← The CEO’s Guide to Marketing
The CEO’s Guide to Marketing
The one with Meta’s CMO and VP Analytics Alex Schultz about timeless truths, measuring for incrementality and impact.
00:51:09
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- [00:00]
Seth Matlins
Foreign. You recently wrote a post on LinkedIn or at least it was shared on LinkedIn that says can we please kill performance marketing? Why is it, I mean, agreeing that it's well past time that will kill performance marketing as one of the two, as the CMO of one of the two companies, you and Google who play probably created the nomenclature. If we go back to the beginning of it, I love the perspective that it's time to kill us. Kill it. Tell us why.
- [00:36]
Alex Schultz
I wish we were one of the ones who named it. Like aren't you 2004, when I started in the industry and Facebook started, it was already called performance marketing, at least as far as I remember.
- [00:46]
Seth Matlins
Well then maybe, maybe the credit goes or discredit goes to our friends at Google. Maybe all they were doing was saying was giving a title. By the way, they deserve credit for it. The rest of us just deserve the discredit for what it's come to stand for. So tell us why to kill it.
- [01:03]
Alex Schultz
Well, I also think the 90s predated all of us, right? So like the banner ad was invented by Hotwired, right? The 468 Banner ad was invented by hotwired. So I think even before Google had search ads, you had Yahoo with was it omniture doing the insertion into Yahoo.
- [01:19]
Seth Matlins
I couldn't tell you who was doing it. But you know, I've been, I've been blaming Facebook at the time and Google for this, this mess. And you're right, I, I, I owe Facebook now Meta and Google an apology. You have my apologies.
- [01:33]
Alex Schultz
I did not say apology. It's all good. But look, I mean I think that the term was definitely part of promotion marketing, sales for Internet marketing back in the 90s and early 2000s and through to today to get people to think about marketing differently in a sort of post click tracking world, you know, clicks equal results, performance, whatever. The thing for me is, you know, ever since I started in marketing, I have had so much respect for the FMCG CPG kind of companies that were the, you know, history of how marketing got to scale because they actually, if you sell toilet paper, it's too expensive to store it in a warehouse. You have to make the right amount to sell and you have to have the marketing and sales tied very tightly into the manufacturing and, and CPG across everything and FMCG across everything had to be really good at that. And that meant that they knew how a banner, a TV ad or a billboard performed and drove sales. And so for me to differentiate between sort of TV ads and Radio ads and you know, direct response ads versus brand ads online is not right because all marketing performs. And so I really.
- [02:49]
Seth Matlins
Marketing can perform.
- [02:51]
Alex Schultz
Sorry, the vast majority of marketing does not perform.
- [02:54]
Seth Matlins
Yeah, exactly.
- [02:55]
Alex Schultz
But all marketing has the all types of marketing perform if done right.
- [02:59]
Seth Matlins
Why do you think the vast majority of marketing doesn't perform?
- [03:02]
Alex Schultz
Because it's really hard. Like actually fundamentally, I think marketing is a very, very hard craft. I think it's hard in two ways. Firstly, actually getting the creative right is hard. And it's hard whether it's a direct response or a brand building, demand generation, awareness, creative. The second one is even if you get the creative right, the number of people who are influenceable at any one time is probably pretty small. And being able to show the right ad to the right person at the right time is really hard as well. So it's hard to do great creative. It's hard to show the right ad to the right person at the right.
- [03:42]
Seth Matlins
Time for our audience. When you say ad, are you speaking specifically of advertising or kind of of marketing and the experiential and just whatever marketing has become? Because of course advertising isn't a proxy for marketing anymore.
- [03:55]
Alex Schultz
No, it's totally fair. I was, I was meaning ad and I was meaning a billboard, a TV ad, a banner ad.
- [04:01]
Seth Matlins
Right.
- [04:01]
Alex Schultz
A search ad, whatever. That was where my head was at.
- [04:03]
Seth Matlins
Right.
- [04:03]
Alex Schultz
But you're right, I have a great bigger experiential team. That's what I'm doing here. And experiential marketing is also part of it. And yeah, you get 5,000 people through the beach or whatever, maybe only 10% of them are super influenceable to change their behaviors on Meta's ads.
- [04:19]
Seth Matlins
Right.
- [04:20]
Alex Schultz
That's still worth it.
- [04:21]
Seth Matlins
Right? Right. And for those in the audience, we are recording at the Cannes Lion Festival of Creativity, thus the beach. And I have to say I was over at your beach location the other day for the first time. It was, it's really amazing and I love, I love the space dedicated to product demonstrations.
- [04:43]
Alex Schultz
Yeah, it's a shout out to Julie Hogan and team for doing that. My favorite is the one where you talk into a phone.
- [04:50]
Seth Matlins
I did that. Yeah.
- [04:51]
Alex Schultz
And it reads you back in a different language. Yeah, yeah.
- [04:53]
Seth Matlins
I love that in your voice, which is really wild. We're going to get to technology specifically and its future facing applications in a bit. But I had the great privilege of getting an advance copy of your book.
- [05:10]
Alex Schultz
I was honored you would accept one.
- [05:12]
Seth Matlins
I read it as you know, from beginning to end. When's it coming out?
- [05:17]
Alex Schultz
Ad week in October, New York.
- [05:21]
Seth Matlins
Click here by Alex Schultz. Ad Week Publishing in October. Available for pre sale now. Thank you for sponsoring our show, Alex. I kid, amongst the things you said in the book are that you really believe in two things. Fundamentally. Tools evolve, but principles are timeless and incremental results are everything. Talk about both.
- [05:46]
Alex Schultz
Yeah, I mean, the first one comes back to this point. I, I have always felt that online marketers have a lot to learn from the tradition of marketing that went before us.
- [05:55]
Seth Matlins
Yeah.
