← The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
The Agile Brand with Greg Kihlström®: Expert Mode Marketing Technology, AI, & CX
#786: Thrad CEO Andrea Tortella on advertising in your conversational AI
00:29:57
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- [00:01]
Strayer University Announcer
At Strayer University, we help students like you go from Is it possible? To Anything is possible by offering access to up to 10 no cost gen Ed courses so you can reach your goals affordably and fast. Visit Strayer Edu to learn more. No Cost Gen Ed is provided by Strayer University affiliate sofia. Eligibility rules apply. Connect with us for details. Strayer University is certified to operate in Virginia by CHEV and has many campuses, including at 2121 15th Street north in Arlington, Virginia.
- [00:31]
Carvana Customer
I sold my car in Carvana last night.
- [00:33]
Greg Kilstrom
Well, that's cool.
- [00:33]
Carvana Customer
No, you don't understand. It went perfectly. Real offer down to the penny. They're picking it up tomorrow. Nothing went wrong.
- [00:39]
Strayer University Announcer
So what's the problem?
- [00:41]
Carvana Customer
That is the problem. Nothing in my life goes to smoothie. I'm waiting for the catch.
- [00:44]
Strayer University Announcer
Maybe there's no catch.
- [00:46]
Carvana Customer
That's exactly what a catch would want me to think.
- [00:48]
Strayer University Announcer
Wow. You need to relax.
- [00:50]
Carvana Customer
I need to knock on wood. Do we have wood? Is this table wood?
- [00:52]
Strayer University Announcer
I think it's laminate.
- [00:53]
Carvana Customer
Okay. Yeah, that's good.
- [00:54]
Andrea Tortella
That's close enough.
- [00:55]
Strayer University Announcer
Car Selling without a Catch Sell your car today on Carvana. Pick up these may apply the Agile Brand.
- [01:13]
Greg Kilstrom
Welcome to Season seven of the Agile Brand where we discuss the trends and topics marketing leaders need to know. Stay curious, stay agile and join the top enterprise brands and martech platforms as we explore marketing, technology, AI, e commerce, and whatever's next for the Omnichannel customer experience. Together we'll discover what it takes to create an agile brand built for today and tomorrow and built for customers, employees and continued business growth. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech, AI and marketing operations. The Agile Brand Podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information, go to teksystems.com to make sure you always get the latest episodes, please hit subscribe on the app you listen to podcasts on and leave us a rating so others can find us as well. And now onto the show. What if the most valuable part of your next conversation with an AI wasn't the answer it gave, but the ad it served? Agility requires more than just adopting new platforms. It demands a complete reimagination of how brands provide value within them. It challenges us to move from interruption to integration, ensuring our presence is not only seen, but welcomed. Today we're going to talk about a significant shift in digital marketing, the collision of conversational AI and advertising as large language models become the new interface for information and interaction. Brands are facing a critical how do you participate in that conversation authentically and effectively without destroying the user experience? We're going to explore how to navigate this new frontier not as intruders, but as valuable contributors. Tell me Discuss this topic I'd like to welcome Andrea Tortella, CEO at Thread. Andrea, welcome to the show.
- [03:03]
Andrea Tortella
Thank you for having me, Greg. I'm so excited.
- [03:06]
Greg Kilstrom
Yeah, looking forward to talking about this and definitely timely topic. A lot of people thinking about this, so can't wait to explore a little bit more. But before we do dive in, why don't you give a little background on yourself and your role at Thread?
