A (1:58)

I don't I didn't know the movie, but he looked good.

B (2:00)

He looked fantastic.

A (2:01)

He looked way better than Jack Black because, like, right next, Jack Black is like short and pudgy and Connor's like, tall and jacked.

B (2:06)

It's like evolved form of.

A (2:08)

That was probably the only feedback of the costume. Otherwise he looked great.

B (2:12)

Yeah, yeah, yeah, 100%.

A (2:13)

How about you? You dressing up at all? Today's Halloween as we're recording this?

B (2:17)

Dude, I'm not. I'm going to. I'm going to. I'm going to play by ear tonight. I might go to a party with my brother and some of his friends. I got a priest costume as a backup, which I think is sick, dude. Pre priest outfits, underrated fits. I think they're pretty tight with like the. With the white collar. Like, not like, not like full. Not like full, you know, Catholic Pope.

A (2:42)

But I love it. I love it. I. We'll see. If my wife makes me dress up, it's. It's probably the first year my daughter will get to enjoy it, so if I have to, I will. But we'll see. I think though, somebody invited me to like a seven o' clock thing on their porch and I was like, my son's gonna be sleeping by seven. Like, totally. I'm out. But yeah. All right, cool. Today, got a fun one. I actually probably being a terrible moderator because I really just did the episode plan and it's a lot of my tweets. Often when you moderate, you'll pick one of my tweets. I feel like you haven't had as many tweets lately. I think you've been actually like, whether you've been moving or actually working or going to World Series Games.

B (3:20)

Yeah, a little bit of both.

A (3:21)

Yeah. So I picked some of mine, but I'm excited to have a conversation about and just get your thoughts and you can tell me where I'm right and where I'm wrong.

B (3:28)

Perfect.

A (3:29)

Let's do it. Cool. Well, before we do that, as always, want to thank our sponsors. Today we got a special bonus episode. So very excited. We'll have a great guest. Kathy from Applovin is going to join us later, but right now I want to thank our sponsors. We have Motion Rich Panel, Prescient, AI After Sell, and House. Let's get into it.

D (3:46)

So I don't know about you guys, but we are fully locked in on Black Friday, Cyber Monday and Holiday Sale at Hexclad. Motion is, as always, a very big part of this. We do a ton of just iterations on Evergreen ads with like Black Friday sale banners. So we're just taking literally our top performing ads for the entire year, slapping a banner on them. And that's at least one part of our content stack for bfcm. So easy just to use motion to look at like last 90, last six months, year to date. Which ads are getting us the best efficiency, which ads are getting us the best scale. It's like a really quick and easy way to pull that report in motion and then come up with just a bunch of overlays onto your evergreen ads. That's one way we're using motion as we head into the peak season for us. The other way we're using it is for more like instantaneous feedback. So we're saying, hey, we did that. We also shot and produced all these seasonal ads, so which ones are performing best and then we'll iterate on those like during bfcm. So all of this is getting powered by motion reports. It's just the quickest, the easiest way to see what's working, what's not. Connor, how are you guys using motion at Ridge to inform your Black Friday, Cyber Monday and holiday ad decisions?

B (4:58)

We're in a similar headspace. We did an exercise that I was calling a Bottoms up planning this year where we granularly looked at what worked at what times throughout, you know, late October, November, December last year. That all comes from analyzing our creative. So we got that foundational approach of what are the things we want to be prioritizing and then we can get into the fact of what are the new things that we want to be trying this year. And motion really kind of led point on a lot of that analysis.

D (5:23)

Cody, how about you?

A (5:24)

Yeah, same thing. Like we'll have everybody propose their strategy and their plan but like there should be no reason to start from scratch. Like there's no, you know, blank page. I think you got to hit that like 80, 20 of explore and exploit. But I think for, for exploiting like you got to look at what's performed well. And you know, we try to have a lot of warm up points. Like we will have like a holiday kits launch soon. We have Labor Day, we have last Black Friday. So we just build a report of all of them. We just see what traits perform well. Anything that you can filter by naming convention so we don't have to start with a blank screen. And then we're able to just get more pinpointed in our strategy, hopefully each launch.

D (5:54)

And lastly, one thing I really, really appreciate about motion is you don't need to like be this expert in how to use the tool. Like, like they're very good at getting you onboarded, getting your data ingested and connected, and then training you on exactly how to use the tool. So if you've been dragging your feet, it's time to get going with motion. Head over to motionapp.com.

A (6:16)

All right, so if anybody has been not living under a rock, have you been on dtc, Twitter, you've seen the apocalypse. It's here, it's coming. Andromeda, which is an awesome name by the way. Like I think we have to give Meta credit for that name. It sounds like a, some, some five headed monster. But it's funny because.

B (6:35)

Yeah, well, just quickly because I did some research on this a couple weeks ago, so I'm not going to be able to recollect as well as I'd like, but Andromeda, they name a bunch of their internal projects off of Greek mythology. So like the glasses are called Orion, you've got the Orion constellation, you've got Andromeda, you've got.

A (6:49)

It does make sense because it's a badass name.

B (6:52)

They're like big AI cluster is another Greek mythological being or something and Andromeda is some sort of woman. I'm not gonna, I remember the story. We'll have to circle back on this later. But Facebook crushing the naming conventions.

A (7:06)

Absolutely, Absolutely. So, and it's just so funny because like especially I feel so, I feel like there's DTC Twitter and then there's like Ecom Twitter and there, there's definitely overlap but that's a little bit more dropshipping affiliate type space and like the, the YouTube gurus and for some reason like they're just learning about Andromeda now and like blaming performance right now at Andromeda, which came out beginning of the year last year for some things. But it's obviously like, don't get me wrong, it is a huge thing. I just, I just find it funny that right now everybody's talking about it. A lot of people are talking about creative diversity, believe that's an old, old wooden ship.

B (7:43)

You know, one, one thing, we should just make the point. And then I do want to jump into. People are blaming Andromeda for poor performance in October right now. You and I are always aligned on this. It pops up like every nine months or whatever. I got a. I got a great stat from our Google rep sentiment snapshot. The economic sentiment index has dropped to its lowest level in over three years. While the potential of November suspension of snap benefits will Intensify the budget crisis for essential goods shoppers. It's one of those things where it's like, is it Andromeda, or do people just have less money right now? Are people squeezed for cash? It feel the government's shut down for 30. Like, is there enough uncertainty, Are enough people affected that people are buying. Largely, people are buying inessential goods on shopify sites at a slightly lower rate. Like, I would bet that's more of what it is versus this. Like, the boogeyman of Andromeda.

A (8:29)

Absolutely. Yeah. No, I completely agree. Barry hot just tweeted. Maybe we'll put it in the show notes. But Barry hot just tweeted, essentially said the same thing. Like, stop blaming Andromeda. Like, it's the government shutdown. Like, there are so many people out of work and obviously there were, you know, fiscal concerns ahead of that. So. Yeah, no, there's. I mean, I don't know if you saw the Chipotle earnings yesterday. Chipotle is down like 15%. They're blaming on consumers not spending. A lot of people are blaming Chipotle on their food quality going down. What's your take on that? Because I'm a Chipotle fan. Do you think they've gone down?

B (8:57)

I eat so much Chipotle.

A (9:02)

Do you think they've gone down? Do you think the prices. Has become high relative to the value.

B (9:07)

Prices of everything are high. Frankly, Chipotle's still good in my book. It wasn't nearly as much of a consumer eight years ago when people, I guess, say it was like, incredible. But I think it is a perfectly fine meal right now. I eat it all the time.

A (9:21)

Do you ever get catering? Because, like, I always joke that if my wife was out of town for a week, I would just get Chipotle catering for the week.

B (9:27)

No, that's.

A (9:29)

Dude, you're. You're living in l. A. You're. You're living the bachelor life. I don't know. Yeah, I should prep.

B (9:34)

I should think about it. But I. Like, I brought that up earlier this year. I remember there was a good set of statistics where I think it was kava. Chipotle and sweetgreen were all declining growth year over year or slowing growth year over year, Something like that. And honestly think that consumer is a great. Like, that is the type of person who's also shopping online. Like, that is a predominant. Like, you are affluent enough where you're going to Chipotle, you're not just buying Walmart groceries. And those are, you know, e Commerce is only 30% right now. We already know it's the most affluent shoppers shopping on D2C sites. And I think there's just a lot of overlap between that online buyer and the Chipotle Cava Sweet green customer. And when all those restaurants are slowing year over year, I think it's a good indicator for how the rest of the D2C ecosystem might be feeling.

A (10:21)

Yeah, yeah, no, I agree with that. And I think they said it's. It's younger consumers and, you know, it's like the 25 to 35 range is really where it seems to be tapped out or struggling the most.

B (10:31)

Totally.

A (10:32)

The one thing I said, I don't know if you ever saw that tweet. I'm a. I'm a big Chipotle fan, but there was like, one guy who went to like, 40 different chipotle and ordered the same thing. Got like 40 burritos. Did you see that one? And he, like, compared them and they were, like, wildly different.