- [05:56]
Alex Schultz
If you go back to Scientific Advertising by Claude C. Hopkins, which is now over 100 years old, sold something like 8 million or 9 million copies. That book talks about split testing in an offline world. And the concepts we talk about in online marketing as performance versus direct response are as old as marketing itself. And so my classic example is you look at direct mail, if you were sending a letter through the mail, or you were sending an email, or you were sending an sms, or you were sending a push notification, you are engaged in database marketing and direct mail. And it is a direct line. And the people who are brilliant at email were brilliant at SMS and push notifications.
- [06:39]
Seth Matlins
You know, I always knew I wanted to be a marketer. Don't ask me why. The first job I actually wanted was to be in direct mail because I loved back in the day the copy intensive strategies. And in fact my mother was the executive assistant to the chair of the Direct Mail Marketers association back in the 80s.
- [07:03]
Alex Schultz
Well, and that was one of the things that David Ogilvy shouted out in his book and in his videos, how it was his first love and his secret weapon. Right. Wasn't that.
- [07:11]
Seth Matlins
Yeah, yeah, yeah. And actually, I mean to your point, and by the way, I'm sure our audience found that little bit of Seth history fascinating. But to your point, David's ads, Ogilvy's ads were so copy dense, which is, I'd never realize that kind of a direct lift of the narrative style of direct mail in its origins.
- [07:34]
Alex Schultz
Absolutely. And so that's like, I think that's the easiest example is direct mail following the line right the way through to push notifications today. There are many others targeting. If you bought a gardening magazine to target gardeners, you were targeting, you can do it better on the Internet now, but it's the same game. So that's the tools evolving, but the principles being timeless.
- [07:53]
Seth Matlins
Right.
- [07:55]
Alex Schultz
The second point on incrementality is everything is okay. So again, just for the tools evolved and the principles are timeless. The Wanamaker quote that everyone in our industry always says, half our advertising is wasted. We just don't know which half is exactly getting incrementality. Like how do I show the ads that have an incremental impact? An incremental impact isn't necessarily just sales, although I think it should be primarily sales. Incremental impact is if you want to move someone's awareness even before they get further down the funnel to buying something. You can measure whether you incrementally moved awareness with an ad by putting it in some state and not putting it in another state, or showing it to some set of user IDs and not showing it to another. So it isn't that incrementality always has to be right to the bottom of the funnel in every campaign. But you should know if you incrementally moved whichever thing you want to move.
- [08:46]
Seth Matlins
Well, I think, I think to, to the notion of killing, you know, performance marketing, certainly, again, the nomenclature of it to your point, I can't make a sale if somebody is unaware of my existence. Therefore, the incrementality of measured against objective and measured in across the full funnel.
- [09:08]
Alex Schultz
Yep.
- [09:10]
Seth Matlins
Matters, right?
- [09:11]
Alex Schultz
Tons. Absolutely tons. And I think you need to understand what the impact of awareness building is for you. So for right now, for say glasses and WhatsApp in the United States, those two things, we have an awareness problem. Like when people are aware of the glasses, sales go up tremendously.
- [09:29]
Seth Matlins
And you're talking about the meta Ray Ban glasses.
- [09:31]
Alex Schultz
The meta Ray Ban glasses and soon to be the Oakley glasses we just did out.
- [09:35]
Seth Matlins
Yes, I saw that. I saw that news.
- [09:37]
Alex Schultz
By the time this is out, they'll be live. And you know, we have an awareness problem. We need people to know they exist. And when they know they exist, sales go up because it runs the whole way through the funnel. But once people are aware, not all of them buy, the majority don't buy. So then those ones we have to cultivate more and we have to get them to have consideration, so on and so forth. So yeah, we can do that. We can think full funnel. We know every part of the funnel is important. Different channels play to different parts of the funnel stronger, of course, and we can measure incremental impact at every point in the funnel.
- [10:10]
Seth Matlins
But so I just had this. The question I'm about to ask, I just discussed with, I don't know if you know, Tomas Puig, the CEO and founder of Alembic and, and they're working on a, and have developed a pretty fascinating, you know, legit causation model in today's world where the funnel isn't linear and the funnel you and I have been talking about kind of harks back to the, you know, the old days when it was linear. How do you, in the. The mess of the consumer journey, where I might be unaware of something, see an Instagram ad for it and try and buy it. I say try because I had a failure the other day where Paul Smith tried to buy a T shirt. I posted about this. I put it in my cart, would never let me check out, which is their fault, not the platform's fault, of course. But I was like, take my money, please. Why are you making it so hard? But how do you. How do you separate signal and noise and what actually mattered along that journey from awareness to purchase?
- [11:14]
Alex Schultz
Well, I think it's really good. I don't think the funnel was ever real in that it was linear. Like, you'd find out a product exists, you'd forget the product exists. You'd be reminded a product would exist. And so I think people, I think you can treat the population as a funnel, but you can't treat any human being as being, you know, a human being is like in a superposition of states through different places in the funnel.
- [11:35]
Seth Matlins
It's a great point. Yeah, it's really interesting.
- [11:37]
Alex Schultz
Yeah. So, you know, I think what you do. I don't like media mix modeling, but it is the right thing to do. So you do the experiments.
- [11:47]
Seth Matlins
Will you, for those CEOs and CFOs in our audience who may not be familiar with media mix modeling, will you just break it down a sec?
- [11:55]
Alex Schultz
I mean, I can try. The idea is you run different media and you want to understand the impact of those different media. You can't continually run tests that are large enough to understand the impact of those different media without it being, A, very expensive, because the tests are expensive to do, typically, and B, it really limiting the impact of your campaigns because some tests require you to have, say, half the country on and half the country off, which means that you would literally halve the impact because you were not showing it to half the country. So what you do is you run tests and experiments to figure out the incremental benefit of each channel that you are using.
