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- [00:00]
A
Hey, real quick, before we dive in, if you've got a brand or marketing tool that marketers need to know about, sponsor the show here at Perpetual Traffic. Perpetual Traffic puts you in front of thousands of seasoned marketers, CMOs and agency owners. So head on over to perpetual traffic.com to apply to be a sponsor of this show.
- [00:19]
B
I remember you were able to do people that had like income brackets, credit scores, like all this type of stuff. So we needed to make sure that these are married individuals, they were employed, they had this household income and they had this credit score.
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A
This was a whole different era. Creative wasn't as important. I think a lot of people say, oh, Zuckerberg is so brilliant by putting ads in the newsfeed, he literally had no choice to do it. Zuckerberg really didn't want anything to do with advertising.
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B
He said that this year the only thing he's put his priority to is ensuring that the consumer has a. You're listening to Perpetual Traffic.
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A
Are you struggling to keep up with marketing tasks? ActiveCampaign's autonomous marketing platform eliminates the busy work automatically. Building and optimizing email, SMS and WhatsApp journeys, all for you. It's all powered by billions of data points that show you what drives revenue so you can launch campaigns in minutes instead of weeks. Extend your team with AI agents that handle campaign admin and tedious tasks that you know your team doesn't want to do. Focus on strategy and let the AI do the rest with data driven decisions. Clear next steps and on brand messaging across every channel. Try the next era of marketing for free@activecampaign.com hello and welcome to the Perpetual Traffic podcast. This is your host, Ralph burns, founder and CEO of Tier 11, alongside my amazing pink microphone co host Lauren E.
- [01:50]
B
Petrulo, the founder of Mongoose Media.
- [01:52]
A
Notice I didn't say fuchsia or purple like last episode. Anyway, so glad you joined us here today. If you're a VP of Marketing, Director of Marketing, CEO, you need to be on Meta Advertising. Sorry, just sorry to break it to you, we've got a client call later on today that is all Google, like 80% Google and 20% Meta. And they're like, why can't we scale? And it's because they've got it all wrong. They need to be 80% meta and 20% Google, if not less. So that is what we're seeing so much right now with this Andromeda update and we're seeing just businesses absolutely transform and we've got probably 20 different examples. We are very crappy about putting together case studies here on our site. I don't know how many you have, but you know, the cobbler's kids have no shoes when it comes to marketing, when you're marketing an agency. The point is this, is that we're doing this three part series here to show you how meta has evolved. And in order to understand where we're at right now, I think you got to really understand where we've been. And the funny part about this is we're just about at the point in time where little Lauren E. Petrulo starts advertising on Meta in the history of the advertising platform. So you are going to have a lot more to say on today's episode.
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B
Yeah, I felt that I don't know any of this stuff. You're like, right hand column. I was like, isn't that where the birthdays were?
- [03:18]
A
Right, right. Felt like it was a monologue, I think on part two. But that's all right. You know, it kind of got us up to that point. I wanted to get you in on this. Okay, so where we left off on part two was a couple of different things, is that they did strike a deal with Microsoft to start their first advertising on Meta. And this is something that I think it was maybe Dustin Moskowitz was pushing for. Maybe it was Eduardo Saverin. But anyway, the one of the founders really wanted to put advertising on Facebook. At that time it was not Meta, it was the Facebook. Then it's Facebook Watch. The social network.
- [03:54]
B
Social network.
- [03:55]
A
Yeah, yeah. Does a really good history of like how all that evolved. The point is this, is that they never really looked at this as an advertising model because Zuckerberg never really knew what Facebook was going to be. I'm actually listening to an interview of him about the evolution of it. He's like, first it was just a website and was like, I really didn't think it was going to turn into a business. So I was like, I'll just set that aside, I'll figure out something else. Like it almost never came to be, which is crazy. But then all of a sudden he realized, if I can unite the world and have the world communicate with the rest of the world and bring people together. Which is, I believe his statement that he said many times, this is a great way to do it. And the best way to monetize it ended up being advertising, which is the thing that we use every single day, Spending hundreds of millions of dollars a year and creating billions in revenue for our clients. So that all started with this Microsoft Deal. But then it evolved into what then became the News Feed. The News Feed actually we sort of take for granted, which came in in 2006. It was probably their single biggest.