B (10:44)

Yeah, well, the Chipotle by my house in Salt Lake was wildly, wildly inconsistent. I once got a salad, and they put the. The salad on top. They put the lettuce on top. Like, they just. They had no idea what they were doing. And then you would go into the store and they'd give you a completely different. They'd really take care of you. So Chipotle can be experienced in many different ways across locations, across in store delivery, etc. But I'm bullish. I like the steak. Bowls are good.

D (11:12)

Yeah.

A (11:12)

So glad we got that out of the way. The economy, it sucks. We can complain about it all day, obviously, like, it's. It's important. Like, brands need to know it. Like, don't fire your agencies, fire your team, because the economy sucks. Like, it is a lot harder. And don't get me wrong, the standards are. Are higher, but we. We have to be realistic about it. That being said, there's nothing we can do about that. So let's talk about what we love to talk about. Absolutely. Give us the summary. Like, what's your take on these changes? Just, like, give the. The listener who maybe is less informed understanding of what Andromeda is when it came out, why everyone is freaking about it right now. Freaking out about it right now.

B (11:48)

Yeah, totally. We covered this back in. It was like, April, I believe, is when we first did our podcast on it, which basically shows you kind of the. The latency between B2C, Twitter and E COM. Twitter. Maybe the big difference with Andromeda is that they. They've released this new more efficient AI engine so that they, they can reference more creative in the ad auction to better match creative with the user. And their point was that they are able to improve ad match quality because of that. And it was something like they were improving ad match quality 8% by being able to reference more creative. Now what the reps will tell you and what the meta organization will tell you is that because of this change, the importance of a large amount of diverse creative is more important than ever. Because now meta is actually utilizing that in order to serve ads to consumers. So everybody is. Now that is like the goal of Andromeda. That is the guidance around how your creative strategy can change. And that is what people are freaking out about right now.

A (12:51)

So, so practically what does this look like? What do brands need to do different? Like let's, let's get into that or is there any more that you want to share on, like the actual underpinnings or. Because there are other changes. There's like gem and lattice and stuff like that. I don't understand it. All my understanding is just all of this AI, tons of compute thrown at it, and, and it's just like you need more ads than ever before and you need more different ads than ever before. Right, That's.

B (13:16)

And I think that is as far as like the, the important parts of what you need to understand. I think that's more or less it.

A (13:22)

Yeah. And I think people have been talking about creative diversity for a while, right? For a year, maybe two years. And I, I don't feel like it's ever been super well defined. And I feel like with these conversations that people have been having, we're getting closer to that of defining what that actually looks like.

B (13:38)

I also think the big difference, I mean, look, I'm sure you guys have been in the same bucket, but the problem with, hey, you need diverse creative and we would produce all this creative and it just maybe wouldn't get spend. Right. So. So at least the way that I would connect those. My experience so far with what meta is now telling me is like, yeah, a year and a half ago when we were producing a bunch of creative, their ad matching engine was not utilizing the entire catalog of ads in order to serve it to a person. It would be, you know, for the sake of simplicity and efficiency, they would focus on a subset of your ads and then match those with users. So theoretically, I completely understand, hey, if they are way better at utilizing the catalog now diversity can actually be utilized at a higher rate and we will benefit from that. So again, I think it's all a little tbd. My media buyers will say, hey, we're still kind of not seeing much ad spend get, get floated down to the account across this like, long tail of ads. But it seems as if from a technical perspective, Meta is continuing to invest in this future of massive ad selection and now they are better utilizing all of that.

A (14:43)

Yeah. And the one thing that I think everyone seems to be freaking out about, and I think for good reason, and people are starting to come around to, is the what constitutes a different ad in Meta and how different the changes need to be to be considered different. My understanding of it, and I know nothing about AI and models, is like there are so many ads and there's so much that is Meta is throwing at it and like they're just going to bucket things together as kind of the same ad if they think it doesn't really change the. Really the. It's all going back to like the bear auction outcome. It's kind of like if we don't think that this small headline change or even a, a different visual but with the same offer and the same messaging is going to really change the auction dynamics or like the engagement or the potential conversion rate, we're going to bucket that together. And I think that saves them compute and that can kind of say, hey, we don't really have to scan those. We can put resources on other advertisers, other options, other bigger swings. So I think that's the thing that like, I was personally very shocked to learn and I think I've been thinking about this a lot and, and, and advising my team to make ads that look different.

B (15:55)

Right.

A (15:55)

That if you're doing statics, don't just do, hey, I'm going to do the same image with a different headline. Like, I want to do a different ad. I'm like, if we're gonna change the image, like, let's change it more different. But I think like some of those things that either have different message, like one like you can have the same ad, one's about a sale, one's about, you know, a feature. Meta buckets those together. Even though you're like, those are actually, we're saying different things because they look similar. Or if you have the similar headline, doesn't have to be the same similar. Right. Like feel great. Right. And you have a white background with a grid format and then you have a blue background with a different format off. Not always, but Meta is often saying that those are also a very similar ad.

B (16:34)

Yeah.

A (16:35)

And I think that is blowing people's minds a little bit.

B (16:37)

Totally. Yeah. Look, and I think everybody's still trying to like, wrap their minds around what it means to be creative, diver, creatively diverse and how do you like, operationalize that and action that. We were talking about this internally because I think it's helpful is we're, we're thinking it more, we're thinking about it more from the perspective of what does content look like that people often consume? Like, and I was just, I was just making this point. I think we're like over indexing and maybe this segues nicely into one of your points. But like, we'll, we'll over index quite a bit on performance. Ugc. A lot of well done, quick cutting ugc. Only some percentage of the Instagram platform actually consumes content that looks like that. So we should be thinking, and we actually have many examples of this too. We'll try things that look like headlines from articles, right? The like, did you know, style blocks. And then it'll have a big headline like it's breaking news, something like that. That is a new format that is a very consistently consumed style of content across Instagram. And I think creatively diverse. And then if you're put in that mindset, memes are another one. Like, memes are different than news articles are different than UGC are different than, you know, like beautiful static ads that like people really like consuming. So I think it's almost like we're thinking ad first. Like, okay, I am the ad strategist. How do I create diversity? And that can be a little bit overwhelming. Thinking about it more from the perspective of what are people consuming has at least been helpful for our internal processes.

A (18:05)

Is it, Is this a shift? Like, are you, Is this a shift where you think best practice was or it was, it worked to think, what ads should we create for this product? And shifting to what is social, what is organic content that people are consuming in that demo? Is that, is that a shift that you guys are making or you think it should have always been done this way?

B (18:27)

Oh, yeah, no, it's a good question. I mean, it's probably it probably. Well, look here, here's the question. I don't, I don't have a, an answer, but historically, pre Andromeda, if you created extremely diverse content in the way that I just described, going content first instead of like, I like the way that you phrased it. Ads for a product first would, Would meta serve budgets across that different content? The answer is like, sometimes it would, sometimes it wouldn't. So I don't know what I would have considered best practice or if we should have been doing something differently. Our strategy has like, I think objectively worked to some degree. So I'm not like, oh my God, we've been missing the ball. It's like, but we need to be in the mindset of how are we continuing to evolve with content consumption online and ad algorithms online. And like how. And you know, to your points around just reaching net new people, we need to be in that mindset. And I think these all kind of are pointing in that direction.

D (19:28)

Lately. Every marketer I talk to says the same thing. The pressure's on, budgets are tight, goals are higher than ever, and I have to prove what's working, not just report it. That's the new reality of marketing. You can't afford to rely on guesses or platform reported results. You need clear, unbiased, causal proof of what's actually driving growth. And that's exactly where House comes in. Incrementality testing is the scientific way to measure true impact. It is the most unbiased way to understand true impact, to see what's moving the needle and what's just noise so you can reallocate spend based on fact, not faith. All of the marketing operators use House for their incrementality testing at Hexclad, Jones, Beauty and Ridge, and it's becoming a core part of the modern measurement stack. House helps you run real experiments across your channel so you can answer questions that actually matter, like which channels are truly driving incremental revenue and which are just taking credit. How much should I really be spending on Meta, Google and YouTube? What's the Halo effect of ads on Amazon or retail sales? And how should I structure my campaign so every dollar goes towards real, measurable impact? What sets House apart is the combination of unbiased, rigorous science and marketer friendly design. The math under the hood is very complex, but the platform itself is very, very. You choose your question, you launch your test in minutes and you get clear, actionable results you can actually use. Plus, every customer, every brand gets a dedicated measurement strategist. And I will tell you what, the House measurement strategist team is very dialed in. They are very strategic, helping you set these tests up in a way where you're going to get statistically significant results that are actionable. And ultimately there's someone who has lived in the world of growth and they know how to translate data into strategy, interpret the results and build a repeatable culture of experimentation across your team. In a world where every marketing dollar is under a microscope. You need to know what's real. Measure what matters with house by going to house IO operators. That's H A U S IO operators. And start allocating your budget with confidence.