- [12:32]
Seth Matlins
And is that the incremental benefit in isolation or in combination with the rest of the mix.
- [12:41]
Alex Schultz
So a lot of this depends on how well staffed you are really and how well set up you are for experimentation. So on our part, yes, we did a really complex one for WhatsApp that I think I actually even posted on LinkedIn an image of, of how we'd done it and how we done it, how we did it. And we, the South London boy coming out, how we done it, Mate. Mate. So, yeah, so we, we did that. And what we did was we did a multivariate test. So instead of just saying all of marketing on, all of marketing off in this chest state or this channel on this channel off in this dma, we actually did combinations of channels to see how they interplayed. Because you run a brand ad on us, on YouTube, on television, it will increase brand searches and you will see more conversions from retargeting ads using Advantage plus shopping on our side. And so you can't actually look at each channel completely in isolation. That takes a lot of resource and time to be able to do a full multivariate test. And you need a big campaign to get statistically significant results. So often it makes sense to just test each channel in isolation. If you can test how they interplay, though, it will be more powerful. You then take those coefficients that you get from understanding the incrementality of each channel through the test, and you make a model that says, TV's worth this, radio is worth that. Billboard's worth that. Digital out of home is worth that. Digital online is worth that. If it's brand, if it's direct response and you just put all those weights in and then you look at the impressions, the clicks and so on that you get from the campaign, and you calculate the impact that you have had based on the test that you've done in advance. And that's how you apply the model, which is essentially the weights to the media mix, which is the mix of different channels to get the impact right.
- [14:42]
Seth Matlins
Okay, thank you for that.
- [14:43]
Alex Schultz
Yeah. I don't actually love it because it's not a straight experiment, but it is the only way you can scale. And so you have to go back and test that your media mix model is accurate and hasn't degraded like it might be accurate for six months, but you change the ad. And so suddenly that one ad is better on a billboard, another ads better on YouTube, another ads better on Instagram.
- [15:03]
Seth Matlins
Well, you bring up a point again that you kind of, you spoke about at the very beginning, which is the right creative is hard.
- [15:10]
Alex Schultz
Yes.
- [15:11]
Seth Matlins
How affected is the. The, the media makes modeling by the creative itself. Right, Because I think that, that, I mean, it goes, in fact, it goes back to killing performance marketing because the, the phrase has created this, this false binary between performance and brand, which suggests brand doesn't perform. Yes, brands perform with the right creative, the right communications performance performs with the right creative, the right communications, everything performs or doesn't. How. How do you measure for the incremental impact of good creative? And you know, which is say if you a B test two shitty concepts, one's still going to win.
- [15:49]
Alex Schultz
Yes. Or both fail. Like quite often you can get statistical tie at zero impact. So it's quite possible to totally fail. So, yes, creative can perform differently in different channels. So different. So if you're really lucky, you get a concept that performs equally well platforms across. Yeah, all channels. But the fact of the matter is you don't like I love Chick Fil A's. Eat more chicken. Honestly, I think that works really well on billboards. You know, I'm not sure it scales so well to say a radio ad.
- [16:19]
Seth Matlins
Yeah, it requires the wit and brevity of out of Home and probably doesn't. Doesn't use your word scale to a medium Precisely. With more words.
- [16:31]
Alex Schultz
Precisely.
- [16:32]
Seth Matlins
Yeah.
- [16:33]
Alex Schultz
And so, yeah, absolutely. Different creative will perform. Different creative concepts will perform differently across channels. You know, right now I find the super bowl ad we did with Chris Hemsworth, Chris Pratt and Kris Jenner, that one has scaled really well across channels. Like, they look amazing on a billboard, they're hilarious on tv. It turns into a great short video in vertical format. It works really well for direct response too, because the glasses are super prominent with a buy now button. So that's a format that actually we found does extremely well across different creative media.
- [17:08]
Seth Matlins
But you set out, I'm assuming once you had a. Or maybe even the brief for the concept was a concept that scales across.
- [17:15]
Alex Schultz
It needed to.
- [17:16]
Seth Matlins
Yeah, yeah, yeah. I mean, it's. It's hard to make that. I mean, I've certainly been involved enough where we realized we had something designed for Channel A. And we're like, this is a bigger idea than Channel A. But it's. You got to start with the right brief and speaking the right brief. Something else you said in the book, and I think this is a direct quote, which is. And you were kind of speaking of, I think, your own experience maybe back at ebay. It could have been. I mean, you've been at meta for almost 18 years, so could have been early Meta. But you said we were so scared of not showing measurable, measurable result. I'm going to say that again because I can't speak. We were so scared of not showing measurable results that we reduced creativity and risk taking. This has certainly been a theme across a lot of these shows. Where. Where are we getting better at showing measurable results and measuring what actually matters rather than measuring what we can.
- [18:14]
Alex Schultz
Yeah. So this was actually inside. This was inside meta. And this was an implication of budget cuts that we had quite prominently three years ago. So where are we getting better? I actually think we are getting better in my experience of bringing together data people and creative people. So I think, look, there are people on both sides of those fences, the sort of heavily data folks who don't necessarily believe in design and all of those kind of things, and the heavily kind of ad creative agency leaders who criticize the four horsemen of the dull pocalypse. And I think actually data people can be really creative, like really creative and come up with these clever, incredible ideas. And the two sides of sort of the design artistic side and the data side can both be creative. Both like brand and direct response perform. And so the places where I think it's going well is where we bring them together. A company that's smashing. This is Coca Cola. Right. They've made a massive transition to digital in the last five years from being kind of lagging on digital to being leading on digital. And they do it with creativity and branding, and yet they have the data to back it up. That they are producing the results for the company and they've not been bragging about it and running around like. But they've made a massive digital transformation.
