Rand Fishkin is the founder and former CEO of Moz, a SaaS company based in Seattle and the world’s most popular community and content resource for search marketers. During his 7 year tenure as CEO of Moz, Rand scaled grew the company to almost $30 million in annual revenue.

Rand’s distinctions extend far beyond his experience at Moz. He has been published and mentioned in numerous publications include Business Week, Newsweek, Inc 500, and many other mainstream media publications. Rand has co-authored two books: the Art of SEO, and Inbound Marketing & SEO. He is currently working on his third book, Lost and Founder, scheduled for publication in 2018.

Here are some of the topics discussed in this episode.

Niche Search Engines Have a Place in SEO

Although Google is the dominant search engine, there is still a place for niche search platforms in specific consumer use cases.

“Once you decide, ‘Hey, I’m going to buy a house,’ where do you do all your searching? It’s probably the Redfin app or maybe the Zillow app or your real estate agent’s app… Same with flight searches. So a lot of flight and travel searching happens on an Expedia or an Orbitz or a Travelocity or now Google Flights as well, right? Google bought the data aggregator a couple of years ago and so now they’ve been able to display flight prices and times and all that stuff… There’s certainly a niche portion of it and Google will remain, I suspect, very dominant for a long time to come in the ‘I don’t know where to start to get this answer’. Like, ‘I don’t already have a place where I go for this, so I need Google.’
”

However, with the Google Flights and some of the other relatively new additions to the Google platform, it’s not inconceivable that Google will continue diversifying into more niche search experiences within their platform.

The Political Implications on Search Marketing and Ethics

A tremendous amount of the conversation on internet privacy, and other marketing ethics falls on public policy and regulatory systems established in government legislatures.

“There’s ethics almost at a political belief level.

And that is one that says, ‘I recognize that I may be uncomfortable with some of the consequences of voting for people who will take more heavy-handed government action against corporations, but I believe that on the whole, that regulation is better than a fully free market approach.

And right now, that political will does not exist.

It doesn’t exist on the left; it doesn’t really exist on the right. I shouldn’t say, ‘doesn’t exist on the left…’ There is a small minority of the left for whom it exists. It’s a vocal minority, but enough. But the majority of us really are not comfortable.

The only place where you see that, like I said, is the EU. And there you have some greater comfort. I think that they have experienced a lot of success and happiness and, sort of, positive changes in society through more government control exerted in their societies, you know, both economically and financially and personally. And so they’re more comfortable with it. But the United States, we are staunch believers in free market across the board.

And so I don’t know when you see that, sort of, moral shift. That feels like it’s a long ways off.
”

It’s possible that the opportunity for malicious marketing will not be addressed in the immediate future by elected officials. As a result, we have as marketers have a responsibility to engage in our work responsibility.

Marketing Skills Will Not Be Commoditized

Many professionals consider the rise of AI and machine learning to be a threat to their career. Beyond new technologies, there is also the fear that certain digital marketing skillsets with existing platforms will become commoditized. Rand does not think this is the case.

“Facebook is a nice example. It’s broad enough that almost everyone in the web marketing world understands the very basics of it. But you want to get to mastery with Facebook marketing? Well, guess what? Every week you’d better be learning something new because every week Facebook is releasing new things!”

Rand is right. New technologies and features are appearing within the platforms we as marketers use every day, and it’s likely to be almost impossible to develop expertise in one feature before another is released.

Transcript

Note: this transcript has been lightly edited for clarity.
Ander: This is quite interesting and exciting because I’ve never interviewed a wizard before! Haha.

And I am here today with the Wizard of Moz, Rand Fishkin, in the Moz offices in Seattle.

Rand, thank you so much for joining us.

Rand: Oh my god, Ander, pleasure to be here.

Ander: Yeah, you gave a great talk yesterday at the Seattle Interactive Conference. Fantastic content there on SEO in 2018 and beyond. And I definitely want to talk about some of the ideas that you got into during your talk, but I think that the best place for us to start is with you.

Rand: Ok.

Ander: Who you are, how you became who you are, and what is the nutshell of your professional journey? And the journey of Moz?

Rand: Sure. Well, let’s see… I dropped out of college and started working with my mom, Gillian, on the company that eventually became Moz. Initially it was a consulting business. I was doing web-design and development and then we moved into SEO and our customers started needing that service. And I was very frustrated about learning the practice of SEO. It was a very dark, secretive world and many of the practitioners felt that their secret sauce, right, the unique value that they brought was the knowledge that they had and so they were very unwilling to share openly how SEO worked and what was and wasn’t working. And the search engines were equally secretive. They were all in the, sort of, early days of the war between Google and Microsoft and Yahoo! for market share.

So they were hyper-secretive. You know, Matt Cutts wasn’t even out of the closet. He was just ‘googleguy’ posting on WebmasterWorld.

Ander: Really?

Rand: Yep.

Ander: So this is a little while ago?

Rand: Yeah. It was the wild west days. And I started a blog called SEO Moz. I took the name ‘Moz’ from the Mozilla foundation and DMOZ and Chef Moz, all these open-source movements around, ‘Hey, you know what? I want to do that same thing. I want to make SEO open. I want to make it available and transparent to everyone.’ And that is where it got its name.

And then, you know, years later as we grew, we pivoted into software sort of, kind of accidentally, and that took off. We raised some venture capital and for the next seven years, Moz kind of grew like a rocket. We managed to secure the moz.com domain name and changed our name there.

Then in 2014, after a tough battle with depression and some frustrating launches that happened at the company as well, I actually stepped down as CEO. And so for the last few years I have been an individual contributor – I do Whiteboard Friday, I contribute to a bunch of our product and engineering teams, which you guys can’t see but they are here behind us in the Moz offices.

And then I also do a lot of conferences and events and I’m the Chairperson of our Board of Directors. So, still sort of involved in the company at the very high level and then in the tactics and the marketing and the product.

Ander: Well, I think that many of us listening would agree that ‘Wizard’ might be a cooler job title than CEO anyway. Haha.

Rand: I mean, I like puns! What can I say?

Ander: Yeah, yeah!

Rand: The title of my book next year is ‘Lost and Founder,’ right? So, you know…

Ander: Oh! Cool.

Rand: It’s just a punny world for me.

Ander: Awesome.

Rand, what would you say is your marketing philosophy? And how do you think that that has evolved throughout everything that you’ve learned in the course of your career?

Rand: So I think the philosophy that I stick by is a hopeful one.

Ander: Hmm.

Rand: More so than it is a true one, it’s a hopeful one. And that is, I believe, that the best way to do marketing is to help people and do wonderful work and let them find you rather than aggressively working to sell them. I’m very much a branding and content sort of marketer rather than a funnel and sales sort of marketer.

Ander: Sure. And how has that evolved? How has that, changed at some point, if at all?

Rand: Well, for one thing, I used to believe that it was the only and best way. And now I believe it is a wonderful way that fits with my ethics and my ideals and my strengths and weaknesses, but it’s certainly not the only way. I think that’s a big evolution.

Another one is I apply the caveat that it is not the best way to go for everyone. So it works for me and the types of things that I do and in many of the companies that I help but it is not the way that even I would give everyone advice. Probably one out of ten companies that I advise or end up working with or helping out, I sort of walk through the process with them and say, ‘Yeah, you know what? I think you do have to invest in more aggressive sales tactics in order to accomplish what you want to accomplish.’

Ander: Love that.

You gave a talk yesterday about SEO in 2018. It’s wild that we’re already approaching 2018.

Rand: Yeah. Two and a half months.

Ander: At the time of this recording, that’s right. And there have been quite a few interesting updates to what Google has done this year.

What would you say in your talk yesterday – there were so many different things that we can get into – what was your favorite part of it? What’s the favorite piece of information or little nugget that you got to talk about?

Rand: I actually loved the little bit at the end, just before Q&A, where we got to dive into actual search results and diagnose a few things: why particular sites are ranking and what might be causing that. So I mentioned savetheinternet.org still ranking off the back of a bunch of rapidly received anchor text-rich links from a wide variety of domains which is a very classic SEO ranking, versus some of the other ones that I showed that were much more user growth and usage-driven signals.

Some of the other ones I showed were around the featured snippet and how that was coming from a lower result than you might expect and how you don’t need to be #1 anymore in order to be #0.

Ander: Yeah, very interesting.

Rand: So that kind of stuff, that’s fun for me, right? I like that diagnostic process and the digging into the weeds. I think that the search results themselves give you – if you’ve been studying SEO for a long time – give you this feeling that you almost have a sixth sense, right?

The sixth sense is not ESP. I can’t move things with my mind. But I can diagnose why a website ranks in a position. Haha.

Ander: Right, right. Haha.

Rand: And that’s fun. I really enjoy that.

Ander: You said something that blew my mind. And, when I think about my behavior when I’m searching for something, it’s totally applicable to me as well. It’s that 49% of searches aren’t actually generating any clicks.

Rand: That’s right!

Ander: No one’s clicking on the results.

Rand: Yeah.

Ander: How did you discover that and what do you think the implications of that are?

Rand: Well, I think we’ve known for a long time that there must be a significant portion because Google’s doing such a good job or providing answers in the search results before you ever need to click. So it’s sort of an intuitive knowledge. But we really discovered the number – through working with Jumpshot. We basically said to them, ‘Hey, can you tell us what percent of browser visits result in a hit on a search result and then don’t go any further; no result gets clicked from there?’ And they said, ‘It’s 49%.’ So that discovery and a bunch of other data that I showed around click-through rates and around what types of features you might see earning clicks, around where searches happen – on Amazon or Facebook or Google or Google Images, which was huge. All those things are really interesting data points that you can only get if you have that, sort of, click stream level access.

Ander: Do you think that we’re going to see that number continue to increase?

Rand: Interesting…

Ander: Because one of the things that you also said which I found fascinating is that Google is becoming a ‘suggestion engine.’

Rand: Yeah. Yeah.

Ander: That was something that really, really made me think. And I’m wondering if people, when they have a question or when they need some sort of information, if they’re just getting that without actually clicking on the link, if that’s something that’s going to become something more prevalent?

Rand: I mean, you see that with voice answers for sure, right?

Ander: Right.

Rand: Because Google is basically with voice answers saying, ‘Look, we can’t return a set of results that you can click on. We have to just speak back to you what’s going to be there.’ The alternative is that they visually display it but visually display is basically what search results are.

So I think that yes, it will rise but it will be hard for us to see because search will keep growing at such a rate that the number of clicks that Google sends out continues to rise for years to come and thus we as marketers won’t really feel like we’re losing. It’s just that Google is growing in this other way. That’s my guess.

Ander: And the other thing which you just mentioned is searching all these different platforms. Obviously Google is the go-to when you’re looking for some general information on the web. But I’m wondering if there might be a future where people are searching more within niche sites? More within specific contexts, maybe. Amazon is a great example.

Rand: Well, sure. You know, I think that one that a lot of people do know is that homebuyers don’t do their searches on Google.

Ander: Right.

Rand: Once you decide, ‘Hey, I’m going to buy a house,’ where do you do all your searching? It’s probably the Redfin app or maybe the Zillow app or your real estate agent’s app. It’s not Google proper, right? You might do searches around home prices or, you know, where to get a loan or those types of things but most home-buyers – at least the ones I’ve talked to – they do dozens of searches a day trying to uncover results and see what’s up, and they set up alerts and that kind of stuff. And that happens differently.

Same with flight searches. So a lot of flight and travel searching happens on an Expedia or an Orbitz or a Travelocity or… now Google Flights as well, right? Google bought the data aggregator a couple of years ago and so now they’ve been able to display flight prices and times and all that stuff.

So yeah, I think you’re right. There’s certainly a niche portion of it and Google will remain, I suspect, very dominant for a long time to come in the ‘I don’t know where to start to get this answer’. Like, ‘I don’t already have a place where I go for this, so I need Google.’

Ander: Totally.

One thing that I find very interesting when looking at SEO are all the implications that it has on the rest of your marketing channels. And, one thing we talk a lot about at Instapage is advertising. Obviously AdWords is a very, very big part of the search experience.

Rand: Yeah.

This is, I think, going to continue to be the case for a long time to come. You know, the internet giants have found that web advertising when personalized, when hyper-personalized, and localized, and driven by data, can be extraordinarily effective. And I think in most of the countries where they operate – especially outside of the EU, which does have maybe more of a regulatory environment that they have to watch out for – but everywhere else that they operate, they can do so with relative impunity and, I think, continue to be very aggressive along those fronts even though they’ve gotten more and more subtle with indicating what an ad is. I mean, you remember searching Google five years ago, right? The ad boxes were highlighted in orange.

Ander: Oh yeah, yeah.

Rand: It was very, very clear what was ads and not. Now they look exactly like the organic results except for the tiniest 9-point font that says two letters: ‘A-D’ next to it. And that is all.

So I don’t know how they reduced the subtlety from here but man… Yeah, I think it’s going to continue to be effective for them. I think they’re going to keep being aggressive with it. I think Facebook will keep being aggressive with it. Other players will keep trying to enter that market. But I think it’s frustrating as a marketer to feel like your advertising dollars are flowing to these giant companies rather than the publishers who make the content, right?

I would feel much better about spending a ton on money on the internet if I knew that it were flowing to the people who created the content that I’m advertising against instead of to Google, who just happens to be the behemoth that dominates the system of advertising.

Ander: Sure. So how do we fix that, then?

Rand: Haha.

Ander: I mean, I might have a billion dollars if I had the answer to that question in my pocket.

Rand: No, what you would have is an angry mob of billionaires trying to kill you.

Ander: This is true as well. Haha.

Rand: Yeah.

Ander: So without that problem, and avoiding that problem of a mob of billionaires, how do we fix this?

Rand: It’s hard for me to imagine, how about that? It’s hard for me to imagine that it can be fixed through individual action or through technology. I think that the way you fix discrepancies of this sort is through regulation and that would first have to mean a significant upheaval in how we think about politics as it relates to control and influence of companies in the United States.

Ander: Yeah, I can see that.

Rand: Right now, it seems like we’re in pretty much the opposite boat. Maybe there will be a horrific backlash at some point and the pendulum will swing all the way the other way. You can see that coming from some corners, right? I’ve seen a bunch of articles about how, you know, the perception of tech as this savior, and as this engine of economic growth, and as this wonderful thing in the American economy, has really migrated, right? Really 180’d around and now it’s perceived by all sorts of folks across political aisles that Google and Facebook and Twitter and Microsoft and Apple and these kinds of folks, maybe they’re not so good for us after all.

Ander: One of the most fascinating discussions that I continually have on this podcast is about the ethics of marketing, and that’s exactly what this is touching on – especially when you start getting into the public policy components of this conversation.

Rand: Yeah. Well, I would say I think there’s ethics at two different levels. So there’s ethics in terms of our individual responsibility as marketers to make a commitment not to put lipstick on a pig and then sell it to people, right?

Ander: Right, right.

Rand: That sort of an individual, ‘I’m not going to market in evil ways and I’m not going to market evil things.’

Ander: Yeah.

Rand: Alright. So that’s one commitment. I think that the overwhelming majority of marketers do that. They generally don’t do evil things. And then there’s a small minority that does and they sometimes make the rest of us look bad and that sucks.

But then there’s ethics at a… almost at a political belief level.

And that is one that says, ‘I recognize that I may be uncomfortable with some of the consequences of voting for people who will take more heavy-handed government action against corporations, but I believe that on the whole, that regulation is better than a fully free market approach.

And right now, that political will does not exist.

Ander: Right.

Rand: It doesn’t exist on the left; it doesn’t really exist on the right. I shouldn’t say, ‘doesn’t exist on the left…’ There is a small minority of the left for whom it exists. It’s a vocal minority, but enough. But the majority of us really are not comfortable.

The only place where you see that, like I said, is the EU. And there you have some greater comfort. I think that they have experienced a lot of success and happiness and, sort of, positive changes in society through more government control exerted in their societies, you know, both economically and financially and personally. And so they’re more comfortable with it. But the United States, we are staunch believers in free market across the board.

Ander: Yes, we are.

Rand: And so I don’t know when you see that, sort of, moral shift. That feels like it’s a long ways off.

Ander: Yeah. So it sounds to me that what it really comes down to is the personal responsibility that we have as marketers to do genuine and good work.

Rand: Yeah, yeah. And that I feel across the industry. I feel it so strongly. I love this industry because of that, especially web marketers, you know, with the possible exception of this, kind of, affiliate marketing world where it gets a little more gray hat, or a higher percentage of gray hat and black hat kinds of things.

But I really do feel – and I’ve met tens of thousands of marketers over my career – and, you know, 99% of them are just great people who do have those great ethics. And one of the great things about the marketing world is that you’re so in-demand as a talented web marketer that if you don’t like what the company you’re working with is doing, you can walk away. If you’re running an agency, you can fire them as a client because demand is so high.

Ander: Right.

Rand: So that’s sort of a great thing, right? We’re not trapped in our jobs or trapped with our clients. It’s at that level of, ‘Hey, wait. I also want to see broader change happen.’ And I don’t think we’re willing yet to face that reality and then say, ‘I’m willing to vote for people or parties who represent that sort of a viewpoint.’

Ander: Right. I like what you said about the fact that as marketers we are in demand. It means that we have a little bit of job security, especially with all the AI and different technologies that are coming out now.

I’m wondering if, at some point, a lot of these marketing skills that you have are going to become commoditized… Back, you know, even just a few years ago, Facebook was kind of a specialized skill. And now pretty much everyone knows how to do it – and when I say that, I say it in the broadest way possible. I’m wondering if marketing will maybe become like that or if there are going to continue being all these new things that people just don’t have the time to master themselves?

Rand: Yeah, it feels a little bit more like the latter than the former to me. So, for example, if we were having this conversation in 2007 and you and I had both been in the field for five, six years at that time, I might have said, ‘Yeah, maybe that’s coming.’ But now it’s been another ten years and, if anything, it’s accelerating faster. It is more difficult to master anything in the web marketing world today than it was ten years ago because there’s more of it and it’s changing more quickly.

Ander: What is it… There are, like, 3,000 marketing technology companies now if not 10,000?

Rand: Oh, yeah… right? And understanding the platform and knowing how to use it well. Facebook is a nice example. It’s broad enough that almost everyone in the web marketing world understands the very basics of it. But you want to get to mastery with Facebook marketing? Well, guess what? Every week you’d better be learning something new because every week Facebook is releasing new things!

And every week people, on average, are changing their behavior around Facebook. And there are new industries that are popping up. And, you know, the number of angles and vectors that come in and go out of the marketing practice is so extraordinary that I think even a very sophisticated AI will have a tough time keeping up because the inputs change. So what AI is really good for is, sort of, fixed inputs, fluctuating variables, and then definitive outputs that you desire from it. What it’s really bad at is fluctuation on all three, right? Haha.

Ander: Haha. Yeah.

Rand: Like, ‘What I want is different, what’s going on inside is different, and what goes into it is different.’ Well, you kind of have to re-write the AI script every week.

Ander: Right. And that kind of defeats the whole purpose of AI to begin with.

Rand: Maybe write a great AI script that can write AI to account for it… but…

Ander: That’s also a slippery slope as well.

Rand: That feels like it’s a ways away.

Ander: Yeah.

Rand: I don’t think that marketing in the next decade is going to become a commoditized skill. I think it will continue to be this combination of deeply technical and highly creative, very specialized, hard-to-learn and hard-to-keep-up-with that will mean those of us who are talented will continue to have a lot of control over our careers.

Ander: One of the speakers yesterday – I don’t remember who it was – used the term ‘CMTO’ – Chief Marketing Technical Officer, and how that’s actually now a thing.

Rand: Yeah. I mean, I think that was predicated by the shift of all the dollars from, you know, these CTO’s organization at major companies to the CMO’s organization. And that is a trend that we’ve seen over the last decade and that keeps ramping up.

Ander: Very cool.

Now, we’ve talked quite a bit about this and where marketing is headed in the future, you know, however far away that that might be. What can we as marketers do to prepare ourselves for what’s coming?

Rand: I think you have two options: I think if you want to have a great career, long-term in web marketing, you either need to be deeply strategic or deeply specialized. What I mean by ‘deeply strategic’ is that you can easily diagnose and provide solutions to how a company or an organization should structure its marketing efforts and what channels and tactics might need to be looked at or investigated, even though you yourself might not be an expert at many of them. And then you need to have a deep network of people that you can rely on for the specialized knowledge that you might need to compete well in any given field or any given platform.

Or you could be those deeply specialized marketers. So you can be the, ‘I am absolutely phenomenal at book marketing,’ right? ‘I understand how to sell books…’ Maybe even more specialized than that. ‘I understand how to sell B2B books – business books specifically designed for people inside of companies and organizations – and I know what they buy, and I know when they buy, and I know how they buy and where, and what channels to reach them on, and who their influencers are, and all those kinds of things.’ Or, you know, ‘I’m a hyper-specialized influencer marketing person and I know the ins and outs of that field and I stay up on it.’

But doing both? That’s pretty tough. It may be, may be, possible. Add a third or fourth one in there and you’re not going to be as good as the person who only does one or two.

Ander: Right.

And another important question about the future of marketing is the future of Moz!

Rand: Hmm!

Ander: What do we have to look forward to from you guys? And from you?

Rand: Yeah, so Moz is doing something that I am very happy about which is refocusing on SEO. For a number of years it was trying to be something much bigger and broader to get into all these other fields and now has shut down a lot of those other product efforts and a lot of the, sort of, ancillary functions inside the software and is re-tooling to just be a great SEO software company again.

So I think that is what you can expect, you know? If there’s features and functionality that you’re frustrated that Moz doesn’t have today, if that’s in the SEO realm it’s probably coming in the future.

Ander: Awesome

Rand: My hope is that they can do that in a way that is accessible to a large number of marketers so rather than saying, ‘Hey, we’re going to serve the most hardcore, data-heavy, hyper-technical SEOs – which I think is probably a good 2-5% of the SEO world – rather than cater exclusively or specifically to them, which I think some SEO tools have done and have done successfully, my hope is that Moz finds a way to make that user experience very accessible for lots of folks.

Ander: Awesome. And, you have a book coming out.

Rand: I do, yeah! That’s the Moz world. For me, I’m going to be leaving Moz in February. And will be starting a new company.

Ander: Do you know what that company is yet or are you waiting for the idea?

Rand: Yeah. I will take my own advice and stay specialized. I think I know the world of marketing very well and so it will be in the marketing world. And I know software really well.

Ander: Sure.

Rand: So it’ll be at the intersection of those. I’m not going to start a lemonade stand or…

Ander: The Rand Fishkin Lemonade Stand. Haha.

Rand: Yeah. I’m not getting into hardware, not, like, trying to become a trading platform or anything like that. No initial coin offerings for me.

Ander: Gotcha. Haha.

Rand: But I do hope to be able to build something that’s smaller, actually.

Ander: Interesting.

Rand: I’ve found that really beyond 60-70 people, I don’t love the complexities and, you know, the requirements of… not even the negative aspects but even just the requirements of political aspects that come as you scale up a corporation. That’s not something I’m passionate about, not something I care to do. And I like small. I don’t like big. I like to buy, my coffee from not Starbucks. I like to shop at not Amazon. And so I think I’m going to carry that philosophy into what I do next.

Yeah, the book is coming out next year, probably end of Q1, beginning of Q2, somewhere around there.

Ander: ‘Lost and Founder’.

Rand: Lost and Founder.

Ander: What’s the focus of the book?

Rand: It essentially tries to attack a lot of the most common myths and misconceptions that Silicon Valley startup wisdom has given the startup world. So for example, I am not a fan of minimum viable products.

Ander: Interesting.

Rand: They have their uses, and I talk about it a little bit in the book. But that’s an example. I’m also not a fan of growth hacking, which I think every start-up thinks is absolutely essential. I don’t like the pivot! I think the pivot actually has significant drawbacks that people should be aware of. I’m not a fan of raising venture. And I’ve raised $30 million!

Ander: Wow. Haha.

Rand: So all of these kinds of things I sort of present the, ‘Hey, we did this at Moz. We invested in it deeply. I can tell you the story of how this is. Here’s the common wisdom. We followed that path. Here’s what it led us to.’ And then I try and be a little more expository and open up with other companies experiences and try and share some statistics around these things.