A (21:24)

All right, so I have a list. I tweeted about this this morning. I had a newsletter on it. I just have been thinking a lot about this as I planned. So I, I'm going to read it. Just stop me for feedback where you agree, where you disagree. But I think, I think this goes nicely.

B (21:36)

Could you share your screen?

A (21:37)

Yeah, let me do that. Jason, this.

B (21:41)

I am seeing it.

A (21:42)

All right, cool. So, all right, I want to start this with number five. To me, this is like where it starts the underpinning, I think. And this is not like, you know, I spend most of my time thinking about Jones Road. So this is not like, oh, Jones Road is doing this great. Everyone's bad. Like, this is like Jones Road is doing this bad. And we need to get better. We have to evolve. But I think this is true for Jones Road and this is true for a lot of brands. I think social has changed so much, right. And, and I think a lot of teams haven't adapted or evolved. I think so many teams, again, this is, this is Jones Road are stuck a little bit still in like the, the feed based follower era of Instagram that was pre TikTok and you created content and it was mostly served to your followers. And you know, I think there's just a different style of content that works. It's a different place in the funnel. People are consuming platforms different. It was a little bit more social media or something else, but you know, where they wanted to see what brands had to say and things like that. And with TikTok, every platform is TikTok. Like, I think sometimes people will talk about TikTok and they'll be make. Make TikToks, not ads. You know, like, followers don't matter and they'll kind of like, so like organic social teams will do that. And then when they get to Instagram, they'll have a very different approach. And I'm not like, don't throw the baby out with the bath floor. Like, there's still value in doing like some more branded stuff on Instagram and like having a brand presence. But I think every platform, that, almost every platform has a short form, vertical, video, algorithmically generated feed that shows content to people that engage with it that are not necessarily followers. And you can look, and you can look at some brands or celebrities that have millions of followers that get Very few views. And I think TikTok is the most extreme example of this where you can have millions of followers and get almost no views or you know, vice versa. I've seen some people stand up like Instagram accounts quickly and just make this like super socially native engaging content. Get millions of views on it with like 2,000, you know, followers. So I just think that is the platform and the algorithm and it's, I'm sure there are differences, but it's not that dissimilar between organic and paid and people. I think what it means we'll talk about next. But I think people are going to be served content whether it's an ad or an organic post that they engage with, that the algorithms think they're going to engage with. Right. And no one is seeing the same feed. It's this like whole like monoculture thing is dead. Or it used to be like back 40 years ago, maybe even 20 years ago. It's like you do a TV ad, everyone sees the same media, there's no personalization.

B (24:23)

Right.

A (24:23)

And now we're in like the complete other end of the spectrum where it's hyper personalization at scale. That's like a term meta uses a lot. And again it's true on organic and paid. And I think that is like the real underpinning behind this creative differentiation. And it really, it's, it's style content goes in everything, but it's really who are you creating content for? And it's going to be served to people that engage with it versus your followers.

B (24:48)

Right, okay, so I think this is an interesting point. One, I totally agree. You know, the, the for you feed, for you feed, for you feed is, is a massive shift in social media consumption that happened many years ago at this point. I do think what you're describing, and the way that I've been thinking about it too is it's forced organic social to be more competitive. You, you, you previously had almost a captive audience. If I had 100,000 followers and I just posted on my feed and the feeds are follower based, I would get distribution and I didn't have to compete nearly as much with other people.

A (25:24)

Now it's democratized it a little bit. You could have, you could, you could start an account today and go viral if you had the right post.

B (25:30)

Totally. And that's what I joke all the time, dude. I think, I think organic social, especially like Instagram reels, people are so incredibly good. It's unbelievable. Like, like just random people in, in rural flyover states are making like incredible Content because it is. Yeah it's democratized. You could be anywhere in at any size and if you're creating great content you can earn your way into people's for you feeds and that has forced content creators to take a more performance lens to things. I think organic socials also become more analytical. Right. And you can definitely see that with, with with some things like YouTube where the random creators thinking about retention rates and click through rates and things like that. So I agree with all of this one point. I think you make it in a different tweet. You say you guys want to be creating content that gets shared and prioritizing that those these two observations, you know, creating more content for the, for you feed. And then in another thought you said creating content add content in this context that gets shared. Those feel very connected. Would you agree?

A (26:33)

Yeah, I, I think so because I think good content is good content and you know you talked about the, the social feed is more competitive like that's true across organic and paid. You know and I think they're. There should be at least what I've noticed is our best ads, our best performing ads that we can scale the hardest there is and this is maybe a controversial take in direct response land. There is value in those ads outside of buying something if you know what I mean. Like there's some either humor, relatability education, something like that entertainment that is of the content outside of ads and I think the stuff that is just selling it's outside of like a bottom of funnel static.

B (27:15)

Right?

A (27:15)

I'm talking like top of funnel video content. There's, there's some value in that and I think it's obviously a good algorithmic signal but it's a good algorithmic signal because people are liking it and meta's looking at that.

B (27:28)

This reminds me a little bit of like you know David Herman's a big proponent of with a very small percentage of your budget leave on the ads that are getting good engagement rates despite maybe not having high roas. Which is, which is kind of what we're saying And I think the future is definitely some mix ridge in the. In the past has is for sure exclusively focused on the content that's generating roas on a measurable basis. I do think best case scenario would be some amount of the account focused on shareability engagement because there is value created outside of your one day click roas.

A (28:03)

Yeah, absolutely. Totally agree.

B (28:05)

But what, but what I do think is I think there's a lot of fantastic content that gets really high engagement. That's not Generating intent and, and isn't creating all that much value. That's why I, I do think best case scenario for someone like Ridge is it's, it is a single digit percentage of budget going to this like engagement first approach. Because a lot of the time when we're spending money on meta, we want to be trying to generate intent. So at least from ridges, we want to be, we want to be far and away focused on the, the intent. Generating content.

A (28:40)

Yeah, yeah, no, I absolutely agree. And if we were looking at some of the content, I'm thinking like we had some partnership ads where like you know, a girl said like a mom said her kid just woke up for a nap, just woke up from a nap and like she had five minutes to make up. But it was like there, there was just some emotion to that that you could kind of feel that like was relatable to a parent. Right. Even though it was like, and then she's using product and it's selling, you know, it's just like there's some emotion that it's invoking rather than just buy this thing. So I agree with you. Absolutely. You can go, yeah, there's a Venn diagram and, and the overlap is probably smaller than I'm making it out to be. But I think the point is there is an overlap. It's not organic here and doctor Here, like there is more of an overlap that, that I think needs to be happened and then this goes to my next point. So, you know, like, this is going to be one of those like duh statements. You're probably going to be like, yes, like, where have you been? Like you've been sleeping. You know, like Marc Andreessen says software is eating the world. Like for our world, Creator is eating the world. We're just, we're in the creator era. We've been in it, but like we're very much in the creator era. I think brands are not uniquely positioned to succeed in this era. I think there, there, there are some, don't get me wrong, and I think the most successful brands and you obviously see creators turn into brands, you know, but I think brands either need to have that engine. It was like five years ago and everyone's like, yeah, you have to be a media company and everyone tried to have their like, you know, into the gloss version. It's just like everything obviously for, for a consumer brand is, is, is audience and is, is attention. But creators are where all the attention is going. It's not going to your, your, your press. Right. It's not going to TV screens. It's going to these screens and feeds. And you know, we need to either be good at making content or work with people that are good at it. So I think that's why partnership ads are working well. But I think that's why I also think this, like, direct response UGC from these agencies. Like, again, I think it's dead or dying. I know it still works for some people, but I think we're in the creator era and I think we used to be in this era where we were in the editor era. Right. Where I know you've talked about it. I know Taylor Holiday even said it like that, like your highest paid person on your marketing team should be an editor. I'm not saying there's no value in having a great creative library and be able to make assets, but I think with these Andromeda changes, there's just, there's, there's a ceiling on it that's a lot lower than it used to be. What's your thoughts on that?

B (31:05)

Do you. Well, let me. I have one question here. Do you think brands are not well suited to win in the creator era? And is that because content consumption has moved away? Like, it will just be hard to drive volume from a single brand profile? Or do you think it's just that brands internally are, are not as good at creating content in the way that they need?

A (31:25)

The latter, I think they're. I think both. But the latter is just like not as much native in their DNA. No, again, some it is. Some, some it is. And, and they crush, you know, whether they're a feastables type creator brand, you know, started by a creator like those brands I think are, are uniquely positioned or whether it's just somebody who just really gets it. But I, I think the majority of like DTC brands, DTC 2.0 brands, it's not their native instinct.

