Madvertising by AdQuick — Advertising, Marketing & Ad Tech Podcast
00:18:56 · Mo Moubayed, Adam Singer
[00:18:56] S1: Okay. [00:18:57] S0: And I... I'm super bullish on on out of home. I think it's it's a clear future of what happens if people are fully ad free or fully ad supported where it's just gone too far where, you know, what's really left that reaches everyone. [00:19:11] S1: Exactly. I... I'm really bullish on out of home also. And and it's interesting that you you say online ads aren't going anywhere. I agree with you on that. But I... I've been, you know, thinking about how how AI will affect search. Yeah. And it's a really interesting thought about it. You know? There's a lot of anecdotal evidence and, you know, recent research showing that people are clicking on links less. You know, you do your search within your your chatbot. It'll give you an answer, but you're not clicking through. And it it got me thinking about, you know, how this will affect out of home. I read an article about a week ago by Kieran at... I forget the publication's name. But it was it was around how he believes out of home will go to a 100,000,000,000 by the end of the decade as a market because AI will affect search and and advertisers will will shift money to brand advertising and try to be available in in people's minds. And it got me thinking. I I I actually wrote a a piece about it as well inspired by by that article. So you know I think that's interesting. That makes me about about out of home.
00:20:48 · Adam Singer
[00:20:48] S0: For listeners, we'll have to... We'll get a link, and we'll put that in the show description because I'm sure people listening will wanna read that. For my own for my own behavior, I've noticed things like, you know, I used to wanna know how to make a specific recipe. And before, I would, you know, query for how to make, you know, an... A certain type of soup or, you know, maybe a pico de gallo or something. I'm a really bad cook, so I always have to look it up. And instead of having to go through these pages that were optimized for ad revenue that I find from search, I just ask, you know, I I ask ChatGPT, I ask Perplexity, and you just get the answer. And it's just like, for so many things, there... There's it's just a better experience to go to, to go to AI. And I think Google even knows that too. I mean, they're presenting AI summaries at the top now for a lot of things. So, you know, I think for marketers, I wrote about this on my blog, and I basically just said, look. It's bringing us back to kind of where marketing was initially where everything is a rented channel. You're gonna have to buy ads. And then you're also gonna want an email list. Right? If all of your updates on social are controlled by an algorithm, you're not gonna reach all of your followers. You have to pay for ads to actually reach them. If search is going to go away, you know, it's it's just gonna be something where people go directly for an answer. And maybe for navigational queries. Okay. You know, use Google to go to a brand's website. But it actually takes us back to marketing from the nineties. And in a lot of ways, marketing used to be better. It wasn't this thing that was so growth hacky and trying to extract value and, you know, always at the the very end of the funnel. It was this exercise in brand building and building user love and and and telling me stories across time. And I think... Don't I think it's a bad thing for us to go back to that. I I don't think it would be the worst thing in the world for marketers. So if you are, you know, seeing what's happening with these shifts in AI and you're, like, really reliant on search, you know, start to work on that. But I I don't think... I I think it opens up a lot of different possibilities for your team and your budget.
00:22:57 · Mo Moubayed, Adam Singer
[00:22:57] S1: I'd I'd go a step further, Adam, and say, I think you're positioning in a way that's saying it's... You don't think it's bad if we go back to that. I think it's it's inevitable that we go back to that. Brand building is has been on the rise again. I I know there was a huge swing to performance. There's always a conversation about, oh, is brand better or or performance better? The the simple answer is you need to do both. And if you're just doing performance, then the the longevity of that is is is diminishing. And there's a lot of research around brand and performance together, increasing the ROI of of of performance. So think of it like a bit of a dolphin. Your brand is there. Brand building is sort of consistently there, and it sort of moves you to a new plateau, and your your performance gives you that that spike, but then it... Your your brand gets you to another plateau, which is which is really what you're after. [00:23:54] S0: Yeah. The the large... The largest companies... Can can you imagine Coke being built on performance ads? You can't. They're built on brand. So, you know, Apple wasn't built performance ads. None of the brands you love were were built on performance ads. It's like, it's all short termism. Yeah. It can work for some things, but it's like, you know, that... That's not how you build, like, the next LVMH. Right? They're they're not selling and performing.
00:24:17 · Mo Moubayed
[00:24:17] S1: You hit the nail on the head. Direct to consumer makes a... Direct to consumer online brands makes a lot of sense to be kicking off with performance and just figuring out how you get a really clear ROI for every dollar that you spend in the short term. I believe that. I I think that's the way you get off the ground for a d t... DTC online brand, right? But at a certain stage, when when that ROI starts to diminish with your performance marketing. Right? You need to start to invest in the brand, which which then allows your performance marketing to to to hit new heights. And and you see it all the time. You you see these d to c online brands be performance, performance, performance, and then at one stage, they they they start working on brand, and it really brings them to the front and and forefront of people's minds, consistently. And, you know, a great example of that would be Gymshark. I don't know if you you know them. They're from The UK, but there's a bunch of those those Aloe, I would say, was d two c first performance first, and then now you see their billboards everywhere. And billboards is is, you know, probably the... One of the last ways that you can build brand effectively long term. You know? There's... A lot of channels are trying to move to performance and and just be performance. Whereas I think Ada Home does a really great job of of of brand building.
00:25:51 · Adam Singer, Mo Moubayed
[00:25:51] S0: Totally. You know, the performance stuff is so interesting because for a while, there was so much VC money going into a specific performance playbook that... For example, you've heard of Blue Apron, the delivery company. There was a... They they were paying, so much for acquisition. There was a point where you could sign up for Blue Apron, eat for free for a month because they gave you a month of free food, Then... And then cancel the sign up, and then you could do the same thing three months later. People figured out this hack and posted it online, and, like, everyone was just getting free venture capital money food. And so this is performance marketing. They're they're paying for this offer. And the the problem is, like, you're bringing in a certain type of customer, and that customer may not be a high value customer. You don't really know, because you're just incentivizing them. And and I feel like it's just something in the kind of ZERP easy money era. Like, a bunch of people built companies that were were built on all of this performance ad and values and discounts, and a few did survive. Like, you know, I think DoorDash and a lot of the delivery companies built by having really cheap prices. And then over time, they they raised prices. So I think that playbook worked in some areas, but in in other areas, it's just kind of a a graveyard of dead companies, penny stocks. It... It's just a tough thing to do. [00:27:14] S1: Yeah. Exactly.
00:27:14 · Mo Moubayed, Adam Singer
[00:27:14] S1: Yeah. Exactly. [00:27:17] S0: So, in terms of... I guess we have to talk about AI because I talk about AI with all my guests. Do you guys have any thoughts, opinions on what AI means either from a creative standpoint or a process standpoint, from what you're talking to marketers about or anything you're hearing that's kind of interesting? However you wanna answer the AI question, really.