- [19:42]
Seth Matlins
And they reorganized the entirety of the marketing system globally for exactly that. And you know, they're aggressively in the best way. I think, though some might disagree, embracing AI and experimenting with it. And yeah, they've done a great job. I agree.
- [19:59]
Alex Schultz
So that would be a classic brand where they've actually, they've brought together data and creative as we talk about it at can and realized both are creative, both can work together, and they can do really cool stuff.
- [20:08]
Seth Matlins
But, you know, it's interesting, I go back to the end of actually the beginning of your. The quote I shared, which is, we were so scared. And because we're so scared, it has. We have sacri. Speaking broadly, we have sacrificed judgment to data and let data make decisions rather than inform decisions. Because so many CMOs are dealing with CEOs and CFOs who are, you know, expert in the 50 shades of gray that get you of accounting of numbers, but not in. I'm sorry, in the black and white of numbers, but not the 50 shades of gray that color human behaviors.
- [20:46]
Alex Schultz
Well, the thing I'd say to you is I think that fear kills creativity across the board.
- [20:51]
Seth Matlins
Yeah.
- [20:51]
Alex Schultz
So it isn't that data is stopping you. It actually stops you Being creative with data.
- [20:56]
Seth Matlins
Yes.
- [20:57]
Alex Schultz
It stops you doing creative cool, targeting things that are inspirational and fun and open up new ways to do creative. It's actually when you are in a place where you're under a lot of constraint, you've got a lot of fear, you kill risk taking. And that risk taking is across the board.
- [21:14]
Seth Matlins
Well, you bring up something that I think will be really interesting. Obviously that's a cultural imperative as an organization. Cultural imperative as much as it is anything. How, how does you know Mark and the leadership team there, how do they create a culture that. I mean, putting aside that it's a company built to innovate, built on entrepreneurialism, fail fast, break things. How do you, how do you instill that culture on that cultural. Permission to fuck things up.
- [21:43]
Alex Schultz
So my perspective is there are certain things that, that you should do rigorously and well. So for example, measuring your results. We can all do it. Like we can actually, we can run our ads and we can say, look, we cut out Pennsylvania and we see how the rest of the nation did in the US Except Pennsylvania. And then we know. And my experience is the way that Mark and our CFO Susan do this is if you do the work well, so you execute well on the measurement, they're okay with you taking a risk. And if you come in and you are honest and you say, look, this one didn't work, they're okay with that. If you're consistently every single campaign you do doesn't work for a couple of years, then you've probably got a major problem.
- [22:25]
Seth Matlins
But then you got a problem.
- [22:27]
Alex Schultz
But as long as you are being honest, you're measuring it well and you're not coming and saying, oh, we can't measure this for the things that are measurable, they have no problem with you having the odd failure. Then the interesting thing is some things aren't measurable.
- [22:41]
Seth Matlins
I was just gonna, I can't remember now if it was in the book or something I saw you share online, which is. I think it was on a post, but maybe it's an excerpt from the book how to do the things you can't measure. Yeah, yeah, talk about that.
- [22:56]
Alex Schultz
So my favorite on this right now is the seat, which is this Netflix documentary we did. I saw greenlit it last year. It is the story of Kimmy Antonelli getting the most sought after seat in Formula one that was open Lewis Hamilton's seat when he announced his Ferrari move. And we got Toto Wolff and the team to video a lot of the discussions that they were having and they Basically run the team on WhatsApp. That's one of the key reasons that we sponsor them and they show.
- [23:26]
Seth Matlins
When you say they run the team on WhatsApp, what's that mean? They use WhatsApp as their internal communication.
- [23:31]
Alex Schultz
Construct or beyond that, it is their main communication construct. Especially on race days when they're getting back to main office and back and they want something more real time than email. So they use WhatsApp. And Big Chunk of it is also how private it is. And that Kimi Antonelli news was kept really tight and really private. And our brand is message privately. And so it's perfectly aligned with our brand is it's a top secret thing. It's a big piece of news. And we decided let's try a documentary around it. Let's try and not buy ads. Let's do a documentary as our big piece. Last year we actually won an award here for the Afghan women's soccer documentary we did that was talking about how important it was for them to be private with their messaging to get out of Afghanistan when the Taliban took over Again, women's football wasn't.
- [24:16]
Seth Matlins
So these are mission critical illustrations.
- [24:18]
Alex Schultz
Yes.
- [24:18]
Seth Matlins
Yeah.
- [24:19]
Alex Schultz
And those aren't measurable. Like, neither of those are measurable. We did videos. That was a documentary that reached the top 10 of the documentary of the videos on Netflix in like multiple countries, including the UK and big markets for us. But the reason we could do that is because the other stuff we've done I described in this conversation is multivariate testing of the main billboards and online and digital. And we're like, all of that's really good. This one has huge reach in impressions. We can't prove to you what it did. But everything we can do we measured well.
- [24:51]
Seth Matlins
You obviously, as a group were not dissuaded by the fact that you can't measure it. Couldn't measure it, and in fact had an intuitive belief that it had value. What was at the root of that intuitive belief? Because there's some measurement qualitatively, if not quantitatively, that went into the calculus to greenlight, the first one, the second one, et cetera.
- [25:14]
Alex Schultz
And there's two pieces. One is qualitative, which is it's on brand. It's like such a good idea, so tightly tied to the brand. And the other is quantitative. If this goes well, we've seen other things get huge reach and huge distribution. Formula one itself has grown in the US because of a Netflix documentary. And so there was a proof that if you smashed could do really well and Qualitatively, it was aligned, but you would only know it was a success if you smashed it. And in this case, I would argue that we did smash it. And so it's easy for us to say, come on, it was a top 10 movie on Netflix.