B (31:54)

Yeah, totally. What I would say at least how, how I'm. We. We have a listing out. We're hiring director of social at Ridge. We haven't had an organic social person for two years. It's gonna be a, it's gonna be a, a new hire director level. I'm super excited about it. And what's funny and how it's very related here is like it almost. The way it's specked out is it's almost gonna be like a performance role. Like it is, it is about you're gonna have to have the chops to create great content. We're gonna have someone curating a beautiful feed. It is how Are we getting organic channels? The way that I see all these come together is like I think a big part of this role will be harnessing the power of a larger set of creators, I think. And, and many people are already here. Right. But like the best organic social strategy is not necessarily creating content as a brand and posting on social. It's really like seeding a bunch of product and having 100, 200, 300 people who will speak about your brand in an organic way. And the reason why I still think there's a lot of value to extract from like the editor perspective is they the best brand strategy is many times just aggregating that content, re editing it and then sharing it via ads and social and things like that. So where we are incredibly aligned is that the best way to create content right now is at the creator level and in a more distributed way. You're going to get more distribution that way, you're going to get better content that way. And I believe the best content strategy for Ridge, for our profiles will really just be repurposing a lot of that content.

A (33:21)

Okay, yeah, I was gonna ask about that. Like if you see that person working very closely with your paid team, 100% more, more overlap than maybe like in years past.

B (33:33)

Historically there was essentially no overlap. And next year I imagine them working extremely closely together.

A (33:40)

Yeah, yeah. I mean I think we agree with.

D (33:43)

A lot of it.

A (33:43)

And again, I'm not saying don't do mashups and edit that stuff together. I just think there is only so much you can get out of it these days. And, and, and really the, the 8020 is in the creator content.

B (33:57)

Yeah, total alignment there.

A (34:01)

So what's that? So, so you're looking at it from building the team, things like that. Completely agree. I could even see a world where there's actually one creative strategist. And I think that's a crazy thing to say. Obviously like at our size we need multiple but it's actually like because think about the majority of creative strategy for, for, for growth teams is being done for meta, not all of it, but. And it's social and I think it's where you guys have done a good job. I believe you guys have creators as your creative strategists. Right? Like people that have some TikTok following.

B (34:30)

Yeah, yeah, yeah.

A (34:32)

And did you do. I don't want to put your words in your mouth. Did you do that because you were like, hey, it's easier to teach somebody who knows content, short form social content ads than it is to teach somebody who knows ads content?

B (34:43)

Yes, absolutely 1,000%. And I've seen this mentioned too where it's like you know everything's moving towards content. You made that point earlier. Media buyers trying to become content strategists and some will totally be able to do it. But I think the way more natural progression is somebody who's already getting across our team we've got like an aggregate of 4 million or 5 million followers. It's like the team knows how to create content. They also very much they consume a lot of content and they consume it through a strategic lens. So taking that knowledge and expertise and just putting it through the like hey now we need to create content that generates intent to purchase this product is is a much easier gap to bridge than trying to get somebody who's never created content before doesn't post on social and try to get them making content or briefing out content that's going to be compelling.

D (35:36)

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A (37:25)

So I mean a lot of this, a lot of my, my, my takes here are just things that you are already doing either that you're thinking about or already doing. So I think it's interesting. We're like, like getting to it at different times and points and, and also getting, getting to it slightly differently. But like I find it interesting and telling that like we're, we're kind of coming to very similar conclusions, you know, at the same time.

B (37:47)

Yeah, yeah, no, I had this. It was, I mean it was probably two years ago now, two and a half years ago where we were hiring.

A (37:53)

You don't have to brag like that. I know you're.

B (37:55)

No, no, no. I mean frankly like, no, no, no. There's. We're probably split 50, 50, like we're still super Dr. U G focused. We, we are somewhere in between like creator era and editor era. We're like right in between there. But I was really blown away. I think we were hiring for an organic social role a couple years ago and we didn't end up hiring for it, we ended up hiring a creative strategist instead. And I was blown away by the quality of creators that we're applying and that was like the light bulb moment for me where I was like, oh, this is the skill set we want to be hiring for. Or it's just a fantastic indicator of who we can train up internally. They're relatively, they were relatively junior roles at the time to actually become like a high performing creative strategist.

A (38:42)

I love that. No, I think that's great. I love it. I've been thinking a lot about that because I feel like that's like, it's like putting your money where your mouth is. It's like if you believe in creator, not only is are you working with creators, but you're actually making a creator like a leadership position in your company. Right?

B (38:59)

Totally.

A (38:59)

And I, I mean obviously you guys did that with, with Marquez and stuff like that and I know you're, you know, learning content from him as well, but like I think that's just like such a great way to put your money where your mouth is and, and really being creator first. And we can do an entire episode, not just paid social, on like how to lead in a creator. Like we're having, you know, you'll see a lot of brands doing, but we're doing, we're doing product collabs with creators, you know, like.

B (39:20)

Right.

A (39:20)

Like, I think, I think the era of celebrity partnerships is, you know, is, is, is still going to happen, but I think creator partnerships is kind of, you know, obviously be a, a bigger thing.

B (39:32)

So do you foresee Jones Road hiring a creator to create content for you internally?

A (39:40)

So here I was at the Meta. Yeah. Potential. Yes.

B (39:44)

Okay. Because I was just gonna say like we haven't, we haven't gotten there at all. We have creators on the team, but they are in strategy roles briefing out to other people creating content and at some point, but we probably like make that jump and I'm just curious where you sit on it.

A (39:59)

Yeah, here's, here's where I'm at. We're testing something right now. By the way, this will be. I think we have J.O. from VaynerMedia on next week. Bobby and I know Gary a little and he's been, I have like a bunch of friends from like high school that work for him and so we have a good relationship and occasionally he'll share some advice and we were chatting Social lately and like his whole thing is brandformance, which is like very. The similar hypothesis. But they'll just see whatever does well organically and what I don't know, I can ask, we can ask Jamon is whether they actually just run that as an ad or they're like take those insights, totally make it a little bit more doctor. But it's, that's like a lot of their hypothesis and kind of like teaching. So that'll be interesting. So we were at, we were at the Meta performance roadshow like a month ago, maybe six weeks ago. And do you know that like the new product where you can see like what reels are trend or what topics of reels are trending in your space. I was like I wish I had a full time creator or two that just sees that and is working 40 hours a week and just like makes, makes reels and just like puts it up in the account. Like no approvals, no anything. Because, because like I think a lot of times like brands, organic, social teams, right, they're, they're doing everything in Asana. There's multiple rounds of edits, stuff like that. Like that's not how social should be done but like that's also how a lot of agencies are. Like if you think about these UGC agencies in quotes, like there's, there's pre production meetings or scripts, there's Approval by committee, where it's like the agencies sometimes are making edits that the brands are asking them to make, not for performance reasons. And then there's also so many hypotheses or opinions of you got to change this, got to change this. And it's like, let's just let performance dictate, you know. And I think it's like, it's a very slow workflow and it's like it's, you know, I find that content like not produced enough to be brand building. Right. But not like, like too produced to like.

B (41:52)

Yeah.

A (41:53)

So I think you should go higher. Low is like one of my other thoughts.

B (41:56)

Okay. I like this point a lot. I think that's a good one. And look, I think on this, I think me, you and Connor are all in the boat of the like. I don't think we're like bureaucratic or like over operationalized, but like we're way more in that realm. You know what it reminds me of a little bit also extremely early to this trend. Oliver from Tabs Chocolate who's now doing is. I mean that was at least three years ago. Three or four years ago. He was like, look, I have dozens of creators. They all have individual brand pages on Tik Tok. So they all look like from a consumer perspective, like they are posting from the Tabs Chocolate Tik Tok. But there's no approvals. Those people were just on retainer. And then a small CPM bonus based on the views that they drove. And that's kind of the future that you're talking about. It's just like, like just solve it in mass. And then I don't think Tabs Chocolate got to the point of running ads probably at some point, but you can imagine a future where you've produced so much content that re ingesting that through the official brand page through the official brand ad account is much easier and you have a lot to work with. And that is, that is a, that is a kind of workflow of content creation that I don't think all that many brands are tapped into.

A (43:03)

Yeah. So. And so, so that's what we're doing before I'm going to hire two creators because again, I don't know if that's a move what. But I'm doing it because I was essentially thinking about that. And then with TikTok Shop, a lot of people are doing that on TikTok Shop, right? Where like they'll, they'll see TikTok Shop creators. You know the reason why I think that's the style of content is first of all it's social, right. It's on TikTok. But also there's some level of sales and persuasion that these creators know.

D (43:26)

Right?

B (43:26)

Right.

A (43:27)

And then they'll run at GMV Max and whatever performs well, they'll then take that over to meta.

B (43:30)

Right.

