00:35:26 · Adam, Henry Innis, Sachin
[00:35:26] S2: I think people kind of appreciate that. Yeah. And you mentioned this idea of, like, the marketable founder. Do you think that there's potentially a problem in Australia that we have a vision of, like, these sort of superficial characteristics that a founder might have? Yeah. [00:35:38] S0: And that we... I don't wanna go into it more than that. [00:35:42] S1: I do. Protecting your next funding round. But Henry, we've talked a lot about in the past, and you have some really intelligent opinions on is what's wrong with modern marketing. Obviously you were in this world for a while obviously, you know, you're dedicating the next decade or so of your life to fixing it. What do you think like the average marketer, the average company is getting really wrong right now?
00:36:05 · Henry Innis
[00:36:05] S0: Well, I think when you are bidding bottom of funnel and everybody's bidding bottom of funnel in an auction market, what inevitably happens is you will trade your margin to tech platforms. So I think that's just a fundamental market dynamic. Like, how did d to really start? Think is a... Is an important question to ask. In my view, and and I will say again, these are novice views. There are much smarter founders in Australia than me who will know this. But in my view, what D2C companies effectively did was invested the margin that they would normally pay into a retailer to winning search auctions. And that's fundamentally where those businesses emerged from. Everybody cottoned onto that, set up their own DTC divisions and stuff like that. And because they were selling through their own websites, could afford to then drive that traffic. I think there's been some challenges to my mind in terms of like how performance marketing was set up. I think performance marketing is a real misnomer because it implies that other marketing is not performance driven. On the flip side, I think the concept of brand marketing is also really bad because it implies that brand marketing should not have a short short term payback in order to be effective. Like it is frankly fucking crazy that we say, oh, we'll run a bunch of these brand ads, but, you know, they're not going to do anything for sales in the short term. But magically after a year, they're somehow going to pay off in memory structures or whatever, and it's going to then start generating sales. Like that is not how advertising works.
00:37:36 · Adam
[00:37:36] S2: Is there no like psychological theory that like you need to hear a message a certain amount of times over a certain point of time? No. Don't Where like that embeds in you and that's like your first option?
00:37:44 · Henry Innis
[00:37:44] S0: Definitely like psychological theories around that that that advertising get more effective over a long period of time if repeated. You're a 100% correct. But to say there is no short term payback is also incorrect. If it can't sell today, chances are it can't sell tomorrow. Right? Like, and there's a lot of research around this. So like, Byron Sharp, who wrote a book called How Brands Grow, Ehrenberg-Bass Institute, one of the best institutes in the world in like marketing research for long term brand... Branding. It said an ad that pays off in is... In a short term is more likely to pay off in the long term versus an ad that doesn't. Right? So they actually did all the research across like 50 brands and they found this. Jenny Romaniuk, who's one of the all time market... Like researchers on brands, thinks the concept of like pure play brand campaigns that don't mention products is one of the most dangerous things that have ever been created. And so I think that's a huge problem in the sense that we built this expectation up that brand marketing somehow should not deliver a sales result and performance marketing is the only thing that can deliver a sales result. Both are not true. One is really about mental availability. So, you know, building kind of, you know, presence in someone's mind. And what bottom of funnel is about is physical availability. Like how do we actually distribute the products effectively? And so because of that, you measure... When you're measuring and modeling by being trying to attribute to one channel, it's actually a complete fallacy because actually it's a combination of channels working to influence the overall sales result.
00:39:11 · Sachin, Henry Innis, Adam
[00:39:11] S1: Maybe an example of that is like if someone listens to one that adds on our podcast, but then goes and Googles the company afterwards, that's attributed maybe to the SEO that their company [00:39:20] S0: is That's right. So like, you know, think of it this way. Say someone's buying like a, you know, a new tech license and they're kind of analyzing that from their perspective of, okay, we're gonna we're gonna like walk down straight to see a billboard, see a podcast, they see like all of these different things. Yeah. And then eventually they come and like, like search. Like search is capturing demand. Right? And that's what a lot of performance marketing is. It's demand capture. So I think that's a huge issue. Like definitionally, we put ourselves into two camps, which is creating a really toxic environment versus going, hey, we use these combination of tactics. And if we use these combination of tactics, this is how we get the optimum result. [00:40:01] S2: Right? But how... Like, can you actually attribute if something is coming from multiple factors? [00:40:06] S0: 100%. [00:40:06] S2: If you've that podcast, SEO,
00:40:06 · Adam, Henry Innis
[00:40:06] S2: If you've that podcast, SEO, [00:40:08] S0: all that. Because you don't track by the person, track by the aggregate. Right? So if you think about stats, I'll give you another example. Hedge funds. Right? Hedge funds look at a combination of economic and market factors to predict the future value of a stock. They get it right a lot of the time. Yeah? Same thing exists in marketing. All we need to do is look at the combination of factors including advertising spend, pricing, all of these different factors, model it through really complex algorithm. And what happens? Hey, presto. Much like Bloomberg, we can start to model the value of stocks. Right? We start to model the value of actually, we do these combination of things. This is the likely sales result that this business gets. [00:40:43] S2: So you're trying to isolate like every single variable and see its like influence on the output.