- [25:49]
Seth Matlins
Do you look for in those moments of qualitative consider. Do you look for proof points actively which say, like the F1 Netflix doc that really catapulted it in the United States. As you were saying that, I was reminded of AT&T's initial sponsorship of American Idol back in the day when nobody was texting and they use the viewer judging the vote, the voting as. As one of the first use cases for texting and it skyrocketed. It was wildly successful for them. Do you look for kind of other places where impact, causation and correlation are linked? Impact is clear to kind of feed into the. The. We can. Can't prove it, but we're pretty sure for sure.
- [26:37]
Alex Schultz
I, I always, I do like to say if you need a data scientist and a microscope to figure out if your project worked, it didn't.
- [26:43]
Seth Matlins
It didn't work. Yeah.
- [26:45]
Alex Schultz
And so having examples of where people have swung at the fences and tried something big and it's worked as inspiration makes sense. Obviously you can't do something completely completely novel in that space, but very few things are completely completely novel. And you can usually say, hey, that was that good thing. We can do something far better than that. But it's kind of like that, guys. And so, yeah, that's a big part of it.
- [27:08]
Seth Matlins
Can we talk about lag effects and marketing's lag effects and how, how you would recommend a CEO? The CEOs in our audience understand, and the CFOs too, for that matter, understand marketing's lag effects. And that, you know, what you do today may pay off today, but it actually has the potential to be of impact in perpetuity, if not in perpetuity on certainly a longer time.
- [27:33]
Alex Schultz
Classic example of that. Like they use it in Whipple Squeeze this. That book. Hey, Whipple Squeeze this.
- [27:38]
Seth Matlins
The. The Charmin.
- [27:39]
Alex Schultz
Yeah, but that one isn't. Have I got that one wrong? That's the wrong one. The one with Subaru is that he squeezed this.
- [27:48]
Seth Matlins
No, that I, Mr. Whipple, would squeeze the Charmin, the toilet paper. Subaru. I don't know what the Subaru.
- [27:54]
Alex Schultz
I can't remember. There was a. There was a one about Subaru. I get muddled up with my brand books, obviously, embarrassingly, but cars have a long lag time, right? Right. They're a classic example of this where it's a long lag time. So what do you do? I think there's two to three things. One, you need to understand your funnel even if you're selling a car. So let's say you're selling a Mercedes and it's a really, really long time lag from when you're sort of young and you don't have any money to when you're on average like 50 and you have more money and you get the Mercedes of your dreams.
- [28:26]
Seth Matlins
Right.
- [28:28]
Alex Schultz
You should be as a cmo, in my opinion, having metrics that say are people aware, do they desire? Like where are they in the funnel? And are we able to move up the proportion of the population that's in the funnel even if we aren't moving sales today and have a logical explanation for the CEO, CFO and board of that journey that they believe, because this is not, this is logical and people in the car industry get it. So that's one. Two, most campaigns still have an immediate effect as well. There are people near the bottom of the funnel who get pushed over the hump. Buy a good campaign. So if you're increasing desire for a teenager who's thinking about their Mercedes, you know, 40 years from now as an aspirational purchase, the 47 year old who's on the border of getting their Mercedes sees that ad and they'll probably get nudged over. So you will see an immediate effect. So you should expect that too. And then three, all car companies have a mix of the big brand ad and the dealership, supporting small ads that are direct response and saying get into the dealership. You should be able to prove to your board that on top of those first two points, that should be logical, long term measured, short term, there should be some impact from your long term brand building stuff. And then finally, actually I know how to get people into the dealership on the President's day sale and I have a bunch of good materials that do that. And so it's that blend of dealer focused lead generation into the dealership on the President's day sale along with long lead time building the brand. But I have it measured and I can explain to you the logic. You can now debate me on the logic, but you understand where we're coming from. And I think that is the combination of how you do that with the board, cfo, CEO having been at Meta.
- [30:11]
Seth Matlins
As long as you have. Mark, obviously, I mean he hadn't run a meeting, let alone a company when he, when he created it in the dorm room. He obviously does not come from marketing because he's had one job his whole life. How have you explained some of these things? What marketing is, what it isn't, what it can solve for, what it can't, and on what timeline to leadership at Meta that doesn't come from this marketing world?
- [30:41]
Alex Schultz
Well, a couple of thoughts. One, I think all these founder CEOs are actually quite good at marketing natively. I think we shouldn't dismiss the fact that he's built a thing that's used by billions of people.
- [30:54]
Seth Matlins
I don't. And by the way, you bring up an important point which is that product is where marketing starts.
- [31:00]
Alex Schultz
Absolutely. The 4Ps again, a long term principle tools have changed, but the 4Ps are still there.
- [31:06]
Seth Matlins
Okay, so here's a question just to interrupt for a second which is if you had, would you rather have a parody product and a great brand or a parody brand and a great product?
- [31:17]
Alex Schultz
Parity brand, great product. I mean the reason the Ray Ban Metas are singing and flying off the shelves versus the Ray Ban stories which didn't is the Ray Ban Metas are a great product. The Meta brand is better.
- [31:27]
Seth Matlins
But yeah, the Meta brand is better, isn't it? I mean, I wonder about that example, which is just to say, but it's also a few years later adoption understanding at kind of a category level has changed.
- [31:39]
Alex Schultz
I don't disagree, but I would say the product is twice as good. Like as the head of analytics as well as marketing, the day we started seeing people use that product, I was like, oh my gosh.
- [31:48]
Seth Matlins
What about, what about in, in a less tech driven context, which is to say where the, where the technology really does enable exponential leaps in product improvement. You know, what about automotive, right? I mean, are there differences between Mercedes, BMW, Audi, Jaguar, of course they're all good enough, right? At a certain level they're parody. Right. Which is say they meet a threshold of acceptability. What about in that context?