A (43:31)

Like that's a perfect work stream. We're just not on shop and don't want to be. So I found essentially a version of, you know, I intro you the other day, a version of Oliver. There's just these like crack kids who just have like TikTok shop discords and whatsapps of like hundreds of creators. I have no idea how they find them. But like we're gonna sound so old saying this and so we're testing it and you can get a lot of content very cheap and we launched the stuff yesterday. So like, I don't know how it's doing it, but I am as impressed with this stuff compared to almost anything we've gotten from any of these like UC agencies. And, but the thing is it's cheaper, right? And it's also like lower lift. Like we didn't brief it, we didn't script it, we didn't edit it. Like we got content and we put up and I think it's a volume is super important. But also like we're not making all of these variations. Like we're getting one video, we're getting two video, but they're like different videos from each crater. We're not like, hey, we need, you know, four concepts with four hooks and we're going to take two weeks to edit them. It's just like, like, boom, give us stuff today. They post it, it goes up.

B (44:32)

Yeah, no, I, I, I like that a lot. I think it's a good strategy. I think it's super aligned. It, it's really interesting. We're all in the same bucket. But like not only are we talking about something or the people that you're talking about, are they posting on their own channels or they're just delivering content?

A (44:50)

We are not, we're just getting content because we're not on shops. But, but you definitely could. That would just be a different strategy. And I also, yeah, I wonder how much correlation you would have. Like, I wonder if you could save creative testing costs by seeing what actually does well organically first and then like not launching as much paid potentially.

B (45:11)

Like, and, and that makes, it makes total sense conceptually. It goes back to my earlier point where I'm like, I do worry about, I think there's stuff that would do decently from an organic perspective, but might generate intent at such a high rate that you're actually just better off promoting it. You know what I mean? There's almost like a sweet spot of, like, gets enough engagement, but is salesy enough that it's a fantastic ad but might not have, like, gone viral in the feed.

A (45:34)

Yeah, no, I mean, I agree. Even with partnership ads, like, we'll do a lot of, like, you know, paid influencer work and then run that as a partnership ad. And we haven't found a good correlation between, like, what does well as an organic reel. Like, something will. Will do great there and won't do great as an ad, and vice versa. So I agree. And then, so. So here's. This is a test. If this works, we're going to scale it up. Like, it' super easy thing to do and just. And just scale up and find more creators to do. Number two, I want to hire one of the successful creators as, like, a freelance creative strategist. So I think you guys have done this well. I think, like, Alejandro from Mott and Bow has done this really well where, like, he has a pod and he'll have a creative strategy pod by different product. I want to do it by Persona. Like, I want to hire one of the creators and, and. And have her on retainer as a creative strategist. And so anytime we have a launch, it's like, okay, you're a ma. You're a creator who's a mom. Help us come up first, make content, and then also come up with all of the things we should be saying to moms for this, you know, and then if we have a busy professional says our next one, like, let me find somebody in that. That's like my thing, which is kind of similar to what you've done for your creative strategy team, but at the.

B (46:42)

Persona level, which makes. Which makes total sense. Yeah, look, I. I think you're totally right. I think we'll talk about this way more over the next year. Have you heard any of the interviews from Hudson at Comfort?

A (46:54)

No, I met him once, and it was, like, pretty early, and. And I know a little bit of the strategy. Tell me more about.

B (46:59)

And then.

A (46:59)

And then one last thing. And then I want to hear. I want to hear. Because it seems like they're. They're like the best of this.

B (47:04)

Well, that's all I'm gonna say is they. They just. They do the Tick Tock Shop affiliate route to incentivize people to create content. They do it at massive volume. I've heard they have hundreds of thousands of people signed up as Tick Tock Shop affiliates and, and then, and then they are just producing such mass content that they're able to repurpose across Snapchat, things like that. Like, he's just absolutely nailed extremely high volume content. You get everything you could possibly have under the sun. You get a handful of great ads on that and that feeds like, awesome paid strategy. And I think that's an extremely modern way of doing it.

A (47:37)

Yeah, no, dude, when we were at Beans Talk, like, Sean organized the brunch and there are a few guys there doing similar things and it's just, it's just wild. And I think, you know how like, when we started G2C and like Meta ads were like the arbitrage and we looked at these like, older brands doing like, you know, radio ads and TV and like, we thought they're old. I think that's how these guys look at us.

B (47:56)

Oh, for sure. Yeah, yeah. No, 100%.

A (47:59)

I've. Yeah, yeah.

B (48:00)

Someone called us old heads on Twitter recently and I was like, yeah, that's. That's accurate.

A (48:05)

We're about to be called unk.

B (48:07)

What you're also describing is very like, WAP adjacent.

A (48:12)

Yeah.

B (48:13)

And like WAP is. It was introduced to me as a clipping platform early on, which was like, you would have a. The equivalent of Discord, the community we actually live in. W. But like, you would be feeding them content, they'd be clipping it out, they'd be sharing it. You'd be getting new variations and distribution that way. But waps also moved into actual. Just UGC content creation, which is exactly what you've described.

A (48:33)

Oh, I didn't know that. I feel like SAS is actually ahead here. Like, like, obviously there's like, cluey and all that stuff. Like, I feel like SAS is actually probably doing this better than like a lot of CPG.

B (48:43)

Dude. B2B. I think. I think Connor and I had a conversation around this earlier this year because B2B 2B SaaS has the most interesting. I think a lot of it comes from. Actually some of the crypto stuff or the gambling stuff are like, they end up doing some of the most interesting marketing strategies right now. It's all organic driven because you can't, you know, there's more limitations on what you can say and do when you're promoting gambling on meta or whatever. But just because of that, they. They've. There's a lot of these, like, really interesting case studies. So. Yeah, I Think we could be learning from the, the B2B SaaS guys?

A (49:18)

Yeah. And then, and then last thing and, and like he always does, Taylor Holiday, you know, had some pushback on this tweet and, and I, I, I might agree with this part, I hate to say it. And I also owe him a rebuttal because he, him and Andrew Farris subtweeted me on, on a pod. So we gotta get to that one soon. Um, but he said he was like, how does having like a full time creator get you to differentiated creative? And that's my only thing I don't know about is like, like I don't know if we want to pay, you know, let's say I'm just gonna say 7k a month. If you know, if I have 7k a month. I don't know if it is the most effective to have that go to one person to get 40 reels. It might be better to take that 7k across a bunch of different people.

D (49:58)

I don't know.

A (49:59)

I think maybe some combination of each.

B (50:01)

Yeah, for sure. I mean if the goal is exclusively creative diversity, one person's probably not the right way to go. But there's so much value if they are create. Like you have to think, right, creative diversity is good, but at the end of the day like the best. Jones Road. I'm trying to think like creative diversity is good, but it's not as if the optimal scenario is an evenly distributed set of diverse creative that you have 10% of this, 10 of this, 10 of this. For Jones Road, it's going to be, I don't, you know, I don't know exactly what it is, but you'll over index in a certain type of creative that just does better for your largest swath of customers and potential customers. And having a creator who's really good at producing for that person, it's totally worth paying 7k a month for 40 reels a week.

A (50:46)

Yeah, exactly. Because it's not, that's not our, that's 5% of our creative resources.

B (50:51)

Yeah, exactly.

A (50:52)

You know, for a month it's not, it's not like that. So yeah, I think from a budget. But if you're starting out right, should you be hiring a full time creator? Probably not. But you can also make the argument you actually don't need that much creative diversity if you're just starting out. You just need content.

B (51:05)

Yeah, absolutely.

A (51:09)

So I remember like right around Christmas time when most people should probably normal people were like off taking that, taking their time, chilling with family. I was like Looking through our P and L, our budget for next year. And I was like, how are we going to save money? And one of the things I did is I leaned on a lot of our partners. And I remember slacking a meet from Rich Panel and I was like, what can you do? How can you help us? We had just switched to Rich Panel a few months before, went really well. And I told him jokingly, by the way, I want to throw it out there jokingly, that if he could help cut about 500k from our customer service costs, I'd get a Rich Panel test. Well, we did that. You've probably seen a tweet. He did some AI thing of me with a neck, neck tattoo. I'm not going to do it. Sorry, Amit, but I will talk about how much I love Rich Mantle, how much Amit has helped us. So we had 18 support agents before. It was a lot and it just was not scalable. We had so many people. We had this like old legacy software. It was slow, it was broken, it was expensive, and it just took too many people to operate. So we not only made the switch, but Amit and his team really helped us. Now we have eight people and we have a much better CSAT score. Our numbers are way better, our response times are way quicker. We're leveraging a lot of automation, a lot of AI, but again, it has not hurt customer experience. We track and I get a weekly report of our csat, of all of our stuff, of our nps, and it's going up because we're actually able to get back to people, give people better answers. The automation learns from our best agents. So it's just continually. It's getting better. We switched to Rich Panel about two weeks before Black Friday. Might be a crazy thing to do, but it was super easy. We came out of Black Friday for the first time in three years with no ticket backlog. The software and support has blown us away. I highly recommend you switch. If you do it and they save you a lot of money, you should probably get a tattoo. But it's not something my wife would let me get away with. But yeah, if you're running an E commerce brand, I highly recommend you switch to Rich Panel. You'll be able to leverage their software, save money on software costs, which is great, while saving a significant amount of money on personal costs. So if you want to go into Q4 with a leaner, smarter support setup and come out of there without this crazy tech backlog and just make your CX team happier, go to richpanel.com demo tell them Cody from our credit operator sent you and tell them you're ready to get attached to too. All right, well that was fun Conor. That was a good conversation. Creative got me flowing, got me, got my juices flowing. A lot of ideas but want to pause, take a break because we have a special guest with a special sponsored segment. We have Kathy sun the VP of E Commerce from Applovin here to talk about Applovin Axon. They just released their self serve Axon ads manager which is, is open to anyone with a referral code which we have. It's, it's a long one so make sure we put in the show notes DM us if you need it. But Kathy, thank you so much for joining us.