- [03:20]
Andrea Tortella
Absolutely. I mean my my story in advertising started when I got to university. I was studying economics and business and I really was interested by social sciences, behavior, economics and specifically as it relates to advertising. I was fascinated by the artistic, creative part of advertising, which was super fun to me, actually doing marketing itself, practicing the craftsmanship. And I've always been very interested in technology in general and so the more scientific, analytical part of advertising was also fascinating to me. So that prompted me to do marketing for different companies and eventually led me to Perplexti, where I was leading marketing efforts for them in the uk on UK campuses. And Perplexity had their own advertising ambitions. And so being familiar with the space, you know there is only a set amount of companies that can build their own advertising infrastructure outside of Google. Meta OpenAI not that many companies can build the advertising infrastructure, the monetization engine, which has been the business model of the Internet, to make advertising the business model of the era. And so that prompted me to start Thread to build this infrastructure, to build this business model, the monetization engine, to subsidize the air, to make AI free, to make AI cheaper, to make it accessible to everyone. And so what we do at Thread is we do paid ads in LLM. So we help AI companies make money from ads and then brands advertise in those environments.
- [04:54]
Greg Kilstrom
Yeah, love it, love it. So yeah, let's dive in and I want to start at the strategic level here and really talk about, you know, redefining what advertising within within AI. And so Threads Manifesto states that advertising's true purpose is to inform, assist and inspire in a world where digital ads are often synonymous with disruption. How do you see conversational AI as the unique medium to finally achieve that vision?
- [05:24]
Andrea Tortella
Yeah, absolutely. I think this is even what prompted me to start the company in the first place, is that I love advertising so much. I'm so obsessed by advertising, but I don't think this is something that I share with that many people. And I think a lot of people hate advertising because it's bad advertising. I think that a lot of us feel overwhelmed by advertising, but not because advertising is intrinsically bad, but just because it's not relevant, it's not contextual, and people aren't able to connect with brands that they love. And so I think there's a disconnect in the medium, in the form factor, and a lot of it is in the execution. So why we decided to start a company is to actually bridge that gap. We think that advertising can be extremely impactful, it can be extremely helpful. It is an incredibly valuable value exchange that has enabled the Internet to be free and all the value that's associated to it. And so we think that AI is incredibly valuable and we want as many people as possible to have access to it. And so in that context, we think that LLMs are a very important interface. It's not the only interface. There's new form factors that are emerging from a voice to AI generated videos, to AI hardware. But text is today where we have the biggest usage. And so those chatbots are starting to have increasingly important roles in people's lives. And so we think that there's tremendous opportunity. At the same time, there's also a lot of responsibility and responsible advertising needs to be applied. There's a lot of ethics involved in that. And so making sure that we have responsible advertising is extremely important to us in general. My framework is that I think the advertising experience that we aspire to is one that is not only complementary to the experience experience, but also additive to the experience. Right? That's the best kind of advertising that is actually valuable to people. Right? And so that makes sense in specifically advertising and LLMs, where as we move to text, to agents as well, where people are delegating tasks to AI. A lot of the chats that we have, right today we're serving millions of ads. We're working with Fortune 500 brands. And so most of the chats that we have, people chatting to, chatbots in the land, they basically have problems. They say, like, hey, I'm struggling with this. Whether they say directly or not, people have problems. And so brands are solutions to those people's problems. And so our job is to do the best possible match where the experience is not annoying. The experience is not only complementary, where it makes sense, and there's synergies and texture and it's relevant, but it's additive where the ads should bring so much Value that. Actually, I prefer the experience with the ads rather than without the ads. If I could choose. We want to get to a point where everyone, or as many people as possible say, wow, this is so helpful to me. I had a problem, you showed me something that is so relevant to me, it solved my problem. I really want to make sure that you show me more of that. It makes sense that as AI makes this better, it increases transparency of information where people find what they need and it solves their problems faster. And that's what is the fuel to the economy.
- [08:50]
Greg Kilstrom
Yeah. And so certainly there's a lot of marketing leaders out there thinking about how they can adopt this and how this fits into their strategies. What, what would you say would be the biggest strategic mistake that they could make when approaching this conversational channel? Is it simply trying to port over old display ads or kind of the old way of doing things or what should they be keeping in mind?