I think one of the biggest challenges in the start-up world is that we are all biased by the mythological stories of a handful of hyper-successful companies.

Ander: That makes a lot of sense.

Rand: Yeah. And it’s very frustrating to find that if you are not Facebook or Google or Airbnb, yeah. Or a couple others, right? That, in fact, the advice that you get and the takeaways that you have from those companies’ stories is probably not right for you.

And so, Lost and Founder tries to explain this from a founder’s perspective, told through the story of Moz and other companies’ stories as well. And hopefully will let people at least see a little bit more of the ugly side of how the sausage is made and how you might want to consider some alternatives to making it.

Ander: I love content like that that challenges the status quo and I am incredibly excited to read this book.

Rand: Oh! Thanks.

Ander: Q1 you said, right?

Rand: Yeah, yeah. Probably end of Q1, beginning of Q2. I got a really nice note in my inbox yesterday from one of the early readers. I think he said, ‘This is effing great!’ That was, like, the subject line to the email. And I was like, ‘Oh, man! Maybe I wrote a good book!’ Haha.

Ander: Awesome!

Rand: This is exciting!

Ander: That feels really good, yeah.

Rand: When you’re writing something, you know, you spend so much time with it you can’t tell if it’s good anymore.

Ander: Totally.

Rand: And with a book… you know, I’m used to blogging. Blogging is like, you do a little bit of work, you put it out there, you see how people like it, and then the next day you do the same thing, the next day you do the same thing.

I’m used to super instant feedback. This podcast, right? You’re used to super instant feedback. You’re going to produce this. You’ll put it up in the next few weeks. You’ll see how people like it, how they react to it, how they respond, you’ll see how it gets shared, and then you’ll know, ‘Oh, ok. I can improve.’

Ander: Exactly.

Rand: This is like a two-year podcast.

Ander: Wow. That’s a lot of talking. Haha.

Rand: Yeah, you know, for literally two years I’ve been writing and editing and working on this and then I don’t know what people will think of it when it gets out there.

Ander: That’s kind of a fun thing to be afraid of, though.

Rand: It is. It is. It’s a new experience but one I really like. My editor kept saying, ‘You know, writing a book is torturous. It’s really hard.’ And I would say… my editor’s name is Nicky.. I would say, ‘Nicky, I cannot tell you how much better than creating software this is.’

Ander: Haha.

Rand: Like, so, so much better! There’s no amount of feedback and problems and changes that you could make that will ever convince me that this is anywhere close to as hard or as bad as making software.

Ander: Well, needless to say, we’re all really looking forward to that. It’s going to be a lot of fun to read. Looking forward to elaborating on some of the ideas in there with future podcast guests as well.

Rand: Oh yeah, please. By all means.

Ander: Definitely will do. Rand, thank you so much for taking the time to chat on this Wednesday – typically, as expected – rainy afternoon here in Seattle. Great talk yesterday at Seattle Interactive.

Rand: Thanks, man.

Ander: Cannot wait to see what you’ve got coming up in the future and whatever this new company is that you’re going to start. We’re all going to have our eyes open.

Rand: Alright! Well, I’ll let you know as soon as it has a name and a place.

Ander: Great. Thank you once again. Really appreciate it.

Rand: Yeah, my pleasure. Thanks.

Tyson Quick is the founder and CEO of Instapage. As a lifelong marketer and entrepreneur, he has dedicated his career to creating value for other marketing strategists and practitioners.

Tyson is also the creator of the first-ever Advertising Personalization Classification System. discusses the increasingly powerful opportunity personalization is providing marketers to create more value for their personas.

Here are some of the topics discussed in this episode.

post-click landing pages and Digital Advertising

post-click landing pages are the most effective tool for optimizing the ROI on your digital ad spend. They allow you to maintain the same level of personalization achieved by serving highly targeted ads towards a specific audience.

95% of the people that clicked on your ad – and our ads in the past – were dropping off. That’s a huge efficiency problem. Advertisers and ourselves were spending lots of time targeting the right people but we weren’t continuing that personalization the ad targeting created all the way through to conversion.

The answer was that we needed to create a unique page, a unique conversion page and post-click landing page, for every single ad.

Instead of functioning as a website, post-click landing pages operate as a natural, message-aligned extension to a piece of paid media. The copy, creative assets, and value proposition in each ad should always match exactly what is on the post-click landing page.

The Future of Advertising Personalization

The future of advertising, and marketing in general, is perfect identity recognition. This will allow businesses to provide services and products that people actually want and need at the time that they want and need them.

With the advanced abilities for advertisers to promote solutions that meet their needs at the moment the ad is served, businesses might even be able to anticipate an almost guaranteed return on investments for each of their advertising campaigns.

Even with the most scary-thinking thing where advertisers have an indicator of someone’s likelihood of getting a disease, I think that there’s still going to be more pros than cons. It has yet to be determined, but if I look at history, and I think about how advertising has evolved, it’s only gotten better with more information.

More importantly, with consumers able to opt out of advertising,this level of personalization will make the internet better as a whole

But really, as marketers, most of us have some sinister plot to we’re annoy the hell out of someone. For the first time we can actually present you with products and services that are going to enrich and enhance your life. And you could always opt out of those.

Advertising Personalization Classification

On a scale of zero to five, this new system for classifying the level of personalization within digital advertising ranges from broad geographic targeting to advanced demographic information, specific niche interest, buying intent, and historical behavior patterns.

Ideally, companies could even use that information in a positive way by knowing something about you and offering a solution that is going to make you healthier and live longer. Imagine advertisers notifying you that you have a particular gene that’s going to lead to some sickness. and offering a discount to come to their hospital or see a doctor that specializes in that area.

As technology evolves, it’s possible that the future of highest level of personalization even includes genetic information, real-time health data, and that consumers opt into providing to ad networks to receive hyper-customized solutions for their pain points.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: As to be expected, the very, very first interview of Advertising Influencers features our fearless leader, our founder, and the CEO of Instapage, Tyson Quick. Tyson, how are you doing?

Tyson: Hey, what’s up everyone? I am doing fantastic and I am really excited to get this podcast off the ground. I’m also excited to be the first person that gets to be on.

Ander: I’ve just got to say, it’s great being in the office where we are basically surrounded by people who are so invested in advertising and advertising personalization and our mission, which is lowering the cost of customer acquisition.

Tyson: Yeah, absolutely. We have a fantastic team and we’re really focused on making advertising suck less. We really want to increase the relevancy of advertising and, in turn, lower the cost of customer acquisition for businesses.

Ander: Tyson, as the very first guest to come on the show, and as the founder of our company – let’s take a step back and hear about what brought you here, the sequence of events that led to you realizing why this solution was needed in the marketing technology landscape today.

Tyson: Yeah, absolutely. That’s a great question.

It really came out of spending a few years at various different companies that I was developing and really finding that one of the core issues that we always end up having is efficiently and affordably acquiring new customers.

We really pinpointed it to the fact that, at some point, you have to start spending money to acquire customers. And, we found that we were able to do really good paid advertising and target people pretty effectively.

Where things started to break down was once they left the ad. They went to the place that we were pointing the ads to, we saw a massive drop-off in conversion rates. And so, we started looking at that problem and found that most businesses are still sending their advertising clicks to a general website and they’re only getting about an average conversion rate of 5%.

Ander: I think the average conversion rate for AdWords might even be lower than that.

Tyson: Yeah, it could be, and it’s hard to find some exact data around these statistics, but from all the research we’ve conducted and from our own experience, the average conversion rate from ad click to conversion is hovering around 3-5%.

That means that 95% of the people that clicked on your ad – and our ads in the past – were dropping off. That’s a huge efficiency problem. Advertisers and ourselves were spending lots of time targeting the right people but we weren’t continuing that personalization the ad targeting created all the way through to conversion. So we asked ourselves, how can we solve this problem?

The answer was that we needed to create a unique page, a unique conversion page and post-click landing page, for every single ad. And in order to do that efficiently and at scale, we need to simplify all the processes within that problem. So we set up to build a platform that allowed marketing teams and agencies to build their page by choosing templates and customizing the design as well as get it online without needing any technical resources from the IT team. We build a platform that lets companies, teams and agencies build their pages, integrate their forms with third party marketing tools or sales tools, publish their pages online, and then of course A/B split test their page to increase conversions even further, because you can’t really assume that your first guess to what’s going to convert the highest is going to be the best.

The last piece of this puzzle is adding the collaboration necessary for a team to manage the project, and the deploying post-click landing pages rapidly, quickly, constantly, just as fast as they can create an ad online.

Ander: Why paid? Why have you decided to dedicate so much of your time and so much of your career so far to paid acquisition and digital advertising? And I think a great way to answer that question or to hear your answer would be to hear your story – maybe to go back to the first time that you really encountered digital advertising and paid acquisition as a powerful channel for marketing and growth.

Tyson: Yeah, absolutely. And I’ll kind of start by answering the question and then I’ll back into my story personally a little bit.

Ander: Perfect.

Tyson: So first of all, you know, it goes back to what I said: at some point, almost every single business is going to have to start paying for some customer acquisition, right?

Ander: SEO and all the other growth channels are still very powerful but they only go so far. Is that what you’re saying?

Tyson: Yeah, absolutely. At some point, almost every business is going to have to pay to accelerate their sales. You can always do things like content marketing, organic type of things, but even if it starts working for you, it’s still not going to be enough to really grow your business.

At some point, you’re going to have to spend some money. In the United States alone, there is 60 billion dollars in digital ad spend every single year and growing. Businesses are spending by the billions and the problem is that the majority of that money, about 95% is just being wasted.

Google and some of the big ad networks love it. They are making billions of dollars, but companies are just still throwing money away.

I had started a few smaller companies previously, but immediately before Instapage I started a company called Jounce. We built a great product, a great tool, and got it out the door and it was growing a little bit from our organic efforts, including the content marketing that we were doing. And we realized it wasn’t growing fast enough. We were going to run out of money if we grow at that pace.

It wasn’t “If you build it, they will come.” That’s really no longer true in today’s world where we have a massive abundance of information. People are being bombarded with new products and services at an unprecedented rate. You’re going to have to probably put some money down to capture their attention, right? hat was our case at Jounce and so like I said earlier, we started spending money on advertising and we were able to target the right customer but we were sending all of these clicks to just two or three pages, when really we’re targeting, and our ads are using, dozens of different messaging and targeting different personas. And they would get to the two or three pages that we had and lose that ad to page personalization, right? It wasn’t speaking to them anymore. And they were like, ‘What am I doing here?’ And we were about to kind of just ‘spray or pray’ and some of the people would make it through, they would, you know, find the right message that they were looking for that the ad promised, but it just wasn’t sufficient. I was like, ‘This is not acceptable.’ 95%? When else would a business, in any other part of the business, spend a significant amount of money and only receive a 5% conversion rate or return on that investment, right? That’s just unthinkable.

That was our case at Jounce. We had started spending money on advertising and we were able to target the right customer but we were sending all of these clicks to just two or three pages, when in reality, really we were targeting our ads using a lot of different messaging and targeting dozens of different personas. They would get to the two or three pages that we had and lose that ad to page personalization. It wasn’t speaking to them anymore. We were about to kind of ‘spray or pray’ and some of the people would make it through and find the right message that they were looking for that the ad promised, but it just wasn’t sufficient.

I realized that this wasn’t acceptable. When else would a business, in any other part of the business, spend a significant amount of money and only receive a 5% conversion rate or return on that investment, throwing away 95% of their ad spend? That’s just unthinkable.

Ander: Why do you think not everyone has caught on to this idea yet? The concept of a post-click landing page as ‘the page you land on when you click on an ad,’ may be one thing but actually having a post-click landing page as a natural extension of an ad is something qualitatively new and different. why is not every single company in business doing this?

Tyson: I think there are a few reasons why. First of all, digital advertising has grown and developed rapidly over the past two decades while traditional advertising has been evolving for the last hundreds of years. Digital advertising has brought tons of new channels and new things, so people are still playing catch up.

Most people have not completely transitioned to a digital-first advertising strategy. People are still just getting caught up with SEO, content marketing, social media marketing, and PPC using AdWords, so it makes sense that not everyone has adopted post-click landing pages yet.

Some of these have come online faster because people have been able to deploy resources and educate their companies and hire for these new strategies. But the second reason is that, up until now, up until Instapage and post-click landing page platforms were developed, there wasn’t an easy way to do this efficiently. It didn’t make sense.

Ander: There’s a great piece of data that in 2013 for every $92 people would spend on optimizing an ad, they would only spend $1 to optimize that post-click landing page, which is silly because that’s where the conversion happens.

Tyson: Yeah, I think I read the same statistic. For about every dollar, only like two cents or something is spent on acquisition.

Ander: exactly.

Tyson: Another reason reason why is that it’s much easier to just increase your budget than try to personalize the entire ad click to page to conversion experience. Very few people have solved that problem.

If you want to personalize the experience from every single ad clicks, you’re going to have to plan it all out. You’ll have to get a designer and a front-end developer to take that design and turn it into a live page. You’ll need a back-end engineer to integrate our forms and do some of the interactive stuff to send our leads to a third-party service. You’ll need to figure out some type of technology to do any type of A/B split testing. And then, you’re going to have to figure out how to do the project management on top of all of those things to make it go smoothly.

All those things combined start to really add up. One single page in the past may have taken someone a couple of weeks. Even if it’s a couple of days, is that scalable? Probably not, right? The longer it takes, the less ROI it’s going to have in the first place.

Ander: Especially when you do so with our philosophy in that every promotion needs its own page.

Tyson: Absolutely. We truly believe that. And, in order for this to be a reality and in order for this to make sense, it has to be fast, simple, and effective. That’s really at the core of what Instapage is doing. We want to take all of those elements that I just mentioned, all of those stages in the development cycle, and reduce it to a very simple, straightforward process that a marketing team can do without needing technical resources.

A marketing team should be creative people, right? They’re thinking about messaging, they’re thinking about design, and that experience with the advertisement. You don’t need any of the technical resources, you don’t need a third-party agency or something to hire out to do this.

Ander: What do you think is the reason that personalization is becoming more increasingly important? And, we could break this down to a societal reason to global society as a whole but what do you think is contributing to the need us as marketers to change how we break through the noise to get our message out to the right audience?

Tyson: First of all, personalization has always mattered but it matters more today because we’re being exposed to so much more information and we have to really decipher what is relevant and important to us, and what’s not, more than ever.

But, really, at the core of it, is advertising still kind of sucks. And the reason why it sucks is because most of the time, it’s either not relevant to my interests or what I want to buy or need to buy or what I’m interested in.

But it’s also kind of annoying sometimes, right? The annoying part has been the core driver to the success of Facebook and Google. They’re creating advertising that is less annoying. With Google, you’re showing buying intent. You’re going to Google, you’re searching for something, so advertising there makes a lot of sense because you’re looking for something. You want it.

Ander: Of course.

Tyson: Even with their re-targeting campaigns, the person seeing the ad has already shown interest in something. And that can be annoying too if you do it too much and you’re following them everywhere. There’s a limit to that too.

Facebook, of course, has taken a slightly different route. They’re enabling advertisers to understand what you really like. For example, my girlfriend has been in a relationship with me for almost five years and she’s the average age of a female in the United States to get married, and so she’s now starting to see wedding rings and stuff on Facebook. And I asked her the other day what type of ring she likes and she showed me one she saw on a Facebook ad. That’s a really good example of being less annoying.

Think about Netflix and Amazon, and how they use these personalization algorithms to present you with products or movies that you may like. It’s saving you time and bringing something to you when it’s actually relevant.

People are already focused on that problem. But the other part about it being very relevant in the context of post-click landing pages is when you do engage with an ad, it needs to continue to be relevant to you. It needs to match that advertising experience.

If it was that ring, I don’t want to click on that ring and then go to, a huge gallery of a bunch of different rings or, heaven forbid, their homepage. Maybe it’s the jeweler’s website and they don’t send you to a unique product page. You go to the homepage and you say, ‘Ok, what happened to that ring?’

Ander: The beauty of that example that you used with your girlfriend is you could be served an ad for the same product, but if you were to see that ad, it’s not because you’d be the one receiving the ring. It’s actually because you’re the one looking for the ring to give to the person who’s going to be receiving it. And targeted ads and post-click landing pages can articulate the unique value proposition for you as an individual and your individual needs as it compares to your girlfriend’s.

Tyson: Yeah, absolutely. And the thing there is the advertiser would have to change the message in the ad and the post-click landing page.

For her, it was all about showing the rings, because she has to decide what she likes first. But if they’re targeting me with that same ring, Facebook knows that I am in a relationship and I may be wanting to buy a ring.

So, the messaging has to change. If that ad copy says, ‘Hey, are you looking to get a ring for your girlfriend pretty soon?’ or ‘Are you ready to take the next leap?’ or whatever it is, and I click on ad and then I went to that page and that message was not still speaking to me, I’m going to be less likely to buy it.

If I click on the ad and go to the page and it says ‘Your girlfriend’s going to love this ring! Purchase it today!’ or whatever, I might buy it. But if I go there and it’s a plain page and focusing on other things, or it’s messaging to a female, I may just leave. It’s no longer speaking to me. A

People care about human experiences. We don’t like to go about our lives feeling like we’re being force-fed information on things. We care about stories. We care about what we want.

Ander: Right.

Tyson: We are self-centered entities. We’re living our own lives and thinking about what’s in it for us, is this worth our time?

Speaking to an individual matters more than it ever has because we have so much to process. And, advertising personalization matters tremendously to the success of this industry and to better people’s lives. In that scenario with the ring, like, that’s beneficial.

Ander: Well, you’re providing someone with something that addresses their individual pain points and individual needs and individual components of their lives, instead of providing a one size fits all product.

Tyson: Absolutely, and I’ve said this before to other people.

I tell them that most every single business or service has a customer that would want to buy that and get value from it. The problem in the past has been companies aren’t able to effectively reach those unique individuals to create a sizeable business. As a result, they end up converting maybe 30-50% of users that probably are not the most ideal customer but because they can’t reach all of the right customers and they have to just kind of capture as many people as they can, even if that product or service may not be the best fit for that person because they’ve got revenue to generate.

Instead, if you were able to save on your advertising without blasting it out to everyone and pinpoint those ideal customers and speak to them, you’ll convert at a higher rate, and you’re going to have the same amount of success, or even more, because more people are happy. More people got value out of the product and they weren’t conned into getting something that they don’t need or want.

Ander: And they’re going to have a higher lifetime value for your business.

Tyson: Absolutely. They’re going to be repeat buyers, they’re going to love you, they’re going to be brand loyalists and evangelists in the best case. It’s a win-win for everyone.

It’s important to note that advertising and marketing are not inherently bad, right? They’re not negative things. Again, right now it’s either distracting or not relevant.

In an ideal perfect world, we are being presented things that we may very well want. I might be interested in rock climbing – which I am – and at some point I may want some new shoes or something, I might want to be presented with a new product that’s going to make my rock climbing experience even better.

Maybe I don’t have time to go out and constantly stay up-to-date on the new product announcements in that category. But Facebook or some channel knows that’s an interest of mine. Maybe I’ve been to a particular brand’s website in the past, and they can say ‘Hey, let’s tell this guy that we have a new product out that’s going to change his rock climbing experience. He bought a shoe from us three years ago. It’s probably getting worn out by now. Let’s hit him up, let’s target him.’ Not someone else. They’re going to target me.

And then if I click on that ad and I go to that post-click landing page page, then it continues there and maybe they say, ‘You’ve been here before. Here’s a discount for being a loyal customer.’ That’s a good transaction.

Ander: Yeah. There’s a lot of value in that for every single person involved.

Tyson: Absolutely.

Ander: Obviously, advertising personalization is becoming increasingly more important. But it goes beyond that. It’s becoming increasingly more essential to having successful marketing campaigns and breaking through the noise to let people know about your business and get your message to the right audience at the right time.

But beyond that, where is all of this going? What in your mind is the future of marketing and the future of personalizing products to meet people’s specific needs?

Tyson: Yeah, I’m actually really excited about where all of this is going. Some people think of it as Orwellian and it being kind of scary. But really, as marketers, most of us have some sinister plot to we’re annoy the hell out of someone. For the first time we can actually present you with products and services that are going to enrich and enhance your life. And you could always opt out of those. You can unfollow a business. Facebook lets you say that you don’t want to see ads from a specific person or business. Google has Chrome and they let you even install ad blockers. It’s forcing us advertisers to use that information and data properly to create good experiences.

And, advertising can be enjoyable. A good example is the Super Bowl. People love watching and talking about the Super Bowl ads, right? You don’t think about good advertising. You don’t feel like it’s an annoying thing.

I’m about to introduce a new advertising personalization classification system. No one’s ever done this It’s something that I’ve been thinking about a lot.

Over the last few hundred years we’ve been evolving the precision in which we can target people. And now, it really needs a classification system. From my point of view, there are a total of five stage. We’re at Level 4 out of Level 5.

Where we’re headed in the future is perfect identity recognition, an understanding of a person’s needs, wants, and purchasing behavior so we can really understand what they would want to see and nothing else. Going forward, we may know you by name and speak to you as a person would speak to you. A brand speaking directly to you and offering a some special deal just for you because you’ve been a loyal customer and you like this particular product and you’re the perfect age for it or whatever.

There’s so much data available now. And it may be scary to think about for some people, again, but I think level 5 may even include things like genetic information. Of course there are applications in which that that could be used negatively like people have talked about like genetic information altering the coverage that an insurance company could provide. That may be so, but I think there are more benefits from that than negatives.

Ideally, companies could even use that information in a positive way by knowing something about you and offering a solution that is going to make you healthier and live longer. Imagine advertisers notifying you that you have a particular gene that’s going to lead to some sickness. and offering a discount to come to their hospital or see a doctor that specializes in that area.

Even with the most scary-thinking thing where advertisers have an indicator of someone’s likelihood of getting a disease , I think that there’s still going to be more pros than cons. It has yet to be determined, but if I look at history, and I think about how advertising has evolved, it’s only gotten better with more information. And again, it’s still going to be up to the individual consumer to either opt out of that, or use ad blockers to indicate that you don’t want to see this.

Ander: It is a choice.

Tyson: Yeah, it is a choice. And I think it’s up to the consumers to demand that level of transparency and freedom to opt out, and I think we are successfully doing that. But I think that people are going to choose the benefits over some of the potential negatives. I think that we should be optimistic.

Consumers drive demand and if something’s not working, they’re going to change it, whether that requires not buying something from a particular business or going to government and to make sure that this particular information about us can’t be used to discriminate against things like health insurance.’

That aside, life is better when you are focused on things that you care about and things that are relevant to you as an individual, right? Life is already complicated and stressful enough that we don’t need to see tens of thousands of irrelevant, annoying messages. We just don’t need that.

Ander: No, we don’t. We have enough to look at. We have enough emails in our inbox every single day and I think that everybody is on the same page. We do want to have more opportunities to be provided with things that are actually valuable instead things that actually are relevant to our problems and our pain points, whatever they may be.

Tyson: Yeah, absolutely. I also want to talk about the future of where this personalization is going and more of how it impacts the business.

Imagine a future where a business could develop their product or service and then they could start advertising with almost a near guaranteed return on investment. So imagine if you have a product or service and you understand who the right buyer for this would be, where they’re located, and what the likelihood that they can afford this is. Everything I mentioned so far you can already do by targeting with digital advertising. And then you start paying for ads and you can guarantee that you can deploy a page or deploy the experience that’s going to capture that either lead or sale, in a low-cost manner with high likelihood of that click actually turning into a customer.

We think it’s possible that Instapage can help be the next big advertising efficiency multiplier. If we look at some of the statistics that we have. I think just over one out of every three people that click on an ad that come to our pages end up signing up to try our product or to attend a webinar. It’s even higher if you look at webinars. Almost 50% of the people that come to our webinar page actually convert.

Ander: And I’ve seen that conversion rate with my own eyes. That is absolutely true.

Tyson: Absolutely. So if we get to the point where 30-50% of everyone that comes to your conversion page is actually opting into your product, we’re going to change the dynamics of the ability for a business to succeed.

Ander: And, what I’m actually realizing right now during this conversation, is what’s going to happen as a result of that. The really, really good products are going to start standing out against the really bad ones.