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B
Well, it's before the newsfeed then, like, it was just profiles and you just like went like people do on dating profiles.
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A
Yeah, it was almost like he wasn't really sure whether it was going to be a dating site or what it was.
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B
Oh, like you would comment on people's stuff, I think. Right. Like you'd be like, oh, hey Sean, happy birthday or something. So you just go to people's profiles.
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A
I think that was it. Like, this is a little bit before my day, but. So I don't know what the experience of it was. I still really don't even use Facebook all that much socially right now. The point is, it's like the people are on it. So that's what we advertised on it. But yeah, I think it was more like a messenger kind of thing. And that's what it evolved from, from its original incarnation.
- [05:41]
B
Like a visual white page, yellow page, Rolodex thing. The feet you sat on as a kid.
- [05:47]
A
Yeah, yeah. I mean, that was it. And so. But now we know it as like the Newsfeed. So the News feed is, you know, you get obviously updates from your friends. You see ads on there, all of that. And remember, this was browser based. It was not on mobile yet in 2006 and 2007. And then we talked about their huge mistake with Beacon, which I did not experience this firsthand, but if you actually look, we'll leave a link in the show notes, like, what is Facebook Beacon? And it was literally, it was an advertising program that shared user activities from third party websites, like purchases to their Facebook feeds by default. Oh, man, can you imagine?
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B
Oh, my God, you. You would see how many times I buy pink shoes and like, let the world know it. Like, it's funny till it's not funny.
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A
I know. You know what's really funny? If you use the. If you use Venmo.
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B
Oh my gosh.
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A
Like, yeah, people don't realize when they use Venmo. Like, if they don't shut off their privacy settings, like, everything that they do is broadcast all your friends. It's crazy.
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B
Oh, wait, Ralph, this is the. This is the hidden social network piece that I think most people do. The way my friends use Venmo is like, they communicate in petty ways to other people in a sense of like, say, Ralph, you and I go out for lunch, you're coming to Orlando, and what John lives, like, what, 45 minutes away from where I am. And, John, you and I are all friends on Venmo. And then we would make the, like, say you paid me $100 back for drinks or something. And then your message on Venmo would be like, drinking is so much more fun without John with the intention of John seeing it, like, that petty type of stuff. Or I've seen it where, like, people are blocked. Like, say, okay, let's do a different situation. So let's say you and John are dating, and then you're like, you end everything with John, and John's desperately trying to get you back. You blocked him on socials, you blocked his number. So then he's going to send you money on Venmo and be like, will you please unblock me? Like, those are the best things. Or like, you just, like, nuts. When I go through my Venmo feed. So I check all my financials every Sunday, and I'll see, like, what's the balance in my Venmo account. And I just love scrolling to see the comedy of what my friends are sending to each other, because maybe they went out for, like, Mexican foods, but it's like tacos, tequilas, and titties or something like that. They're just going to explain something ridiculous. And I now I have fomo, and I'm going to message him like, hey, Christy, thanks for the invite. Sounds like you guys.
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A
Thanks for the invite. Thanks for not inviting me. Yeah, yeah. It's so, so funny. Like, my sister is on there. My boy. Both of my boys are on there. So they're. I mean, they're obviously. They're on all these networks. And so whenever she would have, like, a facial or she would get like, you know, maybe some Botox.
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B
Person. Yes. No.
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A
And so my kids are like, well, how was your appointment at the Doctors last week?
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B
All right.
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A
You know, because they didn't know. And she's like, what? How did you know that it was because of Venmo?