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Andrea Tortella
Yeah, I think there's no single one response for marketing leaders. I think the single one mistake which is the denominator across all marketing teams and marketing leaders is, is inertia. It's lack of movement, is lack of experimentation. Right. Action creates information which allows for iteration. And so I think how the best marketers are going to win in the AI era, just like in startups. Right. As a startup we need to move fast. Right. Like the Silicon Valley motto is move fast and break things. And so in that context, I think there's a lot of great parallel as it relates to marketers where I think the, the best marketers that I see and just in general are the marketers that move at light speed. They're the marketers that are able to advertise at a speed of thought. They're able to advertise at a speed of culture, they're able to advertise at a speed of news, they're able to advertise the speed of product development. And so speed and being anti slow.
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Greg Kilstrom
Right.
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Andrea Tortella
I, I think is what I would encourage all marketers to do. Another, I think this, this concept of time timing as a framework in marketing is very underappreciated. Right. I think marketers in the industry is like overhyped on so many metrics that I think to me are a bit either vanity metrics. And I think this is not necessarily a hot takes. I think most people can agree that advertising and marketing in general has a lot of vanity metrics, but I think the most underpriced concept, to me, the most undervalued concept and marketing is all about underpriced assets, right? Pockets of underpriced attention, punching above your weight class, having the lowest CPMs, lowest CPCs to have the highest CAC to LTV. But I see very little timing in the equation. What do I mean by that? Is this speed to market? You're able to advertise the speed of thought at a speed of user feedback, right? And so when thinking about your marketing mix, when thinking about your marketing portfolio, I would encourage marketing teams to do this mental exercise and think about how long does it take me to go live, right? How long does it take me to. I have an idea. I want to do a campaign across different channels. How long is it going to take me? And it's always taking too long. It's always taking too long. So you want to make that shorter and then you also want to break down across the channels, right? If I have an idea today and I want to go live on search, I want to go live on social, I want to go live on digital at home, I want to go live on retail media, I want to go live on ctv, how long does it take me? Is it going to take minutes, hours, days, weeks or more? That's way too long. Especially as the news cycles are faster and a lot of the arbitrage is usually on the trends. And so arbitrage is on the speed, the speed of trends, on the speed of culture. And so timing is extremely important. We're very lucky and I feel very humble to be in this category is that by advertising LLMs, we're not only AI advertising, we're AI ads within AI, where AI is not only the tool to make ads, but it's the distribution channel itself. And so what we get to do is that we make the actual ads in real time for every single conversation. Right? Basically how it works is that a user chat once in a while, one of the messages is sponsored. It's exactly the same thing. You just have a little sponsored by a little ad icon. And so we get to make this text creative in real time. For every single conversation there, we get to have an asymmetry and arbitrage, right? Because now I don't need to make the creative, I don't need to make the assets, I don't need to waste time and do so many meetings back and forth. A brand comes to us, they tell me, hey, I want to launch a campaign for Greg.com for X amount launch. That's it, right? And so we then use signals in real time from the conversation itself, right? Which gives us A lot of context, right. That's actually how we're able to perform so well as we have so much more data than everyone else. Right. If you look at search, people only type a few keywords with us in chat, people type the whole lives, right? Those paragraph long messages compounded over deep conversations where you know, 15% of our conversations are 100 plus messages. Right. So it means that someone enters a chat, they write 100 messages before they leave 15% of the time. That's crazy, right? That's so much data. It's a word that makes it also unique is that users are very intellectually stimulated, they're very engaged, they have very deep, thoughtful conversations as opposed to social media where people are just doom scrolling brain rotting context, which people are locked in. They enter conversation in a chat at the top of funnel and then they go lower in the conversation. They understand the problem, they understand the brand, they understand the category. And so that's what advertising is, is making the users more educated about the problem. Now if I'm buying a product, I understand the pain, I understand why I actually need it. And so that creates a higher quality user that yields much better outcomes for advertisers. Higher ltv. And so yeah, basically timing.
- [14:45]
Greg Kilstrom
And so from the, from the advertiser, from the, from the brand's perspective then certainly from a tactical standpoint, you know, if you're running banner ads, you need, you know, designers and copywriters and stuff like that. What does this look like from the brand's perspective? Like what, what inputs do they need to provide and what is their role in this?