It’s going to be way, way easier for us as consumers – whether we’re a business purchasing a SaaS product or a consumer purchasing something for our home, it’s going to become way easier for people to start sifting through all the noise out there to find things that are truly important to them. We’re going to spend less time looking for solutions because those solutions will fall into our lap.

Tyson: Yeah, absolutely. And, obviously we spend a lot of our time searching for things, whether it’s looking at something on the menu, or what new clothes I want to buy. We’re already starting to solve this problem. Look at retail with Amazon. Part of the reason why Amazon is so successful is because you don’t have to spend as much time shopping and sifting through the noise.

Another example is Yelp, with food. The reason why all these services are developing is that people don’t want to have to do so much information consumption and analyzing to make decisions. It’s a waste of our time, it’s stressful, and it creates anxiety.

Advertising done properly is going to do solve that problem for every product and service. In the future, if my car breaks down, my car should be a data point that indicates that I have an issue. And, can I opt into people to come bid for me coming and having that car serviced. They will say, ‘Hey we’re going to do this the cheapest for it. Let us come pick it up for you.’

In that case, take my money. They just saved me time, I don’t even have to think about that problem. No one quantifies the opportunity cost of products and services either. Think about the time wasted making decisions and then there’s anxiety around wondering if we made the right decision?’

Advertising done properly is personalized, super relevant, and it’s timely. At the end of the day, it’s meaningful and useful to a person’s life.

Ander: Awesome. Tyson, I agree with everything you’re saying, the rest of our team does here as well and that is one of the reasons why I’m so excited to be here and so excited to be sharing all of these ideas with everybody out there in the worldwide audience of all-star marketers that are also starting to work with these kinds of methodologies.

Tyson: Absolutely and I want to leave it on this note: I want advertisers and marketing managers and marketers all across the world to start having more fun. You know what I mean? Advertising and marketing, in my opinion, is one of the most exciting departments to work with within an organization because we either make or break companies at the end of the day. But we should be creating enjoyable, fun, unique, and exciting experiences for customers.

We’re story-tellers. Done properly, we’re going to be seen by the public as less sinister, less, manipulative types of people and more as people that are providing value to other people’s live by bringing them meaningful services and products when they need them or they want them that are going to improve their lives. If you look at really good advertising… Apple is a great example. They don’t tell you so much the specs of the product. They talk about how it’s going to improve your life. At the end of the day, it’s a phone. It’s a mini-computer in your pocket. But they tell stories, right? We’re story-tellers.

Ander: Aspirational messaging as opposed to informational value propositions.

Tyson: Yeah. Have fun with it. I’m sure excited about it. And I think that if we start having more fun again, the whole industry is going to thrive and continue to thrive. We’re going to get more respect from the public and we’re going to drive a lot of innovation. We’re going to continue to drive a lot of innovation within this industry.

Ander: Start having more fun. And that applies to life in general but that is obviously something for a different podcast.

Tyson: Absolutely.

Ander: Tyson, it has been a pleasure having you on as the very first guest of Advertising Influencers. And, there are many, many more to come from Silicon Valley and beyond and we’re all excited to be here.

Tyson: Yeah, thanks again Ander. It’s been a pleasure.

Jen Grant is the CMO at Looker, a leading business intelligence company, valued at $850 million as of March 2017. Prior to Looker, Jen spent the last 15 years building powerhouse brands from the ground-up. As the first executive marketing hire at Box, she oversaw its growth from a small “consumer back-up” start-up to an industry-leading enterprise content collaboration company used by the majority of the Fortune 500.

After Box, Jen spent a few years advising Homebrew’s portfolio, on the board of directors of nonprofit K-12 Team, and led the rebranding of Elastic as CMO. Prior to Box, Grant spent 4 years at Google leading the Google Apps EDU, Gmail and Book Search marketing teams.

Here are some of the topics discussed in this episode.

Create Face-to-Face Opportunities

With so many of our marketing channels existing primarily in the digital space, it’s easier to forget the importance in-person interaction with our clients and potential customers.

“We’re starting to see the face-to-face stuff as performing better. And it used to be like, ‘Ugh! Events are so expensive. We can only do so many.’ Now what we’re seeing is medium to small events where you really get this face-to-face interaction and you bring in one of your executives or you bring in an author from a book about data or something like that and you get fifteen people or twenty people in a room. You couldn’t touch those people through email but they will come to an event because they want to meet other data people and that is really compelling…They like to talk to people. And we can’t walk away from the human factor of what marketing is about. ”

These small demand generation and lead nurturing events allow for a higher touch opportunity that simply isn’t possible through strictly digital marketing channels.

The Human Touch in Marketing

Even your product is the market leader in your industry and, the people behind your product are likely the x-factor that drives much of the success.

“Yeah, it’s experiential marketing but it’s also like the human touch. It’s something about getting back to basics, you know, it’s an interesting phenomena. I think it’s happening because people are sick of the digital world. They’re sick of, like, a Facebook ad or a LinkedIn ad. They still respond to them if it’s something educational: ‘You know, I’m going to download a comparative report. Here’s the industry expert who says a thing; I might read about that.’

But really getting people in the door… The person has to feel like you’re going to be there with them. And maybe it’s a B2B thing, but if they’re going to bet on you and your software, they’re not going to bet on the technology, necessarily. They’re going to bet on the technology plus the person that’s going to help them, that they can trust, that they say to themselves, ‘Ok, you’re going to hold my hand. I’m not going to get fired by choosing this software…’ ”

Ultimately, the decision to invest time and money into purchasing and implementing a product comes down to the quality of the team behind it.

There Is Not Always a Single Answer

It’s easy and can be tempting to assign the fault or success of our marketing efforts to a single isolated channel. However, the collective value of your combined channels and testing the effects on each other is far more significant.

“I think the main thing that the more marketers can explain to other executives that it’s not like we’re going to find the thing, it’s that we are going to do all of the things and we’re going to test and optimize and the data and our dashboards, all of these tools are going to show us what’s working, what’s not, and then we’re going to test it again and maybe it’s not working this time. But that’s ok, because we’re going to constantly be pulling that other thing that is working and move a little money over there so it’s just sort of a constant management of many different tactics that is in fact the strategy for how to be successful and helping executives understand that that’s the deal, that there is no one answer, I think would help us a lot.”

Knowing how to communicate how your marketing channels interact with each other to business stakeholders is essential to effective testing and optimization.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: One of my favorite things about doing these podcast interviews is that I get to go new places, get some fresh air outside the office and what better place to do that than in Santa Cruz where the headquarters of Looker is located. And I am here right now with their CMO, Jen Grant.

Jen, thank you so much for having me here in your beautiful office.

Jen: Well, I’m excited to have you here.

Ander: I imagine that Looker is one of the bigger, if not the biggest, technology companies to come out of Santa Cruz. We’re right downtown in the city of Santa Cruz right now.

Jen: That’s right, yeah. There’s lots of tech startups here but we’re the only one that are able to say we fit two floors. And we’re moving into a third floor shortly.

Ander: Awesome. And the last report I read I mean you guys have raised almost $100,000,000 of funding… a little more than that?

Jen: Yep, a little bit more than that. And we now have an office in Dublin, we have an office in New York, a little office in Boulder, and London, and we have an office in San Francisco too.

Ander: Very, very good things are happening for you guys.

I explained it a little bit in the introduction to this interview what you guys do, what makes your product so cool, but it’s going to sound much better coming from you.

Tell us just briefly what Looker is and what you provide to businesses, to marketers, and to everybody else using your product.

Jen: Great. So, some people just think of it just very simply as business intelligence, but I like to think about it as ‘what’s the problem we’re really solving?’ And typically in companies today, you have one of two problems: either you have to wait to get any data to do any sort of analysis on, you know, whether your marketing is working or whether your customers are happy or anything you might want to know about what’s going on in your business. So you have to wait.

Ander: Or use valuable resources from your engineering team, etc.

Jen: Exactly! And then there’s the second problem where maybe you have a little bit of data – so you have a spreadsheet or you have access to Salesforce or you have access to Marketo or you have access to maybe one of the silos of data in your company. And you can run off with your spreadsheet and you can visualize things and then you can get into a meeting and everybody has different data and different conclusions. And then you sit around and fight on whose data is correct and whose analysis is correct instead of saying, ‘Oh, hey, let’s figure out what’s the best thing to do for the company right now so that we can all be more successful.’

Ander: And bad data is worse than no data – at least many people would think so.

Jen: That’s right. And it goes even further than that. I think people usually think about, like, ‘Oh, there’s clean data and dirty data,’ but it really is also in the definitions. So how do you define ‘revenue’ in your company? How do you define the average lifetime value of a customer?

All of those things are decisions and as a company, you should all be using the same definition but many times if you have these silos of data everybody is doing analysis and they’re just deciding, every single time they run the analysis, ‘This is what it means to be an active customer,’ and someone might say, ‘They’re logging in every seven days.’ And someone else might say, ‘They’re logging in every thirty days and they downloaded a file and they shared a thing.’ And you can’t actually have a conversation when everybody’s defining everything different.

That’s really what Looker does. We create a data platform where a data analyst can get everyone to agree on: how do you define, what are your metrics that are important that you want to track, and then make it available for everyone at the company so they don’t have to wait to get the analysis that they need, that everyone can use it.

Ander: And make it available to everybody in a visually digestible way.

Jen: Exactly, yeah. It’s not just rows and columns. You kind of have to look through it. It’s in all the visualizations you need with whatever makes sense: pie charts, bar charts… we have hundreds of visualizations you can use.

Ander: Awesome. Now, how did you end up here? You’re the CMO here of a company that’s been growing very quickly, and continuing to grow very quickly, but this is not your first rodeo, so to speak.

Jen: Yes.

Ander: You have a career that has led you to this point. So, what’s the nutshell of your professional journey?

Jen: Yeah, I would say the quick version is I did lots of crazy things trying to figure out what I was going to do with myself but where I really hit home was when I first worked at Google. And what was so wonderful about that experience was Google was still a little bit earlier so it was still innovative and wild and fun and we were testing and trying things and there was a lot of freedom.

I got put on a very controversial project called Google Book Search and I got stuffed in the middle of a crisis. It was the most educational experience of my entire career in learning how to deal both internally and externally with PR and all of the publicity around the Google Book Search project – that we were scanning libraries, what does that mean, publishers and authors aren’t sure they like it. How do we as Google and how do I as the product marketer explain why this is a valuable project for the world? So that was a hugely impactful experience on my career. And then after that, Box was sort of my risk and my hit where I got to go in and say, ‘Ok, now I own marketing.’ And Box was only 30 people when I got there so.

Ander: Wow! Ok.

Jen: It was a tiny little startup.

Ander: Yeah!

Jen: And we all thought we’re just kind of mucking around but really what we did was sit down and say, ‘Ok, how are we going to build an enterprise content management company?’ To see that from tiny all the way to – I think there were about 1,000 employees by the time I left and it was right before the IPO – was just that wild ride. And so that is kind of what brought me back to Looker because I saw – again – another company that was, not quite as early as I was at Box, but we were about 150 people when I got here. It was right at the stage of customers loving this product, really great executive teams, smart people that I want to work with, and they really needed marketing help.

It was a very technical product. All of their website, all of their messaging was super technical and they hadn’t been able to identify why should anyone else care about this product, which is of course right where I want to be to grow a big company with a great product and actually add value because it’s something they needed.

Ander:. That is awesome. And then throughout this entire process – being at Google, being at Box, etc – how has your marketing philosophy changed? What was it when you started and what is it now?

Jen: You know, it’s so interesting. So, when I started it was all about PR and messaging. At Google there’s always engineers who would build something and then say, ‘Look, I built a thing!’ and then in marketing we’d say, ‘Ok, ok, so who’s going to care about this? How should we explain it? How do we announce it?’ So it was all about the messaging of ok, this is why it matters, this is why it’s interesting. How do I shorten that down into five words and then how do I get the message out there? At Box, it was half that. if you’re familiar at all with Box, PR was our strength.

Ander: Yeah that sounds about right.

Jen: And brand. And we had billboards and we, put stuff on billboards that was super unique and caught people’s attention and got people to think about us. But we also had just a huge focus on PR and announcements and how do we, again, tell everyone how we’re transforming the world? That was a big part of it. For me professionally, it was a huge learning experience to start to ramp up on all the technology of marketing because, believe it or not, when I was first at Box, the idea of marketing automation was sort of a new thing.

Now of course it’s like a requirement! Haha.

Ander: Haha. Yeah.

Jen: We don’t know of a world without it.

Ander: Right.

Jen: But back then we were like, ‘Oh, hey, so how does the handoff to sales work? And what’s the SLA between marketing and sales? And how do we score leads? And oh, let’s try this new product that scores leads. What does that mean?’ It was all building the technology. Eventually what that came down to was data and can we do multi-touch attribution and do we do first touch or last touch?

All my time at Box was sort of lots of fun on the brand side and then a lot of really interesting learnings on following the technology and putting in place all of the new things that were going on.

Ander: Yeah, absolutely. Still things that marketers are debating about today.

Jen: Right. That’s what’s so fascinating now with Looker is now I’m actually marketing a product that’s all about the data and dashboards and we deeply understand what’s going on with our marketing and we’re looking at channels on a daily basis. What’s our conversion rate? How many leads? How on track are we to the goal? Exactly why did this channel go down? You know, all this really data-driven stuff.

And now we’re starting to see a shift in how people respond to marketing. We still will do email. We’re still going to do all of the typical things around nurture and sending content and getting people to download content, all those things.

Ander: Sure, sure.

Jen: But we’re starting to see the face-to-face stuff as performing better. And it used to be like, ‘Ugh! Events are so expensive. We can only do so many.’ Now what we’re seeing is medium to small events where you really get this face-to-face interaction and you bring in one of your executives or you bring in an author from a book about data or something like that and you get fifteen people or twenty people in a room. You couldn’t touch those people through email but they will come to an event because they want to meet other data people and that is really compelling. And so there’s sort of this resurgence of face-to-face marketing that we had kind of, you know, back in the days of ‘let the technology do everything, we can email ourselves to being successful,’ we had sort of said, ‘Oh, so we’re not going to send mail. We’re not going to do as many events. All of these things are so expensive.’ And now we’re turning around and going, ‘You know, actually, at the end of the day people like people!’ Haha.

Ander: Right.

Jen: They like to talk to people. And we can’t walk away from the human factor of what marketing is about.

Ander: Of all of the conversations I’ve had throughout the course of doing these interviews and also just in my own life as a marketer and my career so far, that to me is the fundamental common denominator between everything that’s changing with marketing right now.

There’s this cyclical nature of marketing. And I remember when I first had this realization… A lot of these tech companies have been scared of billboards and scared of TV advertising.

Jen: Yeah.

Ander: And then I saw one of these companies running a Super Bowl ad or something like that and I thought, ‘Wait a second. Things are coming back around.’

Would you categorize what you’re referring to with this face time as experiential marketing or is there another better word for it?

Jen: Yeah, it’s experiential marketing but it’s also like the human touch. It’s something about getting back to basics, you know, it’s an interesting phenomena. I think it’s happening because people are sick of the digital world. They’re sick of, like, a Facebook ad or a LinkedIn ad. They still respond to them if it’s something educational: ‘You know, I’m going to download a comparative report. Here’s the industry expert who says a thing; I might read about that.’

But really getting people in the door… The person has to feel like you’re going to be there with them. And maybe it’s a B2B thing, but if they’re going to bet on you and your software, they’re not going to bet on the technology, necessarily. They’re going to bet on the technology plus the person that’s going to help them, that they can trust, that they say to themselves, ‘Ok, you’re going to hold my hand. I’m not going to get fired by choosing this software…’ Instead, ‘I’m actually going to be promoted because I’m bringing to the company something. And even if there are problems, there’s still a human who’s with me on this journey.’

In Silicon Valley I talk a lot and I advise people and I’ll have lunches and coffee, whatever… it’s a lot of fun for me. And I often find that this is a key thing that most tech founders – who are typically engineers or product managers – they miss how important the human element is, especially in B2B. I’ve had many founders, even some big ones, say, ‘Oh, I don’t think sales is important. People will just sign up online. It’s just logical that they would sign up online.’ And I have to say things like, ‘Humans are not logical! They will never be logical. They’re going to choose the product because of the human interaction that they had, because of the trust that they feel, because you’re going to be there with them.’

That connection is so critical. I think a lot of tech companies start out thinking that that’s not going to be important and then eventually realize when they start hiring sales and hiring marketing, like, ‘Oh, wow. When I speak to people face-to-face they’re more likely to buy. And they may even pay more or buy more of my product because they’re buying into everything.’ They’re not just buying into the technology. They’re buying into the people.

Ander: Totally. Now with all of the data that we have available – especially with products like yours – we’re all so obsessed with optimization, and for a good reason. We always want to be optimizing our campaigns. How do you use data from these types of experiences to continually optimize those experiences?

Jen: Yeah, It’s so much fun to do the kind of optimization we can do now. So most of the time when I get involved – because I think it’s fascinating – it’s on the website. What are we saying on our homepage? What are saying on the product page or the most important pages of the website? And when is it that, if we change something, that we get an increase? And, we’re sort of touching everything. We’re doing the design, we’re doing the messaging.

But one of the things that’s super important in those conversations and it’s a little bit what I bring to the table is, ok, so yes if we had a very large big red button everybody wouldn’t click on it. But we have to balance that with how do we want people to feel and how do we want our brand to be represented? At some point the button is too big and too red and we need to actually express who we are as a brand and it’s hard to see that in that immediate optimization kind of work. But, you know, then we have a post-click landing page – completely sale post-click landing page – and we put the word ‘secure’. Just one little word! And there was a 24% increase in people filling out that silly form.

Ander: Wow!

Jen: I just felt like… ‘Argh! Humans are weird!’

Ander: Yeah, they certainly are. And one interesting thing about humans and how weird humans are in the context for what we’re talking about, is the handoff – and this is something that you and I briefly spoke about when we first connected on the phone a couple of months ago… The handoff between marketing and sales and something that is a hot topic for marketers everywhere.

Jen: Yep.

Ander: I’m wondering what the relationship is that you’ve observed between marketing and advertising with your sales team? I actually happen to know one of your sales guys, a friend of mine from long ago, Rafa. And without knowing the details of his job and everything – I imagine he’s pretty good at what he does… Haha.

Jen: Haha. Yes, he is.

Ander: What’s the relationship that you’ve observed between marketing and sales and how has that changed, especially in the context of this in-person element that you’re saying is so important?

Jen: Yeah, you know, it’s such a critical relationship and it’s so hard to get right. And I’m sure every salesperson and marketing person is nodding their head like, ‘Oh, it’s so hard!’ I’ve had experiences where it’s not been very good and then it turns out at Looker it’s actually the best relationship I’ve had.

It’s for a couple of reasons, but one of them is data. If everyone is looking at the same metrics and we all have decided what’s most important to the business, then there’s no argument over whether we did well or whether we didn’t because we’re all looking at the same data. You can’t argue – the leads either went up or went down, the conversion rate up or down, like, all of those things line up. Then if you say, ‘Ok, well, now let’s work together to say here’s where in our funnel we’re having a problem.’
In our case we schedule meetings. So, let’s say we scheduled more meetings but we’re not getting as many opportunities from those meetings. There could be many things that are going wrong so then we sit down and say, ‘Ok, here are all of the things that are going wrong. Is there any other analysis we could do that would let us know?’ Is it that some sales reps are converting meetings-to-opportunities at a reasonable rate and some just aren’t trained? It could be that. It could also be that the meetings we’re scheduling aren’t as good as they used to be. Ok, so why is that? And let’s dive into why aren’t they as good or is there a new channel we turned on that may give us meetings but not really actually a good channel, it just sort of looked like it at first.

How do we then piece out where everyone can do work to fix it? And that’s where, if you have a healthy sales and marketing team, you can work together on that discussion, look at the data, agree that we’re all going to improve and look, and then come together and say, ‘Ok, well, it’s all for the good of the company. We’re not going to blame each other for, like, oh, it’s your fault or it’s your fault!’

At Looker, that’s a lot of where we’ve had that success is in being able to look at accurate data that we can rely on and agree upon and then actually solve the problem instead of arguing over it. And I have been at plenty of companies and I know plenty of marketers who spend a lot of time, ‘How can I take the data from my system and show that my stuff is working because it is working but I’m not getting the credit for it that I think I deserve…’ And that’s not what it’s about. It’s about let’s make sure we solve the problem because there are always problems with your funnel. It’s never perfect.

Ander: Right. And one of the things that I’ve observed, to go back to our conversation about the cyclical nature of marketing and moving back to these in-person interactions, is this new emphasis on quality over quantity.

Jen: Yeah.

Ander: Instead of one hundred thousand leads, maybe you only need a hundred leads that are actually going to have this crazy high LTV and zero churn rate.

Jen: Exactly. And the reason we can do that is we can actually track the data all the way through the funnel. And I think just recently were we actually able to connect the data silos to say, ‘Oh, this lead from this channel got me this meeting, which got me that opportunity, which went to trial and then closed a deal and then didn’t churn and they paid on time.’ And those are all siloed data sets and until you can put all those data sets together to track that person through the whole thing, you can’t really know, ‘Oh, this channel is maybe only delivering ten meetings but all ten of them are converting into deals that never churn and then they do a press release with us because they love us so much.’
Ok, like that’s still a worthy channel even though it was only ten coming out of it. At the end of the day it’s actually helping us more than maybe, you know, some other channel that’s only got a 1% conversion rate and we have thousands going through it.

Ander: Right.

Jen: And I think that centralizing the data and being able to see end to end is where we can then come back and say, ‘Ok, quality is actually better.’ And we’ve seen that too with this in-person stuff we’ve been talking about with you get fifteen of the right people in a room, that’s a better use of time than going to a tradeshow that has 50,000 people and trying to make your 10×10 booth stand out because you just can’t have those deeper interactions. We had one of the biggest airlines sent us a message when we invited him to a dinner. And he said, ‘Well, I’ve gotten your email and I thought ugh… and then I got this invite and this is a cool restaurant and I thought ahh… I might as well go.’

Ander: Haha. People really like free food.

Jen: Right. And the sales rep who was there was blown away with the conversation because all of a sudden people are having dinner, they’re relaxed, it’s the end of the day… and they start talking about, ‘Yeah, here are my problems. Here’s what I’m having trouble with. Here’s what we have. Here’s what we’re doing about it.’ It’s critically important information for a sales rep to understand this person and what they actually need. And then to be able to go back to them and say, ‘You know you mentioned that this is a problem you’re having, we’d love to show you how we can help with that.’ And then your sales rep loves your marketing people and everybody is happy!

Ander: Of course.

Jen: Haha.

Ander: So, maybe this is a silly question – it sounds silly saying it – but I have a feeling you’re going to be able to help me out here. How do you host those kinds of intimate events with that kind of face time without getting ‘sales-y’?

Jen: Yeah, what’s critically important is to talk about the value of the conversation that you’re going to have. So there’s always, you know, ‘Well, you have to invite them through an email,’ so there’s always a little bit of that. But this is where we sort of started testing in the whole account-based marketing, where we’ll send them a book with an invite to the event in it and say, ‘Hey, this is this book Winning with Data that was written by our CEO and he’s going to be there and not only that but’ – let’s say it’s Atlanta – ‘all of the big data people in Atlanta are coming to this event. It’s limited. There’s only going to be twenty people and we’re going to talk about all of the things that you want to talk about.’ So trying to make it more about what do they get and what’s the conversation that they probably want to have versus, like, ‘Hey, we’re going to show you a demo and we’re going to pitch you on our product.’ Like, literally not going to do any of those things. You’re going to talk to your peers and we have some experts in the room who you can ask lots of questions and they’ll answer anything you want.

Ander: Right. Because I have been to events before where it’s advertised as a networking thing, some free food and drink…

Jen: Yeah. Haha.

Ander: And you go there and then you realize, ‘Wait, I’m just getting a sales pitch.’

Jen: Yeah, they’re just talking.

Ander: Here’s a PowerPoint presentation and they’re going to tell me how this product’s going to increase the ROI of my x, y, z… you know?

Jen: Yeah. No, when we do these types of events, there’s no PowerPoint.

Ander: Yeah.

Jen: There’s no presentation. There’s just ‘Hey, great to have you here. So glad you came. We’ve got lots of people for you to meet. Sit down; let’s eat!’ And we, whoever either from Looker or one of the authors or whatnot that we’ve brought, makes sure that everybody gets a chance to talk to them. But, if they just want to eat the food and chat with their neighbor, that’s also fine.