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B
Oh, that's so good.
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A
I know.
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B
And I found out someone I knew was pregnant from Venmo.
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A
Yeah.
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B
Because they had sent something like, hey, diapers for the baby. And I'm like, you're pregnant.
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A
It's so funny. But, like, that was what Beacon was, but for every purchase you ever make, so imagine how embarrassing that is. So, like, it was in your, you know, your feed, not your news feed, but it would. It would actually broadcast and. Yeah, it's actually in there. Feeds by default. So that's what happened before the News feed. You had a feed. So whatever you were doing, like, you didn't have the news feed as it currently exists. Anyway, the point is, like, that was a failed attempt. And like I said in the last show, there is a long list of failures for Meta. And it's like in this interview I'm listening to with Zuckerberg, it's like I just went from failure to failure to failure. It's like you just figure out what works and what doesn't work. Copy other people. It doesn't say that in the interview, but like, copy your. That we know today. Yeah, copy or acquire. Right. And even the network itself, like, think about Facebook. The network itself was a copy of Friendster, MySpace. I forget the other ones. Like, this is not a novel thing, but Facebook is. Meta is now where it's at today. And all of those other social networks have basically been vanquished to the exception of now, TikTok, Snap, obviously, LinkedIn for business.
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B
Sure.
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A
I guess Venmo is sort of a social app, you know.
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B
Oh, absolutely. I know how much people are giving for weddings. And I'm like, okay, I would know what to expect, because you can. If you're inviting people that are far away from you to a wedding, you can just go to their Venmo history and see what they've given other people, decide whether or not it's worth saving them a seat.
- [10:34]
A
Oh, my God, it's so good. In the evolution here, Sabikum is a big. Was a big failure. But I mean, that is history is. Is littered with failures.
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B
Look, Rob, I brought one. I told you. One of their failures is a thing called Portal. And I have one, actually. I bought a bunch. And it was a really, really good tool. They just discontinued support last year. Like, it was a screen last year. So this is a screen with a camera, right? So obviously you can turn it on, turn it off. Then Portal would listen, like Siri or Alexa, whatever. But, like, I would use this to my computer and I'd have Zoom, so I'd have all my Zoom calls on the portal. It has its own speaker, so it wasn't slowing down my computer. And if someone dropped in, I could just have this as a separate monitor and I connect it to my computer. So it was a really nice, easy monitor. And the reason why I bought it, like, this was the bigger one. But I bought everyone in my family. We're all remote. My mom's in Chicago, brother in Texas, others, Caroline Oliver. I got this Portal on top of the TV because I do Christmas and we Open up all of our gifts together. But before, there was like pairing to your phone and mirroring is like, I can't see you. I can't see seven people from my tiny phone screen and portal. I could call them on WhatsApp. I could call them on messenger or Zoom or whatever. And then they had a camera on top of the tv. They could see more and follow me around with a smart camera. And I could see all of them on the TV screen, which is 10 to 15 times bigger than my phone.
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A
Yeah. So it was a great, it was a great tool, but they discontinued it.
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B
So that is, no one bought it. It was like too expensive, whatever.
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A
But like, think about all the things that, like, I don't know if you remember Slingshot moments, Facebook paper, the Pokemon poke buttons.
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B
I remember you could poke people, but that was stolen. That was from Snapchat or something else. They did not have the poke first, of course.
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A
Right. Like Facebook credits, which was like a virtual currency. Facebook deals, you know, obviously Beacon, you know, Portal devices, Portal tv, Portal plus, Oculus Go. Like the list just goes on and on and on and on. Their workplace. Like, they actually started like a project management system that I remember our partner manager had us all go on. I was like, yes, fucks. You know, it was such a pain. So anyway, the point is this is like, I think that's the key to business is, is going from failure to failure to failure to ultimate success.
- [13:01]
B
Well, it's like Dyson. Dyson had 999 vacuums before they landed on their billion dollar prototype.