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Andrea Tortella
Well, specifically, as it relates to what we do, paid ads in LLMs, in chat interfaces, we only do native endemic advertising. Right. And we think that that's the best kind of ad format that you can have, which doesn't disrupt the digital consumption, which is complementary, which is additive. And so that's what we do where, you know, in LLMs you chat, the experience is text. And so you have text in, text out, the ad is text again. And so that's why we don't have this constraint of banner ads. But in general, like for marketers that do banner ads, that that's totally fine as well. That's totally fair. That's just not what we do because it's not native to our experience. But again they're like, you know, with AI you can make AI generated banners and you can do that a lot faster. And so that speed of experimentation can. The velocity as well increases there.
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Greg Kilstrom
Yeah, I just mean like what, what does A brand provide to thread to make sure that their ads show up in the right place at the right time, so on and so forth.
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Andrea Tortella
They can give us literally anything that they want. The only thing which we need in theory and in practice is the URL that they want us to redirect the advertiser and the budget and potentially a goal. But that is not limited to this. They can give us anything that they want. And so to our knowledge, we have the fastest advertising solution in the world to go from an idea to real time bidding, where you do that in seconds, right? And so how we do that is you literally come on our platform, you say launch a campaign for URL.com for x amount press launch, and that's it, the campaign is live, right? And so how we can afford to do that is we have AI that creates a lot of context and understands the brand really well from what you give us from the URL, from just the whole Internet where we create profiles for your brand, for your audience. Basically AI does everything, literally everything that is doable, AI does that. And obviously we give you more sophisticated granular targeting as well that giving you control over that. But what's great with AI is that you can basically create these form as kind of translations, right? Where you can give me a campaign break. You can upload your brief and that's it. The campaign launches with a brief. You go on my platform, you upload your PDF, your document, that's it, you press launch, campaign is live, right? Just brief to live campaign, brief to real time bidding in seconds, right? And so that's, you know, what, we're really lucky as a, as a channel itself, as a category, we're able to do that. But you could give me anything, right? Any information, any, any brand book that you have, your previous ads as well, any previous campaigns that you did across channels. And then basically AI analyzes either those videos, those, those copies, those billboards, whatever it is, and then understands, you know, what's the goal of the campaign, who you're trying to reach, in what context, right? Another framework which I'm personally fascinated by, which we're just scratching the surface from our targeting capability, is that conversational environments unlock a new world of targeting capabilities, a new world of measurement capabilities. And specifically, what I'm most excited by and how I think about ourselves is that advertising in LLMs is extremely valuable from a pure performance perspective. We have. It's very endemic, it's very conversational, so it hits people very hard, it's very personal. But the other aspect is the amount of data that we have and so how we're able to process those millions of conversations, extract a lot of value from that. And so you can see how it just enables you to do targeting in new ways that were not possible before. So for example, I was talking to a brand that came to me that is in the financial sector, let's say, and that says, hey Andre, I want to target people who have a big ego. Because people with a big ego, they're going to invest more, they're more likely to those kind of profiles. And so today you cannot do that in the walled gardens or those other platforms, maybe you can find proxies, but you cannot do that directly. Right. And so through the semantics of the conversation, you have all this data that's incredibly valuable and that just unlocks these new, new targeting capabilities. Another framework which I'm really excited by. And so that makes sense from understanding how the direction, how AI is trending towards agents where people are delegating more and giving tasks to AI, like hey, write this report or hey, write this email or do this for me. Right. One targeting framework which we use is not contextual targeting, not behavioral targeting, but task based targeting. And so you can say, hey, I want to target people based on their task. And so if I'm doing this task, then advertise products that are related to this task, that are complementary to this task. That is also something which we're very bullish on because those are the kind of behaviors that we're seeing people in AI in LLMs chatting about basic delegating tasks. And so targeting a task per se is something we're, we're really excited by. Yeah.
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Greg Kilstrom
And from a measurement standpoint, I mean certainly, you know, there, I, I would imagine there's some traditional metrics that are gonna, they're gonna be the same no matter what you're advertising, where you're advertising. But are there new or different metrics that you look at in, in this scenario and maybe talk about that so much?