Ander: Awesome.

Jen: Because we also throw in some customers and invite them too.

Ander: Oh very, very smart!

Jen: They turn to the person on their left: ‘Oh, you use Looker? That’s interesting. Tell me more.’ And it’s not us at all.

Ander: Well, we are starting to run out of time but I do have a couple of other questions for you. The first question on somewhat of a silly note – do you guys have a lot of internal puns using the name of your product?

Jen: Haha. We do! We have so many!

Ander: Yeah, ‘looking at Looker,’ or whatever it might be…

Jen: We just did our user conference and our product road map is ‘Looker into the future.’

We try not to go too far but in the early days everybody actually got a nickname that had the word ‘looker’ in it.

Ander: Wow. That’s cute.

Jen: Mine is ‘Looker outside the box’.

Ander: Oh, perfect for a CMO!

Jen: It was perfect.

Ander: Yeah, absolutely. And then on somewhat of a more serious note, we’ve talked about it quite a bit throughout the course of this conversation about where marketing is headed, the importance of face time.

Jen: Yeah.

Ander: What can we do as marketers to prepare for the increasing importance of this as we move into this new frontier of growth and marketing?

Jen: I think the piece that I see as the hurdle is often the CFO, the CEO, that don’t get it, that see the cost of these events but don’t understand the importance of the human connection.

Whereas it’s so easy. I’ve so many people come to me – CFOs, product engineering, and say, ‘Well just find me that one ad that gets a company to sign up. And then we’ll just put all our money into that one thing and we won’t need to do all these other things.’ There’s a huge educational process in just sitting down and saying, ‘Look. When you start looking at this data,’ – and we’ve actually finally been able to see this in the data – ‘it’s all of the things at the same time that matter. It’s not the one thing.’

Ander: The collective value.

Jen: It’s the collective value. There’s never going to be one lever that you magically will find and you just flood all your money into there and ‘whoo hoo, we’re done!’ It’s always going to be, ‘Ok, we need some PPC…’ We actually kind of accidentally for a week shifted our budget on LinkedIn away from the larger companies to the sort of mid-sized, largely because we just wanted to get more leads from that, kind of a little shift. And all of a sudden for that week, that two-week period of time actually, the organic hits to our website dipped on the enterprise side and we were like, ‘What?! There’s a halo effect on our advertising that we didn’t know about! We always thought it was there but now we can prove it.’

Ander: Totally.

Jen: And it’s very rare you have moments like that because why would you ever turn your advertising off just to prove that it also will make everything else drop?

Ander: Well, yeah. I mean I’ve been at companies before where we’ve done tests just turning off all of our advertising in, the eastern United States and just seeing what the effect is on. Maybe a dip in organic or a lift in search traffic whatever.

Jen: Yeah, it happens. That’s the kind of conversation to get other executives to understand what you’re doing, is to start to help them understand that it’s not one thing, that we can’t just have a PPC strategy, like, ‘Ahh, that’s all we’re going to do.’ That’ll never work. Or ‘We’re just going to prospect. We’re going to buy email lists and prospect. That’s our strategy.’ That’s not going to work. You have to do all of the things and part of all of the things is those later stage funnel – the dinners, the sending them a book, the inviting them to a meet-up, doing a small specific-to-an-industry trade show. It’s just a constant test, optimize, test, optimize.

And then the worst part about the whole thing is that once you find something that works, it’s only going to work for about 6-9 months and then it stops working. Haha.

Ander: Right. Haha. And that’s where you have to be innovative.

Jen: Exactly! And then you’ve got to be constantly trying other things. So, I think the main thing that the more marketers can explain to other executives that it’s not like we’re going to find the thing, it’s that we are going to do all of the things and we’re going to test and optimize and the data and our dashboards, all of these tools are going to show us what’s working, what’s not, and then we’re going to test it again and maybe it’s not working this time. But that’s ok, because we’re going to constantly be pulling that other thing that is working and move a little money over there so it’s just sort of a constant management of many different tactics that is in fact the strategy for how to be successful and helping executives understand that that’s the deal, that there is no one answer, I think would help us a lot.

Ander: Awesome. Very, very good advice, and certainly something I will keep in mind and I imagine the rest of us listening will as well.

Jen, thank you so much again for having me here in your office, your awesome office with these nice big windows and…

Jen: A couple of surfboards in the lobby… Haha.

Ander: Couple of surfboards, the smell of the ocean, it’s great! For anyone who does not know, Santa Cruz is a beach town about an hour, hour and a half from San Francisco, so a nice little break from the city.

If people want to find out more about you, more about Looker, what’s the best way to do that?

Jen: looker.com – always easy! Or they can always reach out to me. I’m easy to find.

Ander: Awesome. Jen, once again, thank you so much and I’m sure we’ll talk to you soon.

Jen: Thank you!

Paul Uhlir is a co-founder and the CEO of Add3, a digital marketing agency based in Seattle focused on driving conversions for clients in a number of different industries. Add3 offers an integrated, performance-based approach across multiple channels, including AdWords and SEM, Social Advertising, SEO, Amazon Marketing, and more.

Prior to starting Add3, Paul worked in a number of other organizations including time in a sales role at an early search engine where he learned Digital Marketing. He also spent time working for an online dating company that was eventually sold to Match.com and founded Don’t Blink, an agency focused on the EdTech industry.

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The Allocation of Ad Spend is Changing

The digital advertising industry is growing at an unprecedented rate. AdWords is still the most used platform and generates the most revenue. However, new advertising networks are beginning to take up larger portions of marketers digital advertising budgets.

“I guess what I’m feeling and seeing through budget allocation, the conversations we’re having with our clients and when I talk with other people in the industry, it just feels like they are certainly no longer the only game in town and they are beginning to seed budget and priority to other forms of marketing, which is paid social and I think Amazon, as well. A rising tide raises all boats.”

Even if the gap in dollars spent between AdWords and other networks is growing smaller, the increased adoption of digital advertising will continue to increase ad spend across all platforms.

AdWords is Powerful, but Finite

One of the reasons that AdWords continues to be the largest advertising networks and continues to generate positive ROI for advertisers is the intent focused nature of the platform. However, there are only so many people at any given moment that actively possess the intent necessary for an AdWords click to provide them with what they are looking for.

“Google is finite. There’s only so many people raising their hand and saying, ‘I want to find a date tonight,’ or, ‘I need a hotel in Las Vegas tonight.’ So if you’re a marketer and someone above you is saying, ‘Congratulations, you’re hitting your return on ad spend goals, but this thing has to grow,’ which 99% of marketers are feeling that pressure, you can only go so far in Google. And I think that is why with Facebook’s real improvement in targeting their ever-growing network they’re becoming logical, almost go-to, because people are realizing that’s where the scale is.”

The finite supply of active buyers at any given time creates the power behind AdWords while also showcasing one of it’s weaknesses. This is one of the reasons that Facebook has quickly become the second largest digital advertising network.

Avoid Over-Personalizing

There’s no denying the importance of creating a personalized experience contextual to the needs of your target users and personas. However, over-personalizing to the point of violating brand guidelines or making assumptions that deliver someone too deep into the funnel can backfire as a mistake.

“You have to be careful of delivering the user too deep into the process. So you may think, ‘Ok, hopefully we’re going to generate a lead for a home loan, so let’s find a woman who’s 33 years old, in this income bracket, in this city, of this age.’ And you think, ‘Well, that’s perfect!’ right? Or, ‘That hits this target for this loan product. Let’s deliver this ad to her and it’s so specific why don’t we drop her two layers deep into the funnel because we know we’ve already done the work.’

Well, I think the challenge there on sort of the highest level the end-users may say, ‘How did I land here? Where am I? Why am I being asked to give my name and my address and my personal information?’ So you have to be careful of over-personalizing and assuming that the user knows what you’re hoping them to do.”

Personalization is almost always encouraged in your advertising and their subsequent post-click landing pages. It is, however, important to make sure that there is enough context for a top-of-funnel target customer to understand the value proposition of the product you are selling.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: This is exciting. I just attended the Seattle Interactive Conference – and Add3 was one of the sponsors.

Paul: That’s right.

Ander: The content was absolutely fantastic at that conference. And it’s also cool
because I’ve interviewed Paul Uhlir before, the CEO of Add3. It was a different time and a different place. A totally different universe of content – we talked about your rock-star background.

But thank you so, so much for taking the time to sit down here on this relatively normal rainy Friday morning here in Seattle.

Paul: That’s it!

Ander: It’s a pleasure to have you on again.

Paul: Thanks for having me for round two. I’m happy to be here and you’re right – I don’t remember how long ago we spoke, but things have changed undoubtedly.

Ander: 2013, I believe…

Paul: Ok.

Ander: Yes. A little while ago.

Paul: Things are extremely different. Yep.

Ander: Yeah, the marketing landscape has changed so much since then and we’re going to get into that.

But I think that the best place to start is with you and Add3. So, what is Add3 and how did you end up in the position you’re in now?

Paul: So Add3 is a digital marketing agency. What we do is focus very specifically on driving conversions for our clients.

Ander: And how do you define ‘conversions’?

Paul: That’s a good question. Conversions could be helping Amazon find drivers for their Flex program. It could be getting people to stay in hotel rooms for our large casino clients. It could be driving leads for online dating clients. And so a conversion is defined by the client but it is, in general, someone taking a desire to action that we can track and, of great importance, we have goals against the volume desire that the client wants and the cost that they want to pay for that.

We don’t start any campaign unless we know exactly how many conversions they want to drive and at what cost. We then march toward those goals and hit them, exceed them, or say, ‘Hey, this is what’s getting in the way of these goals.’

Maybe it’s their post-click landing pages, maybe it is the landscape that they just haven’t seen. And then we react fast and accordingly.

Ander: And you guys have some pretty killer clients.

Paul: We do! We do. We have a great list of clients, most, sort of, northwest-focused because we’re here – I was born and raised in Seattle – and then wonderful clients across the country. Nest comes to mind, the home thermostat product owned by Google. They’re down in California. Costco in Seattle, Amazon in Seattle, Personal Capital’s down in the Bay area… It’s a really long list that I’m very appreciative of – not only the ones I listed but the ones I didn’t list.

Ander: Of course.

Paul: Yes.

Ander: And, how did you end up here?

Paul: It’s a good question. I cut my teeth in the online advertising space with a company called GOTONet. We owned search engines – Metacrawler and Dogpile – and I was simply a salesperson. I crushed sales for that. That’s how I learned the search marketing game. Later, I went into business development in the online dating space and Brian Rauschenbach and I ended up working together at a dating company and looked at each other one day after our company was sold to Match.com and said, ‘Why don’t we give our own business a try?’

This was twenty years ago, probably. We started an agency called Don’t Blink and ended up selling that to one of our clients in the online education space. That industry, as most people know, sort of imploded about eight years ago. We dusted ourselves off and started Add3.

Ander: Wonderful!

Now, let’s talk about marketing. What are some of the high-level and most interesting observations that you’re seeing happening within the PPC space today?

Paul: Ok, that’s a good question. So PPC… let’s define that – ‘pay per click’. That is the world we live in. Generally, all of the buying that we’re doing is bidded on some level. The direct buys we do and deal with display is on flat-rate at times.

If you think about the PPC market, my mind goes to paid search and paid social. We started off as a search marketing agency; we are no longer a search marketing agency solely. Advertising budgets are shifting and we are, at Add3, doing our best to react intelligently, not too fast, not too slowly. But I would just say this: three years ago, all of our client engagements would begin with, ‘Ok, let’s nail paid search and then we can expand into display marketing or paid social or the other networks.’

That was the roadmap. The roadmap has changed now. I would say 80% of our engagements begin with, ‘Let’s nail paid social, make sure Google and our paid search spend is in line or complementing that, and then we go onto the next phase.’

Secondary – very important, but still secondary – fortunately, three years ago, we had this sort of vision to see that coming and we built up a paid social team, which is now contributing a large portion of our revenue – more than I sort of anticipated – and is continuing to grow. Now, today, or literally fourteen days ago, we hired a person to run our Amazon marketing services department. That, to me, feels like what paid social felt like three years ago.

Ander: Interesting.

Paul: Yeah.

Ander: So that space is going to grow quite a bit.

Paul: I think it’s going to grow quite a bit. For me… I keep talking about when we dove into paid social but there was a week where honestly three of my clients called and said, ‘What are we going to do about this paid social thing?’ And I thought to myself, ‘Alright, there’s the sign. I need to hire into this and lean into it and learn it.’ It’s a different skill set than paid search and we did that. It was a month ago when probably four of my clients said, ‘Can you help us figure out this Amazon paid thing because it’s a black box, it’s a little mysterious.’ And I said, ‘Guys, we’ve got to hire into this.’ And we did.

Ander: Paul, we had a short but very interesting exchange over email. I asked you about AdWords, about the spend that is going towards what is I believe to be still the biggest digital advertising platform in terms of revenue that is being generated.

Paul: Yes.

Ander: Google last year did about… was it $80 billion in revenue?

Paul: It was big, big numbers, yes.

Ander: Yes. So, I asked you about that and you said that AdWords spend is shifting. It’s moving into other things. But we’re still seeing the numbers go up at Google with the revenue that they’re generating with their bread and butter product.

Paul: Yes. Yeah, so I have to be clear here and sort of tread cautiously.

Ander: Sure, sure.

Paul: Google is crucial to our success.

Ander: Of course!

Paul: And to all of our clients’ success. I guess what I’m feeling and seeing through budget allocation, the conversations we’re having with our clients and when I talk with other people in the industry, it just feels like they are certainly no longer the only game in town and they are beginning to seed budget and priority to other forms of marketing, which is paid social and I think Amazon, as well.

Ander: And the digital advertising space is growing in its entirety, so the numbers that Google is seeing, all those numbers that are going up. All of the other companies are also generating much more money as well.

Paul: Rising tide raises all boats.

Ander: Exactly.

Paul: Yes. Yes, that’s right. That’s right. It’s just very interesting to think about and to think about how long and if AdWords will just continue to generate more and more and more money. This is how I think about it. And this is maybe the unique difference between AdWords and paid social. And why Google works so amazingly well is in Google, the person doing the search is raising their hand and saying, ‘I want this.’

Ander: Right. It’s very intent-focused.

Paul: It’s very intent-focused. In paid social and why we’ve learned so far into it and why budgets are headed that way is this… I always picture a day – maybe it’s three years ago, maybe four years ago – when Zuckerberg grabbed all his top execs and said, ‘Hey guys, make advertising work.’ I know there were conversations but it felt very specific and then all of a sudden, the targeting became so amazing and so precise and so massive – their network is so massive – that the advertising went from, ‘You know, we feel like we should probably be on there because it’s cool,’ to ‘Wow, this is really working.’ However, it’s still not as intent-driven as Google is so the return on ad spend is generally less than that of Google.

However – and this is sort of the key point and I learned this… this surprised me early on in my days of buying Google AdWords – it is finite, right?

Ander: Mm-hmm.

Paul: Google is finite. There’s only so many people raising their hand and saying, ‘I want to find a date tonight,’ or, ‘I need a hotel in Las Vegas tonight.’ So if you’re a marketer and someone above you is saying, ‘Congratulations, you’re hitting your return on ad spend goals, but this thing has to grow,’ which 99% of marketers are feeling that pressure, you can only go so far in Google. And I think that is why with Facebook’s real improvement in targeting their ever-growing network. They’re becoming logical, almost go-to, because people are realizing that’s where the scale is.

Ander: And that’s also where the opportunities for personalization are just tremendous. They’re completely through the roof. And that’s something that we talk a lot about at Instapage, is creating personalized advertising experiences.

Paul: That’s right.

Ander: Our philosophy is that every campaign needs its own post-click landing page.

Paul: I would agree.

Ander: Or every ad group. Or to whatever degree you are able to do that with your team or the agency you’re working with or whatever. What are some of the observations that you’ve made or challenges that you’ve seen marketers experience with regards to personalization?

Paul: Well, it’s an interesting topic. I mean, I agree with you, Ander. If given all the time and all the resources, there should be a different post-click landing page for every ad, every keyword, every ad copy that you deliver.

That’s not possible. I think one challenge that comes to mind is what you have to be careful of is delivering the user too deep into the process. So you may think, ‘Ok, hopefully we’re going to generate a lead for a home loan,’ so let’s find a woman who’s 33 years old, in this income bracket, in this city, of this age. And you think, ‘Well, that’s perfect!’ right? Or, ‘That hits this target for this loan product. Let’s deliver this ad to her and it’s so specific why don’t we drop her two layers deep into the funnel because we know we’ve already done the work.’

Well, I think the challenge there on sort of the highest level the end-users may say, ‘How did I land here? Where am I? Why am I being asked to give my name and my address and my personal information?’ So you have to be careful of over-personalizing and assuming that the user knows what you’re hoping them to do.

We’re always running specific post-click landing page tests versus simply the homepage. And you’d think you could stop running that test eventually because, you know, we have so many clients and have spent so much money that we could say, ‘Look, the post-click landing page always wins.’ But it simply doesn’t. So I think over-personalization is the challenge.

Ander: So how do you know when to stop, then? Because a lot of marketers are looking to personalization and they want to have that very, very customized, perfect-fit experience for the person who is seeing the ad, clicking on the ad, coming to the post-click landing page, etc. But as you said, over-personalizing does have its dangers. And I would certainly agree with that. So what’s the point where you stop?

Paul: Well, you don’t stop. Ever. What you have to do is employ an intelligent A/B testing process between post-click landing page and homepage, find the winner, and then continue to challenge the champion at all times. And, you know, gauge your desire to move through that testing and iteration process and always finding the next champion, or at least always challenging the current champion. Gauge that desire versus the speed at which you want to move and you can just allocate your budget accordingly.

I would say never stop testing. I’ll show my age here with the Classmates advertising, you know, a thousand years ago where they had this one ad, it was actually a picture of three employees of Classmates that said, ‘Were you a member of this class?’ or something and they simply could not beat that ad. And they spent millions and millions of dollars trying to test against it to find something that could beat it. So the idea being just never stop because eventually you will, and I think eventually they did as well.

Ander: Gotcha.

Now, being at Instapage, one of the things that I tell people as kind of a joke (but it’s true) is I am a marketer who works at a marketing company marketing a marketing tool to other marketers. Haha.

Paul: Haha. I think I followed you down that hole.

Ander: Yeah! And an interesting story is also how agencies are acquiring their own customers.

Paul: Right, right.

Ander: How does Add3 do that? How do you guys approach your own customer acquisition?

Paul: That’s right and that’s a very good question. When I was talking with you before we began recording, my mind was spinning and thinking, ‘Ok, so he’s doing this to drive customers for his business. We should be doing more of this ourselves.’

I subconsciously thought about this. It’s a tricky one. I’ll be honest with you. It really is a tricky one. There’s the adage of the cobbler with the bad shoes, in that I think we simply don’t spend enough time marketing ourselves because we’re so busy marketing our clients.

Ander: Of course, of course.

Paul: I will also tell you that we’ve went through peaks and valleys of, ‘Ok, let’s hire a content marketer. Let’s do inbound leads. Let’s do inbound sales.’ And I have a tough time often, sort of, attributing success to those things and maybe this is a very personal thing for myself. So we’ve done, I would say, all of the initiatives. I think in general, if there’s a golden rule it would be: ‘Always do very good work for your clients and that will ultimately turn into more business.’

And that’s what we have had success with and, on some level, relied on. The challenge with that is it’s not predictable and it’s not massively scalable. You know – knock on wood wood – it has worked and it continues to grow. It’s just not a plan, essentially.

Ander: Right.

Paul: We’ll buy some Google AdWords. And, I’m a big believer in SEO, so we have SEO’d our site for queries that we believe we should rank for and can provide great services for. We employ SEO for ourselves and have essentially dipped our toe into any form of marketing that exists. But I would say, at this point – it’s almost embarrassing – our paid budget for Add3 is probably sub $1,000 a month right now.

Ander: Wow.

Paul: Yeah.

Ander: So referrals are a huge part of everything.

Paul: Referrals are it for us right now.Which just makes me nervous as I say it out loud.

Ander: Yeah. Totally understand.

Now, Google and SEO and the changes that are going on over there are fascinating as well. Rand Fishkin did a talk at the Seattle Interactive Conference about SEO in 2018 and beyond.

Paul: What did he say?

Ander: One thing that he said which was very interesting is that Google is becoming a suggestion engine. People are typing things in. They might not even know necessarily what they’re looking for.

Paul: Yes.

Ander: And it’s filling out the query or giving you the suggestions for things that you could be looking for.

Paul: That’s right.

Ander: Another thing he said that I found fascinating is that a lot of Google searches are actually not resulting in clicks, necessarily. There’s a lot of people who are finding results that they need just by seeing what’s on the search page.

Paul: And then typing direct…? Is that what he’s suggesting?

Ander: Not exactly.

Paul: Oh, the answer is there. Oh, that’s right. Yeah, I’ve seen those answers and my agency-owner mind thought, ‘Huh… this is a bit concerning. Nobody needs to click at this point.’

Ander: Right. The thing is that I’m not sure that it’s a good thing for Google, either.

Paul: No, it’s not.

Ander: Yeah, because they want to get paid too.

Paul: I mean, that’s exactly right. Although, I’m very proud of our SEO team. They’re smart and I’ve sat in so many meetings with them while they’ve said, ‘Look, all you really have to do as a client to show up well on Google is to solve the questions that people are asking.’

Ander: Right.

Paul: So that falls in line, what you’re saying about Google perhaps penalizing themselves by not driving clicks, it falls in line with their, sort of, higher-level approach which is just be really useful to the user and it will all work out.

Ander: Yeah. And this is why social is also probably blowing up in such a powerful way.

Paul: Social is blowing up in a powerful way. Yeah, SEO is really interesting. I mean, we have planned that funeral year after year and it never dies.

Ander: Haha. Yeah.

Paul: I don’t think it ever will die. It just morphs and on some level – or, actually, on almost every level – it’s more confusing and more simple at the same time. Ten years ago you could just put up a bunch of text at the bottom in the footer and sort of trick Google.

Ander: Right.

Paul: Google is so smart right now that you essentially can’t trick them, yet you can’t just do nothing at the same time. So what’s the balance?

In general, we take the approach that it boils down to two things: you have to architect your site properly – you simply can’t send them the wrong signal. They need to know who you are and what you are the expert in. And that is often an architecture piece.

From there it’s simply content, you know? That’s what we’re doing right now.

Ander: Exactly. Another thing that Rand said which is interesting – and something that I think about a lot – is the voice search and the implications that might have with SEO and AdWords and everything else.

Paul: It’s coming.

Ander: It is.

Paul: I mean, I’m doing it. I’m doing it.

Ander: Yeah.

Paul: I don’t know what to do about it and how to react accordingly!

Ander: That’s the thing! No one does. That is, in my mind, one of the more fascinating problems that a lot of us marketers are going to be finding solutions for in the coming future.

Paul: Yeah. I mean, what’s interesting is often there’s a clumsy solution introduced which I would think would be something like, ‘Here’s your answer, but wait before we send you a five-second Geico audio commercial,’ right?

Ander: Yeah.

Paul: And that’s just not going to work. But with every transition, they’re thinking of a way to monetize it in the best way. So there has to be some way to monetize it. I can’t imagine them allowing people to pay to have their results show up for voice queries but we’ll see.

Ander: Yeah, we will see. It’s going to be really interesting to see and hear how that all shakes out. And honestly, with so many changes that are going on in the marketing technology landscape and digital advertising, that’s why there are agencies and companies like Add3 to, you know, figure out how we’re going to address these problems.

Paul: That’s exactly right, yeah. I think any success that we’ve had is by staying laser-focused on what I talked about at the beginning, which is driving our clients’ conversions and those conversions are coming from different platforms in different ways almost on a quarterly basis. And so it truly is our job to stay on top of it and be able to say, ‘Alright, Client X, this is what our other clients are seeing. This is how it’s performing. We should probably head this direction.’

Right now, we are sort of eyes-wide-open heading into the Amazon space and saying, ‘How can we help people sell products better on Amazon?’

Ander: Right. And you guys do a very, very good job of staying on top of it, if I do say so myself.

Paul: Thank you very much.