- [13:08]
A
Yeah, it's. It's crazy. Now, Meta, arguably like one of the most successful companies on the planet. So anyway, the point is this is that if you're, if you're listening, it's like, what does this have to do with advertising? It has everything to do with advertising because, you know, 80, 90% of our. Well, maybe not now, but like let's say 70, 80% of our ads fail. They just don't resonate for whatever reason. I think with. We've definitely increased that percentage. We'll have to redo that one with the Andromeda update. The point is this is like, that is the key to success in business.
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B
Is just, I would say failure with Andromeda. I would take it back. So like ads that work and don't, it's like an rbi, right? Like you, you hit less times than you don't. And so ads, you just don't know what's going to resonate if you're still.
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A
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- [14:43]
B
But I wouldn't say within drama and stuff it's failure because there's the incrementality and the like contributional, the contributable lift because someone's not going to make a decision anymore. Like the current advertising landscape isn't like linear where you say I see this ad, therefore I know immediately I'm going to buy because of this one ad.
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A
Sure.
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B
We have all these touch points and the demands of Andromeda, of creative diversification and variety of options for the ad retrieval engine to get is so that you can have I saw this version, this version, this version, this version and this version which combine all the powers together. You are Captain Planet and acquiring whatever it is you are being sold to. So that's where it's like in the past, like why this stuff matters. You have to understand that you had to fail before. Now we get to the instead of failing, it's supportive.
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A
I think there is a difference now between contribution and attribution. So all of those ads contribute but they may not get the last click Attribution.
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B
Yeah.
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A
So to your point, yes, there are some ads that just don't resonate for whatever reason. We see them, you know, Meadow will spend on them and then all of a sudden they just stop spending and we're like all right, well that's it sort of self selects out. So that might be an ad that's a fail. Did it actually contribute to an actual sale as opposed to attribute got the click or got the view that ended up getting the purchase on Google? We don't really know. So yes, I would say there is a big distinction now. Like we used to launch a bunch of ads and then you would see the ones that just didn't resonate. You'd have to pause them. Meta, self Selects them. So it's contribution versus attribution. I think that's a big, big statement. I think I stole that one from John, or maybe me and John came up with that.
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B
I was like, oh, that's really good. I'm going to feel that myself. I'm going to.
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A
I'll just pull a zuck, steal it, Pull a zuck, steal it. Make it your own. All right, so NewsFeed came in 2006. So Sheryl Sandberg comes on the scene in 2008. A lot of people now, I don't know, realize or give her the proper credit for creating what really is the auction system playbook that we now enjoy. Yeah, like Zuckerberg really didn't want anything to do with advertising.
- [16:59]
B
He, he said that this year. He literally said in the, in earnings report, this year is like, this is the first time I have ever cared about ads. Like he, like there's a quote of him saying he's like, I have ignored ads always. I care about the consumer's experience on platform. The only thing he's put his priority to is ensuring that the consumer has a good enough experience that they stay on platform. And he says ads are the exact opposite. They do exactly what I don't want to do, which is get people to leave platform or get people to sign off or discontinue use of the platform. So this year is the first and only time he's ever came out saying I care about ads.
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A
That is true. That's a great statement. I'm not into that interview far enough actually. It's, it's an older interview, but yeah, it's never been his thing. But he realized that he had to monetize it and he had to figure out a way to kind of, you know, detach a bit from the Microsoft arrangement, which was generating, you know, at this point in time, hundreds of millions of dollars in revenue. Like it was a grow. It was growing like a weed using a non native platform, basically using a white label platform. And so Sheryl Sandberg comes in and really sort of saves the day and creates the system that we know today. And even at that point in time, we talked about this in our last part two is this was the evolution of the right hand rail ads, which you were like, what are those? Well, I mean, remember Facebook was a browser based. That's the only place that you could go. You went to the computer, you logged into Facebook, you still do it today. You're technically not on an app. You're like the blue app that we all have on our phones. That's usually the way that we interact with Facebook, with Instagram, but still this was a web based browser know platform. And so on the right hand side, which we left links in the show notes from last week's show on exactly what those right hand rail ads look like. And now they're sort of an afterthought. I don't even know if they exist anymore. Do they actually exist? Like we don't even talk about them.