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Andrea Tortella
Of course, like you, we do everything standard, but I think that's what's most exciting for us as a startup and pushing innovation, pushing the frontier of what's possible in this new environment. One that I want to specifically point you to is something which we call attention shift. Attention is one of the most hyped words in advertising. Everybody uses and overuses it, but I think specifically how we approach it, we're very much an outsider young team. I just graduated university three months ago and so thinking about ourselves as like industry outsiders, very Naive, not knowing anyone or anything. What is our role? Right. What does advertising even mean? What are we doing here? And so advertising comes from the Latin advertire, which means redirect the attention. And so that's how we thought about things where that's what we do. We redirect the attention from the publisher to the advertiser. The publisher owns the attention of the user and sells it to the advertiser in exchange of this financial transaction. And so what we need to do is to facilitate this attention shift from the publisher to the advertiser. And so how do we translate that into metrics? Is thinking about an attention shift and a shift in the conversation, where you can look at the shift of the conversation before an ad and then after an ad. Right. If I didn't have the ad, would the conversation be the same? Or actually because I showed the ad, have the conversation pivoted towards the advertiser or maybe towards something else. Right. And so a concrete example could be something like, you know, category of fitness is very strong. A lot of people ask like, hey, I want to lose weight, I want to work out, like, suggest me a workout. Okay? The eye is going to tell you to do some push ups, to do some pull ups. Now we can say, hey, you know, if you're going to work out, maybe you should check out this protein powder can help you recover from a workout. Now what's interesting to see, what does the user say after this? Do they talk more about fitness or do they talk more about protein? Right. And so basically what we do technically is we convert the actual messages, the words in every single message, into vectors. You have the first user message of the asking a question about fitness, you have the message of the protein and then you have the message after. And so how much does like literally a spatial vector shift the conversation? And basically what you will see is you have a conversation, you have the ad that happens, you have a spike in attention shift because, you know, they read the message, they go all the way to the protein. And those are also relatively, in absolute terms, they're close, right? But then you can make them on a relative basis and then you have the spike of attention shift, they go to protein. Now does the attention stay right for as long as possible or does it drop a little bit? That doesn't come back. And so what's also interesting here to think about is like the longevity, the lifetime of an ad. Another thing which is interesting here to think about is like from a business model perspective, how do we monetize, right? Like if you were monetizing a click basis, someone might not click on the ad, but like what did they chat with the brand? But then, so the amount of clicks on the Internet are dropping and there are fewer, fewer clicks on the Internet and an industry which is reliant on the clicks, well, how are you going to monetize? That also opens up the door to think about new monetization units. In this scenario, it might be more valuable for the brand to have the users not click on a website and then just be lost on a website, but actually stay in chat, talk to the brand, understand about the brand, be more educated, get lower in the funnel, build more trust with the brand than just clicking and then like losing them on the website. Right? And that's also something which we're thinking about is like the longevity of the ad. What's really unique about this form factor is that for the first time ever, brands are able to talk to their customers one on one at scale. What does that mean? Is that like, if I see a billboard, you know, for gcdko in the street, I can't go in the street and like talk billboard in the street, or same on Instagram or Google. I can see like an image or a video and then like ask a question to it, like, sure I can. You know, I see the nice image, I want to buy the shoes, but I can't ask to the billboard, to the Instagram ad. Like, how light are the shoes? Are the shoes waterproof? Do you have the same shoes in red? Who's the founder of the company? When is the next discount in the chat? You can. And that is mind blowing, right? And that is also data that then goes to the advertiser that can be extremely valuable to them, right? In that sense, I think about us not only as an advertising company, but merely or even more as a data company, right? We're able to have such valuable insights for the brand that do not only help the marketing function, but also other functions of business. Where like if people are complaining about the shoes and say like, hey, those shoes are not comfortable, I hate them, like then the advertising knows that then they can, you know, the engineering and the product team can then make adjustments to that. And so that's where actually a lot of the alpha is not only on the pure advertising in terms of customer acquisition, which is very appealing, right? And that's the case in every new wave of distribution. The first Google Ads, incredibly performance, first TikTok ads, insane. First Facebook ads. In early days, you always have this arbitrage, why because of the asymmetry between supply and demand. Right. You have incredible amounts of usage, incredible amount in this case today, a lot of people chatting to LLMs, a lot of eyeballs, a lot of attention, relatively few media buyers on the demand side. And so that doesn't make it a very competitive landscape where not that many people are bidding for the same impression. Therefore, CPM is lower, cost per click is lower, but that's not the most valuable thing. Sure, you can get a cheap click, cheap impression. The coolest thing is the data. That's the insight. That's a new world. It's discovering a new continent.