Ander: I really love the content that you guys are putting out there. Here’s a question that I’d also like to explore a bit.

So Facebook… obviously the dominant social advertising platform. That’s where a lot of money is going. It works and the targeting is really good, but there are all of these other social networks that are also launching ad platforms. Quora is one example. And we actually see, at Instapage, that organic Quora traffic is very, very valuable.

Paul: Hmm. I believe it.

Ander: Yeah. And it makes perfect sense.

Are there any other platforms that come to mind that you think are fascinating that are launching these abilities to advertise on them?

Paul: You know, I’m almost embarrassed to say that other networks are not popping into my head. And I think the reason for that is it’s not that I’m not constantly reading every blog and every adage and GeekWire and seeing what’s coming up. We still are beholden to volume on some level.

Ander: Yeah.

Paul: And it’s hard to rationalize committing a lot of time and resources and pixeling and setting up reports to channels that won’t drive at least 10% of the volume of an ad spend. And so we’re not, probably, testing as well as we should be on a lot of those pieces.

Ander: Now, I mean, that said, you’ve got to do what works – especially as an agency.

Paul: You have to do what works! You have to do what works and, you know, you see so many articles about the Frightful Five. There really is something to that. You know, we could spend 95% of our budget on Google and Facebook – Facebook owing Instagram as well.

Ander: Sure, sure.

Paul: And probably crush it and do just fine.

Ander: Right.

Paul: And I don’t have the numbers but I would imagine our spend, if you add Bing into that as well, probably swallows up about 90% of it and the other being direct buys. So I’m very pleased with Bing’s growth and the deals that they’re cutting because you need alternatives because if it becomes, ‘Hey! We’ll be your agency. We’ll buy on two platforms for you…’ at some point they think, ‘Couldn’t we hire somebody who could figure this out?’

Ander: Right, right.

Paul: So we have to be finding the next Quoras or diving into those things. I’ll just make a mental note to keep finding them.

Ander: Yeah, for sure. And it’s going to be interesting to see how those things shake out as well.

Paul: I will say this, one thing that your question made me think of is Snap and Snapchat and where that will go and when it will become a true advertising player. It’s not in our world yet. We haven’t been able to make the math work.

Ander: Yeah, I see Snapchat as something’s that far more, right now, anyway, geared towards Fortune 50 companies.

Paul: That’s exactly right.

Ander: Major, major media presence.

Paul: And priced accordingly.

Ander: Right.

Paul: One story I will tell that we’ve seen over the last year is that LinkedIn, for our B2B clients, was always, ‘Well, that’s a no-brainer. We should obviously advertise on LinkedIn because we’re trying to reach businesses and we can target the exact person in the role that we need.’ Well, it didn’t pencil for a long time. It was simply like, ‘This is the exact person we need to target. Here’s the ad. We did all the personalization that you mentioned. But it was just too expensive. The clicks were too expensive.’

And something has changed there and it may be the number of advertisers that are in or the targeting that they’ve added. But somehow, price has come down a bit and targeting has improved that LinkedIn is now pencilling for us, which is really nice. So, it’s nothing new. Nobody’s going to be surprised that we’re spending money there but it’s working a lot better than it had been.

Ander: Awesome. Now, we are running out of time and there’s one thing that I definitely want to hear from you. It’s my favorite question to ask people. Normally I ask the guests who come on the show where marketing is headed. We’ve talked a little bit about that.

But, I’d like to actually pivot that question for this conversation. Instead, I’m curious what you’re most excited about for what’s coming next.

Paul: What am I excited about for what’s coming next? I’m excited to watch the battle that’s going to happen – and is already happening and continues to expand – between Google and Facebook and Amazon, and see who, not necessarily comes out the winner there, but who begins to steal or take the lion’s share of the advertising dollars.

I’m also very interested to see how far personalization goes. We’ve talked a lot about that and there are certain ad products that Google offers that I find myself saying in meetings with clients, something to the extent of, ‘Buy this now because it’s not going to be around for long because there’s a team at Google in their legal side saying, ‘We have to stop doing this…”

Ander: Haha.

Paul: You know, involving Gmail. And it already has been sort of shrinking down.

Ander: Right.

Paul: It feels like we may be at the far end of a pendulum swing in terms of personalization, and it may be coming back.

Ander: Interesting. Marketing is cyclical in nature.

Paul: It’s extremely cyclical.

Ander: Especially how everything changes.

Paul: Yeah, it changes. And then the question is: how do we all react if some of these highly personalized tools are maybe taken away or more generalized? How can we react and continue to hit the results that we and our clients have become accustomed to?

Watching what happens there will be really interesting.

Ander: It certainly will. And there actually is one final question, which is arguably the most important one. If any of us listening want to work with you guys, how do we look you up?

Paul: Oh, that’s easy! And thank you for asking!

Ander: Yes.

Paul: Email me – Paul@add3.com. It’s that simple. Have a look at our website – add3.com – and reach out. If you ever find yourself thinking, ‘Man, I wish we could be driving more sales or more customers at a lower price – or at a higher volume,’ come say hello!

Ander: And, again, the content you are producing out there is fantastic! So I really am looking forward to seeing how you guys continue to grow.

Paul: It’s nice of you to say and I would like to thank you for having me on again. I enjoy the show. You guys do great stuff.

Ander: Awesome. Thank you so much, Paul. It’s been a pleasure.

Paul: Thank you.

Jeremy Wacksman is the CMO of Zillow Group, an online real estate marketplace for renters, home buyers, homeowners, and realtors to find and share information about properties. Jeremy oversees marketing as well as product management and strategy for Zillow Group and its portfolio of brands within the real estate industry.

Prior to joining Zillow, Jeremy drove marketing and product management for Microsoft’s Xbox LIVE and consumer mobile efforts, where he grew digital distribution for Xbox and led product strategy for a mobile incubation group. He also previously worked in product management and sales for Trilogy Software, a pioneer in ecommerce software.

Jeremy is on the boards of directors for Rover.com and Room 77. Jeremy holds an M.B.A from the Kellogg Graduate School of Management at Northwestern and a B.S. in engineering from Purdue University.

Here are some of the topics discussed in this episode.

Obsess About The Persona You’re Serving

It’s essential to develop the deepest understanding you possibly can of your target personas. A complex knowledge of their pain points, motivations, and frustrations will help generate the empathy you need to continually create value for your users.

“If you are obsessed about the persona you’re serving, the consumer you’re trying to attract, the customer you’re trying to engage with who’s using your platform, it forces you to constantly challenge assumptions and find new ways to solve problems because you have empathy for what your user is trying to do. And the relentless piece comes in making it not just marketing’s problem. And I think a big part of marketing and product’s goal is to help everyone in the organization have an understanding and an obsession around your customer.”
Once your and your marketing team have internalized this deep understanding of your personas, it will be easier to communicate and foster this obsession among the rest of the departments within your organization.

The Two Phases of Retention

Depending on the nature of your product, it’s likely that retention goes beyond keeping a paying customer in one component of your product. With the multiple overlapping personas Zillow focusses on, there are two stages of retention.

“Yeah, and retention for us is really two phases. It’s retention within the life stage – so, when you’re a buyer, you may be spending two years, two buying cycles, actually buying. And we have folks that are using Zillow across multiple calendar years because they haven’t actually found a house yet or it didn’t work out that year. So there’s retention in that segment and how do we build the right tools to help keep their search warm, alert them of the right way to learn from what they’re doing when they change habits and they start looking in a different area? Are we smart and do we respond to that? When we bring them back in the next shopping cycle are we recognizing them and delivering the right value for them?

And then your question of how do you think about retention across life stages… ‘I rented this year and now I’m not renting again for two years,’ or ‘I bought and I may not buy for a decade.’ And that goes back to just providing tools and access for free. So you had a great experience; that experience is our brand impression that brings you back. A buyer will actually almost relentlessly check their ‘zestimate’, their home value of what they bought for months and years after they bought it to keep tabs on the market, and that data we have becomes a really great retention tool as they think about going to sell or go in to make that next purchase.”

Retention within one life stage is different versus retention across require different approaches. Incorporating a tool like Zillow’s ‘zestimate’ feature can help keep your users engaged while they are between different life stages.

Don’t Get Paralyzed on Data

Analysis paralysis is one of the biggest challenges we face as marketers, especially with the depth of data we have available on a daily basis. One way to avoid this is frequent experimentation and knowing when follow your intuition.

“You can get paralyzed on data, which is why we’re a big experimentation culture. It’s like you may have a bunch of data sources that might give you one or two or three different answers and you could run an experiment that might give you a fourth answer. So you have to use data but you have to use your gut. And if you don’t use some of both, you could sit on your hands for far too long.”

Allowing for this level of frequent experimentation also requires enabling you managers to make decisions on their own. If your organization has fostered a relentless obsession with your personas across your entire team, it’s easier to count on their decisions delivering real value for your audiences.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: So one of my favorite things about doing this podcast, speaking to various CMOs, VPs – whoever they might be – is talking to the marketing leaders who are working with organizations that are valuable to me as an individual. And Zillow quite literally put a roof over my head.

Jeremy: Good to hear!

Ander: And many other people. Jeremy Wacksman, CMO of Zillow, thank you so much for taking the time to have me here into your office with this gorgeous view of Puget Sound here in Seattle. Thanks.

Jeremy: No problem. Thanks for having us. We’re happy to do it.

Ander: Yeah, awesome. So, people know about Zillow. People know a little bit about why Zillow has become such a huge deal over the past… I guess it would be thirteen years now.

Jeremy: Almost, yeah.

Ander: Which is really, really cool. But let’s hear about you. What is the sixty-second nutshell, or whatever you want to call it, of your professional journey?

Jeremy: Sure. I always describe my professional journey as one long walk off the engineering reservation. I actually started my career in computer science and I thought I was going to be a developer coming out of undergrad back in the Dot Com 1.0 days in Austin, Texas for a company called Trilogy, which is a big part of the Dot Com 1.0 boom. And I quickly A) figured out I wasn’t a great engineer, but B) kind of fell in love with the product side of things.

Ander: [chuckles] Yeah, yeah.

Jeremy: And so I quickly got into helping sell and then build and strategy around product and that led me to grad school in marketing and a focus on product in marketing. There was a stint at Xbox and now at Zillow.

And so the constant in that career has been kind of consumer technology and consumer technology brands and services. And it’s just been kind of an evolution from the tech side to more of the marketing side.

Ander: Mm-hmm. It’s very interesting that you started out as an engineer. I was at the Seattle Interactive Conference over the past few days. Really, really fascinating stuff. Great, great content. And I don’t remember who said this, but one person was talking about the CMTO, the Chief Marketing Technical Officer.

Jeremy: Yeah, I haven’t heard that title but I do agree with that theory that marketing is becoming a technical discipline. And, you know, when we talk about the future of marketing, you know, the future of marketing is absolutely data science and engineering and understanding the data that you have. So I think the idea that technology kind of permeates all facets of an organization is absolutely true and it’s sort of where we’re all headed.

Ander: And on that note – you touched on it a little bit but I’d love to hear more about this – how would you describe your marketing philosophy? And how has that changed over the course of your career?

Jeremy: My philosophy, I think, is pretty simple. It’s kind of two things: one is relentlessly obsess about your customer.

Ander: ‘Relentlessly obsess.’

Jeremy: Yeah.

Ander: Love it.

Jeremy: And the second one is always be learning. And those kind of go hand-in-hand, right? If you are obsessed about the persona you’re serving, the consumer you’re trying to attract, the customer you’re trying to engage with who’s using your platform, it forces you to constantly challenge assumptions and find new ways to solve problems because you have empathy for what your user is trying to do. And the relentless piece comes in making it not just marketing’s problem. And I think a big part of marketing and product’s goal is to help everyone in the organization have an understanding and an obsession around your customer. And one of the reasons Zillow has been so successful is that was our founding DNA. You know, we were built from Rich and Lloyd who founded the company with a focus on turning the lights on around the data in the real estate industry to empower consumers to make better decisions about homes.

So we started with that DNA of a focus on the customer. And then the second piece was to just always be learning – especially in marketing, but really in any discipline. You know, the marketing landscape changes so fast. You can’t A) rest on your laurels, but B) anything you did last year may or may not work the same way the next year. And the next tool, the next strategy, the next tactic is always right around the corner and so you need a team that has a growth mindset and is always willing to test and re-test and kind of challenge conventional thinking to find the ways to grow.

Ander: So how do you create that team? How do you foster the development of a marketing team that lives up to that?

Jeremy: For us, it actually rides hand-in-hand with the core values we have here at Zillow. And a couple of those that I think really point towards the culture of the types of people that make great marketers is that focus on always be learning. We have a philosophy around ‘move fast, think big.’

Which means data is great, but let’s not wait for perfect data before making a decision. Can we run an experiment, can we A/B test, can we learn something quickly to help make a better decision faster? And another one of our philosophies is that Zillow is a team sport and that no one channel or team or function can solve a problem by themselves. Many of these challenges are cross-functional in nature and so you need a team of folks that are curious to learn and solve problems together. And if you all are focusing on the customer goal or the problem you’re trying to solve, you have the best chance of finding the solution or finding the right outcome.

Ander: Awesome. You said something interesting a few moments ago about the internal function of a marketing team – making sure that the company actually knows what the product is that all the engineers are building, that everyone’s trying to sell, that all the customers are using. Can you elaborate on that a little bit more?

Jeremy: Yeah, I mean, I think you articulate it well. Our job is to win the hearts and minds of our consumers and help them find Zillow and use Zillow and keep coming back to Zillow.

Ander: Mm-hmm.

Jeremy: But in that job, it’s also helping understand what those consumers are and translating that for the organization. What I was referring to is understanding your customer is not marketing’s job; it’s the company’s job. And I think marketing can play a role in helping build the tools that everyone can use to understand the customer, but then it’s also up to us to make sure that those tools are used across the organization.

Ander: Right. ‘Understand the customer’ is something that in an early-stage company, an early-stage startup, you spend a lot of time doing. But I see some companies and I actually wonder are they still doing that persona development at, you know, post-IPO stage or when they are more mature? And clearly you guys are doing that.

Jeremy: Yeah, I mean, we’re sitting in a conference room where you’re actually looking at our personas on the wall, right?

Ander: I was looking at those earlier. Such cool graphics. I really like those.

Jeremy: That’s an artifact. That’s a cultural artifact that allows the entire company to rally around those personas. And it does. It sets that tone that we’re always… and it goes back to that growth mindset of ‘always be learning.’

Ander: Totally.

Jeremy: That the persona you wrote down three years ago, maybe 90% of it is the same but what’s changed? What’s the new development? What’s the new change in consumer behavior, you know? And in our housing industry, affordability has become a big challenge and inventory is a big challenge and the buyer stress is up. And so how does that impact people who are using our site to try and buy and what tools can we build for them and how can we actually talk to them in our marketing channels, knowing that that’s what’s going on today. And that may not have been what’s going on three or four years ago.

Ander: Right. Exactly. Let’s shift gears a little bit and talk about real estate and talk about the many unique challenges that the real estate industry is facing when it comes to marketing.

Jeremy: Yep.

Ander: What are some of those challenges?

Jeremy: I mean, the two things that make real estate really unique, if you think about it as a consumer marketer, is the buying process is an incredibly long time frame, right? So, you’re attribution window, if you will, could be years. In many cases it’s definitely months. The average person spends 4-6 months shopping for a home. And the other piece is that – and this is maybe true of all categories – people have rational needs, but they are by definition emotional creatures.

Ander: Yes.

Jeremy: And that is heightened in real estate where you have this trade-off between wanting to dream and wanting to fall in love with a house and then quickly, once you fall in love with a house, flipping into rational mode of, ‘Can I afford it? Can I get it? What are all the steps I have to go through?’ So it’s a complex, long journey. Not everyone proceeds the same way and you have to understand who people are and what state they’re in to help attract them at the right time or put the right tool in front of them or help them along their journey.

Ander: Mm-hmm.

Jeremy: And for me, the constant in all that is sort of… it goes back to understanding your customer, but how do you bring that to life? It’s data science and it’s personalization. And having the site and the mobile technology and the marketing campaigns get smarter and learn who you are and help nudge you along your journey or help learn from what you did last time to sort of get a better experience the next time because you’re going to be shopping for a while and it’s going to be a stressful process. And our tools need to be a helper to you and a way to help get you through that process.

Ander: One thing that I find fascinating with consumer-oriented products that have a very long buying cycle is retention and getting people to use the product again.

Jeremy: Yep.

Ander: And I think, you know, in my personal experience, I found an apartment on Zillow. I’m going to use Zillow again to find another apartment at some point because the experience worked for me. How do you guys address that?

Jeremy: Yeah, and retention for us is really two phases. It’s retention within the life stage – so, when you’re a buyer, you may be spending two years, two buying cycles, actually buying. And we have folks that are using Zillow across multiple calendar years because they haven’t actually found a house yet or it didn’t work out that year. So there’s retention in that segment and how do we build the right tools to help keep their search warm, alert them of the right way to learn from what they’re doing when they change habits and they start looking in a different area? Are we smart and do we respond to that? When we bring them back in the next shopping cycle are we recognizing them and delivering the right value for them?

Ander: Mm-hmm.

Jeremy: And then your question of how do you think about retention across life stages… ‘I rented this year and now I’m not renting again for two years,’ or ‘I bought and I may not buy for a decade.’ And that goes back to just providing tools and access for free. So you had a great experience; that experience is our brand impression that brings you back. A buyer will actually almost relentlessly check their ‘zestimate’, their home value of what they bought for months and years after they bought it to keep tabs on the market, and that data we have becomes a really great retention tool as they think about going to sell or go in to make that next purchase.

Ander: Now, obviously, it’s not just about the buyers though. I mean, I’m looking at these personas up here and you guys have the renter, the buyer, the home-owner, the seller… there are all these different people with very different motivations for using the product.

Jeremy: Yep.

Ander: How do you structure your marketing team to focus on all of those personas and give them the attention they deserve?

Jeremy: Well, what’s interesting about the real estate industry is you may exhibit the
behavior of a buyer, a home-owner, or a seller – let’s take those…

Ander: Sure.

Jeremy: But you are all of those things at once, right?

Ander: Huh. Yeah, yeah.

Jeremy: The majority of sellers are also buying and so a seller is both a home-owner because they own the home and they’re a buyer because they’re buying a new home. But the idea of the personas is to be able to think about the need states and the mindset that that person is in at that time. And that’s the key for marketing and product is, ok, you may be trying to sell your house right now but if you’re shopping for a home, you’re shopping like a buyer.

Ander: Mm-hmm.

Jeremy: And are we building the right tools for you to shop like a buyer? Now, you may come back and think about selling your house, and the value of your house, and how do you make that decision, and then you’re thinking like a seller and we need to help you along that journey. So you may be the same person, but you may be acting like three different personas across your transaction.

Ander: What is your favorite marketing channel? And, you know, obviously at this point, you’re not running Facebook ads or anything like that, you know? There’s other people here who are doing those kinds of things. But what’s something that you really enjoy if you had to pick one channel for acquisition or retention or whatever it might be?

Jeremy: Yeah, my favorite channel is the one that works. [chuckles]

Ander: That’s a good answer!

Jeremy: I mean, I say that as a joke but the point is, like, they evolve.

Ander: Uh-huh.

Jeremy: I mean, we’re sitting here five or six years ago and Facebook didn’t work well, pre-IPO Facebook. The targeting tools weren’t there, right? But only if you were relentlessly re-trying and testing new things did you find and make Facebook work and work well and then you could run to it. And so our campaign today, you know, has many channels in it. I mean, the offline traditional stuff that’s worked for decades, in terms of TV and radio… but the online stuff evolves quickly and Facebook and Google are big pieces of that. But for me, it’s about figuring out how they work together and then re-testing and back testing the assumptions and what you did to figure out, ‘Is what worked last quarter still working in this quarter?’

Ander: Gotcha. Where does advertising fit into all of that for you guys?

Jeremy: Many of those channels are advertising for us. The thing about our category that lends itself well to advertising, it is a life-stage category and there are new people coming into the category every year. And a big reason advertising is a big part of our marketing mix is because teaching people that the category exists and teaching people that they can start their home search online is still a big job of both us as the leader in the category and the category itself.

You know, many folks who haven’t bought a home in a decade, we weren’t around the last time they bought a home.

Ander: Right, right.

Jeremy: So even though we are a household name to you, we are not a household name to them yet.

Ander: How important is it to become that household name as a brand?

Jeremy: It’s very strategic to help be at the front of the home shopping process so that they start their home search with us. And, as you experienced, if you have a great product and you bring people to the front door and they have a great experience with it, that product and your CRM becomes the best wind back. Experience in that brings the consumers back hopefully for life.

Ander: Yeah, I would certainly hope so. What is something that has surprised you about your role here as the CMO of Zillow?

Jeremy: The surprises come, I think, in the category in that you look at what the rational needs of the consumer are and the emotional needs that they have and how do you tease out giving people what they want and helping them discover all the great data. And I think the other surprise is just that there’s far more data out there for us and for all brands than you can even sift through and the secret is trying to find the signal out of the noise of data that you have.

Ander: Certainly.

Jeremy: And try and build campaigns and build programs that help engage with more people out of the data that you do have.

Ander: Mm-hmm. And there is such a thing as too much data.

Jeremy: Yeah.

Ander: Especially when you’re… I mean, I think that – and most other marketers I think would agree with this – I think that having the wrong data is worse than having no data at all.

Jeremy: Possibly. And also you can get paralyzed on data, which is why we’re a big experimentation culture. It’s like you may have a bunch of data sources that might give you one or two or three different answers and you could run an experiment that might give you a fourth answer. So you have to use data but you have to use your gut. And if you don’t use some of both, you could sit on your hands for far too long.

Ander: Is there a good way to know when your gut actually comes into play? I mean, it’s kind of a counter-intuitive question when you think about it, but a lot of us, especially people who are really, really deep in these very granular pieces of data, we want that data to justify our decisions as marketers but we also know that we do need to use our gut a little bit.

Jeremy: Yeah, I don’t think there’s any perfect way to do it. I think we do it by empowering decision-making within the teams and letting them run experiments and bring back data and results and make their own decisions as much as they can. And we do it by staying close to the customer.

So you can run an experiment and a spreadsheet can tell you something and then if you sit and you listen to consumers or you watch site intercepts where people are explaining how they got there and what they’re trying to do and what works for them, that makes it real. So understanding and listening and actually watching your consumer or your customer use your product, that helps inform your gut and inform how you use the data.

Ander: Awesome. So, Zillow IPO in 2011… how does the role of the CMO change within a company after an IPO?

Jeremy: I guess I would say there’s more to do but it’s the same fundamental job. The job is still win the hearts and minds of consumers, help solve their problems and understand their needs, drive engagement with them, you know, help with the business on the advertiser’s side and make sure they come back. The channels will grow, the budgets will grow, the audiences will grow, right? Investors was an audience that wasn’t around for Zillow in 2010 and now it’s an audience that we think about. But fundamentally the job is the same. And for us, it’s because our mission hasn’t changed. I mean, our mission to build the most vibrant home-related marketplace to help all of us make home decisions… that hasn’t changed. And IPO is a liquidation event. It’s a fundraising event but, it’s just a stepping stone towards that long-term mission and when you have that ideal as a company… you know the IPO step doesn’t really change what we’re all doing. It’s just a step along the way.

Ander: Mm-hmm. And speaking of what you’re doing, what’s next for Zillow? What do we have to look forward to with what Zillow is doing and what Zillow is going to be doing in the future?

Jeremy: Yeah, I mean, we talked a little bit about it earlier. I think personalization and data science is kind of the new marketing and, you know, we see that starting to come to every channel of marketing. And when you have tens of millions of consumers every day coming and describing and using your site and asking different questions, the smarter we can be, the more personalized we can be every time you come back so that when you find your next rental, we’ve been prescriptive and helped you proactively do that.

Ander: Very cool.

Jeremy: That, for us, is what’s next. I always think about it as think about the world just before mobile and then think about the world just before, kind of, tablets. It was a single device, kind of, research search box. And now it’s like an always-on personalization service. And you have that expectation as a user. Your Zillow on your phone needs to behave the way the rest of the push-a-button, get-stuff-done apps are on your phone even though you’re going to spend months finding your rental and you have to find just what’s right for you.