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B
Right hand rail.
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A
That's how little they matter. Yeah. Like go on Facebook like on the browser and actually see if you see a right hand rail ad.
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B
I think that's going to be like all your audience network side of it. I mean you still. It's the 1200 by 628 size because it just depends on like which browser you're using, which device, like all. There's so many different versions of how you're looking at the app. Like when you go into the ad dimensions and ad creatives. I've seen what's as close as I can to what you're referring to in.
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A
And around this time, around 2009, 2010 is when I first started advertising on Facebook. So I was an affiliate. I'd just been fired from the corporate world. I had a bunch of affiliate friends and they were like, yeah, there's this new platform called Facebook. You should check it out. And I was like, well, you know, what is it? I didn't really understand. So I was an affiliate for dating sites at that point, which no way. Absolutely loved. Yeah. Oh my God. Yeah, Plenty of fish. Which was one of them. Christian Mingle. I was a super affiliate for Christian Mingle.
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B
Oh my goodness.
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A
I've like created like Trish, who's still my webmaster, like created all these like Christian dating site, like huge sites with like hundreds of pages to rank for SEO. And then we then sent paid traffic to them. So I was like, all right, well they've got all this, they've got all these users. I think there's hundreds of millions of users at this point. I mean now there's Obviously there's nearly 4 billion users. So still a lot of users. But like I said last time, like you had very limited targeting options. You had where they lived, what the age they were, what their marital status was and if they were, you know, who they were interested in, like what type of person they're interested in. I'm like, this is perfect for dating sites. And so I actually launched an ad on Christian Mingle. I think it was late 2009 on the right hand rail. And I forgot to put a cap on my spend.
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B
Oh, no.
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A
And I remember I had my red Dell laptop and I had brought it upstairs to our bedroom up here, and I woke up like, I was like, holy crap. I didn't put a cap on my spend. And so I opened up my laptop and I had spent, I think, $2,700 in literally like two hours.
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B
Oh, my gosh.
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A
Without a single conversion.
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B
Oh, my gosh.
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A
And so instead of being pissed, I was like, holy crap, how much traffic is on this thing?
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B
Yeah.
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A
And that was late 2009, early 2010. So this was a huge deal. I was like, well, if they ever figure out the targeting, then this would be absolutely phenomenal. And lo and behold, in two. Let's fast forward a couple of years here. So basically between 2008, when I believe it was 2008, when Sheryl Sandberg came on board, double check my math on this. I believe it was, yeah, 2008, 2008 and 2012, the only advertising really was those right hand rail ads with very limited targeting. So the next step in the evolution, this is where you sort of come into play. Here is their S1 crisis. So they had to file for an IPO. They said, all right, it's about time. We're going to. We're going to file for an ipo. This is. They said, all right, we're going to become a mobile first company. However, a little note on the bottom of their S1 filing said, Basically all of our users, our daily active users, and our revenue per user is coming from the desktop and literally zero is coming from mobile. And this freaked out the investor community. And of course, at that same point in time, that's when they bought Instagram in 2012. And they bought it during the quiet period which we mentioned on last week's show.
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B
Didn't they buy it for, like, I mean, it was like the biggest acquisition. I remember, like, shortly after, like, they bought WhatsApp for like a billion. And. But I remember, like, the Instagram purchase was something so outrageous that it was shocking. But then, like, literally it felt like the next year, the WhatsApp billion dollar purchase made Instagram seem minuscule.
- [23:13]
A
Yeah, I mean, Instagram was bought supposedly for a billion dollars.
- [23:16]
B
Okay.