- [32:20]
Alex Schultz
Well there I'm pushing you that they're all parity products and one of them is not a great product. That's massively different.
- [32:25]
Seth Matlins
So we won't, we won't name names.
- [32:27]
Alex Schultz
But, but in that, in that world, I think, I think you, the brand is what matters.
- [32:31]
Seth Matlins
Yeah.
- [32:32]
Alex Schultz
And I think actually if you look at the continuum of companies, the people who saw the thing that sold soap at the beginning was the chemists who knew how to make soap. Then the thing that sold soap was the salespeople who knew how to get the soap into the stores. Then the thing that sold soap was the marketers who could get people to demand it at scale. And now it's a finance game. And so actually, like, there is an evolution of industries that soap used to be a technology industry primarily, still does some amazing tech today. But primarily it's a parity product where brand makes the difference.
- [33:03]
Seth Matlins
Yeah. Okay. You were saying. So great native marketers, these founders.
- [33:08]
Alex Schultz
Yes, the founders are great native marketers. That's where I start from. They actually get it incredibly well. I think some of my struggle is we used to have a board mostly of B2B marketers. We now have some people who've built big B2C or run big B2C brands, which is exciting for me. A little scary because we've got people on the board now who really get this. But fundamentally, the biggest thing that I benefited from is I followed Gary Briggs and Antonio Lucio. Gary's a great product marketer. He's interim CMO while my old colleague Kate is recovering from cancer and all power to her. Yes, indeed, at OpenAI. But he was a great product marketer. I worked under him at ebay. He was number two with Lorraine at Google. Amazing guy.
- [33:53]
Seth Matlins
I think, you know, he was. Gary was a client of mine twice.
- [33:56]
Alex Schultz
Absolutely.
- [33:57]
Seth Matlins
Yeah. Actually, shout out to Gary.
- [33:59]
Alex Schultz
He's a great guy and he's a.
- [34:00]
Seth Matlins
He's a brilliant guy.
- [34:02]
Alex Schultz
Senior figure in marketing in tech. And he educated a ton of people, including our leadership on product marketing.
- [34:09]
Seth Matlins
Yeah.
- [34:09]
Alex Schultz
And then Antonio came in and I'm benefiting the brand stuff.
- [34:13]
Seth Matlins
Yeah.
- [34:13]
Alex Schultz
Things like the seat that couldn't have happened without Antonio Lucio running our marketing team before me, you know, and so what do you.
- [34:20]
Seth Matlins
I'm by the way, credit to you for giving credit to them as deserved. But if you were kind of, you know, as you look back and Tony, you said Antonio kind of helped educate on brand, Gary educate on product marketing. What were. What do you think? Kind of the fundamentals were that, that they. That they shared that made your life easier.
- [34:41]
Alex Schultz
So I think Gary shared how to launch a product. You look at the very early days, you look at our old blogs about. We hear you, we're listening. Like, if you look at some of the old blogs, you can tell we didn't actually like, launch products. Well. And so Gary explained how product marketing brought you insights from the field to make the product better and also so that it would match with what consumer expectations were and also how you explained it to the world at large. And he built, in my opinion, the product marketing function at the company that in particular Chris Cox wanted us to have and that was it. It was like educating the difference between just throwing it over the fence and actually having a thoughtful launch. That's Gary and that's really reductive. But that, of course, was a huge thing he did for the company. And then Antonio, he brought the passion for brand creative into the company and what it looks like to have a great creative team doing great creative work around brand creative. And so he introduced us to great agencies. You know, Droga5 was hugely involved in our rebrand. That was something I inherited as our lead agency at that moment. And he introduced Mark to those agency leaders and he talked about what the process is and educated me on the brief. Like, coming from direct response marketing, I didn't know why everyone banged on about the brief all the time. And now I bang on about the brief and understand it. And that education for our various product leaders of the importance of the brief and the importance of the creative team to get the great creative. And it's not just something you can get at the snap of a finger. That was.
- [36:14]
Seth Matlins
Antonio, what, from your perspective as somebody who's come to the brief, apparently, a bit later, what do you think is the difference between a great brief and a not great brief?
- [36:25]
Alex Schultz
Brevity, clarity and alignment.
- [36:27]
Seth Matlins
Boom.
- [36:29]
Alex Schultz
The brief needs to be one page, but you got to get it into one page. It's got to be brief.
- [36:34]
Seth Matlins
Needs to be brief. You can have a briefing document, it provides texture. But the brief, I. I'm always like, if you can't fit it on a large post it note, you have over done it.
- [36:43]
Alex Schultz
So we have a brief on a page and we have a longer brief. Always, yeah, clarity. You need to be super clear what the company cares about and doesn't care about. So we had one thing with our Ray Ban meta glasses that went very poorly where the product leaders had clarity on what they thought the important features were to feature. And we did and we didn't agree and it wasn't in the brief. And then after the fact, the product team said, why didn't you do all these features? And we're like, we gave you the brief. Nowhere in here is there clarity that it was critical to you that those features were in. And so clarity in the brief on like, what is critical? It needs to be in there. And then alignment, you got to be aligned that everything in the brief is everything.
- [37:26]
Seth Matlins
How clear is the brief you get from your leadership in terms of what they expect marketing to deliver, what business objectives they expect marketing to deliver against.
- [37:36]
Alex Schultz
Mostly insanely messy but that's because they're not. They don't understand. They don't understand it at the level that my team understands it and my team pushes me on. So they understand it at a high level. They've been coached. A high level. But it's wrong to expect them. Our job actually is to go back and forth with them and refine it to the point where they're like, wow, this is clear. This is on one page. This says what I want. I am aligned with this. So they have to give it to us in their language and we have to refine it to ours. We can't expect otherwise.