So for us, understanding the data and being able to personalize your experience is, I think, the big trend.

Ander: With all of these things in mind, we’ve talked a little bit about where marketing is going. You just talked about that just now. How can we as marketers prepare for this future, especially given how many things we don’t know? I mean, there’s so many new technologies coming out. There must be, what, 5,000 different marketing technology companies out there now, or something like that?

Jeremy: Probably.

Ander: [chuckles] It’s wild. How can we prepare for the coming future as marketers?

Jeremy: Yeah, I mean, I think just don’t get too over your skis. You can always start small and test. It’s easy to have these conversations around all the stuff that’s happening and it seems like a tsunami coming of stuff but at the end of the day, you have your goals for whatever your brand is or your customer base is for the next year, and you have a way to get from A to B. And you have to build some strategies and tactics to get there. Even when we started TV advertising, which was a capability the company didn’t have… start small and do a test.

Ander: Mm-hmm.

Jeremy: And, you know, you don’t need to run all the way to PhD level, multi-touch, multi-channel attribution on day one. Just run an A/B test and see how it works and then add online to it and then another channel to it and then keep going. And, you know, five years later we have a great, well-versed media mix model and team that’s way smarter than I am to help me understand fractional attribution and incremental spend.

We didn’t start there. We got started very simply with an idea and a hypothesis and a test. And I think if you take that approach to whatever comes next, at the end of the day you have to break the problem down into how you get started.

Ander: Don’t be afraid to experiment.

Jeremy: Yep.

Ander: Jeremy, this has been an awesome conversation. I really appreciate you taking the time to share some of your insight and advice and perspectives on the industry with us and I am so happy that I got to see this wonderful view again of Puget Sound here from your office. So once again, thank you so much. It’s been a real pleasure meeting you and coming here to Zillow HQ here in Seattle and I really appreciate your time.

Jeremy: Great. Thanks for having me.

Dale Sperling is the CMO of Stash, a consumer financial technology company that allows anyone with a mobile device and at least $5 to start investing immediately. Stash has acquired over half a million new users in 2017 with over 25k joining every week. In June of this year, the company raised a $40 million in Series D funding.

Dale started her marketing career at AOL in Impact Marketing and Sales Development. She has also worked at the Walt Disney Internet Group and cofounded CreatorBox in 2014, a build-it-yourself toy experience for parents and children to do together. She has been with Stash running marketing since May 2015.

Here are some of the topics discussed in this episode.

Attribution is Also a Challenge For Your Users

Determining which paid and organic traffic sources generate the lowest CAC and highest conversion rates is a daunting task for marketers. One less technical solution is to simply ask users how they found out about a company. However, even this doesn’t necessarily generate reliable data.

“Oftentimes people misrepresent where they were exposed and even though they had seen the subway and had Facebook ads ten times sent to them and had an in-app ad, they might say that they heard us on the radio. And we weren’t running on the radio in that geo, right? So people 90% of the time get it, but there’s a fair amount of people who don’t know and they make it up. ”

When running a multi-channel marketing machine, especially one that includes traditional broadcast media like radio and television,

Video is Essential

It’s possible that the growing importance of video content is the single most important modern marketing trend to include in your marketing strategy.

“But all of the consumption of content online, digital, and all of these new channels popping up for users to consume video. If you’re not in that space from a branded content standpoint, from an entertainment standpoint, from a commercial standpoint, however you want to represent your brand or get in the game, you have to be creating some video content. And it has to be a big part of your content plan or else you’re going to be left behind. ”

Instead of looking at video as another type of content or an independent channel, video content should be integrated into everything a brand does to drive awareness, acquire customers, retain users, and drive both loyalty and evangelism.

Continue Delivering Education

Educational content is especially important for a very top of funnel audience without awareness of a need for the product in the first place.

“From a marketing perspective, getting people to understand that they should be doing it [investing] and then also delivering on that experience of what they should have from both an education standpoint and an intent standpoint, and that future looking state of why they’re doing it, is an important piece to communicate. ”

For Stash, an investment platform that demonstrates its greatest value over time, delivering new educational value on a regular basis reminds new investors why they should continue to engage.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: This is one of the many interviews that I am doing while I’m here in New York on this little adventure for the Advertising Influencers podcast and for Instapage.

Today, I’m speaking with Dale Sperling, the CMO here at Stash.

Dale, thank you so much for inviting me into your office here, for making the time to chat, and for sharing some of your insight with us. Really appreciate it.

Dale: My pleasure. Welcome!

Ander: I gave a little bit of background to who you are, and what Stash is. But the best way to get started is hearing it from you.

Dale: Sure. Stash is investing simplified. Anyone with a smartphone, two minutes to spare, and five dollars can sign up for an account with us and start investing with five dollar minimums. We provide education and guidance and we really empower people to learn to invest and invest with confidence and do it themselves.

Ander: That is awesome. And, as the CMO here, you’ve been here for about how long?

Dale: I actually started with Stash before it even launched, so this July was my two year anniversary.

Ander: Awesome. Congratulations!

Now the other thing that I would love to know, and I’m sure everybody listening would love to know as well, is a little bit about how you got here, what is your sixty second professional journey in a nutshell?

Dale: Sure. So, I started out after college. I took an internship at AOL.

Ander: Did you study marketing?

Dale: I did. Marketing, Business Management at Rutgers. And I actually didn’t know what I wanted to do coming out of school. I wasn’t totally enamored with marketing. Thought maybe I wanted to be a teacher. But I was following the money and thought that marketing would be a great place since that’s where I got my education.

I started in a marketing services team at AOL and really just learned the ropes from the ground up. Got really involved in a team that was doing promotion marketing, so I was the sweepstakes girl.

Ander: Oh, ok!

Dale: Which was always exciting! You know, sales, sales presentations, and I think what was unique with how I started and then where I jumped around from there was that I did a little bit of everything. So, once I got a handle on a particular skillset, I was ready to tackle something else. I wanted to learn everything about how advertising worked and how ads were served and the tracking and reporting and I loved the data and the details, so I jumped around a lot.

Ander: I’m sure that that all extended to email marketing and all of the other things that you can do as marketers now.

Dale: Yes. So, a fair amount in re-engagement and what we used to call CRM, which is now re-engagement and retention.

Ander: Right.

Dale: And then did a lot of product marketing and really had a touch on everything to brand marketing, product marketing, re-engagement and retention. And what we used to do was marketing; now it’s called growth hacking.

Ander: Right. Haha. Or any of the other millions of other terms that people are using to describe marketing now.

Now, I guess I could call you a full-stack marketer. Throughout your career and as you’ve developed your skills, what has your marketing philosophy become? What’s something that might have surprised you along the way as all these new channels have come out, new technologies, things that we never could have imagined maybe ten, or five years ago, even?

Dale: Really what, I think, all of these new channels, new partners, and new ways to connect with people comes down to is being open to testing everything.

Ander: Right.

Dale: And not getting stuck in the old ways of doing things or what you know is going to be something that’s going to perform, but having an open mind to a new path to something. And, testing in a small way and killing it if it doesn’t work, really quickly.

Ander: Failing fast.

Dale: Failing fast! It was never really an approach that I had done in previous roles, but now with so many options if you’re not trying and learning constantly, you’re falling behind.

Ander: Yeah. And how does that come into play here at Stash? What are some of the experiences that you’ve had in your two years here where you’ve actually seen that play out in one way or another?

Dale: I mean, we really embody that here at Stash. It’s ingrained in our culture. When you start at Stash, you get The Lean Startup. It’s like our bible here!

Ander: Haha. Required reading!

Dale: Yes! And everyone’s given the power to test and try new things and break things and do it fast and fail fast and move on and learn and iterate. We do that on the product side, in engineering, and in marketing. And I think it’s clearly seen in marketing as we’re always open to testing new stuff, any crazy idea. If it aligns with the KPI that we’re heading towards, then we’re willing to test it.

Ander: Awesome. Is there any test that you’ve run that just kind of blew you away, surprised you? You know, maybe someone had some obscure idea and you said, ‘Well, we can test it. Let’s see what happens,’ and it just kind of blew your mind?

Dale: That’s an interesting one. Blew my mind.

I’d say that one thing that blew my mind on the negative side is a test that I thought was for sure going to perform. Everyone’s been saying ‘print is dead’ for a long time and there’s this slow revitalization of print and something unique to it, right, for this new generation who’s had all digital and now it’s something tactile that they could see and connect to. So I was convinced that on-demand engagement print piece would be very relevant and we tested it and it failed miserably!

Ander: Interesting.

Dale: I was floored! I thought for sure this was going to be an amazing channel for us because the costs are so amazingly scalable, or the production is scalable, the costs are low. And it’s personalized and printed on-demand based off of triggers and real live stuff that’s happening that you’re doing in the app. And it failed miserably.

Ander: Was this like direct mail marketing and postcards? What exactly was it?

Dale: It was postcards that were triggered from things that happened in your account that made you feel that we were connected, on another platform, in another medium.

Ander: Yeah.

Dale: On the flip side, I’m going to give you a positive ‘wow, that surprised me.’

Ander: Sure.

Dale: We’re doing a lot of programmatic testing and particularly finding a way to do some programmatic broadcast testing and it’s been wildly successful.

Ander: Awesome. What’s an example of that?

Dale: So we created a video for digital and it was very low budget. We had a whole bunch of low budget videos created because I love to test and test small and then build out a more robust experience based on what works. And so one of our cost-effective videos that we had created performed really well and so we stepped up and started using it in other mediums, Taxi TV, and then we tested it in broadcast. And I was a little hesitant because it wasn’t of the highest quality production and it actually performed wildly successfully.

Ander: Are we talking about traditional broadcasting?

Dale: Local network, yeah.

Ander: Wow!

Dale: Yeah, TV.

Ander: You know, it’s interesting. I have this theory and the theory is slowly being proven… I guess it’s a hypothesis or whatever it is. Marketing is cyclical and I’ve always thought that it’s going to come full circle. Billboards are going to become relevant again, postcards are going to become relevant again, and so is TV, local TV markets and stuff like that. So you guys had success with that?

Dale: Yes. And we’re interested in pursuing that further and we’ll see. We’re starting to really put a lot of effort behind video and build from a digital standpoint and now doing some investments to make some higher quality stuff for broadcast.

Ander: There are so many companies that aren’t doing broadcast. When you mentioned broadcast at first, I didn’t know if you meant, like, livestreaming or something like that. That’s so, so cool to me.

So with those TV spots you’re running, maybe they’re thirty seconds?

Dale: Thirty seconds, yeah.

Ander: Ok. And you shot these on a super low budget, you mentioned.

Dale: Super low.

Ander: How did you track the success of those? Did you just look at lift or was there a URL? What were you guys doing?

Dale: Yeah, so no URLs. We look at incrementality and lift overall. We geo-test and make sure that we’re seeing lift in a specific geo and that there is no, sort of, cannibalization from other campaigns. If it’s performing well from a CPA standpoint, we’ll test again and keep testing. And as we expand the geos and see if it holds, then we’re off to the races.

Ander: Have you guys figured out a way to figure out whether it’s a questionnaire or something if someone has come from a TV ad?

Dale: We do collect some information through customer service and when we do surveys we get that feedback. And just like the subway gets customers, it’s the same exposure.

Oftentimes people misrepresent where they were exposed and even though they had seen the subway and had Facebook ads ten times sent to them and had an in-app ad, they might say that they heard us on the radio. And we weren’t running on the radio in that geo, right? So people 90% of the time get it, but there’s a fair amount of people who don’t know and they make it up.

Ander: It’s funny. I never really thought that attribution is difficult for the customer as well as for the marketer.

Dale: Yes.

Ander: Let’s shift gears a bit and talk about Stash and talk about what I guess I could call the consumer financial technology industry. Is that fair to say?

Dale: Yes.

Ander: Ok, cool. There’s so many different apps out there. I mean, there’s, Acorns and Betterment and all these different things you can choose from. I mean, there’s probably twenty that come to mind for you, anyway. I played around with Stash – and I have my investments set up through something different – but it’s a really, really cool platform.

One of the things that you guys say in your ETF portfolios is ‘Portfolios as unique as you.’ And you have personas behind them, like the techie, the environmental enthusiast, or whatever it’s called. I might be using the wrong names. What inspired that idea? It’s really interesting to me.

Dale: With our app and the service that we provide and how we’re different from many of our competitors, is that we want people to invest with intent. And we want you to save and invest and know where your money is going and when you care about what you’re investing in and when it matters to you, you feel more ownership and you’re a shareholder and you’re more likely to be in it for the long term and really feel as if it’s something valuable that you’ve invested your time and thought and put yourself into it. You’ve invested yourself as well.

So really we named all of our investments for that, to have that connection with people, that relatability, so that, you know, instead of Berkshire Hathaway B, we call it Roll with Buffett.

Ander: Interesting. Cool.

Dale: So you might connect better with Roll with Buffett…

Ander: Haha.

Dale: And feel like, ‘Hey, I wanna roll with Buffett…’ Really it’s Berkshire Hathaway B, but we’ve made it relatable for that new investor who now feels like, ‘I’ve got a partial share of Warren Buffett’s thing,’ whatever they see that as.

The ‘investments as unique as you’ is really so that user knows that they can invest in what they want and what they believe in and make their own portfolio work for them.

Ander: Was that the vision of the founders when they launched the company?

Dale: I believe that vision evolved.

Ander: Sure.

Dale: Choice and the personalization of the portfolio was always a piece of it but really the company was built from this concept, this ‘aha’ moment, that people aren’t investing because they think it’s too expensive and they think they don’t know enough and it’s unrelatable or they think it’s something that they can put off for a future point in time.

Ander: Right.

Dale: So the initial launch and the way the app was created was to solve for that, allowing people to buy fractional shares. We’ve curated a set of ETFs, so we take that paradox of choice out of the space and you now have a set of curated ETFs that you can relate to because we’ve renamed them to be something that you can connect with.

Ander: Interesting. And a lot of the other platforms out there you’re either investing in something super generic – you don’t even necessarily know which stocks you’re investing in or which funds or whatever. I like how you guys do that, how you break it down into something that’s almost value based. It’s really, really cool.

Now that said, this whole industry, there are a lot of mobile apps that are allowing people to invest quickly, that are allowing people to invest with not a ton of money, not rolling in tens of thousands or hundreds of thousands of dollars like many seasoned investors who play the stock market might be doing.

What are some of the unique marketing challenges that exist within this space and how is Stash working to address those challenges?

Dale: I think one of the most important things in this space with all these apps and services that are allowing people to invest with these low minimums is that people don’t know what they’re doing. They’re getting in the game because they know they should and we’re getting to a point where people understand what investing is and that they should be doing it and we have all these different options. For instance, you could be a Robinhood customer and you get access to free trading but you don’t get that educational component that you get with Stash.

Ander: Right.

Dale: You can join Acorns and you can round up your purchases and save money. Again, you don’t have that educational piece and the focus isn’t investing. It’s saving.

From a marketing perspective, getting people to understand that they should be doing it and then also delivering on that experience of what they should have from both an education standpoint and an intent standpoint, and that future looking state of why they’re doing it, is an important piece to communicate.

Ander: So one of the challenges that I imagine every single company has in this space, you know, mobile apps on your phone where you can be investing money, etc, is this trust factor. It’s not a bank, it’s not something that is quote-unquote ‘traditional.’ It’s new technology. And even though there are people throwing thousands of dollars into Bitcoin where it’s even more unpredictable, there’s still a big question about the security behind what is happening with that money that you basically entrust to this start-up to invest for you.

And I know that, you know, all of the legal stuff, all of the government regulations are in place. You guys are following all the rules and everything and all of these companies are following the bureaucratic steps of the system to make sure it’s all secure.

But, what about the messaging? What about communicating that in a tangible way to somebody who is not yet totally sold on the idea?

Dale: So this is a marketing challenge, obviously, and something we all deal with and causes drop in our funnel all the time. We know those key points where people get a little nervous about putting their bank details in to fund their accounts. And that’s universal across all of our competitive set.

Ander: Sure.

Dale: And we message them with all the security protocols we have put in place. But ultimately it comes down to trust and can we create a relationship through our messaging, through our visuals, through the brand association, through word-of-mouth, that they know their friends invest and their friends haven’t had any issues so far.

Ander: Mm-hmm.

Dale: So far, so good, right? Can we get that trust from that consumer? And that evolves over time and so if they’re not ready to take that step with us because they’re nervous about Stash as a company and our viability or just investing through a mobile app, we have that line of communication open with them and we provide them content and education and we still send them, every week, all of our great articles that we write that are timely investment articles telling them about the investments that they could be in and what’s going on in the market. We take that softer approach where we build that brand trust and over time convert them to understanding we’re here, we’re providing value and we have your best interests at heart. We’re a registered investment advisor and we have a fiduciary responsibility to act in our clients’ best interests. So it’s a slow engagement, a gradual engagement model of building that trust and once you have that trust, it’s like the Holy Grail of that marketing experience.

Ander: Yeah, that’s something that I can certainly understand. I’m wondering how much those personas, the ‘portfolios as unique as you,’ going back to what we talked about earlier, I wonder how much that contributes to the trust?

I’m a musician and if I see, like, the musician ETF or whatever it is, I feel like that might resonate with me. I don’t know if that’s something that’s actively been considered by your team or not?

Dale: You know, I think so. We hope, right, that you connect to that versus just maybe a single investment. It’s also a way for us to sort of merchandize the investments. If you think of it as a wonderful store window and you’re looking in and one particular investment might not connect immediately with you. But if we can connect you from a personality standpoint, that might be that connection. We’re working to sort of build that into the app experience. Right now that’s just on the web.

But I think it’s one angle that works, giving people the ability to choose and connect on a personality level just works for millennials, oftentimes. They like that nice, clean, packaged-up opportunity.

Ander: Yeah. And keeping things simple is incredibly important.

One of the things that’s interesting about investing is that the value is not as directly apparent for a period of time. You sign up for a product, you put your money into that investment, and then you’ve got to wait a little while. It’s not something that happens overnight. It’s not like you’re playing a hand of blackjack or anything else like that. What are your observations around how that affects some of the retention that you have to work on, making sure that people really are understanding why they have this money there in the first place once they do it?

Dale: That’s a really good question because that is also an opportunity and it’s a struggle of ours because we’ve done really well with this low barrier to entry with the five dollar investment minimums. You can start investing with just five dollars. For the beginner investor, it can be a little confusing because they put their five dollars in and they’re like, ‘When’s it going to grow?’

Ander: Right.

Dale: ‘It’s not a hundred dollars yet.’ Haha. And so the challenge is to educate them about investing at regular cadence and it’s fine to invest small amounts, actually we encourage people to invest small amounts. If you have a hundred dollars to put in, we don’t want you to put it in all today. We want you to spread it out so you have the opportunity to do dollar-cost average, catch the highs and catch the lows and that’s the way to invest with the most confidence so you don’t have to time the market.

Really the opportunity is that low minimum but educating people around what you do after you make that first investment and how you should invest on a regular cadence and how you should save and invest with intent is that opportunity that we attack with education.

Ander: Mm-hmm. And I imagine that same thing applies to any product where it will take time to see the ROI that you put into it.

So taking everything we’ve talked about, kind of looking holistically at a lot of the themes that we’ve discussed, especially in the financial industry with these consumer fintech products like Stash, where is marketing heading? What is the future of marketing? And what do we as marketers really need to do to prepare for this future, to keep all of these changes in technology and processes in mind?

Dale: The big headline here is data. It’s becoming more and more data-driven by the minute. And I think from an education standpoint, people that are in marketing tracks and have that as their major in college, I do see the curriculum changing and I think there’s going to be a growing need for marketers coming out of school in their jobs to level up and start learning more about how to crunch data, read data, analyze, visualize, all of the above. We might see job descriptions for a traditional marketing role now have requirements for statistical analysis and other things that we haven’t seen in the past, that certainly I didn’t need to have, which, thank god because I hated statistics! Haha.

Ander: Haha.

Dale: But I think data is going to be a big driving force moving forward for marketing, especially here. I mean, we’re making all of our marketing decisions on data.

Ander: Right.

Dale: So that’s one big thing. Also, video consumption.

Ander: Especially with your TV ad spend.

Dale: That is happening! But all of the consumption of content online, digital, and all of these new channels popping up for users to consume video. If you’re not in that space from a branded content standpoint, from an entertainment standpoint, from a commercial standpoint, however you want to represent your brand or get in the game, you have to be creating some video content. And it has to be a big part of your content plan or else you’re going to be left behind.

The banner blindness saturation of the marketplace is crazy.

Ander: Yeah.

Dale: And specifically the millennial audience right now is consuming more and more video by the day. So that’s a big effort for the future, I think, for marketers to continue to put emphasis on and create unique new video that really engages their users.

Ander: Awesome. Yeah, we have a full-time in-house video team at Instapage and it was quite an investment. But it’s awesome. I mean, they’re churning out these amazing videos every two weeks or so that are just super high production quality. So I totally agree with that.

Well, Dale, this has been an awesome conversation. Thank you so much for sharing your insight with all of us listening. You have an excellent office here and I guess we’re not quite in Midtown but…

Dale: Flatiron.

Ander: Flatiron, ok. I get a little more familiar with my New York neighborhoods every time I come here.

Dale: You are in the best conference room…

Ander: This really is the best conference room!

Dale: It’s called Young Money.

Ander: Young Money. There’s fascinating constellation wallpaper all over the place and they’ve got a great kitchen as well, so I will leave it at that.

Dale, if people want to check out Stash, what should they do? How should they learn about you guys?

Dale: They can go to the app or play stores and download Stash. Or go to our website stashinvest.com and just read more and learn and check out some of our educational content and get to know the brand.

Ander: And start with only five dollars.

Dale: Start with only five dollars. But don’t stop there! Put in more!

Ander: Haha. Right, exactly. Well, Dale, thank you once again and I’m sure we’ll talk to you soon.

Dale: Great. Thanks.

Todd Saunders is the CEO at AdHawk, a digital advertising software that aggregates and optimizes digital ad data to take the complexity out of digital advertising. AdHawk is a graduate of Techstars Boulder in 2015.

Before taking the startup plunge, Todd worked on the AdWords team at Google, where he helped high growth startups and small businesses with their digital advertising strategies. He is an expert at optimizing advertising accounts and improving ROI.

Todd is also a contributor at Search Engine Land.

Here are some of the topics discussed in this episode.

Hire a Specialist

Marketers can’t do everything. Even if a member of your team has a full-stack digital marketing skill set, it’s possible they aren’t able to execute on channels well enough to determine if they actually work.

“They’ll try a strategy or they’ll try Facebook in general or just Google in general and they’ll say, ‘It’s not working,’ and they’ll shut it down and just say, ‘It doesn’t work for us.’ If you actually look underneath the hood, there was a small setting or a small adjustment or a small targeting thing that all of a sudden their cost for acquisition goes from $50 to $10 and they’re like, ‘We completely said no, we’re never going to advertise on Facebook again or we’re never going to advertise on Google again,’ but they didn’t actually give it a fair shot with someone that was knowledgeable. They just kind of hoped that what they were doing was correct and if it didn’t work that one time, it was never going to work. We see that happen all the time. ”

It frequently takes an expert to properly execute on a channel well enough to determine its efficacy. Sometimes, the nuances of a channel are only accessible to a seasoned practitioner.

Consider the Additional Benefits of Direct Response Advertising

Direct response advertising and PPC channels are most frequently used as a form of customer acquisition. However, these forms of advertising, as well as display ads, can have secondary benefits beyond sales opportunities that also generate significant ROI.

“Our ads have not just helped us with sales and growing the business obviously, but we’ve had conversations recently with HubSpot and with Google and both of them found us from an ad. We’ve actually had business development opportunities from people seeing our ads, not just sales opportunities.”

The business development or partnership opportunities generated by digital advertising campaigns might present greater or equal value, even when compared to revenue opportunities.

Voice Search Will Affect AdWords

Voice search is among the new and evolving technologies that could dramatically impact especially within AdWords, search engine marketing, and other digital advertising. Ads triggered by specific keywords will have to adapt to different types of queries that reflect human speech patterns instead of written text.

“One of the more interesting things I’ve read recently is about how voice search is going to affect Google AdWords in particular. So when people are searching, they say things differently than how they would type them. So there are now, if you look at your Google search terms, you can see people asking more questions rather than giving prompts. Because they’re using voice to do those searches.”