- [23:18]
A
So, yeah. And then WhatsApp just a, like a year or two later, like two years later was 22 billion.
- [23:25]
B
Okay. I was like, okay, so Billy, for Instagram. But then WhatsApp was, okay, $22 billion. Because I was like, I remember being like, wow. Instagram was such a monumental acquisition for an app. And then when it was like, so soon after they did a. What is that? A billion to 20, a 22x acquisition for another app, it's like, oh, man. Do the. What are the people at Instagram are like, I wish I had waited. But at that point, what's another two or three billion dollars? You don't have the ability to spend all that money in a single lifetime.
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A
So the funny thing is, is Zuckerberg had hundreds of millions of users. Instagram was really a photo app, if you remember. Like, it had cool filters at like 30, 40, 50 million users. It was definitely very popular, geared for.
- [24:13]
B
Photographers because at first it was, like, showing the aesthetics, but then when the filters came in, photographers were like, whoa, you're degrading my photos. But then the increase of users are like, look, now I'm also a photographer.
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A
Right, right. That was the thing.
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B
Yeah.
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A
And they didn't have advertising either, remember? So it was. It was basically just an app. But it also had. It was only like a dozen or so people. I listened to an interview with Kevin Systrom, who is the founder of Instagram, who's now since left. I guess they had issues. We can talk about that at a later date. Point is, is like, they only had, you know, 20 employees, maybe, or less at this point. Like, this was tiny, but for a billion dollars, like, think about it today. Like, how incredible of an acquisition was that?
- [25:01]
B
But again, the, like, Jack Dorsey moment, like, Twitter was trying to acquire Instagram and there is, like, some stuff, like, from a political standpoint where, like, there was a monopolization play and that there were other valid bids that were in play. But Meta did this. Like, Mark did this, like, overnight sneak attack, saying, you must sign this within 24 hours while Jack Dorsey was going up and back and forth in the acquisition process. But, like, there's definitely some, like, politicking. That was politicking.
- [25:34]
A
We all know this as marketers and business owners, that growth is. Is amazing until something breaks or some catastrophic event, heaven forbid, should ever happen to your business. And I don't mean just your ad campaigns going sideways. Maybe a client slips on a wet floor or a shipment suddenly goes missing, or a contractor gets hurt or an employee gets hurt. Suddenly the thing you've been building can take a huge financial hit, maybe one that you worry might take down the company. And you should always be thinking about that as the business owner. Most people don't think about business insurance until after something goes wrong, when it's already Too expensive or it's too late. That's why we're big fans of what next insurance is doing business. Insurance is so important for any business, whether you're online or offline, and they've basically taken the pain out of business insurance. It's 100% online, ridiculously fast, and designed specifically for small businesses. You answer just a few questions and next tells you exactly what coverage you need. No phone calls, no waiting, no holding the line for the next representative. Just fast, affordable production that actually has your back when things go sideways. Policies start for as little as $29 a month. Don't wait for a crisis to remind you you're not covered. Get protected in minutes@nextinsurance.com perpetual. That's next insurance.com forward slash perpetual. Absolutely. It was a genius move by Zuck. I don't want to mean to be, like, totally, like, kissing his ass here. Like, we have nothing to gain by this. We're just using his platform. But, I mean, this was a very, very smart move. 2012 was a big year. So you're going for an IPO during the quiet period you acquire Instagram, you can't say anything about it. The stock price basically comes out. It shoots up like triples on the. On day one, but then craters 50% because of this little line that says, we're basically. We are a desktop company and everything's moving to mobile. And we're. We don't have a strategy right now. Instagram, I believe, was an app at that point. So was the Facebook app even created at that point? They were still trying to figure this whole thing out because, remember, it was still web based. Still web based. It was like a website.
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B
Yeah.
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A
So anyway, so another thing happens around this period of time, and I think this is really important is Alexnet is. If you know what Alexnet is.
- [28:05]
B
No idea.