- [38:08]
Seth Matlins
Yeah. And then communicate backstories. So as we get towards the end of this before, before kind of series of, of quick question, answer that we always do, I want to ask you. I'd be remiss if I didn't ask you about what from your very privileged seat, you think the future of not just AI in marketing is, but marketing with and maybe even around AI looks like what happens to, you know, the emotional when bots are not emotional or bots marketing to bots and they just want functional benefit.
- [38:44]
Alex Schultz
I love that last point. That's. That's actually a very last point. Look, I think AI is an incredible tool and similar to every 10 years, I think marketing is going to change completely. Like you think about marketing, 20 years ago, Internet was barely a thing, mobile was not a thing. Marketing ten years ago, mobile was the booth at the side of the trade conference. Now mobile is everything, right? Like every 10 years marketing reinvents itself. And you go back a century and you think it was newspapers and not radio, you know, and then you bring in radio and then you bring in television, then you bring in color television. Somewhere in that you have the innovation of the soap opera. I mean so much has changed. And I think we forget how this industry knows how to revolutionize itself. So what the first thing is, yeah, I think AI is a revolution and it will be a revolution for this industry. The second point I'd say is I think we always over catastrophize. So all the articles at the moment saying we think AI is going to destroy agencies. Like no agencies are going to be absolutely necessary to get enterprises to migrate and use AI.
- [39:49]
Seth Matlins
And when you say agencies, because of course there are many types, you're talking.
- [39:53]
Alex Schultz
About creative agencies or creative agencies, media agencies.
- [39:56]
Seth Matlins
I think the media agencies are kind of screwed because I think you're going to see more for a couple of reasons. I think you're going to see more in housing of planning and buying, especially for companies that are smaller. You know, the SBEs, obviously they provide a scale and expertise and leverage at a buying level for the biggest companies. But I think that the biggest issue is that the hold cos, as speaking broadly, have so decommoditized creative. Right. Creative agencies have been like GIF with purchase for the media win and the margin is going to come out of media because of technology media buying and planning.
- [40:39]
Alex Schultz
Interesting. So I actually feel slightly differently.
- [40:41]
Seth Matlins
Yeah.
- [40:41]
Alex Schultz
I think data will be a differentiator and what we're seeing more and more as the AI gets better is what really matters is the data that you have and how you use it. So if you use average.
- [40:53]
Seth Matlins
That's always been the case.
- [40:54]
Alex Schultz
Absolutely.
- [40:55]
Seth Matlins
Yeah.
- [40:55]
Alex Schultz
But if you use average data, you get average results. If you use expert data, you get expert results. And even above expert results, at least what I'm seeing is the holdcos are not stupid. They understand what's happening and they are moving to understand what they can differentiate and a ton of that is around data.
- [41:12]
Seth Matlins
Well, my understanding is it's superficial understanding. That was kind of the premise of the Omnicom IPG merger.
- [41:19]
Alex Schultz
Yeah, I think it's the premise of that premise of what Publicis is saying that they're doing with their data platform. It's the algorithmic era for Dentsu.
- [41:27]
Seth Matlins
But will they have as much of a, a lack of a better word stranglehold on data or in this era where everybody is. Certainly the biggest companies are preparing for this AI future, they're going to have access to a lot of data plus their corpus is going to be the corpus that's actually the differentiated one, the proprietary data.
- [41:46]
Alex Schultz
But the enterprise is the same deal. Like you can do some stuff in house, but are you really going to build the in house expertise that a company will have that looks across 10, 20, 30 different players or 100 or a thousand different players and knows how to do this and rinse and repeat and also is it the best thing to do? Not invented here. Should you build or buy?
- [42:05]
Seth Matlins
There's real value in outsource as an enterprise.
- [42:08]
Alex Schultz
You're going to outsource? I outsource a bunch of stuff for myself.
- [42:11]
Seth Matlins
Yeah.
- [42:11]
Alex Schultz
And I have an amazing technology team.
- [42:14]
Seth Matlins
Yes, you would have a good one, I imagine.
- [42:16]
Alex Schultz
I actually and I did insourcing at ebay, whereas at Meta I decided to outsource a ton of the work because I don't think we need to build it. And there are people like I gain so much from working with my agency partners because they see things from other companies that I haven't thought of and I don't invent all the best things. And I have a great team.
- [42:34]
Seth Matlins
The ability to extrapolate and apply from experience across categories has always been, I thought, the greatest benefit of my having been on the agency side as I went back and forth agency client, because you find that there's great commonality between a deodorant and a computer at some.
- [42:53]
Alex Schultz
Point in the funnel, 100%. And so I actually think they're going to play that role in AI. What they do will be revolutionized, but every single one of them is saying they're going to revolutionize because they see it coming. And so, yes, it's going to be different, it's going to be way different. But I still think there's a massive role for agencies, I think at the data layer, that's where I think we will be, and at the learning and best practice layer. So I think the future will look surprisingly similar to the past in a lot of ways, unless we get to the point where the bots become super intelligent and that I can't predict what that will look like. But short of that, AI is another tool. It is a tool that people will need help to learn how to use. Some people will be brilliant at doing it in house, just like some people have incredible in house creative teams. Some people rely on agencies just like they do today. And I think like the industry will evolve with it, because this is the industry, in my opinion, that evolves the fastest to change. The only constant in marketing over the last century has been new channels, new tools and change with constant principles that underlie them. And I know I'm sounding like a shill here, but that's one of the key things I want to get through in my book, and it is the closing chapter of my book is about AI and remembering that these principles are timeless. But the tools change.