It’s also interesting to consider how Google and other SEM advertising networks will deliver ads without a written or visual component for an audience to reference. It’s a challenging question, and the solutions are not clear-cut for the marketers or the advertisers.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: Here again in New York for Advertising Influencers with the is the founder and CEO of AdHawk, Todd Saunders.

Todd, thanks so much for having me into your office here. We are in the Chelsea neighborhood of New York City, is that correct?

Todd: We are. We are a couple of blocks away from Google, right next to the High Line and actually right above 1 Oak nightclub, a place I’ve never been but I get to hear their music every day. So that’s fun.

Ander: Hmm! Ok, I saw that they were closed for a private event today so maybe the music won’t be quite as loud.

Todd: Every day is a private event for them, I think.

Ander: Haha. Gotcha Alright. Again, thanks so much for having me here. I really appreciate you taking the time to sit down and chat with us on this podcast.

I think the best thing to do to get started, even though I explained a little bit about it in the introduction, is for you to tell us about AdHawk. It’s a really, really cool product but you’re going to do it much more justice explaining it than I will.

Todd: Yeah, so you can think of AdHawk like your digital marketing account manager in your pocket. And I think it would help to just give you a little bit of my back story so you can understand where it came from.

Ander: Yes, please.

Todd: My co-founder and I actually met on the AdWords team at Google. We were account managers there working with small businesses so our job was to help thousands of small businesses do two things: understand their data in their AdWords account and then, based on that, what optimizations to take or, really, what next action they can take based on what the data is telling them.

Ander: And how can we define ‘small business’? Just to get a ballpark.

Todd: Yeah, so it was companies spending less than $2,000 a month on advertising.

Ander: Gotcha.

Todd: So you can imagine, we’re working with advertisers only spending $2,000 a month, it’s more of a scaled program so we get to see thousands of advertisers. But as you make your way up Google, you start working with less customers that spend more. So during our second year at Google, we actually started a team called Accelerated Growth and on that team we worked with high-growth start-ups to basically help them scale. So instead of working with thousands of companies, we worked with ten. And instead of budgets being $2,000 a month, budgets were $2 million a month.

Ander: That’s very different!

Todd: Extremely different! But what was actually interesting – and we thought it would be much more different – but what was interesting to us was they had the same problems. It was, ‘I don’t understand what’s inside of my AdWords account and every time I understand it, I then don’t understand what’s in my Facebook account or my Twitter account. And then Google changes something. And then Facebook changes something.’
We heard that time and time again and when we looked at the industry of account managers at Facebook, account managers at Google… you have account managers everywhere. There needed to be a one universal account manager, whether that be a person or software, that can tell you the story about the data and help you optimize. And that’s really the story behind AdHawk.

Ander: Gotcha

Todd: We joined Techstars in 2015. It was just two business co-founders and I think all odds were stacked against us if you look at two business co-founders.

Ander: Haha. Right.

Todd: We applied to Techstars with no product, no engineers, no traction. I think we were one of the earlier companies to ever join Techstars.

Ander: You made it very difficult for yourself. Haha.

Todd: Made it very difficult for ourselves but it installed a sense of hustle that we needed and efficiency in order to keep up with everyone else.

Ander: Of course..

Todd: And that’s been part of our culture today.

So to give you some more about AdHawk… We have a mobile app and a web app that update in real-time. They are connected to Facebook ads, Instagram ads, Google ads, YouTube ads, and Google Shopping ads. And what it does is tells a story around your data.

It’ll tell you that women in Chicago are converting at a $30 CPA but men in Wisconsin with this income level are converting at a $50 CPA. It’ll tell you a story about who your customer is based on location, gender, age, how much you’re spending, and then we’ll provide you with recommendations on how to optimize your account based on that.

And then they can accept or reject any of those recommendations. If they accept, that change is then automatically applied to their account. So no different than what we did as account managers, just way more scalable and across all platforms, not just Google.

Ander: So it’s a virtual account manager in some ways?

Todd: That’s a great way of thinking about it.

Ander: Awesome. That’s really cool and you went into this a little bit already, but I’m curious to hear more about your marketing philosophy. We all have one, whatever it might be, but I’m especially curious to hear how it’s changed since you’ve started AdHawk. Obviously you had to grow this company that is helping grow other companies.

Todd: Yeah, it was very interesting. We started very much with the philosophy of ‘do things that don’t scale.’ So we tried to find any hack or any way we could get by with growing business without really spending any money.

A couple of things we did at the beginning – Google used to offer Google consumer surveys and they used to have $50 free for every email address that you had. What we actually did at the beginning was we opened up over a hundred email addresses and instead of surveys asking people, ‘Are you interested in digital advertising?’ we would actually ask them, ‘Have you heard of AdHawk? Do you know that AdHawk does this? Oh, it can also do this!’

It was a way of targeting people totally for free, giving them ‘questions’ but really just telling them the answers and it was 100% free as long as we opened up an email for every $50 that we spent.

We did some stuff like that at the beginning and I think in order to target marketers they can see through a lot of the, ‘download this whitepaper, maybe listen to this podcast,’ which, of course, I’m on a podcast.

Ander: Yeah, we’re in a similar situation in that we’re both marketers who market a marketing product to other marketers. Haha.

Todd: Exactly. And some marketing people just know if you write a lot of whitepapers and then you see a whitepaper or an e-book online, you can kind of see through that a little bit and say, ‘Oh, well, they want my email, they want to know how much I’m spending. Maybe I’ll just tell them I’m spending more so that I can get the next e-book for free.’ There’s a lot of things you have to think about. You almost have to backwards engineer that you are speaking to a marketer. You almost have to out-market the marketer.

Ander: That’s really interesting. There is a component of that that I actually do appreciate though when marketing marketing technology to marketers. If I see a marketing tool that is advertised to me – I see your ads on Facebook, as an example – I, as a marketer, know that I’m probably in a pretty solid category of someone who you’d want to be seeing your ads.

Todd: Yep.

Ander: If I see a well-done ad that’s done by a marketing company and then I get inserted into some sort of email drip or something like that that to me is actually well done, it validates the product, you know?

Todd: 100%.

Ander: But it’s totally different than some product that’s not in my area of expertise.

Todd: Yeah, and you can appreciate that, right? Because we work with businesses to help them with their advertising, the more that they see our product work or our own ads work online, if they convert on one of our ads, they then automatically believe in our product before even touching it. Because they’re like, ‘Well, you made me convert so your ads definitely work, which means that whatever is powering it, whatever algorithms are behind it, works.’

You’re totally right. And on top of that, I think there’s a couple of other techniques that we used that were successful. I think the number one thing that we’ve done is we do ego-trapping a lot. So what I mean by that is we write a lot of content. It’s probably the number one way that we do get leads. And in the content, we’ll screenshot twenty different ads that we think are really good. We’ll write about them, we’ll talk about why they’re really good, why their products are really good, and then we’ll reach out to those marketers to say, ‘Hey, you were on our list of Top 20 Products,’ massage their ego a little bit and allow them to share it. And we do that a lot. You definitely draw the line of, like, is this click bait-y or is this substantial content? And you have to be a lot closer to the substantial content.

But we try to do as much as we can when it comes to writing strong content, adding in other people as part of the content – whether that’s a quote that they shared, whether it’s mentioning their business so they can help us share it – because if someone like that is sharing our product, it gives us some validity to what we’re doing and other big names in the business.

Ander: Oh, yeah. Absolutely.

Now, since launching AdHawk… how big are you guys now? How big is the team?

Todd: We are twenty people now. In the last two years, we’ve grown the team from zero people to twenty people. We now actually have engineers on the team so that product is moving.

Ander: That’s very good to know! Haha.

Todd: Haha. Yes, it is, yeah. The product is moving really quickly and we actually just celebrated crossing $2 million in annually recurring revenue a couple of weeks ago.

Ander: Nice. Congratulations.

Todd: We’re excited about the progress we’ve made but the digital advertising space is big and it’s only getting bigger so we are a speck among the opportunity and we’re excited about the future.

Ander: So being a speck among the opportunity there, what are some of the unique challenges that you face as that little speck right now? there are so many different advertising optimization tools to choose from. How do you deal with that here at AdHawk?

Todd: Totally. And I think it’s, ‘how do we deal with that with customers? And even early on, how did we deal with that with investors being in the adtech space?’

If you look back in the past, there’s been so many AdTech companies. But what they fought on is, ‘Our algorithm is this big black box and we can be .01% more efficient than you and we’re .001% more efficient than you.’ And it’s just how can we move the needle ever so slightly because there is a limit of diminishing returns when it comes down to it. And, that’s really good when you’re working with the Walmarts of the world or the big Fortune 500 companies of ‘can I get .001% more efficient?’

Ander: Yeah, because that’s hundreds of thousands of dollars more, if not more.

Todd: If not more, exactly. But when you’re working with companies that we target, companies that are spending, you know, $5,000-50,000 a month on advertising, there’s a lot more than that. These customers want to not just lower their cost for acquisition, but they want to understand, ‘Hey, why is this happening? Who is my customer? Who are we optimizing for?’

So we’ve tried to take the algorithm and the optimization outside of that black box by allowing customers to fully see what our algorithm is coming up with and allowing them to take that final action. And that’s been really a huge value add for our customers and a huge selling point for us.

The other challenge in this industry, I think, is there’s a lot of people out there that claim they can do things that maybe they aren’t qualified to do, or that they say they’re powered by something that they’re actually not. If you’re a marketer, you probably get ten or twenty emails every single day from someone saying, ‘I’m an SEO master and we do SEO for all these different companies.’ And same with paid advertising. So we’d have to break through from that noise when our customers are getting berated with cold emails every single day. It’s a bit of a challenge but, again, I think you said it best: if you see our advertising, you see our content, you see some of the podcasts that we’ve done ourselves, and you find it interesting and you end up converting, you’re then automatically bought in to our product because you see the value in it.

Ander: Very interesting.

What are some of the big mistakes that you see people making with advertising?

Todd: The biggest one I see is marketers can’t be good at everything, right? I’ve seen big companies spending millions of dollars that will say, ok, you know content marketing or you’re our podcast guy or you’re our TV producer, and because you know marketing we’re going to go have you manage our AdWords account or our Facebook ads account. And, I believe that person can handle it and most of the time can hold down the fort. But when you’re spending that much money it’s such a niche skillset to know that what I find is that you get this person thrown in this position, they can hold down the fort but they’re a little bit over their head, A) because they’re doing a million other things like everyone at every start-up, but B) it’s a very, very specific skillset.

What ends up happening is they’ll try a strategy or they’ll try Facebook in general or just Google in general and they’ll say, ‘It’s not working,’ and they’ll shut it down and just say, ‘It doesn’t work for us.’ If you actually look underneath the hood, there was a small setting or a small adjustment or a small targeting thing that all of a sudden their cost for acquisition goes from $50 to $10 and they’re like, ‘We completely said no, we’re never going to advertise on Facebook again or we’re never going to advertise on Google again,’ but they didn’t actually give it a fair shot with someone that was knowledgeable. They just kind of hoped that what they were doing was correct and if it didn’t work that one time, it was never going to work. We see that happen all the time.

Ander: Absolutely.

Todd: Another big mistake people make is we live in a mobile world and if you want to advertise on mobile, you need to make sure your site is mobile optimized. And, that doesn’t just mean you can pull up your website and when you pull it up it renders correctly.

I mean, you guys know that at Instapage. The form needs to be a certain way and you need to use analytics to figure out where certain elements need to be. It’s not just that it renders properly.

Ander: There’s also a psychology aspect behind it too. Normally when you’re on mobile you’re probably engaged in more discovery than actually purchasing or engaging in that conversion. When you get to that post-click landing page, your attention span is even lower. There’s probably other things going on around you, you’re on public transit or whatever you’re doing. It’s not just actually having the page look presentable. It’s the psychology of it as well.

Todd: 100%. And you have to be able to tell the right story. You shouldn’t be looking at these ad campaigns as: is this campaign working? Is this mobile device or post-click landing page working? It’s is the funnel working?

If you can get really qualified traffic from mobile devices into a specific post-click landing page, telling a specific story, you may not necessarily see a lot of conversion. But what you might see is your brand searches go way up when you advertise for this top-of-funnel mobile traffic because these people are coming to your site. They aren’t ready to convert that day but over the course of the next week, month, or couple months, they may come back and actually convert on your site whether you do that through your marketing or you do that some of your own channels.

Ander: Right.

Todd: I just would recommend looking at all of your paid advertising, not just on a campaign by campaign basis but an entire funnel and how they affect each other.

Ander: Exactly. Now, the tricky thing with that is attribution.

Todd: Attribution is extremely difficult because every company wants to have their own attribution and define a conversion the way they want to define a conversion. We’ve seen Facebook mistakenly over-count that recently.

But yeah, that is definitely an issue. At the end of the day, you can use some third-party tracking pixels if you do want to. But if you know the products well enough, you can set it up that they’re all pretty similar with very little waste.

Ander: Does AdHawk address any of that?

Todd: In terms of attribution, we sit on top of Google and Facebook’s attribution but we do hope you align the settings so that they equal each other. Facebook counts a lot of view-through conversions whereas Google and their conversions column doesn’t do that. You can add in other columns for that but it doesn’t. We just make sure that whatever you’re doing on Google aligns with whatever you’re doing on Facebook. If you do include view-through on Facebook, then we make sure to include view-through on Google and vice versa.

Again, I don’t think there’s necessarily a right way to do attribution as long as it’s consistent across your channels. That is the most important thing. It’s not ‘Do I count view-through? Do I not count view-through? Do I count 5-day? 1-day?’ Just be consistent and the rest should take care of itself.

Ander: Do you think that marketers, advertisers, and brands are under-personalizing their advertising, and not taking advantage of the degree to which they can get really granular with their audiences?

Todd: Yeah, I mean, as a marketer I think you read too much into it, right? You can sit there and say, ‘Wow, this is creepy.’

A good example is a lot of our customers use Gmail ads. Gmail ads are pretty cool. They allow you to target businesses based on who they’re sending emails to and what they’re saying in their email. Now, that sounds creepy but it’s no different than I can target you based on what you’re searching in Google or I can target you based on the things you’ve searched previously.

Ander: Right.

Todd: It’s all the same. But as a marketer we just think way too much about it. But I think the average customer appreciates a highly targeted ad that doesn’t feel like spam. As then soon as you see an ad for something that you actually really want and you like, it’s actually a good feeling. I don’t think that ads always have to feel that bad. We’ve gotten some feedback from customers that have told us that they wished that they could have an Instagram feed of just ads because it’s a good way to discover products.

I know I’ve bought products off of Instagram ads multiple times of things I never knew even existed.

Ander: Oh yeah. That’s how I found out about AdHawk for the very first time. Haha.

Todd: There you go! It’s actually funny. Our ads have not just helped us with sales and growing the business obviously, but we’ve had conversations recently with HubSpot and with Google and both of them found us from an ad. We’ve actually had business development opportunities from people seeing our ads, not just sales opportunities.

Ander: One of the things that I think is interesting is that as the level of advertising personalization continues to increase, there might be some “creepy stuff”… Maybe they’re sending ads to you in your Spotify playlist because of data that’s being collected in your car or something like that.

Todd: Sure.

Ander: But I think that there’s a case to be made that as these ads become more and more relevant, people are going to be bothered less and less by them. Do you think that that’s true?

Todd: I think that’s true. Actually, I have this conversation a lot with my friends that aren’t in tech.

Ander: I do too.

Todd: Yeah. And the truth is we look at it very differently. Google, Facebook, all these companies would rather the customer pay $5.99 for unlimited Google searches. The problem is, if you say that to someone, they’ll say, ‘No way! Google should be free forever.’ And the truth is, if you want to keep using Google or keep using Facebook or Instagram, they have to make money somehow. There’s a big demographic that is up in arms about advertising. And I get it; there is some spammy advertising. There is some advertising that makes it so that when you’re on an article you can’t even read the article without getting so many ads.

Ander: Ugh. That is awful.

Todd: Yes, that’s awful. Totally. But I think Facebook and Google have both done a good job of controlling that and doing it in a way that doesn’t ruin the user experience.

But they have to make money and if anyone is willing to pay them $5.99 or a quarter every time they make a Google search, they would rather that but that’s just not the cultural norm right now.

Ander: No. And the other thing though is that Google makes software that allows you to block ads.

Todd: Oh, yeah.

Ander: I mean, the company that needs to make money from the ad revenue is also giving consumers the opportunity to not see those ads at all.

Todd: Not see those ads and provide feedback on those ads like, ‘Hey, I don’t want to see this. This is why I don’t want to see this.’ On YouTube you can skip the ads. So there’s a ton of different ways that they offer that. There’s, YouTube Red, the paid subscription service with no ads.

Ander: Yeah.

Todd: They want quality too. It doesn’t help them to have not-quality, untargeted ads in their feed. That doesn’t help anybody. The couple of dollars they’re getting in revenue from that is a drop in the bucket for these guys. They would much rather have quality advertising, happy customers, and happy advertisers.

Ander: What makes poor advertising? What’s something that you see people doing right now that is just resulting in these awful, awful ads?

Todd: Not knowing the person you’re actually targeting. When we started AdHawk, we had to do some of our own advertising and we said, ‘Alright, here are four personas of people and based on these personas, this is the message that works with this person, and this is the message that works with that person.’

Too many times people say, ‘Alright, here’s my target market, and here’s the one message that all of them are going to attribute with.’ That’s just not the case. I would highly recommend before you start, before you put any money in advertising, really define those four personas – define who they are, why they want your product, how much money they’re willing to spend on your product, and then I would challenge you to open up another persona of someone that is wildly different than that and open up another persona of someone that is wildly different than that. Because one message, as you guys know, one post-click landing page isn’t going to just attract all of the people that you’re targeting.

Ander: Our philosophy is that every ad, or at least every campaign, every promotion, needs a page.

Todd: Yes. I would totally agree. If you have the ability to do that, I would sign up for Instapage and get that done. Haha.

Ander: Haha. Well, that’s why we built the platform! So thank you for the kind words there and the shameless plus, I suppose you could say.

Todd: Yeah.

Ander: Todd, where is marketing going? Where is advertising going? Every time I ask it, people say, ‘That’s a big question,’ and I say, ‘I know, that’s why I asked it!’

But what is the space going to look like a few years from now and how can we as marketers and as advertisers prepare for this coming future?

Todd: To be part of everyone else, that’s a big question. But I’ve seen a couple of things. So, one of the more interesting things I’ve read recently is about how voice search is going to affect Google AdWords in particular. So when people are searching, they say things differently than how they would type them.

Ander: Interesting.

Todd: So there are now, if you look at your Google search terms, you can see people asking more questions rather than giving prompts.

Ander: With voice.

Todd: Because they’re using voice to do those searches.

Ander: Right.

Todd: But then what they’re going to do is they’re going to do that and it’ll come up with a search on their phone, right? They’re going to use their phone to do that search then it’s going to come up with some ads and they’re going to click on the same ad that would have come up if they could have just typed that into Google themselves. So we’re seeing the types of searches change. I’ve seen from direct searches and prompts to more so questions. And, you can change your keywords that way in order to help you.

On the Facebook side, I’m not too sure how voice is going to affect what they’re doing but what I am seeing just in the industry as a whole is consolidation. We see these companies that are, you know, very specifically focused on email marketing or these other companies that are focused on, maybe, making great post-click landing pages and these other companies that are really focused on paid advertising.

That was good over the last five or ten years but the truth is now in order to have good paid advertising, you need a good post-click landing page. In order to have a good post-click landing page, you need to then also have good email marketing. And they all work really well together and previously you could just focus on one or two of them and that would be enough. But now if we’re helping you drive the best customers to your website through paid advertising but your website isn’t up to par, you’re not going to get the highest conversion rate. And then if half of those people convert and they need to go to an email drip campaign and you’re not using a good email drip software, then you’re not going to get the highest conversion rates there. I’m seeing a lot of consolidation of companies that initially only focused on one part of marketing automation who are now saying, ‘This is great but we could be a lot better at this if we can focus on the other challenges they’re facing in order to kind of close the loop.’

Ander: So it sounds like we all need to be looking at our funnels more holistically.

Todd: Yeah. I would definitely say that’s a good summary. A better summary than what I said there, yeah!

Ander: Haha. Awesome. Well, Todd, this has been a really interesting conversation. I love what you guys are working on at AdHawk. You’ve got a kind of neat office here right in Chelsea above a nightclub that you’ve never been to which, again, is very interesting. Maybe you’ll have to go at some point.

Todd: They don’t allow people in t-shirts and shorts. Haha.

Ander: Oh, I see! Ok. Haha. For sure. Well, thanks again. I really appreciate you taking the time to do this.

If people want to take a look at AdHawk and they want to learn more about you guys, what is the best way they can do that?

Todd: You can visit our site. It is tryadhawk.com – T-R-Y-A-D-H-A-W-K.com. We’re also very active on Twitter, so if you tweet @AdHawk or even at myself @ToddSaunders, we try to enter AdHawk questions or just digital marketing questions in general. So, feel free to reach out.

Ander: Yeah. And check out their ads. Hopefully you’ll see them because they’re really good!

Todd: Yeah, exactly.

Ander: Alright, Todd. Thanks again. We’ll talk to you soon.

Todd: Alright. Appreciate it.

Adam Lovallo is a Co-Founder and the Editor in Chief of Grow.co, a publication dedicated to the growth of mobile applications. Adam and Grow.co is also responsible for putting on MAU, the world’s leading mobile acquisition and retention summit, hosted annually in Las Vegas.

Previously Adam was the Head of Growth at Living Social, a social deals app, where he managed a 9-figure advertising budget and a team of 15 other marketers. He is also the founder of Course Report, an online resource for individuals considering enrollment in coding, design, marketing, or other technology boot camps.

Here are some of the topics discussed in this episode.

Marketing Mobile Apps Can Be Incredibly Challenging

The number of challenges facing mobile app marketers is daunting. In addition to having mobile application stores act as an additional friction point, the created user behavior of quickly testing an app has made retention difficult.

“I also think that we’ve sort of created an expected user behavior. It’s so seamless to install an app. There is no risk. You can try it out. There’s a known behavior to install, look at the app for ten seconds, and then uninstall it. Like, totally normal. I never would go to a website, go through the account creation process and then just leave instantly. It’s just not a behavior… So that’s why the retention rates, in part, are so poor and it’s somewhat unfortunate user behavior, particularly if you’re talking about investing in user acquisition dollars. You just spent $20 or whatever to get that person to install the app and then boom… They’re gone in five seconds. ”

While a significant portion of Facebook’s advertising revenue is mobile application installations, the unit economics of advertising for top-of-funnel acquisition frequently don’t add up, especially when a 10% retention rate in the first 90 days is considered successful.

In-App Video Ads Works, and Are Not (Necessarily) Intrusive

Common sense might suggest that in app-video ads companies use to monetize their mobile applications are annoying, intrusive, and disruptive to users. On the contrary, not only do they work, but they can even present an equal value exchange for mobile application users if the content is something the users actually enjoy.

“There are plenty of companies that are monetizing primarily through ads that do well in addition to the virtual goods sales you were alluding to. In some cases, you look at networks like AppLovin, Vungle, Supersonic, AdColony… Those are rewarded video networks so as a user, you watch this video and then you’ll get coins and you can use the coins within the app that you were just playing.

You might call them a sort of value exchange. Creatives, can actually can work really well. I think sometimes the intrusive formats aren’t necessarily a sign of desperation. In fact, the rewarded video stuff specifically, people like. It is really intrusive in that you literally cannot advance to the next level without watching this video but the video’s not disinteresting and you get a reward for doing it. So it’s like, ok, it’s not a terrible deal. At least from the advertiser’s perspective, there’s some focus being paid to the creative as opposed to a random banner ad online. So, I wouldn’t assume that intrusive necessarily means bad user experience or intrusive means desperation.”

Additionally, these in-app video ads don’t indicate desperation by mobile app companies to generate revenue. It’s also an opportunity to present users with a potential reward for engaging in the application.

Mobile Micro Services Have Potential

The future of mobile applications might lie in the microservices popping up within the applications we use every day, especially messenger apps like iMessage and Facebook messenger.