C (53:36)

Yeah, thank you. Really happy to be here. I always thought I'd be on this podcast at some point.

B (53:41)

I'm glad we were able to make it happen.

A (53:43)

Yeah, I'm glad you chose this one over operators, that's all I gotta say.

C (53:48)

But yeah, really excited to be here.

A (53:50)

Big, big news. Applovin Connor and I both been spending for over a year but you guys have obviously been making a lot of progress, a lot of making a lot of wa and is now available self serve and to everybody with a referral code. Again we'll, we'll share the code. It's a, it's a long one but if you need highly recommend getting on Applovin. Kathy, first question for you. What is Axon?

C (54:14)

What is Axon? Axon is the name for our new self serve platform. It's Applovin as everyone knows but to the extent that people are not yet aware and you know we have actually only been around for a year. It's basically it's showing long form video ads in mobile games so they're around 35 seconds long on average and you imagine yourself you're playing a game. You're playing five, 10 minutes and then there's a, you start a new game, there's going to be a longish ad in there that you can then watch and then to the point that if you want to buy something you click and then there's a deterministic match to a purchase that happens on your website site. So I'm happy to show an example if that would be helpful to people.

B (54:59)

Let's do it.

C (55:00)

Okay.

B (55:01)

We should really be watching more ads on this show Cody. I mean it's embarrassing that this only happens once in a blue moon.

C (55:07)

I have no idea what's going to pop up. So let's See? So can you guys see my screen?

B (55:14)

Yes. And we should describe we're looking at a mobile solitaire game.

C (55:18)

Yes, we're looking at this game. I will actually share you guys a link to it. It's. It's an indie game developer. A friend of someone on the team built this, but it only shows ecom ads. So I think that helps a little bit. But you can see it's a pretty basic solitaire game. You're trying to get some points. Here I have 100,000 points and here it's. If I, if I click this and I can double the points that I'm going to able. I'll be able to get for the next five minutes. So if I look see that I'm in a good spot, I might click that and sorry that you can't get the audio, but this looks like it's ad for Paleo Valley. So you can see there's no way to kind of swipe away from this ad. You're basically sitting here for a full minute, right? It looks like in this case. And you just end up kind of. I mean, what are you going to do? Put your phone down and stare into space like it's, it's really engaging, immersive. You're there, you're watching the entire message as you wait to get back to your game and you're getting a real reward at the end of the day, right. You get a hit of dopamine when it's over and you feel like, okay, there was an actual value exchange. It wasn't something that's kind of annoying me in the middle of the other content that I'm trying to look at. I'm actually getting something for this. So this is actually the interactive. So this is a. The video has ended and after the timer runs out. So this is a special part of the Applovin ad format in the second screen sometimes. This is a mini game. I know Paleo Valley has a couple of those as well. But if you click on this, obviously you go to their website and then the third screen of the ad is this dynamic product ad. So again they've brought in their feed. It's probably Marpipe or something like that. Looks pretty nice. And I'll just click and see what happens. Oh, sorry. But yeah, hypothetically that would go to. That would go to your website.

B (57:18)

So super, super interesting. I'm curious because that's not. There's many different ad units within Applovin now, right. They're not all completely non skippable in the way that we just watched in that in order to get the 2x1.

C (57:31)

That one is a bit of a longer one. Yes. But they're all three parts like that and the shortest one you can skip after around 5 seconds and most people skip at the 8 second. So on average it's about 35 seconds the whole experience.

B (57:47)

And then, and then I'm curious, I'm asking for Ridge here like what, what percentage of our ads are showing up in the fully non skippable inventory?

C (57:58)

It's about 50. 50 across the board. Yeah.

B (58:02)

Cause I'm always saying, I'm always saying just the, the quality of the ad units really high full screen takeover, short form vertical video. I always bring up the five non skippable seconds. I'm like that's extremely. And I wasn't even aware that we had so much of our inventory going towards non skippable ads.

C (58:22)

Yeah. This is the main thing with people that have tried it is we get really basic questions on what the ad format even looks like even from people that have spent millions of dollars on the platform. Which is pretty funny to me. But I get it. It's hard if you download any random game because there's so many gaming ads that even find the E comm ones and so, so hopefully we'll share the link to this one. But you should see all E comm ads in this one and you can start to see the experience. But yeah, they tend to be very long last Q4, I think it was January. We put out an official number that we read about a billion dollar run rate in E comm spend back then. So if you think about, you guys probably see around a $25 cpm. That's like 100 million impressions a day at, at 35 seconds each, you're running a million hours of ad view time per day. Then it starts to make sense of why we're driving millions of dollars in sales. Right. I mean there's the algorithm behind it, but just the sheer amount of time that people are spending with your ads I think is, is pretty unique and it's, it's a pretty good format.

A (59:30)

So yeah, it seems like from my perspective of the market, you guys kind of came out of nowhere last year. You know, I think a lot of D2C advertisers hadn't heard about you and I think there was, there was very equal parts optimism. I think brands have been, have wanted another channel to, to scale and that has scale and significant performance for so long. And there have been very few that were very consistent for a Bunch of brands. But then there was so there was a ton of optimism but there was also I think a lot of skepticism because you know, how could this is working so well so quickly? So how, what makes the, the engine so good? Like what, why are brands able to scale so hard and see like really good performance when you know a lot of these other things have not worked?

C (60:19)

Yeah, a hundred percent. I mean I think we're so used to skepticism as a business. I mean my background is that I, I invested in the business in 2018 when I was at KKR. I think we were one of the first kind of outset institutional capital in the business at that time. And we were able to invest at like a 1.4 billion equity valuation. And you can see where it is now. And the only reason we were able to do an investment at that time at that kind of multiple is that everyone's skeptical. Everyone doesn't believe in mobile gaming inventory. Historically there hasn't been any model that any other industry outside of gaming has been able to use to be competitive I think in that inventory. Right. Because if you think about it in the gaming space we're really, really strong. And gaming advertisers don't do things on instinct. They are extremely performance oriented. I mean I don't think they do as much in terms of upper funnel and omnichannel and TV the way that other advertisers do. And so they really, really look at the numbers. And so at the time I was thinking if mobile gaming advertisers are willing to spend money on this channel, that means there's something here. Right. And it's not a small market. Right. It's about 100 billion of spend happens in mobile games a year on in app purchases and currency and things like that. And the reason that we're able to I think be very competitive with Facebook and Google in the gaming industry specifically in our history is that the models are always really good at predicting who would ins and actually make those purchases inside the game. So actually buy currency, buy gems, buy whatever it is. And our models just kept getting better and better. So if you think about it of the what we disclosed last year we were about a billion in Ecom, but 10 billion in gaming spend. And I think last quarter we were growing 80% year over year. So our models are still continuing to get better and better at just finding purchasers because you think about it like nobody wants to play a game and buy something. Right. So it's a combination of the model and then the ad format that I showed you that. I think is, is pretty differentiated.

B (62:34)

One thing I've thought a lot about that I think is unique is again, I've said this from the very beginning about applovin because the CPMs are higher than Meta, but the watch time is so much longer. Right. Like we have, we have our best at, I mean undoubtedly our, our, our great thumbstop rate on Meta. For us, if someone watches three seconds, it's about 30% percent, 35%, something like that. On AppLovin you have five non skippable seconds. So all of a sudden if you're looking at cost per thousand impressions, Applovin might be double what meta is. That's like roughly what it is for us, maybe a little bit more. But if you look at cost per five seconds watched, it's like, it's like a 60% cheaper on applovin than it is on Meta. And I think that often goes missed. And I was thinking about like, how is that even possible? And it's because I think the gaming inventory is so unique in that people are very locked in. They are there to play their game. It is a very, there's just more retention. If Meta rolled out 5 non skippable seconds on reels, people would just click out and go watch YouTube shorts or watch TikTok.

C (63:35)

It's a completely different dynamic, which is why playing game is helpful because people are actually clicking and wanting to watch that ad or they are, you know, playing a couple games and then an ad comes up. So they've been playing 15 minutes and then there's a single ad. So it's very different from a feed like TikTok or Instagram where or you know, every other one is an ad. And so that's why we can, that's why people are okay with watching such a long ad because it's similar to TV. You watch 15 minutes of a TV episode, then you watch an ad that feels fine versus you don't want to be watching one every, every one minute of TV, one minute of ads. Right. So it's just a different, it's a different kind of economic equation between the user and the ad.