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Greg Kilstrom
Yeah, yeah, no, love it. And you know, definitely want to watch this and watch, watch it closely. You know, as we're, you know, we're kind of wrapping up 20, 25 and, and lot of, lot of leaders looking and planning ahead. What's your recommendation for, you know, marketing execs out there that are trying to prepare for a lot of things but you know, a lot, a lot of things that you touched on and just AI in general. You know, how should a marketing exec prepare their brand for this shift towards more conversational AI? Advertising.
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Andrea Tortella
Conversational AI is the next distribution channel. LLMs chat interfaces are already the next distribution channel. And so I think for advertisers that are not yet experimenting, that are not testing and that are not doing anything, again, as I mentioned, inertia is the single biggest risk to your brand and to your company. And so I think that's the only thing, there's no secret answer is actually being there in the trenches, learning. It's just about being curious. And even ourselves pushing their frontier, we're hyper curious thinking about we have all this raw material, we're data mining here, how do we refine it, how do you process it? And I think that's the same thing that brands should do. They should be hyper curious, experimenting, testing. As I mentioned, action creates information which allows for iteration and it's just having a feedback loop which then starts a flywheel and then that's something that just scales from there.
- [27:52]
Greg Kilstrom
Yeah, yeah, love it. So, as we wrap up here, a couple of last questions for you. If we were having this interview one year from now, what is one thing that we would definitely be talking about?
- [28:03]
Andrea Tortella
Interesting. I would say the data aspect of advertising, LLMs is one that is very much underappreciated. And so I think in general, even though data driven advertising has been very much spoken of, I think this new frontier, this new environment unlocks data capabilities that then can be applied across other channels. And so imagine that has access to conversational data that then I could apply in my targeting capabilities across other channels. Right. I know what people are chatting about and you know what they're saying in LLMs. How can this help actually other channels? Right. And how can this reinforce my omnichannel marketing strategy? And so within a year and just like longer term, I think now that I'm here in this new channel, how can this channel not only help me in one more angle of attack and one more vector of distribution, but how can it reinforce all of my channels and all of my my my Go to market.
- [29:10]
Greg Kilstrom
Yeah, Love it. Well Andrea, thanks so much for sharing today. One last question before you before we wrap up. What do you do to stay agile in your role and how do you find a way to do it consistently?
- [29:21]
Andrea Tortella
I try to have conversation like this to try to learn and be as intellectually stimulated and as curious as possible. I personally, as I mentioned earlier, I'm obsessed, disease level addicted to our marketing where I try to practice the craftsmanship myself as much as possible. And so that means coming up with the craziest possible marketing campaigns and just having fun. And so yeah, just like practice what you preach, do marketing and practice the art and science.
- [29:51]
Greg Kilstrom
Love it, love it. Well again I'd like to thank Andrea Tortello CEO at Thread, for joining the show. You can learn more about Andrea and Thread by following the links in the show notes. Thanks again for listening to the Agile brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show as well. You can access more episodes of the show@theagilebrand.com that's the agile Brand and contact me if you're interested in consulting or advisory services or are looking for a speaker for your next event, go to www.gregkilstrom.com that's G R E G K I H L s t r o-m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creature creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.
- [31:03]
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Andrea Tortella
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- [32:29]
Andrea Tortella
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