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A
Alexnet is basically is the first AI generator. Like, all right. It was developed by a team of three researchers from the University of Toronto. Alex Krazevsky, Ilya Suskiver, and Geoffrey Hinton.
- [28:21]
B
These guys thinks to be the second and third person that lands on the moon when your whole app the three of you created is called Alexnet.
- [28:29]
A
Yeah, exactly, exactly. So Alexnet was founded by these three individuals, a few that went on to, like, big jobs in Meta OpenAI and then into academia. They actually came out with a project of how to. This is called the 2012 ImageNet Challenge, where thousands of images were labeled. And Alexnet was one of the entries into this program. And this program, like, they figured out With a very high degree of accuracy, they could identify, based on the images, how to categorize the images. Like, these are monkeys, these are dogs.
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B
This is a, like in Silicon Valley.
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A
Hot dog.
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B
No, hot dog.
- [29:14]
A
Yeah, exactly. And this was like a big, big breakthrough because this is sort of the generative, like, this is the genesis of AI. It's image recognition. It's understanding how to logically sequence and categorize pieces of data. Hundreds of thousands of pieces of data. So Alexnet, these three founders, they were the ones who won the contest. And lo and behold, they then sold or licensed their tech to Facebook and Google. And that's the reason why we have the recommendation engine that underlies all the advertising, is because this original AI, this is like the genesis of AI in 2012 with this AlexNet project, or at.
- [30:03]
B
Least an AI image recognition. Because I've seen a lot of stuff with Google where like maybe five or seven years ago I was listening to interviews of Google AI image recognition being that of like the age of a toddler. And it's progression to being able to identify feelings. So there are people in this photo that are happy but not being able to understand like contextual stuff because that's like, I like in that type. This is like five or seven years ago. And they're like saying the future of image recognition will say like, you can see that there's a woman in the background wearing a wedding ring crying, and then there's a man in the background throwing off a wedding ring. And so it can, he's like, in the future it'll be able to understand. And that's where we're at with like Nano Banana and being able to add in all these different layers for images. But this is the genesis of image recognition, which as you're saying is like the baseline for meta and Google's search and discovery features. But then also, if you think of Today, fast forward 13, 14 years with all the stuff that we're doing with generative AI and being able to create stuff, you have to know, how is this possible? Because it took over a decade and billions of dollars of investments to build the model that is today that serves the ads. There's a reason why this matters because it all pertains back to ads, but it's just showing the evolution in history of why what's happening today is so substantial. Because it was built on stuff that's been in the works behind for decade plus.
- [31:31]
A
Yeah, so this was really what we referred to back in 2012. There's no such. We didn't really talk about it as AI in 2012 but this was like a deep neural network and this is the future building blocks of AI. So it triggered a mandate to integrate these deep neural networks into the news feed ranking models like allowing the algorithm to move beyond simple data and to classify the actual content of photos and videos which enabled a new level of visual targeting. To your point, like the next level of that is recognizing emotion within those images and or video as well, which is sort of that next sort of stage. And then obviously there's generative AI. We can talk about that. Of course on future shows. The point is for meta and for Google and Facebook at that time and Google, this Alexnet AI feature was absolutely critical to the success of the recommendation engine inside the newsfeed. If you can figure that out, like if you can figure out like what I like, if I like something, how do I know? Like how do they then show me more content of stuff that I like or that I hover over? Well it all started with this Alexnet licensing from these three super smart individuals. And then see one went to, one came on board in meta, another went to OpenAI. But that's the reason why we have the newsfeed today and the reason why we have ads today. It's all based on that sort of foundation ads, successful ads that actually target the right people. If you're selling a anti aging serum, chances are you probably want to show that to people who are interested in an anti aging serum. And this Alexnet was the foundation for that ranking model and for the algorithm and the advertising platform that we now enjoy today. Does that make sense?
- [33:27]
B
Totally makes sense.
