00:42:07 · Sachin, Henry Innis, Adam
[00:42:07] S1: How much kind of marketing spend do you need as a baseline to these models to start to work? Like, how much data do you need to train? [00:42:13] S0: It's more of it like... Well, so I'll give that answer in two parts. One, for us, it's probably you need to pay... Have a marketing budget of more than 5,000,000,000 for, like, off these to work. Right? But I think in in general, it's actually variation of spend and variation of sales that counts a lot more. You can have a really small marketing budget of like $500,000 and you could still build them with pretty good market mix model. [00:42:33] S1: If you're turning things on and off. [00:42:35] S0: Correct. And most media plans, they have natural variation, so it kind of works. [00:42:39] S2: Yeah. Yeah. Interesting. So basically what you're doing is that you're integrating every part of like someone's marketing data, all the different platforms, and then you're finding all those variables and you're solving those calculations. [00:42:50] S0: Yeah. Totally. It's like just seem like a Bloomberg terminal. Right? Bloomberg terminals make it... Make capital allocation easy. I wanna build the Bloomberg terminal for marketing. [00:42:57] S2: Yeah. Why wasn't this done far before? Like, why wasn't this sort of data centric approach like the I... Well, it was first of all,
00:42:57 · Adam, Henry Innis, Sachin
[00:42:57] S2: Yeah. Why wasn't this done far before? Like, why wasn't this sort of data centric approach like the I... Well, it was first of all, [00:43:05] S0: so there's like heaps of market mix modelling vendors. The thing is they're consultancies. And when you have your entire P and L for 500 people was built around head hours, pretty hard to change a business. Right? Yeah. So I just think that that's a difficulty for a lot of businesses. I think the second kind of component is it just was expensive, like pre cloud, it was expensive to do this. Pre like proper large modeling techniques. It was hard to do this as well. Like a lot of the recent pushes in terms of, you know, how you can unlock large model libraries, how you can model quickly in the cloud, you know, how Vertex runs, for example, like that stuff all counts right now [00:43:40] S1: Yeah. [00:43:40] S0: For actually making it way easier to execute this sort of business. And and to go quite practical, what are [00:43:45] S2: some you think are underrated and overrated marketing channels right now? [00:43:49] S0: Oh, I'm sure you get myself in trouble. Yeah. Let's do it. [00:43:52] S2: Like, I'm sure you must have a view of all these different channels and nuances depending on what sort of business you are, but I'd love to hear some takes.
00:43:52 · Adam, Henry Innis, Sachin
[00:43:52] S2: Like, I'm sure you must have a view of all these different channels and nuances depending on what sort of business you are, but I'd love to hear some takes. [00:43:58] S0: So I... Yeah. I will I will caveat this by saying every business is different. Every business executes differently, etcetera, etcetera. The number one thing I see as being quite important within a business is how they execute a channel. So there are some businesses that are really good at social. There are some businesses that are not so good at social. Right? It's actually knowing that sometimes is quite valuable. And like what would make [00:44:20] S1: business good at social is that they understand their audience, understand what you [00:44:23] S2: want, like anyone else or something [00:44:25] S1: where they're, [00:44:25] S0: yeah, they understand how to target, how to bomb, feel creative. They're probably changing it out enough. You know it looks like it belongs in the feed etcetera etcetera is probably like a good example of that. I will say that you know I think bottom of funnel auctions are like an overrated area of the that programmatic advertising? Yeah programmatic advertising. I think, you know, I think display inventory is still probably a bit overinvested. I'm of fraud in it as well. Right? So it's it's a relatively challenging space to operate in, at least to de dupe the fraud. So you kind of got to work on a white list basis. [00:45:02] S1: Is that new usually cost per click? Is that usually what it's sold on? Well, things kind of sell on cost per
00:45:02 · Sachin, Henry Innis, Adam
[00:45:02] S1: Is that new usually cost per click? Is that usually what it's sold on? Well, things kind of sell on cost per [00:45:08] S0: click, but like actually what the machines do is they optimize to cost per click and then they just sell you cheaper and cheaper inventory. They're still doing CPMs on the back end. Yeah. So often when you cap [00:45:20] S2: So they're working out like how many clicks you've paid for, but what's the cheapest way for them to do it?
00:45:24 · Henry Innis
[00:45:24] S0: Yeah. So like what often what you get when you like run a CPC cap is you actually just start to lower the quality of your traffic. Right? So that's like a huge problem because people start to optimise towards price and CPM goals or CPC targets. And what they're actually doing is lowering their overall incremental volume. So I think that's an issue. Think... So those bottom of funnel channels, I think it's just challenging and I think it gets cyclically more challenging. So at the moment why I think they're overrated is because the interest rates are lowering the pool of available demand. Like if you think about people just buying less, so it lowers the pool of available demand at that bottom of funnel demand capture. But at the same time, you have a whole heap of brands who are piling into that because they're seeking only performance gains. So they're trying to dial up performance. So what happens when you have an economy contracting, but brands piling in because the economy is contracting? You have like not much value extraction in that. So I think that's a wouldn't say overrated, but I'd say like We're investing. It's a it's a structural issue in the economics of marketing right now. I think a second kind of challenge is like, I think an underrated asset is, you know, broadcast video and online video to a degree is increasingly moving to the living room screen. Right? Like, you you look at the growth of connected television and stuff like that. That's... That kind of stuff is like what has been growing very rapidly. And so what's ended up happening there is that we've priced a lot of that inventory, a kind of, you know, sitting on the mobile phone, which is less impactful to someone's attentions. It cuts through less. It's still priced on the laptop or mobile phone basis. When in reality, it's probably getting as effective as TV. Yeah. Right? Really. So one of the things that I would be doing as a marketer quite practically is like, and I say this all the time, you know, target based on device. Yeah. Target your targeting parameters really need to be around device and online video now because for YouTube, for example, can you
00:47:22 · Adam, Sachin
[00:47:22] S2: do that? Can you target YouTube on YouTube? Yeah, [00:47:26] S1: YouTube watch time on TV just overtook Netflix, which is exactly Like as wild.