridge.com, boom, that's done. Amazing. But for the person running ridge.com, we actually have to bring in net new ideas and I feel like that's where it's almost like a process of curation where humans at least have some sort of advantage right now. What are those net new ideas? The execution, the iteration, the like replication can be done with AI but the the truly net new stuff feels at least human driven at the very least.

Taylor Holiday (65:51)

Oh see like you're you're a hopeful man. I, I so one of the, I think our industry is like insane, insanely like replicative. Like think about the whole creative workflow is like load up motion or foreplay and go look at everybody else's ads and then make a bunch of new ads. Like I think that's a prompt problem. Like I, I bet if you said here's my campaigns, all the visuals, the rule is you can't make anything like one of these. Make a visual that is distinct from all of them. That's still like a structured task that, that allows it to exclude things and then include then anything that's not there. I think that problem will be more solved. I don't know. I think I'm more to the side that what you're describing is how a human brain works just as much as it is how an AI brain works.

Connor (66:37)

Yeah, yeah, yeah, I hear that. It's at least, I'd like to think it's at least and maybe I'm just trying to justify my job. It's at least on a longer term time frame because like even what you just described, you could theoretically just prompt it to create something that new. You said the industry is very duplicative or something. But even that is like curation where it's like what are the brands you're looking at to duplicate or iterate on or whatever else. And that's where, I don't know. I think that that strategic piece is safe for let's call it three months.

Taylor Holiday (67:08)

Let me show you something real fast. Tell me what you think of this. So George at cozyearth is a good friend, awesome nine figure brand guy. Yeah, he, he's a lurker on Twitter. He needs to, he needs to engage more. Another awesome marketing leader and he was hitting me up about like some product collabs that they could do and I think there's like a perfect collab opportunity between Tobas and him. So I introduced Krista and George and before I did it like just to have fun, I went into chat GPT and I said design me a collaboration between these two and I don't know if you can. I'll share my screen real fast. I don't know if this will get it. Can I do that? Here we go. Okay. So this is like the campaign that it came up with. The frontier luxe blanket. The concept material fusion pulling from all of like to Cova's core value propositions and side of Cozier's edge detailing weight and feel. Here's the packaging, here's the sustainability and craftsmanship. And here's like the image of what this product should look like. Like, right? And that was like off a very basic like design, a collaboration between these things. So that is like, to me lives in this realm of. It's a novel idea in that this product doesn't exist in the world. Right, like, so it's not an iteration of a blanket that exists, but it's taking a set of source material from both brands that have like, like, it's like the, the ingredients, right, for the problem and it's, it can design the full campaign from beginning to end. I could build a distribution plan off of it in this way that is like really wild to me. So like, does that qualify as net new to you? Like where, where would you put that in that category of new versus Iterative?

Connor (68:48)

Well, the collaboration between COSI and to Covis is extremely net new. And that's your idea.

Cody (68:54)

You can use AI to come up with. You can give it a prompt and I've done this. This is our goal. This is what you need to know about Jones Road. Give me a list of companies that we should.

Taylor Holiday (69:05)

That's again, just change the prompt to. But the point is that there's novelty in there. It's not an iteration on a product. It's a net new product that didn't exist in the world that was suggested by the AI. And even if I went a layer further and I said design a collaboration between two brands and give me five products, you would end up with products that don't exist in the world as a suggested idea. And I think you cannot exclude that from the realm of, of new. Like, that is just, it just is that product, the visual of it, the, the components does not exist in the world. And so I think that's where I just go, well, if that's the case, like, then what is again the surface area of a thing that it cannot access to? And I just keep struggling. It's like grasping for a straw to find where that is. Because I, I, I, I have seen novelty. I, I again, I've received emotional feedback. I've seen visuals that are net new in the world that it's just, it's hard to figure out where it stops.

Connor (69:58)

Yeah, look, I totally hear you and maybe you guys are like, you guys are like whittling away at the novelty. But like, I'd even describe the. Hey, give me a list of brands that Cozy Earth could potentially collab with. There's still a process of curation there that is really important.

Cody (70:12)

And then you wanted to create a new brand for you.

Connor (70:17)

We're just trying to prove where in the loop are humans valuable. And I think that there's, I agree that there's something like, like there's something intrinsically good Utah based blanket brand versus like western first cowboy boots. It's like it's not incredibly obvious if you show up to chat GPT and say cozy Earth needs a bunch of collabs, give me some ideas. I don't think toous ends up on the list and I think it could be a great collab that is the process of curation that I think is still valuable.