B (64:20)

Totally. And then do you know, also, I'm really curious, I don't mean to derail the conversation too much here, Cody, but what percentage of ads are viewed because they're getting rewarded in the game? Like the example that you showed?

C (64:32)

Yeah. So it's like that 50, 50 that we discussed. So when they get a reward, it can go minimum, minimum 30 seconds. Right. When they're not getting a reward and it's between. They're just trying to get to the next level. It's probably. Yeah, that's, that's where the 5 second one comes in. But it's, but it's the 5 second is only the first screen. Then you get the second screen and the third screen.

B (64:52)

Right.

C (64:53)

So the overall minimum is still like 10 seconds.

B (64:55)

Totally love it.

D (65:00)

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A (67:08)

I have, I, I have so many questions. It's just like where do we want to go?

C (67:11)

Yeah, we're having fun.

A (67:13)

What, what do brands need to know? I want to share from me and Connor's perspective because obviously we're, we're both spending on the platform and, and can talk about performance but like Kathy, first like what do brands need to know about getting on app level and are there certain types of brands that succeed? Is it certain demographics? Are there certain creative styles? Is it certain average order values? Does it work for everybody? Where, where do we start?

C (67:35)

I would say you guys are pretty sophisticated. You guys know a lot relative to the average E Comm brand because they haven't been able to get into the platform right. And so I would just kind of go back to the fact that we've launched this self serve platform, we've completely rebuilt our systems. I don't know if you guys remember when we even switched from billing to credit card. Now everyone's like we didn't even have a system to accept credit card before and now we do. So it's been, you know, this huge sprint over the entire year and last summer to, to get the platform ready for this and we've leaned into, is just simplicity. So you guys know we don't have all sorts of different targeting options. It's basically you can go. Our goal is like 15 minutes from couple clicks pixel install drop in a couple 9 by 16 videos. I mean the more the better obviously 9 by 16 images and you could have a campaign going very, very rapidly. Right. Without much effort and manual intervention by advertisers. That's where we think the market is going and we've kind of built for that. And in terms of what people should know, I think, what I think is very interesting is the opportunity for a lot of the smaller brands that have started with us. I mean we have people at this point, we started on October 1. We already have people who came in off the street and are spending more than five figures a day. So I think that's a really positive sign for how even without a person hand holding them along the way and making creatives for them that they can be successful on their own.

A (69:06)

And Connor, you've said this a lot, but I Think talk about like the creative and like being able to port it over and like having it be like another place to put you know, creatives that you're already seeing. Like how.

B (69:17)

Yeah, yeah. So our. I've talked about this all the time. I just mentioned it that I think what is easy for advertisers to not take account is the difference in the ad unit. So you have these. You just have a significantly better watch time. It is, it is four or five times better than. Than something like a meta so we can edit our content accordingly. Right on meta. When we're running ads we need to earn those first three seconds. That's why you have. We do gunshot hooks and we have people shredding wallets and things like that because we want to get them interested immediately so that they're not. It's called a thumb stop. We don't want them swiping right past. App oven is fundamentally different. For the first five seconds of that ad we can actually. It's more like a YouTube in stream where you also have five non skippable seconds. We can establish a premise. We can earn attention in a way that's a little bit more substantive and I think our creatives should reflect that. So I talk about that all the time and it is short form vertical videos. We have a lot of content that already fits that format. It's just a matter of editing it a little bit differently given the ad unit. My second question is it's not so much a question but feedback that I've gotten from the applovin team that I've. We've internalized and are trying to action on Better going into November and December is the importance we. Cody and I just talked about this for 45 minutes more ads and I think and, and Kathy, I'd love for you to comment on this. What I've been told is the way the ad auction works, it's kind of naturally higher frequency. Therefore we need to have more ads so we're not driving up frequency on the exact same piece of content all the time. Is that correct?

C (70:47)

Yeah. I would say if you, if you play that game a little bit, you'll start to see we only have a couple hundred advertisers on the platform pre sales. Right. You'll start to see the same advertisers over again because that's all we have. Right. I was super excited the other day because I bought a Grazzi boxed wine off of one of our ads and then I got two other wine related advertisers in a row. And I was like, oh, we actually are now starting to build density in different categories versus there's only one furniture advertiser, there's only one, you know, wallet advertiser. You start to have multiple, but without that, that if the, if the model has a signal that you know, someone's interested in wallets, they're going to chase that person down with the only wallet offer they have for totally an extended period of time. And then imagine if you're watching a minute long commercial, you don't want to watch that same one over and over again. That's just going to annoy you. Versus if you see a lot more options, then you start to learn more and more. And at the end of the day suddenly you've watched like a full hour of ads about rich for some reason. Like there's like you must buy like the model will force you. I will tell a story about one of our, one of our advertisers that joined very recently. We, we saw that they were, they were doing pretty, pretty well. They're kind of like a small brand, like a two person shop selling cookware. And their revenue was around like 12k at the time. They're spending 2k on the platform. Like the ROAS looks pretty solid there. But they had three videos and one interactive or one end card. Right. So we jumped in and we tried to explain all this stuff to them. We made some interactives for them. We told them hey, just put more videos in here that are long form. Their revenue in within, you know, a month jumped from 12k to 130k. It's just, it makes a massive difference. And that's not their revenue from us, that's their revenue overall. So Today we make 70, make up 70% of their revenue. Wow, that's crazy. And, and you know their ROAS is about like 150 to 200 or like 2x. So it's a pretty decent profit for them on every item they sell. And like that's why we're really excited about self serve because we feel like some of these brands that come in, we really have an opportunity to actually change the course of their business. And it can just be as simple as put more ads in. I will tell you, when we first reach out to them, they said we don't have ads. And then we started making money. They're like, oh yeah, it's actually pretty easy to make a ton of ads bats. Right? Just stitch other stuff together. It doesn't, you know, you don't have to make new, new brand New content. Necessarily so.

B (73:19)

I love that story. Except for the fact that we're hearing about another cookware brand on marketing operators. It's a little, it's a little, little bit of a faux pas. We're, we're, we're Pro Hex Cloud here. Also big supporters of the, the Applovin ad platform.

C (73:33)

Yeah, a hundred percent.

A (73:35)

I think, like from my side, like, Applovin feels. I, I know what you're talking about. Like the creative differences and like how users are using the platform feels different than Paid Social, but I feel like all other aspects are very similar and I think that's one reason why I'm curious if you guys engineered it this way. But, you know, Axon is a very good and simple ads manager. That's like, interface is really good and simple. It seems to have a model where it's not manual targeting. And it's very similar to what, you know, most people are used to on Meta and Paid Social, where creative is a really important thing. There's just not that many options really. So it makes it very easy. And then I think it seems to.

C (74:12)

Be that's the biggest complaint. Yeah, people want more buttons to press. They're like, what can I do? And I'm like, put more diverse ads.

A (74:20)

No, it's just more similar. And then also, like, you can scale it very quickly and aggressively for like a launch and a promo versus, like, you know, outside, when people are thinking about where do they go for meta. It's like YouTube TV. It's like those are just like a very different way to do it. The measurement is completely different on those. Applovin I just think is closer to how most brands and teams are operating on Meta, which I think just gives it more familiarity.

C (74:44)

Yeah, sure. Yeah. I think the measurability has been something that people have been really excited about because we do have a click. So it's, you know, actually, Sean Frank came up with this at a dinner we were at. He said it's clickable tv. He's like, it's the length of a TV ad, but you can actually click and there's utms and you can use whatever you want. I mean, ga. Google is a great partner of ours. Triple Attribution works really well. Like, North Beam is awesome. And then a bunch of people have done a lot of incrementality testing on the platform as well and, and had really, really good results. So I think that's, that, that's what people gives people, faith that it's working and they can measure it.

A (75:21)

Yeah, we've got, we've got a few holdouts under our belt. So I have gone both ways to be totally transparent on how I feel about it and how it's working for us. I will say it, it has always performed very well. Total incrementality for us.

C (75:34)

Yeah.

A (75:34)

The challenge we have had is just not always being able to reach, reach new people. And we've tried, you know, various things. We had, we had lunch with some of your team a few weeks ago and they gave us feedback. They're like, you guys just need way more creative. And I just didn't know that. Like I actually thought we had a decent amount of creative and they shared like what, you know, the volume of creative other advertisers are doing and we've seen success and so we, we still don't see the, the best ratio compared to other channels. It's probably the worst ratio that we have of new versus revenue repeat. But I've think about a few ways. The total return is actually so good that like I'm just making up. Let's say that we're like on meta, we use north theme for a lot of stuff. Let's say on meta we're looking for like a one.

B (76:16)

Right.