- [44:11]
Seth Matlins
Well, look, I gave you a shout out for the book in the beginning and I'll say it again. I think, I think the audience knows that I do not. Chill. I found it an incredibly useful resource and reference guide. And I meant, I meant what I said to you when I said I'll have a hard copy. I expect it to be autographed, by the way, by my desk. It's just that good. It's just that useful. But I want to go back to the last part of my initial or the last question I asked, which is in a world where SEO becomes what my friend Joe Marchese calls because he Likes the lyric of it, the AI SEO where bots are doing more and more work for us. They're not sentient yet, they're not emotional, they're trained to be functional. What happens to branding in that context? I mean, what I read is, okay, you have to actually I asked ChatGPT this, I was like, how do you translate emotional benefit to functional ones? And if I remember correctly, it was, you know, try translate love to trust trust to something else. You just have to keep pushing it down. But the emotional and functional. Functional is emotional. Emotional and emotional is functional. I'm getting off on my own internal tangent, but what do you think happens?
- [45:30]
Alex Schultz
Yeah, look, I think a bunch of decisions. There's this really good book, Player of Games, that a ton of people in the Valley put on their reading lists. And it's like the concept of taking a thought experiment of the end of what if we do get superhuman AI? That's where Player of Games goes. It's by Ian Banks. And I think what it tries to get at is what is unique about humanity and what are people going to be excited about, even in a world where we don't have to do the thinking. And actually, if you think about it in that book, it's about individual brands, it's about creativity. And so I think it comes down to what do the human beings at the end want to be associated with? Do they want to be a BMW person or do they want to be a Mercedes person? And it might well be that the AI agent says, look, here's your choice between these two. I've researched them. This one costs slightly more, this one costs slightly less. This one has slightly better tech in the driver's seat. This one has a slightly nicer leather. You have to decide functionally what you care about and emotionally which brand you want to buy. But I'm going to tell you, these are the two best functionally.
- [46:33]
Seth Matlins
Right? But if we then take that same logic, I mean, luxury is luxury and I think luxury will be impervious. Not if not impervious, certainly protected and isolated from it because it there is little functional efficacy to luxury. Which is to say you can buy the same sweater or a sweater for $4,000 less, take it to toilet paper, which we've talked about a couple of times. I mean, if my data on this is a little old, but something in the recent past was like 84% of product searches CP, FMCG on Amazon were by category, not brand.
- [47:11]
Alex Schultz
Well, if you go and actually sort of talk, in my opinion, to the FMCG people, the, this, the FMCG people in particular, like we're at a place where they are fighting on functionality a lot. Where they're in a place where people are not that brand loyal now compared to 60 years ago. And honestly, I think a ton of that is because a bunch of products are now very, very, very similar. Yes, good enough and they're good enough. And so actually it's independent of the bots. Like brand loyalty in commoditized products has dropped and people are more willing to switch.
- [47:47]
Seth Matlins
You know, you're absolutely right. I didn't even think about what my own data point or Amazon's proved, which is we're already at that place. Right. And you're absolutely right. All right, we are almost at time, so I want to give you a quick, a quick series of fill in the blank questions and answers. You ready for it?
- [48:06]
Alex Schultz
Ready.
- [48:07]
Seth Matlins
All right. Marketing is fun. How would you explain marketing to the CEO that doesn't understand it?
- [48:15]
Alex Schultz
Roi?
- [48:16]
Seth Matlins
A brand is ephemeral. Sources of strategic advantage are data. The hardest part of being a CMO.
- [48:23]
Alex Schultz
Is everyone else thinks they can do the job.
- [48:26]
Seth Matlins
The hardest part of being a CEO.
- [48:28]
Alex Schultz
Everyone else thinks they can do the job.
- [48:32]
Seth Matlins
The biggest tensions between a CMO and their C suite colleagues are events like CAN on a day to day basis are proving results. Yeah, but you know, by the way, your note about Cannes is kind of interesting to me because I am a huge Cannes fan. I think, I think it is what you make of it. And I, I said this to Simon Cook, who's the CEO of the Lions. I was like, everything everybody says about Ken is true. It's ridiculous. It's a boondoggle. It's this. It's the most productive week I have in the year. And it's what you do with it and what your expectations are. But it is interesting that an industry rooted in image and perception doesn't know how to typically manage same internally.
- [49:17]
Alex Schultz
What blows my mind and actually surprised a lot of people is when we had our large budget cuts in 20, 21, 22, I came in and I fought for Cannes. Yeah, I fought for Cannes against a bunch of colleagues who were like, isn't it a boondog? Or you're all drinking rose, whatever. And I fought and I said, it is the most efficient week of our sales team.
- [49:36]
Seth Matlins
Most efficient. I was speaking to the CEO of a company here who said he has 36 meetings this week. That proximity, that concentration, more business will come from this week, I suspect than any given few months because of those.
- [49:52]
Alex Schultz
36 and actually, for what it's worth, I. I do have a methodology, and we measure it, and it's very ROI positive. So it was a fight that I did on logic, and then we won on data down the line. So I agree. But it is when people see the pictures, the pictures are of beaches and Rosa.
- [50:08]
Seth Matlins
Yes. I mean, it is a pretty place to have 36 meetings.
- [50:11]
Alex Schultz
Yes.
- [50:12]
Seth Matlins
All right, last question for you, sir. Brands and businesses grow when they invest. Alex Schultz, thank you so much for being here. I really enjoyed it. You know, one of the things I love about your brain is that you. You have this balance of qual and quant that one. And depth of expertise in both. That one doesn't find a lot. I'm purely qualitative and can't even balance my checkbook, as my wife knows.
- [50:37]
Alex Schultz
Thank you very much.
- [50:38]
Seth Matlins
And thank you to our audience. Whether you're listening or watching, we appreciate you being a part of the Forbes CEO's Guide to Marketing. I'm Seth Matlins. Hit the subscribe button, give us your rating. And please, if you have a review, at least a good one, we welcome your sharing it because it helps others find the show. Thanks, thanks, thanks. And we'll see you later.