Taylor Holiday (70:43)

Yeah, I don't again today still valuable for sure. And I think, I think part of the experience is that it's all responsive right now in that I think a big chasm shift is when it becomes proactive. Right. In the sense that it doesn't, doesn't require me to prompt it. Right. And this is where when you think about like what a marketer does, it's like they bring the ideas. But the second like you show up and there's an email saying hey, I was thinking you should do a product collab between X and Y. I think that's like a very different thing too. Right then I had to go and ask it to give me something. So I think there is like that threshold is the one that will really I think also make it feel like because I think about like the, the units of interaction. Like really like I'd say 85% of my communication with all of my employees is like text in a slack box. And, and the reality is, is that like that can be entirely replicated by an AI in the way that is, is really challenging. And this is why I think people need to think really deeply about how to make their work more human in this moment. And a lot of that is about getting out and building relationships external to do kvm. Like have you guys heard of the KVM rule? Have you heard of this? Okay, so the KVM rule is this theory that like the, the sequence of AI adoption is going to follow through keyboard, video, mouse. Right? So anything that's done exclusively with a keyboard, video or mouse is gone. It's dead. It cannot be replicated better by humans using those tools. So instead what humans need to focus on is anything that's not kvm. So carpenters, electricians, like these things like robotics is slower to get to those, those elements. It'll get there eventually, but it's going to be way slower. The same thing in our work is like Being in person, interacting with a client, having dinner, those are all things that are very hard to replicate. But anything that happens with keyboard, video mouse is in real trouble. And so that's sort of like there's a rule or theory around that that I think is I'm finding to be more and more true in, in, in the. In my work.

Connor (72:35)

DTC dinners. Safe.

Taylor Holiday (72:38)

There you go. At the end, it was about the friends podcasting.

Connor (72:44)

Podcasting arguable.

Cody (72:46)

We got another six months I think.

Taylor Holiday (72:49)

Have you guys seen on that point we could do this all day long. There's like. So we have this global accelerator program which is like for seven figure brands that's like growing like crazy. And the biggest constraint is hiring. So we, we have to like source from all around the world and we have to do all these interviews all the time. And there's this new tool that's like an AI interviewer. It's, it's freaking incredible. It's like, like the first interview can be an AI that gets on and asks you a series of questions, transcribes them, scores them, provides you a sequence whether they move on or not. And it's like it's a zoom call and they feel like a person and they have a set of interactions and they can be open ended and like it's just so to the point of podcasters. It's like, man, that person is incredible at interviewing. Where does that go from there? It's just like, it just doesn't stop. It's just crazy.

Connor (73:32)

Dude, I'd love to have a AI moderator for marketing operators.

Taylor Holiday (73:36)

Yes, that would be cool. Yeah.

Cody (73:38)

Yeah.

Taylor Holiday (73:39)

Well think about it. Yeah, you could just be sleeping right now, man. You could be making money.

Connor (73:44)

100%.

Cody (73:45)

Yeah, I'm looking into like a, a user research thing. I have a demo set, I think it's called. Listen. It's a new one, but same thing. It's like how can we. Because right now we'll, we'll have somebody on our CX team talk to customers and reach out to them and like, you know, put everything in a document. But, but, but yeah, like imagine just being able to scale that, that program up.

Taylor Holiday (74:00)

That's right, exactly. There's so many things like that kvm, man, it's in trouble.

Connor (74:04)

All right.

Taylor Holiday (74:04)

Right.

Connor (74:04)

You guys want to call it a show?

Taylor Holiday (74:06)

It's great.

Connor (74:07)

I think it was killer. Taylor, thank you for coming on.

Taylor Holiday (74:09)

Yeah, guys, I appreciate you all. You're, you're doing good work in the world. It's fun to listen to you all the time.

Connor (74:14)

Appreciate it.

D (74:15)

Appreciate it. Yeah, appreciate it.

Connor (74:16)

All right. Thank you for listening to episode 59 of Marketing Operators. Thank you again for Taylor Holiday for coming on a shadow guest turned real guest officially. Thank you to our sponsors Motion rich panel after self prescient in house. And as always, make sure to, like, subscribe. Subscribe, tweet at us. Let us know what you think and share with your friends and family. All right, see you next week.