A (76:16)

Like a one one day click. Well, there's a very little delta between new versus total for us now. Right. On Applovin we might see like a 50% Delta, but our one day, our new one day click is actually not far far off of our meta. It's like similar just below and I think there's a lot of optimizations we can make. So it's actually a much better total return. It's a much better. Just like dollars in, dollars out is actually looking a lot better for us. And so I think I just had to get past looking at just the ratio and the percent new and stuff like that. It's like I'll take a 10% worse new customer return. Still within our goals or ranges because the total return is that much better.

C (76:57)

Yeah. And that's. And the incremental total return. Right. I mean, I think there's, there's someone that would have shopped anyways. But if, if they're a return repeat customer, they're a loyal customer and you measure it with a house or work magic or measured study and that is actually incremental return. I think there's still value to that. I don't know if you would dispute that.

A (77:15)

Oh, for sure.

B (77:17)

Yeah.

C (77:17)

Yeah.

B (77:17)

Cody and I haven't fought about that yet. That's why Keck doesn't matter.

A (77:21)

Yeah, no, no. Well, I. So I agree with that. And I think, I think everybody weights it different, right? And every business values a new versus a total differently. I do think that incremental and repeat often get kind of correlated together when it's not the same. Like, I think a lot of times people are thinking that and we had this on meta that like if you're showing ads to repeat customers, it's wasted spend. It's like, no, that can still be very incremental. Right. We've had that when we had exclusions not work properly on meta either. Like, and then we fix them. Like our repeat revenue went way down. Like it wasn't wasted spend, it just wasn't going to new customers. And so I just think different businesses value it differently. But I also, I'm willing to have more of our spend beyond repeat incrementality first. First of all in Q4, right? Like, definitely. And then now that much less of our meta spend is going to repeat customers. Like I don't mind it nearly as much. So that's why we're back on it. But we are seeing as we are are spending more and then, and then doing more with creatives or even like landing pages. Like part of the feedback your team gave us was like just duplicate your creative sets but just put in different landing pages. And I was like, that's the lowest lift thing. Like that, if that works, like that's great. And I think that's been a decent lever as well.

B (78:33)

You know one, one thing I would just add to that as a very general point, but something I talk about with the team, spending money on retention, let's call it spending money on returning customers can be incremental. Spending money on returning visitors can also be incremental. Spending money on but net new visitors same. Right. Best case scenario, you validated it at different levels. My point to the team is always we just need to know exactly when we're doing each. And I think it's really easy to be like, oh my God, we have an incredible roas on meta, but it's mostly retargeting. So it's like you can't really bet on scaling that 5x. Like you can't count on those results to scale. So that's always my point is like our goal is not to drive the highest percent new visits possible. We just, we need tools and able to do that so that we can also have, you know, some of our spend going to return returning visitors or returning customers.

A (79:22)

I agree. And you also just got to Know your targets for each one and you should have different targets for them, right? Yeah.

C (79:28)

I think also it's, it's helpful to understand how the models work because obviously we don't have email exclusions on our platform, but our models are just built to goal seek for revenue. Right. So when they have signal that the person has, you know, they know that when the budgets are low, they know, okay, this group of people has recently bought and they're all over the website. They're visiting the website a ton. Let me go look, look after, go after those people because I see that their intent to purchase is super, super high. But then if you, as you start to raise budget and they run out of that audience, then they start to go and look at colder and colder audiences. And by the way, if you have that diversity of creatives that might hook someone new that never would have been interested before, if you have only one creative, then you only have one shot. Right. To show all of those prospecting audiences what your brand is all about. So I guess my point also would be to the extent that people play the games and they see it like, I think Connor Rowling was asking me this yesterday. I said, just like download the game and do you see ads about hexcloud? And he's like, no, I see ads about other brands and it's like, yeah, there is prospecting happening there, but the more that you put new creatives, the more you're going to be able to unlock those new audiences. And that's what we have seen that over and over again.

A (80:44)

Creative really is the target.

C (80:46)

I mean. Yeah.

B (80:48)

I've got one inconsequential question. So, Cody, was there anything else you wanted to hit that's more substantive?

A (80:54)

Let's hear it.

B (80:55)

All right, Kathy, what mobile games would you recommend? What are you telling Connor to download or what are you playing?

C (81:01)

So I think we talk about Candy Crush a lot and Wordscapes a lot. I think if you guys want to see a lot of E comm ads, I'll send you one that is kind of rigged only to watch E comm ads because.

B (81:13)

Oh, no, no, no. But that's not what I'm, I'm asking for, for. I'm asking for high quality mobile games.

C (81:18)

I mean, I think Royal Match is really good. It's super popular right now. Monopoly go really popular. Yeah, a hundred percent. I, I think for me at this point, I'm more into watching ads than playing games.

B (81:31)

Yeah, fair enough.

A (81:32)

Yeah. We're not asking the good games to watch to play. We're asking the good, the good apps to download, to watch ads.

C (81:37)

Exactly. That. That's, that's the only thing I'm interested in.

A (81:41)

All right, I do have one more question. So I am very curious and want both of your take on this, but Kathy, I'll start with you. You mentioned it's, you know, sound on unskippable. What are creative best practices? Because we really have just taken our stuff from other channels and taken our 9 by 16 that's working across other places and sending it over and we're even taking some stuff that hasn't worked to test it. But what are best practices? Like is it a sound on or sound off platform? How important is getting in line like branding in the beginning? What can you share with us?

C (82:11)

Yeah, I would say it's not always sound on. So some games, it's basically a publisher level decision. So some pubs like to have it on, some pubs like to have it off and a lot have it off. And so captions is a huge thing. Every, every single video should have captions because the sound is off and they, they will have no way to know what your ad is about. I would say where people have seemed to have a lot of success, obviously UGC ads. But now we're starting to see advertisers that don't have ugc, that have non UGC ads that are really successful as well. So I think some of what you talk about, Cody, about just the diversity of what the ad is, don't just keep doing iterations of the same thing, but try concepts that are truly different. I think is really important. Obviously longer ads. So we do, you know, we talk about the 5 second unskippable. But in the ads that I showed you and the ads that we have, in a lot of cases you have up to 60 seconds. We're trying to make that even longer through our product development. Right. So if you, if you have a 30 second AD in a 60 second spot, it will just, it will, the ad will just directly end. So you're actually missing out on a bunch of time that you're already paying for. Now our model will be kind of smart and then tend to put you into shorter placements, but I think longer ads and just stitching things together is just a great way to get value out of the gate. Some of the stuff you mentioned, Cody, that the team had talked to you about, iterations on end cards or interactives as we call them, there's a lot of interesting things to do there. We do have a library of those on our support site. But I think just playing games and watching other people's end cards is super helpful as well. Those are really unique to our platform and they drive about to 70% of the clicks because the video is only clickable on the, on the Shop now button. And the DPAs, you know, you're looking for a specific product, but a lot of the actual clicks and purchases happen on that end card. And a lot of people, sometimes they only have one, sometimes they have like hundreds of videos and only one interactive. And I'm like, what are you doing? This is, this is crazy. Because it is a three part ad. You want all three parts to look good. I think the last thing I'll mention is just making sure your catalog looks good too, because there's a lot of high intent on the catalog portion of the ad, which is the third part. And just having something, something that looks good. We have a lot of feed partners that we work with. Just bring in your feed, bring in attractive images there. And that actually drives a lot of the purchase of the overall ad unit too. After the video, the. The end card and then the. The feed.

A (84:44)

That's interesting. I didn't know that. We really haven't talked about feed for us. I will say I was always so surprised by the end card thing because usually like meta end cards where you're like doing ads, it's like that's the. That's like the last thing you should ever test. It's the very end of the ad. You should test the hook and stuff like that. So I was definitely very surprised with how big of a lever the end cards were.

C (85:03)

Yeah, I mean, in the gaming environment, people, that is the most important part of the unit because it's a video and then there's actually a screen where you're playing an entire mini game. And so it's a really, really flexible unit because you can code. You know, people used to code entire landing pages in there. There's a lot you can do with it, and I think it's something that's pretty unexplored by most people. But the simplest version is you could just upload a static and it'll work. Work. But there's a lot more that you can do as well.

A (85:30)

Awesome. Great. Connor, anything else you got? Or should we call it here?

B (85:33)

I think we covered a lot of ground.

A (85:35)

Kathy, anything else you want to share?

C (85:38)

Nope, I think that's it. This has been great. Yeah, I'm super excited to talk about Axon, everyone, and glad to see you guys are having success. And I'M really excited for what next couple weeks going to Black Friday are going to look like.

D (85:50)

Awesome.

B (85:50)

Thank you for coming on.

C (85:52)

Okay. Thank you for having me. Me.

A (85:57)

All right. That was a great episode. That was a fun one. Bonus episode of marketing operators, as always, want to thank our sponsors. Want to thank Kathy from Applovin for coming on. If you want to get going, get on Applov before Q4. You can do it with our referral code. Check the show notes. As always, thank you so much for our sponsors. Thank you to Applov and thank you to motion rich panel pression AI after cell and house.