“In the medium term I think one trend that is interesting is a mess of apps that live within messaging apps as little micro-services…For example, I love Yelp. I think it’s spectacular but I don’t use it all the time. Does it necessarily need to be on my phone every day as a little button? Or could it live within the confines of something that I do use every day in a way that makes sense? That’s an interesting trend.”

In the same way that marketing technology integrations are simplifying our work as digital marketers, microservices and consumer integrations between popular niche products and those they use every day might increase acquisition and retention in mobile applications.

Transcript

Note: this transcript has been lightly edited for clarity.

Ander: A few of the guests I’ve had on this podcast, Advertising Influencers, I have talked to in the past and I’m talking to one of those people today, Adam Lovallo.

Adam, thanks so much for making time at the end of this Wednesday. I know you’ve had a really long day, so I really appreciate you having me here at your office.

Adam: My pleasure.

Ander: Now, you do a lot of things… You’re the co-founder of Grow.co, you do some work with venture capital, there are a million things that you’ve got going on.

I think that the best way to get started is to hear, in a nutshell, how you got to where you are now and what you do. Also, tell us about Grow.co! it’s awesome.

Adam: Ok, I’ll take those down one at a time.

Ander: Sure.

Adam: Grow.co is basically a community or conference business. We do events focused on growth marketing generally but with a very particular focus on the mobile app ecosystem. And to me, that is a sort of discipline inclusive of acquisition, most of which is paid, some product, some components of product teams, particularly around referral programs, user onboarding, etc, and then the world of CRM, email, push notification, in-app messaging, whatever.

We do a weekly newsletter, we have online forums, and really our main thing is a large event that we have annually in Las Vegas that kind of brings the mobile app community together. We started it almost four years ago now and the event has grown over time, the community has grown over time and we’ve sort of found a little niche in the mobile app space, in large part because that’s so – even still today – so nascent.

Ander: Yeah. I mean many of the thought leaders that I’ve interviewed for this podcast are working with primarily desktop products. They might have a mobile app or something like that.

Adam: Yep.

Ander: But, SaaS products and other things like that are not necessarily quite as conducive to the mobile experience. However, mobile’s huge!

Adam: Yeah. You know, you’re physically here in New York and that’s part of it. Like, there aren’t that many companies in this market that are doing that much in mobile. Some people would take exception to that.

Ander: Specifically in New York?

Adam: Yeah.

Ander: Interesting.

Adam: Because New York, I think, if you look at the tech scene, over-indexes tremendously into AdTech and to eCommerce, and couple of other areas. Maybe FinTech too.

Ander: Right.

Adam: But for consumer-facing mobile products… there aren’t that many large teams here in New York. There are some but it tends to be way more concentrated on the West Coast.

Ander: Interesting. Ok. And that makes sense, especially with the AdTech and the FinTech as well. Totally understand that.

Adam: Yeah. But anyway, we’ve been doing grow.co for the last four years. I started the business with my partner Jay, who’s just around the corner here, after working LivingSocial for a long time which is the daily deals then Groupon competitor. Really at the time I just thought, ‘Oh, there’s no real community for people who are self-identifying as growth marketers,’ which in and of itself is a somewhat nebulous definition.

But I thought, ‘Ok, well, if there’s no community for that, we can probably do something there and add value.’ It’s a modest business in just dollars and cents terms but I think we’ve had a relatively outsized impact in this space. So that’s been cool to see it grow.

Ander: Awesome. What’s something in that four year period that you’ve learned? And, what are some things that might have surprised you along the way?

Adam: I’ll give you two answers: I’ll give you the industry-level answer because I think that’s interesting and I’ll give you more of a business-level answer.

Ander: Perfect.

Adam: So the industry level… If you go back five years to when we thought about starting this business, there were a lot of questions that people were just trying to answer. How does attribution work in this mobile medium? What are the main sources of traffic? How should I think about utilizing push notifications in concert with email? What are the right flows through which users can be driven? Can I link a user from the mobile web to an app at all? Haha.

Ander: Haha yeah.

Adam: Really basic stuff. And our event and community – not just the event, but also the newsletter and the online forums and stuff – was really about answering those questions. It’s like, hey, there’s this thing called ‘deep linking,’ here’s how it works. Today, as that space has matured, a lot of those questions that were asked then are just understood.

Ander: Right.

Adam: Oh yeah, of course. You’re doing deep linking, you need Branch. You’re thinking about push notifications, here’s this thing. Sources of traffic, like, X, Y, Z… a lot of which is Facebook.

I’ve never really seen a transition like that in an industry or have been part of one and sitting in this role, I’ve been able to see that. That’s been really cool.

I think the level of sophistication has increased and the world is far better understood by many more companies. There are still lots of people that need to figure out the mobile app space and the mobile space in general, no doubt. But you look at organizations like New York Times and Nickelodeon and stuff and they have really good mobile apps and really good mobile teams behind them. That was definitely not the case even only a couple of years ago.

Ander: Very true.

Adam: So yeah, that I think has been the biggest thing in terms of the industry.

In terms of the business, or really the community, I have learned a lot in the process about community building. My biggest learning is that one-to-one conversations are the most effective way to really go about this. Because at the end of the day, we want people to be part of our forum, we want people to get our newsletter, and we want people to come to our events. And we want them to get value out of that. The best way to convince people that that is a worthwhile value exchange is to physically talk to them.

Ander: In person.

Adam: In person, over the phone, whatever.

Ander: Right.

Adam: And just honestly demonstrate, to some extent, that I know what I am talking about and more so our community knows what they are talking about and therefore it is worth investing your time to be part of that.

With the conference business in general, the best way to get people to come to stuff is if you actually know who those people are, what they’re interested in, and what are the topics they’re interested in. That can be kind of painstaking. It’s a lot of conversations, it’s a lot of phone calls, it’s a lot of happy hours and dinners, and just sort of staying in the mix. So I’ve slowly gotten better about that over time. And once you get someone in a community like this – in any community – and there’s a level of buy-in, it becomes a lot easier. Getting really great speakers to give presentations at our events is a hundred times easier today as it was five years ago.

Ander: Oh, yeah. It’s the same with the podcast, you know?

Adam: No doubt.

Ander: I can cold email somebody who I’ve never met before and it’s much more likely they’re going to come on than at the very beginning of the show when we didn’t have any guests so far.

Adam: Totally. Totally. So, that’s been a big lesson for me. I mean, it’s a pretty basic one I suppose but I took for granted that that would just happen and it really didn’t. It required going out and meeting people.

Ander: Yeah.

Adam: And now it’s quite a bit easier and it gives us a platform to do more stuff more quickly and grow.

Ander: Yeah, for sure.

Let’s talk about mobile growth, specifically. Obviously there’s a whole different quality of experience. It’s a whole different user experience when you’re on mobile. Many times you’re on the go. When people are clicking on ads on mobile you want those post-click landing pages to be conversion friendly upfront, you know? Make it super simple for them.

And one of the things that I actually talk about in some of my webinars I do at Instapage is how it’s not just that it has to be mobile friendly, where it renders effectively on a mobile device. It also has to account for the different environment someone is in when they’re on their mobile device.

Adam: Oh, for sure.

Ander: You’re on the bus. You’re browsing through Facebook and clicking on something and your attention is in different places, etc.

What are some of the things that you really see people struggling with when it comes to mobile app growth?

Adam: Well, a couple of things – if you look at the top free charts (formerly top grossing charts, although those no longer exist, at least in the way they used to), there has not been as much movement in the last year or two as there was in the early days of the app store. In other words, it is – like most things – very much an 80/20 rule applies. It’s extremely concentrated usage in a handful of companies and apps. So breaking through that is really tough.

People talk about app discovery being really difficult and they’re right. It is really difficult. And you say, ‘Alright, well, I can do paid channels,’ right? Basically Facebook’s business today, the way they actually generate revenue, is mobile app installs. It’s a massive percentage of their revenue.

Ander: Really? More than 50%?

Adam: I think so. I could be wrong about that but it’s a large percentage. And you say, ‘Ok, well, that’s cool. We’ll do that.’ The trick is the economics are tough so if you say, ‘Well, to get an install paid, I might be paying three, four, five dollars potentially more for the average user to be worth in excess of, say, five dollars in contribution dollars.’

It’s not just revenue but actual contribution. That’s a relatively high bar in the context of an ecosystem in which 90-day retention rates for an app could be 10% or something.

Ander: Is a 90-day retention rate of 10% considered good?

Adam: That’s considered average, depending on what numbers you look at.

Ander: Ok.

Adam: But you say, ‘Alright, five dollar install, 90-day retention, average user that is retained after 90 days is fifty dollars.’ That’s a large number. So at the end of the day, paid user acquisition, is really just not economical for a lot of business. Maybe even most.

Ander: I’m sure it works for some.

Adam: Absolutely. If you’re Machine Zone and you’ve got three of the biggest games in the world and you monetize people like crazy, you can spend a zillion dollars a year, which is actually what they do.

Ander: Sure.

Adam: But if you’re a company like Yik Yak that’s anonymous messaging and there is no model yet even though there might be one day in the future, it’s almost impossible to imagine a world in which paid user acquisition is ever going to back out on its own.

I think app discovery is really tough in part because just the costs of doing paid marketing are so tremendously high. A lot of people point to this, like, ‘Ok, so, fine. Paid is tough but I can at least take advantage of deep linking, convert web and mobile web traffic to installs.’ And for sure that is doable. Take the user out of the mobile web, deep link them into the app experience, give them a good custom on-boarding experience in the app. The app is probably faster and better than the mobile web almost without a doubt. That’s not a bad funnel but it’s completely predicated on having a site that has a ton of traffic.

Ander: Right.

Adam: Which is non trivial.

Ander: Yeah, yeah.

Adam: So yeah, it’s tough. And I think… look no further than the fact that there haven’t been that many really big new mobile app businesses that are consumer-facing that have started in the last couple of years that are in an ascendant position. Duolingo just raised a ton of money so that’s a pro example.

Ander: Right.

Adam: But they are few and far between. It’s really, really becoming very concentrated in the big players, especially in gaming.

Ander: Yeah.

Adam: And honestly it’s hard. I think it’s certainly doable to find the right spot if you can sell with user acquisition in a unique way, and I’ve seen a couple of instances of that of late. But otherwise I think you have to be a lean, very-focused product that solves one very particular problem because just putting an app into the store basically does nothing these days.

You need to be thinking about app store optimization and say, ‘Ok, we’re going to make an app that measures blah, blah, blah and we’re only going to rank for this one search term and that’s all we care about and that is our growth lever.’ And that’s viable. But, launch a new social networking app tomorrow and see what happens. That’s tough.

Ander: Yeah. I’m thinking about the way that I discover apps and a lot of it, funnily enough, is me waiting for an appointment or something and just browsing the app store?

Adam: Absolutely.

Ander: Looking at what’s ‘trending now’ or ‘what’s hot.’ All that stuff. Another way that I discover a lot of apps, that I’m just realizing now is Product Hunt.

Adam: Interesting.

Ander: Yeah. I don’t know if that’s something that you’ve encountered.

Adam: I mean, I suppose for nerds that is the thing. Like us, for sure.

Ander: Haha. Right.

Adam: But real human beings I would say probably not. Like, normal consumers.

Ander: Yes, that’s fair.

Adam: But yeah, you’re right about the app store. That in and of itself creates challenges. So if the app store is so critical, which I think it is, your placement within search results and within the app store, is critical and whether you’re being featured on an editorial basis is critical. And so, to their credit, the Apple and Google teams have tried to democratize that to some extent. They’ll feature indie games and they’ll feature big games, etc.

But at the end of the day they still very much over-index to featuring the big companies that are creating these products, that are heavily invested. So that, makes it harder to break into, in some respects because there’s this additional gatekeeper that can throttle you up or down on how much exposure you’re getting that you can kind of influence but not really. It’s largely at their discretion. But yeah, word of mouth and just searching within the app store… Probably in excess of 50% of new installs are coming from some combination of those two. And that’s pretty difficult to actually influence.

Ander: Yeah, for sure. I’m wondering also what percentage of new mobile app installs are apps by the New York Times or NPR or other brands that are already huge, you know?

Adam: Absolutely.

Ander: Do you have any sense of that?

Adam: Vast, vast, vast majority. Extremely concentrated in the top 100 or top 250. Immensely. And if you really drill down, the top 10, 20 are, orders of magnitude bigger than guys further down the charts.

So, yeah. You are very correct that it is very, very concentrated. And the average user, depending on that stats you look at, is only using X number of apps a month. Maybe, ten or fifteen.

So you might install something, you might install fifty things over the course of your phone’s life but you maybe only use five things consistently. So all of those variables coming into play it’s like, this is tough!

Ander: Yeah.

Adam: I also think that we’ve sort of created an expected user behavior. It’s so seamless to install an app. There is no risk. You can try it out. There’s a known behavior to install, look at the app for ten seconds, and then uninstall it. Like, totally normal. I never would go to a website, go through the account creation process and then just leave instantly. It’s just not a behavior.

Ander: Haha. Yeah, that’s true.

Adam: It’s like, why would you do that? But in the mobile app space, it’s like boom! Click. Install. It’s on my phone, I open it, click, click, no. Gone.

Ander: Yeah.

Adam: So that’s why the retention rates, in part, are so poor and it’s somewhat unfortunate user behavior, particularly if you’re talking about investing in user acquisition dollars. You just spent $20 or whatever to get that person to install the app and then boom… They’re gone in five seconds.

Ander: I’m wondering about the mobile apps that have been successful. There’s Tinder and there’s Snapchat.

Adam: Sure.

Ander: Which are mobile platforms. I mean, maybe they have a web app now but that’s really how they became what they are.

Adam: Absolutely.

Ander: Also thinking about other ones, like, Mint, the finance app acquired by Intuit. Stuff like that. And I wonder what those apps really did that was the tipping point for them breaking through the noise.

Adam: Yeah, I wonder that too. And if I had that answer, I would probably not be talking to you because I’d be a billionaire right now.

Ander: Right.

Adam: I mean, at the end of the day – not to belittle their success – but at some level, one out of a million things is going to hit and so I think that’s partially it. I think obviously they’re great products, product market fit, and also timing of when they launched into the store. Tinder’s interface is unique but it’s not that far from, like, Hot or Not which was a site twenty years ago.

Ander: Right.

Adam: Or fifteen years ago, whatever. But they did a spin on it, they put in this mobile form factor, there’s obviously the location component, which is brilliant, and they were the first one there really doing that. There have been a myriad of companies who have basically copied Tinder subsequently, none of which are really material. I mean, maybe with a couple of exceptions.

Ander: Right.

Adam: So, yeah. I don’t know what the secret sauce is but I do know that today it is really hard to break through. But this is all super cynical and negative as is sort of my natural inclination as a growth marketing person…

Ander: Haha.

Adam: Couple of interesting use cases that I’ve seen are, like, ‘Ok, what if we build an app business where we’re really solving for organic word-of-mouth user acquisition from day one?’

Ander: Interesting.

Adam: So there are these guys in New York who are doing this sort of network of community apps. They’re essentially subreddits with a really niche, really narrow areas of focus. Once you get a little seed of people who are really into board games or whatever within that board gaming community on that app, they can really grow it organically. I think that’s brilliant. Multiply that by a thousand interests and, ok, you start to have a real user base.

Ander: Yeah.

Adam: That’s obviously a totally unique case but an interesting one. And I think that it’s a strategy will allow them to work around having to pay Facebook $5 an install, which probably never would be economical. It still can be done but it’s just a lot harder than it was years ago. A lot harder.

Ander: Shifting gears to something a little bit different but still very much related, especially with the way that these mobile apps are monetizing… There’s a lot of freemium products out there. In some cases there’s gated content or you are required to buy more tokens to play a game.

Adam: Yeah.

Ander: But some apps monetize with ads. That said, every time I’m on a mobile app and I see a very intrusive ad, my thought is, ‘Well, these guys are desperate,’ you know? However, that may be completely off base. I’m wondering how many companies are actually successfully monetizing their applications by installing ads.

Adam: I think it depends. The gaming sector is over 50% of the mobile ecosystem for a reason. And it’s not because they’re all losing a ton of money. There are plenty of companies that are monetizing primarily through ads that do well in addition to the virtual goods sales you were alluding to. In some cases, you look at networks like AppLovin, Vungle, Supersonic, AdColony… Those are rewarded video networks so as a user, you watch this video and then you’ll get coins and you can use the coins within the app that you were just playing.

You might call them a sort of value exchange. Creatives, can actually can work really well. I think sometimes the intrusive formats aren’t necessarily a sign of desperation. In fact, the rewarded video stuff specifically, people like. It is really intrusive in that you literally cannot advance to the next level without watching this video but the video’s not disinteresting and you get a reward for doing it. So it’s like, ok, it’s not a terrible deal. At least from the advertiser’s perspective there’s some focus being paid to the creative as opposed to a random banner ad online. So, I wouldn’t assume that intrusive necessarily means bad user experience or intrusive means desperation.

Ander: Awesome.

Adam: But you’re definitely right to some extent in that 320×50 little pixel standard banner ads on mobile monetize very poorly and many of the clicks that they do generate are accidental.

Ander: Haha. I mean, that’s the other thing.

Adam: Right. There is definitely a shift to larger, more intrusive I guess, ad formats. And look no further than Facebook, right? Facebook is auto-rolling video that are essentially the entirety of your feed as you scroll by them. I would argue that that is rather intrusive.

Ander: Yeah.

Adam: And it works. People respond to it. So, you know, that is the state of mobile user acquisition which really at the end of the day is 75% of Facebook and Google conversation.

Ander: Yeah. So that’s the state of it right now but what does the state of it look like five or ten years from now? I mean, I’ve seen articles that have said we’re not even going to have mobile phones in ten years because everything is just going to be a wearable device. Who knows if that’s true or not.

But where do you think this space is going?

Adam: I wish I was smart enough to really answer that question.

Ander: Well, you’d be a billionaire. Haha.

Adam: Exactly. I’m working on that.

Ander: Yeah.

Adam: In the medium term I think one trend that is interesting is a mess of apps that live within messaging apps as little micro services. The cliché – but still legitimate – reference example that people point to is WeChat in China. So they say, ‘Oh! WeChat in China for a lot of people coming onto the internet, the mobile device is like the first real device that they’ve used,’ and so it’s like the first thing that they’ve encountered.

WeChat is massive and messaging is obviously really important. It’s basically why phones exist, and having these little third-party services that exist within the confines of the messaging app make a lot of sense. Banking, ride sharing, whatever.

I think that’s super interesting. What it does from the user’s perspective is it simplifies things, you’re always in the messaging app so it’s always right there. There’s obviously the opportunity to have really clear sharing and sort of virality inherent to being within a social platform like a messaging app. And at the end of the day, this sounds like a dumb thing but it’s just not another little button on your phone.

For example, I love Yelp. I think it’s spectacular but I don’t use it all the time. Does it necessarily need to be on my phone every day as a little button? Or could it live within the confines of something that I do use every day in a way that makes sense? That’s an interesting trend.

Ander: Really interesting.

Adam: None of this by the way is an original observation but it’s something that I’m quite interested in. So you say, ‘Oh so this is what’s going on in China with LINE, WeChat, etc,’ and it’s already a thing today. The question is in more Western markets. How far do you get? And the closest we’ve gotten today is within Facebook Messenger, which Facebook is using as kind of a test bed.

They have this HTML5 app platform called Instant Games, basically an HTML5 app. They basically load instantaneously, you play the game within the confines of Messenger, within the Messenger app. Third-party developers can deploy their games to this platform and because it lives within Messenger, there’s all this functionality that you couldn’t otherwise do.

Ander: Right.

Adam: Tapping into an existing social graph, having leaderboards by region, easy ways to share, like, all of that stuff is enabled because it’s within this messaging platform. So that’s one thing that I personally think is interesting. Whether it’s Facebook Messenger, WhatsApp (all of which are Facebook products, by the way)…

Ander: That’s right.

Adam: Snapchat… I don’t know. Give some of these developers the opportunities to build experiences on top of them that actually make sense. For instance, if I’m texting my girlfriend within Messenger – or really messaging my girlfriend within Messenger – having experiences online, and they already are doing this by the way, they’ll share the restaurant that I want to go to seamlessly.

Ander: And any time I type into Facebook Messenger, ‘You want to meet at 5?’ or something like that, it comes up now ‘start plan,’ you know?

Adam: Right. Yeah, exactly. Even in iMessage. There’s iMessage apps now, which essentially the same concept – building little services, little apps on top of what is something that a billion people use or whatever.

I think that’s a really interesting trend in mobile, really in general, because it maybe – maybe – would be an easier lift to get someone to, on occasion, use Yelp in the confines of one of these other platforms versus installing Yelp, having it on their phone, and having this separate thing that they remember where it is and that they go to click on it when they need it. I don’t know that you ever get to the point where even WeChat is today but maybe so. That’s a medium range or maybe a long range trend that I am quite interested in. And at the end of the day I’m a growth person so part of the reason why it’s interesting to me is that end lock potentially unlocks really big growth opportunities.

If I could build an app on WhatsApp – which a zillion people use – that makes it really easy and useful for people to share it because that’s the inherent nature of the product I’ve built, that’s something that could grow really quickly.

Ander: Yes. Certainly agree.

Adam: So, who knows? I think it’s even conceivable – if I’m right about any of this – that a lot of the incumbent players in these various use cases or categories could face competition from someone who is focused on travel or focused on restaurants or focused on whatever, but within that environment. Maybe that’s where potentially Yelp’s next competitor comes from or TripAdvisor’s next competitor comes from. Potentially. And the gaming case is really the test case. That’s what’s there now so we’ll see where that ends up. But I am personally quite [inaudible] on it and I think the experience is actually not that bad. Like, play an Instant game. Challenge your friend. Like, it’s pretty good.

Ander: Yeah.

Adam: Yeah. It’s totally intuitive. And it doesn’t strike me as a huge stretch. If I can play a game with you, why can’t I, you know, plan a trip with you within the same confines? You know, it’s right there.

Ander: Absolutely. Is there anything that we as marketers can do to prepare for all this?

Adam: I think the biggest thing is just being aware of it and using this stuff.

Some people in the gaming space are doing this and building products for this. To me that, I think, is the biggest thing. There are little shades of this, so Facebook says, ‘Oh, you can create a bot and you can use the bot on your own site for customer service use cases.’ That’s probably not something that anybody should be doing today. It’s super experimental but it’s kind of interesting. I think it’s worth being aware of what is possible.

And, read a couple of articles about how WeChat actually works and their mini-program stuff and all of the stuff that I’ve referenced. I think that is a worthwhile activity because it does seem somewhat inevitable. Maybe not to the extent that I’m speculating about. But for customer services use cases or whatever, why would those not be built on top of existing communication platforms? That, to me, makes sense.

Ander: For sure.

Adam: So yeah, that’s my tip. That’s what I’m trying to do!

Ander: Yeah. Awesome. This has been by far the most mobile-centric conversation I’ve had on this podcast.

Adam: Good!

Ander: And it’s really interesting. We’re going to have to see how all of this stuff shakes out, especially with the Internet of Things and all the other technologies coming out. It could be a totally different universe five or six years from now.

Adam: Absolutely, I mean, look at where it was six years ago.

Ander: Right.

Adam: You know, you need no more evidence than that.

Ander: Exactly. Well, Adam, I know you’ve had a long day. I’ve had a long day too. I still have more work to do and I imagine you might as well.

So, thank you so much for inviting me up to your office here right by the Flatiron district of New York City. I really appreciate it.

If people want to check out anything you’re working on what’s the best way they can do that?

Adam: Grow.co. You can contact me. It’s not hard. We have a newsletter. You can check out our event. And most importantly for people listening to this, I think we have a couple of Google Groups forums that you can access through this site. There’s an application form. I keep them vendor-free so anyone on the sales side I don’t let in, only basically people working on the marketing side.

Ander: Interesting.

Adam: For a consumer-facing business.

Ander: Cool.

Adam: And, not that I have any problem with sellers or vendors. It’s just to keep the conversation totally non sales-y. So, if anyone’s interested, they’re welcome to do that. We have groups around subscription e-commerce, mobile app stuff, product managers, etc.

Ander: Awesome. Adam, once again, thank you so much and I’m sure we’ll talk to you soon.

Adam: My pleasure.