- [33:29]
A
It's crazy to think about it. And that's why we have AI today. So it actually started really back with meta. So anyway, so that was a big deal in 2000. This is all happening in 2012. Like 2012 was a pretty, pretty big deal. The next phase of this though was because they realized that holy crap, everything is going to mobile. What are we going to do about these right hand rail ads? Like we, we need like sort of the next evolution. And so that's when in 2012, 2013, this is when I sort of really got on board with it is and realized that that Meta and Facebook at that point in time, not yet Instagram, because Instagram didn't have any ads. Like this was the key. If you put ads in the newsfeed and make them native, all of a sudden you've got a far better engine for advertising. And they layered in all that targeting. Remember all the targeting we had in 2012-2013, it did like 20 like up until really like two, three years ago. It was a targeting based platform. You also had, you had big data in there, like household income.
- [34:39]
B
Yeah. And we would feel like the value Datalogix or Oracle. So that even enhanced stuff where I'd be pay 15% extra on my CPMs. Like it was so much of an audience forward platform because you were finding the audience and then putting the creative in front of them. Where it's like, when it's like, here's the audience I want, I want someone who drives a BMW, who attends yoga classes three times a week, who's read books by this author, this author and this authority and is a frequent traveler internationally. Oh, and, and you could do credit scores. You had, I remember you were able to do people that had like income brackets, credit scores, like all this type of stuff. So especially in the timeshare space where I've like run ads for every major timeshare company and hospitality brand you can think of, where it's like we needed to make sure that these are married individuals, they were employed, they had this household income and they had this credit score and they lived in this zip code. Like, I mean it was now not you, like if you're listening to this, you're like, what do you mean you could do all that? I can't do any of that now. Yeah. This is a different era.
- [35:48]
A
This was a whole different era. And like they were buying this data and embedding it into the platform. So it was from 2013 up until literally like within the last year. This was a targeting based platform in a lot of cases. And creative wasn't as important. It was like just show the ad like your targeting is going to be so great. Like you said, you know, into yoga drives. A BMW has this level of income lives in this particular geography. Like all of this was being gathered by the pixel from all the sites that you're being tracked on. And then there's data that's being pumped in and matched with your user ID from all these major data companies. Like the targeting was it. Now it's the complete opposite. We hardly use any targeting now because the creative creates the targeting and I think maybe that's another takeaway. All right, hope you enjoyed today's show on why meta is the best advertising platform on the planet in 2026. There's a lot of information here. So we are cutting this up into four episodes, which is a great way to start the year so that you can go back and listen to these episodes as sort of shorter episodes, understand exactly the history. As I said many times in today's show and in this four part series here. In order to understand where we're at right now, it's really important to know where we've been. And I think a lot of us have forgotten that there was a beginning to all of this. Andromeda didn't just happen. News feed didn't just happen. Ads on Meta didn't just happen. They all had a story that went along with it and that's the reason for this four part series here. So I hope you're enjoying it. And part four is going to be coming up next, of course. So of course, wherever you listen to podcasts, make sure that you do leave us a rating and review. It helps us get out to a wider audience, teach people how to do this stuff the right way, through metrics that matter and growth that scales and really teaching you how to leverage this. Andromeda change on Meta right now, which is the biggest shift in advertising that we've seen. I've been doing this for nearly 20 years now. It is the biggest shift since ads in the newsfeed and on Facebook. It wasn't even better yet. And this is a major, major shift right now, which we're on the vanguard of. We've talked about it here many, many times. We talk about it with all our clients. Like I said, we spent 40, $50 million on this stuff, testing out these strategies, talking to you about it every single week, twice weekly. And if you need our help, head on over to cure11.com apply. We'll be happy to talk to you about how we can help you scale and grow in 2026. So on behalf of my amazing co host, Lauren Episode Petrulo, Ciao till next show. See ya.
- [38:28]
B
You've been listening to Perpetual Traffic.